Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2026 (this "Quarterly Report") and with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the "SEC") on March 12, 2026. This discussion contains forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions, hopes, beliefs, strategies or projections regarding the future of our pipeline and business and words such as "may," "will," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "project," "potential," "seek," "target," "goal," "intend" and variations of such words and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, and similar expressions are intended to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. These forward-looking statements are based on current expectations and beliefs concerning future developments and their potential effects. There can be no assurance that future developments affecting us will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this Quarterly Report entitled "Risk Factors" and elsewhere in this Quarterly Report. These and many other factors could affect our future financial and operating results. We undertake no obligation to update any forward-looking statement to reflect events after the date of this Quarterly Report. As used in this Quarterly Report, unless the context suggests otherwise, "we," "us," "our," "the Company," "Oruka Therapeutics, Inc.," and "Oruka," refers to Oruka Therapeutics, Inc. and its consolidated subsidiary, Oruka Therapeutics Operating Company LLC, taken as a whole.

Overview

We are a clinical-stage biopharmaceutical company focused on developing novel monoclonal antibody therapeutics for psoriasis ("PsO") and other inflammatory and immunology ("I&I") indications. Our name is derived from or, for "skin," and arukah, for "restoration," and reflects our mission to deliver therapies for chronic skin diseases that provide patients the most possible freedom from their condition. Our strategy is to apply antibody engineering and format innovations to validated modes of action, which we believe will enable us to improve meaningfully upon the efficacy and dosing regimens of standard-of-care medicines while significantly reducing technical and biological risk. Our programs aim to treat and potentially modify disease by targeting mechanisms with proven efficacy and safety involved in disease pathology and the activity of pathogenic tissue-resident memory T cells ("TRMs").

Our lead program, ORKA-001, is designed to target the p19 subunit of interleukin-23 ("IL-23p19") for the treatment of PsO. Our co-lead program, ORKA-002, is designed to target interleukin-17A and interleukin-17F ("IL-17A/F") for the treatment of PsO, hidradenitis suppurativa ("HS"), psoriatic arthritis ("PsA"), and other conditions. These programs each bind their respective targets at high affinity and incorporate half-life extension technology with the aim to increase exposure and decrease dosing frequency. We are also developing ORKA-004, a novel, extended half-life antibody designed to target TNF-like ligand 1A ("TL1A"), which we plan to pursue in combination with ORKA-001 and ORKA-002 in a variety of diseases. We believe that our focused strategy, differentiated portfolio, and deep expertise position us to set a new treatment standard in large I&I markets with continued unmet need.

Since our inception in February 2024, we have devoted substantially all of our resources to raising capital, organizing and staffing our company, business and scientific planning, conducting discovery and research activities, establishing and protecting our intellectual property portfolio, establishing arrangements with third parties for the manufacture of our programs and component materials, developing and progressing our pipeline, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales. To date, we have funded our operations primarily with proceeds from the issuance of convertible preferred stock, common stock, a convertible note, and pre-funded warrants.

Since our inception, we have incurred significant losses and negative cash flows from our operations. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of any programs we may develop. As of September 30, 2026, we had an accumulated deficit of $312.1 million. For the three and nine months ended September 30, 2026, we had net losses of $50.0 million and $123.0 million, respectively, and we used net cash of $101.0 million for our operating activities during the nine months ended September 30, 2026.

We had cash, cash equivalents, and marketable securities of $1.2 billion as of September 30, 2026. We expect that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operating plans for at least twelve months from the date of filing of this Quarterly Report. We expect to continue to incur substantial losses for the foreseeable future, and our transition to profitability will depend upon successful development, approval and commercialization of our product candidates and upon achievement of sufficient revenues to support our cost structure.

Our Portfolio and Development Plans

ORKA-001

ORKA-001 is a high affinity, extended half-life monoclonal antibody ("mAb") designed to target IL-23p19. IL-23 is a pro-inflammatory cytokine that plays a critical role in the proliferation and development of T helper 17 ("Th17") cells, which are the primary drivers of several autoimmune and inflammatory disorders, including PsO. IL-23 is composed of two subunits: a p40 subunit that is shared with IL-12 and a p19 subunit that is specific to IL-23. First-generation IL-23 antibodies bound p40 and inhibited both IL-12 and IL-23 signaling, while more recent IL-23 antibodies targeting the p19 subunit have shown improved efficacy and safety. Based on clinical evidence, we believe that ORKA-001 could achieve higher response rates than established therapies in PsO while requiring less frequent dosing and maintaining the favorable safety profile of therapies targeting IL-23p19.

ORKA-001 is engineered with YTE half-life extension technology, a specific three amino acid change in the fragment crystallizable ("Fc") domain to modify the pH-dependent binding to the neonatal Fc receptor ("FcRn"). As a result, it has a pharmacokinetic profile designed to support a subcutaneous ("SQ") injection as infrequently as once or twice per year. In addition, emerging evidence suggests that IL-23 blockade can modify the disease biology of PsO, possibly leading to durable remissions and preventing the development of PsA. We believe that the expected characteristics of ORKA-001 increase its potential to deliver these disease-modifying benefits.

We initiated a Phase 1 trial of ORKA-001 in the fourth quarter of 2024. In September 2025, we announced interim results and updated those results in April 2026. The data showed that ORKA-001 has a human half-life of approximately 100 days and was well tolerated at all dose levels, with a favorable safety profile consistent with the anti-IL-23 class. The Phase 1 trial data support that a single 600 mg dose maintained ORKA-001 concentrations well above effective trough levels through Week 52, the last timepoint evaluated, with sustained inhibition of IL-23 pathway signaling observed throughout that time period.

In the third quarter of 2025, we commenced dosing in a Phase 2a clinical trial of ORKA-001 in patients with moderate-to-severe PsO (also known as "EVERLAST-A"). EVERLAST-A enrolled 84 patients randomized 3:1 to receive 600 mg of ORKA-001 at Weeks 0 and 4 or matching placebo. Patients initially randomized to placebo received 600 mg of ORKA-001 at Weeks 16 and 20. At Week 28, patients who achieved PASI 100 were randomized 2:1 to an arm where either (1) they do not receive another dose until disease recurrence (to evaluate the possibility of both yearly dosing and extended off-treatment remissions) or (2) they receive 300 mg ORKA-001 every six months. Eligible patients initially randomized to ORKA-001 have the option to transition to the open-label extension study of ORKA-001 at Week 52, and eligible patients initially randomized to placebo have the option to transition to the open-label extension study at Week 28.

In April 2026, we presented Week 16 data for all EVERLAST-A patients, showing that 40 of 63 participants (63.5%) treated with ORKA-001 achieved the primary endpoint of PASI 100, representing a 100% reduction from baseline in the Psoriasis Area and Severity Index ("PASI"), with identical results observed for Investigator's Global Assessment ("IGA") 0. Other key secondary endpoints included PASI 90 at Week 16, achieved by 83% of participants, and IGA 0/1 at Week 16, achieved by 84% of participants. Through Week 16, ORKA-001 was observed as well tolerated with a safety profile consistent with prior IL-23p19 inhibitors. There were no serious treatment-emergent adverse events ("TEAEs") and only one severe TEAE, which occurred in the placebo group. Additionally, there were no injection site reactions.

In September 2026, we announced Week 28 data for EVERLAST-A, showing that efficacy continued to deepen through Week 28, six months after the last dose of ORKA-001, with 71% of participants achieving PASI 100 and 87% achieving PASI 90. Patients who initially received placebo and crossed over blinded to ORKA-001 at Week 16 demonstrated a similar pattern of clinical response to those initially receiving ORKA-001. In this dosing arm, 40% achieved PASI 100 at Week 28 (12 weeks after dosing) compared to 43% of patients in the active arm at the equivalent timepoint. ORKA-001 continued to be well tolerated through Week 28 with a safety profile consistent with the IL-23p19 class. Two patients experienced serious adverse events, neither deemed drug related: one tibial fracture and one case of prostate adenocarcinoma in a patient with elevated prostate-specific antigen (PSA) at baseline. We expect to announce Week 52 data from EVERLAST-A in December 2026.

Additionally, we commenced dosing in a Phase 2b clinical trial of ORKA-001 in patients with moderate-to-severe PsO (also known as "EVERLAST-B") in December 2025. EVERLAST-B enrolled 187 patients randomized equally to four treatment groups: 37.5 mg ORKA-001 at Week 0, 300 mg ORKA-001 at Weeks 0 and 4, 600 mg ORKA-001 at Weeks 0 and 4, or placebo. The primary endpoint was PASI 100 at Week 16. Building on EVERLAST-A, this design is intended to further test the potential for ORKA-001 to achieve yearly dosing, higher efficacy and extended off-treatment remissions. At Week 28, patients who have achieved PASI 100 will be re-randomized 1:1 to either a 600 mg dose once yearly or placebo. Patients who have not achieved PASI 100 at Week 28 will receive a 300 mg dose every six months. Eligible patients initially randomized to placebo have the option to roll over into the open-label extension study of ORKA-001 at Week 28. The trial continues through Week 100 to assess durability of response, maintenance dosing, and long-term safety.

In October 2026, we announced Week 16 data for EVERLAST-B, showing that 61% of participants in the 600 mg ORKA-001 group achieved the primary endpoint of PASI 100, highly consistent with the Week 16 results observed in EVERLAST-A. Efficacy increased in a dose-dependent manner, with the 600 mg group outperforming both lower dose groups on complete skin clearance. The ORKA-001 600 mg group also demonstrated high response rates across secondary endpoints, including 86% of patients achieving each of PASI 90 and IGA 0/1. Through Week 16, ORKA-001 was observed as well tolerated with a safety profile consistent with the IL-23p19 class. The only TEAEs occurring in ≥5% of patients treated with ORKA-001 were upper respiratory tract infection and headache, which occurred at rates similar to those seen with approved IL-23 inhibitors. No dose-dependent trends in adverse events were observed across ORKA-001 treatment groups, and no injection-site reactions occurred in any patients who received ORKA-001. We expect to announce Week 52 data from EVERLAST-B in the second half of 2027.

Based on the results from the EVERLAST clinical program, we intend to discuss Phase 3 plans with regulatory authorities. Pending results from those discussions, we plan to initiate Phase 3 trials of ORKA-001 in moderate-to-severe PsO in the first half of 2027 with the 600 mg dose.

ORKA-002

ORKA-002 is a high affinity, extended half-life mAb designed to target IL-17A and IL-17F ("IL-17A/F"). IL-17 inhibition has become central to the treatment of psoriatic diseases, including PsO and PsA, and has also shown efficacy in other I&I indications, such as HS and axial spondyloarthritis ("axSpA"). More recently, the importance of inhibiting the IL-17F isoform along with IL-17A has become appreciated, and dual blockade with the recently approved therapy Bimzelx (bimekizumab) has led to higher response rates in patients than blockade of IL-17A alone. ORKA-002 is designed to bind IL-17A/F at similar epitopes, or binding sites, and affinity ranges as bimekizumab, but incorporates half-life extension technology that could enable more convenient dosing intervals.

In January 2026, we announced interim findings from the Phase 1 trial of ORKA-002 in healthy volunteers. The results showed that ORKA-002 has a half-life of approximately 75-80 days, which supports the potential for twice-yearly maintenance dosing in PsO and quarterly maintenance dosing in HS. Single doses of ORKA-002 demonstrated potent and sustained inhibition of IL-17 signaling in an ex vivo assay through 24 weeks. The data supports that ORKA-002 was well tolerated at all dose levels, with a favorable safety profile consistent with the anti-IL-17 class. The trial remains blinded, and as of January 6, 2026, which was the data cutoff date, all subjects remained on trial.

Based on these Phase 1 results, we initiated ORCA-SURGE, a Phase 2 trial of ORKA-002 in patients with moderate-to-severe PsO, in February 2026. ORCA-SURGE enrolled 171 patients randomized 1:1:1:1 to receive 40 mg, 160 mg or 320 mg of ORKA-002 at Weeks 0 and 4, or matching placebo. The primary endpoint is PASI 100 at Week 16. Maintenance dosing will evaluate the potential for twice-yearly dosing with ORKA-002. We expect to announce Week 16 data from ORCA-SURGE in the first quarter of 2027.

In addition, we initiated ORCA-SPLASH, a Phase 2 trial of ORKA-002 in patients with moderate-to-severe HS, in August 2026. ORCA-SPLASH is designed to enroll approximately 160 patients. Patients will be randomized 1:1 to receive 320 mg of ORKA-002 or placebo at Week 0, Week 4, Week 8, and Week 12. The primary endpoint is HiSCR75 (Hidradenitis Suppurativa Clinical Response 75) at Week 16. Participants then enter an open-label maintenance period evaluating 320 mg of ORKA-002 every 12 weeks.

ORKA-004 and Additional Pipeline Program

ORKA-004 is a novel, subcutaneously administered, extended half-life mAb designed to target TL1A. We anticipate initiating clinical development of ORKA-004 in the fourth quarter of 2026. We plan to pursue ORKA-004 in combination with ORKA-001 and ORKA-002, with Phase 2 combination trials planned to begin in 2027.

In addition, we have a fourth program, ORKA-003, designed to target an undisclosed pathway. These additional programs provide the potential for indication expansion beyond PsO while maintaining our strategic focus in I&I diseases, and especially inflammatory dermatology conditions.

Option Agreements and License Agreements - Paragon Therapeutics

In March 2024, we entered into two Antibody Discovery and Option Agreements with Paragon and Paruka (each, an "Option Agreement"), pursuant to which we initiated certain research programs with Paragon focusing on discovering, generating, identifying and/or characterizing antibodies directed to a particular target, including for IL-23 and IL-17A/F for ORKA-001 and ORKA-002, respectively. In September 2024, we exercised our exclusive option to acquire certain rights to ORKA-001, and in December 2024, we entered into a corresponding license agreement with Paragon pursuant to which Paragon granted us a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting IL-23 in all fields other than the field of inflammatory bowel disease. In December 2024, we exercised our exclusive option to acquire certain rights to ORKA-002, and in February 2025, we entered into the corresponding license agreement with Paragon pursuant to which Paragon granted us a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting IL-17A/F in all fields (collectively, the "License Agreements"). In May 2026, we amended our ORKA-001 License Agreement with Paragon to expand the definition of "ORKA-001 Field" to include inflammatory bowel disease. The amendment expands the definition of ORKA-001 Field to encompass all therapeutic, prophylactic, palliative and diagnostic uses, subject to the restriction that we will not dose a human patient in a clinical trial of ORKA-001 for inflammatory bowel disease as part of a combination until June 1, 2028 or as a monotherapy until June 1, 2030 (the "Monotherapy Dosing Restriction"). In the event we or a licensee of Paragon's retained rights under the ORKA-001 License Agreement consummates a material transaction, including a change of control of the Company or such licensee, then any remaining restrictions outside of the initial definition of ORKA-001 Field set forth in the Monotherapy Dosing Restriction shall remain in effect only until June 1, 2028.

Pursuant to each of the License Agreements, Paragon has agreed not to conduct any new campaigns that generate anti-IL-23 monospecific antibodies or anti-IL-17A/F monospecific antibodies in the respective agreed-upon fields. Each of the ORKA-001 and ORKA-002 License Agreements may be terminated on 60 days' notice to Paragon, on material breach without cure, and on a party's insolvency or bankruptcy to the extent permitted by law.

In December 2025, the Company exercised its exclusive option to acquire certain rights to ORKA-003, and in August 2026, it entered into the corresponding license agreement with Paragon (the "ORKA-003 License Agreement").

Pursuant to the terms of each of the License Agreements and the ORKA-003 License Agreement, we are obligated to pay Paragon non-refundable milestone payments of up to $12.0 million under each respective agreement upon the achievement of certain clinical development milestones and up to $10.0 million under each respective agreement upon the achievement of certain regulatory milestones. In addition, we are obligated to pay Paragon a low single-digit percentage royalty for antibody products for each of ORKA-001, ORKA-002 and ORKA-003. For each of the License Agreements and the ORKA-003 License Agreement, the royalty term ends on the later of (i) the last-to-expire licensed patent or our patent directed to the manufacture, use or sale of a licensed antibody in the country at issue or (ii) 12 years from the date of first sale of our product. There is also a royalty step-down if there is no Paragon patent in effect during the royalty term for each program.

During the three and nine months ended September 30, 2026, we incurred and expensed a milestone of nil and $3.0 million for the ORKA-002 License Agreement, respectively. Pursuant to the License Agreements, as of September 30, 2026, we have incurred and expensed milestone payments of $7.0 million for each of ORKA-001 and ORKA-002 and have not incurred or expensed any milestone payments in connection with the ORKA-003 License Agreement.

Components of Results of Operations

Revenue

To date, we have not generated revenue from any sources, including product sales, and do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts for our product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales or payments from future collaboration or license agreements that we may enter into with third parties, or any combination thereof. We cannot predict if, when, or to what extent we will generate revenue from the commercialization and sale of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates.

Operating Expenses

Research and Development

Research and development expenses consist primarily of costs incurred in connection with the development and research of our programs. These expenses include:

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costs of funding research performed by third parties that conduct research and development activities on our behalf;

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costs incurred, and milestone payments under license and option agreements;

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expenses incurred in connection with continuing our current research programs and discovery-phase development of any programs we may identify, including under future agreements with third parties, such as consultants and contractors;

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expenses incurred under agreements with contract research organizations ("CROs"), contract manufacturing organizations ("CMOs"), and with clinical trial sites that conduct research and development activities on our behalf;

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the cost of development and validating our manufacturing process for use in our preclinical studies and current and future clinical trials;

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personnel-related expenses, including salaries, bonuses, employee benefits, travel, and stock-based compensation expense; and

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allocated human resource costs, information technology costs, and facility-related costs, including rent, maintenance, utilities, and depreciation for our leased office space.

We expense research and development costs as incurred. Non-refundable advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered or the services rendered. Our primary focus since inception has been the identification and development of our pipeline programs. Our research and development expenses primarily consist of external costs. See Note 9 to the condensed consolidated financial statements included in Part I - Item 1 of this Quarterly Report for further details on the Option Agreements and License Agreements.

We expect our research and development expenses will increase substantially for the foreseeable future as we continue to invest in research and development activities related to the continued development of our programs, developing any future programs, including investments in manufacturing, as we advance any program we may identify and continue to conduct clinical trials. The success of programs we may identify and develop will depend on many factors, including the following:

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timely and successful completion of preclinical studies and clinical trials;

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effective investigational new drug ("IND") or comparable foreign applications that allow commencement of our planned clinical trials or future clinical trials for any programs we may develop;

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successful enrollment and completion of clinical trials;

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positive results from our clinical trials that support a finding of safety and effectiveness, acceptable pharmacokinetics profile, and an acceptable risk-benefit profile in the intended populations;

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receipt of marketing approvals from applicable regulatory authorities;

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establishment of arrangements through our own facilities or with third-party manufacturers for clinical supply and, where applicable, commercial manufacturing capabilities; and

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maintenance of a continued acceptable safety, tolerability, and efficacy profile of any programs we may develop following approval.

Any changes in the outcome of any of these variables with respect to the development of programs that we may identify could mean a significant change in the costs and possible delays in timing associated with the development of such programs. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development of a program, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development. We may never obtain regulatory approval for any of our programs.

General and Administrative

General and administrative expenses consist primarily of personnel-related expenses, including salaries, bonuses, employee benefits, travel, and stock-based compensation, for our executive and other administrative personnel. Other significant general and administrative expenses include legal services, including intellectual property and corporate matters; professional fees for accounting, auditing, tax, insurance, and allocated human resource costs, information technology costs, and facility-related costs, including rent, utilities, maintenance, and depreciation for our leased office space.

We expect our general and administrative expenses will increase substantially for the foreseeable future as we anticipate an increase in our personnel headcount to support the expansion of research and development activities, as well as to support our operations generally. We also expect to continue to incur significant expenses associated with being a public company, including costs related to accounting, audit, legal, regulatory, and tax-related services associated with maintaining compliance with applicable Nasdaq and SEC requirements; director and officer insurance costs; and investor and public relations costs. We also expect to incur additional intellectual property-related expenses as we file patent applications to protect innovations arising from our research and development activities.

Other Income (Expense), Net

Total other income (expense), net, consists of interest earned on our cash, cash equivalents, and marketable securities, and foreign currency transactions gains and losses.

Results of Operations

Comparison of the Three Months Ended September 30, 2026 and 2025

The following table summarizes our results of operations for the periods presented (in thousands):

		Three Months Ended September 30,								Change
		2026				2025				$				%
Operating expenses
Research and development(1)		$	53,696			$	28,988			$	24,708				85	%
General and administrative(2)			8,440				5,117				3,323				65	%
Total operating expenses			62,136				34,105				28,031				82	%
Loss from operations			(62,136	)			(34,105	)			(28,031	)			82	%
Other income (expense)
Interest income			12,166				3,832				8,334				217	%
Other income (expense), net			5				(4	)			9				*
Total other income, net			12,171				3,828				8,343				218	%
Net loss		$	(49,965	)		$	(30,277	)		$	(19,688	)			65	%

*	Percentage not meaningful

(1)	Includes related party amounts of nil and $9,595 for the three months ended September 30, 2026 and 2025, respectively.

(2)	Includes related party amounts of $50 and $8 for the three months ended September 30, 2026 and 2025, respectively.

Research and Development Expenses

The following table summarizes our research and development expenses for the periods presented (in thousands):

		Three Months Ended September 30,								Change
		2026				2025				$				%
External research and development expenses		$	38,295			$	15,581			$	22,714				146	%
Other research and development expenses:
Personnel-related (excluding stock-based compensation)			8,778				3,774				5,004				133	%
Stock-based compensation			4,740				8,341				(3,601	)			(43	)%
Other			1,883				1,292				591				46	%
Total research and development expenses		$	53,696			$	28,988			$	24,708				85	%

Research and development expenses increased by $24.7 million, from $29.0 million for the three months ended September 30, 2025 to $53.7 million for the three months ended September 30, 2026.

External research and development expenses, including CROs, CMOs and other third-party preclinical studies and clinical trials expenses increased by $22.7 million, from $15.6 million for the three months ended September 30, 2025 to $38.3 million for the three months ended September 30, 2026. The increase is primarily related to increased CRO expenses related to our ongoing clinical trials and increased CMO product development and manufacturing expenses. These increases were partially offset by the absence of a $3.0 million milestone pursuant to ORKA-001 License Agreement with Paragon related to dosing of the first patient in a Phase 2 trial during the prior year.

Personnel-related expenses, excluding stock-based compensation, increased by $5.0 million, from $3.8 million for the three months ended September 30, 2025 to $8.8 million for the three months ended September 30, 2026. This increase was primarily attributable to the growth in our research and development headcount to support our growing portfolio of clinical trials. Stock-based compensation expense decreased by $3.6 million, from $8.3 million for the three months ended September 30, 2025 to $4.7 million for the three months ended September 30, 2026. The decrease in stock-based compensation expense is primarily related to a $6.6 million decrease due to absence of expense related to the Paruka warrant liability under the Option Agreements, which was recorded in the prior year, partially offset by a $3.0 million increase related to employee awards due to an increase in research and development headcount.

Other research and development expenses increased by $0.6 million, from $1.3 million for the three months ended September 30, 2025 to $1.9 million for the three months ended September 30, 2026, primarily due to a higher allocation of shared costs to support the increase in our research and development employee headcount.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the periods presented (in thousands):

		Three Months Ended September 30,								Change
		2026				2025				$				%
Personnel-related (excluding stock-based compensation)		$	2,895			$	1,945			$	950				49	%
Stock-based compensation			4,391				1,824				2,567				141	%
Other general and administrative expenses			1,154				1,348				(194	)			(14	)%
Total general and administrative expenses		$	8,440			$	5,117			$	3,323				65	%

General and administrative expenses increased by $3.3 million, from $5.1 million for the three months ended September 30, 2025 to $8.4 million for the three months ended September 30, 2026.

Personnel-related expenses, excluding stock-based compensation, increased by $1.0 million, from $1.9 million for the three months ended September 30, 2025 to $2.9 million for the three months ended September 30, 2026. This increase was primarily attributable to an increase in headcount to support our growing operations as a public company.

Stock-based compensation expense increased by $2.6 million, from $1.8 million for the three months ended September 30, 2025 to $4.4 million for the three months ended September 30, 2026, primarily due to additional equity awards issued to existing employees and equity awards granted to new hires.

Other general and administrative expenses decreased by $0.2 million, from $1.3 million for the three months ended September 30, 2025 to $1.2 million for the three months ended September 30, 2026, primarily due to a higher allocation of shared costs to research and development, reflecting growth in our research and development headcount to support our expanding clinical programs.

Total Other Income (Expense), Net

Interest income from cash equivalents and marketable securities was $12.2 million and $3.8 million for the three months ended September 30, 2026 and 2025, respectively. The increase was primarily due to interest earned on higher cash and marketable securities balances.

Comparison of the Nine Months Ended September 30, 2026 and 2025

The following table summarizes our results of operations for the periods presented (in thousands):

		Nine Months Ended September 30,								Change
		2026				2025				$				%
Operating expenses
Research and development(1)		$	126,098			$	73,000			$	53,098				73	%
General and administrative(2)			22,579				14,620				7,959				54	%
Total operating expenses			148,677				87,620				61,057				70	%
Loss from operations			(148,677	)			(87,620	)			(61,057	)			70	%
Other income (expense)
Interest income			25,669				11,781				13,888				118	%
Other income (expense), net			17				(11	)			28				*
Total other income, net			25,686				11,770				13,916				118	%
Net loss		$	(122,991	)		$	(75,850	)		$	(47,141	)			62	%

*	Percentage not meaningful

(1)	Includes related party amounts of $3,000 and $15,998 for the nine months ended September 30, 2026 and 2025, respectively.

(2)	Includes related party amounts of $54 and $130 for the nine months ended September 30, 2026 and 2025, respectively.

Research and Development Expenses

The following table summarizes our research and development expenses for the periods presented (in thousands):

		Nine Months Ended September 30,								Change
		2026				2025				$				%
External research and development expenses		$	87,548			$	45,607			$	41,941				92	%
Other research and development expenses:
Personnel-related (excluding stock-based compensation)			21,641				9,538				12,103				127	%
Stock-based compensation			12,232				14,712				(2,480	)			(17	)%
Other			4,677				3,143				1,534				49	%
Total research and development expenses		$	126,098			$	73,000			$	53,098				73	%

Research and development expenses increased by $53.1 million, from $73.0 million for the nine months ended September 30, 2025 to $126.1 million for the nine months ended September 30, 2026.

External research and development expenses, including CROs, CMOs and other third-party preclinical studies and clinical trials expenses increased by $41.9 million, from $45.6 million for the nine months ended September 30, 2025 to $87.5 million for the nine months ended September 30, 2026. The increase is primarily related to an increase in our CRO expenses related to our ongoing clinical trials, increased CMO product development and manufacturing expenses, and a $5.0 million expense related to a non-refundable upfront payment made to Halozyme pursuant to our collaboration and license agreement. These increases were partially offset by lower research related expenses incurred during the current year.

Personnel-related expenses, excluding stock-based compensation, increased by $12.1 million, from $9.5 million for the nine months ended September 30, 2025 to $21.6 million for the nine months ended September 30, 2026. This increase was primarily attributable to the growth in our research and development headcount to support our growing portfolio of clinical trials. Stock-based compensation expense decreased by $2.5 million, from $14.7 million for the nine months ended September 30, 2025 to $12.2 million for the nine months ended September 30, 2026. The decrease in stock-based compensation expense is primarily related to a $9.7 million decrease due to absence of expense related to the Paruka warrant liability under the Option Agreements, which was recorded in the prior year, partially offset by a $7.2 million increase related to employee awards due to an increase in research and development headcount.

Other research and development expenses increased by $1.5 million, from $3.1 million for the nine months ended September 30, 2025 to $4.7 million for the nine months ended September 30, 2026, primarily due to a higher allocation of shared costs to support the increase in our research and development employee headcount.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the periods presented (in thousands):

		Nine Months Ended September 30,								Change
		2026				2025				$				%
Personnel-related (excluding stock-based compensation)		$	7,133			$	5,356			$	1,777				33	%
Stock-based compensation			11,151				5,413				5,738				106	%
Other general and administrative expenses			4,295				3,851				444				12	%
Total general and administrative expenses		$	22,579			$	14,620			$	7,959				54	%

General and administrative expenses increased by $8.0 million, from $14.6 million for the nine months ended September 30, 2025 to $22.6 million for the nine months ended September 30, 2026.

Personnel-related expenses, excluding stock-based compensation, increased by $1.8 million, from $5.4 million for the nine months ended September 30, 2025 to $7.1 million for the nine months ended September 30, 2026. This increase was primarily attributable to an increase in cash personnel costs due to additional headcount to support our growing operations as a public company.

Stock-based compensation expense increased by $5.7 million, from $5.4 million for the nine months ended September 30, 2025 to $11.2 million for the nine months ended September 30, 2026, primarily due to additional equity awards issued to existing employees and equity awards granted to new hires.

Other general and administrative expenses increased by $0.4 million, from $3.9 million for the nine months ended September 30, 2025 to $4.3 million for the nine months ended September 30, 2026, primarily due to higher spending on professional services to support our growing operations as a public company, partly offset by higher allocation of shared costs to research and development, reflecting growth in our research and development headcount.

Total Other Income (Expense), Net

Interest income from cash equivalents and marketable securities was $25.7 million and $11.8 million for the nine months ended September 30, 2026 and 2025, respectively. The increase was primarily due to interest earned on higher cash and marketable securities balances.

Liquidity and Capital Resources

As of September 30, 2026, we had $1.2 billion of cash, cash equivalents, and marketable securities.

Since our inception, we have incurred significant operating losses and negative cash flow from operations. We expect to incur significant expenses and operating losses for the foreseeable future as we continue the preclinical and clinical development of our programs and our early-stage research activities. We have not yet commercialized any products, and we do not expect to generate revenue from sales of products for several years, if at all. Through September 30, 2026, we have funded our operations primarily with proceeds from issuances of convertible preferred stock, common stock, a convertible note, and pre-funded warrants.

In October 2025, we entered into a Sales Agreement (the "Initial Sales Agreement") with TD Securities (USA) LLC, as our sales agent, pursuant to which we could issue and sell, from time to time, shares of common stock for aggregate gross proceeds of up to $200.0 million under an at-the-market ("ATM") equity offering program pursuant to a registration statement on Form S-3 (the "Prior Registration Statement"). The Prior Registration Statement was deemed terminated as of August 27, 2026.

On August 21, 2026, we entered into an amendment to the Initial Sales Agreement (as amended, the "Sales Agreement"), pursuant to which we may issue and sell, from time to time, shares of common stock for aggregate gross proceeds of up to $500.0 million under the ATM equity offering program, pursuant to a registration statement on Form S-3. We are not obligated to make any sales of shares under the Sales Agreement. As of September 30, 2026, an amount of $500.0 million remained available under the ATM program.

During the three months ended September 30, 2026, we issued and sold an aggregate of 1,499,500 shares of our common stock pursuant to the ATM offering program and the Prior Registration Statement for net proceeds of $122.5 million, after deducting sales agents' commissions. During the nine months ended September 30, 2026, we issued and sold an aggregate of 2,667,395 shares of our common stock pursuant to the ATM offering program and the Prior Registration Statement for net proceeds of $161.4 million, after deducting sales agents' commissions. In April 2026, we sold 9,660,000 shares of our common stock in an underwritten public offering for net proceeds of $658.3 million, after deducting underwriting discounts and commissions and related issuance expenses.

Our primary use of cash is to fund the development of our product candidates and advance our pipeline. This includes both the research and development costs and the general and administrative expenses required to support those operations. Since we are a clinical stage biopharmaceutical company, we have incurred significant operating losses since our inception and we anticipate such losses, in absolute dollar terms, to increase as we continue to pursue clinical development of our product candidates, prepare for the potential commercialization of our product candidates, and expand our development efforts in our pipeline of nonclinical candidates. We expect that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operating plans for at least twelve months from the date of filing of this Quarterly Report. We will need to secure additional financing in the future to fund additional research and development, and before a commercial drug can be produced, marketed, and sold. If we are unable to obtain additional financing or generate license or product revenue, the lack of liquidity could have a material adverse effect on our company.

Cash Flows

The following table summarizes our cash flows for the periods presented (in thousands):

		Nine Months Ended September 30,
		2026				2025
Net cash used in operating activities		$	(101,049	)		$	(65,616	)
Net cash used in investing activities			(584,783	)			(74,723	)
Net cash provided by financing activities			830,416				170,017
Net increase in cash and cash equivalents		$	144,584			$	29,678

Operating Activities

For the nine months ended September 30, 2026, net cash used in operating activities was $101.0 million, which was primarily attributable to a net loss of $123.0 million, partially offset by net non-cash charges of $20.6 million and net cash provided by changes in our operating assets and liabilities of $1.3 million. Net cash provided by changes in our operating assets and liabilities were primarily comprised of an increase of $10.2 million in accounts payable and an increase of $5.9 million in accrued expenses and other liabilities, partially offset by an increase of $14.4 million in prepaid expenses and other current assets and a decrease of $0.4 million in operating lease liability. Net non-cash charges primarily comprised of $23.4 million in stock-based compensation expense, partially offset by $3.4 million in net accretion of premiums and discounts on marketable securities.

For the nine months ended September 30, 2025, net cash used in operating activities was $65.6 million, which was primarily attributable to a net loss of $75.9 million and net cash used by changes in our operating assets and liabilities of $5.9 million, partially offset by net non-cash charges of $16.2 million. Net cash used by changes in our operating assets and liabilities were primarily comprised of a decrease of $6.0 million in related party accounts payable and other current liabilities, an increase of $3.2 million in prepaid expenses and other current assets, partly offset by an increase of $5.0 million in accrued expenses and other current liabilities. Net non-cash charges primarily comprised of $20.1 million in stock-based compensation expense (includes $9.7 million from Paruka Warrant Obligation), partially offset by $4.3 million in net accretion of premiums and discounts on marketable securities.

Investing Activities

For the nine months ended September 30, 2026, net cash used in investing activities was $584.8 million, which included $910.9 million in purchases of marketable securities, $0.2 million in purchases of property and equipment, partially offset by $326.3 million in proceeds from maturities of marketable securities.

For the nine months ended September 30, 2025, net cash used in investing activities was $74.7 million, which included $420.0 million in purchases of marketable securities, $0.1 million in purchases of property and equipment, partially offset by $345.4 million in proceeds from maturities of marketable securities.

Financing Activities

For the nine months ended September 30, 2026, net cash provided by financing activities was $830.4 million due to $658.3 million of net proceeds from the April 2026 underwritten public offering, $161.4 million of net proceeds from the ATM offering program, $10.4 million of proceeds from the issuance of shares of common stock in connection with exercises of stock options and employee warrants, and $0.3 million of proceeds from the issuance of common stock under the employee stock purchase plan.

For the nine months ended September 30, 2025, net cash provided by financing activities was $170.0 million due to $169.9 million of net proceeds related to a private placement with certain institutional investors (the "2025 PIPE Financing") which closed on September 19, 2025 and $0.1 million proceeds from the issuance of shares of common stock in connection with purchases under our employee stock purchase plan.

Contractual Obligations and Commitments

We enter into contracts in the normal course of business with CROs, CMOs and with other vendors for preclinical research studies, clinical trials, manufacturing, and other services and products for operating purposes. These contracts generally provide for termination on notice or may have a potential termination fee if the contract is cancelled within a specified time, and therefore, are cancelable contracts. We do not expect any such contract terminations and did not have any non-cancellable obligations under these agreements as of September 30, 2026. See Notes 9 and 10 to the condensed consolidated financial statements included in Part I - Item 1 of this Quarterly Report for further information on our contractual lease obligations for our headquarters in Menlo Park, California, and our office in Waltham, Massachusetts, and other commitments, including the commitments under the Option and License Agreements.

Critical Accounting Policies and Significant Judgments and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues recognized and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are described in more detail in Note 2 to our condensed consolidated financial statements included in Part I - Item 1 of this Quarterly Report. During the three months ended September 30, 2026, there were no changes to our critical accounting policies and significant judgments and estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Off-Balance Sheet Arrangements

As of September 30, 2026, we did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.