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

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Paragraph-level year-over-year comparison of Gossamer 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.

+513 added−434 removedSource: 10-K (2026-03-17) vs 10-K (2025-03-13)

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

513 paragraphs added · 434 removed · 348 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

96 edited+69 added−37 removed282 unchanged
Biggest changeThe ACA, among other things: (1) increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations; (2) created a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics that are inhaled, infused, instilled, implanted or injected; (3) established an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in certain government healthcare programs; (4) expanded the availability of lower pricing under the 340B drug pricing program by adding new entities to the program; (5) expanded the eligibility criteria for Medicaid programs; (6) created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; (7) established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and (8) established a Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services, or CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drugs.
Biggest changeAmong the provisions of the ACA of importance to seralutinib, the ACA: established an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; extended manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; established a new Patient-Centered Outcomes Research Institute to oversee, and established a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending.
Seralutinib (PDGFR, CSF1R and c-KIT Inhibitor) Seralutinib, also known as GB002, is an investigational inhaled, small molecule, platelet-derived growth factor receptor, or PDGFR, colony-stimulating factor 1 receptor, or CSF1R, and c-KIT inhibitor, currently being evaluated in a Phase 3 clinical trial for the treatment of PAH.
Seralutinib (Inhaled PDGFR, CSF1R and c-KIT Inhibitor) Seralutinib, also known as GB002, is an investigational inhaled, small molecule, platelet-derived growth factor receptor, or PDGFR, colony-stimulating factor 1 receptor, or CSF1R, and c-KIT inhibitor, currently being evaluated in a Phase 3 clinical trial for the treatment of PAH.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure, drug price reporting and other transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure, drug price reporting and other transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
We believe that the key competitive factors affecting the success of any of our product candidates will include efficacy, safety profile, convenience, cost, level of promotional activity devoted to them and intellectual property protection. We expect to face competition for seralutinib from existing products and products in development.
We believe that the key competitive factors affecting the success of any of our product candidates will include efficacy, safety profile, convenience, cost, level of promotional activity devoted to them and intellectual property protection. We expect to face competition for seralutinib and RT234 from existing products and products in development.
The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to CMS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers including physician assistants and nurse practitioners, and teaching hospitals, and applicable manufacturers and applicable group 21 Table of Contents purchasing organizations to report annually to CMS ownership and investment interests held by physicians (as defined by statute) and their immediate family members.
The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to CMS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers including physician assistants and nurse practitioners, and teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians (as defined by statute) and their immediate family members.
Intellectual property rights may not address all potential threats to our competitive advantage. Seralutinib As of December 31, 2024, with respect to seralutinib, we have exclusively licensed two issued U.S. patents owned by Pulmokine, which are not due to expire before 2037, excluding any additional term for patent term extension; one pending U.S.
Intellectual property rights may not address all potential threats to our competitive advantage. Seralutinib As of December 31, 2025, with respect to seralutinib, we have exclusively licensed two issued U.S. patents owned by Pulmokine, which are not due to expire before 2037, excluding any additional term for patent term extension; one pending U.S.
Seralutinib is a PDGFR, CSF1R and c-KIT inhibitor initially targeted for PAH and PH-ILD patients. We expect competition within the PAH indication will include prostanoids / prostacyclin receptor agonists, including Orenitram (United Therapeutics), Uptravi (Janssen), Tyvaso (United Therapeutics), and Remodulin (United Therapeutics), and activin ligand traps, including Winrevair (Merck).
Seralutinib is a PDGFR, CSF1R and c-KIT inhibitor initially targeted for PAH and PH-ILD patients. We expect competition within the PAH indication will include prostanoids / prostacyclin receptor agonists, including Orenitram (United Therapeutics), Uptravi (Janssen), Tyvaso (United Therapeutics), Yutrepia (Liquidia) and Remodulin (United Therapeutics), and activin ligand traps, including Winrevair (Merck).
U.S. Drug Development Process In the United States, the FDA regulates drugs under the federal Food, Drug, and Cosmetic Act, or the FDCA, and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.
Drug Development Process In the United States, the FDA regulates drugs under the federal Food, Drug, and Cosmetic Act, or the FDCA, and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.
Summary of Preclinical Program Seralutinib inhibits both PGDFR α and β, and it inhibited and reversed cell overgrowth in lung blood vessels in a PAH rat model, which replicates many features of human PAH, including the abnormal cell proliferation that can block the small vessels of the lung.
Summary of Preclinical Program Seralutinib inhibits both PDGFR α and β, and it inhibited and reversed cell overgrowth in lung blood vessels in a PAH rat model, which replicates many features of human PAH, including the abnormal cell proliferation that can block the small vessels of the lung.
Once the MA is obtained in all EU member states and study results are included in the product information, even when negative, the product is eligible for six months’ supplementary protection certificate extension (if any is in effect at the time of approval) or, in the case of orphan medicinal products, a two year extension of the orphan market exclusivity is granted.
Once the MA is obtained in all EU member states and study results are included in the product 26 Table of Contents information, even when negative, the product is eligible for six months’ supplementary protection certificate extension (if any is in effect at the time of approval) or, in the case of orphan medicinal products, a two year extension of the orphan market exclusivity is granted.
Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties.
Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory 27 Table of Contents requirements may result in administrative, civil or criminal penalties.
Additionally, there has been a recent trend of increased regulation of payments and transfers of value provided to healthcare professionals or entities and many EU member states have adopted national “Sunshine Acts” which impose reporting and transparency requirements (often on an annual basis), similar to the requirements in the United States, on pharmaceutical companies.
Additionally, there has been a recent trend of increased regulation of payments and transfers of value provided to healthcare professionals or 23 Table of Contents entities and many EU member states have adopted national “Sunshine Acts” which impose reporting and transparency requirements (often on an annual basis), similar to the requirements in the United States, on pharmaceutical companies.
The centralized procedure is mandatory for certain types of products, such as: (i) medicinal products derived from biotechnology medicinal 23 Table of Contents products, (ii) designated orphan medicinal products, (iii) advanced therapy medicinal products, or ATMPs, and (iv) medicinal products containing a new active substance indicated for the treatment certain diseases, such as HIV/AIDS, cancer, neurodegenerative diseases, diabetes, auto-immune and other dysfunctions and viral diseases.
The centralized procedure is mandatory for certain types of products, such as: (i) medicinal products derived from biotechnology medicinal products, (ii) designated orphan medicinal products, (iii) advanced therapy medicinal products, or ATMPs, and (iv) medicinal products containing a new active substance indicated for the treatment certain diseases, such as HIV/AIDS, cancer, neurodegenerative diseases, diabetes, auto-immune and other dysfunctions and viral diseases.
This progressive obstruction of blood flow from the right side of the heart to the lungs can cause the right ventricle to fail, thus leading to severe breathlessness, reduced exercise tolerance and death. 5 Table of Contents Seralutinib was designed to inhibit multiple kinases that play a role in the pathology of PAH, including PDGFRα/β, CSF1R and c-KIT.
This progressive obstruction of blood flow from the right side of the heart to the lungs can cause the right ventricle to fail, thus leading to severe breathlessness, reduced exercise tolerance and death. Seralutinib was designed to inhibit multiple kinases that play a role in the pathology of PAH, including PDGFRα/β, CSF1R and c-KIT.
Based on REVEAL registry data, newly diagnosed functional class III and IV patients have 5-year survival rates of 60% and 44%, respectively, while rates for previously diagnosed patients were even lower at 57% and 27%, respectively. Overview of PAH Market PAH most commonly affects women between the ages of 30 and 60.
Based on REVEAL registry data, newly diagnosed functional class III and IV patients have 5-year survival rates of 60% and 44%, respectively, while rates for previously diagnosed patients were even lower at 57% and 27%, respectively. 7 Table of Contents Overview of PAH Market PAH most commonly affects women between the ages of 30 and 60.
Clinical trials of medicinal products in the EU must be conducted in accordance with EU and national regulations and the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use, or ICH, guidelines on GCP as well as the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.
Clinical trials of medicinal products in the EU must be conducted in accordance with EU and national regulations and the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use, or ICH, guidelines on GCP as well as the 24 Table of Contents applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.
The requirements regarding quality documentation for medicinal products when used with a medical device, including single integral products, co-packaged and referenced products, are outlined in the EMA guideline of July 22, 2021, which became applicable as of January 1, 2022. 26 Table of Contents The aforementioned EU rules are generally applicable in the EEA.
The requirements regarding quality documentation for medicinal products when used with a medical device, including single integral products, co-packaged and referenced products, are outlined in the EMA guideline of July 22, 2021, which became applicable as of January 1, 2022. The aforementioned EU rules are generally applicable in the EEA.
Under the above described procedures, before granting the MA, the regulatory authorities make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy. Under the centralized procedure the maximum timeframe for the evaluation of a MAA by the EMA is 210 days.
Under the above described procedures, before granting the MA, the regulatory authorities make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy. 25 Table of Contents Under the centralized procedure the maximum timeframe for the evaluation of a MAA by the EMA is 210 days.
If granted, the data exclusivity period prevents generic or biosimilar applicants from relying on the preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar MA in the EU during a period of eight years from the date on which the reference 24 Table of Contents product was first authorized in the EU.
If granted, the data exclusivity period prevents generic or biosimilar applicants from relying on the preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar MA in the EU during a period of eight years from the date on which the reference product was first authorized in the EU.
Clinical Trials must be conducted under protocols 14 Table of Contents detailing, among other things, the objectives of the trial, dosing procedures, subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND as well as any subsequent protocol amendments.
Clinical Trials must be conducted under protocols detailing, among other things, the objectives of the trial, dosing procedures, subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND as well as any subsequent protocol amendments.
Symptoms include shortness of breath at rest or with minimal exertion. 6 Table of Contents Other symptoms include fatigue, chest pain, dizzy spells and fainting. The progressive nature of this disease causes the right side of the heart to work much harder and eventually weaken or fail.
Symptoms include shortness of breath at rest or with minimal exertion. Other symptoms include fatigue, chest pain, dizzy spells and fainting. The progressive nature of this disease causes the right side of the heart to work much harder and eventually weaken or fail.
Overview of PH-ILD (WHO Group 3 Pulmonary Hypertension) We believe that seralutinib has potential as a therapeutic treatment for PH-ILD, a subtype of WHO Group 3 Pulmonary Hypertension. PH-ILD is a collection of progressive and often fatal forms of PH that affect the small airways of the 7 Table of Contents lungs.
Overview of PH-ILD (WHO Group 3 Pulmonary Hypertension) We believe that seralutinib has potential as a therapeutic treatment for PH-ILD, a subtype of WHO Group 3 Pulmonary Hypertension. PH-ILD is a collection of progressive and often fatal forms of PH that affect the small airways of the lungs.
In a separate rat model of PAH, the SU5416 hypoxia model, seralutinib demonstrated a statistically significant reduction in circulating plasma NT-proBNP as compared to placebo, while the difference between imatinib and placebo was not significant for this PAH biomarker.
In a separate rat model of PAH, the SU5416 hypoxia model, seralutinib demonstrated a statistically significant reduction in circulating plasma NT-proBNP as compared to placebo, while the difference between imatinib and placebo was not 8 Table of Contents significant for this PAH biomarker.
The holder of a MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, or QPPV, who is responsible for establishment and maintenance of that system, and oversees the safety 25 Table of Contents profiles of medicinal products and any emerging safety concerns.
The holder of a MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, or QPPV, who is responsible for establishment and maintenance of that system, and oversees the safety profiles of medicinal products and any emerging safety concerns.
Although many of the issues discussed above with respect to the United States apply similarly in the context of the European Union, or EU, the approval process varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods.
Although many of the issues discussed above with respect to the United States apply similarly in the context of EU, the approval process varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods.
In addition, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if the second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
In addition, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if the second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity within the relevant approved use or indication or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs relating to the approved use or indication of patients with the rare disease or condition.
A combination product, however, is assigned to a Center that will have primary jurisdiction over its regulation based on a determination of the combination product’s primary mode of action, which is the single mode of action that provides the most important therapeutic action.
A combination product, however, is assigned to a Center that will have primary jurisdiction over its regulation based on a determination of the combination product’s primary mode of action, which is the 14 Table of Contents single mode of action that provides the most important therapeutic action.
There were no SAEs, and the most frequently reported AEs were mild-to-moderate cough and mild headache. Systemic PK was characterized by low systemic exposure and rapid drug clearance in PAH patients, which was consistent with PK data from the Phase 1a studies in healthy 8 Table of Contents volunteers.
There were no SAEs, and the most frequently reported AEs were mild-to-moderate cough and mild headache. Systemic PK was characterized by low systemic exposure and rapid drug clearance in PAH patients, which was consistent with PK data from the Phase 1a studies in healthy volunteers.
Pediatric development In the EU, MAAs for new medicinal products have to include the results of trials conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the EMA’s Pediatric Committee, or PDCO.
Pediatric development In the EU, MAAs for new medicinal product candidates have to include the results of trials conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the EMA’s Pediatric Committee, or PDCO.
Accordingly, we plan to investigate seralutinib through the Investigational New Drug, or IND, framework and seek approval through the NDA pathway. We do not anticipate 13 Table of Contents that the FDA will require a separate medical device authorization for the device, but this could change during the course of its review of any marketing application that we may submit.
Accordingly, we plan to investigate seralutinib through the Investigational New Drug, or IND, framework and seek approval through the NDA pathway. We do not anticipate that the FDA will require a separate medical device authorization for the device, but this could change during the course of its review of any marketing application that we may submit. U.S.
The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug.
The manufacturing process must be capable of 16 Table of Contents consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug.
The designation of such drug also entitles a party to financial incentives such 17 Table of Contents as opportunities for grant funding toward clinical trial costs, tax advantages and user-fee waivers.
The designation of such drug also entitles a party to financial incentives such as opportunities for grant funding toward clinical trial costs, tax advantages and user-fee waivers.
Unless earlier terminated, the collaboration agreement will remain in force until no Licensed Products are being developed or commercialized in the United States and in the ROW Territory, on a country-by-country basis, until no royalty terms are in effect for all countries.
Unless earlier terminated, the collaboration agreement will remain in force until no Licensed Products are being developed or commercialized in the United States and in the ROW Territory, on a country-by-country basis, until no 13 Table of Contents royalty terms are in effect for all countries.
Third-party payors may not consider seralutinib to be medically necessary or cost-effective compared to other available therapies, or the rebate percentages required to secure favorable coverage may not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development. U.S.
Third-party payors may not consider seralutinib to be medically necessary or cost-effective compared to other available therapies, or the rebate percentages required to secure favorable coverage may not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our investment.
Smith was the Senior Vice President of Sales and an Executive Leadership Team member at Actelion Pharmaceuticals US, Inc., where he spearheaded two successful PAH drug launches, Opsumit (macitentan) and Uptravi (selexipag).
Previously until 2018, Mr. Smith was the Senior Vice President of Sales and an Executive Leadership Team member at Actelion Pharmaceuticals US, Inc., where he spearheaded two successful PAH drug launches, Opsumit (macitentan) and Uptravi (selexipag).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new manufacturer discounting program (which began in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (beginning in 2024); and replaces the Part D coverage gap discount program with a new manufacturer discount program (beginning in 2025).
In addition, appropriate packaging must be 15 Table of Contents selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.
In addition, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.
The principal purposes of our equity and cash incentive plans are to attract, retain and motivate personnel through the granting of stock-based and cash-based compensation awards, in order to align our interests and the interests of our stockholders with those of our employees and consultants. As of March 6, 2025, we had 144 full-time employees and 1 part-time employee.
The principal purposes of our equity and cash incentive plans are to attract, retain and motivate personnel through the granting of stock-based and cash-based compensation awards, in order to align our interests and the interests of our stockholders with those of our employees and consultants. As of March 10, 2026, we had 161 full-time employees and 1 part-time employee.
If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or inability to manufacture the product in sufficient quantities.
If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same approved use or indication within such rare 18 Table of Contents disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or inability to manufacture the product in sufficient quantities.
In December 2022, we announced positive topline results from the 24-week Phase 2 TORREY trial in 86 PAH patients. In this well-treated patient population, the seralutinib arm demonstrated a statistically significant, placebo-adjusted improvement of 14.3% in its primary efficacy endpoint, pulmonary vascular resistance, or PVR. Seralutinib has been generally well tolerated in all completed clinical trials.
In December 2022, we announced positive topline results from the 24-week Phase 2 TORREY trial in 86 PAH patients. In this well-treated patient population, the seralutinib arm demonstrated a statistically significant, placebo-adjusted improvement of 14.3% in its primary efficacy endpoint, pulmonary vascular resistance, or PVR.
Since its enactment, there have been judicial and political challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Other legislative changes have been proposed and adopted since the ACA was enacted.
Since its enactment, there have been judicial and political challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
Under the collaboration agreement, we will jointly develop seralutinib with Chiesi. We will lead global development of seralutinib in PAH and PH-ILD and will lead potential commercialization for PAH and PH-ILD in the United States, with both parties contributing 50%of commercial efforts, including performing 50% of the commercialization activities.
We will lead global development of seralutinib in PAH and PH-ILD and will lead potential commercialization for PAH and PH-ILD in the United States, with both parties contributing 50% of commercial efforts, including performing 50% of the commercialization activities.
Healthcare Reform In the United States, there has been, and continues to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the profitable sale of product candidates.
Healthcare Reform In the United States and some foreign jurisdictions, there has been, and we expect there will continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the profitable sale of product candidates.
We also may face some competition from products used in Functional Class I and II patients, such as the oral PDE5 inhibitors, including Revatio (Pfizer Inc.) and Adcirca (United Therapeutics); the sGC stimulator Adempas (Bayer AG); and oral ERAs, including Tracleer (Janssen), Letairis (Gilead Sciences, Inc.) and Opsumit (Janssen); and combination PDE5 inhibitor / ERA therapies, such as Opsynvi (Janssen).
We also may face some competition from products used as frontline therapy for PAH, such as the oral PDE5 inhibitors, including Revatio (Pfizer Inc.) and Adcirca (United Therapeutics); the sGC stimulator Adempas (Bayer AG); and oral ERAs, including Tracleer (Janssen), Letairis (Gilead Sciences, Inc.) and Opsumit (Janssen); and combination PDE5 inhibitor / ERA therapies, such as Opsynvi (Janssen).
Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of good laboratory practice, or GLP, as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes).
Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances. Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of good laboratory practice, or GLP, as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes).
Once filed, the FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use and whether its manufacturing is cGMP-compliant to assure and preserve the product’s identity, 16 Table of Contents strength, quality and purity.
The resubmitted application also is subject to review before the FDA accepts it for filing. 17 Table of Contents Once filed, the FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use and whether its manufacturing is cGMP-compliant to assure and preserve the product’s identity, strength, quality and purity.
Our philosophy is to offer a comprehensive compensation and benefits package to support our greatest assets, our people, and our human capital resources objectives include, as applicable, identifying, attracting, retaining and motivating our highly qualified management and our clinical, scientific and other employees and consultants.
Our ultimate goal is to enhance and extend the lives of patients. 29 Table of Contents Our philosophy is to offer a comprehensive compensation and benefits package to support our greatest assets, our people, and our human capital resources objectives include, as applicable, identifying, attracting, retaining and motivating our highly qualified management and our clinical, scientific and other employees and consultants.
The following table summarizes the current development plan for seralutinib in PH: Mechanism of Action in PAH PAH is driven by abnormal cellular proliferation within and around the small blood vessels of the lung that carry blood from the right side of the heart to the lungs.
Mechanism of Action in PAH PAH is driven by abnormal cellular proliferation within and around the small blood vessels of the lung that carry blood from the right side of the heart to the lungs.
The decrease in BMPR2 characteristic of PAH results in induction of granulocyte-macrophage colony-stimulating factor, or GM-CSF, and macrophage recruitment. Notably, in the BMPR2 knock out mouse, there is significant pulmonary inflammation due to activation of tissue macrophages.
Additionally, macrophage activity in PAH is associated with bone morphogenetic protein receptor type II, or BMPR2, levels. The decrease in BMPR2 characteristic of PAH results in induction of granulocyte-macrophage colony-stimulating factor, or GM-CSF, and macrophage recruitment. Notably, in the BMPR2 knock out mouse, there is significant pulmonary inflammation due to activation of tissue macrophages.
Of those 145 employees, 30, or 21%, have a Ph.D. or M.D., and 84, or 58%, are women. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.
Of those 162 employees, 32, or 20%, have a Ph.D. or M.D., and 95, or 59%, are women. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.
Pediatric exclusivity is another type of marketing exclusivity available in the United States. Pediatric exclusivity provides for an additional six months of marketing exclusivity attached to an existing period of regulatory exclusivity or patent term if a sponsor conducts clinical trials in children in response to a written request from the FDA.
Pediatric exclusivity provides for an additional six months of marketing exclusivity attached to an existing period of regulatory exclusivity or patent term if a sponsor conducts clinical trials in children in response to a written request from the FDA. The issuance of a written request does not require the sponsor to undertake the described clinical trials.
Our employees are a team of highly dedicated, passionate individuals who pride themselves on a culture of respect, humility, transparency, inclusion, dedication, collaboration and fun. Our ultimate goal is to enhance and extend the lives of patients.
Our employees are a team of highly dedicated, passionate individuals who pride themselves on a culture of respect, humility, transparency, inclusion, dedication, collaboration and fun.
All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations, which among other things, include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.
Submission of an IND therefore may or may not result in FDA allowance to begin a clinical trial. 15 Table of Contents All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations, which among other things, include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.
The United States Food and Drug Administration, or FDA, the European Commission, or EC, and the Pharmaceuticals and Medical Devices Agency, or PMDA, of Japan have granted seralutinib orphan drug designation for the treatment of patients with PAH.
The FDA, the European Commission, or EC, and the Pharmaceuticals and Medical Devices Agency, or PMDA, of Japan have granted seralutinib orphan drug designation for the treatment of patients with PAH. Chiesi is currently evaluating the totality of the PROSERA dataset.
The FDA may request additional information rather than accept an NDA for filing. In this event, the NDA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing.
The FDA may request additional information rather than accept an NDA for filing. In this event, the NDA must be resubmitted with the additional information.
We have the right to terminate by providing written notice in the event Chiesi or its affiliates or sublicensee brings a patent challenge and Chiesi 12 Table of Contents does not take certain steps to withdraw from or cease supporting such challenge.
We have the right to terminate by providing written notice in the event Chiesi or its affiliates or sublicensee brings a patent challenge and Chiesi does not take certain steps to withdraw from or cease supporting such challenge. Chiesi may terminate the collaboration agreement for any reason upon prior written notice to us, subject to a notice period.
Caryn Peterson, our Executive Vice President, Regulatory Affairs, has considerable experience and regulatory expertise as a Managing Director of Development & Strategic Consulting Associates, as well as management positions leading regulatory affairs at Syndax Pharmaceuticals and FeRx Incorporated. Our Strategy We are a clinical-stage biopharmaceutical company focused on the development and commercialization of seralutinib for the treatment of PH.
Caryn Peterson, our Executive Vice President, Regulatory Affairs, has considerable experience and regulatory expertise as a Managing Director of Development & Strategic Consulting Associates, as well as management positions leading regulatory affairs at Syndax Pharmaceuticals and FeRx Incorporated.
It is currently unclear to what extent the government of the UK will seek to align its regulations with the EU. The EU laws that have been transposed into UK law through secondary legislation remain applicable in Great Britain (England, Scotland and Wales), or GB, however, new legislation such as the (EU) CTR is not applicable in GB.
The EU laws that have been transposed into UK law through secondary legislation remain applicable in Great Britain (England, Scotland and Wales), or GB, however, new legislation such as the (EU) CTR is not generally applicable in GB.
Our success will be based in part on our ability to build and actively manage a portfolio of drugs that addresses unmet medical needs and creates value in patient therapy. 10 Table of Contents License and Collaboration Agreements Pulmokine In October 2017, we entered into a license agreement, or the Pulmokine Agreement, with Pulmokine, Inc., under which we were granted an exclusive worldwide license and sublicense to certain intellectual property rights owned or controlled by Pulmokine, including intellectual property rights co-owned by Pulmokine and Gilead Sciences, to develop and commercialize seralutinib and certain backup compounds for the treatment, prevention and diagnosis of any and all disease or conditions.
License and Collaboration Agreements Pulmokine In October 2017, we entered into a license agreement, or the Pulmokine Agreement, with Pulmokine, Inc., under which we were granted an exclusive worldwide license and sublicense to certain intellectual property rights owned or controlled by Pulmokine, including intellectual property rights co-owned by Pulmokine and Gilead Sciences, to develop and commercialize seralutinib and certain backup compounds for the treatment, prevention and diagnosis of any and all disease or conditions.
Macrophages, which express the CSF1 receptor, are now recognized to play an important role in PAH pathology. Activated CSF1R positive macrophages accumulate around pulmonary arterioles in PAH, which have been shown in vivo in PAH patients with positron emission tomography. Additionally, macrophage activity in PAH is associated with bone morphogenetic protein receptor type II, or BMPR2, levels.
Macrophages, which express the CSF1 receptor, are now recognized to play an important role in PAH pathology. Activated CSF1R positive macrophages accumulate around pulmonary arterioles in PAH, which have been 6 Table of Contents shown in vivo in PAH patients with positron emission tomography.
Competition may increase further as a result of advances made in the commercial applicability of technologies and greater availability of capital for investment in these fields.
Additional mergers and acquisitions in the pharmaceutical industry may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances made in the commercial applicability of technologies and greater availability of capital for investment in these fields.
FDA may withdraw approval of a drug or indication approved under accelerated approval on an expedited basis if, for example, the confirmatory trial fails to verify the predicted clinical benefit of the product or if the sponsor fails to conduct such trials in a timely manner.
FDA may withdraw approval of a drug or indication approved under accelerated approval on an expedited basis if, for example, the confirmatory trial fails to verify the predicted clinical benefit of the product or if the sponsor fails to conduct such trials in a timely manner. 19 Table of Contents Fast track designation, breakthrough therapy designation, priority review and accelerated approval do not change the standards for approval but may expedite the development or approval process.
While the prevalence of PH-ILD is unknown, we believe PH-ILD is at least as prevalent as PAH. Patients living with PH-ILD generally have a poor disease prognosis and have an increased mortality rate, as compared to PAH patients. There is only one FDA-approved treatment for PH-ILD, and there are no approved therapies in the EU.
While the prevalence of PH-ILD is unknown, we believe PH-ILD is at least as prevalent as PAH. Patients living with PH-ILD generally have a poor disease prognosis and have an increased mortality rate, as compared to PAH patients. We believe seralutinib may have potential in fibrotic lung disease, including PH‑ILD.
The criteria are essentially the same, but have been tailored for the market, i.e., the prevalence of the condition in the UK, rather than the EU, must not be more than five in 10,000.
The criteria are essentially the same, but have been tailored for the market, i.e., the prevalence of the condition in the UK, rather than the EU, must not be more than five in 10,000. Should an orphan designation be granted, the period or market exclusivity will be set from the date of first approval of the product in the UK.
PDE5 inhibitors are often used in combination with ERAs as an early treatment strategy. In patients who fail to respond to combination therapy of an ERA and a PDE5 inhibitor, it is common practice to add a prostanoid. Prostanoids are also commonly used to treat patients with evidence of right heart failure.
In patients who fail to respond to combination therapy of an ERA and a PDE5 inhibitor, it is common practice to add a prostanoid. Prostanoids are also commonly used to treat patients with evidence of right heart failure. The recent introduction of an activin ligand trap therapy (sotatercept) to the market has provided patients with an additional treatment option.
Laws and regulations in the EU and other jurisdictions apply broadly to the collection, use, storage, disclosure, processing and security of personal data, and have generally become more stringent over time.
Foreign Data Privacy and Security Laws We are also subject to laws and regulations in non-U.S. countries governing data privacy and the protection of personal data, including health-related data. Laws and regulations in the EU and other jurisdictions apply broadly to the collection, use, storage, disclosure, processing and security of personal data, and have generally become more stringent over time.
Upon termination of the Gilead Agreement for any reason, our sublicense under the Pulmokine Agreement will survive provided that we did not cause a material breach that was the basis for such termination and we agree to be bound by the terms of the Gilead Agreement.
Upon termination of the Gilead Agreement for any reason, our sublicense under the Pulmokine Agreement will survive provided that we did not cause a material breach that was the basis for such termination and we agree to be bound by the terms of the Gilead Agreement. 12 Table of Contents Upon termination of the Pulmokine Agreement for any reason, all rights and licenses granted to us under the agreement will terminate and revert to Pulmokine, and in the event of certain termination events, we would grant Pulmokine worldwide rights to the terminated program.
Among policy makers and payors in the United States, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.
The licenses granted to Chiesi are subject to retained rights of our Company for the worldwide development and manufacture of seralutinib and Licensed Products, commercialization of Licensed Products in the United States, and performance of our obligations and exercise of our rights that may be set forth in the global development plan and U.S. commercialization plan, in each case in accordance with the collaboration agreement. 11 Table of Contents Chiesi granted us a non-exclusive, sublicensable (with Chiesi’s consent required in the US Territory for third party sublicenses) licenses under certain practiced intellectual property rights relating to seralutinib and Licensed Products and arising intellectual property rights, in each case as controlled by Chiesi, for the worldwide development and manufacture of seralutinib and Licensed Product and a co-exclusive license (with Chiesi) to commercialize seralutinib and Licensed Products in the US Territory.
Chiesi granted us a non-exclusive, sublicensable (with Chiesi’s consent required in the US Territory for third party sublicenses) licenses under certain practiced intellectual property rights relating to seralutinib and Licensed Products and arising intellectual property rights, in each case as controlled by Chiesi, for the worldwide development and manufacture of seralutinib and Licensed Product and a co-exclusive license (with Chiesi) to commercialize seralutinib and Licensed Products in the US Territory.
CMS has published the negotiated prices for the initial ten drugs, which will first be effective in 2026, and has published the list of the subsequent 15 drugs that will be subject to negotiation, although the Medicare drug price negotiation program is currently subject to legal challenges.
CMS has published the negotiated prices for the initial ten drugs, which became effective in 2026, and the subsequent 15 drugs, which will first be effective in 2027. CMS has also published the next set of 15 drugs that will be subject to negotiation.
Even if a product candidate qualifies for one or more of these programs, the FDA may later decide that the product candidate no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. 18 Table of Contents Post-Approval Requirements Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory standards is not maintained or if problems occur after the product reaches the market.
Even if a product candidate qualifies for one or more of these programs, the FDA may later decide that the product candidate no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.
However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. 20 Table of Contents Pediatric exclusivity is another type of marketing exclusivity available in the United States.
As seralutinib advances through development, we expect to enter into longer-term commercial supply agreements with key suppliers and manufacturers to fulfill and secure our production needs. Intellectual Property We strive to protect the proprietary technology, inventions and improvements that are commercially important to our business, including seeking, maintaining, and defending patent rights, whether developed internally or licensed from third parties.
Intellectual Property We strive to protect the proprietary technology, inventions and improvements that are commercially important to our business, including seeking, maintaining, and defending patent rights, whether developed internally or licensed from third parties.
Seralutinib treatment resulted in a statistically significant reduction in NT-proBNP, a biomarker of right heart stress, as early as 12 weeks, increasing to a placebo-adjusted 408.3 ng/L mean difference at Week 24 (p = 0.0012).
In patients with a baseline REVEAL 2.0 Risk Score of 6 or greater, seralutinib demonstrated a 23% placebo-adjusted reduction in PVR (p = 0.0134) and a placebo-adjusted 22-meter improvement in 6MWD (p = 0.2482). 9 Table of Contents Seralutinib treatment resulted in a statistically significant reduction in NT-proBNP, a biomarker of right heart stress, as early as 12 weeks, increasing to a placebo-adjusted 408.3 ng/L mean difference at Week 24 (p = 0.0012).
Later discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market. After approval, some types of changes to the approved product, such as adding new indications, certain manufacturing changes and additional labeling claims, are subject to further FDA review and approval.
After approval, some types of changes to the approved product, such as adding new indications, certain manufacturing changes and additional labeling claims, are subject to further FDA review and approval.
However, on January 1, 2025, a new arrangement called the “Windsor Framework” came into effect and reintegrated Northern Ireland under the regulatory authority of the MHRA with respect to medicinal products. The Windsor Framework removes EU licensing processes, and EU labelling and serialization requirements in relation to Northern Ireland, and introduces a UK-wide licensing process for medicinal products.
However, on January 1, 2025, an arrangement called the “Windsor Framework” came into effect and reintegrated Northern Ireland under the regulatory authority of the MHRA with respect to medicinal products.
The recent introduction of an activin ligand trap therapy (sotatercept) to the market has provided patients with an additional treatment option. While some existing treatments have led to significant improvements in time to clinical worsening and other composite endpoints in PAH patients, there are no cures.
While some existing treatments have led to significant improvements in time to clinical worsening and other composite endpoints in PAH patients, there are no cures.
Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.
Such scrutiny has resulted in several recent congressional inquiries and 21 Table of Contents proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. The Inflation Reduction Act, or IRA, was enacted in 2022.
The true incidence and prevalence of PAH are unknown. The estimated PAH patient population in the US is about 50,000 patients, and the estimated patient population in the EU is over 70,000 patients. The number of diagnosed PAH patients continues to increase, and we believe this increase is likely due to enhanced awareness and diagnosis of the disease.
The true incidence and prevalence of PAH are unknown. The estimated PAH patient population in the US is about 50,000 patients, and the estimated patient population in the European Union, or EU, is over 70,000 patients.
Worldwide branded drug sales for PAH and PH-ILD therapies totaled over $7 billion in 2023. Treatment Paradigm in PAH Currently approved PAH therapies consist of three classes of vasodilators and one activin ligand trap therapy. The three classes of vasodilatory therapy are PDE5 inhibitors (and guanylate cyclase stimulators), ERAs, and prostanoids (and prostacyclin receptor agonists).
Treatment Paradigm in PAH Currently approved PAH therapies consist of three classes of vasodilators and one activin ligand trap therapy. The three classes of vasodilatory therapy are phosphodiesterase type 5, or PDE5, inhibitors (and guanylate cyclase stimulators), ERAs, and prostanoids (and prostacyclin receptor agonists). PDE5 inhibitors are often used in combination with ERAs as an early treatment strategy.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

186 edited+75 added−41 removed485 unchanged
Biggest changeOur future capital requirements will depend on many factors, including: • the type, number, scope, progress, expansions, results, costs and timing of, our clinical trials and preclinical studies of seralutinib or product candidates we may choose to pursue in the future; • the costs and timing of manufacturing for seralutinib, including commercial manufacturing if seralutinib is approved; • the costs, timing and outcome of regulatory review of seralutinib; • the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; • the costs associated with hiring additional personnel and consultants as our clinical activities increase; • the timing and amount of the milestone or other payments we must make to Pulmokine from whom we have in-licensed seralutinib; • the costs and timing of establishing or securing sales and marketing capabilities if seralutinib is approved; • our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for seralutinib, if approved; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and • costs associated with any products or technologies that we may in-license or acquire.
Biggest changeAttempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to develop seralutinib. 32 Table of Contents Our future capital requirements will depend on many factors, including: • the outcome of our discussions with the FDA on a potential path forward for seralutinib in PAH; • the costs, timing and outcome of regulatory review of seralutinib; • the type, number, scope, progress, expansions, results, costs and timing of, our clinical trials and preclinical studies of seralutinib or product candidates we may choose to pursue in the future or that may be required by regulatory agencies; • the costs and timing of manufacturing for seralutinib, including commercial manufacturing if seralutinib is approved; • the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; • the costs associated with hiring additional personnel and consultants as our clinical activities increase; • the timing and amount of the milestone or other payments we must make to Pulmokine from whom we have in-licensed seralutinib; • the costs and timing of establishing or securing sales and marketing capabilities if seralutinib is approved; • our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for seralutinib, if approved; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and • costs associated with any products or technologies that we may in-license or acquire.
The FDA or comparable foreign regulatory authorities could delay, limit or deny approval of seralutinib for many reasons, including: • such authorities may disagree with the design or implementation of our clinical trials; 38 Table of Contents • negative or ambiguous results from our clinical trials or results may not meet the level of statistical significance required by the FDA or comparable foreign regulatory agencies for approval; • serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to seralutinib; • the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; • such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the United States; • we may be unable to demonstrate that seralutinib’s clinical and other benefits outweigh its safety risks; • such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • such authorities may not agree that the data collected from clinical trials of seralutinib are acceptable or sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials • such authorities may disagree regarding the formulation, labeling and/or the specifications of seralutinib; • approval may be granted only for indications that are significantly more limited than what we apply for and/or with other significant restrictions on distribution and use; • such authorities may find deficiencies in the manufacturing processes or facilities of our third-party manufacturers with which we contract for clinical and commercial supplies; or the approval policies; • regulations of such authorities may significantly change in a manner rendering our or any of our potential future collaborators’ clinical data insufficient for approval; or • such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission.
The FDA or comparable foreign regulatory authorities could delay, limit or deny approval of seralutinib for many reasons, including: • such authorities may disagree with the design or implementation of our clinical trials; • negative or ambiguous results from our clinical trials or results may not meet the level of statistical significance required by the FDA or comparable foreign regulatory agencies for approval; • serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to seralutinib; • the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; • such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the United States; • we may be unable to demonstrate that seralutinib’s clinical and other benefits outweigh its safety risks; • such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • such authorities may not agree that the data collected from clinical trials of seralutinib are acceptable or sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials • such authorities may disagree regarding the formulation, labeling and/or the specifications of seralutinib; • approval may be granted only for indications that are significantly more limited than what we apply for and/or with other significant restrictions on distribution and use; • such authorities may find deficiencies in the manufacturing processes or facilities of our third-party manufacturers with which we contract for clinical and commercial supplies; or the approval policies; 41 Table of Contents • regulations of such authorities may significantly change in a manner rendering our or any of our potential future collaborators’ clinical data insufficient for approval; or • such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission.
These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: 50 Table of Contents • the timing and cost of, and level of investment in, research, development, regulatory approval and commercialization activities relating to seralutinib, which may change from time to time; • coverage and reimbursement policies with respect to seralutinib, if approved, and potential future drugs that compete with seralutinib; • the cost of manufacturing seralutinib, which may vary depending on the quantity of production and the terms of our agreements with third-party manufacturers; • the timing and amount of the milestone or other payments we must make to Pulmokine and other third parties from whom we have in-licensed seralutinib, including payments due upon a change in control of our subsidiaries as well as timing and amount of the milestone or other payments we receive from Chiesi; • expenditures that we may incur to acquire, develop or commercialize additional product candidates and technologies; • the level of demand for any approved products, which may vary significantly; • future accounting pronouncements or changes in our accounting policies; and • the timing and success or failure of preclinical studies or clinical trials for seralutinib or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners.
These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • the timing and cost of, and level of investment in, research, development, regulatory approval and commercialization activities relating to seralutinib, which may change from time to time; • coverage and reimbursement policies with respect to seralutinib, if approved, and potential future drugs that compete with seralutinib; 52 Table of Contents • the cost of manufacturing seralutinib, which may vary depending on the quantity of production and the terms of our agreements with third-party manufacturers; • the timing and amount of the milestone or other payments we must make to Pulmokine and other third parties from whom we have in-licensed seralutinib, including payments due upon a change in control of our subsidiaries as well as timing and amount of the milestone or other payments we receive from Chiesi; • expenditures that we may incur to acquire, develop or commercialize additional product candidates and technologies; • the level of demand for any approved products, which may vary significantly; • future accounting pronouncements or changes in our accounting policies; and • the timing and success or failure of preclinical studies or clinical trials for seralutinib or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners.
For example: • others may be able to develop products that are similar to seralutinib but that are not covered by the claims of the patents that we own or license; • we or our licensors or predecessors might not have been the first to make the inventions covered by the issued patents or patent application that we own or license; • we or our licensors or predecessors might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or license may be held invalid or unenforceable, as a result of legal challenges by our competitors; 61 Table of Contents • 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 may not develop additional proprietary technologies that are patentable; and • the patents of others may have an adverse effect on our business.
For example: • others may be able to develop products that are similar to seralutinib but that are not covered by the claims of the patents that we own or license; • we or our licensors or predecessors might not have been the first to make the inventions covered by the issued patents or patent application that we own or license; • we or our licensors or predecessors might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or license may be held invalid or unenforceable, as a result of legal challenges by our competitors; • 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 may not develop additional proprietary technologies that are patentable; and 64 Table of Contents • the patents of others may have an adverse effect on our business.
Seralutinib, will therefore require review and coordination by FDA’s drug and device centers prior to approval, which may delay approval. Under FDA regulations, combination products are subject to current good manufacturing practice, or cGMP, requirements applicable to both drugs and devices, including the Quality System regulation currently applicable to medical devices in the United States.
Seralutinib, will therefore require review and coordination by FDA’s drug and device centers prior to approval, which may delay approval. Under FDA regulations, combination products are subject to current good manufacturing practice, or cGMP, requirements applicable to both drugs and devices, including the Quality Management System regulation currently applicable to medical devices in the United States.
Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. We expect to face competition for seralutinib from existing products and products in development. Seralutinib is a PDGFR, CSF1R and c-KIT inhibitor initially targeted for PAH and PH-ILD patients.
Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. We expect to face competition for seralutinib and RT234 from existing products and products in development. Seralutinib is a PDGFR, CSF1R and c-KIT inhibitor initially targeted for PAH and PH-ILD patients.
The commencement, data readouts and completion of clinical trials can be delayed for a number of reasons including delays related to: • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies, including the doses and endpoints of our ongoing and planned Phase 3 clinical trial of seralutinib; • obtaining regulatory authorizations to commence a trial or reaching a consensus with regulatory authorities on trial design; • any failure or delay in reaching an agreement with contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • obtaining approval or positive opinion from one or more institutional review boards, or IRBs or ethics committees; • IRBs refusing to approve, suspending or terminating a trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of a trial; • changes to clinical trial protocol; • clinical sites deviating from trial protocol or dropping out of a trial; • manufacturing sufficient quantities of seralutinib or obtaining sufficient quantities of combination therapies for use in clinical trials; • subjects failing to enroll or remain in our trials at the rate we expect, or failing to return for post-treatment follow-up, including subjects failing to remain in our trials; • subjects choosing an alternative treatment for PAH or other indications including PH-ILD for which we are developing seralutinib, or participating in competing clinical trials; • lack of adequate funding to continue a clinical trial; 34 Table of Contents • subjects experiencing severe or unexpected drug-related adverse effects; • occurrence of serious adverse events in trials of the same class of agents conducted by other companies; • selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; • a facility manufacturing seralutinib or any of its components, including the device component of orally inhaled seralutinib , being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of cGMP or similar foreign regulations or other applicable requirements, or infections or cross-contaminations of seralutinib in the manufacturing process; • any changes to our manufacturing process that may be necessary or desired; • third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, good clinical practices, or GCP, or other regulatory requirements; third-party contractors not performing data collection or analysis in a timely or accurate manner; or • third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications.
The commencement, data readouts and completion of clinical trials can be delayed for a number of reasons including delays related to: • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies, including the doses and endpoints of our ongoing or potential future Phase 3 clinical trial of seralutinib; • obtaining regulatory authorizations to commence a trial or reaching a consensus with regulatory authorities on trial design; • any failure or delay in reaching an agreement with contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • obtaining approval or positive opinion from one or more institutional review boards, or IRBs or ethics committees; • IRBs refusing to approve, suspending or terminating a trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of a trial; • changes to clinical trial protocol; • clinical sites deviating from trial protocol or dropping out of a trial; • manufacturing sufficient quantities of seralutinib or obtaining sufficient quantities of combination therapies for use in clinical trials; • subjects failing to enroll or remain in our trials at the rate we expect, or failing to return for post-treatment follow-up, including subjects failing to remain in our trials; • subjects choosing an alternative treatment for PAH or other indications including PH-ILD for which we are developing seralutinib, or participating in competing clinical trials; • lack of adequate funding to continue a clinical trial; • subjects experiencing severe or unexpected drug-related adverse effects; • occurrence of serious adverse events in trials of the same class of agents conducted by other companies; • selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; • a facility manufacturing seralutinib or any of its components, including the device component of orally inhaled seralutinib , being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of cGMP or similar foreign regulations or other applicable requirements, or infections or cross-contaminations of seralutinib in the manufacturing process; • any changes to our manufacturing process that may be necessary or desired; • third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, good clinical practices, or GCP, or other regulatory requirements; third-party contractors not performing data collection or analysis in a timely or accurate manner; or 37 Table of Contents • third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications.
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; • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare and Medicaid Services, or CMS, information related to payments and other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, anesthesiology assistants and certified nurse-midwives), and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by non- governmental third-party payors, including private insurers, or by the patients themselves; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information or which require tracking gifts and other remuneration 52 Table of Contents and items of value provided to physicians, other healthcare providers and entities; and state and local laws that require the registration of pharmaceutical sales representatives.
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; • the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare and Medicaid Services, or CMS, information related to payments and other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, anaesthesiology assistants and certified nurse-midwives), and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales 54 Table of Contents and marketing arrangements and claims involving healthcare items or services reimbursed by non- governmental third-party payors, including private insurers, or by the patients themselves; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information or which require tracking gifts and other remuneration and items of value provided to physicians, other healthcare providers and entities; and state and local laws that require the registration of pharmaceutical sales representatives.
The degree of market acceptance of seralutinib will depend on a number of factors, including: • demonstration of clinical efficacy and safety compared to other more-established products; • the indications for which seralutinib is approved; • the limitation of our targeted patient population and other limitations or warnings contained in any FDA- or foreign regulatory authorities- approved labeling; • acceptance of a new drug for the relevant indication by healthcare providers and their patients; • the pricing and cost-effectiveness of seralutinib, as well as the cost of treatment with seralutinib in relation to alternative treatments and therapies; • our ability to obtain and maintain sufficient third-party coverage and adequate reimbursement from government healthcare programs, including Medicare and Medicaid, private health insurers and other third-party payors; • the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with seralutinib in the absence of sufficient third-party coverage and adequate reimbursement; • any restrictions on the use of seralutinib, and the prevalence and severity of any adverse effects; • potential product liability claims; • the timing of market introduction of seralutinib as well as competitive drugs; • the effectiveness of our or any of our potential future collaborators’ sales and marketing strategies; and • unfavorable publicity relating to seralutinib.
The degree of market acceptance of seralutinib will depend on a number of factors, including: • demonstration of clinical efficacy and safety compared to other more-established products; • the indications for which seralutinib is approved; • the limitation of our targeted patient population and other limitations or warnings contained in any FDA- or foreign regulatory authorities- approved labeling; • acceptance of a new drug for the relevant indication by healthcare providers and their patients; • the pricing and cost-effectiveness of seralutinib, as well as the cost of treatment with seralutinib in relation to alternative treatments and therapies; • our ability to obtain and maintain sufficient third-party coverage and adequate reimbursement from government healthcare programs, including Medicare and Medicaid, private health insurers and other third-party payors; 48 Table of Contents • the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with seralutinib in the absence of sufficient third-party coverage and adequate reimbursement; • any restrictions on the use of seralutinib, and the prevalence and severity of any adverse effects; • potential product liability claims; • the timing of market introduction of seralutinib as well as competitive drugs; • the effectiveness of our or any of our potential future collaborators’ sales and marketing strategies; and • unfavorable publicity relating to seralutinib.
As a result, such persons or their appointees to our board of directors, acting together, have the ability to control or significantly influence all matters submitted to our board of directors or stockholders for approval, including the appointment of our management, the election and removal of directors and approval of any significant transaction, as well as our management and business affairs.
As a result, such persons or their appointees to our board of directors, acting together, have the ability to significantly influence all matters submitted to our board of directors or stockholders for approval, including the appointment of our management, the election and removal of directors and approval of any significant transaction, as well as our management and business affairs.
These transactions may never be successful and may require significant time and attention of management. In addition, the integration of any business that we may acquire in the future may disrupt our existing business and may be a complex, risky and costly endeavor for which we may never realize the full benefits of the acquisition.
These transactions may never be successful and may require significant time and attention from management. In addition, the integration of any business that we may acquire in the future may disrupt our existing business and may be a complex, risky and costly endeavor for which we may never realize the full benefits of the acquisition.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EEA, and the United States remains uncertain.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EEA / UK, and the United States remains uncertain.
We have received orphan drug designation in the United States and the EU for seralutinib for treatment of PAH and may seek additional orphan designations for seralutinib in the future. There can be no assurance that we will be able to maintain or obtain such designations.
We have received orphan drug designation in the United States, the EU and Japan for seralutinib for treatment of PAH and may seek additional orphan designations for seralutinib in the future. There can be no assurance that we will be able to maintain or obtain such designations.
In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. For example, in March 2010, the ACA was enacted in the United States.
In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. For example, in 2010, the ACA was enacted in the United States.
In addition, if seralutinib receives marketing approval, and we or others later identify undesirable side effects caused by seralutinib, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw, suspend or limit approvals of seralutinib; • we may be required to recall a product or change the way seralutinib is administered to patients; • regulatory authorities may require additional warnings on the label, such as a “black box” warning or a contraindication; • we may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a medication guide outlining the risks of such side effects for distribution to patients, or similar risk management measures; 37 Table of Contents • we may be required to change the way seralutinib is distributed or administered, conduct additional clinical trials or change the labeling of seralutinib or be required to conduct additional post-marketing studies or surveillance; • we could be sued and held liable for harm caused to patients; • sales of seralutinib may decrease significantly or seralutinib could become less competitive; and • our reputation may suffer.
In addition, if seralutinib receives marketing approval, and we or others later identify undesirable side effects caused by seralutinib, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw, suspend or limit approvals of seralutinib; • we may be required to recall a product or change the way seralutinib is administered to patients; • regulatory authorities may require additional warnings on the label, such as a “black box” warning or a contraindication; • we may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a medication guide outlining the risks of such side effects for distribution to patients, or similar risk management measures; • we may be required to change the way seralutinib is distributed or administered, conduct additional clinical trials or change the labeling of seralutinib or be required to conduct additional post-marketing studies or surveillance; • we could be sued and held liable for harm caused to patients; • sales of seralutinib may decrease significantly or seralutinib could become less competitive; and • our reputation may suffer.
Any future pandemic or future epidemic disease outbreaks could also potentially further affect the business of the FDA or other regulatory authorities, which could result in delays in meetings related to planned clinical trials or other regulatory matters.
Any future pandemic or future epidemic disease outbreaks could also potentially further affect the business of the FDA or other regulatory authorities, which could result in delays in meetings related to future clinical trials or other regulatory matters.
Later discovery of previously unknown problems with seralutinib, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of seralutinib, withdrawal of seralutinib from the market or voluntary or mandatory product recalls; • restrictions on product distribution or use, or requirements to conduct post-marketing studies or clinical trials; • fines, restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical trials; • refusal by the FDA or foreign regulatory authorities to approve pending applications or supplements to approved applications filed by us or suspension or revocation of approvals; • product seizure or detention, or refusal to permit the import or export of seralutinib; and • injunctions or the imposition of civil or criminal penalties.
Later discovery of previously unknown problems with seralutinib, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: 47 Table of Contents • restrictions on the marketing or manufacturing of seralutinib, withdrawal of seralutinib from the market or voluntary or mandatory product recalls; • restrictions on product distribution or use, or requirements to conduct post-marketing studies or clinical trials; • fines, restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical trials; • refusal by the FDA or foreign regulatory authorities to approve pending applications or supplements to approved applications filed by us or suspension or revocation of approvals; • product seizure or detention, or refusal to permit the import or export of seralutinib; and • injunctions or the imposition of civil or criminal penalties.
We also have limited experience as a company in preparing, submitting marketing applications and have not previously submitted an NDA or other comparable foreign application for any product candidate.
We have limited experience as a company in preparing, submitting marketing applications and have not previously submitted an NDA or other comparable foreign application for any product candidate.
The provisions in our charter documents include the following: 68 Table of Contents • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors, unless the board of directors grants such right to the stockholders, to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the required approval of at least 66-2/3% of the shares entitled to vote to remove a director for cause, and the prohibition on removal of directors without cause; • the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66-2/3% of the shares entitled to vote to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • an exclusive forum provision providing that the Court of Chancery of the State of Delaware will be the exclusive forum for certain actions and proceedings; • the requirement that a special meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
The provisions in our charter documents include the following: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; 71 Table of Contents • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors, unless the board of directors grants such right to the stockholders, to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the required approval of at least 66-2/3% of the shares entitled to vote to remove a director for cause, and the prohibition on removal of directors without cause; • the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66-2/3% of the shares entitled to vote to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • an exclusive forum provision providing that the Court of Chancery of the State of Delaware will be the exclusive forum for certain actions and proceedings; • the requirement that a special meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
We will need to reassess, as of June 30, 2025, whether we will continue to qualify as a smaller reporting company and a non-accelerated filer for filings beyond the fiscal year ending December 31, 2025. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
We will need to reassess, as of June 30, 2026, whether we will continue to qualify as a smaller reporting company and a non-accelerated filer for filings beyond the fiscal year ending December 31, 2026. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
We expect our expenses to remain high in connection with our ongoing activities, particularly as we conduct our ongoing and planned clinical trials of seralutinib, continue research and development, and seek regulatory approval for seralutinib. In addition, as seralutinib progresses through development and toward commercialization, we will need to make milestone payments to Pulmokine from whom we have in-licensed seralutinib.
We expect our expenses to remain high in connection with our ongoing activities, particularly as we conduct our ongoing and future clinical trials of seralutinib, continue research and development, and seek regulatory approval for seralutinib. In addition, as seralutinib progresses through development and toward commercialization, we will need to make milestone payments to Pulmokine from whom we have in-licensed seralutinib.
By way of example, California enacted the California Consumer Privacy Act, as amended by the California Privacy Rights Act, or collectively, the CCPA, requires covered businesses that process the personal information of California residents to, among other things: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information; and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
By way of example, California enacted the California Consumer Privacy Act, as amended by the California Privacy Rights Act, or collectively, the CCPA, requires covered businesses that process the personal information of California 55 Table of Contents residents to, among other things: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information; and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begin its Section 404 reviews, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begin its Section 404 reviews, investors may lose confidence in the accuracy and completeness of our financial reports, the market price 77 Table of Contents of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.
Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million / £17.5 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.
Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violate: (1) the laws and regulations of the FDA and other similar regulatory requirements, including those laws that require the reporting of true, complete and accurate information to such authorities, (2) manufacturing standards, including cGMP and similar requirements, (3) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations in the United States and abroad or (4) laws that require the true, complete and accurate reporting of financial information or data.
Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violate: (1) the laws and regulations of the FDA and other similar regulatory requirements, including those laws that require the reporting of true, complete and accurate information to such authorities, (2) manufacturing standards, including cGMP and similar requirements, (3) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations in the United States and 59 Table of Contents abroad or (4) laws that require the true, complete and accurate reporting of financial information or data.
In addition, before we can initiate clinical development for our product candidates, and in some cases, before we can pursue clinical development of a product candidate for a new potential indication, we must submit the results of preclinical studies to the FDA along with other information, including information about product candidate chemistry, manufacturing and controls and our proposed clinical trial protocol, as part of an IND, and we are also required to submit regulatory filings to foreign regulatory authorities for clinical trials outside of the United States.
In addition, before we can initiate clinical development for our product candidates, and in some cases, before we can pursue clinical development of a product candidate for a new potential indication, we must submit the results of preclinical studies to the FDA along with other 36 Table of Contents information, including information about product candidate chemistry, manufacturing and controls and our proposed clinical trial protocol, as part of an IND, and we are also required to submit regulatory filings to foreign regulatory authorities for clinical trials outside of the United States.
We will be required to identify and enroll a sufficient number of subjects for each of our clinical trials. Potential subjects for any planned clinical trials may not be adequately diagnosed or identified with the diseases which we are targeting or may not meet the entry criteria for such trials.
We will be required to identify and enroll a sufficient number of subjects for each of our clinical trials. Potential subjects for any future clinical trials may not be adequately diagnosed or identified with the diseases which we are targeting or may not meet the entry criteria for such trials.
If patients are unwilling to participate in our trials for any reason, including the existence of concurrent clinical trials for similar patient populations in PAH, if they are unwilling to enroll in a clinical trial with a placebo-controlled design or the availability of approved therapies, or we otherwise have difficulty enrolling a sufficient 36 Table of Contents number of patients, the timeline for recruiting subjects, conducting studies and obtaining regulatory approval of seralutinib may be delayed.
If patients are unwilling to participate in our trials for any reason, including the existence of concurrent clinical trials for similar patient populations in PAH, if they are unwilling to enroll in a clinical trial with a placebo-controlled design or the availability of approved therapies, or we otherwise have difficulty enrolling a sufficient number of patients, the timeline for recruiting subjects, conducting studies and obtaining regulatory approval of seralutinib may be delayed.
For example, as a result of the military conflict between Russia and Ukraine, the United States and its European allies have recently announced the imposition of sanctions on certain industry sectors and parties in Russia and the regions of Donetsk and Luhansk in Ukraine, as well as enhanced export controls on certain products and industries.
For example, as a result of the military conflict between Russia and Ukraine, the United States and its European allies announced the imposition of sanctions on certain industry sectors and parties in Russia and the regions of Donetsk and Luhansk in Ukraine, as well as enhanced export controls on certain products and industries.
We are a smaller reporting company within the meaning of the Securities Act, and if we decide to take advantage of certain exemptions from various reporting requirements applicable to smaller reporting companies, our common stock could be less attractive to investors. 70 Table of Contents We are a smaller reporting company.
We are a smaller reporting company within the meaning of the Securities Act, and if we decide to take advantage of certain exemptions from various reporting requirements applicable to smaller reporting companies, our common stock could be less attractive to investors. 73 Table of Contents We are a smaller reporting company.
Under the Orphan Drug Act of 1983, the FDA may designate a product as an orphan product if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States, or a patient population of greater than 200,000 individuals in the United States, 40 Table of Contents but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.
Under the Orphan Drug Act of 1983, the FDA may designate a product as an orphan product if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States, or a patient population of greater than 200,000 individuals in the United States, but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.
Conducting clinical trials outside the United States also exposes us to additional risks, including risks associated with: • additional foreign regulatory requirements; • foreign exchange fluctuations; • compliance with foreign manufacturing, customs, shipment and storage requirements; 41 Table of Contents • cultural differences in medical practice and clinical research; • diminished protection of intellectual property in some countries; and • interruptions or delays in our trials resulting from geopolitical events, such as war or terrorism.
Conducting clinical trials outside the United States also exposes us to additional risks, including risks associated with: • additional foreign regulatory requirements; • foreign exchange fluctuations; • compliance with foreign manufacturing, customs, shipment and storage requirements; • cultural differences in medical practice and clinical research; • diminished protection of intellectual property in some countries; and • interruptions or delays in our trials resulting from geopolitical events, such as war or terrorism.
If seralutinib ultimately receives regulatory approval, we, in collaboration with Chiesi, must build a marketing and sales organization with technical expertise and supporting distribution capabilities to commercialize seralutinib in the United States, which will be expensive and time consuming, or collaborate with 49 Table of Contents third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems.
If seralutinib ultimately receives regulatory approval, we, in collaboration with Chiesi, must build a marketing and sales organization with technical expertise and supporting distribution capabilities to commercialize seralutinib in the United States, which will be expensive and time consuming, or collaborate with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems.
Although we have determined that our internal control over financial reporting was effective as of December 31, 2024, we cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future.
Although we have determined that our internal control over financial reporting was effective as of December 31, 2025, we cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future.
Any difficulties or delays in the commencement or completion, or termination or suspension, of our current or planned clinical trials could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.
Any difficulties or delays in the commencement or completion, or termination or suspension, of our current or future clinical trials could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could significantly reduce the value of our shares to a potential acquiror or delay or prevent changes in control or changes in our management without the consent of our board of directors.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could significantly reduce the value of our shares to a potential acquirer or delay or prevent changes in control or changes in our management without the consent of our board of directors.
Our ability to achieve coverage and acceptable levels of reimbursement for seralutinib by third-party payors will have an effect on our ability to successfully commercialize seralutinib. Even if we obtain coverage for seralutinib by a third-party payor, the resulting reimbursement payment rates may not be 47 Table of Contents adequate or may require co-payments that patients find unacceptably high.
Our ability to achieve coverage and acceptable levels of reimbursement for seralutinib by third-party payors will have an effect on our ability to successfully commercialize seralutinib. Even if we obtain coverage for seralutinib by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high.
Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and making decisions on pricing and reimbursement. 55 Table of Contents If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of seralutinib.
Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and making decisions on pricing and reimbursement. If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of seralutinib.
Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing biopharmaceutical products. We have incurred significant operating losses since our inception. If seralutinib is not successfully developed and approved, we may never generate any revenue.
Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing biopharmaceutical products. 31 Table of Contents We have incurred significant operating losses since our inception. If seralutinib is not successfully developed and approved, we may never generate any revenue.
For example, we are currently conducting our registrational Phase 3 study of seralutinib in PAH at sites outside the United States. If we experience delays in the completion of, or termination of, any clinical trial of seralutinib, the commercial prospects of seralutinib will be harmed, and our ability to generate product revenues from seralutinib will be delayed.
For example, we are currently conducting the open label Phase 3 study of seralutinib in PAH at sites outside the United States. If we experience delays in the completion of, or termination of, any clinical trial of seralutinib, the commercial prospects of seralutinib will be harmed, and our ability to generate product revenues from seralutinib will be delayed.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of 68 Table of Contents being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
We expect competition within the PAH indication will include prostanoids / prostacyclin receptor agonists, including Orenitram (United Therapeutics), Uptravi (Janssen), Tyvaso (United Therapeutics), and Remodulin (United Therapeutics), and activin ligand traps, including Winrevair (Merck).
We expect competition within the PAH indication will include prostanoids / prostacyclin receptor agonists, including Orenitram (United Therapeutics), Uptravi (Janssen), Tyvaso (United Therapeutics), Yutrepia (Liquidia) and Remodulin (United Therapeutics), and activin ligand traps, including Winrevair (Merck).
These CROs, investigators and other third parties play a significant role in the conduct and timing of these trials and subsequent collection and analysis of data. While we have agreements governing the activities of our third-party contractors, we have limited influence over their actual performance.
These CROs, investigators and other third parties play a significant role in the conduct and timing of these trials and subsequent collection and analysis of data. While we have agreements governing the 44 Table of Contents activities of our third-party contractors, we have limited influence over their actual performance.
We cannot predict the breadth of claims 64 Table of Contents that may be allowed or enforced in our patents or in third-party patents. In addition, Congress or other foreign legislative bodies may pass patent reform legislation that is unfavorable to us. For example, the U.S.
We cannot predict the breadth of claims that may be allowed or enforced in our patents or in third-party patents. In addition, Congress or other foreign legislative bodies may pass patent reform legislation that is unfavorable to us. For example, the U.S.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, 69 Table of Contents which may discourage such lawsuits against us and our directors, officers and other employees.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.
These payors may deny or revoke the reimbursement status of seralutinib or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in product development.
These payors may deny or revoke the reimbursement status of seralutinib or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment.
Any patents that we own or license may be challenged or circumvented by third parties or may be narrowed or invalidated as a result of challenges by third parties. Consequently, we do not know whether seralutinib will be protectable or remain protected by valid and enforceable patents.
Any patents that we own or license may be challenged or circumvented by third parties or may be narrowed or invalidated as a result of challenges by third parties. Consequently, we do not know whether seralutinib will be protectable or remain protected by valid and enforceable 62 Table of Contents patents.
Furthermore, the enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.
Furthermore, the enforceability of similar choice of forum provisions in other companies’ certificates of 72 Table of Contents incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.
From time to time, we may also disclose interim data from our clinical studies. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
From time to time, we may also disclose interim data from our clinical studies. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient 43 Table of Contents enrollment continues and more patient data become available.
In addition, the uncertainties associated with such proceedings could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties or enter into development or manufacturing partnerships that would help us bring seralutinib to market.
In addition, the uncertainties associated with such proceedings could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research 66 Table of Contents programs, license necessary technology from third parties or enter into development or manufacturing partnerships that would help us bring seralutinib to market.
If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or 66 Table of Contents personnel, which could adversely affect our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management team and other employees.
If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely affect our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management team and other employees.
Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
Sanctions imposed by the United States and other countries in response to such conflicts may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
For example, in 2023 the closures of Silicon Valley Bank, or SVB, and Signature Bank and their placement into receivership with the Federal Deposit Insurance Corporation, or FDIC created bank-specific and broader financial institution liquidity risk and concerns.
For example, in 2023 the closures of Silicon Valley Bank, or SVB, and Signature Bank and their placement into receivership with the Federal Deposit Insurance Corporation, or 75 Table of Contents FDIC created bank-specific and broader financial institution liquidity risk and concerns.
The success of seralutinib will depend on several factors, including the following: • successful enrollment in clinical trials and completion of clinical trials and preclinical studies with favorable results; 32 Table of Contents • regulatory authority acceptance of our proposed design of future clinical trials and allowance to proceed with such clinical trials under INDs by the FDA or under similar applications by comparable regulatory authorities; • demonstrating safety and efficacy to the satisfaction of applicable regulatory authorities; • receipt of marketing approvals from applicable regulatory authorities, including NDAs from the FDA and maintaining such approvals; • making arrangements with our third-party manufacturers for, or establishing, commercial manufacturing capabilities; • establishing sales, marketing and distribution capabilities and launching commercial sales of seralutinib, if and when approved, whether alone or in collaboration with others; • establishment and maintenance of patent and trade secret protection or regulatory exclusivity for seralutinib; • maintaining an acceptable safety profile of seralutinib following any approval; and • maintaining and growing an organization of people who can develop seralutinib and our technology.
The success of seralutinib or RT234, if we exercise our option to acquire Respira Therapeutics, will depend on several factors, including the following: • regulatory authority acceptance of our proposed design of future clinical trials and allowance to proceed with such clinical trials under INDs by the FDA or under similar applications by comparable regulatory authorities; • demonstrating safety and efficacy to the satisfaction of applicable regulatory authorities; • receipt of marketing approvals from applicable regulatory authorities, including NDAs from the FDA and maintaining such approvals; • making arrangements with our third-party manufacturers for, or establishing, commercial manufacturing capabilities; • establishing sales, marketing and distribution capabilities and launching commercial sales of seralutinib, if and when approved, whether alone or in collaboration with others; • successful enrollment in clinical trials and completion of clinical trials and preclinical studies with favorable results; • establishment and maintenance of patent and trade secret protection or regulatory exclusivity for seralutinib; • maintaining an acceptable safety profile of seralutinib following any approval; and 35 Table of Contents • maintaining and growing an organization of people who can develop seralutinib and our technology.
Derivation or interference proceedings provoked by third parties or brought by us or declared by the USPTO or similar proceedings in foreign patent offices may be necessary to determine the priority of inventions with respect to our 63 Table of Contents patents or patent applications.
Derivation or interference proceedings provoked by third parties or brought by us or declared by the USPTO or similar proceedings in foreign patent offices may be necessary to determine the priority of inventions with respect to our patents or patent applications.
Moreover, even if we or our future strategic partners were able to obtain a license, the 62 Table of Contents rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property. In addition, we cannot be certain that we could redesign seralutinib or processes to avoid infringement, if necessary.
Moreover, even if we or our future strategic partners were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property. In addition, we cannot be certain that we could redesign seralutinib or processes to avoid infringement, if necessary.
There can be no assurance that future credit and financial market instability and a deterioration in 72 Table of Contents confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions.
There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions.
In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S.
In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has 67 Table of Contents created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S.
We do not know whether our ongoing or planned trials will begin on time or be completed on schedule, if at all.
We do not know whether our ongoing or future trials will begin on time or be completed on schedule, if at all.
Even if patent applications we own or license currently or in the future issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other 59 Table of Contents third parties from competing with us, or otherwise provide us with any competitive advantage.
Even if patent applications we own or license currently or in the future issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage.
Risk Factors. 28 Table of Contents You should carefully consider the following risk factors, together with the other information contained in this annual report on Form 10-K, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before making a decision to purchase or sell shares of our common stock.
Item 1A. Risk Factors. You should carefully consider the following risk factors, together with the other information contained in this annual report on Form 10-K, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before making a decision to purchase or sell shares of our common stock.
Disruptions at the FDA and other government agencies caused by funding shortages, staffing limitations or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business.
Disruptions at the FDA and other government agencies caused by funding shortages, staffing limitations or policy changes could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business.
For the foregoing reasons, we cannot be certain that our ongoing and planned clinical trials and preclinical studies will be successful.
For the foregoing reasons, we cannot be certain that our ongoing and future clinical trials and preclinical studies will be successful.
If these requirements divert 73 Table of Contents the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations.
If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations.
If we fail to 58 Table of Contents comply with our obligations under these agreements, or we are subject to bankruptcy-related proceedings, the licensor may have the right to terminate the license, in which event we would not be able to market products covered by the license.
If we fail to comply with our obligations under these agreements, or we are subject to bankruptcy-related proceedings, the licensor may have the right to terminate the license, in which event we would not be able to market products covered by the license.
We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market seralutinib effectively.
We likely will have little control over such third parties, and any of them may fail to devote the necessary resources 51 Table of Contents and attention to sell and market seralutinib effectively.
You should carefully consider these risk factors, together with the risk factors set forth in this Item 1A. • We have a limited operating history, a history of losses and expect to incur additional losses in the future. • We will require substantial additional financing to achieve our goals. • We depend heavily on the ability to successfully advance seralutinib through clinical development. • Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and the results of preclinical studies and early clinical trials are not necessarily predictive of future results. • Our business may be adversely affected by difficulties or delays in enrolling patients in our current or planned clinical trials or the commencement or completion, or termination or suspension, of our current or planned clinical trials. • We operate in a highly regulated industry and such regulation may cause unanticipated delays or prevent the receipt of the required approvals to commercialize seralutinib. • We are dependent on third parties to conduct our pre-clinical and clinical trials. • Our business activities could be adversely affected by a global pandemic and other epidemic diseases. • We are dependent on third parties to manufacture seralutinib. • We may not be successful in entering into or maintaining collaborations, licenses and other similar arrangements, including the maintenance of our collaboration with Chiesi. • I f approved, the success of seralutinib will depend on meeting ongoing regulatory obligations, market acceptance and adequate coverage by governmental authorities and insurers. • We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. • Our results of operations may fluctuate significantly. • Our business relies on our ability to attract, retain and motivate highly qualified management, clinical and scientific personnel. • If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of seralutinib. • Our business relies on our ability to protect our intellectual property and our proprietary technologies. • We must comply with our license agreements or we could lose our license rights to seralutinib. • Our stock price is volatile, and investors may incur substantial losses. 29 Table of Contents • We have been involved in securities class action litigation and could be subject in the future to securities class action litigation.
You should carefully consider these risk factors, together with the risk factors set forth in this Item 1A. • We have a limited operating history, a history of losses and expect to incur additional losses in the future. • We will require substantial additional financing to achieve our goals. • We depend heavily on the ability to advance seralutinib through clinical development successfully. • The results from the PROSERA Phase 3 clinical trial may not be sufficient to support FDA approval or continued development of seralutinib, which would materially and adversely harm our business. • We may not realize the expected benefits from our recent workforce reduction. 30 Table of Contents • Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and the results of preclinical studies and early clinical trials are not necessarily predictive of future results. • Our business may be adversely affected by difficulties or delays in enrolling patients in our current or future clinical trials or the commencement or completion, or termination or suspension, of our current or future clinical trials. • We operate in a highly regulated industry and such regulation may cause unanticipated delays or prevent the receipt of the required approvals to commercialize seralutinib. • We are dependent on third parties to conduct our pre-clinical and clinical trials. • Our business activities could be adversely affected by a global pandemic and other epidemic diseases. • We are dependent on third parties to manufacture seralutinib. • We may not be successful in entering into or maintaining collaborations, licenses and other similar arrangements, including the maintenance of our collaboration with Chiesi. • I f approved, the success of seralutinib will depend on meeting ongoing regulatory obligations, market acceptance and adequate coverage by governmental authorities and insurers. • We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. • Our results of operations may fluctuate significantly. • Our business relies on our ability to attract, retain and motivate highly qualified management, clinical and scientific personnel. • If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of seralutinib. • Our business relies on our ability to protect our intellectual property and our proprietary technologies. • We must comply with our license agreements or we could lose our license rights to seralutinib. • Our stock price is volatile, and investors may incur substantial losses. • We have been involved in securities class action litigation and could be subject in the future to securities class action litigation.
Our competitors include larger and better funded pharmaceutical, biopharmaceutical, biotechnological and therapeutics companies. Moreover, we may also compete with 48 Table of Contents universities and other research institutions who may be active in the indications we are targeting and could be in direct competition with us.
Our competitors include larger and better funded pharmaceutical, biopharmaceutical, biotechnological and therapeutics companies. Moreover, we may also compete with universities and other research institutions who may be active in the indications we are targeting and could be in direct competition with us.
These products may compete with seralutinib, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. 65 Table of Contents Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
These products may compete with seralutinib, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
Despite the implementation of security measures as part of our cybersecurity program, our IT systems and those of our current and any future CROs and other contractors, consultants and collaborators are vulnerable to attack and damage from computer viruses and malware (e.g., ransomware), misconfigurations, “bugs” or other vulnerabilities, cybersecurity threats, unauthorized 71 Table of Contents access, natural disasters, terrorism, war and telecommunication and electrical failures.
Despite the implementation of security measures as part of our cybersecurity program, our IT systems and those of our current and any future CROs and other contractors, consultants and collaborators are vulnerable to attack and damage from various threat actors, including computer viruses and malware (e.g., ransomware), misconfigurations, “bugs” or other vulnerabilities, 74 Table of Contents cybersecurity threats, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.
Our employees and independent contractors, including principal investigators, CROs, consultants and vendors, may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. 56 Table of Contents We are exposed to the risk that our employees and independent contractors, including principal investigators, CROs, consultants and vendors may engage in misconduct or other illegal activity.
Our employees and independent contractors, including principal investigators, CROs, consultants and vendors, may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We are exposed to the risk that our employees and independent contractors, including principal investigators, CROs, consultants and vendors may engage in misconduct or other illegal activity.
As of December 31, 2024, we have sold $200.0 million in aggregate principal amount of 5.00% convertible senior notes due 2027 and have approximately $88.3 million of other liabilities, including trade payables. We may also incur additional indebtedness or liabilities to meet our future financing needs.
As of December 31, 2025, we have sold $200.0 million in aggregate principal amount of 5.00% convertible senior notes due 2027 and have approximately $96.5 million of other liabilities, including trade payables. We may also incur additional indebtedness or liabilities to meet our future financing needs.
Pursuant to the terms of the license agreement with Pulmokine, Gilead Sciences and Rensselaer the licensors may have the right to control enforcement of our licensed patents or defense of any claims asserting the invalidity of these patents and even if we are permitted to pursue such enforcement or defense, we will require the cooperation of our licensors.
Pursuant to the terms of the license agreement with Pulmokine, Gilead Sciences and the Rensselaer Center for Translational Research, Inc., the licensors may have the right to control enforcement of our licensed patents or defense of any claims asserting the invalidity of these patents and even if we are permitted to pursue such enforcement or defense, we will require the cooperation of our licensors.
Additionally, our existing license agreement with Pulmokine includes sublicenses from a third party who is not the original licensor of the seralutinib intellectual property.
Additionally, our existing license agreement with Pulmokine includes sublicenses from a third party who is not the original 61 Table of Contents licensor of the seralutinib intellectual property.
Any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of seralutinib in PAH and other indications including PH-ILD, which could have a material adverse effect on our business, financial condition and results of operations.
Any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of seralutinib in PAH and other indications that we may pursue in the future, including PH-ILD, which could have a material adverse effect on our business, financial condition and results of operations.
The commercial success of 46 Table of Contents seralutinib will depend significantly on the broad adoption and use of the resulting product by physicians and patients for approved indications.
The commercial success of seralutinib will depend significantly on the broad adoption and use of the resulting product by physicians and patients for approved indications.
Our inability to enroll a sufficient number of subjects for our Phase 3 trial of seralutinib or any of our future clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.
Our inability to enroll a sufficient number of subjects for any of our future clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.
Although we have completed Phase 2 clinical trials for multiple product candidates including seralutinib, we have not, as an organization, completed later-stage clinical trials or submitted an NDA, and we may be unable to do so for seralutinib.
Although we have completed Phase 2 and 3 clinical trials for multiple product candidates including seralutinib, we have not, as an organization, submitted an NDA, and we may be unable to do so for seralutinib.
In addition, if a product candidate that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same drug for the same disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the manufacturer is unable to assure sufficient product quantity.
In addition, if a product candidate that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same drug for the same indication or use within the relevant disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity within the relevant indication or use or where the manufacturer is unable to assure sufficient product quantity to meet the needs relating to the indication or use protected by orphan exclusivity.
It is possible that as we test seralutinib in our Phase 3 trial in PAH, or as the use of seralutinib becomes more widespread if it receives regulatory approval, illnesses, injuries, discomforts and other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, will be reported by subjects.
It is possible that as we test seralutinib in future clinical trials, or as the use of seralutinib becomes more widespread if it receives regulatory approval, illnesses, injuries, discomforts and other adverse events that were observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, will be reported by subjects.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeKey elements of our cybersecurity governance program includes but are not limited to the following: • Processes to assess cybersecurity risk, designed to help identify material risks from cybersecurity threats to critical systems and information; • a security team principally responsible for coordinating and managing (1) cybersecurity risk evaluation processes, (2) implementation of cybersecurity controls, and (3) response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of the organization’s cybersecurity processes; • cybersecurity awareness training of employees, including incident response personnel including third party providers, and senior management; • a cybersecurity incident response plan which includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile.
Biggest changeKey elements of our cybersecurity governance program includes but are not limited to the following: • processes to assess cybersecurity risk, designed to help identify material risks from cybersecurity threats to critical systems and information; • a security team principally responsible for coordinating and managing (1) cybersecurity risk evaluation processes, (2) implementation of cybersecurity controls, and (3) response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of the organization’s cybersecurity processes; • cybersecurity awareness training of employees, including incident response personnel including third party providers, and senior management; • a cybersecurity incident response plan which includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile. 78 Table of Contents We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, which have materially affected us, including our operations, business strategy, results of operations, or financial condition.
See “Risk Factors - Our information technology systems, or those of any of our CROs, manufacturers, other contractors or consultants or Chiesi or potential future collaborators, may fail or suffer security breaches, which could result in a material disruption of our seralutinib development program, which could materially affect our results.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated oversight of cybersecurity risks, including oversight of management’s implementation of the cybersecurity governance program.
See “Risk Factors - Our information technology systems, or those of any of our CROs, manufacturers, other contractors or consultants or Chiesi or potential future collaborators, may fail or suffer security breaches, which could result in a material disruption of our seralutinib development program, which could materially affect our results.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity risks, including oversight of management’s implementation of the cybersecurity governance program.
The Audit Committee receives formal annual reports from IT management regarding cybersecurity risks. In addition, management would update the Audit Committee and Board, where it deems appropriate, regarding cybersecurity incidents it considers to be significant or potentially significant.
The Audit Committee receives formal annual reports from IT management regarding cybersecurity risks. In addition, management would update the Audit Committee and Board, where it deems appropriate, regarding cybersecurity incidents it considers to be significant or potentially significant. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us and alerts and reports produced by security tools deployed in our IT environment.
These affiliations support continuous knowledge exchange, including best practice program development, emergent threat intelligence collaboration, and real time peer benchmarking for modern cyber defense strategies. 79 Table of Contents Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us and alerts and reports produced by security tools deployed in our IT environment.
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. 75 Table of Contents Assessment and management of material risks from cybersecurity threats are performed by the Executive Director, Information Security, Risk & Compliance and the Vice President, IT and Facilities, reporting to the Executive Vice President, Technical Operations and Administration.
Assessment and management of material risks from cybersecurity threats are performed by the Executive Director, Information Security, Risk & Compliance and the Vice President, IT and Facilities, reporting to the Executive Vice President, Technical Operations and Administration. Our Executive Vice President, Technical Operations and Administration reports to the President and Chief Executive Officer.
Our Executive Vice President, Technical Operations and Administration reports to the President and Chief Executive Officer. This group holds primary responsibility for our overall cybersecurity governance program, along with our internal Cybersecurity Oversight Committee, which includes senior personnel from key departments in the organization.
This group holds primary responsibility for our overall cybersecurity governance program, along with our internal Cybersecurity Oversight Committee, which includes senior personnel from key departments in the organization. Individual cybersecurity experience for the group responsible for the program is detailed below.
Removed
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, which have materially affected us, including our operations, business strategy, results of operations, or financial condition.
Added
The Executive Vice President, Technical Operations and Administration (EVP) brings more than two decades of senior leadership experience across the biotechnology and pharmaceutical sectors, having served in roles including General Counsel, Managing Director, and Vice President at multiple global life science organizations. The EVP continues to provide strategic oversight of corporate operations, legal governance, and enterprise risk management.
Added
In addition the EVP provides active leadership on cybersecurity program maturity, regulatory alignment, and enterprise resilience. This includes evaluation of cybersecurity risk posture, accountability for key IT and security controls, and board level monitoring of cybersecurity operations, incident readiness, and compliance frameworks aligned with industry best practices.
Added
The EVP plays a critical role in ensuring organizational integrity, operational continuity, and protection of sensitive scientific, clinical, and corporate information assets.
Added
The Vice President of IT (VP) is a highly experienced technology executive with decades of hands on expertise architecting, deploying, and managing enterprise IT systems in highly regulated and rapidly scaling environments.The VP has designed and implemented Zero Trust frameworks, conditional access models, and cloud first architectures that strengthen organizational security and performance.
Added
In addition to hands-on cybersecurity experience, the VP has managed full scope IT operations, including network and systems engineering, enterprise cloud migrations, endpoint lifecycle management, and service delivery excellence. The VP plays a critical role in elevating the organization’s technology posture, enhancing cybersecurity resilience, and delivering secure, reliable, high performance IT environments.
Added
The Executive Director, Information Security, Risk & Compliance (ED) brings over sixteen years of hands on and strategic experience across cybersecurity engineering, governance, risk management, compliance, and IT operations.
Added
The ED has led and executed programs spanning technical and business domains, including enterprise business continuity and disaster recovery planning, identity and access management architecture, access administration, security monitoring and incident response, and third party/vendor risk management. Cybersecurity tools administration experience includes endpoint detection and response, cloud security, identity governance, vulnerability management, and Zero Trust–aligned architectures.
Added
The ED maintains active CISSP, CISA, and CDPSE certifications. The ED is a member of the local FBI InfraGard chapter, an active member of ISACA, ISC2, and multiple regional CISO executive roundtables.

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 See Item 12 of Part III of this Annual Report on Form 10-K for information about our equity compensation plans which is incorporated by reference herein. 77 Table of Contents Stock Performance Graph The following stock performance graph compares our total stock return with the total return for (i) the Nasdaq Composite Index and the (ii) the Nasdaq Biotechnology Index for the period from February 8, 2019 (the date our common stock commenced trading on the Nasdaq Global Select Market) through December 31, 2024.
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans See Item 12 of Part III of this Annual Report on Form 10-K for information about our equity compensation plans which is incorporated by reference herein. Unregistered Sales of Equity Securities None. Issuer Repurchases of Equity Securities None.
Market Information Our common stock is listed on the Nasdaq Global Select Market under the symbol “GOSS.” Holders of Common Stock As of March 6, 2025, there were 227,221,261 shares of our common stock outstanding held by approximately 34 holders of record of our common stock.
Market Information Our common stock is listed on the Nasdaq Global Select Market under the symbol “GOSS.” Holders of Common Stock As of March 10, 2026, there were 234,696,281 shares of our common stock outstanding held by approximately 33 holders of record of our common stock.
Removed
The figures represented below assume an investment of $100 in our common stock at the closing price of $17.94 on February 8, 2019 and in the Nasdaq Composite Index and the Nasdaq Biotechnology Index on February 8, 2019 and the reinvestment of dividends into shares of common stock.
Removed
The comparisons in the graph are not intended to forecast or be indicative of possible future performance of our common stock. Unregistered Sales of Equity Securities None. Issuer Repurchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

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

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Biggest changeResults of Operations for the Years Ended December 31, 2024 and 2023 The following table sets forth our selected statements of operations data for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 vs 2023 Change 2024 2023 (in thousands) Revenue: Revenue from sale of licenses $ 90,682 $ — $ 90,682 Revenue from contracts with collaborators 24,019 — 24,019 Total revenue 114,701 — 114,701 Operating expenses: Research and development 138,487 135,304 3,183 In process research and development — 10,000 (10,000) General and administrative 36,133 38,455 (2,322) Total operating expenses 174,620 183,759 (9,139) Loss from operations (59,919) (183,759) 123,840 Other income (expense) Interest income 1,779 1,997 (218) Interest expense (11,517) (13,511) 1,994 Other income, net 14,022 15,456 (1,434) Total other income (expense), net 4,284 3,942 342 Loss before provision for income taxes (55,635) (179,817) 124,182 Provision for income taxes 893 — 893 Net loss $ (56,528) $ (179,817) $ 123,289 Operating Expenses Revenue For the year ended December 31, 2024, our revenue was $114.7 million.
Biggest changeResults of Operations for the Years Ended December 31, 2025 and 2024 The following table sets forth our selected statements of operations data for the years ended December 31, 2025 and 2024: Years Ended December 31, 2025 vs 2024 Change 2025 2024 (in thousands) Revenue: Revenue from sale of licenses $ — $ 90,682 $ (90,682) Revenue from contracts with collaborators 48,471 24,019 24,452 Total revenue 48,471 114,701 (66,230) Operating expenses: Research and development 174,093 138,487 35,606 In process research and development 7,475 — 7,475 General and administrative 37,631 36,133 1,498 Total operating expenses 219,199 174,620 44,579 Loss from operations (170,728) (59,919) (110,809) Other income (expense) Interest income 1,970 1,779 191 Interest expense (10,989) (11,517) 528 Other income, net 9,289 14,022 (4,733) Total other income, net 270 4,284 (4,014) Loss before provision (benefit) for income taxes (170,458) (55,635) (114,823) Provision (benefit) for income taxes (88) 893 (981) Net loss $ (170,370) $ (56,528) $ (113,842) Operating Expenses Revenue Our revenue is generated from our ongoing collaboration with Chiesi and consists of a one-time development cost reimbursement payment for the licenses and ongoing cost-sharing payments for performance of research and development and pre-commercial services.
During the year ended December 31, 2023, operating activities used approximately $159.2 million of cash, primarily resulting from a net loss of $179.8 million and changes in accrued research and development expenses of $7.8 million, changes in amortization of premium on investments of $9.5 million, reduced by stock-based compensation expense of $28.5 million and in process research and development expense of $10.0 million.
During the year ended December 31, 2023, operating activities used approximately $159.2 million of cash, primarily resulting from a net loss of $179.8 million, changes in accrued research and development expenses of $7.8 million and amortization of premium on investments of $9.5 million, reduced by stock-based compensation expense of $28.5 million and in process research and development expense of $10.0 million.
Investing activities During the year ended December 31, 2024, investing activities provided approximately $29.0 million of cash, primarily resulting from the maturities of marketable securities of $523.8 million, offset by purchases of marketable securities of $494.8 million.
During the year ended December 31, 2024, investing activities provided approximately $29.0 million of cash, primarily resulting from the maturities of marketable securities of $523.8 million, offset by purchases of marketable securities of $494.8 million.
We expect to incur expenses and operating losses for the foreseeable future as we continue our development of and seek regulatory approvals for seralutinib, including the conduct of ongoing and planned clinical trials and other research and development activities; and as we hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company.
We expect to incur expenses and operating losses for the foreseeable future as we continue our development of and seek regulatory approvals for seralutinib, including the conduct of ongoing and future clinical trials and other research and development activities; and as we hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company.
Our future capital requirements will depend on many factors, including: • the type, number, scope, progress, enrollment pace, expansions, results, costs and timing of, our preclinical studies and clinical trials of seralutinib which we are pursuing or may choose to pursue in the future; • the costs and timing of manufacturing for seralutinib; 86 Table of Contents • the costs, timing and outcome of regulatory review of seralutinib; • the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; • the costs associated with hiring additional personnel and consultants to continue the development and potential commercialization of seralutinib; • the timing and amount of the milestone or other payments we must make to Pulmokine from whom we have in-licensed seralutinib; • the costs and timing of establishing or securing sales and marketing capabilities if seralutinib is approved; • our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; • costs associated with any products or technologies that we may in-license or acquire; and • any delays and cost increases that result from epidemic diseases.
Our future capital requirements will depend on many factors, including: • the costs, timing and outcome of regulatory review of seralutinib; • the type, number, scope, progress, enrollment pace, expansions, results, costs and timing of, our preclinical studies and clinical trials of seralutinib which we are pursuing or may choose to pursue in the future; • the costs and timing of manufacturing for seralutinib; • the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; • the costs associated with hiring additional personnel and consultants to continue the development and potential commercialization of seralutinib; • the timing and amount of the milestone or other payments we must make to Pulmokine from whom we have in-licensed seralutinib; • the costs and timing of establishing or securing sales and marketing capabilities if seralutinib is approved; • our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; • costs associated with any products or technologies that we may in-license or acquire; and • any delays and cost increases that result from epidemic diseases.
On August 18, 2023, we filed a registration statement on Form S-3 registering the resale of the shares of common stock and shares of common stock issuable upon the exercise of warrants issued in the private placement, which was declared effective on August 28, 2023. On May 3, 2024, we entered into the collaboration agreement with Chiesi.
On August 18, 2023, we filed a registration statement on Form S-3 registering the resale of the shares of common stock and shares of common stock issuable upon the exercise of warrants issued in the private placement, which was declared effective on August 28, 2023. On May 3, 2024, we entered into the Chiesi Collaboration Agreement.
Additional information about our long-term borrowings is presented in Note 5 “Indebtedness” and operating leases is presented in Note 11 "Commitments and Contingencies" to the Notes to Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K, herein by this reference.
Additional information about our long-term borrowings is presented in Note 5 “Indebtedness” and operating leases is presented in Note 11 "Commitments and Contingencies" to the Notes to Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K, incorporated herein by this reference.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or in other parts of this annual report. 78 Table of Contents Overview We are a clinical-stage biopharmaceutical company focused on the development and commercialization of seralutinib for the treatment of PH, including PAH and PH-ILD.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or in other parts of this annual report. 81 Table of Contents Overview We are a clinical-stage, clinical biopharmaceutical company focused on the development and commercialization of seralutinib for the treatment of PH, including PAH and PH-ILD.
Our clinical development costs may vary significantly based on factors such as: • per patient trial costs; • the number of trials required for approval; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; • the number of doses that patients receive; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring requested by regulatory agencies; • the duration of patient participation in the trials and follow-up; • the cost and timing of manufacturing seralutinib; • the costs incurred as a result of health epidemics and pandemics, including the COVID-19 pandemic, and clinical site staff shortages, including clinical trial delays; • the phase 3 stage of development for seralutinib; and • the efficacy and safety profile of seralutinib.
Our clinical development costs may vary significantly based on factors such as: • per patient trial costs; • the number of trials required for approval; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; • the number of doses that patients receive; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring requested by regulatory agencies; • the duration of patient participation in the trials and follow-up; • the cost and timing of manufacturing seralutinib; • the costs incurred as a result of health epidemics and pandemics and clinical site staff shortages, including clinical trial delays; • the phase 3 stage of development for seralutinib; and • the efficacy and safety profile of seralutinib.
General and administrative General and administrative expenses consist primarily of salaries and employee-related costs, including stock-based compensation, for personnel in executive, finance and other administrative functions. Other significant costs include facility-related costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services and insurance costs.
General and administrative General and administrative expenses consist primarily of salaries and employee-related costs, including stock-based compensation, for personnel in executive, finance and other administrative functions. Other significant costs include facility-related costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services, insurance costs and commercial planning expenses.
Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023 is incorporated by reference into this MD&A.
Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 is incorporated by reference into this MD&A.
If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock.
If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce 90 Table of Contents the value of our common stock.
During the year ended December 31, 2023, investing activities used approximately $111.0 million of cash, primarily resulting from the purchases of marketable securities of $441.7 million, offset by the maturities of marketable securities of $330.7 million.
During the year ended December 31, 2023, investing activities used approximately $111.0 million of cash, primarily resulting from the purchase of marketable securities of $441.7 million, offset by the maturities of marketable securities of $330.7 million.
We anticipate that we will make determinations as to how much funding to direct to seralutinib on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory 80 Table of Contents developments and our ongoing assessments as to seralutinib's commercial potential. We will need to raise substantial additional capital in the future.
We anticipate that we will make determinations as to how much funding to direct to seralutinib on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to seralutinib's commercial potential. We will need to raise substantial additional capital in the future.
In the future, we may generate revenue from a combination of license fees and other upfront payments, other funded research and development agreements, milestone payments, product sales, other third-party funding, US profit/loss share and royalties in connection with strategic alliances.
In the future, we may generate revenue from a combination of license fees and other upfront payments, other funded research and development agreements, milestone payments, product sales, other third-party funding, U.S. profit/loss share and royalties in connection with strategic alliances.
Results of Operations for the Years Ended December 31, 2023 and 2022 The discussion of our financial condition and results of operations for the year ended December 31, 2023 and the comparison of 2023 and 2022 results included in Item 7.
Results of Operations for the Years Ended December 31, 2024 and 2023 The discussion of our financial condition and results of operations for the year ended December 31, 2024 and the comparison of 2024 and 2023 results included in Item 7.
However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.
However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into 82 Table of Contents such other arrangements when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.
To determine revenue recognition for contracts with customers, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine 82 Table of Contents the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
To determine revenue recognition for contracts with customers, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
If we conclude that some or all aspects of the arrangement represent a transaction with a customer, we account for those aspects of the arrangement within the scope of ASC Topic 606, Revenue from Contracts with Customers (ASC 606).
If we conclude that some or all aspects of the arrangement represent a 85 Table of Contents transaction with a customer, we account for those aspects of the arrangement within the scope of ASC Topic 606, Revenue from Contracts with Customers (ASC 606).
Our goal is to be an industry leader in, and to enhance the lives of patients living with PH. In May 2024, we entered into the collaboration agreement for seralutinib with Chiesi. In December 2022, we announced positive topline results from the Phase 2 TORREY Study in PAH patients.
Our goal is to be an industry leader in, and to enhance the lives of patients living with PH. In May 2024, we entered into the Chiesi Collaboration Agreement focused on the development and commercialization of seralutinib. In December 2022, we announced positive topline results from the Phase 2 TORREY Study in PAH patients.
We raised $1,401.1 million from October 2017 through December 31, 2024 through the sale of Series A and Series B convertible preferred stock, issuance of convertible notes, proceeds from our IPO, completed in February 2019, proceeds from 2027 Notes (as defined below), issuance of common stock in May 2020 and July 2022, issuance of common stock and accompanying warrants in July 2023 and entry into the collaboration agreement in May 2024.
We raised $1,396.9 million from October 2017 through December 31, 2025 through the sale of Series A and Series B convertible preferred stock, issuance of convertible notes, proceeds from our IPO completed in February 2019, proceeds from the 2027 Notes (as defined below), issuances of common stock in May 2020 and July 2022, issuance of common stock and accompanying warrants in July 2023 and entry into the Chiesi Collaboration Agreement in May 2024.
In consideration and as reimbursement for our development costs, Chiesi paid us an up-front, nonrefundable payment of $160.0 million. In addition, we and Chiesi share equally in the costs of ongoing global seralutinib clinical development, with the exception of the PROSERA Phase 3 study, and the costs of commercialization in the United States.
In consideration and as reimbursement for our development costs, Chiesi paid us an up-front, nonrefundable payment of $160.0 million. In addition, we and Chiesi share equally in the costs of ongoing global seralutinib clinical development, with the exception of the PROSERA Phase 3 study, and the costs of commercialization in the U.S. Territory.
From our inception through the year ended December 31, 2024, our operations have been financed primarily by proceeds of $1,401.1 million from the sale of Series A and Series B convertible preferred stock, proceeds from our IPO, proceeds from the 2027 Notes, proceeds from issuance of common stock in May 2020 and July 2022, proceeds from issuance of common stock and accompanying warrants in July 2023 and the collaboration agreement with Chiesi.
From our inception through the year ended December 31, 2025, our operations have been financed primarily by proceeds of $1,396.9 million from the sale of Series A and Series B convertible preferred stock, proceeds from our IPO, proceeds from the 2027 Notes, proceeds from issuance of common stock in May 2020 and July 2022, proceeds from issuance of common stock and accompanying warrants in July 2023 and the Chiesi Collaboration Agreement.
Liquidity and Capital Resources We have incurred substantial operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable. As of December 31, 2024 and 2023, we had an accumulated deficit of $1,268.6 million and $1,212.0 million, respectively.
Liquidity and Capital Resources We have incurred substantial operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable. As of December 31, 2025 and 2024, we had an accumulated deficit of $1,438.9 million and $1,268.6 million, respectively.
As of December 31, 2024, we were 84 Table of Contents unable to estimate the timing or likelihood of achieving the milestones or making future product sales. Other contractual obligations include future payments under the 2027 Notes and existing operating leases.
As of December 31, 2025, we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales. Other contractual obligations include future payments under the 2027 Notes and existing operating leases.
Provision for income taxes For the year ended December 31, 2024, the tax expense was $0.9 million, which was primarily attributable to the treatment of the Chiesi income and a partial release of the valuation allowance. There was no provision for income taxes for the year ended December 31, 2023.
Provision (benefit) for income taxes There was $0.1 million tax benefit for the year ended December 31, 2025. For the year ended December 31, 2024, the tax expense was $0.9 million, which was primarily attributable to the treatment of the Chiesi income and a partial release of the valuation allowance.
As of December 31, 2024, we had $294.5 million in cash, cash equivalents and marketable securities. We have incurred significant operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future. For the years ended December 31, 2024 and 2023, our net loss was $56.5 million and $179.8 million, respectively.
As of December 31, 2025, we had $136.9 million in cash, cash equivalents and marketable securities. We have incurred significant operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future. For the years ended December 31, 2025 and 2024, our net loss was $170.4 million and $56.5 million, respectively.
On May 3, 2024, we announced a strategic global partnership with Chiesi. Under the terms of the collaboration agreement, we granted Chiesi exclusive licenses for the worldwide development, manufacture and commercialization of seralutinib and licensed products and an Equity Option to purchase our common stock.
On May 3, 2024, we announced a strategic global partnership with Chiesi. Under the terms of the Chiesi Collaboration Agreement, we granted Chiesi exclusive licenses for the worldwide development, manufacture and commercialization of seralutinib and licensed products and an Equity Option to purchase our common stock, which expired in November 2025 and is no longer exercisable.
We categorize Terminated Programs as any research and development expenses attributable to our clinical stage product candidates that were terminated prior to December 31, 2023. We expect to incur research and development expenses for the foreseeable future as we continue the development of seralutinib.
We categorize Terminated Programs as any research and development expenses attributable to our clinical stage product candidates that were terminated prior to December 31, 2023 or any research and development expenses that are not directly allocated to seralutinib. 83 Table of Contents We expect to incur research and development expenses for the foreseeable future as we continue the development of seralutinib.
Other income (expense), net Other income, net was $4.3 million for the year ended December 31, 2024, compared to other income, net of $3.9 million for the year ended December 31, 2023, for an increase of $0.3 million, which was primarily attributable to a $3.2 million increase in investment accretion and a $2.0 million decrease in interest expense, offset by a $3.6 million decrease in other income primarily related to $2.8 million of employee retention credit under the CARES Act and $1.0 million of Ireland Corporate R&D tax credit.
Other income (expense), net Other income, net was $0.3 million for the year ended December 31, 2025, compared to other income, net of $4.3 million for the year ended December 31, 2024, for a decrease of $4.0 million, which was primarily attributable to a $6.4 million decrease in investment accretion, offset by a $0.5 million decrease in interest expense and a $1.1 million increase in other income primarily related to $1.4 million of employee retention credit under the CARES Act.
We are also eligible for double-digit royalties in the mid-to-high teens percentage on tiers of annual net sales outside of the U.S. and to an equal share of profits and losses from the commercialization of seralutinib and licensed products in the U.S. .
Territory, with the exception of the PROSERA Phase 3 study, for which we bear all costs. We are also eligible for double-digit royalties in the mid-to-high teens percentage on tiers of annual net sales outside of the U.S. Territory and to an equal share of profits and losses from the commercialization of seralutinib and licensed products in the U.S.
For the year ended on December 31, 2024, we received cost-sharing payments from Chiesi in the amount of $7.8 million.
For the year ended on December 31, 2025, we received cost-sharing payments from Chiesi in the amount of $28.6 million.
Financing activities During the year ended December 31, 2024, financing activities used $11.5 million of cash, resulting from the principal repayment of long-term debt of $12.6 million, reduced by the proceeds from the issuance of equity option pursuant to stock purchase agreement with Chiesi of $0.5 million and the proceeds from issuance of common stock pursuant to the ESPP of $0.6 million.
During the year ended December 31, 2024, financing activities used $11.5 million of cash, resulting from the principal repayment of long-term debt of $12.6 million, reduced by the proceeds from the issuance of equity option pursuant to stock purchase agreement with Chiesi of $0.5 million and the proceeds from issuance of common stock pursuant to the ESPP of $0.6 million. 89 Table of Contents During the year ended December 31, 2023, financing activities provided $190.2 million of cash, primarily resulting from proceeds from the issuance of common stock and warrants in a private offering of $201.3 million, reduced by the principal repayments of long-term debt of $11.6 million.
General and administrative expenses General and administrative expenses were $36.1 million for the year ended December 31, 2024, compared to $38.5 million for the year ended December 31, 2023, for a decrease of $2.3 million, which was primarily attributable to a $2.2 million decrease in stock-based compensation expense, a decrease of $0.8 million in legal expense, a decrease of $0.6 million in insurance costs, offset by an increase of $0.6 million in professional services expense and an increase of $0.4 million in travel costs.
General and administrative expenses General and administrative expenses were $37.6 million for the year ended December 31, 2025, compared to $36.1 million for the year ended December 31, 2024, for an increase of $1.5 million, which was primarily attributable to a $6.3 million increase in commercial planning expense and a $1.2 million increase in personnel expense, offset by a $5.1 million decrease in stock-based compensation expense and a decrease of $1.1 million in facilities expense.
Our revenue consists of a one-time development cost reimbursement payment for licenses and ongoing cost-sharing payments for performance of research and development services classified as revenue from contracts with collaborators.
Components of Results of Operations Revenue To date, we have generated all of our revenue from the Chiesi Collaboration Agreement. Our revenue consists of a one-time development cost reimbursement payment for licenses and ongoing cost-sharing payments for performance of research and development services classified as revenue from contracts with collaborators.
If we are unable to raise additional capital when needed, we could be forced to delay, limit, reduce or terminate seralutinib development or future commercialization efforts or grant additional rights to develop and market seralutinib even if we would otherwise prefer to retain such right. 79 Table of Contents Components of Results of Operations Revenue To date, we have generated all of our revenue from our collaboration agreement with Chiesi.
If we are unable to raise additional capital when needed, we could be forced to delay, limit, reduce or terminate seralutinib development or future commercialization efforts or grant additional rights to develop and market seralutinib even if we would otherwise prefer to retain such right.
As of December 31, 2024, we had an accumulated deficit of $1,268.6 million.
As of December 31, 2025, we had an accumulated deficit of $1,438.9 million.
In process research and development In process research and development, or IPR&D, expenses include IPR&D acquired as part of an asset acquisition or in-license for which there is no alternative future use, are expensed as incurred.
In process research and development In process research and development, or IPR&D, expenses include IPR&D acquired as part of an asset acquisition or in-license, for which there is no alternative future use, and the value of the right to acquire Respira Therapeutics via a merger, or the Respira Merger Option, with Prana Bio, the 100% owner of Respira Therapeutics, and are expensed as incurred.
The following table shows a summary of our cash flows for each of the years shown below: Years Ended December 31, 2024 2023 2022 (in thousands) Net cash used in operating activities $ (3,468) $ (159,158) $ (187,032) Net cash provided by (used in) investing activities 29,023 (110,970) (1,035) Net cash provided by (used in) financing activities (11,488) 190,154 117,090 Effect of exchange rate changes on cash and cash equivalents (102) 110 (517) Net increase (decrease) in cash and cash equivalents $ 13,965 $ (79,864) $ (71,494) Operating activities During the year ended December 31, 2024, operating activities used approximately $3.5 million of cash, primarily resulting from a net loss of $56.5 million and changes in amortization of premium on investments, net of accretion of 85 Table of Contents discount, of $13.1 million, reduced by stock-based compensation expense of $20.6 million and changes in contract liabilities of $55.9 million.
The following table shows a summary of our cash flows for each of the years shown below: Years Ended December 31, 2025 2024 2023 (in thousands) Net cash used in operating activities $ (171,266) $ (3,468) $ (159,158) Net cash provided by (used in) investing activities 156,358 29,023 (110,970) Net cash provided by (used in) financing activities 6,425 (11,488) 190,154 Effect of exchange rate changes on cash and cash equivalents 141 (102) 110 Net increase (decrease) in cash and cash equivalents $ (8,342) $ 13,965 $ (79,864) Operating activities During the year ended December 31, 2025, operating activities used approximately $171.3 million of cash, primarily resulting from a net loss of $170.4 million and changes in prepaid expenses and other current assets of $8.5 million and amortization of premium on investments of $7.3 million, reduced by changes in accrued research and development expenses of $11.2 million and stock-based compensation expense of $10.6 million.
The total potential transaction value includes the one-time $160.0 million development cost reimbursement payment for licenses, research and development funding, and certain regulatory and commercial milestones.
The total potential transaction value includes the one-time $160.0 million development cost reimbursement payment for licenses, research and development funding, and certain regulatory and commercial milestones. We and Chiesi share equally in the costs of ongoing global seralutinib clinical development and the costs of commercialization in the U.S.
As of December 31, 2024, we had cash, cash equivalents and marketable securities of $294.5 million. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to capital preservation and liquidity.
In addition, we have received $36.4 million as of December 31, 2025 through reimbursement related to the Chiesi Collaboration Agreement. As of December 31, 2025, we had cash, cash equivalents and marketable securities of $136.9 million. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to capital preservation and liquidity.
Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
Cash 87 Table of Contents used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
To date, we have focused primarily on organizing and staffing our company, business planning, raising capital, identifying, acquiring and in-licensing our product candidates and conducting preclinical studies and clinical trials. We have funded our operations primarily through equity financings and the collaboration agreement.
Our ultimate goal is to enhance and extend the lives of patients. We were incorporated in October 2015 and commenced operations in 2017. To date, we have focused primarily on organizing and staffing our company, business planning, raising capital, identifying, acquiring and in-licensing our product candidates and conducting preclinical studies and clinical trials.
In the fourth quarter of 2023, we initiated the registrational Phase 3 PROSERA Study in PAH. We expect to report topline data from the PROSERA study in the fourth quarter of 2025. In addition to PAH, we believe that seralutinib holds potential as a therapeutic for the treatment of PH-ILD.
In addition to PAH, we believe that seralutinib holds potential as a therapeutic for the treatment of PH-ILD. In October 2025, we activated the first clinical site for the global registrational Phase 3 SERANATA Study for the treatment of PH-ILD.
Funding requirements Based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities, will be sufficient to fund our operations through at least the next 12 months from the date these consolidated financial statements were available to be issued.
Funding requirements Based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities, will be sufficient to fund our operations through the fourth quarter of 2026.
During the year ended December 31, 2022, investing activities used approximately $1.0 million of cash, primarily resulting from the purchase of marketable securities of $238.0 million and the purchase of property and equipment of $0.4 million, partially offset by maturities of marketable securities of $237.5 million.
Investing activities During the year ended December 31, 2025, investing activities provided approximately $156.4 million of cash, primarily resulting from the maturities of marketable securities of $376.4 million, offset by purchases of marketable securities of $227.1 million.
Provision for income taxes Our tax provision from income taxes is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. 81 Table of Contents Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP.
Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP.
Research and development expenses Research and development expenses were $138.5 million for the year ended December 31, 2024, compared to $135.3 million for the year ended December 31, 2023, for an increase of $3.2 million, which was primarily attributable to an increase of $36.1 million of costs associated with clinical trials for seralutinib, offset by a decrease of $32.9 million of costs associated with preclinical studies and clinical trials for terminated programs. 83 Table of Contents The following table shows our research and development expenses by program for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 (in thousands) Seralutinib $ 129,247 $ 93,158 Terminated programs 9,240 42,146 Total research and development $ 138,487 $ 135,304 In process research and development expenses There were no IPR&D expenses for the year ended December 31, 2024.
Research and development expenses Research and development expenses were $174.1 million for the year ended December 31, 2025, compared to $138.5 million for the year ended December 31, 2024, for an increase of $35.6 million, which was primarily attributable to an increase of $44.4 million of costs associated with clinical trials for seralutinib, offset by a decrease of $9.2 million of costs associated with preclinical studies and clinical trials for terminated programs.
If we obtain regulatory approval for seralutinib, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.
We do not expect to generate any revenue from product sales unless and until we successfully complete development and obtain regulatory approval for seralutinib, which we expect will take a number of years, if at all. If we obtain regulatory approval for seralutinib, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.
During the year ended December 31, 2022, operating activities used approximately $187.0 million of cash, primarily resulting from a net loss of $229.4 million and payments against operating lease liabilities of $2.7 million, partially reduced by stock-based compensation expense of $42.6 million and amortization of operating lease right-of-use assets of $2.6 million.
During the year ended December 31, 2024, operating activities used approximately $3.5 million of cash, primarily resulting from a net loss of $56.5 million and amortization of premium on investments, net of accretion of discount, of $13.1 million, reduced by stock-based compensation expense of $20.6 million and changes in contract liabilities of $55.9 million.
Other income (expense), net Other income (expense), net consists of (1) interest income on our cash, cash equivalents and marketable securities, (2) investment accretion, (3) interest expense related to our Credit Facility, prior to its termination and the 2027 Notes, (4) research and development tax credit and (5) other miscellaneous income (expense).
These expenses will likely include audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, as well as commercial preparedness, corporate strategy, business development, corporate communications and investor relations costs associated with operating as a public company. 84 Table of Contents Other income (expense), net Other income (expense), net consists of (1) interest income on our cash, cash equivalents and marketable securities, (2) investment accretion, (3) interest expense related to our Credit Facility, prior to its termination and the 2027 Notes, (4) research and development tax credit and (5) other miscellaneous income (expense).
For additional information regarding the collaboration agreement, as well as our license agreement with Pulmokine, see the section titled “Business—License and Collaboration Agreements” in this annual report. We do not expect to generate any revenue from product sales unless and until we successfully complete development and obtain regulatory approval for seralutinib, which we expect will take a number of years.
For additional information regarding the collaboration agreement, as well as our license agreement with Pulmokine, see the section titled “Business—License and Collaboration Agreements” in this annual report.
During the year ended December 31, 2022, financing activities provided $117.1 million of cash, primarily resulting from proceeds from the purchase of shares pursuant to our 2019 Employee Stock Purchase Plan, or ESPP, of $1.2 million, proceeds from the private offering of $119.9 million, and proceeds from the exercise of stock options of $1.7 million, partially offset by the principal repayments of long-term debt of $5.8 million.
Financing activities During the year ended December 31, 2025, financing activities provided $6.4 million of cash, resulting from the proceeds from the exercise of warrants of $3.7 million, the proceeds from the exercise of stock options of $1.9 million and the proceeds from the issuance of common stock pursuant to the ESPP of $0.8 million.
We expect to activate clinical sites for a global registrational Phase 3 for the treatment of PH-ILD in the second half of 2025. We have assembled a deeply experienced and highly skilled group of industry veterans, scientists, clinicians and key opinion leaders from leading biotechnology and pharmaceutical companies, as well as leading academic centers from around the world.
We have assembled a deeply experienced and highly skilled group of industry veterans, scientists, clinicians and key opinion leaders from leading biotechnology and pharmaceutical companies, as well as leading academic centers from around the world. Our employees are a team of highly dedicated, passionate individuals who pride themselves on a culture of respect, humility, transparency, inclusion, dedication, collaboration and fun.
Additionally, the process of testing seralutinib in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.
Additionally, the process of testing seralutinib in clinical trials and seeking regulatory approval is costly, and the timing of progress and expenses in these trials is uncertain. Pending feedback from the FDA on a potential path forward for seralutinib, we also expect that the level of spending for our ongoing and planned commercial planning activities for seralutinib may increase.
IPR&D expenses for the year ended December 31, 2023 were $10.0 million, which was attributable to a milestone obligation incurred upon the initiation of the Phase 3 clinical trial of seralutinib in the fourth quarter of 2023 and paid to Pulmokine in 2024.
IPR&D expenses for the year ended December 31, 2025 were $7.5 million, which was attributable to the acquisition of Respira Merger Option.
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Our employees are a team of highly dedicated, passionate individuals who pride themselves on a culture of respect, humility, transparency, inclusion, dedication, collaboration and fun. Our ultimate goal is to enhance and extend the lives of patients. We were incorporated in October 2015 and commenced operations in 2017.
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In February 2026, we announced topline results from the Phase 3 PROSERA Study in PAH patients. Seralutinib demonstrated a placebo-adjusted improvement in the primary endpoint, 6MWD at Week 24, of 13.3 meters (p = 0.0320), missing the prespecified alpha threshold of 0.025.
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We and Chiesi share equally in the costs of ongoing global seralutinib clinical development and the costs of commercialization in the United States, with the exception of the PROSERA Phase 3 study, for which we bear all costs.
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We believe seralutinib demonstrates a risk benefit profile that supports continued regulatory dialogue, and we plan to engage with the FDA, including through requesting a Type C meeting, to understand their perspective on the totality of the PROSERA and TORREY datasets and potential regulatory paths forward.
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These expenses will likely include audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs associated with operating as a public company.
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Enrollment in the SERANATA Study was paused in February 2026 to support disciplined resource allocation and to evaluate the implications of PROSERA as we engage with regulators.
Removed
Our revenue is generated from our ongoing collaboration with Chiesi and consists of a one-time development cost reimbursement payment for the licenses and ongoing cost-sharing payments for performance of research and development and pre-commercial services.
Added
We have funded our operations primarily through equity financings and the Chiesi Collaboration Agreement.
Removed
During the year ended December 31, 2023, financing activities provided $190.2 million of cash, primarily resulting from proceeds from the issuance of common stock and warrants in a private offering of $201.3 million, reduced by the principal repayments of long-term debt of $11.6 million.
Added
Subject to obtaining clarity on potential regulatory paths forward, we anticipate that our general and administrative expenses may increase in the future to support our continued research and development and commercial planning activities and, if seralutinib receives marketing approval, commercialization activities.
Added
Provision for income taxes Our tax provision from income taxes is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period.
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Revenue was $48.5 million for the year ended December 31, 2025, compared to $114.7 million for the year ended December 31, 2024, for a decrease of $66.2 million, which was primarily attributable to a decrease of $90.7 86 Table of Contents million from sale of licenses, offset by an increase of $24.5 million of revenue associated with performance of research and development and pre-commercial services.
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The following table shows our research and development expenses by program for the years ended December 31, 2025 and 2024: Years Ended December 31, 2025 2024 (in thousands) Seralutinib $ 173,635 $ 129,247 Other programs 458 — Terminated programs — 9,240 Total research and development $ 174,093 $ 138,487 In process research and development expenses There were no IPR&D expenses for the year ended December 31, 2024.
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Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures, including commercial planning expenditures.
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On January 28, 2026, we filed a registration statement on Form S-3, or the 2026 Shelf Registration Statement, covering the offering from time to time of common stock, preferred stock, debt securities, warrants and units, which registration statement became automatically effective on January 28, 2026.
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The opinion of our independent registered public accounting firm on our audited financial statements as of and for the years ended December 31, 2025 and 2024 contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.
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Future reports on our financial statements may include an explanatory paragraph with 88 Table of Contents respect to our ability to continue as a going concern.
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Our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 included in this Annual Report do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might be necessary should we be unable to continue our operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024 and 2023, we had minimal assets and liabilities denominated in foreign currencies and an immediate 87 Table of Contents change of 10% in the exchange rate of the foreign currencies would result in a net impact of approximately $0.1 million in our consolidated balance sheets and consolidated statement of operations and comprehensive loss.
Biggest changeAs of December 31, 2025 and 2024, we had minimal assets and liabilities denominated in foreign currencies and an immediate change of 10% in the exchange rate of the foreign currencies would result in a net impact of approximately $0.1 million in our consolidated balance sheets and consolidated statement of operations and comprehensive loss.
As of December 31, 2024 our cash and cash equivalents consisted of cash, money market funds and commercial paper, and our marketable securities consisted of commercial paper, corporate debt securities and U.S. Treasury and agency securities. We do not believe that we have a material exposure to interest rate risk.
As of December 31, 2025 our cash and cash equivalents consisted of cash, money market funds and commercial paper, and our marketable securities consisted of commercial paper, corporate debt securities and U.S. Treasury and agency securities. We do not believe that we have a material exposure to interest rate risk.

Other GOSS 10-K year-over-year comparisons