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What changed in Upstream Bio, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Upstream Bio, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+535 added−516 removedSource: 10-K (2026-03-26) vs 10-K (2025-03-12)

Top changes in Upstream Bio, Inc.'s 2025 10-K

535 paragraphs added · 516 removed · 411 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

168 edited+50 added−37 removed405 unchanged
Biggest changeFor example, in the United States, in 2010 the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), was enacted, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars; increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations; subjected manufacturers to new annual fees and taxes for certain branded prescription drugs; created a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; and provided incentives to programs that increase the federal government’s comparative effectiveness research. 47 Other legislative changes have been proposed and adopted in the United States since the ACA was enacted: • The Budget Control Act of 2011 and subsequence legislation, among other things, created measures for spending reductions by Congress that include aggregate reductions of Medicare payments to providers of 2% per fiscal year, which remain in effect through 2032.
Biggest changeFor example, in the United States, in 2010 the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), was enacted, which, among other things, subjected 47 biologic products to potential competition by lower-cost biosimilars; increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations; subjected manufacturers to new annual fees and taxes for certain branded prescription drugs; created a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; and provided incentives to programs that increase the federal government’s comparative effectiveness research.
Furthermore, clinical data from our MAD trial indicate an approximately 50% greater effect on FeNO than has previously been reported for tezepelumab. We have not conducted head-to-head clinical studies of verekitug against tezepelumab, and note that ongoing and future clinical trials for verekitug may produce differing clinical activity and tolerability results.
Furthermore, clinical data from our MAD trial indicate an approximately 50% greater effect on FeNO than has previously been reported for tezepelumab. We have not conducted head-to-head clinical studies of verekitug against tezepelumab, and note that ongoing and future clinical trials for verekitug may produce differing clinical activity and tolerability results.
This effort has resulted in a greater than 6-fold improvement in the concentration of the formulation of verekitug, from 30 mg/mL to 200 mg/mL, which has enabled the ability to employ both a 0.5mL (100 mg) and a 2.0mL (400 mg) SC injection in our severe asthma Phase 2 clinical trial.
This effort has resulted in a greater than 6-fold improvement in the concentration of the formulation of verekitug, from 30 mg/mL to 200 mg/mL, which enabled the ability to employ both a 0.5mL (100 mg) and a 2.0mL (400 mg) SC injection in our severe asthma Phase 2 clinical trial.
An applicant seeking approval to market and distribute a new biological product in the United States generally must satisfactorily complete each of the following steps: • preclinical laboratory tests, animal studies and formulation studies performed in accordance with the FDA’s Good Laboratory Practices (“GLP”) regulations, as applicable; • completion of the manufacture, under cGMP conditions, of the product candidate that the sponsor intends to use in human clinical trials along with required analytical and stability testing; • submission to the FDA of an Investigational New Drug application (“IND”), for human clinical testing, which must become effective before human clinical trials may begin; • approval by an independent institutional review board (“IRB”) representing each clinical trial site before each clinical trial site may be initiated; • performance of adequate and well-controlled human clinical trials, in accordance with current Good Clinical Practices (“GCP”) and any additional nonclinical studies required to establish the safety and effectiveness of the product candidate for each proposed indication; • preparation and submission to the FDA of a biologics license application (“BLA”), as applicable, requesting approval to market the product candidate for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product and proposed labeling; • review of the product by an FDA advisory committee, where appropriate and as applicable; • satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of third parties, at which the product, or components thereof, are produced to assess compliance with cGMP and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; • satisfactory completion of any FDA audits of the preclinical studies and clinical trial sites to assure compliance with GLP, as applicable, and GCP, and the integrity of clinical data in support of the BLA; • payment of user fees under the Prescription Drug User Fee Act (“PDUFA”), unless exempted; 33 • obtaining FDA approval, or licensure, of the BLA; and • compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”) and any post-approval studies or other post-marketing commitments required by the FDA.
An applicant seeking approval to market and distribute a new biological product in the United States generally must satisfactorily complete each of the following steps: • preclinical laboratory tests, animal studies and formulation studies performed in accordance with the FDA’s Good Laboratory Practices (“GLP”) regulations, as applicable; • completion of the manufacture, under cGMP conditions, of the product candidate that the sponsor intends to use in human clinical trials along with required analytical and stability testing; • submission to the FDA of an Investigational New Drug application (“IND”), for human clinical testing, which must become effective before human clinical trials may begin; • approval by an independent institutional review board (“IRB”) representing each clinical trial site before each clinical trial site may be initiated; • performance of adequate and well-controlled human clinical trials, in accordance with current Good Clinical Practices (“GCP”) and any additional nonclinical studies required to establish the safety and effectiveness of the product candidate for each proposed indication; • preparation and submission to the FDA of a biologics license application (“BLA”), as applicable, requesting approval to market the product candidate for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product and proposed labeling; • review of the product by an FDA advisory committee, where appropriate and as applicable; • satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of third parties, at which the product, or components thereof, are produced to assess compliance with cGMP and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; 33 • satisfactory completion of any FDA audits of the preclinical studies and clinical trial sites to assure compliance with GLP, as applicable, and GCP, and the integrity of clinical data in support of the BLA; • payment of user fees under the Prescription Drug User Fee Act (“PDUFA”), unless exempted; • obtaining FDA approval, or licensure, of the BLA; and • compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”) and any post-approval studies or other post-marketing commitments required by the FDA.
The federal False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the federal False Claims Act and to share in any monetary recovery; • HIPAA, which created new federal criminal statutes that prohibit a person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”) and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates, independent contractors or agents of covered entities, that perform services for them that involve the 46 creation, maintenance, receipt, use, or disclosure of, individually identifiable health information relating to the privacy, security and transmission of individually identifiable health information.
The federal False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the federal False Claims Act and to share in any monetary recovery; • HIPAA, which created new federal criminal statutes that prohibit a person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any 46 healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”) and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates, independent contractors or agents of covered entities, that perform services for them that involve the creation, maintenance, receipt, use, or disclosure of, individually identifiable health information relating to the privacy, security and transmission of individually identifiable health information.
During this market exclusivity period, the EMA, the European Commission or the European Union Member States may only grant a marketing authorization to a “similar medicinal product” for the same therapeutic indication as an authorized orphan product if: (i) a second applicant can establish that its product, although similar to the authorized orphan product, is safer, more effective or otherwise clinically superior; (ii) the marketing authorization holder for the authorized orphan product consents to a second application; or (iii) the marketing authorization holder for the authorized orphan product cannot supply enough orphan medicinal product.
During this market exclusivity period, the European Commission or the European Union Member States may only grant a marketing authorization to a “similar medicinal product” for the same therapeutic indication as an authorized orphan product if: (i) a second applicant can establish that its product, although similar to the authorized orphan product, is safer, more effective or otherwise clinically superior; (ii) the marketing authorization holder for the authorized orphan product consents to a second application; or (iii) the marketing authorization holder for the authorized orphan product cannot supply enough orphan medicinal product.
In May 2024, we presented full proof-of-concept data from our randomized, double-blind, placebo-controlled Phase 1b MAD clinical trial in asthma patients demonstrating that dosing with verekitug led to rapid and complete TSLP receptor occupancy, and 16 reductions in disease-related biomarkers, FeNO and blood eos, that were rapid, substantial and sustained for up to 24 weeks after the last dose.
In May 2024, we presented full proof-of-concept data from our randomized, double-blind, placebo-controlled Phase 1b MAD clinical trial in asthma patients demonstrating that dosing with verekitug led to rapid and complete TSLP receptor occupancy, and reductions in disease-related biomarkers, FeNO and blood eos, that were rapid, substantial and sustained for up to 24 weeks after the last dose.
Across multiple experiments, verekitug was found to be at least more than four times more potent based on the IC 50 and IC 90 values for both the Ba/F3 cell proliferation and CCL17 production assays. The IC 90 values from the in vitro assays suggest a target trough concentration of approximately 0.3 µg/mL as an effective dose for verekitug.
Across multiple experiments, verekitug was found to be at least more than four times more potent based on the IC 50 and IC 90 values for both the Ba/F3 cell proliferation and CCL17 production assays. 17 The IC 90 values from the in vitro assays suggest a target trough concentration of approximately 0.3 µg/mL as an effective dose for verekitug.
Chronic inflammation causes structural changes within the lungs, narrowing already small airways and damaging lung parenchyma which causes air sacs to lose functionality and decreases lung elasticity. It is typically caused by long-term exposure to irritants, most often cigarette smoke. People with a history of asthma are also more likely to have COPD.
Chronic inflammation causes structural changes within the lungs, narrowing already small airways and damaging lung parenchyma which causes air sacs to lose functionality and decreases lung elasticity. It is typically caused by long-term exposure to irritants, most often cigarette 5 smoke. People with a history of asthma are also more likely to have COPD.
We believe verekitug has the potential, if approved, to address unmet needs in multiple diseases characterized by TSLP-driven pathobiology due to the high potency and potential for extended dosing intervals that we have observed in our preclinical and clinical development to date. 4 Only one drug targeting the TSLP pathway has been approved for the treatment of severe asthma.
We believe verekitug has the potential, if approved, to address unmet needs in multiple diseases characterized by TSLP-driven pathobiology due to the high potency and potential for extended dosing intervals that we have observed in our preclinical and clinical development to date. Only one drug targeting the TSLP pathway has been approved for the treatment of severe asthma.
These 0.5mL and 2.0mL injection volumes are comparable to or smaller than those of other biologics approved for the treatment of severe asthma, including tezepelumab (1.91mL), dupilumab (2.0mL) and mepolizumab (1.0mL). These process improvements have led to an approximately 35% increase in yield as well, while maintaining comparable product quality.
These 0.5mL and 2.0mL injection volumes are comparable to or smaller than those of other biologics approved for the treatment of severe asthma, including tezepelumab (1.91mL), dupilumab (2.0mL) and mepolizumab 29 (1.0mL). These process improvements have led to an approximately 35% increase in yield as well, while maintaining comparable product quality.
Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what 36 conditions, if any. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions, if any. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
(“Regeneron”), which we refer to as the “Regeneron Letter Agreement.” The Regeneron Letter Agreement relates to a prior Non-Exclusive License and Material Transfer Agreement (the “Terminated Regeneron License Agreement”) that Regeneron and Astellas entered into in March 2007, as amended in July 2010 and subsequently terminated in 31 June 2018, subject to certain surviving rights and obligations of both Regeneron and Astellas.
(“Regeneron”), which we refer to as the “Regeneron Letter Agreement.” The Regeneron Letter Agreement relates to a prior Non-Exclusive License and Material Transfer Agreement (the “Terminated Regeneron License Agreement”) that Regeneron and Astellas entered into in March 2007, as amended in July 2010 and subsequently terminated in June 2018, subject to certain surviving rights and obligations of both Regeneron and Astellas.
In clinical trials, biologics have shown to reduce airway hyperactivity and the number of asthma attacks. They may allow for the reduction or even discontinuation of long-term oral steroid use. Biologics are administered either subcutaneously or intravenously on a bi-weekly, monthly, or bi-monthly basis, depending on the specific product.
In clinical trials, biologics have shown to reduce airway hyperactivity and the number of asthma attacks. They may allow for the reduction or even discontinuation of long-term oral steroid use. Biologics are administered either subcutaneously or intravenously on a bi-weekly, monthly, bi-monthly, or bi-annual basis, depending on the specific product.
Tezepelumab, an approved antibody against TSLP without restriction to patients with only type 2 inflammation, has been shown to have clinical benefits in patients with severe asthma who do not have elevated type 2 biomarkers as with all other approved therapies. 7 Beyond its role in inflammation, TSLP also acts on airway structural cells.
Tezepelumab, an approved antibody against TSLP without restriction to patients with only type 2 inflammation, has been shown to have clinical benefits in patients with severe asthma who do not have elevated type 2 biomarkers as with all other approved therapies. Beyond its role in inflammation, TSLP also acts on airway structural cells.
As a result, we may be unable to meaningfully protect our know-how, trade secrets, and other proprietary information. In addition, we plan to rely on regulatory protection based on orphan drug exclusivities, data exclusivities, and market exclusivities. See the section titled “—Government regulation” below for additional information.
As a result, we may be unable to meaningfully protect our know-how, trade secrets, and other proprietary information. 31 In addition, we plan to rely on regulatory protection based on orphan drug exclusivities, data exclusivities, and market exclusivities. See the section titled “—Government regulation” below for additional information.
Based on its extended dosing interval and effect on broadly accepted disease-associated biomarkers, we believe verekitug, if approved, will be the preferred biologic for the treatment of severe asthma, CRSwNP and COPD. 3 Our current clinical development plan for verekitug is summarized in the pipeline chart below.
Based on its extended dosing interval and effect on broadly accepted disease-associated biomarkers, we believe verekitug, if approved, will be the preferred biologic for the treatment of severe asthma, CRSwNP and COPD. 3 Our current clinical development pipeline for verekitug is summarized in the chart below.
Our commercial success depends in part upon our ability to obtain and maintain patent and other proprietary protection for commercially important technologies, inventions and trade secrets related to our business, defend and enforce our intellectual property rights, particularly our patent rights, preserve the confidentiality of our trade secrets and operate without infringing valid and enforceable intellectual property rights of others.
Our commercial success depends in part upon our ability to obtain and maintain patent and other proprietary protection for commercially important technologies, inventions and trade secrets related to our business, defend and enforce our intellectual 30 property rights, particularly our patent rights, preserve the confidentiality of our trade secrets and operate without infringing valid and enforceable intellectual property rights of others.
Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that 45 reimbursement will be available for any product candidate that we commercialize and, if reimbursement is available, the level of reimbursement.
Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. We cannot be sure that reimbursement will be available for any product candidate that we commercialize and, if reimbursement is available, the level of reimbursement.
Symbols: observed mean values from Phase 1b MAD study; Solid lines: predicted PK from Phase 1 SAD clinical trial in healthy volunteers; LLOQ: lower limit of PK quantification Figure 13: Post-dose serum concentration of verekitug for each Phase 1b MAD cohort, overlayed with PK model based on Phase 1 SAD trial data We demonstrated that dosing with verekitug led to rapid and complete TSLP receptor occupancy and reductions in FeNO and eos that were rapid, substantial and sustained for up to 24 weeks after last dose. 23 The pharmacodynamics of verekitug were assessed over the 32-week observation period by measuring TSLP receptor occupancy in CD14+ monocytes.
Symbols: observed mean values from Phase 1b MAD study; Solid lines: predicted PK from Phase 1 SAD clinical trial in healthy volunteers; LLOQ: lower limit of PK quantification Figure 12: Post-dose serum concentration of verekitug for each Phase 1b MAD cohort, overlayed with PK model based on Phase 1 SAD trial data We demonstrated that dosing with verekitug led to rapid and complete TSLP receptor occupancy and reductions in FeNO and eos that were rapid, substantial and sustained for up to 24 weeks after last dose. 23 The pharmacodynamics of verekitug were assessed over the 32-week observation period by measuring TSLP receptor occupancy in CD14+ monocytes.
Tezepelumab is projected to reach peak global annual sales of over $3.0 billion for severe asthma alone in 2032 and, according to Amgen, achieved more than 20% of new to brand share of prescriptions in the United States in its first commercial year.
Tezepelumab is projected to reach global annual sales of over $3.0 billion for severe asthma alone in 2032 and, according to Amgen, achieved more than 20% of new to brand share of prescriptions in the United States in its first commercial year.
Despite the fact that severe asthma accounts for a small percentage of people with asthma, half of all 11 asthma-related healthcare costs are attributed to their treatment. In the United States, asthma is responsible for $80 billion in annual costs due to care, absenteeism and mortality.
Despite the fact that severe asthma accounts for a small percentage of people with asthma, half of all asthma-related healthcare costs are attributed to their treatment. In the United States, asthma is responsible for $80 billion in annual costs due to care, absenteeism and mortality.
Severe asthma may impact normal daily activities, resulting in missing work or school and can directly impact a person’s quality of life. People with severe asthma often demonstrate significant reduction of their lung function when tested by spirometry or a pulmonary function test.
Severe asthma may impact normal daily activities, resulting in missing work or school and can directly impact a person’s quality of life. People with severe asthma often demonstrate significant reduction of their lung function when tested by spirometry or a 11 pulmonary function test.
The market exclusivity period for the authorized therapeutic indication may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, including if the product is sufficiently profitable not to justify market exclusivity.
The market exclusivity period for the authorized therapeutic indication may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, including if the product is sufficiently profitable not to justify market exclusivity.
A biologic targeting the TSLP ligand is also in development by Amgen and AstraZeneca (Tezspire). While there are numerous biologics approved for the treatment of severe asthma, tezepelumab, a monoclonal antibody targeting the TSLP ligand, is the first and only treatment for severe asthma without any biomarker limitation.
A biologic targeting the TSLP ligand is also in development by Amgen and AstraZeneca (Tezspire) for COPD. While there are numerous biologics approved for the treatment of severe asthma, tezepelumab, a monoclonal antibody targeting the TSLP ligand, is the first and only treatment for severe asthma without any biomarker limitation.
Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation. Compliance with cGMP requirements Concurrent with clinical trials, companies must finalize a process for manufacturing the product candidate in commercial quantities in accordance with cGMP requirements.
Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation. 35 Compliance with cGMP requirements Concurrent with clinical trials, companies must finalize a process for manufacturing the product candidate in commercial quantities in accordance with cGMP requirements.
To meet the future needs of our business, we may lease additional or alternate space, and we believe suitable additional or alternative space will be available in the future on commercially reasonable terms. Legal proceedings From time to time, we may become involved in litigation or other legal proceedings.
To meet the future needs of our business, we may lease additional or alternate space, and we believe suitable additional or alternative space will be available in the future on commercially reasonable terms. 49 Legal proceedings From time to time, we may become involved in litigation or other legal proceedings.
The then-anticipated therapeutic threshold concentration (1.0 µg/mL), conservatively estimated as a 1 ⁄ 2 -log escalation from the 0.3 µg/mL concentration derived from in vitro pharmacology assays, was predicted to be maintained with a 12-week dosing interval. a Projected conservative therapeutic threshold at time of study Figure 10: Simulated PK profiles for repeated SC administration based on Phase 1 SAD clinical trial data Phase 1b MAD clinical trial design We conducted a multicenter, randomized, double-blind, placebo-controlled Phase 1b MAD clinical trial of verekitug in asthma patients.
The then-anticipated therapeutic threshold concentration (1.0 µg/mL), conservatively estimated as a 1 ⁄ 2 -log escalation from the 0.3 µg/mL concentration derived from in vitro pharmacology assays, was predicted to be maintained with a 12-week dosing interval. a Projected conservative therapeutic threshold at time of study Figure 9: Simulated PK profiles for repeated SC administration based on Phase 1 SAD clinical trial data Phase 1b MAD clinical trial design We conducted a multicenter, randomized, double-blind, placebo-controlled Phase 1b MAD clinical trial of verekitug in asthma patients.
Airway smooth muscle cells express TSLP receptor and when stimulated by TSLP, they increase production of IL-6 and IL-8. Bronchial fibroblasts also produce TSLP and express TSLP receptor. With TSLP receptor signaling, the bronchial fibroblasts produce collagen, a smooth muscle actin, arginase 1 and transforming growth factor b1.
Airway smooth muscle cells express TSLP receptor and when stimulated by TSLP, they increase production of IL-6 and IL-8. Bronchial fibroblasts also produce TSLP and express TSLP receptor. With TSLP receptor signaling, the bronchial fibroblasts produce collagen, a smooth muscle actin, arginase 1 and 7 transforming growth factor b1.
Verekitug inhibited the interaction between TSLP and TSLP receptor in a dose-dependent manner with a 50% inhibitory concentration (“IC 50 ”) of 208 ng/mL and a 90% inhibitory concentration (IC 90 ) of 462 ng/mL. Verekitug also inhibited 17 TSLP-induced proliferation of Ba/F3 cells (IC 50 = 90.7 ng/mL, IC 90 = 200 ng/mL).
Verekitug inhibited the interaction between TSLP and TSLP receptor in a dose-dependent manner with a 50% inhibitory concentration (“IC 50 ”) of 208 ng/mL and a 90% inhibitory concentration (IC 90 ) of 462 ng/mL. Verekitug also inhibited TSLP-induced proliferation of Ba/F3 cells (IC 50 = 90.7 ng/mL, IC 90 = 200 ng/mL).
Factors payors consider in determining reimbursement are based on whether the product is: • a covered benefit under its health plan; • safe, effective and medically necessary; • appropriate for the specific patient; • cost-effective; and • neither experimental nor investigational.
Factors payors consider in determining reimbursement are based on whether the product is: • a covered benefit under its health plan; • safe, effective and medically necessary; 45 • appropriate for the specific patient; • cost-effective; and • neither experimental nor investigational.
Failure to respond to a complete response letter may be considered by the FDA as a request to withdraw the application. The FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory committee.
Failure to respond to a complete response letter may be considered by the FDA as a request to withdraw the application. 36 The FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory committee.
The IRB will consider, among other things, clinical trial design, patient informed consent, ethical factors, the safety of human subjects and the possible liability of the institution. An IRB must operate in compliance with FDA regulations.
The IRB will consider, among other things, clinical trial design, patient informed consent, ethical factors, the safety of human subjects and the possible liability of the institution. An IRB must operate in compliance with 34 FDA regulations.
Importantly, a dedicated EMA contact and rapporteur from the Committee for Medicinal Products for Human Use (“CHMP”) are appointed early in the PRIME scheme facilitating increased understanding of the product at the EMA’s committee level.
Importantly, a dedicated EMA contact and a rapporteur from the Committee for Medicinal Products for Human Use (“CHMP”) are typically appointed early in the PRIME scheme facilitating increased understanding of the product at the EMA’s committee level.
If a product designated as an orphan drug ultimately receives marketing approval for an indication broader than what was designated in its orphan drug application, it may not be entitled to exclusivity.
If a product designated as an orphan drug ultimately receives marketing approval for an indication broader than what was designated in its orphan drug application, it may not be entitled to exclusivity for that broader indication.
We also compete with these 29 organizations to recruit management, scientists and clinical development personnel, and our inability to compete successfully could negatively affect our level of expertise and our ability to execute our business plan.
We also compete with these organizations to recruit management, scientists and clinical development personnel, and our inability to compete successfully could negatively affect our level of expertise and our ability to execute our business plan.
Similar to asthma and CRSwNP, 15 biologics are also being developed as new and potentially transformative treatments, and recently, dupilumab became the first biologic approved for the treatment of COPD.
Similar to asthma and CRSwNP, biologics are also being developed as new and potentially transformative treatments, and recently, dupilumab became the first biologic approved for the treatment of COPD.
However, given serum concentrations for the first three cohorts remained above the projected therapeutic threshold, a single dose administration (25 mg) cohort was included to generate data in support of PK/PD. 22 As shown in Figure 13, observed mean serum concentrations from the Phase 1b MAD study replicated the modeled PK from the Phase 1 SAD clinical trial in healthy volunteers.
However, given serum concentrations for the first three cohorts remained above the projected therapeutic threshold, a single dose administration (25 mg) cohort was included to generate data in support of PK/PD. 22 As shown in Figure 12, observed mean serum concentrations from the Phase 1b MAD study replicated the modeled PK from the Phase 1 SAD clinical trial in healthy volunteers.
To help reduce the risk of introduction of adventitious agents with the use of biological products, the PHSA emphasizes the importance of manufacturing controls for products with attributes that cannot be 35 precisely defined.
To help reduce the risk of introduction of adventitious agents with the use of biological products, the PHSA emphasizes the importance of manufacturing controls for products with attributes that cannot be precisely defined.
Figure 8: Incidence of treatment-emergent adverse events by cohort Phase 1 SAD clinical trial PK data In the six IV cohorts, there was a linear and dose-proportional increase in maximum serum concentration (“C max ”) and total drug exposure over time (area under the curve) over the 0.1-10 mg/kg dose range.
Figure 7: Incidence of treatment-emergent adverse events by cohort Phase 1 SAD clinical trial PK data In the six IV cohorts, there was a linear and dose-proportional increase in maximum serum concentration (“C max ”) and total drug exposure over time (area under the curve) over the 0.1-10 mg/kg dose range.
Of the more than 50 million people diagnosed with asthma in these major markets, it is estimated that only 440,000 patients are treated with biologics currently, or less than 20% of eligible patients. This creates a significant opportunity for a biologic that meets patients’ needs in terms of efficacy and the reduced burden of a longer dosing interval.
Of the more than 50 million people diagnosed with asthma in these major markets, it is estimated that only 440,000 patients are treated with biologics currently, or less than 25% of eligible patients. This creates a significant opportunity for a biologic that meets patients’ needs in terms of efficacy and the reduced burden of a longer dosing interval.
Any patents that we hold may be challenged, circumvented or invalidated by third parties. Verekitug program We own 12 patent families directed to verekitug. A first patent family is directed to compositions of matter of verekitug and methods of using the same for treating asthma and expire in 2034, without taking any potential patent term extension into account.
Any patents that we hold may be challenged, circumvented or invalidated by third parties. Verekitug program We own 6 patent families directed to verekitug. A first patent family is directed to compositions of matter of verekitug and methods of using the same for treating asthma and expire in 2034, without taking any potential patent term extension into account.
As summarized in Figure 14 below, the first three cohorts (verekitug doses ≥100 mg) had substantial occupancy through the end of the observation period. The fourth single low dose cohort, added to interrogate the minimal concentration required to maintain full receptor saturation, produced substantial occupancy for 12 to 16 weeks supporting the high potency of verekitug at low doses.
As summarized in Figure 13 below, the first three cohorts (verekitug doses ≥100 mg) had substantial occupancy through the end of the observation period. The fourth single low dose cohort, added to interrogate the minimal concentration required to maintain full receptor saturation, produced substantial occupancy for 12 to 16 weeks supporting the high potency of verekitug at low doses.
Figure 9 below illustrates the PK profiles for the six IV cohorts and one SC cohort in our Phase 1 SAD trial. a Projected conservative therapeutic threshold at time of study Figure 9: Single dose PK profiles for six IV cohorts and one SC cohort 20 Data from the SC cohort showed the absolute bioavailability after a dose of 1 mg/kg of verekitug was approximately 70%.
Figure 8 below illustrates the PK profiles for the six IV cohorts and one SC cohort in our Phase 1 SAD trial. a Projected conservative therapeutic threshold at time of study Figure 8: Single dose PK profiles for six IV cohorts and one SC cohort 20 Data from the SC cohort showed the absolute bioavailability after a dose of 1 mg/kg of verekitug was approximately 70%.
Figure 12: Treatment emergent adverse events observed in Phase 1b MAD clinical trial PK/PD data demonstrated substantial and sustained receptor occupancy and biomarker suppression, supporting dosing intervals of up to Q24W We observed a desirable pharmacokinetics profile for verekitug that is supportive of extended dosing intervals up to every 24 weeks.
Figure 11: Treatment emergent adverse events observed in Phase 1b MAD clinical trial PK/PD data demonstrated substantial and sustained receptor occupancy and biomarker suppression, supporting dosing intervals of up to q24w We observed a desirable pharmacokinetics profile for verekitug that is supportive of extended dosing intervals up to every 24 weeks.
FDA approved biologic treatments Mechanism of action Type of asthma Dosing interval Omalizumab / Xolair Anti-IgE Moderate to severe persistent allergic asthma 2 or 4 weeks Dupilumab / Dupixent Blocks IL-4 and IL-13 Moderate to severe eosinophilic asthma 2 weeks Mepolizumab / NUCALA Blocks IL-5 Severe eosinophilic asthma 4 weeks Reslizumab / Cinqair 4 weeks (IV) Benralizumab / Fasenra 8 weeks Tezepelumab / Tezspire Blocks TSLP Severe asthma (without restriction to type 2 patients only) 4 weeks Table 1: Overview of FDA approved biologic treatments for asthma Tezepelumab is a human monoclonal antibody that binds to the TSLP ligand and prevents its interaction with the TSLP receptor.
FDA approved biologic treatments Mechanism of action Type of asthma Dosing interval Omalizumab / Xolair Anti-IgE Moderate to severe persistent allergic asthma 2 or 4 weeks Dupilumab / Dupixent Blocks IL-4 and IL-13 Moderate to severe eosinophilic asthma 2 weeks Mepolizumab / Nucala Blocks IL-5 Severe eosinophilic asthma 4 weeks Reslizumab / Cinqair 4 weeks (IV) Benralizumab / Fasenra 8 weeks Depemokimab / Exdensur 26 weeks Tezepelumab / Tezspire Blocks TSLP Severe asthma (without restriction to type 2 patients only) 4 weeks Table 1: Overview of FDA approved biologic treatments for asthma Tezepelumab is a human monoclonal antibody that binds to the TSLP ligand and prevents its interaction with the TSLP receptor.
As of March 5, 2025, this first patent family has two issued U.S. patents, 20 issued patents in foreign jurisdictions, including Argentina, Australia, Brazil, Canada, a European patent (validated in Albania, Austria, Belgium, Bulgaria, Switzerland, Cyprus, Czech Republic, Germany, Denmark, Estonia, Spain, Finland, France, Great Britain, Greece, Hungary, Croatia, Ireland, Iceland, Italy, Liechtenstein, Latvia, Lithuania, Luxembourg, Monaco, Malta, Macedonia, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Sweden, Slovenia, Slovakia, and Turkey), Hong Kong, Indonesia, Israel, India, Japan, South Korea, 30 Malaysia, Mexico, Philippines, Russia, Singapore, Taiwan, Ukraine, Vietnam and South Africa, and one pending application in Thailand.
As of March 20, 2026, this first patent family has two issued U.S. patents, 20 issued patents in foreign jurisdictions, including Argentina, Australia, Brazil, Canada, a European patent (validated in Albania, Austria, Belgium, Bulgaria, Switzerland, Cyprus, Czech Republic, Germany, Denmark, Estonia, Spain, Finland, France, Great Britain, Greece, Hungary, Croatia, Ireland, Iceland, Italy, Liechtenstein, Latvia, Lithuania, Luxembourg, Monaco, Malta, Macedonia, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Sweden, Slovenia, Slovakia, and Turkey), Hong Kong, Indonesia, Israel, India, Japan, South Korea, Malaysia, Mexico, Philippines, Russia, Singapore, Taiwan, Ukraine, Vietnam and South Africa, and one pending application in Thailand.
The major asthma markets, including the United States, France, Spain, Germany, Italy, the United Kingdom (“UK”) and Japan, have estimated annual sales of approximately $7.5 billion for 2023 with a compound annual growth rate (“CAGR”) of approximately 5.9% through 2032. The United States alone is estimated to have approximately $6.0 billion in asthma market sales for 2023.
The major asthma markets, including the United States, France, Spain, Germany, Italy, the United Kingdom (“UK”) and Japan, have estimated annual sales of approximately $7.5 billion for 2023 with a compound annual growth rate (“CAGR”) of approximately 5.9% through 2032. The United States alone was estimated to have approximately $6.0 billion in asthma market sales for 2023.
The centralized procedure is optional for products containing a new active substance not yet authorized in the European Union, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the European Union. Manufacturers must demonstrate the quality, safety and efficacy of their products to the EMA.
The centralized procedure is optional for products containing a new active substance not yet authorized in the European Union, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the European Union. Applicants must demonstrate the quality, safety and efficacy of their products to the EMA.
Our code of business conduct and ethics, corporate governance guidelines and the charters of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available on our corporate website. 49
Our code of business conduct and ethics, corporate governance guidelines and the charters of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available on our corporate website.
Table 1 below identifies FDA-approved biologic treatments for asthma and each product’s mechanism of action, 10 specific asthma indication and dosing interval. Despite the efficacy shown in clinical trials, it is estimated that less than 20% of people with severe asthma receive biologic treatment.
Table 1 below identifies FDA-approved biologic treatments for asthma and each product’s 10 mechanism of action, specific asthma indication and dosing interval. Despite the efficacy shown in clinical trials, it is estimated that less than 25% of people with severe asthma receive biologic treatment.
Figure 5: Verekitug neutralizes TSLP, a cytokine upstream of those targeted by existing biologics Preclinical data Target engagement and inhibition In preclinical studies conducted by Astellas, which were not designed to support formal statistical comparisons, verekitug was able to efficiently bind and inhibit the TSLP receptor.
Figure 4: Verekitug neutralizes TSLP, a cytokine upstream of those targeted by existing biologics Preclinical data Target engagement and inhibition In preclinical studies conducted by Astellas, which were not designed to support formal statistical comparisons, verekitug was able to efficiently bind and inhibit the TSLP receptor.
Clinical data Phase 1 SAD clinical trial design Verekitug was investigated in a Phase 1 SAD clinical trial conducted by Astellas, which enrolled 56 healthy volunteers aged 18 to 55. The primary objective of the study was safety, tolerability and PK following single intravenous (“IV”) and subcutaneous (“SC”) doses of verekitug.
Phase 1 clinical trials Phase 1 SAD clinical trial design Verekitug was investigated in a Phase 1 SAD clinical trial conducted by Astellas, which enrolled 56 healthy volunteers aged 18 to 55. The primary objective of the study was safety, tolerability and PK following single intravenous (“IV”) and subcutaneous (“SC”) doses of verekitug.
As summarized in Figure 8 below, treatment-emergent adverse events (“TEAEs”) were reported by 21 of 42 participants receiving verekitug (50%) and 3 of 14 (21%) participants receiving placebo. The majority of TEAEs were mild in severity and less than half of all reported TEAEs were considered to be related to the study drug.
As summarized in Figure 7 below, treatment-emergent adverse events (“TEAEs”) were reported by 21 of 42 participants receiving verekitug (50%) and 3 of 14 (21%) participants receiving placebo. The majority of TEAEs were mild in severity and less than half of all reported TEAEs were considered to be related to the study drug.
These results, as shown in Figure 6 below, underscore the potency of verekitug and the potential for sufficient efficacy even at low drug concentrations. Figure 6: Left panel: In a competitive ELISA study, verekitug was shown to inhibit the interaction between TSLP and TSLP receptor in a dose-dependent manner.
These results, as shown in Figure 5 below, underscore the potency of verekitug and the potential for sufficient efficacy even at low drug concentrations. Figure 5: Left panel: In a competitive ELISA study, verekitug was shown to inhibit the interaction between TSLP and TSLP receptor in a dose-dependent manner.
PD, pharmacodynamics; PK, pharmacokinetics; SC, subcutaneous; PBO, placebo 21 Figure 11: Trial design schematic for Phase 1b MAD trial Phase 1b MAD safety and tolerability data Similar to the Phase 1 SAD clinical trial, the data from the Phase 1b MAD clinical trial showed a favorable tolerability profile for verekitug at all dose levels.
PD, pharmacodynamics; PK, pharmacokinetics; SC, subcutaneous; PBO, placebo 21 Figure 10: Trial design schematic for Phase 1b MAD trial Phase 1b MAD safety and tolerability data Similar to the Phase 1 SAD clinical trial, the data from the Phase 1b MAD clinical trial showed a favorable tolerability profile for verekitug at all dose levels.
Figure 7: Trial design schematic for Phase 1 SAD trial Phase 1 SAD clinical trial safety and tolerability data We presented the results from the Phase 1 SAD clinical trial of verekitug at the ATS International Conference in May 2023. The data showed a favorable tolerability profile at all dose levels in healthy participants.
Figure 6: Trial design schematic for Phase 1 SAD trial Phase 1 SAD clinical trial safety and tolerability data We presented the results from the Phase 1 SAD clinical trial of verekitug at the ATS International Conference in May 2023. The data showed a favorable tolerability profile at all dose levels in healthy participants.
As summarized in Figure 12 below, TEAEs were reported by 21 of 24 (87.5%) participants receiving verekitug and 7 of 8 (87.5%) patients receiving placebo. TEAEs were mild to moderate in severity with no severe TEAEs reported. Over 90% of the TEAEs were deemed unrelated to study drug.
As summarized in Figure 11 below, TEAEs were reported by 21 of 24 (87.5%) participants receiving verekitug and 7 of 8 (87.5%) patients receiving placebo. TEAEs were mild to moderate in severity with no severe TEAEs reported. Over 90% of the TEAEs were deemed unrelated to study drug.
The final cohort was a 1 mg/kg SC dose. Figure 7 below summarizes the Phase 1 SAD trial design. BMI, body mass index; IV, intravenous; PD, pharmacodynamics; PK, pharmacokinetics; R, randomization; SC, subcutaneous; ULN, upper limit of normal.
The final cohort was a 1 mg/kg SC dose. Figure 6 below summarizes the Phase 1 SAD trial design. BMI, body mass index; IV, intravenous; PD, pharmacodynamics; PK, pharmacokinetics; R, randomization; SC, subcutaneous; ULN, upper limit of normal.
The final cohort was a single low dose of 25 mg subcutaneously. The 32-week trial included an observation period of up to 24 weeks after the last dose in the multi-dose cohorts. Figure 11 below summarizes this trial design.
The final cohort was a single low dose of 25 mg subcutaneously. The 32-week trial included an observation period of up to 24 weeks after the last dose in the multi-dose cohorts. Figure 10 below summarizes this trial design.
Much like the Anti-Kickback Statue prohibition in the United States, the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the European Union.
Much like the Anti-Kickback Statute prohibition in the United States, the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the European Union.
An orphan designation provides a number of benefits, including fee reductions, regulatory assistance and the possibility to apply for a centralized marketing authorization. Marketing authorization for an orphan product leads to a ten-year period of market exclusivity being granted following marketing approval of the orphan product.
An orphan designation provides a number of benefits, including fee reductions, regulatory assistance and the possibility to apply for a centralized marketing authorization. Marketing authorization for an orphan product leads to a ten-year period of market exclusivity following marketing approval of the orphan product.
Dupilumab’s effect on FeNO has been observed to be similar to that of tezepelumab, at an approximately -27% change from baseline, whereas mepolizumab has been observed to have no effect on FeNO. These data are presented for reference purposes only and do not represent results of head-to-head comparative studies among these product candidates or relative to verekitug.
Dupilumab’s effect on FeNO was observed to be similar to that of tezepelumab, at an approximately -27% change from baseline, whereas mepolizumab was observed to have no effect on FeNO. These data are presented for reference purposes only and do not represent results of head-to-head comparative studies among these product candidates or relative to verekitug.
For this reason, these doses are being tested in our Phase 2 trial in severe asthma. Figure 18: PK simulations of verekitug. Solid line = median, Shadow = 5-95 percentile prediction range Japan PK trial We also completed a third Phase 1 clinical trial of verekitug to support clinical development in Japan and other Asian countries.
For this reason, these doses were tested in our Phase 2 trial in severe asthma. Figure 18: PK simulations of verekitug. Solid line = median, Shadow = 5-95 percentile prediction range Japan PK trial We also completed a third Phase 1 clinical trial of verekitug to support clinical development in Japan and other Asian countries.
Accelerated evaluation may be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation.
Accelerated assessment may be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation.
Exclusive license agreement with Maruho In October 2021, we entered into a license agreement with Maruho Co., Ltd. (“Maruho”), as amended on May 30, 2023, which we refer to as the “Maruho License Agreement,” under which we granted to Maruho an exclusive, irrevocable, perpetual, royalty-free, sublicensable (subject to our right of first negotiation as described below) license.
Exclusive license agreement with Maruho In October 2021, we entered into a license agreement with Maruho Co., Ltd. (“Maruho”), as amended on May 30, 2023 (the “Maruho License Agreement”), under which we granted to Maruho an exclusive, irrevocable, perpetual, royalty-free, sublicensable (subject to our right of first negotiation as described below) license.
A PK model fitted to the single dose SC PK data was used to predict the PK profiles after repeat SC administration at different dose levels and dose intervals, as illustrated in Figure 10 below.
A PK model fitted to the single dose SC PK data was used to predict the PK profiles after repeat SC administration at different dose levels and dose intervals, as illustrated in Figure 9 below.
All cohorts demonstrated 100% TSLP receptor occupancy by verekitug within two weeks after first dose. Figure 14: Percent of free TSLP receptors for each Phase 1b MAD cohort compared to placebo over 32 weeks 24 As shown in Figures 15A and 15B below, reductions in blood eos and FeNO levels were rapid, substantial and sustained.
All cohorts demonstrated 100% TSLP receptor occupancy by verekitug within two weeks after first dose. Figure 13: Percent of free TSLP receptors for each Phase 1b MAD cohort compared to placebo over 32 weeks 24 As shown in Figures 14 and 15 below, reductions in blood eos and FeNO levels were rapid, substantial and sustained.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Existing therapeutics for asthma include controller medications, reliever medications and more recently, biologics from Genentech, Inc. (“Genentech”) and Novartis Pharmaceuticals Corporation (“Novartis”) (Xolair), Sanofi and Regeneron (Dupixent), GlaxoSmithKline (“GSK”) (Nucala), AstraZeneca (Fasenra), and Amgen and AstraZeneca (Tezspire).
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Existing therapeutics for asthma include controller medications, reliever medications and more recently, biologics from Genentech, Inc. (“Genentech”) and Novartis Pharmaceuticals Corporation (“Novartis”) (Xolair), Sanofi and Regeneron (Dupixent), GSK (Nucala), GSK (Exdensur), AstraZeneca (Fasenra), and Amgen and AstraZeneca (Tezspire).
Figure 15A: Levels of blood eosinophils compared to baseline for each cohort in Phase 1b MAD trial over 32 weeks 25 Figure 15B: Levels of fraction of exhaled nitric oxide (right column) compared to baseline for each cohort in the Phase 1b MAD trial over 32 weeks Patients receiving verekitug doses of 100 mg or greater experienced reductions in blood eos of up to 52% and FeNO reductions of up to 49% at 32 weeks.
Figure 14: Levels of blood eosinophils compared to baseline for each cohort in Phase 1b MAD trial over 32 weeks 25 Figure 15: Levels of fraction of exhaled nitric oxide (right column) compared to baseline for each cohort in the Phase 1b MAD trial over 32 weeks Patients receiving verekitug doses of 100 mg or greater experienced reductions in blood eos of up to 52% and FeNO reductions of up to 49% at 32 weeks.
Nasal polyps are associated with significant morbidity and debilitating symptoms; it is estimated that 40% to 45% of people with severe asthma also have CRSwNP and that up to 65% of people with CRSwNP also have asthma, demonstrating a strong association between the two conditions. The current treatment options for patients with CRSwNP are corticosteroids, surgery and, more recently, biologics.
Nasal polyps are associated with significant morbidity and debilitating symptoms; it is estimated that more than 40% of people with severe asthma also have CRSwNP and that up to 70% of people with CRSwNP also have asthma, demonstrating a strong association between the two conditions. The current treatment options for patients with CRSwNP are corticosteroids, surgery and, more recently, biologics.
The projections for tezepelumab’s peak sales are not indicative of the potential market opportunity for verekitug and are subject to a number of assumptions, risks and uncertainties that could cause them to be smaller than currently estimated.
The projections for tezepelumab’s global annual sales are not indicative of the potential market opportunity for verekitug and are subject to a number of assumptions, risks and uncertainties that could cause them to be smaller than currently estimated.
Existing therapeutics for CRSwNP include topical corticosteroids, nasal saline irrigations and more recently, biologics from Genentech and Novartis (Xolair), Sanofi and Regeneron (Dupixent) and GSK (Nucala). Existing therapeutics for COPD include inhaled steroids and bronchodilator inhalers and more recently, a biologic from Sanofi and Regeneron (Dupixent).
Existing therapeutics for CRSwNP include topical corticosteroids, nasal saline irrigations and more recently, biologics from Genentech and Novartis (Xolair), Sanofi and Regeneron (Dupixent), GSK (Nucala), and Amgen and AstraZeneca (Tezspire). Existing therapeutics for COPD include inhaled steroids and bronchodilator inhalers and more recently, a biologic from Sanofi and Regeneron (Dupixent) and GSK (Nucala).
Dupilumab (Q2W), mepolizumab (Q4W), reslizumab (Q4W) and benralizumab (Q8W) are biologics that target cytokines acting downstream of the TSLP receptor.
Dupilumab (q2w), mepolizumab (q4w), reslizumab (q4w), benralizumab (q8w), and depemokimab (q26w) are biologics that target cytokines acting downstream of the TSLP receptor.
Of the 900,000 people diagnosed with CRSwNP in the United States, major European markets and Japan, it is estimated that approximately 200,000 adults are eligible for biologics. 14 We believe there is a significant opportunity for additional biologic entrants into this market given the large unmet medical need that remains as many people with CRSwNP continue to live with uncontrolled symptoms despite surgery, as shown in Figure 4, and corticosteroid treatment.
Of the 900,000 people diagnosed with CRSwNP in the United States, major European markets and Japan, it is estimated that approximately 300,000 adults are eligible for biologics in the United States alone. 14 We believe there is a significant opportunity for additional biologic entrants into this market given the large unmet medical need that remains as many people with CRSwNP continue to live with uncontrolled symptoms despite surgery, and corticosteroid treatment.
In the past several years, six biologic treatments for asthma have been approved by the FDA and five of these have achieved or are projected to achieve greater than $1.0 billion in annual sales by 2025, underscoring the need for new treatments and the large size of the market.
In the past several years, seven biologic treatments for asthma have been approved by the FDA and six of these have achieved or are projected to achieve greater than $1.0 billion in annual sales by 2026, underscoring the need for new treatments and the large size of the market.
Market opportunity for COPD Millions of people worldwide continue to suffer from COPD despite currently available treatments, underscoring the large need for more effective treatments for this patient population. Dupilumab, is currently the only biologic approved for the treatment of COPD and others are in late-stage clinical development.
Market opportunity for COPD Millions of people worldwide continue to suffer from COPD despite currently available treatments, underscoring the large need for more effective treatments for this patient population. Dupilumab and Mepolizumab are currently the only biologics approved for the treatment of COPD, and others are in late-stage clinical development.
Verekitug is, to our knowledge, the only monoclonal antibody currently in clinical development that targets the TSLP receptor. We believe these characteristics will translate into a differentiated profile, including improved clinical outcomes, substantially extended dosing intervals, and the potential to treat for a broad spectrum of TSLP-driven inflammatory diseases.
Verekitug is, to our knowledge, the only monoclonal antibody currently in clinical development that targets the TSLP receptor. We believe these characteristics will translate into a differentiated profile, including improved clinical outcomes, substantially extended dosing intervals, and the potential to treat for a broad spectrum of TSLP-driven inflammatory diseases. • Advance verekitug in severe asthma, CRSwNP and COPD.
We are currently conducting two separate multi-national, placebo-controlled, randomized Phase 2 clinical trials to investigate the efficacy of two extended dosing intervals of 12 and 24 weeks for patients with severe asthma and 12 weeks for patients with CRSwNP.
We conducted two separate multi-national, placebo-controlled, randomized Phase 2 clinical trials to investigate the efficacy of two extended dosing intervals of 12 and 24 weeks for patients with severe asthma and 12 weeks for patients with CRSwNP.
PRIME designation in the European Union The PRIority MEdicines (“PRIME”), scheme is intended to encourage product development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure.
PRIME designation in the European Union The PRIority MEdicines (“PRIME”), scheme is intended to encourage product development in areas of unmet medical need and is intended to support development of products representing substantial innovation reviewed under the centralized procedure.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition to the factors discussed in this section and elsewhere in this Annual Report, these factors include: • the commencement, enrollment, completion or results of our current or future preclinical and clinical trials for verekitug or any other potential future product candidates; • any delay in identifying and advancing a clinical candidate for our other programs; • any delay in our regulatory filings for verekitug or any other potential future product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • adverse results or delays, suspensions or terminations in future preclinical studies or clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial; • adverse regulatory decisions, including failure to receive regulatory approval of verekitug or any other potential future product candidates or the failure of a regulatory authority to accept data from preclinical studies or clinical trials conducted in other countries; • changes in laws or regulations applicable to verekitug or any other potential future product candidates, including but not limited to clinical trial requirements for approvals; • adverse developments concerning our manufacturers; • our inability to obtain adequate product supply for any approved product or inability to do so at acceptable prices; • our inability to establish collaborations, if needed; • our failure to commercialize verekitug or any other potential future product candidates, if approved; • additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to verekitug or any other potential future product candidates; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our growth; • actual or anticipated variations in quarterly and annual operating results; 95 • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or verekitug or any other potential future product candidates in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • changes in the structure of the healthcare payment systems; • overall performance of the equity markets; • sales of our common stock by us or our stockholders in the future; • trading volume of our common stock; • changes in accounting practices, such as the adoption of a new accounting standard; • ineffectiveness of our internal controls; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • general political and economic conditions; and • other events or factors, many of which are beyond our control.
Biggest changeIn addition to the factors discussed in this section and elsewhere in this Annual Report, these factors include: • the commencement, enrollment, completion or results of our current or future preclinical and clinical trials for verekitug or any other potential future product candidates; • any delay in identifying and advancing a clinical candidate for our other programs; • any delay in our regulatory filings for verekitug or any other potential future product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • adverse results or delays, suspensions or terminations in future preclinical studies or clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial; • adverse regulatory decisions, including failure to receive regulatory approval of verekitug or any other potential future product candidates or the failure of a regulatory authority to accept data from preclinical studies or clinical trials conducted in other countries; • changes in laws or regulations applicable to verekitug or any other potential future product candidates, including but not limited to clinical trial requirements for approvals; • adverse developments concerning our manufacturers; • our inability to obtain adequate product supply for any approved product or inability to do so at acceptable prices; • our inability to establish collaborations, if needed; • our failure to commercialize verekitug or any other potential future product candidates, if approved; • additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to verekitug or any other potential future product candidates; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our growth; • actual or anticipated variations in quarterly and annual operating results; • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or verekitug or any other potential future product candidates in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; 97 • changes in the structure of the healthcare payment systems; • overall performance of the equity markets; • sales of our common stock by us or our stockholders in the future; • trading volume of our common stock; • changes in accounting practices, such as the adoption of a new accounting standard; • ineffectiveness of our internal controls; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • general geopolitical, industry and macroeconomic conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, tariffs (including tariffs that have been or may in the future be imposed by the United States or other countries), sanctions, trade protection measures or other trade barriers (including further legislation or actions taken by the United States or other countries that restrict trade), social, political and economic risks and military acts of war or terrorism; and • other events or factors, many of which are beyond our control.
We are currently conducting, and may in the future conduct, clinical trials for verekitug or any other potential future product candidates outside the United States, and the FDA and comparable foreign regulatory authorities may not accept data from such trials.
We are currently conducting, and may in the future conduct, clinical trials for verekitug or any other potential future product candidates outside the United States, and the FDA and comparable foreign regulatory authorities may not accept data from such trials.
Our future capital requirements will depend on many factors, including but not limited to: • the scope, timing, progress, costs and results of the ongoing development of verekitug as well as for potential discovery, preclinical development and clinical trials for other potential future product candidates; • the number of clinical trials required for regulatory approval of verekitug or our potential future product candidates; • the costs, timing and outcome of regulatory review of verekitug or our potential future product candidates; • the costs associated with acquiring or licensing additional product candidates, technologies or assets, including the timing and amount of any milestones, royalties or other payments due in connection with our acquisitions and licenses; • the cost of manufacturing clinical and commercial supplies of verekitug or our potential future product candidates; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights; • the effectiveness of our approach to identifying target patient populations; 51 • our ability to maintain existing, and establish new, strategic collaborations or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement; • the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for verekitug or any other potential future product candidates for which we receive marketing approval; • the revenue, if any, received from commercial sales of verekitug or any other potential future product candidates for which we receive marketing approval; • expenses to attract, hire and retain skilled personnel; • the costs of operating as a public company; • our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payors; • the effect of macroeconomic trends including inflation and rising interest rates; • addressing any potential supply chain interruptions or delays; • the effect of competing technological and market developments; and • the extent to which we acquire or invest in business, products and technologies.
Our future capital requirements will depend on many factors, including but not limited to: • the scope, timing, progress, costs and results of the ongoing development of verekitug as well as for potential discovery, preclinical development and clinical trials for other potential future product candidates; • the number of clinical trials required for regulatory approval of verekitug or our potential future product candidates; • the costs, timing and outcome of regulatory review of verekitug or our potential future product candidates; • the costs associated with acquiring or licensing additional product candidates, technologies or assets, including the timing and amount of any milestones, royalties or other payments due in connection with our acquisitions and licenses; • the cost of manufacturing clinical and commercial supplies of verekitug or our potential future product candidates; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights; • the effectiveness of our approach to identifying target patient populations; • our ability to maintain existing, and establish new, strategic collaborations or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement; • the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for verekitug or any other potential future product candidates for which we receive marketing approval; • the revenue, if any, received from commercial sales of verekitug or any other potential future product candidates for which we receive marketing approval; • expenses to attract, hire and retain skilled personnel; • the costs of operating as a public company; • our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payors; • the effect of macroeconomic trends including inflation and rising interest rates; • addressing any potential supply chain interruptions or delays; • the effect of competing technological and market developments; and • the extent to which we acquire or invest in business, products and technologies.
Collaborations involving verekitug or any other potential future product candidates pose a number of risks, including the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization of verekitug or any other potential future product candidates or may elect not to continue or renew development or commercialization programs, based on clinical trial results, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, which divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon verekitug or any other potential future product candidates, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with verekitug or any other potential future product candidates; • a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements over proprietary rights, including trade secrets and intellectual property rights, contract interpretation, or the preferred course of development might cause delays or termination of the research, development or commercialization of verekitug or any other potential future product candidates, might lead to additional responsibilities for us with respect to such product candidate, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and 73 • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidate.
Collaborations involving verekitug or any other potential future product candidates pose a number of risks, including the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization of verekitug or any other potential future product candidates or may elect not to continue or renew development or commercialization programs, based on clinical trial results, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, which divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon verekitug or any other potential future product candidates, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with verekitug or any other potential future product candidates; • a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements over proprietary rights, including trade secrets and intellectual property rights, contract interpretation, or the preferred course of development might cause delays or termination of the research, development or commercialization of verekitug or any other potential future product candidates, might lead to additional responsibilities for us with respect to such product candidate, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidate.
Product candidates that appear promising in the early phases of development may fail to reach the market for several reasons, including: • clinical trial results may show product candidates to be less effective than expected (for example, a clinical trial could fail to meet its primary or key secondary endpoint(s)) or have an unacceptable safety or tolerability profile; • failure to receive the necessary regulatory approvals or a delay in receiving such approvals, which, among other things, may be caused by patients who fail the trial screening process, slow enrollment in clinical trials, patients dropping out of trials, patients lost to follow-up, length of time to achieve trial endpoints, additional time requirements for data analysis or a Biologics License Application (“BLA”) or similar foreign application preparation, discussions with the FDA, an FDA request for additional preclinical or clinical data (such as long-term toxicology studies) or unexpected safety or manufacturing issues; • preclinical study results may show verekitug or any other potential future product candidates to have harmful side effects; 54 • post-marketing approval requirements; or • the proprietary rights of others and their competing products and technologies that may prevent verekitug or any other potential future product candidates from being commercialized.
Product candidates that appear promising in the early phases of development may fail to reach the market for several reasons, including: • clinical trial results may show product candidates to be less effective than expected (for example, a clinical trial could fail to meet its primary or key secondary endpoint(s)) or have an unacceptable safety or tolerability profile; • failure to receive the necessary regulatory approvals or a delay in receiving such approvals, which, among other things, may be caused by patients who fail the trial screening process, slow enrollment in clinical trials, patients dropping out of trials, patients lost to follow-up, length of time to achieve trial endpoints, additional time requirements for data analysis or a Biologics License Application (“BLA”) or similar foreign application preparation, discussions with the FDA, an FDA request for additional preclinical or clinical data (such as long-term toxicology studies) or unexpected safety or manufacturing issues; • preclinical study results may show verekitug or any other potential future product candidates to have harmful side effects; • post-marketing approval requirements; or • the proprietary rights of others and their competing products and technologies that may prevent verekitug or any other potential future product candidates from being commercialized.
All of these milestones are based on a variety of assumptions which, if not realized as expected, may cause the timing of achievement of the milestones to vary considerably from our estimates, including: • our available capital resources or capital constraints we experience; • the rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling conflicts with participating clinicians and collaborators; • our ability to identify and enroll patients who meet clinical trial eligibility criteria; • our receipt of approvals by the FDA and other comparable foreign regulatory authorities and the timing thereof; • other actions, decisions or rules issued by regulators; • our ability to access sufficient, reliable and affordable supplies of materials used to manufacture verekitug or any other potential future product candidates; • the efforts of our collaborators with respect to the commercialization of verekitug or any other potential future product candidates; and • the securing of, costs related to, and timing issues associated with, product manufacturing as well as sales and marketing activities.
All of these milestones are based on a variety of assumptions which, if not realized as expected, may cause the timing of achievement of the milestones to vary considerably from our estimates, including: • our available capital resources or capital constraints we experience; • the rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling conflicts with participating clinicians and collaborators; 64 • our ability to identify and enroll patients who meet clinical trial eligibility criteria; • our receipt of approvals by the FDA and other comparable foreign regulatory authorities and the timing thereof; • other actions, decisions or rules issued by regulators; • our ability to access sufficient, reliable and affordable supplies of materials used to manufacture verekitug or any other potential future product candidates; • the efforts of our collaborators with respect to the commercialization of verekitug or any other potential future product candidates; and • the securing of, costs related to, and timing issues associated with, product manufacturing as well as sales and marketing activities.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by “5 percent shareholders” over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by “5 percent shareholders” over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited.
If the interim, top-line or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, verekitug or any other potential future product candidates may be harmed, which could harm our business, financial condition, results of operations and growth prospects.
If the interim, top-line or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the 65 conclusions reached, our ability to obtain approval for, and commercialize, verekitug or any other potential future product candidates may be harmed, which could harm our business, financial condition, results of operations and growth prospects.
If a natural disaster, power outage, public health crisis or other event occurred that prevented us from conducting our clinical trials, releasing clinical trial results or delaying our ability to obtain 100 regulatory approval for verekitug or any other potential future product candidates, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.
If a natural disaster, power outage, public health crisis or other event occurred that prevented us from conducting our clinical trials, releasing clinical trial results or delaying our ability to obtain regulatory approval for verekitug or any other potential future product candidates, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.
FDORA also gives the FDA increased authority to withdraw approval of a drug or biologic granted accelerated approval on an expedited basis if the sponsor fails to conduct such studies in a timely manner, send status updates on such studies to the FDA every 180 days to be publicly posted by the agency, or if such post-approval studies fail to verify the drug’s predicted clinical benefit.
FDORA also gives the FDA increased authority to withdraw approval of a drug or biologic granted accelerated approval on an expedited basis if the sponsor fails to conduct such studies in a timely manner, send status updates on such studies to the FDA every 180 days to be publicly posted by the agency, or if such post-approval studies fail to 81 verify the drug’s predicted clinical benefit.
We may be subject to, and may in the future become party to, or threatened with, adversarial proceedings or litigation concerning intellectual property rights with respect to verekitug or any other potential future product candidates we may develop, including interference proceedings, post grant review, inter partes review, and derivation proceedings before the USPTO and similar proceedings in foreign jurisdictions such as oppositions before the European Patent Office.
We may be subject to, and may in the future become party to, or threatened with, adversarial proceedings or litigation concerning intellectual property rights with respect to verekitug or any other potential future product candidates we may develop, including 90 interference proceedings, post grant review, inter partes review, and derivation proceedings before the USPTO and similar proceedings in foreign jurisdictions such as oppositions before the European Patent Office.
Even if we are able to establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: • the failure of the third-party manufacturer to comply with applicable regulatory requirements and reliance on third parties for manufacturing process development, regulatory compliance and quality assurance; • manufacturing delays if our third-party manufacturers give greater priority to the supply of other products over verekitug or any other potential future product candidates or otherwise do not satisfactorily perform according to the terms of the agreement between us; • limitations on supply availability resulting from capacity and scheduling constraints of third parties; • the possible breach of manufacturing agreements by third parties because of factors beyond our control; 74 • the possible termination or non-renewal of the manufacturing agreements by the third party, at a time that is costly or inconvenient to us; and • the possible misappropriation of our proprietary information, including our trade secrets and know-how.
Even if we are able to establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: • the failure of the third-party manufacturer to comply with applicable regulatory requirements and reliance on third parties for manufacturing process development, regulatory compliance and quality assurance; 75 • manufacturing delays if our third-party manufacturers give greater priority to the supply of other products over verekitug or any other potential future product candidates or otherwise do not satisfactorily perform according to the terms of the agreement between us; • limitations on supply availability resulting from capacity and scheduling constraints of third parties; • the possible breach of manufacturing agreements by third parties because of factors beyond our control; • the possible termination or non-renewal of the manufacturing agreements by the third party, at a time that is costly or inconvenient to us; and • the possible misappropriation of our proprietary information, including our trade secrets and know-how.
Further, if this occurs, our competitors or other third parties may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their drug earlier than might otherwise be the case. Any of the foregoing could materially harm our business, financial condition, results of operations and growth prospects.
Further, if this occurs, our competitors or other third parties may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their drug 92 earlier than might otherwise be the case. Any of the foregoing could materially harm our business, financial condition, results of operations and growth prospects.
Compliance with these requirements is costly, and any failure to comply or other issues with verekitug or any other potential future product candidates post-approval could adversely affect our business, financial condition, results of operations and growth prospects. 55 Certain estimates of market opportunity and forecasts may prove to be smaller than we believe.
Compliance with these requirements is costly, and any failure to comply or other issues with verekitug or any other potential future product candidates post-approval could adversely affect our business, financial condition, results of operations and growth prospects. Certain estimates of market opportunity and forecasts may prove to be smaller than we believe.
If we are unable to do so, we may have to curtail the development of verekitug or any other potential future product candidates for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
If we are unable to do so, we may have to curtail the development of verekitug or any other potential future product candidates for which we are seeking to collaborate, reduce or delay its development program or one 73 or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
Our limited operating history as a company makes any assessment of our future success and viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by early-stage biopharmaceutical companies in rapidly evolving fields, and we have not yet demonstrated an ability to successfully overcome such risks and difficulties.
Our limited operating history as a company makes any assessment of our future success and viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by early-stage biopharmaceutical companies in rapidly evolving fields, and we have not yet 50 demonstrated an ability to successfully overcome such risks and difficulties.
Non-compliance could also result in a material adverse effect on our business, financial position and results of operations. In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows.
Non-compliance could also result in a material adverse effect on our business, financial position and results of operations. 58 In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows.
The FDA, the EMA, or the European Commission, or other comparable foreign regulatory authorities could also require us to conduct further studies prior to considering our application or granting approval of any type, including, for example, if other products are approved via the accelerated pathway, or comparable foreign abbreviated pathway, and subsequently converted by FDA or comparable foreign 80 regulatory authorities to full approval.
The FDA, the EMA, or the European Commission, or other comparable foreign regulatory authorities could also require us to conduct further studies prior to considering our application or granting approval of any type, including, for example, if other products are approved via the accelerated pathway, or comparable foreign abbreviated pathway, and subsequently converted by FDA or comparable foreign regulatory authorities to full approval.
An important change introduced by the Leahy-Smith Act is that, as of March 16, 2013, the United States transitioned to a “first-to-file” system for deciding which party should be granted a patent when two or more patent applications are filed by different 91 parties claiming the same invention.
An important change introduced by the Leahy-Smith Act is that, as of March 16, 2013, the United States transitioned to a “first-to-file” system for deciding which party should be granted a patent when two or more patent applications are filed by different parties claiming the same invention.
Artificial intelligence presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data. Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations.
Artificial intelligence presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data. Issues in the development and use of artificial intelligence (“AI”), combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations.
If later-stage clinical trials do not produce favorable results, our ability to obtain regulatory approval for verekitug or any other potential future product candidates will be adversely impacted. 63 For planning purposes, we sometimes estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development objectives.
If later-stage clinical trials do not produce favorable results, our ability to obtain regulatory approval for verekitug or any other potential future product candidates will be adversely impacted. For planning purposes, we sometimes estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development objectives.
Any inability to access or delay in accessing these funds could adversely affect our business and financial position. In addition, changes in regulations governing financial institutions are beyond our control and difficult to predict; consequently, the impact of such changes on our business and results of operations is difficult to predict and may have an adverse effect on us.
Any inability to access or delay in accessing these funds could adversely affect our business and financial position. In addition, changes in regulations governing financial institutions are beyond our control and difficult to predict; 102 consequently, the impact of such changes on our business and results of operations is difficult to predict and may have an adverse effect on us.
For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement causing us to fail to make a required related party transaction disclosure. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.
For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement causing us to fail to make a required related party transaction disclosure. Additionally, controls can 104 be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.
Preparing for and complying with these obligations requires us to devote significant resources and may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf. We may at times fail in our efforts to comply with our privacy and data security obligations.
Preparing for and complying with these obligations requires us to devote significant resources and may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf. 59 We may at times fail in our efforts to comply with our privacy and data security obligations.
It is possible that even if verekitug or any other potential future product candidates have a beneficial effect, that effect will not be detected during clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis of our clinical 60 trials.
It is possible that even if verekitug or any other potential future product candidates have a beneficial effect, that effect will not be detected during clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis of our clinical trials.
The facilities used by our contract manufacturers to manufacture verekitug or any other potential future product candidates must be evaluated by the FDA and comparable foreign regulatory authorities. We have limited control over the manufacturing process of, and are dependent on, our contract manufacturing partners for compliance with cGMPs.
The facilities used by our contract 76 manufacturers to manufacture verekitug or any other potential future product candidates must be evaluated by the FDA and comparable foreign regulatory authorities. We have limited control over the manufacturing process of, and are dependent on, our contract manufacturing partners for compliance with cGMPs.
Reference pricing used by various EU Member States and parallel distribution, or arbitrage between low-priced and high-priced EU Member States, can further reduce prices. There can be no assurance that any country that has price controls or reimbursement limitations for 85 biopharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products.
Reference pricing used by various EU Member States and parallel distribution, or arbitrage between low-priced and high-priced EU Member States, can further reduce prices. There can be no assurance that any country that has price controls or reimbursement limitations for biopharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products.
Export controls and trade sanctions laws and regulations may restrict or prohibit altogether the provision, sale, or supply of our products to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions or an embargo. We are also subject to anti-corruption and anti-bribery laws, including the U.S.
Export controls and trade sanctions laws and regulations may restrict or prohibit altogether the 87 provision, sale, or supply of our products to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions or an embargo. We are also subject to anti-corruption and anti-bribery laws, including the U.S.
In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit, or prevent marketing approval of a product candidate. Any marketing approval that we may ultimately obtain could be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.
In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit, or prevent marketing approval of a 55 product candidate. Any marketing approval that we may ultimately obtain could be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.
Additional funds may not be available on terms that are favorable to us, or at all. We, our collaborators, and our service providers are subject to a variety of stringent and evolving privacy and data security laws, regulations, and rules, contractual obligations, industry standards, policies, and other obligations related to privacy and data security.
Additional funds may not be available on terms that are favorable to us, or at all. 57 We, our collaborators, and our service providers are subject to a variety of stringent and evolving privacy and data security laws, regulations, and rules, contractual obligations, industry standards, policies, and other obligations related to privacy and data security.
We may experience delays in completing our clinical trials or preclinical studies and initiating or completing additional clinical trials or preclinical studies, including as a result of regulators not allowing or delay in allowing clinical trials to proceed under an IND or similar foreign authorization, or not approving or delaying approval for any clinical trial grant or similar approval we need to initiate a clinical trial.
We may experience delays in completing our clinical trials or preclinical studies and initiating or completing additional clinical trials or preclinical studies, including as a result of regulators not allowing or delay in allowing clinical trials to proceed under an IND or similar foreign authorization, or not approving or delaying approval for any clinical trial grant or similar approval we need 63 to initiate a clinical trial.
Further, as a company with an increasingly global presence, our systems are subject to frequent attacks, which are becoming more commonplace in the industry, including attempted hacking, 71 phishing attempts, such as cyber-related threats involving spoofed or manipulated electronic communications, which increasingly represent considerable risk.
Further, as a company with an increasingly global presence, our systems are subject to frequent attacks, which are becoming more commonplace in the industry, including attempted hacking, phishing attempts, such as cyber-related threats involving spoofed or manipulated electronic communications, which increasingly represent considerable risk.
In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. We may also submit marketing applications in other countries.
In many jurisdictions outside the United 77 States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. We may also submit marketing applications in other countries.
If any of the physicians or other professionals or entities with whom we expect to do business is found to not be in compliance with applicable laws, they may be 81 subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment.
If any of the physicians or other professionals or entities with whom we expect to do business is found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment.
If we, our vendors, or our third-party partners experience an actual or perceived breach or privacy or security incident because of the use of generative artificial intelligence, we may lose valuable intellectual property and confidential information and our 59 reputation and the public perception of the effectiveness of our security measures could be harmed.
If we, our vendors, or our third-party partners experience an actual or perceived breach or privacy or security incident because of the use of generative artificial intelligence, we may lose valuable intellectual property and confidential information and our reputation and the public perception of the effectiveness of our security measures could be harmed.
We intend to establish a sales and marketing organization, either on our own or in collaboration with third parties, with technical expertise and supporting distribution capabilities to 68 commercialize verekitug or any other potential future product candidates that may receive regulatory approval in key territories.
We intend to establish a sales and marketing organization, either on our own or in collaboration with third parties, with technical expertise and supporting distribution capabilities to commercialize verekitug or any other potential future product candidates that may receive regulatory approval in key territories.
The competition for qualified personnel in the biotechnology and biopharmaceutical industries is intense, and our future success depends upon our ability to attract, retain, and motivate highly skilled scientific, technical and managerial employees. We face competition for personnel from other companies, universities, public and private research institutions, and other organizations.
The competition for qualified personnel in the biotechnology and biopharmaceutical industries is intense, and our future success depends upon our ability to attract, retain, and motivate highly skilled scientific, technical and managerial 70 employees. We face competition for personnel from other companies, universities, public and private research institutions, and other organizations.
Further, derivation proceedings, entitlement proceedings, ex parte reexamination, 87 inter partes review, post grant review, and opposition proceedings provoked by third parties or brought by the USPTO or any foreign patent authority may be used to challenge the inventorship, ownership, claim scope, or validity of our patents.
Further, derivation proceedings, entitlement proceedings, ex parte reexamination, inter partes review, post grant review, and opposition proceedings provoked by third parties or brought by the USPTO or any foreign patent authority may be used to challenge the inventorship, ownership, claim scope, or validity of our patents.
In the case of employees, the agreements also provide that all inventions conceived by the individual, and that are related to our current or planned business or research and development or made during normal working hours, on our premises or using our equipment or proprietary 92 information, are our exclusive property.
In the case of employees, the agreements also provide that all inventions conceived by the individual, and that are related to our current or planned business or research and development or made during normal working hours, on our premises or using our equipment or proprietary information, are our exclusive property.
We may not be able to obtain adequate remedies for any breaches of such agreements. Ultimately, enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive, and time consuming, and the outcome is unpredictable.
We may not be able to obtain 94 adequate remedies for any breaches of such agreements. Ultimately, enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive, and time consuming, and the outcome is unpredictable.
Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial 101 new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.
Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.
In addition, such foreign trials are subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the United States or the applicable jurisdiction.
In addition, such 54 foreign trials are subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the United States or the applicable jurisdiction.
Although the UK is regarded as a third country under the EU GDPR, the European Commission has adopted an adequacy decision in favor of the UK, a decision recognizing the UK as providing adequate protection under the EU GDPR and enabling data transfers from EU Member States to the UK without additional safeguards.
Although the UK is regarded as a third country under the EU GDPR, the European Commission adopted an adequacy decision in favor of the UK, a decision recognizing the UK as providing adequate protection under the EU GDPR and enabling data transfers from EU Member States to the UK without additional safeguards.
As a result, the top-line or preliminary results that we report may differ from future results of the same studies or trials, or different conclusions or considerations may qualify such results, once 64 additional data have been received and fully evaluated.
As a result, the top-line or preliminary results that we report may differ from future results of the same studies or trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.
Results of ongoing or future clinical trials of verekitug or any other potential future product candidates could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics, despite a favorable tolerability profile observed in earlier-stage testing.
Results of ongoing or future clinical trials of 66 verekitug or any other potential future product candidates could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics, despite a favorable tolerability profile observed in earlier-stage testing.
These contractors may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could impede their ability to devote appropriate time to our clinical programs.
These contractors may also have 71 relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could impede their ability to devote appropriate time to our clinical programs.
If we do not have 72 sufficient funds, we may not be able to further develop verekitug or any other potential future product candidates or bring them to market and generate product revenue. Collaborations are complex and time-consuming to negotiate and document.
If we do not have sufficient funds, we may not be able to further develop verekitug or any other potential future product candidates or bring them to market and generate product revenue. Collaborations are complex and time-consuming to negotiate and document.
Even if we obtain such designations for verekitug or any other potential future product candidates, there can be no assurance that we will realize their intended benefits. 78 For example, we may seek a Fast Track Designation for verekitug or any other potential future product candidates we develop.
Even if we obtain such designations for verekitug or any other potential future product candidates, there can be no assurance that we will realize their intended benefits. For example, we may seek a Fast Track Designation for verekitug or any other potential future product candidates we develop.
In the EU, marketing exclusivity prevents the EMA and competent authorities in the EU from accepting another application for 79 marketing authorization for a similar medicinal product in the same therapeutic indication as the authorized orphan product. The applicable period is seven years in the U.S. and ten years in the EU.
In the EU, marketing exclusivity prevents the EMA and competent authorities in the EU from accepting another application for marketing authorization for a similar medicinal product in the same therapeutic indication as the authorized orphan product. The applicable period is seven years in the U.S. and ten years in the EU.
Congress has indicated that it will continue to seek new legislative measures to control drug costs. In December 2021, Regulation No 2021/2282 on Health Technology Assessment (“HTA”) amending Directive 2011/24/EU, was adopted in the EU.
Congress has indicated that it will continue to seek new legislative measures to control drug costs. 85 In December 2021, Regulation No 2021/2282 on Health Technology Assessment (“HTA”) amending Directive 2011/24/EU, was adopted in the EU.
Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions 99 and the stability of global financial markets.
Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary product recalls; • fines, warning letters or holds on clinical trials; • refusal by the FDA or comparable foreign regulatory authorities to approve pending applications or supplements to approved applications filed by us or suspension, variation or withdrawal of approvals; • product seizure or detention or refusal to permit the import or export of verekitug or any other potential future product candidates; • total or partial suspension of production, distribution, manufacturing or clinical trials; • operating restrictions; • suspension of licenses; and 77 • injunctions, fines or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary product recalls; • fines, warning letters or holds on clinical trials; • refusal by the FDA or comparable foreign regulatory authorities to approve pending applications or supplements to approved applications filed by us or suspension, variation or withdrawal of approvals; 78 • product seizure or detention or refusal to permit the import or export of verekitug or any other potential future product candidates; • total or partial suspension of production, distribution, manufacturing or clinical trials; • operating restrictions; • suspension of licenses; and • injunctions, fines or the imposition of civil or criminal penalties.
Accordingly, from time to time we may consider 56 opportunities to acquire, make investments in or license other technologies, products and businesses that may enhance our capabilities, complement our existing products and technologies or expand the breadth of our markets or customer base.
Accordingly, from time to time we may consider opportunities to acquire, make investments in or license other technologies, products and businesses that may enhance our capabilities, complement our existing products and technologies or expand the breadth of our markets or customer base.
We may experience challenges in recruiting principal investigators and patients to participate in ongoing and future clinical trials for verekitug or any other potential future product candidates if we are unable to sufficiently demonstrate the potential of such product candidate.
We may experience challenges in recruiting principal investigators and patients to participate in ongoing and future clinical trials for verekitug or any other potential future product candidates if we are unable to sufficiently demonstrate the potential of such product candidates.
Further, patients often acclimate to the treatment regimen that they are currently taking and do not want to switch unless their physicians recommend switching products or they are required to switch due to lack of coverage and adequate reimbursement.
Further, patients often acclimate to the treatment regimen that they are currently taking and do not want to switch unless their physicians 67 recommend switching products or they are required to switch due to lack of coverage and adequate reimbursement.
We face competition with respect to our indications for verekitug and will face competition with respect to any other drug candidates that we may seek to develop or commercialize in the future, from major pharmaceutical 67 companies, specialty pharmaceutical companies and biotechnology companies worldwide.
We face competition with respect to our indications for verekitug and will face competition with respect to any other drug candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide.
In addition, there can be no assurance that any such products that are approved will be manufactured or 66 produced economically, successfully commercialized or widely accepted in the marketplace or be more effective than other commercially available alternatives.
In addition, there can be no assurance that any such products that are approved will be manufactured or produced economically, successfully commercialized or widely accepted in the marketplace or be more effective than other commercially available alternatives.
Our 70 failure or the failure of third parties to comply with the applicable protocol, informed consent forms, legal and regulatory requirements and scientific standards can result in rejection of our clinical trial data or other sanctions.
Our failure or the failure of third parties to comply with the applicable protocol, informed consent forms, legal and regulatory requirements and scientific standards can result in rejection of our clinical trial data or other sanctions.
Although the development and commercialization of verekitug in severe asthma, CRSwNP and COPD are our initial focus, as part of our longer-term growth strategy, we plan to initiate and advance development of verekitug in additional indications.
Although the development and potential commercialization of verekitug in severe asthma, CRSwNP and COPD are our initial focus, as part of our longer-term growth strategy, we plan to initiate and advance development of verekitug in additional indications.
We are subject to the reporting requirements of the Exchange Act, which require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition.
We are subject to the reporting requirements of the Exchange Act, which require, among other things, that we file with the SEC annual, quarterly and current reports with respect 103 to our business and financial condition.
Although to our knowledge we have not experienced any significant cybersecurity incident to date, if such an event were to occur, it could seriously harm our development programs and our business operations.
Although to our knowledge we have not experienced any significant 72 cybersecurity incident to date, if such an event were to occur, it could seriously harm our development programs and our business operations.
Individual EU Member States will 83 continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement.
Individual EU Member States will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement.
In addition, even if verekitug or any other potential future product candidates are granted such designations, we may not be able to realize the intended benefits of such designations.
In addition, even if verekitug or any other potential future product candidates are granted such designations, we may not be able to maintain such designations or realize the intended benefits of such designations.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.
Uncertainties resulting from the initiation and 89 continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.
Our expected growth could also require significant capital expenditures and may divert financial 69 resources from other projects, such as the development of additional product candidates.
Our expected growth could also require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates.
If any such changes were to be imposed, they could adversely affect the operation of our business. See the sections titled “Business—Government regulation—Coverage and reimbursement” and “—Healthcare reform.” The containment of healthcare costs has become a priority of federal, state and foreign governments, and the prices of products have been a focus in this effort.
If any such changes were to be imposed, they could adversely affect the operation of our business. See the sections titled “Business—Government regulation—Coverage and reimbursement” and “—Healthcare reform”. The containment of healthcare costs has become a priority of federal, state and foreign governments, and the prices of products have been a focus in this effort.
Verekitug or any other potential future product candidates for which we intend to seek approval as biological products may face competition sooner than anticipated. The Biologics Price Competition and Innovation Act of 200 (the “BPCIA”) created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.
Verekitug or any other potential future product candidates for which we intend to seek approval as biological products may face competition sooner than anticipated. The Biologics Price Competition and Innovation Act of 2010 (the “BPCIA”) created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.
Even if verekitug or our potential future product candidates are approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. To date, we have funded our operations principally through private financings and our initial public offering (“IPO”), which closed in October 2024.
Even if verekitug or our potential future product candidates are approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate. To date, we have funded our 51 operations principally through private financings, our initial public offering (“IPO”), which closed in October 2024.
The federal NOLs are not subject to expiration and are limited in utilization to 80% of our taxable income 102 and the state NOLs begin to expire in 2041.
The federal NOLs are not subject to expiration and are limited in utilization to 80% of our taxable income and the state NOLs begin to expire in 2041.
For more information on healthcare laws and regulations that may impact our company, see the section titled “Business—Government regulation—Other healthcare laws.” The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.
For more information on healthcare laws and regulations that may impact our company, see the section titled “Business—Government regulation—Other healthcare laws”. The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.
In addition, we limited control over the ability of our 75 contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel.
In addition, we limited control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel.
Any cybersecurity incident could adversely affect our business, by leading to, for example, the loss of trade secrets or other intellectual property, demands for ransom or other forms of blackmail, or the unauthorized disclosure of personal or other sensitive information of our employees, clinical trial patients, customers, and others.
Any cybersecurity incident or data breach could adversely affect our business, by leading to, for example, the loss of trade secrets or other intellectual property, demands for ransom or other forms of blackmail, or the unauthorized disclosure of personal or other sensitive information of our employees, clinical trial patients, customers, and others.
The 93 FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names.
The FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names.
The Delaware Forum Provision does not apply to any causes of action arising under the Securities Act or the Exchange Act.
The Delaware Forum 100 Provision does not apply to any causes of action arising under the Securities Act or the Exchange Act.
For example: • verekitug or any other potential future product candidates, if approved, may eventually become commercially available in generic or biosimilar product forms; • others may be able to make similar antibodies to verekitug or any other potential future product candidates that are not covered by the claims of the patents that we license or may own in the future; • we, or current or future licensors or collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future, potentially resulting in the invalidation of such patents or refusal of such applications; • we, or current or future licensors or collaborators, might not have been the first to file patent applications covering certain of our or their inventions; • we, or current or future licensors or collaborators, may fail to meet our obligations to the U.S. government regarding any in licensed patents and patent applications funded by U.S. government grants, leading to the loss or unenforceability of patent rights; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing on our owned or licensed intellectual property rights; • it is possible that our pending patent applications or those that we may own or license in the future will not lead to issued patents; • it is possible that there are prior public disclosures that could invalidate our patents; • it is possible that there are unpublished patent applications that may later issue with claims covering verekitug or any other potential future product candidates or technology similar to ours; • it is possible that our patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable or result in a change in ownership; • issued patents to which we hold rights may be held invalid, unenforceable, or narrowed in scope, including as a result of legal challenges by our competitors; • the claims of our issued patents or patent applications, if and when issued, may not cover verekitug or any other potential future product candidates or narrowly cover them in such a way that competitors may be able to design around to avoid infringement allegations; • the laws of foreign countries may not protect our proprietary rights or the proprietary rights of current or future licensors or collaborators to the same extent as the laws of the United States; • the inventors of our patents or patent applications may become involved with competitors, develop products or processes that design around our patents, or become hostile to it or the patents or patent applications on which they are named as inventors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we have engaged in scientific collaborations in the past and we intend to continue to do so in the future, and our collaborators may develop adjacent or competing products that are outside the scope of our patents; • we may not develop additional proprietary technologies that are patentable; 94 • verekitug or any other potential future product candidates we develop may be covered by third-party patents or other exclusive rights; • the patents of others may prohibit or otherwise harm our business; or • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently commercialize the technology and/or file a patent covering such intellectual property.
For example: • verekitug or any other potential future product candidates, if approved, may eventually become commercially available in generic or biosimilar product forms; • others may be able to make similar antibodies to verekitug or any other potential future product candidates that are not covered by the claims of the patents that we license or may own in the future; • we, or current or future licensors or collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future, potentially resulting in the invalidation of such patents or refusal of such applications; • we, or current or future licensors or collaborators, might not have been the first to file patent applications covering certain of our or their inventions; • we, or current or future licensors or collaborators, may fail to meet our obligations to the U.S. government regarding any in licensed patents and patent applications funded by U.S. government grants, leading to the loss or unenforceability of patent rights; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing on our owned or licensed intellectual property rights; • it is possible that our pending patent applications or those that we may own or license in the future will not lead to issued patents; • it is possible that there are prior public disclosures that could invalidate our patents; • it is possible that there are unpublished patent applications that may later issue with claims covering verekitug or any other potential future product candidates or technology similar to ours; • it is possible that our patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable or result in a change in ownership; • issued patents to which we hold rights may be held invalid, unenforceable, or narrowed in scope, including as a result of legal challenges by our competitors; • the claims of our issued patents or patent applications, if and when issued, may not cover verekitug or any other potential future product candidates or narrowly cover them in such a way that competitors may be able to design around to avoid infringement allegations; • the laws of foreign countries may not protect our proprietary rights or the proprietary rights of current or future licensors or collaborators to the same extent as the laws of the United States; • the inventors of our patents or patent applications may become involved with competitors, develop products or processes that design around our patents, or become hostile to it or the patents or patent applications on which they are named as inventors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we have engaged in scientific collaborations in the past and we intend to continue to do so in the future, and our collaborators may develop adjacent or competing products that are outside the scope of our patents; • we may not develop additional proprietary technologies that are patentable; • verekitug or any other potential future product candidates we develop may be covered by third-party patents or other exclusive rights; • the patents of others may prohibit or otherwise harm our business; or • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently commercialize the technology and/or file a patent covering such intellectual property. 96 Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
We may not have the financial resources to continue development of verekitug or any other potential future product candidates if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, verekitug or any potential future product candidates, including: • our inability to demonstrate to the satisfaction of the FDA, EMA, the European Commission, or other comparable foreign regulatory authorities that verekitug is, or any other potential future product candidates are, safe and effective; • insufficiency of our financial and other resources to complete the necessary clinical trials and preclinical studies; • negative or inconclusive results from our clinical trials, preclinical studies or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional clinical trials or preclinical studies or abandon a program; • product-related adverse events experienced by subjects in our clinical trials, or by individuals using drugs or therapeutic biologics similar to verekitug or any other potential future product candidates; • delays in submitting an Investigational New Drug (“IND”) application or other regulatory submission to the FDA, EMA, or other comparable foreign regulatory authorities, or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial or a suspension, termination, or hold, of a clinical trial once commenced; • conditions imposed by the FDA, the competent authorities of individual EU Member States or other comparable foreign regulatory authorities regarding the scope or design of our clinical trials; • poor performance of verekitug or any other potential future product candidates during clinical trials; • better than expected performance of control arms, such as placebo groups, which could lead to negative or inconclusive results from our clinical trials; • delays in enrolling subjects in our clinical trials; 53 • high drop-out rates of subjects from our clinical trials; • inadequate supply or quality of verekitug or any other potential future product candidates or other materials necessary for the conduct of our clinical trials; • higher than anticipated clinical trial or manufacturing costs; • unfavorable FDA, EMA, competent authorities of individual EU Member States, or other comparable foreign regulatory authority inspection and review of our clinical trial sites; • failure of our third-party contractors or investigators to comply with regulatory requirements or the clinical trial protocol or otherwise meet their contractual obligations in a timely manner, or at all; • delays and changes in regulatory requirements, policies and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our therapies in particular; or • varying interpretations of data by the FDA, EMA, the European Commission, and other comparable foreign regulatory authorities.
If verekitug or any other potential future product candidates encounter safety or efficacy problems, development delays or regulatory issues or other problems, our development plans and business would be materially harmed. 53 We may not have the financial resources to continue development of verekitug or any other potential future product candidates if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, verekitug or any potential future product candidates, including: • our inability to demonstrate to the satisfaction of the FDA, EMA, the European Commission, or other comparable foreign regulatory authorities that verekitug is, or any other potential future product candidates are, safe and effective; • insufficiency of our financial and other resources to complete the necessary clinical trials and preclinical studies; • negative or inconclusive results from our clinical trials, preclinical studies or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional clinical trials or preclinical studies or abandon a program; • product-related adverse events experienced by subjects in our clinical trials, or by individuals using drugs or therapeutic biologics similar to verekitug or any other potential future product candidates; • delays in submitting an Investigational New Drug (“IND”) application or other regulatory submission to the FDA, EMA, or other comparable foreign regulatory authorities, or delays or failure in obtaining the necessary authorizations from regulators to commence a clinical trial or a suspension, termination, or hold, of a clinical trial once commenced; • conditions imposed by the FDA, the competent authorities of individual EU Member States or other comparable foreign regulatory authorities regarding the scope or design of our clinical trials; • poor performance of verekitug or any other potential future product candidates during clinical trials; • better than expected performance of control arms, such as placebo groups, which could lead to negative or inconclusive results from our clinical trials; • delays in enrolling subjects in our clinical trials; • high drop-out rates of subjects from our clinical trials; • inadequate supply or quality of verekitug or any other potential future product candidates or other materials necessary for the conduct of our clinical trials; • higher than anticipated clinical trial or manufacturing costs; • unfavorable FDA, EMA, competent authorities of individual EU Member States, or other comparable foreign regulatory authority inspection and review of our clinical trial sites; • failure of our third-party contractors or investigators to comply with regulatory requirements or the clinical trial protocol or otherwise meet their contractual obligations in a timely manner, or at all; • delays and changes in regulatory requirements, policies and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our therapies in particular; or • varying interpretations of data by the FDA, EMA, the European Commission, and other comparable foreign regulatory authorities.
For more information on the laws and regulations that may impact coverage and reimbursement of verekitug or any other potential future product candidates, see the section titled “Business—Government regulation—Coverage and reimbursement.” Ongoing healthcare legislative and regulatory reform measures may have a material adverse effect on our business and results of operations.
For more information on the laws and regulations that may impact coverage and reimbursement of verekitug or any other potential future product candidates, see the section titled “Business—Government regulation—Coverage and reimbursement”. 84 Ongoing healthcare legislative and regulatory reform measures may have a material adverse effect on our business and results of operations.
Our quarterly and annual operating results may fluctuate significantly, due to a variety of factors, many of which are outside of our control and may be difficult to predict, including: • the timing and cost of, and level of investment in, research, development and, if approved, commercialization activities relating to verekitug or any other potential future product candidates, which may change from time to time; • the timing and status of enrollment for clinical trials; • the cost of manufacturing verekitug or any other potential future product candidates, as well as building out our supply chain, which may vary depending on the quantity of production and the terms of our agreements with manufacturers; • expenditures that we may incur to acquire, develop or commercialize additional product candidates and technologies; • timing and amount of any milestone, royalty or other payments due under any collaboration or license agreement; • future accounting pronouncements or changes in our accounting policies; • the timing and success or failure of preclinical studies and clinical trials for verekitug or any other potential future product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; • the timing of receipt of approvals for verekitug or any other potential future product candidates from regulatory authorities in the United States and internationally; • exchange rate fluctuations; 96 • coverage and reimbursement policies with respect to verekitug or any other potential future product candidates, if approved, and potential future drugs that compete with our products; and • the level of demand for verekitug or any other potential future product candidates, if approved, which may vary significantly over time.
Our quarterly and annual operating results may fluctuate significantly, due to a variety of factors, many of which are outside of our control and may be difficult to predict, including: • the timing and cost of, and level of investment in, research, development and, if approved, commercialization activities relating to verekitug or any other potential future product candidates, which may change from time to time; • the timing and status of enrollment for clinical trials; • the cost of manufacturing verekitug or any other potential future product candidates, as well as building out our supply chain, which may vary depending on the quantity of production and the terms of our agreements with manufacturers; • expenditures that we may incur to acquire, develop or commercialize additional product candidates and technologies; • timing and amount of any milestone, royalty or other payments due under any collaboration or license agreement; • future accounting pronouncements or changes in our accounting policies; • the timing and success or failure of preclinical studies and clinical trials for verekitug or any other potential future product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; • the timing of receipt of approvals for verekitug or any other potential future product candidates from regulatory authorities in the United States and internationally; • exchange rate fluctuations; • coverage and reimbursement policies with respect to verekitug or any other potential future product candidates, if approved, and potential future drugs that compete with our products; and • the level of demand for verekitug or any other potential future product candidates, if approved, which may vary significantly over time. 98 The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results.
We may also experience delays in developing a sustainable, reproducible and scalable manufacturing process or transferring that process to commercial partners, which may prevent us from completing our future clinical studies or 61 commercializing our products on a timely or profitable basis, if at all.
We may also experience delays or encounter difficulties in developing a sustainable, reproducible and scalable manufacturing process or transferring that process to commercial partners, which may prevent us from completing our future clinical studies or commercializing our products on a timely or profitable basis, if at all.
Item 1A. Risk Fact ors. Our business involves significant risks. Investors should carefully consider the risks and uncertainties described below, as well as the other information in this Annual Report on Form 10-K (this “Annual Report”) and in the other documents that we file with the Securities and Exchange Commission (the “SEC”).
Item 1A. Risk F actors. Our business involves significant risks. Investors should carefully consider the risks and uncertainties described below, as well as the other information in this Annual Report on Form 10-K (this “Annual Report”) and in the other documents that we file with the Securities and Exchange Commission (the “SEC”).

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have also implemented a process to assess and review the cybersecurity practices of certain third-party vendors and service providers that may be critical to the operations of our business and who have access to our information systems including, as appropriate, through the inclusion of cybersecurity requirements in our contracts. 103 We have not identified any cybersecurity incidents or threats that have materially affected us or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition; however, like other companies in our industry, we and our third-party vendors may, from time to time, experience threats and security incidents relating to our and our third-party vendors’ information systems.
Biggest changeWe have not identified any cybersecurity incidents or threats that have materially affected us or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition; however, like other companies in our industry, we and our third-party vendors may, from time to time, experience threats and security incidents relating to our and our third-party vendors’ information systems.
For more information, see “ Risk Factors–Risks related to our dependence on third parties–Our information technology systems, or those used by our CROs or other contractors or consultants, may fail or suffer security breaches, which could adversely affect our business. ” Governance Related to Cybersecurity Risks Our audit committee of the board of directors, or the Audit Committee, is responsible for overseeing cybersecurity risk , pursuant to the Audit Committee charter, and periodically updates our board of directors on such matters.
For more information, see “ Risk Factors–Risks related to our dependence on third parties–Our information technology systems, or those used by our CROs or other contractors or consultants, may fail or suffer security breaches, which could adversely affect our business. ” Governance Related to Cybersecurity Risks Our audit committee of the board of directors, (the “Audit Committee”), is responsible for overseeing cybersecurity risk, pursuant to the Audit Committee charter, and periodically updates our board of directors on such matters .
Cyber Risk Management and Strategy We have adopted processes for assessing, identifying, and managing cybersecurity risks, which are built into our information technology function and are designed to help protect our information assets and operations from internal and external cybersecurity threats, protect employee and clinical trial information from unauthorized access or attack, as well as secure our networks and systems.
Cyber Risk Management and Strategy We have adopted processes for assessing, identifying, and managing cybersecurity risks, that are integrated into our overall enterprise management framework, built into our information technology function and are designed to help protect our information assets and operations from internal and external cybersecurity threats, protect employee and clinical trial information from unauthorized access or attack, as well as secure our networks and systems.
Added
We have also implemented a process to assess and review the cybersecurity practices of certain third-party vendors and service providers that may be critical to the operations of our business and who have access to our information systems including, as appropriate, through the inclusion of cybersecurity requirements in our contracts.

Item 2. Properties

Properties — owned and leased real estate

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We previously leased and occupied 8,146 square feet of office space and subleased an additional 3,405 square feet of office space in Waltham, Massachusetts.
Removed
The initial term of this lease and sublease expired on June 30, 2023 and 2024, respectively, with an option to continue each thereafter on a month to month basis unless terminated by either party upon written notice. In July 2024, we provided written notice of our intent to terminate this lease and sublease.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of outcome, litigation can have an adverse impact on our business, financial condition, results of operations and prospects because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures. Not applicable. 104 PART II
Biggest changeRegardless of outcome, litigation can have an adverse impact on our business, financial condition, results of operations and prospects because of defense and settlement costs, diversion of management resources and other factors. 106 Item 4. Mine Safety Disclosures. Not applicable. 107 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 104 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 105 Item 6. [Reserved] 105 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 106
Biggest changeItem 4. Mine Safety Disclosures 107 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 108 Item 6. [Reserved] 108 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 109

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans is incorporated by reference herein to Part III, Item 12 of this Annual Report on Form 10-K.
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans is incorporated by reference herein to Part III, Item 12 of this Annual Report on Form 10-K. Recent Sales of Unregistered Equity Securities None.
Holders As of March 5, 2025, we had 28 holders of record of our common stock. The actual number of stockholders is greater than the number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Holders As of March 20, 2026, we had three holders of record of our common stock. The actual number of stockholders is greater than the number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Removed
Recent Sales of Unregistered Equity Securities During the period between October 1, 2024 and December 31, 2024, we issued options to purchase an aggregate of 263,161 shares of our common stock to certain employees under our 2024 Stock Option and Incentive Plan at a weighted-average exercise price of $18.45 per share.
Removed
We deemed these issuances to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), either in reliance on Rule 701 of the Securities Act as sales and offers under compensatory benefit plans and contracts relating to compensation in compliance with Rule 701, or in reliance on Section 4(a)(2), as transactions by an issuer not involving a public offering.
Removed
On October 11, 2024, we filed a registration statement on Form S-8 under the Securities Act to register all of the shares of our common stock subject to outstanding options and all shares of our common stock otherwise issuable pursuant to our equity compensation plans.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+9 added−25 removed88 unchanged
Biggest changeAs of December 31, 2024, we had federal and state research and development credits of $3.5 million and $0.3 million, respectively, which will, if not utilized, begin to expire in 2043 and 2037, respectively. 110 Results of operations Comparison of the years ended December 31, 2024 and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Change (in thousands) Collaboration revenue - related party $ 2,370 $ 2,380 $ (10 ) Operating expenses: Research and development 62,966 31,799 31,167 General and administrative 17,168 10,695 6,473 Total operating expenses 80,134 42,494 37,640 Loss from operations (77,764 ) (40,114 ) (37,650 ) Other income (expense): Change in fair value of preferred stock tranche right liabilities 2,859 15,527 (12,668 ) Interest income 12,123 4,165 7,958 Other expense, net (24 ) (115 ) 91 Total other income, net 14,958 19,577 (4,619 ) Net loss $ (62,806 ) $ (20,537 ) $ (42,269 ) Collaboration revenue—related party Related party collaboration revenue was $2.4 million for each of the years ended December 31, 2024 and 2023.
Biggest changeResults of operations Comparison of the years ended December 31, 2025 and 2024 The following table summarizes our results of operations for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Change (in thousands) Collaboration revenue $ 2,854 $ 2,370 $ 484 Operating expenses: Research and development 136,806 62,966 73,840 General and administrative 26,409 17,168 9,241 Total operating expenses 163,215 80,134 83,081 Loss from operations (160,361 ) (77,764 ) (82,597 ) Other income (expense): Change in fair value of preferred stock tranche right liability — 2,859 (2,859 ) Interest income 16,933 12,123 4,810 Other expense, net (15 ) (24 ) 9 Total other income, net 16,918 14,958 1,960 Net loss $ (143,443 ) $ (62,806 ) $ (80,637 ) Collaboration revenue Collaboration revenue was $2.9 million and $2.4 million for the years ended December 31, 2025 and 2024.
Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our operating expenses and capital expenditure requirements through 2027. We expect to continue to incur significant net operating losses for the foreseeable future.
Based on our current operating plan, we believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operating expenses and capital expenditure requirements through 2027. We expect to continue to incur significant net operating losses for the foreseeable future.
Investing activities During the year ended December 31, 2024, net cash used in investing activities was $59.5 million, consisting primarily of purchases of short-term investments of $290.6 million, net of maturities of short-term investments of $231.6 million and purchases of property and equipment of $0.5 million.
During the year ended December 31, 2024, net cash used in investing activities was $59.5 million, consisting primarily of purchases of short-term investments of $290.6 million, net of maturities of short-term investments of $231.6 million and purchases of property and equipment of $0.5 million.
The royalties are determined on a product-by-product and country-by-country basis and expire on the later of (i) a specified number of years after the launch of a given Royalty Product in a given country and (ii) the expiration of the last valid claim of royalty bearing company patent rights claiming or covering such Royalty Product in such country.
The royalties are determined on a product-by-product and country-by-country basis and expire on the later of (i) a specified number of years after the launch of a given Royalty Product in a given country and (ii) the expiration of the last valid claim of royalty bearing company patent rights claiming or covering such Royalty Product in such country.
In accordance with the Lonza License Agreement, we entered into a sublicense with Wuxi Biologics (Hong Kong) Limited to manufacture the Compound, requiring us to pay a mid-six-figure annual fee to Lonza pursuant to this provision.
In accordance with the Lonza License Agreement, we entered into a sublicense with Wuxi Biologics (Hong Kong) Limited to manufacture the Compound, requiring us to pay a mid-six-figure annual fee to Lonza pursuant to this provision.
This is due to the numerous risks and uncertainties associated with drug development, including the uncertainty of: • the scope, timing, progress, costs and results of the ongoing development of verekitug as well as for potential discovery, preclinical development and clinical trials for other potential future product candidates; • the number of clinical trials required for regulatory approval of verekitug or our potential future product candidates; • the costs, timing and outcome of regulatory review of verekitug or our potential future product candidates; • the costs associated with acquiring or licensing additional product candidates, technologies or assets, including the timing and amount of any milestones, royalties or other payments due in connection with our acquisitions and licenses; • the cost of manufacturing clinical supplies of verekitug or our potential future product candidates; • the costs associated with hiring additional clinical, quality control, medical, scientific and other technical personnel to support the ongoing development of verekitug; • the costs associated with increasing our headcount as we expand our research and development organization and market development and pre-commercial planning activities; 109 • the effectiveness of our approach to identifying target patient populations; • our ability to maintain existing, and establish new, strategic collaborations or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement; • the effect of macroeconomic trends including inflation and rising interest rates; and • addressing any potential supply chain interruptions or delays.
This is due to the numerous risks and uncertainties associated with drug development, including the uncertainty of: • the scope, timing, progress, costs and results of the ongoing development of verekitug as well as for potential discovery, preclinical development and clinical trials for other potential future product candidates; • the number of clinical trials required for regulatory approval of verekitug or our potential future product candidates; • the costs, timing and outcome of regulatory review of verekitug or our potential future product candidates; • the costs associated with acquiring or licensing additional product candidates, technologies or assets, including the timing and amount of any milestones, royalties or other payments due in connection with our acquisitions and licenses; • the cost of manufacturing clinical supplies of verekitug or our potential future product candidates; • the costs associated with hiring additional clinical, quality control, medical, scientific and other technical personnel to support the ongoing development of verekitug; 112 • the costs associated with increasing our headcount as we expand our research and development organization and market development and pre-commercial planning activities; • the effectiveness of our approach to identifying target patient populations; • our ability to maintain existing, and establish new, strategic collaborations or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement; • the effect of macroeconomic trends including inflation and rising interest rates; and • addressing any potential supply chain interruptions or delays.
Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low in any particular period.
Although 119 we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low in any particular period.
We remeasured the tranche right liabilities to fair value at each reporting date and immediately prior to being settled, and recognized changes in the fair value of the preferred stock tranche right liability as a component of other income (expense) in our consolidated statements of operations and comprehensive loss.
We remeasured the tranche right liability to fair value at each reporting date and immediately prior to being settled, and recognized changes in the fair value of the preferred stock tranche right liability as a component of other income (expense) in our consolidated statements of operations and comprehensive loss.
Upon settlement of the tranche rights, we derecognized the related liability, and stopped recognizing changes in the fair value of the preferred stock tranche right liability. Interest income Interest income consists of interest earned on money market funds, U.S. treasury bills and U.S. government agency bond investments.
Upon settlement of the tranche right, we derecognized the related liability, and stopped recognizing changes in the fair value of the preferred stock tranche right liability. Interest income Interest income consists of interest earned on money market funds, U.S. treasury bills and U.S. government agency bond investments.
We anticipate that our expenses will increase substantially if, and as we: • continue to conduct our ongoing clinical trials of verekitug, including advancement into global Phase 2 clinical trials, as well as initiate and complete additional clinical trials of verekitug in new indications or patient populations; • conduct larger-scale clinical trials for verekitug or any potential future product candidates; 106 • manufacture, or have manufactured, clinical and commercial supplies of verekitug; • seek regulatory approvals, prepare for and, if approved, proceed to commercialization for verekitug in current or new indications or any potential future product candidates; • attract, hire and retain additional clinical, scientific, and management personnel; • implement operational, financial, and management information systems; • add quality control, quality assurance, legal, compliance, and other groups to support our operations; • obtain, maintain, protect, expand and enforce our intellectual property portfolio, including intellectual property obtained through license agreements; • defend against any claims by third parties that we have infringed, misappropriated or otherwise violated any intellectual property of any such third party; • make royalty, milestone or other payments under current, and any future, license or collaboration agreements; • establish a sales, marketing and distribution infrastructure, either ourselves or in partnership with others, to commercialize verekitug, if approved; • potentially experience any delays, challenges, or other issues associated with the clinical development of verekitug and any potential future product candidates, including with respect to our regulatory strategies; and • incur additional legal, accounting, investor relations and other general and administrative expenses associated with operating as a public company.
We anticipate that our expenses will increase substantially if, and as we: • continue to conduct our ongoing clinical trials of verekitug, including our global Phase 2 clinical trials, as well as initiate and complete additional clinical trials of verekitug in new indications or patient populations; • conduct larger-scale clinical trials for verekitug or any potential future product candidates; • manufacture, or have manufactured, clinical and commercial supplies of verekitug; 109 • seek regulatory approvals, prepare for and, if approved, proceed to commercialization for verekitug in current or new indications or any potential future product candidates; • attract, hire and retain additional clinical, scientific, and management personnel; • implement operational, financial, and management information systems; • add quality control, quality assurance, legal, compliance, and other groups to support our operations; • obtain, maintain, protect, expand and enforce our intellectual property portfolio, including intellectual property obtained through license agreements; • defend against any claims by third parties that we have infringed, misappropriated or otherwise violated any intellectual property of any such third party; • make royalty, milestone or other payments under current, and any future, license or collaboration agreements; • establish a sales, marketing and distribution infrastructure, either ourselves or in partnership with others, to commercialize verekitug, if approved; • potentially experience any delays, challenges, or other issues associated with the clinical development of verekitug and any potential future product candidates, including with respect to our regulatory strategies; and • incur additional legal, accounting, investor relations and other general and administrative expenses associated with operating as a public company.
Our future capital requirements, both short- and long-term, will depend on a variety of factors, including, but not limited to: • the rate of progress in the development of verekitug and our potential future product candidates, if any; • the scope, progress, results and costs of non-clinical studies, preclinical development, laboratory testing and clinical trials for verekitug and any potential future product candidates and associated development programs; • the number and scope of preclinical studies and clinical trials that we pursue; • the costs, timing, and outcomes of seeking and obtaining approvals by the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more preclinical studies or clinical trials than those that we currently expect or for such authorities to change their requirements on studies that had previously been agreed to; • our ability to establish licensing or collaboration agreements or other strategic agreements; • the achievement of milestones or other developments under any licensing or collaboration agreements; • the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under any license or collaboration agreements; • the costs to establish, maintain, expand, enforce, and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing any patents or other intellectual property rights; • the costs associated with successfully defending against any claims by third parties that we have infringed, misappropriated or otherwise violated any intellectual property of any such third party; • the costs of acquiring, licensing, or investing in additional businesses, products, product candidates, and technologies that we may identify; • the costs to manufacture or to have manufactured sufficient, reliable, timely, and affordable supply of materials including commercial-grade product formulations that can be used in clinical trials and for commercial launch; • the costs of commercializing product candidates, if approved, whether alone or in collaboration with others; • the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; • the costs of building or contracting sales, marketing, and/or distribution capabilities, systems, and internal infrastructure for any product candidate that receives marketing approval; • the impact of competitors’ product candidates and technological advances and other market developments; • the expenses needed to attract and retain skilled personnel; and 114 • the size of the markets and degree of market acceptance of any product candidates in territories in which we receive regulatory approval, including product pricing, product coverage, and the adequacy of reimbursement by third-party payors.
Our future capital requirements, both short- and long-term, will depend on a variety of factors, including, but not limited to: • the rate of progress in the development of verekitug and our potential future product candidates, if any; • the scope, progress, results and costs of non-clinical studies, preclinical development, laboratory testing and clinical trials for verekitug and any potential future product candidates and associated development programs; • the number and scope of preclinical studies and clinical trials that we pursue; • the costs, timing, and outcomes of seeking and obtaining approvals by the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more preclinical studies or clinical trials than those that we currently expect or for such authorities to change their requirements on studies that had previously been agreed to; • our ability to establish licensing or collaboration agreements or other strategic agreements; • the achievement of milestones or other developments under any licensing or collaboration agreements; • the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under any license or collaboration agreements; • the costs to establish, maintain, expand, enforce, and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing any patents or other intellectual property rights; • the costs associated with successfully defending against any claims by third parties that we have infringed, misappropriated or otherwise violated any intellectual property of any such third party; • the costs of acquiring, licensing, or investing in additional businesses, products, product candidates, and technologies that we may identify; • the costs to manufacture or to have manufactured sufficient, reliable, timely, and affordable supply of materials including commercial-grade product formulations that can be used in clinical trials and for commercial launch; • the costs of commercializing product candidates, if approved, whether alone or in collaboration with others; • the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; • the costs of building or contracting sales, marketing, and/or distribution capabilities, systems, and internal infrastructure for any product candidate that receives marketing approval; • the impact of competitors’ product candidates and technological advances and other market developments; • the expenses needed to attract and retain skilled personnel; and • the size of the markets and degree of market acceptance of any product candidates in territories in which we receive regulatory approval, including product pricing, product coverage, and the adequacy of reimbursement by third-party payors. 117 Our business plans may change in the future and we will continue to require additional capital to meet the needs of our operating expenses.
The increase in related party accounts receivable resulted primarily from the timing of revenue recognition compared to the timing of payments from Maruho for qualifying reimbursable expenses related to the Maruho License Agreement.
The increase in accounts receivable resulted primarily from the timing of revenue recognition compared to the timing of payments from Maruho for qualifying reimbursable expenses related to the Maruho License Agreement.
Any royalties due under the Lonza License Agreement are payable on a country-by-country basis until ten years from the first commercial sale of the Compound in that particular country. During the years ended December 31, 2024 and 2023, we did not make any royalty payments to Lonza under the Lonza License Agreement.
Any royalties due under the Lonza License Agreement are payable on a country-by-country basis until ten years from the first commercial sale of the Compound in that particular country. During the years ended December 31, 2025 and 2024, we did not make any royalty payments to Lonza under the Lonza License Agreement.
As a result, we will need additional financing to support our continuing operations. To date, we have funded our operations primarily with the sale of our Preferred Stock and the proceeds from our IPO. We do not have any products approved for sale and have not generated any revenue from product sales since our inception.
As a result, we will need additional financing to support our continuing operations. To date, we have funded our operations primarily with the sale of our redeemable convertible preferred stock and the proceeds from our IPO. We do not have any products approved for sale and have not generated any revenue from product sales since our inception.
Net cash provided by changes in operating assets and liabilities was primarily driven by a $2.0 million increase in accounts payable and a $1.5 million increase in accrued expenses and other current liabilities, partially offset by a $1.0 million increase in prepaid expenses and other current assets and a $0.5 million increase in related party accounts receivable.
Net cash provided by changes in operating assets and liabilities was primarily driven by a $2.0 million increase in accounts payable and a $1.5 million increase in accrued expenses and other current liabilities, partially offset by a $1.0 million increase in prepaid expenses and other current assets and a $0.5 million increase in accounts receivable.
There are no future payments owed to Astellas under the Astellas Asset Purchase Agreement. 107 In connection with the Astellas Asset Purchase Agreement, we concurrently entered into a letter agreement (the “Regeneron Letter Agreement”) with Astellas and Regeneron Pharmaceuticals, Inc. (“Regeneron”).
There are no future payments owed to Astellas under the Astellas Asset Purchase Agreement. 110 In connection with the Astellas Asset Purchase Agreement, we concurrently entered into a letter agreement (the “Regeneron Letter Agreement”) with Astellas and Regeneron Pharmaceuticals, Inc. (“Regeneron”).
The change in fair value of the Series B preferred stock tranche right liability was due to changes in the assumptions used in the valuation model during the periods, including the estimated fair value of the Series B Preferred Stock, volatility and estimated time to the tranche closing.
The change in fair value of the Series B Preferred Stock tranche right liability was due to changes in the assumptions used in the valuation model during the period, including the estimated fair value of the Series B Preferred Stock, volatility and estimated time to the tranche closing.
The increase in interest income was due to increased balances in our money market funds, U.S. treasury bills and U.S. government agency bonds held during the year ended December 31, 2024, as compared to the year ended December 31, 2023. Liquidity and capital resources 112 Since our inception, we have incurred significant operating losses.
The increase in interest income was due to increased balances in our money market funds, U.S. treasury bills and U.S. government agency bonds held during the year ended December 31, 2025, as compared to the year ended December 31, 2024. 115 Liquidity and capital resources Since our inception, we have incurred significant operating losses.
During the years ended December 31, 2024 and 2023, we received payments from Maruho in the amount of $1.9 million and $2.7 million, respectively. License agreement with Lonza In October 2021, in connection with the Astellas Asset Purchase Agreement, we entered into a license agreement with Lonza Sales AG (“Lonza”) (as amended, the “Lonza License Agreement”).
During the years ended December 31, 2025 and 2024, we received payments from Maruho in the amount of $2.8 million and $1.9 million, respectively. License agreement with Lonza In October 2021, in connection with the Astellas Asset Purchase Agreement, we entered into a license agreement with Lonza Sales AG (“Lonza”) (as amended, the “Lonza License Agreement”).
Item 7. Management’s Discus sion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K (this “Annual Report”).
Item 7. Management’s Discussion and Analy sis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K (this “Annual Report”).
We have not yet commercialized verekitug and we do not expect to generate revenue from product sales of verekitug for the next several years, if at all. To date, we have financed our operations primarily with the sale of our Preferred Stock and proceeds from our IPO.
We have not yet commercialized verekitug and we do not expect to generate revenue from product sales of verekitug for the next several years, if at all. To date, we have funded our operations primarily with the sale of our redeemable convertible preferred stock and the proceeds from our IPO.
To date, we have not made any royalty payments to Lonza under the Lonza License Agreement. 108 Components of our results of operations Collaboration revenue—related party To date, we have not generated any revenue from product sales and do not expect to generate any revenue from product sales in the foreseeable future.
To date, we have not made any royalty payments to Lonza under the Lonza License Agreement. 111 Components of our results of operations Collaboration revenue To date, we have not generated any revenue from product sales and do not expect to generate any revenue from product sales in the foreseeable future.
Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. 118 Item 7A. Quantitative and Q ualitative Disclosures About Market Risk.
Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. 120 Item 7A. Quantitative and Q ualitative Disclosures About Market Risk.
The increase of $6.5 million was primarily driven by an increase in personnel expenses of $4.5 million due to increased headcount in our general and administrative functions. Personnel expenses for the years ended December 31, 2024 and 2023 included stock-based compensation expense of $4.8 million and $2.4 million, respectively.
The increase of $9.2 million was primarily driven by an increase in personnel expenses of $4.3 million due to increased headcount in our general and administrative functions. Personnel expenses for the years ended December 31, 2025 and 2024 included stock-based compensation expense of $7.5 million and $4.8 million, respectively.
Income taxes We recorded a full valuation allowance of our deferred tax asset position during each of the years ended December 31, 2024 and 2023, as we believe it was more likely than not that we would not be able to utilize our deferred tax assets.
Income taxes We recorded a full valuation allowance of our deferred tax asset position as of December 31, 2025 and 2024 as we believe it was more likely than not that we would not be able to utilize our deferred tax assets.
Revenue during the year ended December 31, 2024 was primarily related to the work performed associated with our Phase 2 clinical trial in patients with severe asthma and the revenue during the year ended December 31, 2023 was primarily related to the work performed associated with our Phase 1 clinical trial in patients with severe asthma under the Maruho License Agreement.
Revenue during each of the years ended December 31, 2025 and 2024 was primarily related to the work performed associated with our Phase 2 clinical trial in patients with severe asthma under the Maruho License Agreement.
For the years ended December 31, 2024 and 2023, we reported net losses of $62.8 million and $20.5 million, respectively. Our net losses have resulted principally from costs incurred in our research and development activities. As of December 31, 2024, we had an accumulated deficit of $190.8 million, and we had cash, cash equivalents and short-term investments of $470.5 million.
For the years ended December 31, 2025 and 2024, we reported net losses of $143.4 million and $62.8 million, respectively. Our net losses have resulted principally from costs incurred in our research and development activities. As of December 31, 2025, we had an accumulated deficit of $334.2 million, and we had cash, cash equivalents and short-term investments of $341.5 million.
We have the right to terminate the Lonza License Agreement at any time by providing prior written notice to Lonza. During the years ended December 31, 2024 and 2023, we made annual payments to Lonza in the amount of $0.5 million and $0.4 million, respectively.
We have the right to terminate the Lonza License Agreement at any time by providing prior written notice to Lonza. During each of the years ended December 31, 2025 and 2024, we made an annual payment to Lonza in the amount of $0.5 million pursuant to the Lonza License Agreement.
Other income (expense) Change in fair value of preferred stock tranche right liability In connection with our Preferred Stock financings, we issued shares under stock purchase agreements that provided an obligation for us to issue additional Preferred Stock in subsequent closings upon the satisfaction of certain conditions.
Other income (expense) Change in fair value of preferred stock tranche right liability In connection with our Series B redeemable convertible preferred stock (“Series B Preferred Stock”) financing, we issued shares under a stock purchase agreement that provided an obligation for us to issue additional Series B Preferred Stock in subsequent closings upon the satisfaction of certain conditions.
The Series A and Series B tranche right liabilities were settled in February 2023 and April 2024, respectively, upon the satisfaction of relevant conditions. We classified the preferred stock tranche rights as liabilities on our consolidated balance sheets and initially recorded them at fair value upon the issuance date of the rights.
The Series B tranche right liability was settled in April 2024 upon the satisfaction of relevant conditions. We classified the preferred stock tranche right as a liability on our consolidated balance sheets and initially recorded it at fair value upon the issuance date of the right.
As of December 31, 2024, we had federal and state net operating losses (“NOLs”) carryforwards of $37.6 million and $49.1 million, respectively. The federal NOLs are not subject to expiration and are limited in utilization to 80% of taxable income and the state NOLs begin to expire in 2041.
As of December 31, 2025, we had federal and state net operating losses (“NOLs”) carryforwards of $66.9 million and $92.9 million, respectively. The federal NOLs are not subject to expiration and are limited in utilization to 80% of taxable income and 113 the state NOLs begin to expire in 2041.
Examples of estimated accrued research and development expenses include: • expenses incurred under agreements with third parties, including CROs and investigative sites that conduct research, preclinical studies and clinical trials on our behalf, and in connection with the Maruho License Agreement; • expenses incurred under agreements with third parties, including CMOs, that develop and manufacture our product candidate for use in our preclinical studies and clinical trials; and • other providers and vendors in connection with research and development activities. 116 We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CROs, investigative sites, CMOs, and third-party vendors that conduct research, preclinical studies, and conduct clinical trials on our behalf.
Examples of estimated accrued research and development expenses include: • expenses incurred under agreements with third parties, including CROs and investigative sites that conduct research, preclinical studies and clinical trials on our behalf, and in connection with the Maruho License Agreement; • expenses incurred under agreements with third parties, including CMOs, that develop and manufacture our product candidate for use in our preclinical studies and clinical trials; and • other providers and vendors in connection with research and development activities.
Generally, we issue stock option awards with service-based vesting conditions and record the expense for these awards using the straight-line method such that the aggregate amount of expense recognized is at least the fair value of what was legally vested.
Generally, we issue stock option awards with service-based vesting conditions and record the expense for these awards using the straight-line method such that the aggregate amount of expense recognized is at least the fair value of what was legally vested. In March and April 2024, we granted awards with performance-based conditions to our Chief Executive Officer and Chief Financial Officer.
The increase of $31.2 million was primarily driven by an increase of $23.8 million in expenses directly related to our verekitug program and $7.4 million of unallocated research and development expenses.
The increase of $73.8 million was primarily driven by an increase of $48.1 million in expenses directly related to our verekitug program and $25.7 million of unallocated research and development expenses.
The increase in direct costs of $7.2 million related to the CRSwNP indication was due to continued progress associated with our Phase 2 clinical trial during the year ended December 31, 2024 compared to the same period in 2023.
The increase in direct costs of $19.6 million related to the asthma indication was primarily due to the continued progress associated with our Phase 2 clinical trial and Phase 2 LTE study during the year ended December 31, 2025, compared to the same period in 2024.
The 111 increase in direct costs of $3.1 million related to the COPD indication was due to the costs associated with initiation of planning activities for our COPD Phase 2b clinical trial for which there were no comparable expenses during the same period of 2023.
The increase in direct costs of $31.5 million related to the COPD indication was due to the costs associated with the initiation of our COPD Phase 2 clinical trial for which there were no comparable expenses during the same period in 2024.
During the year ended December 31, 2023, net cash used in investing activities was $82.8 million, consisting primarily of purchases of short-term investments of $129.0 million, net of maturities of short-term investments of $46.3 million and purchases of property and equipment of $0.1 million. 113 Financing activities During the year ended December 31, 2024, net cash provided by financing activities was $418.9 million, consisting of $268.8 million in net proceeds from our IPO after deducting underwriters discounts and commissions, and offering costs, $149.9 million in net proceeds from the issuance of Series B Preferred Stock and $0.2 million in net proceeds from the exercise of stock options.
Financing activities During the year ended December 31, 2025, net cash provided by financing activities was $2.4 million, consisting primarily of proceeds from the exercise of stock options. 116 During the year ended December 31, 2024, net cash provided by financing activities was $418.9 million, consisting of $268.8 million in net proceeds from our IPO after deducting underwriters discounts and commissions, and offering costs, $149.9 million in net proceeds from the issuance of Series B Preferred Stock and $0.2 million in proceeds from the exercise of stock options.
Cash flows The following table summarizes our sources and uses of cash for each of the periods presented: Year Ended December 31, 2024 2023 (in thousands) Net cash used in operating activities $ (59,172 ) $ (37,926 ) Net cash used in investing activities (59,485 ) (82,842 ) Net cash provided by financing activities 418,910 129,550 Net increase in cash, cash equivalents and restricted cash $ 300,253 $ 8,782 Operating activities During the year ended December 31, 2024, operating activities used $59.2 million of cash, resulting primarily from our net loss of $62.8 million, non-cash changes in fair value of the preferred stock tranche right liability of $2.9 million and non-cash amortization of premiums and accretion of discounts on short-term investments of $1.7 million, partially offset by changes in operating assets and liabilities of $1.9 million and non-cash stock-based compensation expense of $6.0 million.
Cash flows The following table summarizes our sources and uses of cash for each of the periods presented: Year Ended December 31, 2025 2024 (in thousands) Net cash used in operating activities $ (133,275 ) $ (59,172 ) Net cash used in investing activities (93,480 ) (59,485 ) Net cash provided by financing activities 2,441 418,910 Net increase (decrease) in cash, cash equivalents and restricted cash $ (224,314 ) $ 300,253 Operating activities During the year ended December 31, 2025, operating activities used $133.3 million of cash, resulting primarily from our net loss of $143.4 million and non-cash amortization of premiums and accretion of discounts on short-term investments of $1.5 million, partially offset by non-cash stock-based compensation expense of $10.3 million and changes in operating assets and liabilities of $0.6 million.
We have advanced this highly potent monoclonal antibody into separate Phase 2 trials for the treatment of severe asthma and chronic rhinosinusitis with nasal polyps (“CRSwNP”) and have initiated planning activities for a Phase 2b trial in chronic obstructive pulmonary disease (“COPD”).
We have advanced this highly potent monoclonal antibody into separate Phase 2 trials for the treatment of severe asthma, including a long-term safety and efficacy extension study (“Phase 2 LTE”), chronic rhinosinusitis with nasal polyps (“CRSwNP”), and chronic obstructive pulmonary disease (“COPD”).
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements.
We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements.
The increase in manufacturing costs of $3.2 million was primarily attributable to an increase in CMO costs for the development of Phase 3 clinical material during the year ended December 31, 2024 for which there was no comparable expense during the same period in 2023.
The increase in manufacturing costs of $16.4 million was primarily attributable to an increase in CMO costs for the development of Phase 3 clinical material, partially offset by a decrease in CMO costs for the development of Phase 2 clinical material during the year ended December 31, 2025, compared to the same period in 2024.
Additionally, there was an increase of $1.0 million of professional fees primarily related to increased consulting and audit fees. Other expenses increased by $1.0 million primarily due to an increase in software licenses, corporate insurance, occupancy costs and taxes.
Additionally, there was an increase of $2.4 million in professional fees primarily due to increased market research, recruiting, legal and consulting costs. Other expenses increased by $2.5 million primarily due to an increase in corporate insurance, taxes and occupancy costs.
The increase in personnel expenses of $2.3 million was primarily due to increased headcount in our research and development function. Personnel expenses for the years ended December 31, 2024 and 2023 included stock-based compensation expense of $1.2 million and $1.1 million, respectively.
The increase in personnel expenses of $8.4 million was primarily due to increased headcount in our research and development functions. Personnel expenses for the years ended December 31, 2025 and 2024 included stock-based compensation expense of $2.9 million and $1.2 million, respectively. The increase of $0.9 million in professional fees was related to consulting services to support our verekitug program.
Through December 31, 2024, we have received gross proceeds of $400.0 million from sales of our Preferred Stock, $268.8 million in net proceeds from our IPO and received $5.3 million in connection with our research and development arrangement with Maruho. As of December 31, 2024, we had cash, cash equivalents and short-term investments of $470.5 million.
Through December 31, 2025, we have received gross proceeds of $400.0 million from the issuance and sale of our redeemable convertible preferred stock and $268.8 million in net proceeds from our IPO. As of December 31, 2025, we had cash, cash equivalents and short-term investments of $341.5 million.
General and administrative expenses Year Ended December 31, 2024 2023 Change (in thousands) Personnel expenses (including stock-based compensation) $ 10,842 $ 6,352 $ 4,490 Professional fees 4,349 3,347 1,002 Other 1,977 996 981 Total general and administrative expense $ 17,168 $ 10,695 $ 6,473 General and administrative expenses were $17.2 million for the year ended December 31, 2024 compared to $10.7 million for the year ended December 31, 2023.
General and administrative expenses Year Ended December 31, 2025 2024 Change (in thousands) Personnel expenses (including stock-based compensation) $ 15,188 $ 10,842 $ 4,346 Professional fees 6,718 4,349 2,369 Other 4,503 1,977 2,526 Total general and administrative expense $ 26,409 $ 17,168 $ 9,241 General and administrative expenses were $26.4 million for the year ended December 31, 2025 compared to $17.2 million for the year ended December 31, 2024.
The increase in direct costs of $13.5 million related to the asthma indication was primarily due to increased costs related to the continued progress associated with our Phase 2 clinical trial during the year ended December 31, 2024 compared to the same period in 2023, partially offset by decreased costs related to the wind down of our Phase 1 clinical trial compared to the same period in 2023.
The decrease in direct costs of $3.0 million related to the CRSwNP indication was primarily due to wind down activities associated with our Phase 2 clinical trial during the year ended December 31, 2025 compared to the same period in 2024.
Other income (expense) Change in fair value of preferred stock tranche right liabilities We recorded other income for the change in the fair value of the preferred stock tranche right liabilities of $2.9 million for the year ended December 31, 2024, related to the Series B preferred stock tranche right liability, as compared to other income of $15.5 million for the year ended December 31, 2023, including $6.6 million related to the Series A preferred stock tranche right liability and $8.9 million related to the Series B preferred stock tranche right liability.
Other income (expense) Change in fair value of preferred stock tranche right liability We recorded other income for the change in the fair value of the preferred stock tranche right liability of $2.9 million for the year ended December 31, 2024 related to the Series B Preferred Stock tranche right liability, for which there was no comparable income during the year ended December 31, 2025 as the Series B tranche right liability was settled in April 2024.
Net cash used by changes in operating assets and liabilities was primarily driven by a $6.2 million increase in prepaid expenses and other current assets due to payments made to a CRO for start-up costs related to our Phase 2 clinical trials, partially offset by a $1.3 million increase in accounts payable, a $0.4 million increase in accrued expenses and other current liabilities and a $0.3 million decrease in related party accounts receivable.
Net cash provided by changes in operating assets and liabilities was primarily driven by a $4.0 million increase in accrued expenses and other current liabilities, partially offset by a $1.5 million increase in prepaid expenses and other current assets due to upfront payments to CROs for activities associated with our COPD Phase 2 trial and our Phase 2 LTE study in patients with severe asthma, a $1.3 million decrease in accounts payable and a $0.6 million decrease in operating lease liabilities.
Through December 31, 2024, we have incurred approximately $51.0 million, $13.9 million and $3.1 million in direct external expenses for the development of verekitug for severe asthma, CRSwNP and COPD, respectively, since their development candidate nominations.
We begin to separately track program expenses at development candidate nomination. Through December 31, 2025, we have incurred approximately $98.7 million, $37.7 million and $21.5 million in direct external expenses for the development of verekitug for severe asthma, COPD and CRSwNP, respectively, since their development candidate nominations.
Research and development expenses Year Ended December 31, 2024 2023 Change (in thousands) Direct research and development expenses by program: Verekitug program: Asthma indication $ 28,069 $ 14,537 $ 13,532 CRSwNP indication 10,524 3,330 7,194 COPD indication 3,115 — 3,115 Unallocated research and development expense: Personnel expenses (including stock-based compensation) 9,911 7,588 2,323 Manufacturing costs 6,580 3,373 3,207 Professional fees 2,062 1,495 567 Other unallocated expenses 2,705 1,476 1,229 Total research and development expense $ 62,966 $ 31,799 $ 31,167 Research and development expenses were $63.0 million for the year ended December 31, 2024 compared to $31.8 million for the year ended December 31, 2023.
Research and development expenses Year Ended December 31, 2025 2024 Change (in thousands) Direct research and development expenses by program: Verekitug program: Asthma indication $ 47,694 $ 28,069 $ 19,625 COPD indication 34,562 3,115 31,447 CRSwNP indication 7,564 10,524 (2,960 ) Unallocated research and development expense: Manufacturing costs 23,013 6,580 16,433 Personnel expenses (including stock-based compensation) 18,343 9,911 8,432 Professional fees 2,940 2,062 878 Other unallocated expenses 2,690 2,705 (15 ) Total research and development expense $ 136,806 $ 62,966 $ 73,840 114 Research and development expenses were $136.8 million for the year ended December 31, 2025 compared to $63.0 million for the year ended December 31, 2024.
Our business plans may change in the future and we will continue to require additional capital to meet the needs of our operating expenses. See the section titled “Risk factors—Risks related to our limited operating history, financial condition and need for additional capital” included elsewhere in this Annual Report.
See the section titled “Risk factors—Risks related to our limited operating history, financial condition and need for additional capital” included elsewhere in this Annual Report. We believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our operating expenses and capital expenditure requirements through 2027.
Lease agreement On July 3, 2024, we entered into a three-year agreement for office space located at 890 Winter Street in Waltham, Massachusetts. We began paying monthly rent starting one month after lease commencement. Initial base rent is approximately $0.7 million for the first year and approximately $0.8 million for the second and third year.
These payments were recognized as research and development expense in the consolidated statements of operations and comprehensive loss. 118 Lease agreement In July 2024, we entered into a three-year agreement for office space located at 890 Winter Street in Waltham, Massachusetts. We began paying monthly rent starting one month after lease commencement.
To date, we have financed our operations primarily through the issuance and sale of our redeemable convertible preferred stock, proceeds from our initial public offering (“IPO”) and cash received in connection with research and development services we provided to Maruho Co., Ltd (“Maruho”), a related party.
To date, we have financed our operations primarily through the issuance and sale of our redeemable convertible preferred stock and proceeds from our initial public offering (“IPO”). As of December 31, 2025, we have received total gross proceeds of $400.0 million from the issuance and sale of our redeemable convertible preferred stock.
The Series A and Series B tranche right liabilities were settled in February 2023 and April 2024, respectively, upon the satisfaction of relevant conditions. Interest income Interest income was $12.1 million and $4.2 million for the years ended December 31, 2024 and 2023, respectively, representing an increase of $7.9 million.
Interest income Interest income was $16.9 million and $12.1 million for the years ended December 31, 2025 and 2024, respectively, representing an increase of $4.8 million.
The Lonza agreement continues for an indefinite period of time unless otherwise terminated.
The Lonza agreement continues for an indefinite period of time unless otherwise terminated. We have the right to terminate the Lonza License Agreement at any time by providing prior written notice to Lonza.
We anticipate reporting top-line data from our severe asthma Phase 2 trial in the second half of 2026 and plan to dose the first patient in our COPD program in the second half of 2025. Our experienced team is committed to maximizing verekitug’s unique attributes to address the substantial unmet needs for patients underserved by today’s standard of care.
Our experienced team is committed to maximizing verekitug’s unique attributes to address the substantial unmet needs for patients underserved by today’s standard of care.
During the year ended December 31, 2023, operating activities used $37.9 million of cash, primarily resulting from our net loss of $20.5 million, net non-cash gains of $13.1 million and net cash used by changes in our operating assets and liabilities of $4.3 million.
During the year ended December 31, 2024, operating activities used $59.2 million of cash, resulting primarily from our net loss of $62.8 million, non-cash changes in fair value of the preferred stock tranche right liability of $2.9 million and non-cash amortization of premiums and accretion of discounts on short-term investments of $1.7 million, partially offset by changes in operating assets and liabilities of $1.9 million and non-cash stock-based compensation expense of $6.0 million.
We have the right to terminate the Lonza License Agreement at any time by providing prior written notice to Lonza. 115 During the years ended December 31, 2024 and 2023, we made annual payments of $0.5 million and $0.4 million, respectively, to Lonza pursuant to the Lonza License Agreement and recognized it as research and development expense in the consolidated statements of operations and comprehensive loss.
During the years ended December 31, 2025 and 2024, we made an annual payment to Lonza in the amount of $0.5 million pursuant to the Lonza License Agreement.
Removed
We completed enrollment in our CRSwNP Phase 2 clinical trial in January 2025 and expect to report top-line data from this trial in the second half of 2025, enabling regulatory discussions and preparations for a Phase 3 program in CRSwNP.
Added
We reported positive top-line results in our CRSwNP Phase 2 trial in September 2025 and positive top-line results in our severe asthma Phase 2 trial in February 2026. We initiated our Phase 2 COPD trial in July 2025.
Removed
As of December 31, 2024, we have received total gross proceeds of $400.0 million from the issuance and sale of our Series A redeemable convertible preferred stock (“Series A Preferred Stock”) and Series B redeemable convertible preferred stock (“Series B Preferred Stock”), which are collectively referred to as the “Preferred Stock,” and we have also received $5.3 million in connection with research and development services we provided to Maruho.
Added
We plan to initiate dosing in Phase 3 trials in both severe asthma and CRSwNP in the first quarter of 2027, prioritizing a Phase 3 development strategy that focuses on maximizing efficacy in both indications, without biomarker restriction, with quarterly at-home administration.
Removed
The increase in other unallocated expenses of $1.2 million was primarily driven by an increase in preclinical studies to support our verekitug clinical trials. The increase of $0.6 million in professional fees was related to manufacturing and preclinical services to support our verekitug program. We begin to separately track program expenses at development candidate nomination.
Added
As of December 31, 2025, we had federal and state research and development credits of $5.7 million and $1.2 million, respectively, which will, if not utilized, begin to expire in 2043 and 2037, respectively.
Removed
The change in the fair value of the Series A preferred stock tranche right liability was due to changes in the assumptions used in the valuation model during the periods, including the expected fair value of the Series A Preferred Stock and the probability and expected timing of achieving certain milestone events.
Added
On July 4, 2025, new U.S. tax legislation was signed into law (known as the “One Big Beautiful Bill Act” or “OBBBA”) which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025.
Removed
Net non-cash gains included a gain related to the change in fair value of preferred stock tranche right liabilities of $15.5 million, stock-based compensation expense of $3.4 million, a gain of $1.3 million related to amortization of premiums and accretion of discounts on short-term investments, issuance costs allocated to the Series B preferred stock tranche right liability of $0.1 million, depreciation and amortization expense of $0.1 million and $0.1 million of non-cash lease expense.
Added
In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, but many are generally not effective until 2026. The impacts of the OBBBA were not material to the 2025 consolidated financial statements; however, we will continue to evaluate impacts to future periods.
Removed
The decrease in related party accounts receivable resulted primarily from the timing of revenue recognition compared to the timing of payments from Maruho for qualifying reimbursable expenses related to the Maruho License Agreement.
Added
Investing activities During the year ended December 31, 2025, net cash used in investing activities was $93.5 million, consisting primarily of purchases of short-term investments of $385.9 million, net of maturities of short-term investments of $292.6 million.
Removed
During the year ended December 31, 2023, net cash provided by financing activities was $129.6 million, consisting of $80.0 million in proceeds from the issuance of Series A Preferred Stock, $49.4 million in net proceeds from the issuance of Series B Preferred Stock, including the Series B preferred stock tranche right liability, and $0.1 million in net proceeds from the exercise of stock options.
Added
Initial base rent was approximately $0.7 million for the first year and approximately $0.8 million for the second and third year. The lease commenced in September 2024.
Removed
We believe that our existing cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements through 2027. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.
Added
We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CROs, investigative sites, CMOs, and third-party vendors that conduct research, preclinical studies, and conduct clinical trials on our behalf.
Removed
The lease commenced in September 2024. On July 8, 2024, we provided notice of termination of our current operating lease and sublease of office space at 460 Totten Pond Road, Waltham, Massachusetts. This notice became effective on October 9, 2024, after which our rights and obligations under this lease and sublease ceased.
Added
We are also a “smaller reporting company,” as defined in the Securities Exchange Act of 1934, as amended.
Removed
Certain personnel (including our former Chief Executive Officer, current Chief Executive Officer, current Chief Financial Officer, current Chief Medical Officer, current Chief Business Officer and former Chief Operating Officer) were issued stock option awards with performance-based vesting conditions, in addition to continued service, that are monitored for when it is considered probable that the performance condition will be achieved and we recognize stock-based compensation expense using graded vesting.
Removed
After the achievement of the performance condition in February 2023, the stock-based compensation for our performance-based stock options was solely subject to continued service until the fourth anniversary of the second closing of our Series A Preferred Stock. In March and April 2024, we granted awards with performance-based conditions to our current Chief Executive Officer and current Chief Financial Officer.
Removed
Valuation of preferred stock tranche right liabilities In connection with our Preferred Stock financings, we issued shares under stock purchase agreements that provided an obligation for us to issue additional Preferred Stock in subsequent closings upon the satisfaction of certain conditions.
Removed
We classified each of the Series A and Series B preferred stock tranche rights as a liability on our consolidated balance sheets and initially recorded them at fair value upon the issuance date of the rights.

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