Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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

Certain statements contained in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words and phrases "designed to," "may," "might," "can," "will," "to be," "could," "would," "should," "expect," "intend," "plan," "objective," "anticipate," "believe," "estimate," "predict," "project," "potential," "likely," "continue," "ongoing" or similar expressions, or the negative of such words, are intended to identify "forward-looking statements." We have based these forward-looking statements on our current expectations and projections about future events. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include those below in this Quarterly Report under the caption "Risk Factors," and in our other filings with the Securities and Exchange Commission, or SEC. Statements made herein are as of the date of the filing of this Form 10-Q with the SEC and should not be relied upon as of any subsequent date. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim, any obligation to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes that appear in Item 1 of this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and related notes for the year ended December 31, 2024, which are included in our Annual Report on Form 10-K filed with the SEC on March 28, 2025.

Unless otherwise indicated, all information in this Quarterly Report on Form 10-Q gives effect to a 1-for-20 reverse stock split of our common stock that became effective on June 16, 2025 (the "Reverse Stock Split"), and all references to historical share and per share amounts give effect to the Reverse Stock Split.

Overview

We are a clinical-stage biotechnology company that has been focused on the discovery and development of next-generation therapeutics for cancer patients.

On October 30, 2025, we announced the discontinuation of development of our lead product candidate, solnerstotug, and initiated a comprehensive review of strategic alternatives to maximize stockholder value. These alternatives include, but are not limited to, a sale of assets, licensing arrangements, collaborations, a sale of the Company, a business combination, a merger, or an orderly wind-down of operations.

On November 14, 2025, we announced the implementation of a workforce reduction to preserve cash, pursuant to which we reduced our workforce by approximately 65% (the "2025 Workforce Reduction"). We expect to incur aggregate cash charges of approximately $1.6 million in connection with the 2025 Workforce Reduction, primarily consisting of severance payments and other employee termination-related expenses, with the remaining employees forming a small team to assist in exploring strategic alternatives and managing compliance with regulatory and financial reporting requirements.

We are devoting substantial time and resources to the strategic review. Despite devoting significant efforts to identify and evaluate potential strategic alternatives, there can be no assurance that this strategic review process will result in us pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms or at all. We have not set a definitive timeline for completion of this strategic review process, and our board of directors has not approved a definitive course of action. Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased stockholder value or that we will make any additional cash distribution to our stockholders. If a strategic transaction is not completed, including if our board of directors determines that no potential transactions or counterparties would be in the best interests of our stockholders, our board of directors may decide to pursue a dissolution and liquidation.

Our pipeline consists of one clinical-stage program and three preclinical programs.

We do not have any product candidates approved for sale, have not generated any revenue from product sales, and do not expect to generate any revenue from product sales for at least the next several years. We have largely funded our operations with proceeds from the sale of convertible preferred stock, common stock and convertible debt. Through the date of this Report, we have raised an aggregate of $123.4 million of gross proceeds from private placements of our equity and convertible debt securities and net proceeds of $138.5 million from our initial public offering, or IPO, in February 2021.

We have incurred significant operating losses over the last several years. Our net loss was $16.4 million and $22.4 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $278.4 million.

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our accounts payable and accrued expenses. We expect to continue to incur net losses and negative cash flows for the foreseeable future, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will decrease.

Going Concern

Based on our available cash, cash equivalents and marketable securities and current operating plans excluding any financing, we will not have sufficient cash and cash equivalents to fund our operating expenses and capital requirements beyond one year from the issuance of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and therefore, we have concluded that there is substantial doubt about its ability to continue as a going concern.

Components of Our Results of Operations

Operating Expenses

Research and Development Expense

Our research and development expense consists of expenses incurred in connection with the discovery and development of our product candidates. These expenses include:

We expense all research and development costs in the periods in which they are incurred. Costs for certain research and 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.

Our direct external research and development expenses consist primarily of third party costs, such as fees paid to CROs, CMOs, research/testing laboratories and outside consultants in connection with our preclinical development, process development, manufacturing and clinical development activities. We do not allocate these costs to specific product candidates because many of them are deployed across several of our development programs and, as such, are not separately classified. We use internal resources primarily to conduct research and manage our preclinical development, process development, manufacturing and clinical development activities. These employees work across multiple development programs and, therefore, we do not track their costs by program and, as such, are not separately classified. Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. Research and development activities have been central to our business model, prior to our decision to wind down clinical operations in October 2025. We generally expect that our research and development expenses will decrease as we wind down these operations. We may also incur other charges or cash expenditures due to events that may occur as a result of, or associated with, our wind down of clinical operations and review of strategic alternatives. The exact amounts of the charges and costs that we expect to incur, and the timing thereof, are currently unknown and such costs and charges could be material to our results of operation and financial condition.

The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of, or when, if ever, material net cash inflows may commence from any of our product candidates. This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost of clinical trials, which vary significantly over the life of a project as a result of many factors, including:

Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals. We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. Product commercialization will take several years and significant additional development costs.

General and Administrative Expense

General and administrative expenses consist principally of salaries and related costs for personnel in executive, administrative, finance and legal functions, including stock-based compensation, travel and recruiting expenses. Other general and administrative expenses include facility related costs, patent filing and prosecution costs and professional fees for legal, auditing and tax services, and insurance costs.

We generally expect that our general and administrative expenses will decrease as we discontinue development of solnerstotug

and wind down our clinical operations, including through the implementation of our 2025 Workforce Reduction. However, we may also incur other charges or cash expenditures due to events that may occur as a result of, or associated with, our wind down of clinical operations and review of strategic alternatives. The exact amounts of the charges and costs that we expect to incur, and the timing thereof, are currently unknown and such costs and charges could be material to our results of operation and financial condition.

Other Income (Expense)

Our other income (expense) consists of accretion on short-term investments, interest expense and gain or loss on fixed asset disposals.

Income Taxes

Since our inception, we have not recorded any income tax benefits for the net losses we have incurred or for the research and development tax credits earned in each year, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carryforwards and tax credit carryforwards will not be realized.

Results of Operations

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

The following sets forth our results of operations for the three months ended September 30, 2025 and 2024:

Research and Development Expenses

Research and development expenses were $2.5 million for the three months ended September 30, 2025, compared to $4.6 million for the three months ended September 30, 2024. The decrease of $2.1 million was primarily attributable to $0.8 million of lower personnel costs, including stock-based compensation and incentives, $0.4 million less expense associated with clinical trials, $0.3 million of lower facilities and equipment cost, $0.2 million less expense relating to lab supply purchases, $0.2 million of lower preclinical research, $0.1 million of lower manufacturing costs and $0.1 million of lower outside research fees.

General and Administrative Expenses

General and administrative expenses were $2.3 million for the three months ended September 30, 2025, compared to $3.2 million for the three months ended September 30, 2024. The decrease of $0.9 million was primarily attributable to $0.7 million of lower personnel costs, including recruiting, stock-based compensation and incentives, $0.1 million of lower consulting fees and $0.1 million of lower facilities and equipment cost.

Other Income

Other income was $0.3 million for the three months ended September 30, 2025, compared to other income of $0.6 million for the three months ended September 30, 2024. The decrease of $0.3 million was primarily related to a decrease in interest income.

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

The following sets forth our results of operations for the nine months ended September 30, 2025 and 2024:

Research and Development Expenses

Research and development expenses were $8.8 million for the nine months ended September 30, 2025, compared to $14.1 million for the nine months ended September 30, 2024. The decrease of $5.3 million was primarily attributable to $2.4 million of lower personnel costs, including stock-based compensation and incentives, $1.1 million of lower facilities and equipment cost, $0.8 million less expense relating to relating to lab supply purchases, $0.5 million of lower manufacturing cost, $0.4 million less outside research fees and $0.3 million of lower preclinical research expense partially offset by $0.2 million of higher expense associated with clinical trials.

General and Administrative Expenses

General and administrative expenses were $8.5 million for the nine months ended September 30, 2025, compared to $10.2 million for the nine months ended September 30, 2024. The decrease of $1.7 million was primarily attributable to $1.7 million of lower personnel costs, including recruiting, stock-based compensation and incentives, $0.1 million lower cost for external administrative fees, $0.1 million of less expense for directors and officers insurance and $0.1 million of lower board fees, partially offset by $0.3 million of higher consulting cost.

Other Income

Other income was $1.0 million for the nine months ended September 30, 2025, compared to other income of $2.0 million for the nine months ended September 30, 2024. The decrease of $1.0 million was primarily related to a decrease in interest income.

Liquidity and Capital Resources

Sources of Liquidity

We have not generated any product revenue and have incurred net losses and negative cash flows from our operations. As of September 30, 2025, we had cash, cash equivalents and marketable securities of $25.0 million. We have financed our operations through sales of our common stock, convertible preferred stock and convertible debt. Through the date of this Report, we have raised an aggregate of $123.4 million of gross proceeds from private placements of our equity and convertible debt securities and net proceeds of $138.5 million from our IPO in February 2021. Our net loss was $16.4 million and $22.4 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $278.4 million. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures.

We have discontinued development of solnerstotug and initiated a comprehensive review of strategic alternatives aimed at maximizing stockholder value. We are exploring a range of strategic alternatives that may include, among other options, a sale of assets, licensing arrangements, collaborations, a sale of the company, a business combination, a merger, or an orderly wind-down of operations.

As part of the cash preservation associated with the strategic review process, we have implemented a reduction in force of approximately 65% of our workforce. We estimate that we will incur cash expenditures of $1.6 million, primarily consisting of severance payments and other employee termination-related expenses, which we expect to recognize the majority of such costs in the fourth quarter of 2025, with the remaining employees forming a small team to assist in exploring strategic alternatives and managing compliance with regulatory and financial reporting requirements. We expect to incur additional losses in the future to fund our operations during the exploration of strategic alternatives. Failure to manage discretionary spending or execute on a strategic alternative may adversely impact our ability to achieve our intended business objectives.

Cash Flows

The following table summarizes our sources and uses of cash for each of the periods below:

Operating Activities

During the nine months ended September 30, 2025, net cash used in operating activities was $16.6 million, primarily resulting from our $16.4 million net loss and a $1.9 million decrease in our operating assets and liabilities partially offset by increases in non-cash charges of $1.7 million, primarily related to $1.1 million of non-cash lease expense, $1.0 million of stock compensation expense and $0.1 million of depreciation and amortization, partially offset by $0.6 million of accretion on marketable securities.

During the nine months ended September 30, 2024, net cash used in operating activities was $18.9 million, primarily resulting from our $22.4 million net loss and a $0.7 million increase in our operating assets and liabilities, partially offset by increases in non-cash charges of $4.3 million primarily related to $2.7 million of stock compensation expense, $1.2 million of non-cash lease expense, $0.6 million for amortization of financing lease right-of-use assets, and $0.4 million for depreciation and amortization, partially offset by $0.6 million of accretion on marketable securities.

Investing Activities

During the nine months ended September 30, 2025, net cash provided by investing activities was $17.7 million, primarily due to $36.1 million in maturities of short-term investments and $0.2 million of proceeds from the sale of property and equipment, partially offset by $18.6 million in purchases of short-term investments.

During the nine months ended September 30, 2024, net cash provided by investing activities was $25.6 million, primarily due to $52.5 million in maturities of short-term investments, partially offset by $26.8 million in purchases of short-term investments and $0.1 million of purchases of property and equipment.

Financing Activities

During the nine months ended September 30, 2025, net cash used in financing activities was $0.5 million, primarily consisting of $0.6 million of principal payments under our financing leases, partially offset by $0.1 million of proceeds from the sale of financing lease assets.

During the nine months ended September 30, 2024, net cash used in financing activities was $0.6 million, primarily consisting of principal payments under our financing lease.

Material Cash Requirements

Our material cash requirements will have an impact on our future liquidity. Our material cash requirements represent material expected or contractually committed future payment obligations.

Operating Leases

We have operating lease arrangements for our corporate offices and lab facilities. As part of our adoption of ASC 842, we recorded operating ROU assets and operating lease liabilities for these leases as of January 1, 2022. As of September 30, 2025, we had operating lease payment obligations of $1.9 million, with $0.4 million payable for the remainder of 2025. See Note 6 in our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional information.

Finance Leases

We lease research equipment and furniture under finance leases. As part of our adoption of ASC 842, we recorded financing ROU assets and financing lease liabilities for these leases as of January 1, 2022. As of September 30, 2025, we had finance lease

payment obligations of $0.2 million, with $0.1 million payable for the remainder of 2025. See Note 6 in our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional information.

In the biopharmaceutical industry, it can take a significant amount of time and capital resources to successfully complete all stages of research and development and commercialize a product candidate. The ultimate length of time and spend required cannot be accurately estimated as it varies substantially according to the type, complexity, novelty and intended use of a product candidate. Please see the "Funding Requirements" section below for further details.

Funding Requirements

As of September 30, 2025, we had cash, cash equivalents and marketable securities of $25.0 million. Depending on the outcome of our strategic review process, we may need to raise substantial additional capital to fund our future operations. However, we cannot guarantee that we will be able to obtain sufficient additional funding or that if we do obtain additional funding, that such funding will be obtainable on terms satisfactory to us.

Based on our available cash, cash equivalents, and marketable securities, and our current operating plans excluding any financing, we expect that our existing cash and cash equivalents will be unable to fund our operating expenses and capital requirements beyond one year from the issuance of our condensed consolidated financial statements. We have concluded that there is substantial doubt about our ability to continue as a going concern beyond one year from the issuance of the financial statements included in this Quarterly Report on Form 10-Q. We expect our expenses to decrease in connection with the wind down of our clinical operations. However, we may incur substantial additional expenses and other charges as we conduct our strategic alternatives review and evaluate and seek to consummate strategic transactions to maximize stockholder value.

If we are successful in consummating a strategic transaction that enables us to continue to develop our current or new product candidates, we will require substantial additional funding to expand our operations, hire additional personnel, initiate and successfully complete preclinical studies and clinical trials, obtain marketing approval and generate revenue from sales of our product candidates, if approved, and protect our intellectual property. We would expect to finance our operations through the public or private sale of our equity, government or private party grants, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions. Because of the uncertain outcome of our strategic review process and the numerous risks and uncertainties associated with product development, we cannot predict the timing or amount of our future expenses, and there is no assurance that we will ever be profitable or generate positive cash flow from operating activities.

If, for any reason, we utilize our capital resources more quickly than anticipated or are unable to obtain additional funding on a timely basis and/or complete a strategic transaction, we may be required to further revise our business plan and strategy or cease operations. This may limit the strategic options available to us. As a result, our business, financial condition, and results of operations could be materially affected.

Critical Accounting Policies and Significant Judgements and Estimates

This Management's Discussion and Analysis of Financial Condition and Results of Operations is based on our financial statements, which are prepared in accordance with US GAAP. The preparation of our financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, costs and expenses. 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 assumptions on an ongoing basis. Our actual results may differ from these estimates.

We define our critical accounting policies as those accounting principles that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. During the nine months ended September 30, 2025, there were no significant changes to our critical accounting policies disclosed in our audited financial statements for the year ended December 31, 2024, which are included in our Annual Report on Form 10-K, as filed with the SEC on March 28, 2025.

Recent Accounting Pronouncements

See Note 2 in our condensed consolidated financial statements included elsewhere in this Form 10-Q for a description of recent accounting pronouncements applicable to our financial statements. Other than as disclosed in our financial statements, we do not expect that any recently issued accounting standards will have a material impact on our financial statements or will otherwise apply to our operations.

Emerging Growth Company and Smaller Reporting Company Status

We qualify as an Emerging Growth Company ("EGC"), as defined in the JOBS Act. As an EGC, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies, including reduced disclosure about our executive compensation arrangements, exemption from the requirements to hold non-binding advisory votes on executive compensation and golden parachute payments and exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.

We may take advantage of these exemptions until the last day of the fiscal year following the fifth anniversary of our initial public offering or such earlier time that we are no longer an emerging growth company. We would cease to be an EGC earlier if we have more than $1.235 billion in annual revenue, we have more than $700.0 million in market value of our stock held by non-affiliates (and we have been a public company for at least 12 months and have filed one annual report on Form 10-K) or we issue more than $1.0 billion of non-convertible debt securities over a three-year period. For so long as we remain an EGC, we are permitted, and intend, to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not EGCs. We may choose to take advantage of some, but not all, of the available exemptions.

In addition, the JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an EGC to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to "opt out" of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to "opt out" of such extended transition period or (ii) no longer qualify as an EGC. Therefore, the reported results of operations contained in our condensed consolidated financial statements may not be directly comparable to those of other public companies.

We are also a "smaller reporting company," meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million.

If we are a smaller reporting company at the time we cease to be an EGC, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, 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, similar to EGCs, smaller reporting companies have reduced disclosure obligations regarding executive compensation.