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 the condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this "Quarterly Report") and the audited financial statements and the related notes and the discussion under the heading "Inmagene Biopharmaceuticals' Management's and Discussion and Analysis of Financial Condition and Results of Operations" in our Registration Statement on Form S-1 (the "Registration Statement"), filed with the Securities and Exchange Commission (the "SEC") on September 8, 2025 and declared effective on September 15, 2025. The following discussion contains forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results could differ materially from those described in or implied by these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in the Registration Statement, particularly in the sections titled "Risk Factors" and "Special Note Regarding Forward-Looking Statements." We do not intend, and undertake no obligation, to update these forward-looking statements, except as required by law. Unless otherwise stated or the context otherwise requires, the references to the "Company," "we," "our," or "us" refer to Inmagene Biopharmaceuticals together with its consolidated subsidiaries prior to the Merger and to ImageneBio, Inc. together with its consolidated subsidiaries following the Merger, references to "Ikena" refer to Ikena Oncology, Inc. prior to the Merger, references to "Legacy Inmagene" refer to Inmagene Biopharmaceuticals together with its consolidated subsidiaries prior to the Merger and references to "common stock" refer to the Company's voting and non-voting shares of common stock for periods following the Merger and to Legacy Inmagene's ordinary shares for periods prior to the Merger.

Overview

We are a clinical-stage biopharmaceutical company developing therapeutics for patients with immunological, autoimmune and inflammatory diseases. Our lead asset IMG-007 is a non-depleting anti-OX40 monoclonal antibody which binds specifically to OX40 receptor on activated T cells to block their binding to OX40 ligand ("OX40L"). IMG-007 is being developed to potentially treat multiple autoimmune and inflammatory diseases and disorders, with initial evaluation in atopic dermatitis ("AD"). In our Phase 1b/2a clinical proof of concept ("POC") trial, four-week treatment with IMG-007 resulted in marked clinical activity which sustained up to 24 weeks based on multiple outcome measures. In addition, durable inhibition of serum inflammatory markers of diverse T helper ("Th") cells, including Th1, Th2 and Th17 cells was observed. IMG-007 was well-tolerated overall. The cumulative clinical and pharmacodynamic activity of IMG-007 coupled with the safety profile observed to date support further clinical development.

Autoimmune and inflammatory diseases have a large and growing unmet medical need affecting hundreds of millions of patients worldwide. The global immunology market is expected to grow from approximately $103 billion in 2024 to approximately $257 billion by 2032. Many of these diseases are chronic, highly symptomatic, and occur in both children and adults, indicating debilitating symptoms can occur in patients for many years, or throughout their entire lives. Numerous immunological diseases have overlapping pathogenic mechanisms, often rooted in inflammation and autoimmune reactions. Accordingly, therapeutics for such diseases have often been developed for multiple different disease indications. For example, Humira®, which targets TNFα, is approved and utilized at least nine indications in the U.S., including rheumatoid arthritis, Crohn's disease, and plaque psoriasis, while Skyrizi®, which targets IL-23, is approved and used in four indications, including psoriatic arthritis, plaque psoriasis, and ulcerative colitis. These types of molecularly targeted products have become pipelines within themselves, serving a wide range and large numbers of patients, who tend to be treated chronically, and expanding to become revenue franchises.

IMG-007 targets the OX40 receptor and is initially being developed for the treatment of AD with the potential to grow into a "pipeline within a product" for the treatment of various immunological, autoimmune and inflammatory conditions. We believe IMG-007 has the potential to demonstrate a differentiated clinical profile from other AD therapies. In our Phase 1b/2a AD study, 54% of patients achieved EASI-75 (75% reduction in eczema area and severity index) at Week 20 after only three treatments. Out of all 13 treated patients there were no serious adverse events, and no patients experienced pyrexia and chills. A Phase 2b dose-finding AD study was initiated in mid-2025 and dosing of patients is underway, and we plan to submit a protocol amendment to expand the number and exposure range of dosing regimens studied to fully characterize the clinical profile of IMG-007 in the near term. Topline data from the Phase 2b clinical trial is expected in 2027.

OX40 signaling is thought to be important in driving the pathogenesis of a wide spectrum of immunological, autoimmune and inflammatory diseases including dermatological, respiratory, gastrointestinal, and rheumatic diseases, and we intend to explore additional indications with IMG-007 including alopecia areata ("AA"), asthma, and chronic obstructive pulmonary disease ("COPD").

Recent Developments

The Merger

On July 25, 2025 (the "Closing Date"), the Delaware corporation formerly known as "Ikena Oncology, Inc." ("Ikena")

completed its previously announced merger with Inmagene Biopharmaceuticals, an exempted company with limited liability incorporated and existing under the laws of the Cayman Islands ("Legacy Inmagene"), in accordance with the terms of the Agreement and Plan of Merger (the "Merger Agreement"), dated as of December 23, 2024, by and among Ikena, Insight Merger Sub I, an exempted company with limited liability incorporated and existing under the laws of the Cayman Islands and a direct, wholly owned subsidiary of Ikena ("Merger Sub I"), Insight Merger Sub II, an exempted company with limited liability incorporated and existing under the laws of the Cayman Islands and a direct, wholly owned subsidiary of Ikena ("Merger Sub II"), and Legacy Inmagene, providing for the merger of Merger Sub I with and into Legacy Inmagene, with Legacy Inmagene surviving as a wholly owned subsidiary of Ikena (such transaction, the "First Merger"), and the subsequent merger of the surviving entity of the First Merger with and into Merger Sub II, with Merger Sub II surviving as a wholly owned subsidiary of Ikena (with the "Second Merger" and, together with the First Merger, the "Merger"). Also on July 25, 2025, Ikena changed its name from "Ikena Oncology, Inc." to "ImageneBio, Inc."

At the effective time of the First Merger (the "First Effective Time"), (i) each ordinary share and preferred share of Legacy Inmagene (each such share, an "Legacy Inmagene Share") held as treasury shares were canceled and ceased to exist and no consideration was delivered in exchange therefor, (ii) each then-outstanding Legacy Inmagene Share was converted into the right to receive 0.0030510 shares of Ikena common stock, par value $0.001 per share ("Ikena Common Stock") (such ratio, the "Exchange Ratio") and (iii) each then-outstanding option to purchase Legacy Inmagene Shares was converted into an option to purchase Ikena Common Stock, subject to adjustment as set forth in the Merger Agreement. In connection with the Merger, Ikena issued an aggregate of 4,601,375 shares of Ikena Common Stock to Legacy Inmagene shareholders. Following the Reverse Stock Split (as defined below), the Merger and the PIPE Financing (defined below) a total of 11,181,672 shares of common stock of the Company were outstanding.

The Merger was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Under this method of accounting, Legacy Inmagene was deemed to be the accounting acquirer for financial reporting purposes. This determination was primarily due to: (i) the Legacy Inmagene stockholders receiving the largest portion of the voting rights in the Company following the First Merger, (ii) Legacy Inmagene's largest shareholder retained the largest interest in the Company, (iii) Legacy Inmagene designated three of the six members to the Company's Board of Directors on the closing of the Merger, and (iv) certain members of Legacy Inmagene's executive management team became the management of the Company. Accordingly, for accounting purposes: (i) the Merger was treated as the equivalent of pre-Merger Legacy Inmagene issuing stock to acquire the net assets of Ikena, and (ii) the reported historical operating results of the Company prior to the Merger are those of Legacy Inmagene. Additional information regarding the Merger is included in Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report.

Reverse Stock Split

Immediately prior to the First Effective Time, Ikena effected a 1-for-12 reverse stock split of its issued Ikena Common Stock, which became effective on July 25, 2025 (the "Reverse Stock Split"). The shares of Ikena Common Stock traded on The Nasdaq Global Market through the close of business on Friday, July 25, 2025, under the ticker symbol "IKNA." Following the Merger, the shares of the Company's common stock commenced trading on The Nasdaq Capital Market on a post-Reverse Stock Split adjusted basis under the ticker symbol "IMA" on July 28, 2025.

All references to common stock, options to purchase common stock, outstanding common stock warrants, common stock and preferred share data, per share data, and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Exchange Ratio for all periods presented, including the change from ordinary shares to common stock, unless otherwise specifically indicated or the context otherwise requires.

PIPE Financing

Concurrently with the execution of the Merger Agreement, Ikena entered into subscription agreements (the "Subscription Agreements") with certain accredited investors (the "PIPE Investors"), pursuant to which, immediately following the closing of the Second Merger, the PIPE Investors subscribed for and purchased, and Ikena issued and sold, an aggregate of 2,508,339 shares of Ikena Common Stock in a private placement at a price of approximately $29.90 per share for aggregate gross proceeds of approximately $75.0 million (the "PIPE Financing").

The Non-OX40 Divestiture

On July 25, 2025, immediately prior to consummation of the Merger, we consummated the divestiture of the non-IMG-007 business related assets, business and operations (the "Non-OX40 Business") controlled us immediately prior to the Merger (the "Non-OX40 Divestiture"). Specifically, we sold and transferred (including via sublicense) all of the Non-OX40 Business to Miragene Inc, a newly formed private company and our wholly owned subsidiary ("Miragene").

As part of the Non-OX40 Divestiture, Miragene Co, a newly formed private company ("BuyCo") held by the holders of outstanding Legacy Inmagene Shares prior to the Merger, purchased from us all of the outstanding share capital of Miragene (holding the Non-OX40 Business) in exchange for a promissory note in the amount of $8.9 million issued by BuyCo to us. The promissory note accrues interest at an annual rate of 4.61%, with interest payments due monthly in arrears, unless BuyCo elects to capitalize the interest through payment-in-kind ("PIK") treatment. The promissory note matures on the earlier of (i) the year 2035 or (ii) the date on which we declare the promissory note due and payable on or after the occurrence of an event of default. Additionally, in the event that BuyCo receives certain specified milestone or license payments, after the second anniversary of the promissory note, 50% of such proceeds must be used to prepay the outstanding balance of the promissory note. Any payments made under the promissory note from BuyCo to us will be distributed to Legacy Inmagene CVR holders as Legacy Inmagene CVR Payments.

As a result of the Non-OX40 Divestiture, IMG-007, a non-depleting anti-OX40 monoclonal antibody, for the treatment of AD and other potential indications, became the only product candidate we have in clinical development.

Transition Services Agreement

In connection with the Non-OX40 Divestiture, we entered into a Transition Services Agreement (the "Transition Services Agreement"), dated July 25, 2025, with Miragene for the provision of certain transitional services related to the ongoing operations of our business with respect to the IMG-007 program, which may include services related to chemistry, manufacturing and controls, regulatory affairs, clinical trial support and operations, translational science research and support, bioanalytics and pharmacovigilance (collectively, the "Miragene Services"). The initial term of the Transition Services Agreement is six months (the "Initial Term"), which would have been automatically extended for an additional six months if we did not provide written notice to terminate within the first three months of the Initial Term. In addition, we may extend the Initial Term with respect to any or all of the Miragene Services for up to an additional 12 months upon a 60-day written notice prior to the end of the Initial Term. Upon the closing of the Merger, we paid Miragene $1.25 million as a prepayment for the services to be provided during the Initial Term. On October 23, 2025, we provided written notice to Miragene of our election to (i) not have the Transition Services Agreement automatically renew and (ii) extend the term for an additional six months following the end of the Initial Term of the Transition Servies Agreement for certain Miragene Services for aggregate service fees in the amount of $0.2 million.

Impact of General Economic Risk Factors on the Company's Operations

Uncertainty in the global economy presents significant risks to our business. We are subject to continuing risks and uncertainties in connection with the current macroeconomic environment, including elevated and fluctuating inflation, fluctuating interest rates, new or increased tariffs and other barriers to trade, changes to fiscal and monetary policy, changes in government regulatory policies, or government budget dynamics (particularly in the pharmaceutical and biotech areas), geopolitical factors, and supply chain disruptions. While we are closely monitoring the impact of the current macroeconomic and geopolitical conditions on all aspects of our business, including the impacts on participants in any future clinical trials and our employees, suppliers, vendors and business partners and our future access to capital, the ultimate extent of the impact on our business remains highly uncertain and will depend on future developments and factors that continue to evolve. Most of these developments and factors are outside of our control and could exist for an extended period of time. We will continue to evaluate the nature and extent of the potential impacts to our business, results of operations, liquidity and capital resources.

Components of Results of Operations

License Revenue

We have not generated any revenue from product sales. Our revenue has been derived from license payments under collaboration and license agreements.

Operating Expenses

Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.

Research and Development

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

We expense research and development costs as incurred. Costs of certain activities are recognized based on an evaluation of the progress to completion of specific tasks. However, payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized as research and development prepaid expenses on our condensed consolidated balance sheets. The capitalized amounts are recognized as expense as the goods are delivered or services are performed. The successful development of any future product candidates is highly uncertain. Therefore, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that would be necessary to complete the potential development and commercialization of any future product candidates.

General and Administrative

General and administrative expenses consist primarily of personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation, for individuals in our executive, finance, operations, human resources, business development and other administrative functions. Other significant general and administrative expenses include legal fees relating to corporate matters and patent-related activities, allocated facilities and other overhead costs, including insurance and information technology, and professional and consulting fees associated with accounting, audit, tax and investor and public relations.

We expect our general and administrative expenses to increase over the next several years as we continue our research and development activities, prepare for potential commercialization of IMG-007 and any future product candidates, as well as expand our operations and begin operating as a public company following the Merger. These increases will likely include increases related to the hiring of additional personnel and legal, regulatory and other fees and services associated with maintaining compliance with the Nasdaq listing rules and SEC requirements, director and officer insurance premiums and investor relations costs associated with being a public company.

Interest (Expense) Income

Interest (expense) income consists of the accrued interest on the Term Loan Advances (as defined in Note 7 to our condensed consolidated financial statements included elsewhere in this Quarterly Report) from Ikena to us and interest earned on cash, cash equivalents and marketable securities.

Other Income, Net

Other income, net primarily relates to government assistance in the form of grants for qualifying property and equipment, and gains and losses resulting from foreign currency transactions which are denominated in currencies other than the functional currency.

Income Taxes

We recorded an income tax benefit of $0.1 million during the nine months ended September 30, 2025. There was no income tax provision for the nine months ended September 30, 2024. We have recorded a full valuation allowance against our net deferred tax assets at each balance sheet date, as we believe that it is not more likely than not that no benefit will be realized due to the cumulative losses generated to date and expectation of future losses.

Results of Operations

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

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

License Revenue

There was no license revenue for the three months ended September 30, 2025. License revenue for the three months ended September 30, 2024 was from a non-refundable payment from the IMG-013 Agreement (Note 13 to our condensed consolidated financial statements included elsewhere in this Quarterly Report).

Research and Development Expenses

Research and development expenses for the three months ended September 30, 2025 were $15.6 million compared to $3.9 million for the three months ended September 30, 2024. The increase of $11.7 million was primarily due to a $10.0 million increase in stock based compensation, an increase of $0.6 million in compensation costs and a $0.8 million increase related to clinical program development.

General and Administrative Expenses

General and administrative expenses for the three months ended September 30, 2025 were $11.0 million compared to $1.7 million for the three months ended September 30, 2024. The increase of $9.3 million was primarily due to a $5.2 million increase in stock based compensation, an increase of $1.0 million in compensation costs, a $1.3 million increase in professional services costs, and a $0.2 million increase in insurance expense.

Interest Income (Expense)

Interest income (expense) for the three months ended September 30, 2025 was $0.1 million compared to interest income of $46,000 for the three months ended September 30, 2024. The increase of $0.1 million was primarily due to interest expense recorded on the initial Term Loan Advance, which was borrowed in December 2024.

Other Income (Expense), Net

Other income, net for the three months ended September 30, 2025 was $1.8 million was primarily related to a $1.2 million of interest and dividend income from the available-for-sale securities, and $0.3 million of sublease income. Other expense, net of $1.1 million for the three months ended September 30, 2024 was primarily due to a loss on disposal of property and equipment.

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

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

Licensing Revenue

Licensing revenue for the nine months ended September 30, 2025 was $0.8 million which resulted from a non-refundable payment from the IMG-008 Agreement. License revenue for the nine months ended September 30, 2024 was $3.5 million from a non-refundable payment from the IMG-013 Agreement (Note 13 to our condensed consolidated financial statements included elsewhere in this Quarterly Report).

Research and Development Expenses

Research and development expenses for the nine months ended September 30, 2025 were $25.3 million compared to $28.4 million for the nine months ended September 30, 2024. The decrease of $3.1 million is a result of a $14 million decrease in research and development expense related to the exercise of our option under the Hutchmed Agreement in the prior year, offset by an increase of $10.1 million in stock based compensation, and an increase of $0.4 million related to clinical program development.

General and Administrative Expenses

General and administrative expenses for the nine months ended September 30, 2025 was $15.5 million compared with $6.0 million for the nine months ended September 30, 2024. The increase of $9.5 million was primarily due to a $5.3 million increase in stock based compensation, an increase of $0.7 million compensation costs, a $2.6 million increase in professional services costs, and $0.3 million in insurance expense.

Interest (Expense) Income

Interest expense for the nine months ended September 30, 2025 was $0.4 million compared to interest income of $0.3 million for the nine months ended September 30, 2024. The increase of $0.7 million was primarily due to $0.5 million of interest expense recorded on the initial Term Loan Advance, which was borrowed in December 2024, and a decrease of $0.3 million of interest income due to reduced account balances compared to the prior year.

Other Income (Expense), Net

Other income, net for the nine months ended September 30, 2025 was $1.8 million was primarily related to a $1.2 million of interest and dividend income from the available-for-sale securities, and a $0.3 million of sublease income. Other expense, net of $1.2 million for the nine months ended September 30, 2024 was primarily due to a loss on disposal of property and equipment.

Liquidity and Capital Resources

Sources of Liquidity

We have incurred recurring losses and negative cash flows from operations since our inception. For the nine months ended September 30, 2025, we incurred a net loss of $38.4 million and used $40.6 million of cash in operating activities. As of September 30, 2025, we had an accumulated deficit of $223.1 million and cash, cash equivalents and marketable securities of $142.6 million.

Since inception, we have devoted substantially all of our resources to advancing the development of our portfolio of programs, organizing and staffing, business planning, raising capital, and providing general and administrative support for these operations. Current and future programs will require significant research and development efforts, including preclinical and clinical trials, and regulatory approvals for commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure. Even if our development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales. If we obtain regulatory approval for any of our product candidates and start to generate revenue, we expect to incur significant expenses related to developing our internal commercialization capability to support product sales, marketing, and distribution.

Concurrent with the execution of the Merger Agreement, Ikena entered into the Subscription Agreements with the PIPE Investors, pursuant to which, immediately following the closing of the Second Merger, the PIPE Investors subscribed for and purchased, and Ikena issued and sold, an aggregate of 2,508,339 shares of Ikena Common Stock in a private placement at a price of approximately $29.90 per share for aggregate gross proceeds of approximately $75.0 million. The net proceeds from the PIPE Financing are expected to advance our discovery and clinical phase pipeline, business development activities, working capital, and other general corporate purposes.

Concurrent with the execution of the Merger Agreement, Legacy Inmagene and Ikena entered into a Loan and Security Agreement (the "Loan Agreement"), pursuant to which Ikena agreed to lend up to $22.5 million in Term Loan Advances in increments of at least $7.5 million, subject to certain drawdown conditions, of which the first advance of $7.5 million was funded in December 2024. In April 2025, we received a second advance of $7.5 million and in May 2025, we received the third advance of $7.5 million (see Note 7 to our condensed consolidated financial statements included elsewhere in this Quarterly Report). The Term Loan Advances bore interest, on the outstanding daily balance thereof, at a rate equal to 6.0% per annum. The Term Loan Advances were secured by all assets of Legacy Inmagene and its subsidiaries in respect of anti-OX40 monoclonal antibody asset, IMG-007. Upon consummation of the Merger on July 25, 2025, all obligations under the Loan Agreement were automatically forgiven in accordance with provisions contained therein.

We believe that our existing cash, cash equivalents and marketable securities are sufficient to support operations through at least the next 12 months from the date of issuance date of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. We will need substantial additional funding to support our operating activities as we advance our potential product candidates through development, seek regulatory approval, and prepare for and, if any of our product candidates are approved, proceed to commercialization. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operating activities through a combination of equity offerings, government of private party grants, debt financings and license and collaboration agreements. Adequate funding may not be available to us on acceptable terms, or at all.

If we are unable to obtain additional funding, we will assess our capital resources and may be required to delay, reduce the scope of, or eliminate some or all of our planned operations, which may have a material adverse effect on our business, financial condition, results of operations, and ability to operate as a going concern.

Comparison of the Nine months ended September 30, 2025 and September 30, 2024

The following table sets forth a summary of the net cash flow activity for the nine months ended September 30, 2025 and 2024 (in thousands):

Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2025 was $40.6 million, consisting primarily of net loss incurred during the period of $38.4 million and a net change of $18.3 million in our operating assets and liabilities, partially offset by non-cash charges of $16.1 million. The non-cash charges included $15.3 million of stock-based compensation, $0.5 million in non-cash interest expense and $0.5 million of amortization of right-of-use assets. The net change in operating assets and liabilities primarily related to a $3.6 million increase in prepaid expenses and other current assets, a $1.3 million increase in other non-current assets, a $2.2 million decrease in accounts payable, a $9.9 million decrease in accrued expenses and other current liabilities, a $0.7 million decrease in operating lease liabilities, and a $0.7 million decrease in deferred revenue.

Net cash used in operating activities for the nine months ended September 30, 2024, was $17.8 million, consisting primarily of net loss incurred during the period of $31.8 million and a net change of $2.8 million in our operating assets and liabilities, partially offset by $16.7 million in non-cash charges. The non-cash charges included $14.0 million of non-cash research and development expense for the commitment of common stock related to the Hutchmed Agreement, $1.1 million in depreciation and amortization, a loss on disposal of property and equipment of $1.3 million, and $0.3 million of amortization of right-of-use assets. The net change in operating assets and liabilities primarily related to a $0.7 million decrease in accrued expenses and other current liabilities, a $0.3 million decrease in operating lease liabilities, a $2.2 million decrease in accounts payable, and $0.2 million increase in prepaid expenses and other current assets, partially offset by a $0.7 million increase in deferred revenue and a $0.1 million decrease in other non-current assets.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2025 was $4.5 million resulting from payments of $5.2 million made in connection with the Non-OX40 Divestiture, maturities and sale of available-for-sale securities of $2.3 million offset by purchases of available-for-sale securities of $1.5 million.

Net cash provided by investing activities for the nine months ended September 30, 2024 was $11.0 million, primarily due to $10.2 million of cash proceeds from maturities and sales of available-for-sale securities, and $0.8 million of proceeds from sale of property and equipment.

Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2025 was $135.5 million, consisting primarily of $15.0 million of proceeds from the Term Loan, cash acquired of $54.6 million in connection with reverse recapitalization, proceeds of $71.1 million from issuance of common stock for the PIPE Financing, offset by $5.3 million of offering costs in connection with the reverse capitalization.

Net cash provided by financing activities for the nine months ended September 30, 2024 was zero.

Contractual Obligations and Other Commitments

We have entered into contracts in the normal course of business with suppliers, CROs, CMOs, and clinical trial sites. These agreements provide for termination at the request of either party generally with less than one-year notice and, therefore, we believe that our non-cancelable obligations under these agreements are not material. We do not currently expect any of these agreements to be terminated and did not have any non-cancelable obligations under these agreements as of the nine months ended September 30, 2025.

We have milestones, royalties and/or other payments due to third parties under our existing license and collaboration agreements and the Ikena CVR Agreement and Legacy Inmagene CVR Agreement (each as defined in Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report). See Notes 1 and 13 to our condensed consolidated financial statements included elsewhere in this Quarterly Report. We cannot estimate when such payments will be due, and none of these events were probable to occur as of September 30, 2025.

Lease Obligations

As of September 30, 2025, we had two existing leases for office facilities in the United States. These leases are classified as operating lease agreements that expire at various dates from November 2025 through April 2027. Our leases do not include options to terminate prior to the expiration date.

The lease agreement contains scheduled rent increases over the lease term. Under the terms of the lease agreements, we are responsible for certain property management fees, taxes, and common area maintenance expenses.

Future minimum commitments under these leases are $3.5 million as of September 30, 2025 of which $2.2 million is due in less than 12 months, and $1.3 million is due in greater than 12 months.

Term Loan

Under the Loan Agreement, we drew down the first tranche of $7.5 million in December 2024, the second tranche of $7.5 million was taken in April 2025 and the third tranche of $7.5 million was taken in May 2025. The Term Loan bore interest, on the outstanding daily balance thereof, at a rate of 6.0% per annum, and could have been prepaid at any time without premium or penalty.

Upon consummation of the Merger, all unpaid balances of the Term Loan, including the loan principal of $22.5 million and accrued but unpaid interest of $0.5 million, were automatically forgiven.

Critical Accounting Estimates

Our discussion and analysis of our results of operations and liquidity and capital resources are based on our condensed consolidated financial statements which have been prepared in accordance with U.S. GAAP. Our significant accounting policies are more fully described in Note 2 to our condensed consolidated financial statements included elsewhere in this Quarterly Report. The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses and the related disclosures of contingent liabilities in our condensed consolidated financial statements and accompanying notes. We base our estimates and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates and judgments on an ongoing basis. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

Revenue Recognition

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"), which applies to all contracts with customers, except for elements of certain contracts that are within the scope of other standards, such as collaboration arrangements.

Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. A customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, we perform the following five steps:

We only apply the five- step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct. A performance obligation is a promise in an agreement to transfer a distinct good or service to the customer. If a promised good or service is not distinct, it is combined with other promised goods or services into a performance obligation.

The total consideration which we expect to collect in exchange for our goods or services is an estimate and may be fixed or variable. We constrain the estimated variable consideration when we assess it is probable that a significant reversal in the amount of cumulative revenue recognized may occur in future periods. The transaction price is re-evaluated, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur. Revenue is recognized when performance obligations in the contracts are satisfied, in the amount reflecting the expected consideration to be received from the goods or services transferred to the customers.

Consideration received in advance is recorded as deferred revenue and is recognized when or as the related performance obligation is satisfied. The principal activities from which we generate revenue include licensing agreements and collaboration agreements. License revenue primarily represents amounts earned under agreements that license our intellectual property to other companies. Consideration under these contracts generally includes a nonrefundable upfront payment, development, regulatory and commercial milestones and royalties based on net sales of approved products. Collaboration revenue primarily represents amounts earned under strategic collaboration arrangements with third parties for research and other licenses, development, and commercialization of certain product candidates. Under such arrangements, consideration typically includes fixed consideration in the form of an upfront payment and variable consideration in the form of potential development, regulatory, and commercial milestone payments, license fees, funding of research and development services and preclinical and clinical material, and royalties on net sales of licensed products. See Note 13 to our condensed consolidated financial statements included elsewhere in this Quarterly Report.

Research and Development Expenses

Our research and development expenses include estimates of our expenses resulting from obligations under contracts with vendors, consultants and CROs in connection with conducting research and development activities. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. We reflect research and development expenses in our condensed consolidated financial statements by matching those expenses with the period in which services and efforts are expended. We account for these expenses according to the progress of the preclinical or clinical study as measured by the timing of various aspects of the study or related activities. We determine clinical trial cost estimates through review of the underlying contracts along with preparation of financial models taking into account discussions with research and other key personnel and outsider service providers as to the progress of studies or other services being conducted. During the course of a study, we adjust our rate of expense recognition if actual results differ from estimates on a cumulative catch-up basis.

Stock-Based Compensation

We measure stock-based compensation expense for all stock-based awards with service-based and performance-based vesting conditions at the grant date based on the fair value measurement of the award. Compensation expense for service-based awards is recognized over the requisite service period, which is generally the vesting period of the respective award. We use the straight-line method to record the expense of awards with service-based vesting conditions. We use the graded-vesting method to record the expense of awards with both service-based and performance-based vesting conditions, commencing when achievement of the performance condition becomes probable. Expense is adjusted for actual forfeitures of unvested awards as they occur. Prior to the Merger, we calculated the fair value measurement of share options using the Black-Scholes-Merton option-pricing valuation model ("Black-Scholes model"). The Black-Scholes model requires the use of subjective and complex assumptions, which determine the fair value of stock-based awards, including the option's expected term and the price volatility of the underlying shares. We calculate the fair value of options granted by using the Black-Scholes model with assumptions below.

Recent Accounting Pronouncements

For this information, refer to Note 2 of our condensed consolidated financial statements included elsewhere in this Quarterly Report.