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 our unaudited consolidated financial statements and related notes for the three months ended March 31, 2026, included in Part I, Item 1 of this report and with our audited consolidated financial statements and related notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K. This discussion and other sections of this Quarterly Report contain forward-looking statements that involve risks and uncertainties, such as our plans, objectives, expectations, intentions, and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section entitled "Risk Factors" included in Part II, Item 1A of this Quarterly Report. You should also carefully read "Special Note Regarding Forward-Looking Statements".

Overview

Prior to the separation described below, we were a clinical-stage biotechnology company focused on delivering innovative immunology therapeutics for autoimmune and inflammatory diseases. Our clinical-stage pipeline included rosnilimab, a selective pathogenic T cell depleter, for which we completed a Phase 2b trial for the treatment of moderate-to-severe rheumatoid arthritis ("RA"), ANB033, a CD122 antagonist, in a Phase 1b trial for celiac disease ("CeD") and eosinophilic esophagitis ("EoE"), and ANB101, a BDCA2 modulator, in a Phase 1a trial. We also discovered and out-licensed, in financial collaborations, multiple therapeutic antibodies, including a PD-1 antagonist (Jemperli (dostarlimab-gxly) or "Jemperli") to GSK and an IL-36R antagonist (imsidolimab) to Vanda Pharmaceuticals Inc. ("Vanda"). We recognize revenue from milestones and royalties achieved under our immuno-oncology collaboration with GSK and license and transition services revenue from our collaboration with Vanda.

First Tracks Biotherapeutics Separation

In September 2025, we announced that our board of directors ("Board of Directors") approved plans to explore separating our business into two independent, publicly traded companies. We would hold and continue to manage the financial collaboration for Jemperli with GSK and for imsidolimab with Vanda, with a focus on protecting and returning value of the royalties to its stockholders. The spun-out company would be a clinical-stage biotechnology company focused on the development and potential commercialization of innovative therapeutics for autoimmune and inflammatory diseases, including rosnilimab, ANB033 and ANB101. This separation was completed on April 20, 2026.

In connection with the separation, we entered into a separation and distribution agreement (the "Separation and Distribution Agreement") with First Tracks Biotherapeutics, Inc. ("First Tracks Biotherapeutics"). The Separation and Distribution Agreement identifies the assets transferred to (including contracts assigned) or retained by, and the liabilities assumed or retained by, each of us and First Tracks Biotherapeutics. As the separation occurred after March 31, 2026, the results of First Tracks Biotherapeutics are included in our consolidated financial statements.

Collaborative Programs

GSK Collaboration

Multiple company-discovered antibody programs have been advanced to preclinical and clinical milestones under our collaborations. Our collaborations include an immuno-oncology-focused collaboration with GSK.

Under the GSK Agreement, a Biologics License Application ("BLA") for Jemperli (dostarlimab), a PD-1 antagonist antibody, was approved by the FDA in April 2021 for the treatment of advanced or recurrent deficient mismatch repair endometrial cancer ("dMMREC"). In February 2023, the FDA granted full approval for this indication. In addition, in April 2021, the European Medicines Agency ("EMA") granted conditional marketing authorization in the European Union ("EU") for Jemperli for use in women with mismatch repair deficient ("dMMR")/microsatellite instability-high ("MSI-H") recurrent or advanced endometrial cancer who have progressed on or following prior treatment with a platinum containing regimen. A second FDA approval was received in August 2021 for Jemperli in pan-deficient mismatch repair tumors (PdMMRT). In July 2023, the FDA approved Jemperli in combination with chemotherapy for the treatment of adult patients with dMMR MSI-H primary advanced or recurrent endometrial cancer. In December 2023, the EMA approved Jemperli plus chemotherapy for dMMR/MSI-H primary advanced or recurrent

endometrial cancer. In August 2024, the FDA approved Jemperli plus chemotherapy for all adult patients with primary advanced or recurrent endometrial cancer. In January 2025, the EMA approved Jemperli plus chemotherapy for this same indication.

Vanda Collaboration

On January 31, 2025, we entered into an Exclusive License Agreement (the "Vanda License Agreement") with Vanda pursuant to which we granted to Vanda an exclusive, global license for the development and commercialization of imsidolimab (IL-36R antagonist mAb), which has completed two registration-enabling global Phase 3 trials, GEMINI-1 and GEMINI-2, evaluating the safety and efficacy of imsidolimab in patients with generalized pustular psoriasis ("GPP").

In December 2025, Vanda announced the submission of a BLA to the FDA for imsidolimab in GPP. The FDA accepted the BLA filing for imsidolimab in GPP in February 2026 with a target action date of December 12, 2026.

Pursuant to the terms of the Vanda License Agreement, we received an upfront payment of $10.0 million and a $5.0 million payment for existing drug supply. We are also eligible to receive a 10% royalty on net sales under the Vanda License Agreement:

The Separation and Distribution Agreement provides that any and all rights to receive milestone payments under the Vanda License Agreement will be allocated to First Tracks Biotherapeutics. For more information about these collaborations, see Note 4 - Collaborative Research and Development Agreements in the accompanying notes to the consolidated financial statements.

Components of Operating Results

Collaboration Revenue

We have not generated any revenue from product sales. Our revenue has been derived from amortization of upfront license payments, research and development funding, milestone and royalty payments under collaboration and license agreements with our collaborators. From inception through March 31, 2026, we have recognized $606.7 million in revenue from our collaborators.

Research and Development Expense

Research and development expenses consist of costs associated with our research and development activities, preclinical and clinical development of our programs, and manufacturing. Our research and development expenses included:

We may also incur in-process research and development expense as we acquire assets from other parties. Acquired in-process research and development costs that have no alternative future use are immediately expensed.

We expense research and development costs as incurred. We account for nonrefundable advance payments for goods and services that will be used in future research and development activities as expense when the service has been performed or when the goods have been received.

We are conducting research and development activities primarily on inflammation programs. We have a research and development team that conducts antibody characterization, translational studies, IND-enabling preclinical studies, and clinical development. We conduct some of our preclinical activities internally and plan to rely on third parties, such as CROs and CMOs, for the execution of certain of our research and development activities, such as in vivo toxicology and pharmacology studies, drug product manufacturing, and clinical trials.

Following the separation, we do not expect to incur significant research and development expenses.

General and Administrative Expense

General and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation for our executive, finance, legal, business development, human resource, and support functions. Other general and administrative expenses include allocated facility-related costs not otherwise included in research and development expenses, travel expenses, transaction costs, and professional fees for auditing, tax, and legal services.

Non-Cash Interest Expense for the Sale of Future Royalties

Non-cash interest expense for the sale of future royalties consists of interest related to the liability for the sale of future royalties, as well as the amortization of debt issuance costs. We impute interest on the unamortized portion of the liability for the sale of future royalties using the effective interest method and record interest expense based on timing of the payments over the term of the Jemperli Royalty Monetization Agreement and the Zejula Royalty Monetization Agreement (the "Royalty Monetization Agreements"). Our estimate of the interest rate under the arrangements is based on forecasted royalty and milestone payments expected to be made over the life of the agreements.

Interest Income

Interest income consists primarily of interest earned on our short-term and long-term investments and is recognized when earned.

Critical Accounting Policies and Use of Estimates

Our management's discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). The preparation of these financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. We believe there have been no significant changes in our critical accounting policies as discussed in our Annual Report on Form 10-K filed with the SEC on March 3, 2026.

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

Collaboration Revenue

Collaboration revenue consists of milestone payments, royalty payments, upfront license fees and transition services provided under our collaboration agreements. We recognized no milestone revenue during each of the three months ended March 31, 2026 and 2025. We expect that any collaboration revenue we generate will continue to fluctuate from period to period as a result of the timing and amount of milestones from our existing collaborations.

Royalty revenue is a function of our partners' product sales and the applicable royalty rate. During the three months ended March 31, 2026 and 2025, we recognized $25.5 million and $18.1 million, respectively, of royalty revenue related to the net sales of GSK's Jemperli and Zejula. All royalty revenue recognized for the three months ended March 31, 2026 and 2025 is non-cash revenue pursuant to the Royalty Monetization Agreements. For more information, see Note 5 - Sale of Future Royalties in the accompanying notes to the consolidated financial statements. During the three months ended March 31, 2026 and 2025, we recognized $0.0 million and $9.6 million, respectively, of license revenue under ASC 606.

During the three months ended March 31, 2026 and 2025, we recognized less than $0.1 million and $0.1 million, respectively, related to transition services provided under our Vanda License Agreement.

Research and Development Expenses

Research and development expenses were $34.0 million during the three months ended March 31, 2026 compared to $41.2 million during the three months ended March 31, 2025, for a decrease of $7.2 million, primarily due to a $7.8 million decrease in clinical expenses, $0.2 million decrease in outside services for manufacturing expenses, $0.9 million decrease in other research and development expenses, offset by a $1.5 million increase in salaries and related expenses, $0.1 million increase in stock-based compensation expense, and $0.1 million increase in recruiting costs.

We do not track fully burdened research and development costs separately for each of our product candidates. We review our research and development expenses by focusing on external development and internal development costs. External development expenses consist of costs associated with our external preclinical and clinical trials, including pharmaceutical development and manufacturing. Included in preclinical and other unallocated costs are external corporate overhead costs that are not specific to any one program. Internal costs consist of salaries and wages, stock-based compensation and benefits, which are not tracked by product candidate as several of our departments support multiple product candidate research and development programs. The following table summarizes the external costs attributable to each program and internal costs:

General and Administrative Expenses

General and administrative expenses were $26.2 million during the three months ended March 31, 2026 compared to $14.1 million during the three months ended March 31, 2025, for an increase of approximately $12.1 million. The increase is primarily due to an $8.3 million increase in legal expenses due to the GSK lawsuit and activity related to the separation of the business, a $4.9 million increase in stock compensation expense, a $0.7 million increase in personnel costs, and a $0.8 million net increase in other general and administrative expenses, offset by a $2.5 million decrease in transaction costs related to our Vanda License Agreement, and a $0.1 million decrease in market research costs.

We expect that our general and administrative expenses will decrease for the foreseeable future as we experience fewer expenses associated with salaries and related benefits, stock compensation expense, legal, auditing and filing fees, and general compliance and consulting expenses due to the completion of the separation.

Non-Cash Interest Expense for the Sale of Future Royalties

Non-cash interest expense was $20.9 million and $18.1 million during the three months ended March 31, 2026 and 2025, respectively. The increase of $2.8 million in non-cash interest expense is primarily due to an increase in the GSK Jemperli sales which changed the expected timing for Sagard to be paid per the Jemperli Royalty Monetization Agreement.

Interest Income

Interest income was $2.7 million and $4.4 million during the three months ended March 31, 2026 and 2025, respectively. The decrease of $1.7 million in interest income was primarily related to our short-term and long-term investments. The decrease in interest

income is primarily due to the decrease in investment balances, as well as the timing of sales, maturities and purchases of our investments.

Other (Expense) Income, Net

Other (expense) income, net was less than $0.1 million of expense and $1.9 million of income for the three months ended March 31, 2026 and 2025, respectively. The decrease was primarily related to $1.9 million of other income recognized from existing drug supply transferred to Vanda in accordance with our Vanda License Agreement.

Liquidity and Capital Resources

From our inception through March 31, 2026, we have received an aggregate of $1.4 billion to fund our operations, which included $766.4 million from the sale of equity securities, $335.0 million from the sale of future royalties, and $324.2 million from our collaboration agreements. As of March 31, 2026, and prior to the separation of First Tracks Biotherapeutics, we had $286.5 million in cash, cash equivalents and investments.

In addition to our existing cash, cash equivalents and investments, we are eligible to earn milestone and other contingent payments for the achievement of defined collaboration objectives and certain regulatory events, and royalty payments under our collaboration agreements, including the GSK Agreement, the GSK Settlement Agreement, and the Vanda License Agreement. Our ability to earn these milestone and contingent payments and the timing of achieving these milestones is primarily dependent upon the outcome of our collaborators' research and development and sales-based activities. Our rights to payments under our collaboration agreements are our only committed external source of funds.

Funding Requirements

We may seek to obtain additional financing in the future through equity or debt financings or through collaborations or partnerships with other companies.

Prior to the Spin-Off our primary uses of capital were third party clinical and preclinical research and development services, including manufacturing, laboratory and related supplies, compensation and related expenses, legal, patent and other regulatory expenses, and general overhead costs.

Our primary uses of capital, after the completion of the Spin-Off, are and we expect will continue to be, public company costs, legal, audit and tax services, consulting, insurance, transition services from First Tracks Biotherapeutics, and general overhead costs.

Cash, cash equivalents and investments totaled $286.5 million as of March 31, 2026, compared to $311.6 million as of December 31, 2025. We believe that our existing cash, cash equivalents and investments will fund our current operating plan for at least the next twelve months from the issuance of our consolidated financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect.

Cash Flows

The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025:

Operating Activities

Net cash used in operating activities during the three months ended March 31, 2026 was $25.9 million, primarily due to our net loss of $52.9 million, adjusted for addbacks for non-cash items of $35.7 million which includes stock-based compensation, amortization of operating right-of-use assets, non-cash interest expense, income from marketable securities, and depreciation, offset by decreases in working capital of $8.7 million, which includes decreases related to accounts payable and other liabilities, and operating lease liabilities, partially offset by increases related to receivables from collaborative partners, and prepaid expenses and other assets.

Net cash used in operating activities during the three months ended March 31, 2025 was $10.7 million, primarily due to our net loss of $39.3 million, adjusted for addbacks for non-cash expenses of $26.2 million, which includes stock-based compensation, amortization of operating ROU assets, non-cash interest expense, income from marketable securities and net increases in working
capital of $2.4 million.

Investing Activities

Net cash provided by investing activities during the three months ended March 31, 2026 and 2025 of $35.0 million and $14.8 million, respectively, primarily relates to the timing of sales, maturities and purchases of investments.

Financing Activities

Net cash provided by financing activities during the three months ended March 31, 2026 of $1.2 million was primarily due to $14.0 million of cash received for the issuance of common stock, offset by $12.8 million for principal repayments of the liability for the sale of future royalties.

Net cash used in financing activities during the three months ended March 31, 2025 of $28.6 million was primarily due to $23.0 million for repayments of the liability to the sale of future royalties, $4.4 million used for the repurchase and retirement of common stock, and $1.5 million for net share settlement of equity awards, partially offset by $0.3 million of cash received for the issuance of common stock.

Contractual Obligations

Prior to the separation of First Tracks Biotherapeutics, we had entered into agreements with certain vendors for the provision of goods and services. These agreements may include certain provisions for purchase obligations and termination obligations that could require payments for the cancellation of committed purchase obligations or for early termination of the agreements. The amount of the cancellation or termination payments vary and are based on the timing of the cancellation or termination and the specific terms of the agreement and therefore are cancellable contracts. All of these agreements were transferred to First Tracks Biotherapeutics in connection with the separation.

In connection with the separation, we entered into a transition services agreement (the "Transition Services Agreement") with First Tracks Biotherapeutics. The Transition Services Agreement will provide certain specified services for a limited time, to ensure an orderly transition following the Spin-Off. The services provided will consist of digital technology, human resources, and finance, among others.

For further information related to our operating lease and future minimum annual payments, see Note 9 - Commitments and Contingencies in the accompanying notes to the consolidated financial statements.