Quarterly Report for Quarter Ending September 30, 2025 (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 condensed consolidated financial statements and the related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q (this "Quarterly Report") and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission (the "SEC") on February 28, 2025. Certain of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled "Risk Factors", in Part I - Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025, as updated by the factors described under the heading "Risk Factors" in Part II - Item 1A of this Quarterly Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the section entitled "Risk Factors" to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see "Cautionary Note Regarding Forward-Looking Statements" below. The events and circumstances reflected in our forward-looking statements may not be achieved or may not occur, and actual results could differ materially from those described in or implied by the forward-looking statements contained in the following discussion and analysis. As a result of these risks, you should not place undue reliance on these forward-looking statements. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Throughout this Quarterly Report, unless the context otherwise requires, the terms "Jasper," "we," "us" and "our" in this Quarterly Report refer to Jasper Therapeutics, Inc. and its consolidated subsidiary.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report may constitute "forward-looking statements" for purposes of federal securities laws. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "will," "would" and similar expressions (including the negative of any of the foregoing) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

Forward-looking statements in this Quarterly Report may include, for example, but are not limited to, statements about:

	●	our or our management team's expectations, objectives, hopes, beliefs, intentions or strategies regarding the future;
	●	our ability to research, discover and develop additional product candidates;
	●	the success, cost and timing of our product development activities and clinical trials;
	●	the potential attributes and benefits, safety and efficacy of our product candidates;
	●	our ability to obtain and maintain regulatory approval for our product candidates;
	●	our ability to obtain additional funding for our operations in future offerings;
	●	our projected financial information, anticipated growth rate and market opportunity;

	●	our ability to maintain the listing of our public securities on the Nasdaq Capital Market;
	●	our public securities' potential liquidity and trading;
	●	our success in retaining or recruiting, or changes required in, officers, key employees or directors;
	●	our ability to grow and manage growth profitably;
	●	the implementation, market acceptance and success of our business model, developments and projections relating to our competitors and industry;
	●	our ability to obtain and maintain intellectual property protection and not infringe on the rights of others;
	●	our ability to identify, in-license or acquire additional technology;
	●	our ability to maintain our existing license agreements and manufacturing arrangements;
	●	our investigation into a drug product lot used in our Phase 1b/2a BEACON study in CSU and Phase 1b/2a ETESIAN study in asthma, and the results of such investigation;
	●	our expectations regarding the anticipated benefits of our corporate reorganization, including the reduction in force, and our ability to implement and achieve the expected cost savings in connection therewith;
	●	our ability to continue as a going concern; and
	●	the volatility of the trading price of our common stock.

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 we have 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. These risks and uncertainties include, but are not limited to, those factors described under the heading "Risk Factors" in Part I - Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025, as updated by the factors described under the heading "Risk Factors" in Part II - Item 1A of this Quarterly Report. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified, and there may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Overview

We are a clinical-stage biotechnology company focused on developing therapeutics targeting mast cell driven diseases, including Chronic Spontaneous Urticaria ("CSU"), Chronic Inducible Urticaria ("CIndU") and asthma. We are evaluating additional indications in mast cell driven diseases for potential future development as well. We have also historically supported development programs in diseases where targeting diseased hemopoietic stem cells can provide benefits, such as stem cell transplant conditioning regimens.

Our lead product candidate, briquilimab, is a monoclonal antibody designed to block stem cell factor ("SCF") from binding to and signaling through the CD117 ("c-Kit") receptor on mast and stem cells. The SCF/c-Kit pathway is a survival signal for mast cells and we believe that blocking this pathway may lead to depletion of these cells throughout the body, including in the lungs and in the skin, which could lead to significant clinical benefit for patients with mast-cell driven diseases such as chronic urticarias. To that end, we are focusing on advancing a portfolio of clinical programs in mast cell driven diseases, highlights of which are as follows:

CSU - BEACON Study

We commenced the Phase 1b/2a BEACON study in CSU in late 2023 and in January 2025, we presented positive preliminary data as of December 31, 2024 from the first 8 dosing cohorts in the study (10mg, 40mg, 80mg Q8W, 120mg Q8W, 120mg Q12W, 180mg Q8W, 180mg Q12W, and 240mg single-dose). Average patient duration on study as of the cutoff date for the data presented was approximately 28 weeks. Highlights of the data are as follows:

●

Briquilimab demonstrated a rapid onset of clinical efficacy:

o

Clinical responses were seen as early as 1 week post-dose; and

o

Complete responses were observed as early as week 2 post-dose.

●

Briquilimab drove deep and meaningful clinical responses:

o

UAS7 reductions of as much as 29 points were noted 4 weeks post-dose (120mg Q12W); and

o

100% complete responses through 8 weeks were demonstrated at the 240mg dose level.

●

Dose dependent durability was observed in complete responses and well-controlled disease:

o

Complete responses showed durability out to 4 weeks, 6 weeks and 8 weeks at the 120mg, 180mg and 240mg dose levels, respectively.

●

Briquilimab was well-tolerated and demonstrated a favorable safety profile:

o

C-kit related adverse events ("AEs") were low frequency, transient, low-grade events;

o

The majority of AEs observed were resolved while on study prior to subsequent doses; and

o

No dose delays, missed doses or discontinuations were reported due to AEs possibly related to c-Kit blockade.

In July 2025, we reported updated data from the Phase 1b/2a BEACON study in CSU with updates on the 240mg and 360 mg single dose cohorts as well as the 240mg Q8W and the 240mg followed by 180mg Q8W cohorts. Highlights of that update are as follows:

●

Briquilimab administration continued to demonstrate deep and rapid disease control in the 240mg and 360mg single-dose cohorts with 8 of 9 (89%) of participants enrolled across both cohorts achieving a complete response, and with 7 of 9 (78%) achieving a clinical response by week 2.

●

Results from the 240mg Q8W and the 240mg followed by 180mg Q8W dose cohorts demonstrated an atypical absence of UAS7 reduction in 11 of the 13 patients enrolled, and as a result, we are investigating the results of those two cohorts. Among other factors being examined, including clinical site conduct, site dosing procedures, and patient selection criteria, we are also assessing potential product lot variability in one lot of drug product first introduced into the BEACON study in those two cohorts, as all 10 patients dosed with drug supply from that lot failed to show reductions in their reported UAS7 scores. We have provided new clinical drug supply from a different lot for ongoing dosing of existing patients, and are enrolling an additional 10-12 new patients in aggregate across those two cohorts.

In September 2025, we provided an update on the ongoing investigation into the confounded efficacy results reported in July 2025 from the 240mg Q8W and the 240mg followed by 180mg Q8W cohorts of the BEACON study in CSU. Based on the work conducted to date, we believe the anomalous efficacy results in these two cohorts do not appear to be related to drug substance ("DS") or drug product ("DP") manufacturing or distribution processes. This conclusion reflects, among other factors:

●

a comprehensive review of manufacturing and distribution records;

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robust testing of multiple lots across the manufacturing and clinical supply chain;

●

independent, blinded testing of returned drug product samples from trial sites; and

●

review of stability samples from the lots used in the two cohorts compared against other lots.

With no evidence of DS or DP issues, the ongoing investigation is now focused on clinical site activity, including:

●

patient selection and enrollment processes;

●

investigational product handling and administration at the site level;

●

drug delivery methods (for example, injection site, needle and injection media); and

●

additional patient- and site-level data review.

We continue to expect to complete the investigation in the fourth quarter of 2025, supported by a key opinion leader panel that will review findings and provide clinical and chemistry, manufacturing and controls recommendations for integration into the planned Phase 2b CSU study.

CSU - Open Label Extension (OLE) Study

We commenced an Open Label Extension study (the "OLE") in which patients in the BEACON study in CSU and the SPOTLIGHT study in CIndU are eligible to roll over to once they have completed their initial follow up period. All patients rolling over to the OLE study are treated with a 180mg Q8W dosing regimen. Highlights of the initial CSU data update for the OLE study released in July 2025 are as follows:

●

Briquilimab treatment resulted in deep and durable disease control in CSU patients in the OLE study at 180mg Q8W, with 8 of 11 participants (73%) achieving complete response at the week 12 assessment; and

●

Briquilimab continued to be well-tolerated in CSU patients in the OLE and demonstrated a favorable safety profile:

o

C-kit related AEs were low frequency, transient, low-grade events;

o

The majority of AEs observed were resolved while on study prior to subsequent doses; and

o

No dose delays, missed doses or discontinuations were reported due to AEs possibly related to c-Kit blockade.

CIndU - SPOTLIGHT Study

In early 2024, we commenced the Phase 1b/2a SPOTLIGHT study in CIndU. In October 2024, we presented positive preliminary data on the 40mg and 120mg cohorts from the study showing the following for the 6-week preliminary analysis period following dosing, as follows:

●

Across the 40mg and 120mg dosing cohorts in the study, 14 of the 15 participants (93%) achieved a clinical response;

●

In the 120mg dose cohort, 10 of 12 participants (83%) experienced a complete response, and 1 participant experienced a partial response; and

●

Briquilimab has been well-tolerated in the study, with no serious adverse events ("SAEs") and no grade 3 or higher AEs reported.

In late 2024, we added a 180mg single dose cohort to the SPOTLIGHT study in CIndU. In June 2025, we reported positive preliminary data from the 180mg single dose cohort, the highlights of which are as follows:

●

Briquilimab treatment resulted in deep disease control at 180mg, with 12 of 12 participants (100%) enrolled in the cohort achieving a clinical response within the 8-week preliminary analysis period;

●

The efficacy observed was rapid and durable, with 8 of 12 participants (66%) achieving clinical response by week 2, and 7 of 12 participants (58%) maintaining clinical response through week 8; and

●

Briquilimab continued to be well tolerated in the study, with no SAEs and no grade 3 or higher AEs reported in the 180mg cohort.

Asthma - ETESIAN Study

In late 2024, we commenced a Phase 1b/2a study in asthma, the "ETESIAN" study, which is a single dose double-blind, placebo-controlled challenge study seeking to demonstrate proof-of-concept in asthma utilizing a potential therapeutic dose to inform future trials in the broader asthma population. The study is being conducted utilizing a single 180mg dose of subcutaneous briquilimab.

In July 2025, we halted enrollment in the ETESIAN study due to the fact that clinical material for the ETESIAN study was supplied from a drug product lot under investigation due to an atypical lack of efficacy noted in two of the cohorts in the BEACON study in which material from that drug product lot was also used. We are investigating the drug product lot in question and expect to have the results of that investigation in the second half of 2025, at which point we will be able to determine next steps in asthma.

Historically, we have also evaluated briquilimab as a one-time conditioning therapy for severe combined immunodeficiency ("SCID") patients undergoing a second stem cell transplant for which we conducted a Phase 1/2 clinical trial as well as via Investigator Sponsored Trials ("ISTs") in several other stem cell transplant indications. In July 2025, the SCID program and any remaining ISTs were discontinued to focus resources exclusively on our mast cell disease development programs.

We intend to become a fully integrated discovery, development and commercial company in the field of mast cell therapeutics. We are developing our product candidates to be used individually or, in some cases, in combination with other therapeutics. Our goal is to advance our product candidates through regulatory approval and bring them to the commercial market based on the data from our clinical trials and communications with regulatory agencies and payor communities. We expect to continue to broaden our pipeline with additional mast cell indications and next-generation products by leveraging our research organization.

We have an exclusive license agreement with Amgen Inc. ("Amgen") for the development and commercialization of the briquilimab monoclonal antibody in all indications and territories worldwide. We also have an exclusive license agreement with Stanford University for the right to use briquilimab in the clearance of diseased stem cells prior to the transplantation of hematopoietic stem cells.

Recent Developments

On July 8, 2025, we implemented a corporate reorganization to extend our cash runway, including a workforce reduction of approximately 50% of our workforce, representing 20 employees. The reorganization was substantially completed during the third quarter of 2025. In connection with this corporate reorganization, we refined our operating plan to focus on our briquilimab clinical development programs in chronic urticaria and halted enrollment in our Phase 1b/2a ETESIAN study in asthma and halted our other clinical and preclinical programs. The total cost related to the workforce reduction was approximately $1.8 million, all of which represented cash-based expenditure related primarily to severance payments. For each of the three and nine month periods ended September 30, 2025, we recorded restructuring charges of $1.3 million and $0.5 million as research and development expenses and general and administrative expenses, respectively, in our condensed consolidated statements of operations and comprehensive loss.

On September 18, 2025, we entered into an underwriting agreement with TD Securities (USA) LLC as the representative of the several underwriters named therein, relating to an underwritten public offering. On September 22, 2025, we closed the offering and issued an aggregate of 11,670,707 shares of common stock, pre-funded warrants to purchase 675,000 shares of common stock and common warrants to purchase 12,345,707 shares of common stock for net proceeds of $27.5 million.

We have incurred significant losses and negative cash flows from operations since our inception. During the three and nine months ended September 30, 2025 we incurred net losses of $18.7 million and $66.7 million, respectively. During the three and nine months ended September 30, 2024 we incurred net losses of $18.6 million and $46.9 million, respectively. We generated negative operating cash flows of $55.3 million and $41.5 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $307.6 million.

We had cash and cash equivalents of $50.9 million as of September 30, 2025. 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. We do not expect to generate any revenue from commercial product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates. We may never achieve profitability, and unless we do and until then, we will need to continue to raise additional capital.

Our management plans to monitor expenses and raise additional capital through a combination of public and private equity, debt financings, strategic alliances, and licensing arrangements. Our ability to access capital when needed is not assured and, if capital is not available to us when, and in the amounts, needed, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any product candidate, or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially harm our business, financial condition and results of operations.

We expect our expenses will increase substantially in connection with our ongoing and planned activities as we:

●

advance product candidates through preclinical studies and clinical trials;

●

procure the manufacture of supplies for our preclinical studies and clinical trials;

●

acquire, discover, validate, and develop additional product candidates;

●

attract, hire and retain additional personnel;

●

operate as a public company;

●

implement operational, financial and management systems;

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pursue regulatory approval for any product candidates that successfully complete clinical trials;

●

establish a sales, marketing, and distribution infrastructure to commercialize any product candidate for which we may obtain marketing approval and related commercial manufacturing build-out; and

●

obtain, maintain, expand, and protect our portfolio of intellectual property rights.

We do not currently own or operate any manufacturing facility. We rely on contract manufacturing organizations ("CMOs") to produce our drug candidates in accordance with the FDA's current good manufacturing practices ("cGMP") regulations for use in our clinical studies. The manufacture of pharmaceuticals is subject to extensive cGMP regulations, which impose various procedural and documentation requirements and govern all areas of record keeping, production processes and controls, personnel and quality control. Under our license agreement with Amgen, we have received a substantial amount of drug product to support initiation of our planned clinical trials of briquilimab. In November 2019, we entered into development and manufacturing agreements with Lonza Sales AG ("Lonza") relating to the manufacturing of briquilimab and product quality testing. The facility of Lonza in Slough, United Kingdom is responsible for production and testing of drug substance. The facility of Lonza in Stein, Switzerland is responsible for production and testing of drug product. Labelling, packaging and storage of finished drug product is provided by PCI Pharma Services, in San Diego, California. Our agreement with Lonza includes certain limitations on our ability to enter into supply arrangements with any other supplier without Lonza's consent. In addition, Lonza has the right to increase the prices it charges us for certain supplies depending on a number of factors, some of which are outside of our control. In addition, given drug substance and drug product manufacturing and testing with Lonza currently occurs outside the United States, drug product imported into the United States for clinical or commercial use could be subject to significant tariffs in the current political environment.

We do not currently have sales and marketing infrastructure to support commercial launch of our product candidates, if approved. We may build such capabilities in North America prior to potential launch of briquilimab. Outside of North America, we may rely on licensing, co-sale and co-promotion agreements with strategic partners for the commercialization of our product candidates. If we build a commercial infrastructure to support marketing in North America, such commercial infrastructure could be expected to include a targeted sales force supported by sales management, internal sales support, an internal marketing group and distribution support. To develop the appropriate commercial infrastructure internally, we would have to invest financial and management resources, some of which would have to be deployed prior to any confirmation that briquilimab will be approved.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenue from the sale of our product candidates, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and may be forced to reduce our operations.

Components of Results of Operations

Operating Expenses

Research and Development

The largest component of our total operating expenses since our inception has been research and development activities, including the preclinical and clinical development of our product candidates. Research and development expenses consist primarily of compensation and benefits for research and development employees, including stock-based compensation; expenses incurred under agreements with clinical research organizations ("CROs") and investigative sites that conduct preclinical and clinical studies; the costs of acquiring and manufacturing clinical study materials and other supplies; payments under licensing and research and development agreements; other outside services and consulting costs; and facilities, information technology and overhead expenses. Research and development costs are expensed as incurred.

External research and development costs include:

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costs incurred under agreements with third-party CROs, CMOs and other third parties that conduct preclinical and clinical activities on our behalf and manufacture our product candidates;

●

costs associated with acquiring technology and intellectual property licenses that have no alternative future uses;

●

consulting fees associated with our research and development activities; and

●

other costs associated with our research and development programs, including laboratory materials and supplies.

Internal research and development costs include:

●

employee-related costs, including salaries, benefits and stock-based compensation expense for our research and development personnel; and

●

other expenses and allocated overheads incurred in connection with our research and development programs.

We expect our research and development expenses to increase substantially for the foreseeable future as we advance our product candidates into and through preclinical studies and clinical trials, pursue regulatory approval of our product candidates and expand our pipeline of product candidates. The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidates may be affected by a variety of factors, including the safety and efficacy of our product candidates, early clinical data, investment in our clinical programs, competition, manufacturing capability and commercial viability. We may never succeed in achieving regulatory approval for any of our product candidates. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or if, when and to what extent we will generate revenue from the commercialization and sale of our product candidates, if approved.

Our future research and development costs may vary significantly based on factors, such as:

●

the scope, rate of progress, expense and results of our discovery and preclinical development activities;

●

the costs and timing of our chemistry, manufacturing and controls activities, including fulfilling cGMP-related standards and compliance, and identifying and qualifying suppliers;

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per patient clinical trial costs;

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the number of trials required for approval;

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the number of sites included in our clinical trials;

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the countries in which the trials are conducted;

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delays in adding a sufficient number of trial sites and recruiting suitable patients to participate in our clinical trials;

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the number of patients that participate in the trials;

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the number of doses that patients receive;

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patient drop-out or discontinuation rates;

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potential additional safety monitoring requested by regulatory agencies;

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the duration of patient participation in the trials and follow up;

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the cost and timing of manufacturing our product candidates;

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the phase of development of our product candidates;

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the efficacy and safety profile of our product candidates;

	●	the timing, receipt, and terms of any approvals from applicable regulatory authorities, including the FDA and non-U.S. regulators;
	●	maintaining a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates;

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significant and changing government regulation and regulatory guidance;

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changes in the standard of care on which a clinical development plan was based, which may require new or additional trials;

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the extent to which we establish additional strategic collaborations or other arrangements; and

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the impact of any business interruptions to our operations or to those of the third parties with whom we work, particularly in light of geopolitical and macroeconomic trends.

General and Administrative

General and administrative expenses consist primarily of personnel costs and expenses, including salaries, employee benefits, and stock-based compensation for our executive and other administrative personnel; legal services, including relating to intellectual property and corporate matters; accounting, auditing, consulting and tax services; insurance; and facility and other allocated costs not otherwise included in research and development expenses. We expect our general and administrative expenses to increase substantially for the foreseeable future as we anticipate an increase in our personnel headcount to support 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; additional director and officer insurance costs; and investor and public relations costs.

Total Other Income, Net

Total other income, net includes foreign currency transactions gains and losses, interest income, offering costs on the common warrants recognized as other expense, and changes in the fair value of earnout liability and warrant liability. Earnout liability and warrant liability were classified as a liabilities in our condensed consolidated financial statements and were re-measured at each reporting period end. The earnout liability expired in September 2024 as the common stock price targets were not achieved prior to the expiration of the earnout period.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024 (in thousands, except percentages):

		Three Months Ended September 30,								Change				Change
		2025				2024				$				%
Operating expenses
Research and development		$	14,391			$	14,455			$	(64	)			NM
General and administrative			4,775				5,434				(659	)			(12	)
Total operating expenses			19,166				19,889				(723	)			(4	)
Loss from operations			(19,166	)			(19,889	)			723				(4	)
Interest income			342				1,284				(942	)			(73	)
Change in fair value of warrant liability			2,099				-				2,099				100
Other expense, net			(2,011	)			(32	)			(1,979	)			NM
Total other income, net			430				1,252				(822	)			(66	)
Net loss and comprehensive loss		$	(18,736	)		$	(18,637	)		$	(99	)			1

NM = Not meaningful

Research and Development Expenses

The following table summarizes our research and development expenses for the periods indicated (in thousands, except percentages):

		Three Months Ended September 30,								Change				Change
		2025				2024				$				%
Personnel-related costs		$	3,764			$	4,018			$	(254	)			(6	)
General and overhead costs			1,282				1,653				(371	)			(22	)
Program costs			9,345				8,784				561				6
Total research and development expenses		$	14,391			$	14,455			$	(64	)			NM

NM = Not meaningful

Research and development expenses decreased by $0.1 million, from $14.5 million for the three months ended September 30, 2024 to $14.4 million for the three months ended September 30, 2025.

Personnel-related costs, including employee payroll and related expenses, decreased by $0.2 million, from $4.0 million for the three months ended September 30, 2024 to $3.8 million for the three months ended September 30, 2025, primarily due to the workforce reduction as part of the corporate reorganization implemented in July 2025. Stock-based compensation expenses, included in personnel-related costs, decreased by $0.1 million, from $0.6 million for the three months ended September 30, 2024 to $0.5 million for the three months ended September 30, 2025.

General and overhead costs, which include common facilities, human resources and information technology related expenses allocated to research and development, decreased by $0.4 million, from $1.7 million for the three months ended September 30, 2024 to $1.3 million for the three months ended September 30, 2025, primarily due to the corporate reorganization in July 2025.

Program costs increased by $0.5 million, from $8.8 million for the three months ended September 30, 2024 to $9.3 million for the three months ended September 30, 2025. Clinical program expenses primarily consisted of expenses incurred under agreements with CROs, consultants, other professional services, in vivo study costs and lab supplies. Clinical program expenses increased primarily due to an increase in CRO expenses of $0.8 million from $3.6 million for the three months ended September 30, 2024 to $4.4 million for the three months ended September 30, 2025 and an increase in the preclinical in vivo study costs of $0.9 million from $0.1 million for the nine months ended September 30, 2024 to $1.0 million for the nine months ended September 30, 2025, partially offset by a decrease in external consultant and other professional services costs of $0.8 million and lab supply costs of $0.2 million.

At the program level, the increase in clinical program expenses was primarily driven by an increase in costs for the CSU program of $0.3 million from $2.6 million for the three months ended September 30, 2024 to $2.9 million for the three months ended September 30, 2025, an increase in costs for the SCID program of $0.3 million from $0.6 million for the three months ended September 30, 2024 to $0.9 million for the three months ended September 30, 2025 and an increase in costs for the CIndU program of $0.2 million from $0.5 million for the three months ended September 30, 2024 to $0.7 million for the three months ended September 30, 2025, partially offset by decrease in costs for the MDS/AML platform of $0.5 million. CMO product development and manufacturing expenses unallocated by programs increased by $0.2 million from $2.4 million for the three months ended September 30, 2024 to $2.6 million for the three months ended September 30, 2025 due to an increase in manufacturing, packaging, and labeling costs to support clinical programs.

Our program costs for the three months ended September 30, 2025 and 2024 were as follows (in thousands):

		Three Months Ended September 30,
		2025				2024
Briquilimab platform		$	1,518			$	1,405
CMO			2,618				2,432
CSU			2,940				2,646
Asthma			726				762
CIndU			703				465
SCID			916				632
MDS/AML			(76	)			442
Total program costs		$	9,345			$	8,784

General and Administrative Expenses

General and administrative expenses decreased by $0.6 million, from $5.4 million for the three months ended September 30, 2024 to $4.8 million for the three months ended September 30, 2025. Employee payroll and related expenses increased by $0.3 million, from $3.0 million for the three months ended September 30, 2024 to $3.3 million for the three months ended September 30, 2025, primarily due to severance-related costs associated with the corporate reorganization implemented in July 2025. Stock-based compensation expenses, included in employee payroll and related expenses, were $1.0 million and $1.1 million for the three months ended September 30, 2025 and 2024, respectively. Expenses related to legal and other professional services decreased by $0.8 million, from $2.0 million for the three months ended September 30, 2024 to $1.2 million for the three months ended September 30, 2025, primarily due to a decrease of stock-based compensation expenses related to non-employees of $0.4 million and a decrease in recruiting, accounting, audit, tax and other professional service costs of $0.4 million.

Total Other Income, Net

Total other income, net decreased by $0.9 million, from $1.3 million for the three months ended September 30, 2024 to $0.4 million for the three months ended September 30, 2025.

Interest income decreased by $1.0 million, from $1.3 million for the three months ended September 30, 2024 to $0.3 million for the three months ended September 30, 2025, primarily due to lower cash balances invested in money market funds.

The change in fair value of warrant liability of $2.1 million represents a decrease in the fair value of common warrants from the issuance date of September 22, 2025 to September 30, 2025.

Offering costs of $2.0 million associated with the warrant liability were expensed and included in other expense, net for the three months ended September 30, 2025.

Changes in the earnout liability and foreign currency transactions gains and losses were insignificant.

Comparison of the Nine Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024 (in thousands, except percentages):

		Nine Months Ended September 30,								Change				Change
		2025				2024				$				%
Operating expenses
Research and development		$	51,744			$	36,049			$	15,695				44
General and administrative			16,300				14,905				1,395				9
Total operating expenses			68,044				50,954				17,090				34
Loss from operations			(68,044	)			(50,954	)			(17,090	)			34
Interest income			1,403				4,120				(2,717	)			(66	)
Change in fair value of warrant liability			2,099				-				2,099				100
Other expense, net			(2,158	)			(114	)			(2,044	)			NM
Total other income, net			1,344				4,006				(2,662	)			(66	)
Net loss and comprehensive loss		$	(66,700	)		$	(46,948	)		$	(19,752	)			42

NM = Not meaningful

Research and Development Expenses

The following table summarizes our research and development expenses for the periods indicated (in thousands, except percentages):

		Nine Months Ended September 30,								Change				Change
		2025				2024				$				%
Personnel-related costs		$	12,494			$	10,943			$	1,551				14
General and overhead costs			4,376				4,005				371				9
Program costs			34,874				21,101				13,773				65
Total research and development expenses		$	51,744			$	36,049			$	15,695				44

Research and development expenses increased by $15.7 million, from $36.1 million for the nine months ended September 30, 2024 to $51.7 million for the nine months ended September 30, 2025.

Personnel-related costs, including employee payroll and related expenses, increased by $1.6 million, from $10.9 million for the nine months ended September 30, 2024 to $12.5 million for the nine months ended September 30, 2025, as a result of hiring additional employees in our research and development organization before the corporate reorganization in July 2025. Stock-based compensation expenses, included in personnel-related costs, increased by $0.3 million, from $1.3 million for the nine months ended September 30, 2024 to $1.6 million for the nine months ended September 30, 2025.

General and overhead costs, which include common facilities, human resources and information technology related expenses allocated to research and development, increased by $0.4 million, from $4.0 million for the nine months ended September 30, 2024 to $4.4 million for the nine months ended September 30, 2025, primarily due to an expansion of leased facilities.

Program costs increased by $13.8 million, from $21.1 million for the nine months ended September 30, 2024 to $34.9 million for the nine months ended September 30, 2025. Clinical program expenses primarily consisted of expenses incurred under agreements with CROs, consultants, other professional services, in vivo study costs and lab supplies. Clinical program expenses increased primarily due to an increase in CRO expenses of $5.6 million from $8.6 million for the nine months ended September 30, 2024 to $14.2 million for the nine months ended September 30, 2025 and an increase in the preclinical in vivo study costs of $2.6 million from $0.1 million for the nine months ended September 30, 2024 to $2.7 million for the nine months ended September 30, 2025.

At the program level, the increase in clinical program expenses was primarily driven by an increase in costs for the CSU program of $3.1 million from $6.7 million for the nine months ended September 30, 2024 to $9.8 million for the nine months ended September 30, 2025, an increase in costs by $3.1 million for the asthma program that was initiated at the end of 2024 and an increase in costs for the Briquilimab platform of $1.3 million from $4.1 million for the nine months ended September 30, 2024 to $5.4 million for the nine months ended September 30, 2025. CMO product development and manufacturing expenses unallocated by programs increased by $6.3 million from $5.0 million for the nine months ended September 30, 2024 to $11.3 million for the nine months ended September 30, 2025 due to an increase in manufacturing, packaging, and labeling costs to support clinical programs.

Our program costs for the nine months ended September 30, 2025 and 2024 were as follows (in thousands):

		Nine Months Ended September 30,
		2025				2024
Briquilimab platform		$	5,353			$	4,108
CMO			11,269				4,985
CSU			9,780				6,696
Asthma			4,045				901
CIndU			2,416				1,261
SCID			1,807				1,639
MDS/AML			204				1,511
Total program costs		$	34,874			$	21,101

General and Administrative Expenses

General and administrative expenses increased by $1.4 million, from $14.9 million for the nine months ended September 30, 2024 to $16.3 million for the nine months ended September 30, 2025. Employee payroll and related expenses increased by $1.5 million, from $8.2 million for the nine months ended September 30, 2024 to $9.7 million for the nine months ended September 30, 2025, due to severance-related costs associated with the corporate reorganization implemented in July 2025 and hiring of administrative employees before the corporation reorganization. Stock-based compensation expenses, included in employee payroll and related expenses, were $3.0 million and $2.7 million for the nine months ended September 30, 2025 and 2024, respectively. Expenses related to professional consulting services increased by $0.4 million, from $5.3 million for the nine months ended September 30, 2024 to $5.7 million for the nine months ended September 30, 2025. Rent expenses increased by $0.3 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. Other expenses decreased by $0.8 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily related to a decrease in allocation of overhead costs of $0.4 million and a decrease of patent-related costs of $0.3 million.

Total Other Income, Net

Total other income, net decreased by $2.7 million, from $4.0 million for the nine months ended September 30, 2024 to $1.3 million for the nine months ended September 30, 2025.

Interest income decreased by $2.7 million, from $4.1 million for the nine months ended September 30, 2024 to $1.4 million for the nine months ended September 30, 2025, primarily due to lower cash balances invested in money market funds.

The change in fair value of warrant liability of $2.1 million represents a decrease in the fair value of common warrants from the issuance date of September 22, 2025 to September 30, 2025.

Offering costs of $2.0 million associated with the warrant liability were expensed and included in other expense, net for the nine months ended September 30, 2025.

Changes in the earnout liability and foreign currency transactions gains and losses were insignificant.

Liquidity and Capital Resources

As of September 30, 2025, we had $50.9 million of cash and cash equivalents.

In order to assist in funding our future operations, including our planned clinical trials, on March 19, 2025, we filed a new universal shelf registration statement on Form S-3 (the "Shelf Registration Statement") with the SEC, which was declared effective on March 26, 2025 and superseded our prior universal shelf registration statement. As of September 30, 2025, we can sell from time to time up to $263.5 million of common stock, preferred stock, debt securities, warrants, rights, units and depositary shares comprised of any combination of these securities, for our own account in one or more offerings under the Shelf Registration Statement. The terms of any offering under the Shelf Registration Statement will be established at the time of such offering and will be described in a prospectus supplement to the Shelf Registration Statement filed with the SEC prior to the completion of any such offering.

On March 19, 2025, we entered into an Open Market Sale Agreement^SM with Jefferies LLC ("Jefferies"), pursuant to which we may offer and sell through or to Jefferies, as sales agent or principal, shares of common stock from time to time (the "ATM Offering"). On March 26, 2025, we filed with the SEC a prospectus under the New S-3 in connection with the ATM Offering (the "ATM Prospectus"), pursuant to which we may offer and sell shares of common stock having an aggregate offering price of up to $100.0 million. As of September 30, 2025, we issued and sold an aggregate of 1,231,447 shares of common stock for net proceeds of approximately $6.5 million pursuant to the ATM Prospectus.

On September 18, 2025, we entered into an underwriting agreement with TD Securities (USA) LLC as the representative of the several underwriters named therein, relating to an underwritten public offering under the Shelf Registration Statement. On September 22, 2025, we closed the offering and issued an aggregate of 11,670,707 shares of common stock, pre-funded warrants to purchase 675,000 shares of common stock and common stock warrants to purchase 12,345,707 shares of common stock, for net proceeds of approximately $27.5 million.

As of September 30, 2025, $93.5 million remains allocated and available under the ATM Prospectus and $170.0 million remains available and unallocated under the Shelf Registration Statement.

Future Funding Requirements

Our primary uses of cash are to fund our operations, which consist primarily of research and development expenditures related to our programs and, to a lesser extent, general and administrative expenditures. We anticipate that we will continue to incur significant expenses for the foreseeable future as we continue to advance our product candidates, expand our corporate infrastructure, operate as a public company, further our research and development initiatives for our product candidates, scale our laboratory and manufacturing operations, and incur marketing costs associated with potential commercialization. We are subject to all the risks typically related to the development of new drug candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We anticipate that we will need substantial additional funding in connection with our continuing operations.

We have incurred significant losses and negative cash flows from operations since our inception. As of September 30, 2025, we had an accumulated deficit of $307.6 million. Given our recurring losses from operations and negative cash flows, and based on our current operating plan, we have concluded that there is substantial doubt about our ability to continue as a going concern within one year from the date of filing of this Quarterly Report. We expect to finance our future cash needs through equity or debt financings, collaborations or a combination of these approaches. The sale of equity or convertible debt securities may result in dilution to our stockholders, and, in the case of preferred equity securities or convertible debt, those securities could provide for rights, preferences or privileges senior to those of our common stock. Debt financings may subject us to covenant limitations or restrictions on our ability to take specific actions, such as incurring additional debt or making capital expenditures. Our ability to raise additional funds may be adversely impacted by negative global economic conditions and any disruptions to and volatility in the credit and financial markets in the United States and worldwide or other factors. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable or acceptable to us. If we are unable to obtain adequate financing when needed or on terms favorable or acceptable to us, we may be forced to delay, reduce the scope of or eliminate one or more of our research and development programs.

Our future financing requirements will depend on many factors, including:

●

the timing, scope, progress, results and costs of research and development, preclinical and non-clinical studies and clinical trials for our current and future product candidates;

●

the number, scope and duration of clinical trials required for regulatory approval of our current and future product candidates;

●

the outcome, timing and costs of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities for our product candidates, including any requirement to conduct additional studies or generate additional data beyond that which we currently expect would be required to support a marketing application;

●

the costs of manufacturing clinical and commercial supplies of our current and future product candidates;

●

the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;

●

any product liability or other lawsuits related to our product candidates;

●

the revenue, if any, received from commercial sales of any product candidates for which we may receive marketing approval;

●

our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payers;

●

the costs to establish, maintain, expand, enforce and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing our patents or other intellectual property rights;

●

expenses incurred to attract, hire and retain skilled personnel; and

●

the costs of operating as a public company.

A change in the outcome of any of these or other variables could significantly change the costs and timing associated with the development of our product candidates. Furthermore, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such change.

Contractual Obligations and Commitments

We enter into contracts in the normal course of business with CROs for clinical trials, with CMOs for clinical supplies manufacturing and with other vendors for preclinical studies, supplies and other services and products for operating purposes. These contracts generally provide for termination on notice or may have a potential termination fee if a purchase order 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, 2025.

Leases

As of September 30, 2025, we leased approximately 25,900 square feet of space for our headquarters in Redwood City, California. The lease expires in August 2026. We have an option to extend the term for an additional five years to August 2031. In addition to base rent, we pay our share of operating expenses and taxes. As of September 30, 2025, our rent commitments under the lease agreement were $1.8 million within the next 12 months from September 30, 2025.

Stanford License Agreements

In March 2021, we entered into an exclusive license agreement with Stanford (the "2021 Stanford License Agreement "). In July 2023, we entered into an amendment to the 2021 Stanford License Agreement to modify certain milestones set forth thereunder. Pursuant to the 2021 Stanford License Agreement we are required to pay annual license maintenance fees, beginning on the first anniversary of the effective date of the agreement and ending upon the first commercial sale of a product, method, or service in the licensed field of use, as follows: $25,000 for each first and second year, $35,000 for each third and fourth year, and $50,000 at each anniversary thereafter ending upon the first commercial sale. We are also obligated to pay late-stage clinical development milestone payments and first commercial sales milestone payments of up to $9.0 million in total. We will also pay low single-digit royalties on net sales of licensed products. All products were in development as of September 30, 2025, and no such royalties were due as of such date and no milestones were achieved.

In December 2024, we entered into a co-exclusive license agreement with Stanford (the "2024 Stanford License Agreement "). Pursuant to the 2024 Stanford License Agreement, we are required to pay a license issuance fee of $75,000, which was paid in January 2025, and annual license maintenance fees, beginning on the first anniversary of the effective date of the agreement: $25,000 for each of the first through third years, $50,000 for each of the fourth through sixth years and $65,000 at each anniversary thereafter. We are also obligated to pay clinical development milestone payments of up to $1.3 million and sales milestone payments of up to $7.0 million in total. We will also pay low single-digit royalties on net sales of licensed products. All products are in development as of September 30, 2025, and no such royalties were due as of such date and no milestones were achieved.

Cash Flows

The following table summarizes our sources and uses of cash for the periods presented (in thousands):

		Nine Months ended September 30,
		2025				2024
Net cash used in operating activities		$	(55,294	)		$	(41,468	)
Net cash provided by (used in) investing activities			5				(456	)
Net cash provided by financing activities			34,551				47,539
Net (decrease) increase in cash and cash equivalents and restricted cash		$	(20,738	)		$	5,615

Cash Flows from Operating Activities

Net cash used in operating activities was $55.3 million and $41.5 million for the nine months ended September 30, 2025 and 2024, respectively.

Cash used in operating activities in the nine months ended September 30, 2025 was primarily due to our net loss for the period of $66.7 million partially offset by non-cash items totaling $6.6 million and a net change of $4.8 million in our net operating assets and liabilities. The non-cash items consisted of $5.1 million related to stock-based compensation expense, $2.0 million related to offering costs recognized as expense, $0.8 million related to depreciation and amortization expense and $0.8 million of non-cash lease expense, partially offset by change in fair value of warrant liability of $2.1 million. The changes in our net operating assets and liabilities were primarily due to an increase of $5.1 million in accounts payable, a decrease of $0.7 million in other non-current assets, an increase of $0.3 million in accrued expenses and other current liabilities, and a decrease of $0.5 million in prepaid expenses and other current assets, partially offset by a decrease of $1.2 million in operating lease liability and a decrease of $0.3 million in accrued expenses and other current liabilities.

Cash used in operating activities in the nine months ended September 30, 2024 was primarily due to our net loss for the period of $46.9 million and a net change of $0.7 million in our net operating assets and liabilities, partially offset by non-cash net loss of $6.1 million. The non-cash amounts consisted of $4.6 million related to stock-based compensation expense, $1.1 million related to depreciation and amortization expense and $0.4 million of non-cash lease expense. The changes in our net operating assets and liabilities were primarily due to a decrease of $1.1 million in accounts payable, a decrease of $0.7 million in operating lease liability and an increase of $0.3 million in prepaid expenses and other current assets, offset by an increase of $1.1 million in accrued expenses and other current liabilities and a decrease of $0.3 million in other non-current assets.

Cash Flows from Investing Activities

Cash provided by investing activities was less than $0.1 million for the nine months ended September 30, 2025, which primarily consisted of proceeds from sales of property and equipment.

Cash used in investing activities was $0.5 million for the nine months ended September 30, 2024, which primarily consisted of leasehold improvements, purchases of the computer and lab equipment.

Cash Flows from Financing Activities

Cash provided by financing activities for the nine months ended September 30, 2025 was $34.6 million, which consisted of net proceeds of $27.9 million from the issuance of common stock and warrants through the underwritten offering under the Shelf Registration Statement, net proceeds of $6.5 million from the issuance and sale of shares of common stock under the ATM Offering and proceeds from issuance of common stock pursuant to our employee stock purchase plan of $0.2 million.

Cash provided by financing activities for the nine months ended September 30, 2024 was $47.5 million, which consisted primarily of net proceeds from the issuance and sale of shares of common stock in an underwritten public offering of $47.2 million, cash received from the exercise of stock options of $0.3 million and cash received from the issuance of common stock in connection with purchases under our employee stock purchase plan of less than $0.1 million.

Critical Accounting Policies and Significant Judgments and Estimates

Our critical accounting policies are disclosed in Note 2 to the condensed consolidated financial statements included in Part I - Item 1 of this Quarterly Report and Note 2 to the consolidated financial statements included in Part II - Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025. There have been no material changes to our significant accounting policies since the date of issuance of our consolidated financial statements for the year ended December 31, 2024, except for the accounting for warrants issued in connection with the underwritten offering in September 2025.

Warrants to Purchase Common Stock

We account for issued warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance included in ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding. Warrants that meet all of the criteria for equity classification are required to be recorded as a component of additional paid-in capital at the time of issuance, or when the conditions for equity classification are met and are not subsequently remeasured. Warrants that do not meet the required criteria for equity classification are classified as liabilities at fair value. The warrants are subsequently remeasured at each reporting date with changes in fair value recorded in the consolidated statements of operations and comprehensive loss until exercise or expiration.

We use the Black-Scholes pricing model to determine the fair value of warrant liability. Inputs used to determine estimated fair value of the warrant liability include the fair value of the underlying stock at the valuation date, the term of the warrants, and the expected volatility of the underlying stock. The significant unobservable input used in the fair value measurement of the warrant liability is the estimated term of the warrants. The estimates of fair value are uncertain and changes in any of the estimated inputs used as of the date of this report could have resulted in significant adjustments to the fair value.

Recently Issued Accounting Pronouncements

See Note 2 to the condensed consolidated financial statements included in Part I - Item 1 of this Quarterly Report for more information regarding recently issued accounting pronouncements.

Smaller Reporting Company Status

Previously, we were an "emerging growth company," as defined by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). The JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a U.S. Securities Act of 1933, as amended, registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. As of December 31, 2024, we ceased to be an emerging growth company.

We are now a "smaller reporting company," as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the last business day of our second fiscal quarter, or (ii) our annual revenue exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the last business day of our second fiscal quarter.