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 consolidated results of operations together with the section entitled "Risk Factors" and our interim consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should carefully read the sections entitled "Special Note Regarding Forward-Looking Statements" and "Risk Factors" to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Overview

We are a late-stage clinical company dedicated to addressing the underlying causes of severe diseases by upregulating protein expression with RNA-based medicines. Using our proprietary TANGO (Targeted Augmentation of Nuclear Gene Output) approach, we are developing antisense oligonucleotides ("ASOs") to selectively restore protein levels.

Our first investigational new medicine in development, zorevunersen (STK-001), is a potential disease modifying medicine that is in late-stage clinical testing for the treatment of Dravet syndrome. Dravet syndrome is characterized by frequent, prolonged and refractory seizures beginning within the first year of life. The disease is classified as a developmental and epileptic encephalopathy (DEE) due to the developmental delays and cognitive impairment associated with it. Dravet syndrome is one of many diseases caused by a haploinsufficiency, in which a loss of approximately 50% of normal protein levels leads to disease.

Following discussions with the U.S. Food and Drug Administration ("FDA"), European Medicines Agency ("EMA"), and Japan's Pharmaceuticals and Medical Devices Agency ("PMDA"), a Phase 3 study, EMPEROR, was initiated in May 2025,with the first patient dosed in August 2025.This trial follows the completion of two open-label Phase 1/2a studies, MONARCH in the United States and ADMIRAL in the United Kingdom, and further evaluates the efficacy and safety of zorevunersen in children and adolescents ages 2 to up to 18 with Dravet syndrome.

In addition to the MONARCH and ADMIRAL studies, we continue to run open-label extension ("OLE") studies in patients who completed the Phase 1/2a studies and met study entry criteria. The four studies have shown substantial and durable reductions in convulsive seizure frequency when administered on top of standard of care anti-seizure medicines. In the Phase 1/2a studies, 85% of patients were taking at least three and 54% were taking at least four medicines to control seizures. Half the patients in the studies were taking concomitant fenfluramine. Ongoing treatment has led to continuous improvements in cognition and behavior through three years. Additional improvements were indicated within the first nine months of treatment among patients in the Phase 1/2a study. These improvements were observed across multiple domains of the Vineland-3 (Vineland Adaptive Behavior Scale, Third Edition), a standardized assessment of behavioral outcomes that is a key secondary endpoint for the Phase 3 study. Zorevunersen has been generally well tolerated across the studies.

In addition to our Dravet program, we are also pursuing treatment for a second haploinsufficient disease, autosomal dominant optic atrophy ("ADOA"), the most common inherited optic nerve disorder for which there are currently no approved treatments. STK-002 is our clinical candidate for the treatment of ADOA. STK-002 is designed to upregulate OPA1 protein expression by leveraging the non-mutant (wild-type) copy of the OPA1 gene to restore OPA1 protein expression with the aim to stop or slow vision loss in patients with ADOA. In a non-human primate (NHP) model of ADOA conducted in collaboration with UC Davis, treatment with STK-002 was well tolerated and helped protect, and possibly improve, eye health. The data suggest that STK-002 may help preserve the function of important vision-related nerve cells, which could potentially improve or maintain vision. We received authorization in the UK to proceed with a Phase 1 open-label study (OSPREY) of children and adults ages 6 to 55 who have an established diagnosis of ADOA and have evidence of a genetic mutation in the OPA1 gene. The trial initiated in August, and we plan to enroll our first patient in the Phase 1 study in the second half of 2025.

In terms of our liquidity and capital resources, in May 2022, we filed a universal Shelf Registration statement on Form S-3 (the "2022 Registration Statement") with the SEC. The 2022 Registration Statement was declared effective by the SEC on May 31, 2022, and contained two prospectuses: a base prospectus, which covered the offering, issuance and sale by us of up to a maximum aggregate offering price of $400.0 million of our common stock, preferred stock, debt securities, warrants to purchase common stock, preferred stock or debt securities, subscription rights to purchase common stock, preferred stock or debt securities and/or units consisting of some or all of these securities; and a sales agreement prospectus covering the offering, issuance and sale by us of up to a maximum aggregate offering price of $150.0 million of common stock that may be issued and sold under a Controlled Equity Offering Sales Agreement (the "Sales Agreement").

On April 2, 2024, we completed an underwritten public offering, pursuant to the 2022 Registration Statement, of 5,555,557 shares of common stock at a public offering price of $13.50 per share and issued pre-funded warrants to purchase 3,703,730 shares of common stock at a public offering price of $13.499 per share subject to an exercise price equal to $0.0001. The common stock and pre-funded warrants sold resulted in net proceeds of approximately $119.9 million after deducting underwriting discounts, commissions and offering costs. No pre-funded warrants have been exercised as of September 30, 2025.

In October 2024, we filed an automatic universal Shelf Registration statement on Form S-3 (the "2024 Registration Statement") with the SEC. The 2024 Registration Statement contains two prospectuses: a base prospectus, which covers the offering, issuance and sale by us of our common stock, preferred stock, debt securities, warrants to purchase common stock, preferred stock or debt securities, subscription rights to purchase common stock, preferred stock or debt securities and/or units consisting of some or all of these securities; and a sales agreement prospectus covering the offering, issuance and sale by us of up to a maximum aggregate offering price of $150.0 million of common stock that may be issued and sold under the Sales Agreement. The specific terms of any securities to be offered pursuant to the base prospectus will be specified in a prospectus supplement to the base prospectus. Following the filing of our Annual Report on Form 10-K for the year ended December 31, 2024 in March 2025, the 2024 Registrations Statement is no longer effective.

In July 2025, we filed a universal Shelf Registration Statement on Form S-3 (the "2025 Registration Statement") with the SEC. The 2025 Registration Statement was declared effective by the SEC on July 11, 2025.

As of September 30, 2025, we had issued approximately 7.0 million shares of common stock pursuant to the Sales Agreement for net proceeds of $61.0 million pursuant to the 2022 Registration Statement. As of September 30, 2025, we had not issued or sold any shares pursuant to the 2024 Registration Statement or 2025 Registration Statement. Since September 30, 2025, through the date of the issuance of these consolidated financial statements, we sold approximately 1.8 million shares of our common stock and received $48.7 million, net of commissions, pursuant to the 2025 Registration Statement. We may terminate this at-the-market program at any time, pursuant to its terms.

As of September 30, 2025 and December 31, 2024 we had $328.6 million and $246.7 million, respectively, in cash, cash equivalents and marketable securities.

Since inception, we have primarily had operating losses, which are attributable to research and development activities. Our net losses were $38.3 million and $26.4 million for the three months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 we had a net income of $51.0 million and for the nine months ended September 30, 2024 we had net losses of $78.5 million. As of September 30, 2025, we had an accumulated deficit of $439.8 million.

Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, sales, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses, sales, general and administrative expenses, and capital expenditures will continue to increase. In particular, we expect our expenses and losses to increase as we continue our development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products, as well as hire additional personnel, develop commercial infrastructure, pay fees to outside consultants, lawyers and accountants, and incur increased costs associated with being a public company such as expenses related to services associated with maintaining compliance with Nasdaq listing rules and SEC requirements, insurance and investor relations costs. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

Based upon our current operating plan, we believe that our cash, cash equivalents, and marketable securities of approximately $328.6 million as of September 30, 2025, will fund operations to mid-2028. To date, we have not had any products approved for sale and have not generated any product sales. We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. As a result, until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs.

Program Update

Dravet Syndrome Program - zorevunersen

Presentations of new clinical data for zorevunersen at medical congresses have provided greater understanding of its disease-modifying potential that is highly differentiated from any currently available treatments. In August 2025, we announced new positive findings from the long-term open-label extension (OLE) studies of zorevunersen in children and adolescents with Dravet syndrome.

As shown in Exhibit 1, substantial and durable reductions in convulsive seizure frequency on top of standard-of-care medicines were observed through three years of zorevunersen treatment. The data also demonstrate continued improvements in cognition and behavior during the 3-year OLE period as shown in Exhibit 2.

Exhibit 1: Three Year OLE Seizure Data

Source: Stoke data

Exhibit 2: Three Year Vineland OLE Cognition and Behavior

Source: Stoke data

In September 2025, at the 36th International Epilepsy Congress, we presented three-year safety and efficacy data from patients who were treated in the ongoing OLE studies following initial treatment in the Phase 1/2a studies. Zorevunersen was generally well tolerated with no new safety findings emerging. Efficacy data showed durable reductions in major motor seizure frequency on top of standard-of-care anti-seizure medicines and continuing improvements in cognition and behavior. Additionally in October at the 54th Child Neurology Society Annual Meeting, we presented new two-year data from an analysis that was initially performed to understand the potential effects of the Phase 3 dosing regimen on cognition and behavior. The results showed continuing improvements in cognition and behavior at two years that contrast with findings from a two-year natural history study in which patients with Dravet syndrome who were treated with standard of care showed minimal changes. In addition, similar improvements in overall clinical status were reported separately by clinicians and caregivers in 95% of patients treated with zorevunersen in the ongoing OLE studies (n=19).

The global Phase 3 EMPEROR study is actively recruiting patients in the U.S., UK, and Japan. European sites are expected to initiate in 2026. We previously disclosed that more than 150 patients had been identified by investigators as potential study candidates. As of the end of October, more than 20 patients had been randomized and approximately 35 additional patients entered the formal 8-week screening period that immediately precedes randomization to zorevunersen or sham. We are scheduled to meet with the FDA before the end of the year to review four years of safety and efficacy data from clinical studies of zorevunersen. We plan to discuss how the Company and Agency can work together under our Breakthrough Therapy Designation to deliver zorevunersen to patients through potential expedited regulatory pathways.

ADOA Program - STK-002

We are also pursuing treatment for ADOA, the most common inherited optic nerve disorder, with STK-002. Patient recruitment into the Phase 1 OSPREY study of STK-002 is underway in the UK. The OSPREY study has also been authorized by the European Medicines Authority, and European sites are expected to activate in early 2026. In October, we presented 24-month data from the FALCON natural history study at the 2025 American Academy of Ophthalmology Annual Meeting. Data provided insights into disease etiology, progression and clinical assessments that are helping to inform clinical development of STK-002.

Financial operations overview

Revenue

We are comprised of one reportable segment and, as of September 30, 2025 and 2024, have not generated any product revenue since inception, as we do not yet have approved products for sale. If we are able to successfully develop, receive regulatory approval for and commercialize any of our current or future product candidates alone or in collaboration with third parties, we may generate revenue from the sales of these product candidates.

On February 14, 2025, we entered into a License and Collaboration Agreement (the "Biogen Agreement") with Biogen International GmbH ("Biogen") for the joint development and commercialization of zorevunersen and other compounds targeting the SCN1A gene (the "Licensed Product"). Under the terms of the Biogen Agreement, we granted Biogen an exclusive, royalty-bearing license to develop, manufacture, and export licensed products in all territories outside the U.S., Canada, and Mexico (the "Biogen Territory"). In addition, Biogen has the option to exercise an exclusive, royalty-bearing, sublicensable and transferable license for certain future follow-on ASOs directed to SCN1A controlled by us. Under the Biogen Agreement, the parties are jointly developing zorevunersen, and we are leading global development. Together with Biogen, we share global development costs based on an agreed budget. We are responsible for 70.0% of these development costs and Biogen is responsible for the remaining 30.0% of these development costs.

In connection with the closing of this transaction in February 2025, we received an upfront payment of $165.0 million and are eligible to receive development and commercial milestone payments that could total up to approximately $50.0 million and $335.0 million, respectively, if all the specified milestones set forth in this collaboration are achieved. In addition, we are eligible to receive tiered, double-digit royalties ranging from the low double-digit to high teen percentages of future net sales on the licensed products. Royalties payable under the Agreement are subject to standard royalty reductions.

For the nine months ended, September 30, 2025, we recognized revenue related to the Biogen collaboration of $162.3 million.

In January 2022, we entered into a license and collaboration agreement (the "Acadia Agreement") with Acadia Pharmaceuticals Inc. ("Acadia") for the discovery, development and commercialization of novel RNA-based medicines for the treatment of severe and rare genetic neurodevelopmental diseases of the central nervous system. The Acadia Agreement focused on the targets SYNGAP1, MECP2 (Rett syndrome), and an undisclosed neurodevelopmental target of mutual interest. In connection with each target, we agreed to collaborate with Acadia to identify potential treatments for further development and commercialization as licensed products. With respect to SYNGAP1, we have agreed with Acadia to co-develop and co-commercialize licensed products for such target globally, and in connection therewith we granted to Acadia worldwide, co-exclusive (with us) licenses for such licensed products. With respect to MECP2 and the neurodevelopmental target, we granted to Acadia worldwide, exclusive licenses to develop and commercialize licensed products for such targets. Effective as of September 3, 2025, Acadia terminated the MECP2 and the undisclosed

neurodevelopmental programs under the Acadia Agreement (the "Discontinued Acadia Programs") and rights to these targets returned to us. The collaboration with Acadia with respect to SYNGAP1 remains ongoing.

Pursuant to the terms of the agreement, we received an upfront payment of $60.0 million from Acadia. Acadia agreed to fund the research to identify potential licensed products for the Discontinued Acadia Programs, and we will equally fund with Acadia the research to identify potential licensed products for SYNGAP1. We are eligible to receive up to $245.0 million in potential total milestone payments based upon the achievement of certain development, regulatory, first commercial sales and sales milestone events for the SYNGAP1 program, assuming each milestone were achieved at least once. For SYNGAP1 licensed products that we are co-developing and co-commercializing, we will be responsible for 50% of the development and commercialization costs and will receive 50% of the profits from global commercialization. We are provided with a co-development and co-commercialization opt out option relating to the SYNGAP1 target indication at our discretion. Such opt-out would reduce development and commercialization milestones but would provide us with royalties on an escalating basis attributable to net sales milestones. As a result of the termination of the Discontinued Acadia Programs, the Company is no longer eligible to receive the milestones for those programs of up to $662.5 million or any royalties related thereto.

For the nine months ended, September 30, 2025, we recognized revenue related to the Acadia collaboration of $20.7 million.

See Note 7-License and Collaboration Agreements of the notes to our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Operating expenses

Research and development

Research and development expenses consist primarily of costs incurred for the development of our discovery work and preclinical programs, which include:

We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying and developing product candidates. Our direct research and development expenses are tracked on a program-by-program basis from the point a program becomes a clinical candidate for us and consists primarily of external costs, such as fees paid to consultants, central laboratories and contractors in connection with our preclinical activities. We do not allocate employee costs, costs associated with our technology or facility expenses, including depreciation or other indirect costs, to specific programs because these costs are currently deployed across multiple product development programs and, as such, are not separately classified. We use internal resources to manage our development activities and our employees work across multiple development programs and, therefore, we do not track their costs by program.

The table below summarizes our research and development expenses incurred by development program (in thousands):

We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and third-party service providers.

We expect that our expenses will increase substantially in connection with our planned discovery work, preclinical and clinical development activities in the near term and our planned clinical trials in the future. At this time, we cannot reasonably estimate the costs for completing the preclinical and clinical development of any of our other product candidates. We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, including investments in manufacturing, as our programs advance into later stages of development and we conduct clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates.

Because of the numerous risks and uncertainties associated with product development, we cannot determine with certainty the duration and completion costs of the current or future preclinical studies and clinical trials or if, when, or to what extent we will generate revenues from the commercialization and sale of our product candidates. We may never succeed in achieving regulatory approval for our product candidates. The duration, costs and timing of preclinical studies and clinical trials and development of our product candidates will depend on a variety of factors, including:

A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current and future preclinical and clinical product candidates. For example, if the FDA, or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or clinical trials, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development. We expect our research and development expenses to increase for the foreseeable future as we continue the development of product candidates.

Sales, general and administrative expenses

Sales, general and administrative expenses consist primarily of personnel costs, costs related to maintenance and filing of intellectual property, expenses for outside professional services, including legal, human resources, information technology, audit and accounting services, and facilities and other expenses. Personnel costs consist of salaries, benefits and stock-based compensation expense. We expect our sales, general and administrative expenses to increase over the next several years to support our continued research and development activities, manufacturing activities, increased costs of operating as a public company and the potential commercialization of our product candidates. These increases are anticipated to include increased costs related to the hiring of additional personnel, developing commercial infrastructure, fees to outside consultants, lawyers and accountants, and costs associated with being a public company such as expenses related to services associated with maintaining compliance with Nasdaq listing rules and SEC requirements, insurance and investor relations costs.

Other income (expense)

Our other income (expense), net includes (i) interest income earned on cash reserves in our operating, money market fund, investment accounts and on our marketable securities investments and (ii) other items of income (expense), net.

Results of operations for the three months ended September 30, 2025 and 2024

The following table sets forth our results of operations:

Revenue

Revenue for the three months ended September 30, 2025 was $10.6 million compared to $4.9 million for the three months ended September 30, 2024, an increase of $5.7 million. Revenue is generated from satisfying contractual obligations of the collaboration and licensing agreements with Acadia and Biogen. The increase in revenue is driven by $6.7 million for global development activities as part of the Biogen Agreement offset by a decrease of $1.0 million related to the Acadia Agreement.

Research and development expenses

Research and development expenses were $37.7 million for the three months ended September 30, 2025 as compared to $22.2 million for the three months ended September 30, 2024, an increase of $15.5 million. The table below summarizes our research and development expenses (in thousands):

The increase in research and development expenses was attributable to an increase of $3.2 million in personnel-related expenses, $11.7 million in expenses related to our zorevunersen program, $0.2 million in expenses related to our ADOA program, both of which are comprised of third-party services and scientific consulting fees, an increase of $0.2 million in external third-party expenses related to SYNGAP1 and MECP2, and an increase of $0.2 in facilities and other non-program related costs.

Sales general and administrative expenses

Sales, general and administrative expenses were $16.0 million for the three months ended September 30, 2025 as compared to $12.7 million for the three months ended September 30, 2024. The increase of $3.3 million in sales, general and administrative expenses was attributable to an increase of $2.5 million in personnel expenses and an increase $0.8 million in facilities and other sales, general and administrative costs.

Other income (expense)

Other income (expense) was $3.5 million for the three months ended September 30, 2025 as compared to $3.6 million for the three months ended September 30, 2024.

Results of operations for the nine months ended September 30, 2025 and 2024

The following table sets forth our results of operations:

Revenue

Revenue for the nine months ended September 30, 2025 was $183.0 million compared to $13.9 million for the nine months ended September 30, 2024, an increase of $169.1 million. Revenue is generated from satisfying contractual obligations of the collaboration and licensing agreement with Acadia and Biogen. The increase of $169.1 million is primarily driven by $150.8 million related to the IP license performance obligation and $11.5 million for global development activities as part of the Biogen Agreement and $6.8 million related to the Acadia Agreement.

Research and development expenses

Research and development expenses were $96.2 million for the nine months ended September 30, 2025 as compared to $65.7 million for the nine months ended September 30, 2024, an increase of $30.5 million. The table below summarizes our research and development expenses (in thousands):

The increase in research and development expenses was attributable to an increase of $23.0 million in expenses related to zorevunersen, which is comprised of third-party services and scientific consulting fees, an increase of $9.0 million in personnel-related expenses, an increase of $0.3 million in external third-party expenses related to SYNGAP1 and MECP2, offset by a decrease of $1.0 million in expenses related to our ADOA program, which is comprised of third-party services and scientific consulting fees and $0.8 million in facilities and other research and development costs.

Sales general and administrative expenses

Sales, general and administrative expenses were $45.9 million for the nine months ended September 30, 2025 as compared to $36.0 million for the nine months ended September 30, 2024. The increase of $9.9 million in sales, general and administrative expenses was attributable to an increase of $2.4 million in professional fees, $6.7 million in personnel related expenses, and $0.8 million in facilities and other sales, general and administrative costs.

Other income (expense)

Other income (expense) was $10.2 million for the nine months ended September 30, 2025 as compared to $9.2 million for the nine months ended September 30, 2024.

Impact of Enacted Tax Legislation

On July 4, 2025, President Donald Trump signed into law the reconciliation tax bill, commonly referred to as the "One Big Beautiful Bill Act" (the "OBBBA"), which constitutes the enactment date under U.S. GAAP. Key corporate tax provisions of the OBBBA include the restoration of 100% bonus depreciation, the introduction of new Section 174A permitting immediate expensing of domestic research and experimental (R&E) expenditures, modifications to Section 163(j) interest expense limitations and the expansion of Section 162(m) aggregation requirements.

Under U.S. GAAP, the effects of changes in tax laws are recognized in the period in which the new law is enacted. Accordingly, the impact of the OBBBA was reflected as of September 30, 2025 with the reversal of previously recognized income tax expense for both federal and state.

Liquidity and capital resources

Since our inception through September 30, 2025, our operations have been financed by net proceeds of $836.6 million from the sale of convertible notes payable and our convertible preferred stock, our initial public offering, public offerings of common stock and pre-funded warrants, proceeds from the Sales Agreement and the upfront payments from Acadia and Biogen. As of September 30, 2025, we had $328.6 million in cash, cash equivalents and marketable securities. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. On April 2, 2024, we completed an

underwritten public offering of our common stock and issued and sold 5,555,557 shares of common stock at a public offering price of $13.50 per share and issued pre-funded warrants to purchase 3,703,730 shares of common stock at a public offering price of $13.499 per share subject to an exercise price equal to $0.0001. The common stock and warrants sold resulted in net proceeds of $119.9 million after deducting underwriting discounts, commissions and offering costs. No pre-funded warrants have been exercised.

We have primarily incurred losses since our inception in June 2014 and, as of September 30, 2025, we had an accumulated deficit of $439.8 million. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, sales, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Based upon our current operating plan, we believe that our cash, cash equivalents, and marketable securities of approximately $328.6 million as of September 30, 2025, will fund operations to mid-2028. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds through equity offerings, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our ability to raise additional funds may be adversely impacted by potential worsening global macroeconomic conditions, including inflation, changing interest rates and instability in the global banking system, tariffs, and disruptions to and volatility in the credit and financial markets in the United States and worldwide. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders' rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development activities. We currently have no credit facility or committed sources of capital. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated product development programs.

Cash flows

The following table summarizes our cash flows:

Operating activities

During the nine months ended September 30, 2025, cash provided by operating activities was $76.0 million. This was attributable to a net income of $51.0 million, a net change of $0.6 million in our net operating assets and liabilities and non-cash charges of $25.6 million for stock-based compensation, depreciation, amortization and accretion of marketable securities, and a reduction in the carrying amount of right of use assets.

During the nine months ended September 30, 2024, cash used in operating activities was $63.7 million. This was primarily attributable to a net loss of $78.5 million, a net change of $8.0 million in our net operating assets and liabilities, offset by non-cash charges of $22.8 million for stock-based compensation, depreciation, amortization and accretion of marketable securities, and a reduction in the carrying amount of right of use assets.

Investing activities

Our investing activities during the nine months ended September 30, 2025 consisted primarily of $224.5 million of purchases of marketable securities and $0.5 million of purchases of property plant and equipment offset by $99.2 million from the sales of marketable securities.

Our investing activities during the nine months ended September 30, 2024 consisted primarily of $138.1 million of purchases of marketable securities offset by $30.0 million from the sales of marketable securities.

Financing activities

Our financing activities during the nine months ended September 30, 2025 consisted of $4.0 million from the exercise of stock options and $1.0 million in proceeds from our Employee Stock Purchase Plan (the "ESPP").

Our financing activities during the nine months ended September 30, 2024 consisted of $119.9 million of net proceeds from a follow-on offering, $9.0 million of net proceeds from the controlled equity offering sales agreement, $1.2 million from the exercise of stock options and $0.5 million in proceeds from our ESPP.

Contractual obligations and commitments

The following table summarizes our contractual obligations as of September 30, 2025 and the effects that such obligations are expected to have on our liquidity and cash flows in future fiscal periods:

In August 2018, we entered into an agreement to lease approximately 23,000 square feet of space for a term of three years. Lease terms are triple net lease commencing at $0.9 million per year, then with 3% annual base rent increases plus operating expenses, real estate taxes, utilities and janitorial fees. The lease commencement date was December 10, 2018.

In September 2021, we entered into an agreement to extend the initial term of the 23,000 square foot lease for a period of three years ending December 31, 2024. In addition, this agreement provides for the lease of an additional 15,000 square feet of rentable space beginning on April 1, 2022 and ending on December 31, 2024. Initial monthly lease payments are approximately $0.1 million with respect to the 23,000 square feet space, and $0.1 million with respect to the 15,000 square feet space, and in each case subject to annual rent escalations. On April 1, 2022, we recognized a right-of-use asset and operating lease liability of $1.8 million for the 15,000 square feet.

In December 2023, we entered into an agreement to extend the term of the 38,000 square foot lease for a period of two years commencing on January 1, 2025 and ending on December 31, 2026. In December 2023, we recognized a right-of-use asset and operating lease liability of $4.1 million.

In December 2018, we entered into an agreement to lease 2,485 square feet of space for a term of three years. The lease includes one renewal option for an additional two years. Lease terms commence at $0.2 million per year, with 2.5% annual base rent increases plus operating expenses, real estate taxes, utilities and janitorial fees. We occupied this space in May 2019.

In June 2021, we amended the agreement to extend the initial term of the 2,485 square foot lease for a period of three years ending April 30, 2025. In addition, the amendment provided for the lease of an additional 2,357 square feet of rentable space beginning on July 6, 2021 and ending on April 30, 2025. The amended lease provides us with the option to extend the term of the lease for an additional two years with a base annual rent increase of 3%. In March 2025, we further amended this lease to extend the term from April 30, 2025 to June 30, 2025. In 2021, we recognized a right-of-use asset and operating lease liabilities of $0.7 million for the extension of the lease to April 30, 2025 and a right-of-use asset and operating lease liabilities of $0.8 million for the additional 2,357 square feet of rentable space. This lease expired June 30, 2025.

In January 2025, we entered into an agreement to lease 7,581 square feet of space for an initial term of three years and three months. The lease includes two renewal options for an additional three years each. Lease terms commence at $0.7 million per annum, with 2.0% annual base rent increases plus operating expenses, real estate taxes, and utilities. The lease commencement date was July 8, 2025. In July 2025, we recognized a right-of-use asset and operating lease liability of $1.8 million. In September 2025, we entered into a sublease agreement for the 7,581 square feet of space for a term equal to the initial term of the original lease. Sublease terms commence at $0.4 million per annum with 2% annual rent increases. As a result of this sublease, we recognized a right of use asset impairment of $0.7 million.

Commitments

Our commitments primarily consist of obligations under our agreement with the University of Southampton. As of September 30, 2025, we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales. For additional information regarding our agreements, see Note 6-Commitments and Contingenciesof the notes to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Additionally, we have entered into agreements with third-party contract manufacturers for the manufacture and processing of certain of our product candidates for preclinical testing purposes, and we have entered and will enter into other contracts in the normal course of business with contract research organizations for clinical trials and other vendors for other services and products for operating purposes. These agreements generally provide for termination or cancellation, other than for costs already incurred.

Off-balance sheet arrangements

During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under SEC rules.

Critical accounting policies and significant judgments and estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles ("GAAP"). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates.

There have been no significant changes in our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in the section titled "Management's Discussion and Analysis of Financial Condition and Operations" included in our Annual Report on Form 10-K filed with the SEC on March 18, 2025.

Smaller reporting company status

We are a "smaller reporting company," meaning that the market value of our stock held by non-affiliates was less than $700.0 million and our annual revenue is less than $100.0 million as of the last business day of our most recently completed fiscal year. We will continue to be a smaller reporting company for so long as either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million. In addition, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold and certain disclosures of state versus federal income tax expenses and taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements and will adopt the standard effective January 1, 2025 and it will be reflected in the 2025 Annual Report on Form 10-K.

In November 2024, the FASB issued ASU 2024-03 "Income Statement- Reporting Comprehensive Income-Expense Disaggregation Disclosures" ("ASU 2024-03"). ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026. The Company does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements.