Upstream Bio, Inc.

Previous wording

We are a clinical-stage biotechnology company developing treatments for inflammatory diseases, with an initial focus on severe respiratory disorders. We are developing verekitug, the only known antagonist currently in clinical development that targets the receptor for Thymic Stromal Lymphopoietin (“TSLP”), a cytokine which is a clinically validated driver of inflammatory response positioned upstream of multiple signaling cascades that affect a variety of immune mediated diseases. Preclinical and clinical data to date demonstrate verekitug’s highly potent inhibition of the TSLP receptor, which we believe will translate to a differentiated product profile, including improved clinical outcomes, substantially extended dosing intervals and the potential to treat a broad spectrum of patients. We have advanced this highly potent monoclonal antibody into separate Phase 2 trials for the treatment of severe asthma and chronic rhinosinusitis with nasal polyps (“CRSwNP”) and have initiated planning activities for a Phase 2 trial in chronic obstructive pulmonary disease (“COPD”) and a long-term safety and efficacy extension study (“Phase 2 LTE”) in certain adult patients with severe asthma following completed participation in our severe asthma Phase 2 trial. We completed enrollment in our CRSwNP Phase 2 clinical trial in January 2025 and expect to report top-line data from this trial in the third quarter of 2025, enabling regulatory discussions and preparations for a Phase 3 program in CRSwNP. We anticipate reporting top-line data from our severe asthma Phase 2 trial in the first half of 2026 and plan to dose the first patient in our COPD program in mid-2025. Our experienced team is committed to maximizing verekitug’s unique attributes to address the substantial unmet needs for patients underserved by today’s standard of care.

Current wording

We are a clinical-stage biotechnology company developing treatments for inflammatory diseases, with an initial focus on severe respiratory disorders. We are developing verekitug, the only known antagonist currently in clinical development that targets the receptor for Thymic Stromal Lymphopoietin (“TSLP”), a cytokine which is a clinically validated driver of inflammatory response positioned upstream of multiple signaling cascades that affect a variety of immune mediated diseases. Preclinical and clinical data to date demonstrate verekitug’s highly potent inhibition of the TSLP receptor, which we believe will translate to a differentiated product profile, including improved clinical outcomes, substantially extended dosing intervals and the potential to treat a broad spectrum of patients. We have advanced this highly potent monoclonal antibody into separate Phase 2 trials for the treatment of severe asthma, including a long-term safety and efficacy extension study (“Phase 2 LTE”), chronic rhinosinusitis with nasal polyps (“CRSwNP”), and chronic obstructive pulmonary disease (“COPD”). We completed enrollment in our CRSwNP Phase 2 clinical trial in January 2025 and expect to report top-line data from this trial in the third quarter of 2025, enabling regulatory discussions and preparations for a Phase 3 program in CRSwNP. We completed enrollment in our severe asthma Phase 2 trial in June 2025 and anticipate reporting top-line data from this trial in the first quarter of 2026. We initiated our Phase 2 COPD trial in July 2025. Our experienced team is committed to maximizing verekitug’s unique attributes to address the substantial unmet needs for patients underserved by today’s standard of care.

Previous wording

We have incurred significant net operating losses and negative cash flows since our inception. Our ability to generate product revenue sufficient to achieve profitability, if ever, will depend on the successful development, regulatory approval and eventual commercialization of verekitug and any other potential future product candidates, which we expect will take a number of years. For the three months ended March 31, 2025 and 2024, we reported net losses of $27.3 million and $10.9 million, respectively. Our net losses have resulted principally from costs incurred in our research and development activities. As of March 31, 2025, we had an accumulated deficit of $218.1 million, and we had cash, cash equivalents and short-term investments of $431.4 million. Based on our current operating plan, we believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operating expenses and capital expenditure requirements through 2027.

Current wording

We have incurred significant net operating losses and negative cash flows since our inception. Our ability to generate product revenue sufficient to achieve profitability, if ever, will depend on the successful development, regulatory approval and eventual commercialization of verekitug and any other potential future product candidates, which we expect will take a number of years. For the three months ended June 30, 2025 and 2024, we reported net losses of $40.0 million and $14.7 million, respectively, and for the six months ended June 30, 2025 and 2024, we reported net losses of $67.2 million and $25.6 million, respectively. Our net losses have resulted principally from costs incurred in our research and development activities. As of June 30, 2025, we had an accumulated deficit of $258.0 million, and we had cash, cash equivalents and short-term investments of $393.6 million. Based on our current operating plan, we believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operating expenses and capital expenditure requirements through 2027.

Previous wording

continue to conduct our ongoing clinical trials of verekitug, including advancement into global Phase 2 clinical trials, as well as initiate and complete additional clinical trials of verekitug in new indications or patient populations;

Current wording

continue to conduct our ongoing clinical trials of verekitug, including our global Phase 2 clinical trials, as well as initiate and complete additional clinical trials of verekitug in new indications or patient populations;

Previous wording

During the three months ended March 31, 2025, we received payments from Maruho in the amount of $0.6 million. We did not receive any payments from Maruho during the three months ended March 31, 2024.

Current wording

During the six months ended June 30, 2025 and 2024, we received payments from Maruho in the amount of $1.2 million and $0.7 million, respectively.

Previous wording

In October 2021, in connection with the Astellas Asset Purchase Agreement, we entered into a license agreement with Lonza Sales AG (“Lonza”) (as amended, the “Lonza License Agreement”). Pursuant to the Lonza License Agreement, we obtained a worldwide, non-exclusive, sublicensable (subject to Lonza’s right of pre-approval with respect to any sublicense of manufacturing activities) license to certain intellectual property rights owned by Lonza. Lonza was the originator of the master cell bank for the Compound developed by Astellas. As consideration for the rights and licenses granted to us under the Lonza License Agreement, we agreed to pay Lonza certain royalties and annual payments, both payable in Swiss francs, in respect of the manufacturing and sale of the Compound, such amounts to be determined by the party manufacturing the Compound, and range from no annual payment to up to a mid-six figure annual payment, and a less-than-one percent to a low-single-digit percentage royalty on net sales of the Compound. In accordance with the Lonza License Agreement, we entered into a sublicense with Wuxi Biologics (Hong Kong) Limited to manufacture the Compound, requiring us to pay a mid-six-figure annual fee to Lonza pursuant to this provision. Any royalties due under the Lonza License Agreement are payable on a country-by-country basis until ten years from the first commercial sale of the Compound in that particular country. The Lonza agreement continues for an indefinite period of time unless otherwise terminated. We have the right to terminate the Lonza License Agreement at any time by providing prior written notice to Lonza. During the year ended December 31, 2024, we made an annual payment to Lonza in the amount of $0.5 million, which was paid during the three months ended March 31, 2024. During the three months ended March 31, 2025, we had $0.5 million included in accounts payable in connection with the annual payment pursuant to the Lonza License Agreement. These payments are recognized as research and development expense in the consolidated statements of operations and comprehensive loss. To date, we have not made any royalty payments to Lonza under the Lonza License Agreement.

Current wording

In October 2021, in connection with the Astellas Asset Purchase Agreement, we entered into a license agreement with Lonza Sales AG (“Lonza”) (as amended, the “Lonza License Agreement”). Pursuant to the Lonza License Agreement, we obtained a worldwide, non-exclusive, sublicensable (subject to Lonza’s right of pre-approval with respect to any sublicense of manufacturing activities) license to certain intellectual property rights owned by Lonza. Lonza was the originator of the master cell bank for the Compound developed by Astellas. As consideration for the rights and licenses granted to us under the Lonza License Agreement, we agreed to pay Lonza certain royalties and annual payments, both payable in Swiss francs, in respect of the manufacturing and sale of the Compound, such amounts to be determined by the party manufacturing the Compound, and range from no annual payment to up to a mid-six figure annual payment, and a less-than-one percent to a low-single-digit percentage royalty on net sales of the Compound. In accordance with the Lonza License Agreement, we entered into a sublicense with Wuxi Biologics (Hong Kong) Limited to manufacture the Compound, requiring us to pay a mid-six-figure annual fee to Lonza pursuant to this provision. Any royalties due under the Lonza License Agreement are payable on a country-by-country basis until ten years from the first commercial sale of the Compound in that particular country. The Lonza agreement continues for an indefinite period of time unless otherwise terminated. We have the right to terminate the Lonza License Agreement at any time by providing prior written notice to Lonza. During the six months ended June 30, 2025 and 2024, we made an annual payment to Lonza in the amount of $0.5 million pursuant to the Lonza License Agreement. These payments are recognized as research and development expense in the consolidated statements of operations and comprehensive loss. To date, we have not made any royalty payments to Lonza under the Lonza License Agreement.

Previous wording

Collaboration revenue was $0.6 million for each of the three months ended March 31, 2025 and 2024. Revenue during each of the three months ended March 31, 2025 and 2024 was primarily related to the work performed associated with our Phase 2 clinical trial in patients with severe asthma under the Maruho License Agreement.

Current wording

Collaboration revenue was $0.9 million and $0.5 million for the three months ended June 30, 2025 and 2024. Revenue during each of the three months ended June 30, 2025 and 2024 was primarily related to the work performed associated with our Phase 2 clinical trial in patients with severe asthma under the Maruho License Agreement.

Previous wording

Research and development expenses were $25.8 million for the three months ended March 31, 2025 compared to $11.7 million for the three months ended March 31, 2024. The increase of $14.1 million was primarily driven by an increase of $10.8 million in expenses directly related to our verekitug program and $3.3 million of unallocated research and development expenses.

Current wording

Research and development expenses were $37.9 million for the three months ended June 30, 2025 compared to $14.1 million for the three months ended June 30, 2024. The increase of $23.8 million was primarily driven by an increase of $13.3 million in expenses directly related to our verekitug program and $10.5 million of unallocated research and development expenses.

Previous wording

The increase in manufacturing costs of $1.8 million was primarily attributable to an increase in CMO costs for the development of Phase 3 clinical material during the three months ended March 31, 2025, compared to the same period in 2024. The increase in personnel expenses of $1.3 million was primarily due to increased headcount in our research and development function. Personnel expenses for each of the three months ended March 31, 2025 and 2024 included stock-based compensation expense of $0.5 million and $0.3 million, respectively.

Current wording

The increase in manufacturing costs of $8.6 million was primarily attributable to an increase in CMO costs for the development of Phase 3 clinical material during the three months ended June 30, 2025, compared to the same period in 2024. The increase in personnel expenses of $2.1 million was primarily due to increased headcount in our research and development function. Personnel expenses for each of the three months ended June 30, 2025 and 2024 included stock-based compensation expense of $0.7 million and $0.3 million, respectively.

Previous wording

General and administrative expenses were $6.8 million for the three months ended March 31, 2025 compared to $4.0 million for the three months ended March 31, 2024. The increase of $2.8 million was primarily driven by an increase in personnel expenses of $1.9 million due to increased headcount in our general and administrative functions. Personnel expenses for the three months ended March 31, 2025 and 2024 included stock-based compensation expense of $2.2 million and $0.4 million, respectively. Additionally, there was an increase of $0.4 million of professional fees primarily related to market research costs, legal fees and recruiting fees. Other expenses increased by $0.6 million primarily due to an increase in corporate insurance and occupancy costs.

Current wording

General and administrative expenses were $7.4 million for the three months ended June 30, 2025 compared to $4.0 million for the three months ended June 30, 2024. The increase of $3.4 million was primarily driven by an increase in personnel expenses of $1.5 million due to increased headcount in our general and administrative functions. Personnel expenses for the three months ended June 30, 2025 and 2024 included stock-based compensation expense of $1.9 million and $1.1 million, respectively. Additionally, there was an increase of $1.0 million of professional fees primarily related to legal fees and recruiting fees. Other expenses increased by $0.9 million primarily due to an increase in corporate insurance and taxes.

Previous wording

Interest income was $4.7 million and $1.3 million for the three months ended March 31, 2025 and 2024, respectively, representing an increase of $3.4 million. The increase in interest income was due to increased balances in our money market funds, U.S. treasury bills and U.S. government agency bonds held during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

Current wording

Interest income was $4.4 million and $2.9 million for the three months ended June 30, 2025 and 2024, respectively, representing an increase of $1.5 million. The increase in interest income was due to increased balances in our money market funds, U.S. treasury bills and U.S. government agency bonds held during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Previous wording

The increase in direct costs of $3.9 million related to the asthma indication was primarily due to the continued progress associated with our Phase 2 clinical trial during and the initiation of planning activities associated with our Phase 2 LTE study during the three months ended March 31, 2025, compared to the same period in 2024. The increase in direct costs of $5.7 million related to the COPD indication was due to the costs associated with planning activities for our COPD Phase 2 clinical trial for which there were no comparable expenses during the same period of 2024. The increase in direct costs of $1.2 million related to the CRSwNP indication was primarily due to continued progress associated with our Phase 2 clinical trial during the three months ended March 31, 2025 compared to the same period in 2024.

Current wording

The increase in direct costs of $10.2 million related to the asthma indication was primarily due to the continued progress associated with our Phase 2 clinical trial and the initiation of our Phase 2 LTE study during the six months ended June 30, 2025, compared to the same period in 2024. The increase in direct costs of $12.5 million related to the COPD indication was due to the costs associated with planning activities for our COPD Phase 2 clinical trial for which there were no comparable expenses during the same period of 2024. The increase in direct costs of $1.4 million related to the CRSwNP indication was primarily due to continued progress associated with our Phase 2 clinical trial during the six months ended June 30, 2025 compared to the same period in 2024.

Previous wording

We begin to separately track program expenses at development candidate nomination. Through March 31, 2025, we have incurred approximately $61.0 million, $16.7 million and $8.8 million in direct external expenses for the development of verekitug for severe asthma, CRSwNP and COPD, respectively, since their development candidate nominations.

Current wording

We begin to separately track program expenses at development candidate nomination. Through June 30, 2025, we have incurred approximately $74.3 million, $18.9 million and $15.6 million in direct external expenses for the development of verekitug for severe asthma, CRSwNP and COPD, respectively, since their development candidate nominations.

Previous wording

We recorded other income for the change in the fair value of the preferred stock tranche right liability of $2.9 million for the three months ended March 31, 2024 related to the Series B preferred stock tranche right liability, for which there was no comparable income during the three months ended March 31, 2025 as the Series B was settled in April 2024. The change in fair value of the Series B preferred stock tranche right liability was due to changes in the assumptions used in the valuation model during the period, including the estimated fair value of the Series B Preferred Stock, volatility and estimated time to the tranche closing.

Current wording

We recorded other income for the change in the fair value of the preferred stock tranche right liability of $2.9 million for the six months ended June 30, 2024 related to the Series B preferred stock tranche right liability, for which there was no comparable income during the six months ended June 30, 2025 as the Series B was settled in April 2024. The change in fair value of the Series B preferred stock tranche right liability was due to changes in the assumptions used in the valuation model during the period, including the estimated fair value of the Series B Preferred Stock, volatility and estimated time to the tranche closing.

Previous wording

Since our inception, we have incurred significant operating losses. We have not yet commercialized verekitug and we do not expect to generate revenue from product sales of verekitug for the next several years, if at all. To date, we have funded our operations primarily with the sale of our redeemable convertible preferred stock and the proceeds from our IPO. Through March 31, 2025, we have received gross proceeds of $400.0 million from the issuance and sale of our redeemable convertible preferred stock and $268.8 million in net proceeds from our IPO. As of March 31, 2025, we had cash, cash equivalents and short-term investments of $431.4 million.

Current wording

Since our inception, we have incurred significant operating losses. We have not yet commercialized verekitug and we do not expect to generate revenue from product sales of verekitug for the next several years, if at all. To date, we have funded our operations primarily with the sale of our redeemable convertible preferred stock and the proceeds from our IPO. Through June 30, 2025, we have received gross proceeds of $400.0 million from the issuance and sale of our redeemable convertible preferred stock and $268.8 million in net proceeds from our IPO. As of June 30, 2025, we had cash, cash equivalents and short-term investments of $393.6 million.

Previous wording

During the three months ended March 31, 2025, operating activities used $41.2 million of cash, resulting primarily from our net loss of $27.3 million, changes in operating assets and liabilities of $15.0 million and non-cash amortization of premiums and accretion of discounts on short-term investments of $1.7 million, partially offset by non-cash stock-based compensation expense of $2.6 million. Net cash used in changes in operating assets and liabilities was primarily driven by a $13.7 million increase in prepaid expenses and other current assets due to upfront payments to CROs for planning activities associated with our COPD Phase 2 trial and our Phase 2 LTE study in patients with severe asthma and a $1.9 million decrease in accrued expenses and other current liabilities, partially offset by a $0.7 million increase in accounts payable.

Current wording

During the six months ended June 30, 2025, operating activities used $80.4 million of cash, resulting primarily from our net loss of $67.2 million, changes in operating assets and liabilities of $16.0 million and non-cash amortization of premiums and accretion of discounts on short-term investments of $2.7 million, partially offset by non-cash stock-based compensation expense of $5.2 million. Net cash used in changes in operating assets and liabilities was primarily driven by a $15.7 million increase in prepaid expenses and other current assets due to upfront payments to CROs for planning activities associated with our COPD Phase 2 trial and our Phase 2 LTE study in patients with severe asthma, a $1.5 million increase in accounts payable, a $0.3 million increase in accounts receivable, and a $0.3 million decrease in operating lease liabilities, partially offset by a $1.7 million increase in accrued expenses and other current liabilities.

Previous wording

During the three months ended March 31, 2024, operating activities used $17.6 million of cash, resulting primarily from our net loss of $10.9 million, changes in operating assets and liabilities of $3.9 million, non-cash changes in fair value of the preferred stock tranche right liability of $2.9 million, non-cash amortization of premiums and accretion of discounts on short-term investments of $0.6 million, partially offset by non-cash stock-based compensation expense of $0.6 million. Net cash used in changes in operating assets and liabilities was driven by a $1.7 million increase in prepaid expenses and other current assets and a $0.9 million decrease in accrued expenses and other current liabilities, a $0.6 million decrease in accounts receivable and a $0.6 million decrease accounts payable. The decrease in accounts receivable resulted primarily from the timing of revenue recognition compared to the timing of payments from Maruho for qualifying reimbursable expenses related to the Maruho License Agreement.

Current wording

During the six months ended June 30, 2024, operating activities used $25.6 million of cash, resulting primarily from our net loss of $25.6 million, non-cash changes in fair value of the preferred stock tranche right liability of $2.9 million, and non-cash amortization of premiums and accretion of discounts on short-term investments of $1.8 million, partially offset by changes in operating assets and liabilities of $2.5 million and non-cash stock-based compensation expense of $2.1 million. Net cash provided by changes in operating assets and liabilities was primarily driven by a $3.1 million increase in accounts payable and a $0.4 million decrease in prepaid expenses and other current assets, partially offset by a $0.5 million decrease in accrued expenses and other current liabilities and a $0.4 million increase in accounts receivable. The increase in accounts receivable resulted primarily from the timing of revenue recognition compared to the timing of payments from Maruho for qualifying reimbursable expenses related to the Maruho License Agreement.

Previous wording

During the three months ended March 31, 2025, net cash used in investing activities was $213.4 million, consisting of purchases of short-term investments of $266.1 million, net of maturities of short-term investments of $52.7 million.

Current wording

During the six months ended June 30, 2025, net cash used in investing activities was $200.6 million, consisting primarily of purchases of short-term investments of $323.1 million, net of maturities of short-term investments of $122.6 million.

Previous wording

During the three months ended March 31, 2024, net cash provided by investing activities was $13.9 million, consisting of purchases of short-term investments of $23.4 million, net of maturities of short-term investments of $37.3 million.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities was $102.8 million, consisting primarily of purchases of short-term investments of $175.0 million, net of maturities of short-term investments of $72.2 million.

Previous wording

During the three months ended March 31, 2024, net cash provided by financing activities was $9.4 million, primarily consisting of partial net proceeds from the issuance of Series B Preferred Stock, which settled in April 2024.

Current wording

During the six months ended June 30, 2025, net cash provided by financing activities was $0.6 million, consisting primarily of $0.6 million in net proceeds from the exercise of stock options.

Previous wording

During each of the three months ended March 31, 2025 and 2024, we did not make any royalty payments to Lonza under the Lonza License Agreement. The Lonza agreement continues for an indefinite period of time unless otherwise terminated. We have the right to terminate the Lonza License Agreement at any time by providing prior written notice to Lonza.

Current wording

During each of the six months ended June 30, 2025 and 2024, we did not make any royalty payments to Lonza under the Lonza License Agreement. The Lonza agreement continues for an indefinite period of time unless otherwise terminated. We have the right to terminate the Lonza License Agreement at any time by providing prior written notice to Lonza.

Previous wording

During the year ended December 31, 2024, we made an annual payment to Lonza in the amount of $0.5 million, which was paid during the three months ended March 31, 2024. During the three months ended March 31, 2025, we had $0.5 million included in accounts payable in connection with the annual license payment pursuant to the Lonza License Agreement. These payments were recognized as research and development expense in the condensed consolidated statements of operations and comprehensive loss.

Current wording

During each of the six months ended June 30, 2025 and 2024, we made an annual payment to Lonza in the amount of $0.5 million pursuant to the Lonza License Agreement. These payments were recognized as research and development expense in the condensed consolidated statements of operations and comprehensive loss.

Previous wording

During the three months ended March 31, 2025, there were no material changes to our critical accounting policies and significant judgments described under Management’s Discussion and Analysis of Critical Accounting Policies and Significant Judgments which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Current wording

During the six months ended June 30, 2025, there were no material changes to our critical accounting policies and significant judgments described under Management’s Discussion and Analysis of Critical Accounting Policies and Significant Judgments which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.