Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many important factors, including those set forth in the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 19, 2026 (the 2025 Form 10-K), and this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in, or implied by these forward-looking statements.

Overview

We (Galera, or the Company) are a biopharmaceutical company that historically was focused on developing a portfolio of small molecule superoxide dismutase (SOD) mimetics to improve radiotherapy in cancer, primarily by reducing one of the most common side effects of radiotherapy, severe oral mucositis (SOM). In October 2025 we sold our assets related to avasopasem and rucosopasem and all other dismutase mimetics assets to Biossil, Inc. (Biossil), a privately-held company based in Toronto, Canada. In connection with selling these assets, we assigned and Biossil assumed all rights and obligations under the Royalty Agreement with Blackstone Life Sciences (Blackstone), as described below. We received consideration from Biossil in the form of an upfront payment of $3.5 million and are eligible to receive further payments upon the achievement of future regulatory and commercial milestones and received contingent value rights of up to $105.0 million in the aggregate.

On December 30, 2024, we completed the acquisition of Nova Pharmaceuticals, Inc., a privately-held biotechnology company advancing a pan-inhibitor of nitric oxide synthase (NOS). Nitric oxide (NO) plays a critical role in the tumor microenvironment (TME), in the initiation, progression and metastasis of many cancers and in the immune responses to cancer. Specifically, NOS has been shown to be over-expressed in TNBC and especially in the rare subset of triple-negative breast cancer (TNBC) known as metaplastic breast cancer (MpBC) that today has no effective or regulatory approved therapy. Initial clinical data with our pan-NOS inhibitor in these patients, when combined with a taxane, have been promising. With that acquisition, we have shifted our strategic focus to developing a product candidate to treat certain types of advanced breast cancer, including MpBC and other refractory subsets of TNBC. In support of the acquisition, a syndicate of investors led by Ikarian Capital invested $2.9 million to purchase Galera common stock and pre-funded warrants. The Company continues as Galera Therapeutics, Inc., and our common stock is listed on the Over-The-Counter Quote Bulletin Board - Venture Market (OTCQB:GRTX).

In November 2025, our subsidiary Nova Pharmaceuticals, Inc. was merged into another subsidiary, Grape Merger Sub II, LLC, and the surviving entity was renamed Nova Pharmaceuticals Operating, LLC (Nova).

Following the sale to Biossil, our portfolio is now comprised of a pan-NOS inhibitor. Our lead program is a Phase 1/2 trial of the pan-NOS inhibitor in combination with nab-paclitaxel and alpelisib for MpBC. This is an investigator-sponsored trial that is funded by a National Institutes of Health (NIH) grant to investigators at the Methodist Hospital in Houston, Texas (Houston Methodist), including the drug supply for the trial. Assuming we are successful in securing additional capital, a second trial for this agent is being planned in TNBC in collaboration with the I-SPY 2 consortium.

In April 2026 the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Obsidian Therapeutics, Inc. (Obsidian), a privately-held company based in Cambridge, Massachusetts. Pursuant to the Merger Agreement, and upon the terms and subject to the satisfaction or waiver of the conditions described therein, Galera will be merged with and into a merger subsidiary of a newly formed parent company, Gazelle Parent, Inc. (Parent), with Galera surviving as a wholly owned subsidiary of Parent, and Obsidian will be merged with and into a separate merger subsidiary of Parent, with Obsidian surviving as a wholly owned subsidiary of Parent. Upon completion of the transaction, the combined company is expected to operate under the name Obsidian Therapeutics, Inc. and focus primarily on advancing Obsidian's pipeline of engineered tumor infiltrating lymphocyte (TIL) cell therapies for the treatment of patients with solid tumors, including its lead product candidate, OBX-115, while continuing to support Galera's pipeline. Closing of the planned merger (the Obsidian Merger) is subject to certain closing conditions, including, among others, approval by the stockholders of each company, the effectiveness of a registration statement filed with the U.S. Securities and Exchange Commission (the SEC) to register the securities to be issued in connection with the Obsidian Merger and the satisfaction of other customary closing conditions. For more information, please refer to the Company's Current Report on Form 8-K filed with the SEC on April 14, 2026.

Also in April 2026, Galera entered into a securities purchase agreement with certain investors, pursuant to which Galera has agreed to sell, and such investors have agreed to purchase, shares of Galera's Series C Non-Voting Convertible Preferred Stock,

$0.001 par value, for an aggregate purchase price of approximately $350.0 million (less any proceeds received by Obsidian in connection with certain interim permitted financings), prior to the closing of the Obsidian Merger.

The percentage of the combined company that pre-closing Galera security holders will own as of the closing of the Obsidian Merger is subject to adjustment based on the valuation of Galera immediately prior to the closing. Furthermore, each holder of Galera common stock of record as of immediately prior to the consummation of the concurrent financing will be entitled to (i) one contingent value right (CVR) for each share of Galera common stock held by such holder, representing the right to receive a pro rata portion of 80% of any potential future net proceeds received by Parent or its affiliates from the development, commercialization, licensing, sale or other disposition of Galera's product candidate, tilarginine, or related intellectual property during the five years following the closing of the Obsidian Merger and (ii) one CVR for each share of Galera common stock held by such holder, representing the right to receive a pro rata portion of 95% of any potential future net proceeds received by Parent or its affiliates from the Asset Purchase and Sale Agreement with Biossil during the ten years following the closing of the Obsidian Merger.

Since our inception, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, acquiring and developing product and technology rights, and conducting research and development. We have incurred recurring losses and negative cash flows from operations and have funded our operations primarily through the sale and issuance of equity, $117.5 million of proceeds received under the Royalty Agreement with Blackstone, and $3.5 million received from the sale to Biossil, receiving aggregate gross proceeds of $383.4 million.

Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful resumption of development and eventual commercialization of one or more of our current or future product candidates. We may never succeed in these activities, and we expect to continue to incur losses for the foreseeable future. We had net income of $149.0 million for the year ended December 31, 2025, primarily resulting from a $151.0 million non-cash gain from the derecognition of the royalty purchase liability on our consolidated balance sheet, as the result of the assumption by Biossil of our obligations under the Royalty Agreement with Blackstone. Our net loss was $19.0 million for the year ended December 31, 2024. As of March 31, 2026, we had $5.5 million in cash and cash equivalents and an accumulated deficit of $308.9 million.

We expect to continue to incur significant expenses and operating losses for the foreseeable future. Our anticipated operating expenses involve significant risks and uncertainties and are dependent on our current assessment of the extent and costs of activities required to advance our product candidate. We have incurred significant expenses in connection with the planned Obsidian Merger, including expenses for the Merger Agreement and the registration statement on Form S-4. We expect our existing cash and cash equivalents as of March 31, 2026 will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027, but not for more than one year after the date of the filing of this Quarterly Report on Form 10-Q. As a result, there is substantial doubt about our ability to continue as a going concern after such time. For the avoidance of doubt, this estimate is based on our operating plan as of March 31, 2026 and does not assume completion of the Obsidian Merger, the concurrent Private Investment in Public Equity (PIPE) financing or any other future financing.

Our ability to continue operations is dependent on consummating the Obsidian Merger and the concurrent PIPE financing on a timely basis. If the Obsidian Merger is not completed, we may be required to pursue other strategic alternatives, which could include raising additional capital on unfavorable terms, significantly reducing or discontinuing operations, or pursuing a voluntary dissolution.

Our Common Stock is now quoted under its existing symbol "GRTX" on the Over-The-Counter Quote Bulletin Board - Venture Market.

Critical Accounting Policies and Estimates

Our management's discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those described below. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our critical accounting policies are described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies" in the 2025 Form 10-K and the notes to the unaudited interim

consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. During the three months ended March 31, 2026 there were no material changes to our critical accounting policies from those discussed in the 2025 Form 10-K.

Components of Results of Operations

Research and Development Expense

Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our current and past product candidates. We expense research and development costs as incurred. These expenses include:

We track our external research and development expenses on a program-by-program basis, such as fees paid to CROs, CMOs and research laboratories in connection with our preclinical development, process development, manufacturing and clinical development activities. However, we do not track our internal research and development expenses on a program-by-program basis as they primarily relate to personnel-related and share-based compensation expense, early-stage research expenses and other costs that are deployed across multiple projects under development.

The following table summarizes our research and development expenses by program for the three months ended March 31, 2026 and 2025 (in thousands):

We have ceased all clinical trial activity directly funded by the Company, and had suspended the clinical development of our dismutase mimetics product candidates prior to their sale to Biossil.

The successful development of our product candidate 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 development of our product candidate. We are unable to predict when, if ever, material net cash inflows will commence from sales of any future product candidates that we may develop due to the numerous risks and uncertainties associated with clinical development, including:

We may never succeed in achieving regulatory approval for any future product candidates we may develop.

General and Administrative Expense

General and administrative expense consists primarily of personnel expenses, including salaries, benefits and share-based compensation expense for employees in executive, finance, and accounting functions. General and administrative expense also includes legal fees related to intellectual property and corporate matters, director fees, fees for accounting and consulting services, insurance expense, and rent.

Assuming we are successful in securing additional capital, we expect that our expenses will increase in the future to support our continued research and development activities and to expand our operations.

Interest Income

Interest income consists of amounts earned on our cash and cash equivalents held with large institutional banks and a money market mutual fund invested in U.S. Treasury obligations.

Net Operating Loss and Research and Development Tax Credit Carryforwards

As of December 31, 2025, we had federal and state tax net operating loss carryforwards (NOLs) of $157.8 million and $12.6 million, respectively, which will begin to expire in 2044 unless previously utilized. In connection with the Section 382 study performed in 2025, the federal research and development tax credit carryforwards have been written off.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table sets forth our results of operations for the three months ended March 31, 2026 and 2025 (in thousands):

Research and Development Expense

Research and development expense decreased by $78,000 from $93,000 for the three months ended March 31, 2025 to $15,000 for the three months ended March 31, 2026. Research and development expenses decreased following the sale of the dismutase mimetics assets to Biossil in October 2025.

General and Administrative Expense

General and administrative expense decreased by $0.3 million from $1.9 million for the three months ended March 31, 2025 to $1.6 million for the three months ended March 31, 2026. The decrease was primarily due to lower legal and professional fees during the three months ended March 31, 2026.

Interest Income

Interest income decreased from $77,000 for the three months ended March 31, 2025 to $49,000 for the three months ended March 31, 2026, due to the reduction in investable cash and securities and reduced interest rates.

Change in Fair Value of Warrant Liability

During the three months ended March 31, 2025, we recognized a $0.3 million change in the fair value of the warrant liability. This adjustment was recorded prior to the reclassification of the liability-classified warrants to equity.

Liquidity and Capital Resources

We do not have any products approved for sale, and we do not expect to generate any revenue from product sales unless and until we successfully complete development and obtain regulatory approval for our product candidate, which will not be for many years, if ever. Through March 31, 2026, we have funded our operations primarily through the sale and issuance of equity, $117.5 million of proceeds received under the Royalty Agreement with Blackstone Life Sciences, and $3.5 million from the sale to Biossil, receiving aggregate gross proceeds of $383.4 million.

As of March 31, 2026, we had $5.5 million in cash and cash equivalents and an accumulated deficit of $308.9 million. We have no ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years. We expect our existing cash and cash equivalents as of March 31, 2026 will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027, but not for more than one year from the date of the filing of this Quarterly Report on Form 10-Q. As a result, there is substantial doubt about our ability to continue as a going concern through the 12 months from the date of the filing of this Quarterly Report on Form 10-Q. For the avoidance of doubt, this estimate is based on our operating plan as of March 31, 2026 and does not assume completion of the Obsidian Merger, the concurrent PIPE financing or any other future financing.

For more information, see the discussion under the heading "Liquidity" in Note 1 to our unaudited interim consolidated financial statements.

Cash Flows

The following table shows a summary of our cash flows for the periods indicated (in thousands):

Operating Activities

During the three months ended March 31, 2026, we used $0.9 million of net cash in operating activities. Cash used in operating activities reflected our net loss of $1.6 million, partially offset by $0.7 million from other changes in operating assets and liabilities and non-cash share based compensation expense. The primary use of cash was to fund our operations.

During the three months ended March 31, 2025, we used $2.2 million of net cash in operating activities. Cash used in operating activities reflected our net loss of $1.6 million, $0.5 million from other changes in operating assets and liabilities, and net non-cash charges of $0.1 million related to share-based compensation expense and the change in the fair value of the warrant liability. The primary use of cash was to fund our operations.

Financing Activities

During the three months ended March 31, 2025, financing activities provided $0.6 million from the sale of our common stock in a private placement in December 2024.

Funding Requirements

We expect our existing cash and cash equivalents as of March 31, 2026 will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027, but not for more than one year after the date of the filing of this Quarterly Report on Form 10-Q. As a result there is substantial doubt about our ability to continue as a going concern through the 12 months from the date of the filing of this Quarterly Report on Form 10-Q. Our ability to continue operations is dependent on consummating the Obsidian Merger and the related PIPE financing on a timely basis. If the Obsidian Merger is not completed, we may be required to pursue other strategic alternatives, which could include raising additional capital on unfavorable terms, significantly reducing or discontinuing operations, or pursuing a voluntary dissolution.

Because of the numerous risks and uncertainties associated with research, development and commercialization of our product candidate, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including:

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, any future product candidates, if approved, may not achieve commercial success.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders' ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing stockholders' rights. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate certain activities, including planned research and development activities or hiring plans.

If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Key Agreements

Asset Purchase Agreement with Biossil

On October 15, 2025, the Company and Biossil entered into an Asset Purchase and Sale Agreement, as amended (the Purchase Agreement), whereby Biossil agreed to acquire all of the Company's right, title and interest in and to its assets related to avasopasem (GC4419) and rucosopasem (GC4711) and all other dismutase mimetic assets (the Assets).

In connection with the purchase of the Assets, Biossil agreed to assume all further rights and obligations of the Company under the Amended and Restated Purchase and Sale Agreement, dated November 14, 2018, by and among the Company, Clarus IV Galera Royalty AIV, L.P., and the other parties thereto, as amended from time to time. Clarus IV Galera Royalty AIV, L.P. is affiliated with Blackstone Life Sciences (Blackstone).

The purchase price for the Assets consists of (i) an upfront payment of $3,500,000, and (ii) potential future regulatory milestones, commercial milestones and contingent value rights of up to $105,000,000 in the aggregate.

The Purchase Agreement contains customary representations, warranties and covenants related to the Assets and the business of the Company. Certain provisions, including confidentiality, indemnification, and payment obligations, survive the closing of the Transaction in certain circumstances as set forth in the Purchase Agreement.

Methodist Hospital License Agreement

The Company's subsidiary, Nova, has a worldwide license agreement (the License) with Houston Methodist. The License was executed in January 2024 and gives Nova the exclusive rights to certain Houston Methodist patents for use in the field of oncology, and non-exclusive rights to certain Houston Methodist know-how for use in connection with the licensed patents.

As consideration for the License, Nova paid Houston Methodist an initial license fee of $300,000, approximately $147,000 as reimbursement for patent costs incurred prior to the date of the license, and a $100,000 deposit for future patent costs incurred by Houston Methodist to the extent they are not paid by Nova. Under a separate patent prosecution agreement, fees of the law firm maintaining the licensed patents are billed to and payable directly by Nova.

The License includes due diligence requirements for Nova to submit an Investigational New Drug (IND) application by January 31, 2028, and thereafter to initiate Phase 1, 2 and 3 clinical trials and file a Biologics License Application (BLA) by specified

dates. If Nova receives FDA approval for a product covered by the License, fees are payable upon attainment of certain commercial milestones, and low-to-mid single digit royalties are payable on net sales. Fees are also payable on any sublicense revenue that Nova receives.

As additional consideration for the License, Nova made an initial issuance of shares of Nova common stock to Houston Methodist, and subsequently issued additional shares such that Houston Methodist maintained an agreed percentage of Nova outstanding shares. On December 30, 2024, the Houston Methodist shares in Nova were exchanged for approximately 7,323 shares of the Company's Series B Preferred Stock. Refer to Note 9 to our unaudited interim consolidated financial statements included in this Quarterly Report on Form 10-Q.

Unless earlier terminated, the License expires on the later of January 31, 2044, or the end of the patent term for the last licensed patent to expire, after which the license continues on a nonexclusive, royalty-free basis.

Agreement and Plan of Merger with Obsidian Therapeutics, Inc.

On April 14, 2026, we entered into the Merger Agreement with Obsidian and certain newly formed subsidiaries of the Company. Pursuant to the Merger Agreement, and upon the terms and subject to the satisfaction or waiver of the conditions described therein, Galera will be merged with and into a merger subsidiary of Parent, with Galera surviving as a wholly owned subsidiary of Parent, and Obsidian will be merged with and into a separate merger subsidiary of Parent, with Obsidian surviving as a wholly owned subsidiary of Parent. The Merger Agreement includes customary representations, warranties and covenants by the parties and provides for customary closing conditions, including the effectiveness of a registration statement on Form S-4 and approval by the stockholders of both companies. The Merger Agreement also provides for certain termination rights for each of Galera and Obsidian and, in specified circumstances, may require the payment of a termination fee.

Also, in April 2026 we entered into a securities purchase agreement with certain investors, pursuant to which Galera has agreed to sell, and such investors have agreed to purchase, shares of Galera's Series C Non-Voting Convertible Preferred Stock, $0.001 par value, for an aggregate purchase price of approximately $350.0 million (less any proceeds received by Obsidian in connection with certain interim permitted financings), prior to the closing of the Obsidian Merger. The closing of this concurrent financing is conditioned upon the satisfaction or waiver of each of the conditions to the closing of the Obsidian Merger, other than those conditions which, by their nature, are to be satisfied at the closing of the transactions contemplated by the Merger Agreement, as well as certain other conditions.

The percentage of the combined company that pre-closing Galera security holders will own as of the closing of the Obsidian Merger is subject to adjustment based on the valuation of Galera immediately prior to the closing. Furthermore, each holder of Galera common stock of record as of immediately prior to the consummation of the PIPE financing will be entitled to (i) one contingent value right (CVR) for each share of Galera common stock held by such holder, representing the right to receive a pro rata portion of 80% of any potential future net proceeds received by Parent or its affiliates from the development, commercialization, licensing, sale or other disposition of Galera's product candidate, tilarginine, or related intellectual property during the five years following the closing of the Obsidian Merger and (ii) one CVR for each share of Galera common stock held by such holder, representing the right to receive a pro rata portion of 95% of any potential future net proceeds received by Parent or its affiliates from the Asset Purchase and Sale Agreement with Biossil during the ten years following the closing of the Obsidian Merger.