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

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

You should read the following discussion and analysis of our financial condition and results of operations together with the section entitled "Risk Factors," and our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and the notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission. 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. As a result of many factors, including those factors set forth in the section entitled "Risk Factors," our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the section entitled "Risk Factors" to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Our Company

We are a late clinical-stage biotechnology company focused on the discovery and development of innovative engineered T cell therapies that have the potential to provide deep and durable, perhaps curative, responses with one-time administration for patients with autoimmune diseases. Our proprietary CABA®, or Cabaletta Approach to B cell Ablation, platform focuses on the CARTA, or Chimeric Antigen Receptor T cells for Autoimmunity, approach, which is designed to potentially reset the immune system. Based on clinical data reported to date, we believe our CABA® platform has the potential to safely enable complete and durable responses for a broad range of autoimmune diseases and that it has potential applicability across dozens of autoimmune diseases that we have identified, evaluated and prioritized.

Resecabtagene autoleucel (rese-cel, formerly referred to as CABA-201) is a 4-1BB co-stimulatory domain-containing fully human CD19-CAR T construct designed to treat patients with a broad range of autoimmune diseases and is our lead product candidate within the CARTA strategy. Rese-cel is designed to achieve transient and deep depletion of all B cells following a single, weight-based infusion of T cells that are engineered to express an antibody fragment that recognizes a B cell receptor expressed on the surface of all B cells. The construct is designed to allow for the deep elimination of all B cells, including all B cells that contribute to disease, with subsequent repopulation by healthy transitional, naïve B cells. This approach has demonstrated the potential to reset the immune system and result in meaningful clinical responses without chronic therapy requirements in patients. The efficacy and safety of rese-cel were recently reviewed, along with all other commercial and academic constructs in development in a February 2026 Nature Biotechnology publication. As of December 2025, in the first 40 patients dosed with rese-cel with preconditioning across four RESETTM trials, 95% of patients had either no cytokine release syndrome, or CRS, or Grade 1 CRS (transient fever) and 95% of patients experienced no immune effector cell-associated neurotoxicity syndrome, or ICANS.

In December 2025, we initiated a registrational trial with rese-cel for patients with dermatomyositis or anti-synthetase syndrome. In addition, we have ongoing Phase 1/2 trials evaluating rese-cel with a standard preconditioning regimen, fludarabine and cyclophosphamide, in systemic lupus erythematosus, or SLE, in patients with active lupus nephritis, or LN, or active SLE without renal involvement, systemic sclerosis, or SSc, and generalized myasthenia gravis, or gMG.

In addition to our development program across multiple indications using standard preconditioning regimens, based on early data from a Phase 1/2 trial evaluating rese-cel without preconditioning in pemphigus vulgaris patients, we are evaluating rese-cel without preconditioning in non-renal SLE and LN patients. Longer-term data from the no-preconditioning SLE, LN and PV patients is expected to be presented in the second half of 2026.

In January 2026, we announced investigational new drug, or IND, clearance for rese-cel to be manufactured using an automated manufacturing platform - the Cell ShuttleTM from Cellares Corporation, or Cellares - offering the potential for scalability to produce rese-cel for thousands of patients per year with minimal capital investment by the Company. In April 2026, we entered into a commercial supply agreement with Cellares for the commercial supply of rese-cel using Cellares' automated Cell ShuttleTM and through future implementation of Cellares' Cell Q platform.

RESET-Myositis®

The three adult myositis subtypes, dermatomyositis, or DM, anti-synthetase syndrome, or ASyS, and immune-mediated necrotizing myopathy, or IMNM, being evaluated in the RESET-Myositis® Phase 1/2 clinical trial of rese-cel affect approximately 80,000 patients in the U.S. Myositis typically affects middle-aged individuals, particularly women, and the disease is often refractory, despite existing therapies. In the United States, we believe approximately 20% to 25% of the prevalent population, or 16,000 to 20,000 people, would be potentially eligible patients for rese-cel.

The RESET-Myositis® Phase 1/2 clinical trial is designed to treat at least six patients with DM or ASyS, at least six patients with IMNM, as well as at least six patients with juvenile idiopathic inflammatory myopathy, or JIIM, all in separate parallel cohorts, with a single weight-based dose of 1.0 x 106 cells/kg. We announced the FDA granted Fast Track Designation for rese-cel for the treatment of patients with dermatomyositis and Orphan Drug Designation for rese-cel for the treatment of myositis in January and February 2024, respectively. In March 2024, we announced the FDA granted Rare Pediatric Disease designation for rese-cel for juvenile dermatomyositis. In May 2025, we announced the FDA granted Regenerative Medicine Advanced Therapy, or RMAT, designation to rese-cel for the treatment of myositis. Based on clinical data presented in October 2025 at the American College of Rheumatology, or ACR, Convergence 2025, we initiated a DM/ASyS registrational cohort within the RESET-Myositis® trial. There are approximately 60,000 patients with DM in the U.S. who have IVIg as their only FDA-approved treatment option and approximately 15,000 patients with ASyS in the U.S. who have no FDA-approved treatment options. Our registrational trial design includes a 16-week primary endpoint of moderate or major TIS response while off immunomodulators and on no or low-dose steroids. Based on the safety data from the Phase 1/2 cohort, the protocol permits outpatient administration. In addition, we are planning for a pediatric submission in juvenile idiopathic inflammatory myopathy, or JIIM, based on data available at the time of adult submission from the ongoing Ph 1/2 cohort to support a pediatric label claim.

The planned size of 17 patients for the registrational cohort is based on the assumed treatment effect of rese-cel in DM/ASyS patients and an estimated background rate. The estimated background rate will be determined from a retrospective analysis of an external myositis patient registry and will include patients with similar inclusion criteria as those in the registrational DM/ASyS cohort. Based on comprehensive literature review to estimate the background rate, we estimate the likelihood of an active, refractory myositis patient achieving moderate or major TIS response within 16 weeks and concurrently discontinuing all immunomodulators to be less than 10%. Changes in the assumed background rate would result in a change in the number of rese-cel treated patients who would need to achieve the primary endpoint in the 17-patient registrational cohort.

The registrational cohorts will evaluate the same single, weight-based infusion of rese-cel at 1.0 x 106 cells/kg as used in the Phase 1/2 myositis cohorts with similar enrollment criteria. As presented at ACR Convergence 2025, all myositis patients in the Phase 1/2 DM/ASyS cohort with sufficient follow-up who met key registrational inclusion criteria exceeded the registrational primary endpoint, demonstrating major TIS responses with no immunomodulators. Based on discussions with the FDA, we plan to use pooled rese-cel safety data from across the entire RESETTM clinical trial program to supplement myositis-specific safety data for the Biologics License Application, or BLA, submission in myositis, and the required safety database is expected to be approximately 100 autoimmune disease patients treated with the same single weight-based dose. We initiated enrollment in the registrational DM/ASyS cohort in December 2025 and anticipate BLA submission in 2027.

RESET-SLETM

SLE is a chronic, potentially severe, autoimmune disease, most commonly impacting young women between the ages of 15 and 40 with higher frequency and more severity in people of color, where the immune system attacks healthy tissue throughout the body. SLE affects an estimated up to 320,000 patients in the U.S., with LN as the most common end-organ manifestation, affecting approximately 30-40% of SLE patients.

The RESET-SLETM Phase 1/2 clinical trial is designed to treat six SLE patients with active LN, and in a separate parallel cohort, six patients with active SLE without renal involvement, with a single weight-based dose of 1.0 x 106 cells/kg. In May 2023, we announced the FDA granted Fast Track Designation for rese-cel in patients with SLE and LN. In November 2025, we announced the FDA granted RMAT designation to rese-cel for treatment of SLE and LN. In January 2026, Cabaletta announced registrational cohort designs in RESET-SLETM to evaluate the current rese-cel weight-based dose of 1 million cells/kg in a single infusion with preconditioning, including two independent, single-arm cohorts, one consisting of patients with non-renal SLE and one consisting of patients with LN, each evaluating approximately 25 patients with unique endpoints in each cohort. Complete Phase 1/2 data from both cohorts is anticipated in the first half of 2026. Cabaletta will provide an update on next steps for these cohorts in 2026, subject to dose-ranging data evaluating rese-cel without preconditioning in lupus patients.

In the RESET-SLETM trial evaluating rese-cel without preconditioning in patients with lupus, the initial dose cohort is fully enrolled with initial data at the lowest dose anticipated in the first half of 2026 and longer-term durability data is expected to be presented in the second half of 2026.

RESET-SScTM

SSc is a rare and potentially fatal chronic autoimmune disease characterized by progressive skin and internal organ fibrosis that can be life-threatening, including interstitial lung disease, pulmonary hypertension, and scleroderma renal crisis. SSc affects approximately 90,000 patients in the U.S., typically middle-aged individuals, particularly women.

The RESET-SScTM Phase 1/2 clinical trial of rese-cel is designed to treat six patients with severe skin manifestations and six patients with severe organ involvement associated with SSc, each in separate parallel cohorts, with a single weight-based dose of 1.0 x 106 cells/kg. We announced the FDA granted Fast Track Designation for rese-cel for the treatment of patients with SSc to improve associated organ dysfunction and Orphan Drug Designation for rese-cel for the treatment of SSc in January and March 2024,

respectively. In January 2026, Cabaletta announced the FDA granted RMAT designation to rese-cel for treatment of SSc. Complete Phase 1/2 data from both cohorts is anticipated in the first half of 2026, and we anticipate announcing the registrational cohort design for SSc in the first half of 2026.

RESET-MGTM

MG is a rare autoimmune disease characterized by autoantibodies that interfere with signaling at the neuromuscular junction, leading to potentially life-threatening muscle weakness. The majority of patients with MG have autoantibodies known to be pathogenic based on their interference with proteins in the NMJ, of which the majority target AChR. gMG affects approximately 100,000 patients in the U.S. Symptoms of gMG include profound muscle weakness throughout the body, disabling fatigue, and potential shortness of breath due to respiratory muscle weakness, with risk for episodes of respiratory failure.

The RESET-MGTM Phase 1/2 clinical trial of rese-cel is designed to treat six patients with AChR-positive gMG and six patients with AChR-negative gMG, each in separate parallel cohorts, with a single weight-based dose of 1.0 x 106 cells/kg. In October 2025, we announced that rese-cel was generally well tolerated across two AChR-positive and two AChR-negative patients (both seronegative; no anti-MuSK or anti-LRP4 antibodies). No CRS occurred in three of four patients, and grade 2 CRS occurred in one AChR-positive patient that resolved with no sequelae. Both cohorts have been fully enrolled.

Complete Phase 1/2 data from both cohorts were presented at the American Academy of Neurology (AAN) Annual Meeting in April 2026. In the RESET-MG trial, 13 patients with active, refractory disease were treated with rese-cel with preconditioning with a data cut-off of March 6, 2026, and follow-up between 8 and 40 weeks. 7 patients were in the AChR-positive cohort, and 6 patients were in the AChR-negative cohort. 11 of 13 patients experienced no CRS and 13 of 13 patients experienced no ICANS. 10 of 13 patients experienced clinically meaningful improvements in MG-ADL scores off immunomodulators for MG while 3 patients received rescue medications for insufficient response. Of the 10 MG-ADL responders, 9 were off or tapering steroids, and one patient remained on chronic steroids for adrenal insufficiency. We anticipate announcing the registrational cohort design in MG in mid-2026.

RESET-PV®

Pemphigus vulgaris, or PV, is an autoimmune disease that occurs when the immune system produces antibodies that attack a protein called desmoglein, or DSG. DSG normally enables skin cells and the cells lining the inside of your mouth, nose, throat, eyelids, etc. to bind tightly together. Disruption by the antibodies directed to DSG causes the painful blisters and erosions characteristic of PV. Approximately 15,000 patients in the U.S. are affected by PV.

The ongoing RESET-PV® trial is designed to evaluate rese-cel as a monotherapy without preconditioning in patients with mucosal pemphigus vulgaris, or mPV, and mucocutaneous pemphigus vulgaris, or mcPV. In October 2025, we announced that rese-cel exhibited similar CAR T cell expansion and contraction kinetics relative to translational data reported from other RESETTM trials with preconditioning. All three patients experienced substantial depletion of B cells within the first month post-infusion, with patients 2 and 3 achieving complete peripheral B cell depletion. Rese-cel was generally well tolerated with no ICANS reported as of the data cutoff. Durability data from the no-preconditioning PV patients is expected to be presented in the second half of 2026.

As of the data cutoff of April 2, 2026, in the RESET-PV® trial, 4 patients received rese-cel at the lowest dose without preconditioning and had follow-up between 24 and 36 weeks. 3 of 4 patients experienced no CRS (1 patient with Grade 1 CRS) and 4 of 4 patients experienced no ICANS. Complete peripheral B cell elimination was observed in 3 of 4 patients. 2 of 4 patients demonstrated compelling clinical activity through 6 months follow-up and 3 of 4 patients remained off all immunomodulators and steroids as of the data cut-off. We will present this data at the American Society of Gene & Cell Therapy (ASGCT) 2026 Annual Meeting in May 2026. Based on the safety profile observed at the lowest dose, multiple additional patients have been enrolled at a higher dose cohort in the RESET-PV trial® and longer-term data at the higher dose is anticipated in the second half of 2026.

Manufacturing

Our manufacturing strategy utilizes proven external suppliers, with a philosophy of maintaining redundant supply capability for cellular products.

We have established and implemented a phase-appropriate manufacturing supply strategy that includes Process A (early clinical phase), Process B (partially automated, commercially scalable process intended for initial commercial launch), and Process C (fully automated version of Process B). For cell manufacturing, we have partnered with Minaris Advanced Therapies, LLC, or Minaris, and Lonza Houston Inc., or Lonza, to serve as manufacturing partners for the global clinical development of rese-cel. For supply of lentiviral vector, we are working with Oxford Biomedica (UK) Limited, or Oxford.

In January 2026, we entered into a clinical supply agreement with Cellares to serve as a clinical supplier of rese-cel using Cellares' automated manufacturing platform, the Cell Shuttle™, and we announced IND clearance for rese-cel to be manufactured using the Cellares Cell Shuttle™. We will present initial translational data from the first two autoimmune patients treated with rese-cel manufactured using the automated Cellares Cell Shuttle™ platform in the RESET™ clinical development program at ASGCT in May 2026.

In April 2026, we entered into a commercial supply agreement with Cellares under which Cellares would supply rese-cel using Cellares' automated Cell ShuttleTM and through future implementation of Cellares' Cell Q platform.

We were incorporated in April 2017 and started principal operations in August 2018. Our operations to date have been financed primarily by proceeds from the sale of convertible notes and convertible preferred stock prior to our initial public offering, or IPO, and proceeds from the sale of our common stock in public equity offerings, including our IPO, "at-the-market" offerings and follow-on offerings of shares of our common stock and pre-funded warrants. As of March 31, 2026, we had $116.6 million in cash and cash equivalents and through a follow-on offering in May 2026, we raised approximately $141.0 million after deducting underwriting discounts and commissions and offering expenses.

Key Agreements

IASO Agreement

On October 7, 2022, we entered into an Exclusive License Agreement, or the IASO Agreement, with IASO. Pursuant to the IASO Agreement, we received an exclusive, worldwide license under certain IASO intellectual property to use a novel clinical-stage anti-CD19 binder to develop, manufacture, commercialize and otherwise exploit T cell products directed to CD19 for the purpose of diagnosis, prevention or treatment of any autoimmune or alloimmune indications in humans. IASO has the right of first negotiation if we desire to grant a third party an exclusive license to develop, manufacture, commercialize or otherwise exploit the licensed products in the Greater China region. Pursuant to the IASO Agreement, we and IASO have agreed, subject to certain exceptions, to refrain from engaging in certain competitive activities with respect to certain programs. As partial consideration for the exclusive license, IASO received an upfront payment of $2.5 million. IASO is also eligible to receive up to mid double digit millions in milestone payments based upon the achievement of specified pre-clinical, development and regulatory milestones, and up to an additional low triple digit millions in milestone payments based upon achievement of specified sales milestones, for a total consideration, inclusive of the upfront payment, of up to $162 million, along with tiered mid-single digit royalties on future net sales for licensed products that may result from the IASO Agreement. We also may sublicense through multiple tiers the rights granted to it by IASO under the IASO Agreement at any time, however, we must pay IASO a low double-digit percentage of any revenue obtained from sublicenses or options to third parties, subject to certain customary exclusions. The IASO Agreement will continue on a country-by-country, licensed product-by-licensed product basis until the expiration of the royalty term as identified in the IASO Agreement, unless earlier terminated. We and IASO may terminate the IASO Agreement for a material, uncured breach or insolvency of the other party. We may also terminate the IASO Agreement at will upon advance written notice and in the event IASO rejects the IASO Agreement due to bankruptcy-related matters. IASO may also terminate the IASO Agreement if we fail to achieve certain specified diligence milestones in a timely manner and/or if we commence any patent challenges with respect to the patents and patent applications relating to the licensed sequence, in each case upon advance written notice. A milestone payment of $1.5 million was paid to IASO in the first quarter of 2024 after the first patient in a rese-cel trial was dosed.

Oxford Biomedica

In December 2021, we entered into the LSA with Oxford wherein the LSA grants us a non-exclusive license to Oxford's LentiVector® platform for its application in our DSG3-CAART program and puts in place a multi-year vector supply agreement. Under the terms of the agreement, we were required to pay Oxford an upfront fee, as well as costs associated with initial vector manufacturing activities. Oxford, is eligible to receive regulatory and sales milestones in the low tens of millions and royalties in the low single digits on net sales of products that incorporate the Oxford technology. We can terminate the agreement at will upon advance written notice and subject to certain manufacturing slot cancellation fees. In May 2023, we amended the LSA with Oxford to expand the license to include our rese-cel program for an upfront fee of $0.5 million and in August 2023, we entered into a vector supply agreement with Oxford, and a related second amendment to the LSA, for rese-cel with a total cost of up to approximately $5.0 million under the vector supply agreement. In February 2024, we and Oxford entered into a third amendment to the LSA to update the patent schedule. In June 2024, we and Oxford entered into a fourth amendment to the LSA eliminating royalties on net sales of products that incorporate the Oxford technology if Oxford manufactures the vector. Starting in December 2024, we and Oxford entered into work orders for certain process characterization and process performance qualification activities as part of commercial readiness activities. We can terminate the LSA or any work order under the LSA at will upon advance written notice and subject to certain cancellation fees.

Minaris Manufacturing Agreement

In January 2021, we entered into a Development and Manufacturing Services Agreement (Minaris Agreement) with Minaris Advanced Therapies, LLC, or Minaris (f/k/a WuXi Advanced Therapies, Inc.) to serve as a cell processing manufacturing partner for the MuSK-CAART Phase 1 clinical trial, or MusCAARTesTM trial. In August 2023, and as extended in August 2024, we entered into an agreement with Minaris to serve as one of our manufacturing partners for the RESETTM clinical trials through August 2026. We may terminate for convenience the Minaris Agreement or any work order with six months' prior written notice, subject to an early termination fee of up to $1,080 if we terminate both the rese-cel and MuSK-CAART work orders for any reason. Minaris may terminate for

convenience the Minaris Agreement or any work order on 18 months' prior written notice, but such notice may not be effective prior to February 2028. In February 2026, we notified Minaris that we intended to permit the term to expire in August 2026.

Lonza Manufacturing Agreement

In December 2024, we entered into a Development and Manufacturing Services Agreement, or the Lonza Agreement, with Lonza to serve as one of our manufacturing partners for the global clinical development of rese-cel in multiple indications, including potential late-stage clinical trials and preparations for commercial readiness. The Lonza Agreement has a term of five years and can be extended for an additional three year term upon notice to Lonza at least 18 months prior to the expiration of the Lonza Agreement. We can terminate the Lonza Agreement at will upon nine months advance written notice to Lonza subject to the terms of the Lonza Agreement. Lonza can terminate the Lonza Agreement at will upon 24 months advance written notice to us subject to the terms of the Lonza Agreement. Under the initial work order, Lonza will perform cell therapy manufacturing activities for our CAR-T cell therapy product, rese-cel, for an initial term of 12 months with the ability to extend the manufacturing period on a rolling basis subject to the terms of the Lonza Agreement.

Cellares Agreement

In January 2026, we entered into a Development and Clinical Manufacturing Services Agreement, or the Cellares Agreement, with Cellares to serve as one of our manufacturing partners for the clinical development of rese-cel in multiple indications, including potential late-stage clinical trials and preparations for commercial readiness. The Cellares Agreement has a term of five years. We can terminate the Cellares Agreement at will by providing a certain advance written notice to Cellares subject to the terms of the Cellares Agreement. Cellares can terminate the Cellares Agreement at will by providing a certain advance written notice to us subject to the terms of the Cellares Agreement. Under the initial work order, Cellares will perform clinical cell therapy manufacturing activities for our CAR-T cell therapy product, rese-cel.

In April 2026, we announced the execution of a commercial agreement with Cellares to provide future commercial supply of rese-cel, pending FDA approval, using its automated manufacturing and quality control platforms. The agreement facilitates flexible, scalable automated production of rese-cel with minimal capital investment.

Amended and Restated License Agreement with the Trustees of the University of Pennsylvania and the Children's Hospital of Philadelphia

In August 2018, we entered into a license agreement with Penn, which was amended and restated in July 2019 to include CHOP, collectively, the Institutions, and collectively with such amendment, as amended in May 2020 and October 2021, the License Agreement, pursuant to which we obtained (a) a non-exclusive, non-sublicensable, worldwide research license to make, have made and use products in two subfields of use, (b) effective as of October 2018, an exclusive, worldwide, royalty-bearing license, with the right to sublicense, under certain of the Institutions' intellectual property to make, use, sell, offer for sale and import products in the same two subfields of use, and (c) effective as of October 2018, a non-exclusive, worldwide, royalty-bearing license, with limited rights to sublicense, under certain of Penn's know-how to make, have made, use, sell, offer for sale, import and have imported products in the same two subfields of use. Our rights are subject to the rights of the U.S. government and certain rights retained by the Institutions.

Unless earlier terminated, the License Agreement expires on the expiration, abandonment or other termination of the last valid claim in Penn's intellectual property licensed by us. We may terminate the License Agreement at any time for convenience upon 60 days' written notice. In the event of an uncured, material breach, Penn may terminate the License Agreement upon 60 days' written notice.

Components of Operating Results

Revenue

To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sales of products for several years, if at all. If our development efforts for our current or future product candidates are successful and result in marketing approval, we may generate revenue in the future from product sales. We cannot predict if, when or to what extent we will generate revenue from the commercialization and sale of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates.

We may also in the future enter into license or collaboration agreements for our product candidates or intellectual property, and we may generate revenue in the future from payments as a result of such license or collaboration agreements.

Operating Expenses

Research and Development

Our research and development expenses include:

We have not reported program costs since inception because historically we have not tracked or recorded our research and development expenses on a pre-clinical program-by-program basis. We use our personnel and infrastructure resources across the breadth of our research and development activities, which are directed toward identifying and developing product candidates.

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.

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 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:

We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected results from our preclinical studies and 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 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.

General and Administrative Expenses

Our general and administrative expenses consist primarily of personnel costs, costs related to maintenance and filing of intellectual property, depreciation expense and other expenses for outside professional services, including legal, human resources, information technology, audit and accounting services. Personnel costs consist of salaries, benefits and stock-based compensation expense. We expect our 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. We anticipate our general and administrative costs will increase with respect to the hiring of additional personnel, developing commercial infrastructure, fees to outside consultants, lawyers and accountants, and 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.

Other Income

Other income consists of interest earned on our cash, cash equivalents and investments and amortization of bond discount or premium.

Interest Expense

Interest expense consists primarily of interest expense associated with finance lease arrangements.

Other Income, net

Other income, net primarily consists of foreign currency gains and losses and proceeds received from the sale of our Pennsylvania research and development tax credits.

Results of Operations for the three months ended March 31, 2026 and 2025

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

Research and Development

Research and development expenses were $37.4 million for the three months ended March 31, 2026 compared to $29.0 million for the three months ended March 31, 2025. The table below summarizes our research and development expenses:

Specific changes in our research and development expenses year over year include a:

General and Administrative

General and administrative expenses were $6.9 million for the three months ended March 31, 2026 compared to $8.1 million for the three months ended March 31, 2025. The decrease of $1.2 million is primarily driven by lower personnel related costs due to decreased headcount.

Interest Income

Interest income decreased by $0.4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to lower cash, cash equivalents and investment balances earning interest during 2026 as prior financing proceeds were utilized to fund operating activities, as well as reductions in interest rates on government securities.

Interest Expense

Interest expense increased $0.3 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, as a result of finance lease arrangements from embedded leases within our manufacturing agreements with Minaris and Lonza.

Other Income, net

Other Income, net increased $0.3 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, due to proceeds received from the sale of our Pennsylvania research and development tax credits.

Liquidity, Capital Resources and Going Concern

From our inception in April 2017 to the time of our initial public offering, or IPO, our operations were financed by proceeds of $86.4 million from the sale of convertible notes and our convertible preferred stock and proceeds of $71.0 million from the sale of common stock in our IPO. Since our IPO and through March 31, 2026, we have generated cash from public offerings of our common stock and pre-funded warrants to purchase our common stock resulting in aggregate net proceeds of approximately $413.0 million. Our cash and cash equivalents balance of $116.6 million as of March 31, 2026, along with net proceeds of approximately $141.0 million

from our May 2026 financing, should enable us to fund our operations and capital expenditures into mid-2027. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.

We have incurred losses since our inception and, as of March 31, 2026, we had an accumulated deficit of $560.5 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. 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 prepaid expenses and other current assets, accounts payable and accrued expenses.

Any product candidates we may develop may never achieve commercialization and we anticipate that we will continue to incur losses for the foreseeable future. We expect that our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. As a result, until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research, manufacturing and development services, office and laboratory, laboratories and manufacturing facility, license payments or milestone obligations that may arise, laboratory and related supplies, clinical costs, manufacturing costs, legal and other regulatory expenses and general overhead costs.

We evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued. We expect that our current cash and cash equivalents may be sufficient to fund our operations for at least the next twelve months from the date of issuance of these unaudited condensed consolidated financial statements; however, our cash forecast contains estimates and assumptions with significant variability and we cannot predict the amount or timing of all expenditures with certainty. Our ultimate success depends on the outcome of our research and development activities. We expect to incur additional losses in the future as we continue our research and development and we will need to raise additional capital to fully implement our business plan and to fund our operations. Accordingly, we have concluded that substantial doubt exists about the Company's ability to continue as a going concern. 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. 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 certain planned activities to reduce costs.

At-The-Market Offering Sales Agreement

On March 31, 2025, we converted the Form S-3ASR to a Form S-3 (File No. 333-278126) by post-effective amendments. This Form S-3 was declared effective on March 31, 2025. We had a Sales Agreement with TD Securities (USA) LLC, as successor to Cowen and Company, LLC, or TD Cowen, to provide for the offering, issuance and sale of up to an aggregate amount of $200.0 million of common stock from time to time in "at-the-market" offerings, or the 2024 ATM Program, pursuant to its S-3, and subject to the limitations thereof. On June 11, 2025, the 2024 ATM Program with TD Cowen was terminated. Prior to termination, we sold an aggregate of 2,609,865 shares pursuant to the 2024 ATM Program for total net proceeds of $7.7 million, consisting of $5.1 million in 2024 and $2.6 million in 2025.

On August 7, 2025, we filed a Registration Statement (File No. 333-289339) with the SEC, which was declared effective on August 15, 2025, or the 2025 Shelf Registration Statement, in relation to the registration of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof for the purposes of selling, from time to time, our common stock, debt securities or other equity securities in one or more offerings. We also simultaneously entered into a Sales Agreement with TD Cowen to provide for the offering, issuance and sale of up to an aggregate amount of $150.0 million of our common stock from time to time in "at-the-market" offerings, or the 2025 ATM Program, under the 2025 Shelf Registration Statement and subject to the limitations thereof, or the 2025 Sales Agreement. During the year ended December 31, 2025, we sold 4,160,176 shares pursuant to the 2025 ATM Program for net proceeds of $10.2 million. During the first quarter of 2026, we sold 8,055,260 shares of common stock pursuant to the 2025 ATM Program for net proceeds of $22.6 million.

May 2026 Financing

In May 2026, we issued 51,725,000 shares of our common stock at a price of $2.90 per share pursuant to a prospectus supplement dated May 4, 2026 to our shelf registration statement on Form S-3 (File No. 333-278126). The offering was underwritten by TD Securities (USA) LLC, Guggenheim Securities, LLC and Cantor Fitzgerald & Co., as joint book-running managers, and H.C. Wainwright & Co., LLC, as lead manager. Aggregate net proceeds were approximately $141.0 million after deducting underwriting discounts and commissions and offering expenses.

June 2025 Financing

In June 2025, we issued (i) 39,200,000 shares of our common stock and accompanying warrants to purchase an aggregate of 39,200,000 shares of common stock (or pre-funded warrants in lieu thereof) and (ii) in lieu of common stock, to certain investors, pre-funded warrants to purchase an aggregate of up to 10,800,000 shares of our common stock and accompanying warrants to purchase an aggregate of 10,800,000 shares of common stock (or pre-funded warrants in lieu thereof), at an exercise price of $0.00001 per pre-funded warrant. The combined offering price of each share of common stock and accompanying common stock warrant was $2.00. The combined offering price of each pre-funded warrant and accompanying common stock warrant was $1.99999. The pre-funded warrants were exercisable immediately. The common stock and pre-funded warrants were sold in combination with an accompanying common stock warrant to purchase one share of common stock (or a pre-funded warrant in lieu thereof) for each share of common stock or pre-funded warrant sold. Each common stock warrant has an exercise price per share of $2.50. The common stock warrants are immediately exercisable from the date of issuance and will expire fifteen months from the date of issuance. Aggregate net proceeds were $93.6 million after deducting underwriting discounts and commissions and offering expenses. As of March 31, 2026, 4,800,000 pre-funded warrants had been exercised and 6,000,000 remain outstanding. In addition, as of March 31, 2026, 2,775,100 common stock warrants were exercised for proceeds of $6.9 million and 50,315,090 common stock warrants remain outstanding.

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 for the periods indicated:

Operating Activities

During the three months ended March 31, 2026, cash used in operating activities of $42.6 million was attributable to our net loss of $43.5 million and a net change of $9.4 million in our net operating assets and liabilities, partially offset by non-cash charges of $10.3 million for stock-based compensation charges, amortization of finance lease, non-cash operating lease expense, depreciation, accretion of operating lease liabilities and foreign currency exchange rates.

During the three months ended March 31, 2025, cash used in operating activities of $30.8 million was attributable to our net loss of $35.9 million, partially offset by non-cash charges of $8.2 million for stock-based compensation charges, amortization of finance lease, non-cash operating lease expense, depreciation, accretion of operating lease liabilities and foreign currency exchange rates and a net change of $3.1 million in our net operating assets and liabilities.

Investing Activities

During the three months ended March 31, 2026, cash provided by investing activities of $51.0 million was attributable to the maturity of short-term investments.

During the three months ended March 31, 2025, cash used in investing activities of $0.8 million was attributable to purchases of property and equipment.

Financing Activities

During the three months ended March 31, 2026, cash provided by financing activities of $25.3 million was attributable to $22.6 million in sales of common stock under our 2025 ATM Program, net of sales agent commission and fees and $6.9 million from the exercise of common stock warrants, offset by $4.3 million in principal payments on finance leases.

During the three months ended March 31, 2025, cash used by financing activities of $0.6 million was attributable to principal payments on finance leases.

Contractual Obligations and Commitments

For a discussion of contractual obligations and other commitments affecting us, see the discussion under the heading "Management Discussion and Analysis of Financial Condition and Results of Operations - Contractual obligations and other commitments" included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 23, 2026.

There have been no material changes to the Company's contractual obligations and other commitments since December 31, 2025.

Critical Accounting Policies and Significant Judgments and Estimates

The Critical Accounting Policies and Significant Judgments and Estimates included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 23, 2026, have not materially changed.

Smaller Reporting Company Status

We are a "smaller reporting company," as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. We would cease to be a smaller reporting company if we have a public float in excess of $250 million, or have annual revenues in excess of $100 million and a public float in excess of $700 million, determined on an annual basis. This status allows us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements please read Note 2, Summary of Significant Accounting Policies, to our unaudited condensed consolidated financial statements included in this report.