NextCure, Inc.

Previous wording

financial statements and the notes thereto included in this Quarterly Reporton Form 10-Q and the audited financial information and related notes, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations and other disclosures, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, or our “2025 Annual Report.” Some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Reporton Form 10-Q are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “due,” “estimate,” “expect,” “intend,” “may,” “objective,” “plan,” “predict,” “project,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or similar language.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with “Proposed Merger with Avere” and “Restructuring Activities” below and Note 1, Nature of the Business, and Note 15, Subsequent Events, which describe the Merger with Avere and related restructuring actions announced on July 14, 2026, in conjunction with the unaudited condensed financial statements and the notes thereto included in this Quarterly Reporton Form 10-Q and the audited financial information and related notes, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations and other disclosures, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, or our “2025 Annual Report.” Some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Reporton Form 10-Q are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “due,” “estimate,” “expect,” “intend,” “may,” “objective,” “plan,” “predict,” “project,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or similar language.

Previous wording

Forward-looking statements include, but are not limited to, statements about NextCure, Avere Therapeutics, the proposed merger and other matters, including with respect to the structure, timing and completion of the proposed merger; the combined company’s listing on Nasdaq after closing of the proposed merger; expectations regarding the ownership structure of the combined company; expectations regarding the contingent value rights; the future operations of the combined company; the nature, strategy and focus of the combined company; as well as funding for our operations, our expected cash runway, objectives and expectations for our business, operations and financial performance and condition, and expectations regarding including the progress and results of clinical trials, development plans and upcoming milestones regarding our therapies.

Current wording

Forward-looking statements include, but are not limited to, statements about NextCure, Avere, the proposed Merger and other matters, including with respect to the structure, timing and completion of the proposed Merger; the combined company's listing on Nasdaq after closing of the proposed Merger; expectations regarding the ownership structure of the combined company; expectations regarding the contingent value rights; opportunities to monetize, partner, license or otherwise derive value from the Company's legacy assets; the future operations of the combined company; the nature, strategy and focus of the combined company; funding for our operations; our expected cash runway; our objectives and expectations for our business, operations and financial performance and condition; our strategic alternatives relating to our legacy assets; and expectations regarding our collaborations and contractual relationships.

Previous wording

Forward-looking statements involve substantial risks and uncertainties that could cause actual results to differ materially from those projected in any forward-looking statement. Such risks and uncertainties include, among others: risks associated with the possible failure to satisfy the conditions to the closing or consummation of the merger, including NextCure’s failure to obtain stockholder approval for the merger; risks associated with the uncertainty as to the timing of the consummation of the merger and the ability of each of NextCure and Avere Therapeutics to consummate the transactions contemplated by the merger; risks associated with NextCure’s continued listing on Nasdaq until closing of the merger; the failure or delay in obtaining required approvals from any governmental or quasi-governmental entity necessary to consummate the merger; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the merger prior to the closing or consummation of the merger; risks associated with the possible failure to realize certain anticipated benefits of the merger, including with respect to future financial and operating results; the effect of the completion of the merger on the combined company’s business relationships, operating results and business generally; risks associated with the combined company’s ability to manage expenses and unanticipated spending and costs that could reduce the combined company’s cash resources; risks related to the combined company’s ability to correctly estimate its operating expenses and other events; changes in capital resource requirements; risks related to the inability of the combined company to obtain sufficient additional capital to continue to advance its product candidates or its preclinical programs; the outcome of any legal proceedings that may be instituted against the combined company or any of its directors or officers related to the merger or the transactions contemplated thereby; the ability of the combined company to obtain, maintain and protect its intellectual property rights, in particular those related to its product candidates; the combined company’s ability to advance the development of its product candidates or preclinical activities under the timelines it anticipates in planned and future clinical trials; the combined company’s ability to replicate in later clinical trials positive results found in preclinical studies and clinical trials of its product candidates; the combined company’s ability to realize the anticipated benefits of its research and development programs, strategic partnerships, licensing programs or other collaborations; regulatory requirements or developments and the combined company’s ability to obtain necessary approvals from the U.S. Food and Drug Administration or other regulatory authorities; changes to clinical trial designs and regulatory pathways; competitive responses to the merger and changes in expected or exis…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Forward-looking statements involve substantial risks and uncertainties that could cause actual results to differ materially from those projected in any forward-looking statement. Such risks and uncertainties include, among others: risks associated with the possible failure to satisfy the conditions to the closing or consummation of the Merger, including NextCure’s failure to obtain stockholder approval for the Merger; risks associated with the potential failure to complete the financing transaction in a timely manner or at all; risks associated with the uncertainty as to the timing of the consummation of the Merger and the ability of each of NextCure and Avere to consummate the transactions contemplated by the Merger; risks associated with NextCure’s continued listing on The Nasdaq Stock Market, LLC (“Nasdaq”)until closing of the Merger; the failure or delay in obtaining required approvals from any governmental or quasi-governmental entity necessary to consummate the Merger; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Merger prior to the closing or consummation of the Merger; risks associated with the possible failure to realize certain anticipated benefits of the Merger, including with respect to future financial and operating results; the effect of the completion of the Merger on the combined company’s business relationships, operating results and business generally; risks associated with the combined company’s ability to manage expenses and unanticipated spending and costs that could reduce the combined company’s cash resources; risks related to the combined company’s ability to correctly estimate its operating expenses and other events; changes in capital resource requirements; risks related to the inability of the combined company to obtain sufficient additional capital to continue to advance its product candidates or its preclinical programs; the outcome of any legal proceedings that may be instituted against the combined company or any of its directors or officers related to the Merger or the transactions contemplated thereby; the ability of the combined company to obtain, maintain and protect its intellectual property rights, in particular those related to its product candidates; the combined company’s ability to advance the development of its product candidates or preclinical activities under the timelines it anticipates in planned and future clinical trials; the combined company’s ability to replicate in later clinical trials positive results found in preclinical studies and clinical trials of its product candidates; the combined company’s ability to realize the anticipated benefits of its research and development programs, strategic partnerships, licensing programs or other collaborations; regulatory requirements or developments and the combined company’s ability to obtain necessary approvals from the U.S. Food and Drug Administration (the “FDA”) or other regulat…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

LigaChem Biosciences, Inc., Simcere Zaiming Pharmaceutical Co, Ltd., and other third-party vendors and collaborators; our ability to retain key personnel; our intended reliance on and the performance of third parties, including collaborators, contract research organizations and third-party manufacturers; changes in international relations, tariffs, and other trade regulations between the U.S. and China; developments and projections relating to our competitors and our industry, including competing therapies; and the impact of current and future laws and regulations.

Current wording

other intellectual property; our expenses, future revenues, capital requirements, needs for or ability to obtain additional financing and the period over which our current cash and cash equivalents will be sufficient to fund our operations; market and other conditions; the timing and success of strategic transactions involving our legacy programs and our ability to receive future milestone, royalty or other contingent payments under our existing collaboration and licensing arrangements; the potential benefits of and our ability to maintain our relationship with LigaChem, Simcere Zaiming Pharmaceutical Co., Ltd. (“Zaiming”), and other third-party vendors and collaborators; our ability to retain key personnel; changes in international relations, tariffs, and other trade regulations between the U.S. and China; developments and projections relating to our competitors and our industry, including competing therapies; and the impact of current and future laws and regulations.

Previous wording

More detailed information on these and additional factors that could affect our actual results are described under the heading “Risk Factors” in our 2025 Annual Report and in our other filings with the Securities and Exchange Commission (the “SEC”). You should not place undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date of this report, and we assume no obligation to update any forward-looking statements, even if expectations change.

Current wording

More detailed information on these and additional factors that could affect our actual results are described under the heading “Risk Factors” in our 2025 Annual Report, our Quarterly Reports on Form 10-Q (including Part II, Item 1A of this Quarterly Report on Form 10-Q) and in our other filings with the Securities and Exchange Commission (the “SEC”). You should not place undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date of this report, and we assume no obligation to update any forward-looking statements, even if expectations change.

Previous wording

On July 14, 2026, NextCure, Inc., (“NextCure” or “Parent”), Neptune Merger Sub Corp., a Delaware corporation and a wholly owned subsidiary of NextCure (“First Merger Sub”), Neptune Second Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of NextCure (“Second Merger Sub” and, together with First Merger Sub, the “Merger Subs”), and Avere Therapeutics, entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, (i) First Merger Sub will merge with and into Avere Therapeutics, with Avere Therapeutics continuing as a wholly owned subsidiary of NextCure and the surviving corporation of the merger (the “First Merger”), and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, Avere Therapeutics will merge with and into Second Merger Sub, with Second Merger Sub continuing as the surviving entity and a wholly owned subsidiary of NextCure (the “Second Merger” and, together with the First Merger, the “Merger”). The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended.

Current wording

On July 14, 2026, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Avere pursuant to which Avere would become a wholly owned subsidiary of NextCure and the combined company is expected to operate as Avere Therapeutics, Inc. The proposed Merger remains subject to stockholder approval and other customary closing conditions.

Previous wording

Our product candidate SIM0505 is a novel ADC candidate developed by Simcere Zaiming Pharmaceutical Co, Ltd. (“Zaiming”), to which we acquired the global rights (excluding China, Hong Kong, Macau and Taiwan) to develop, manufacture, and commercialize under the License Agreement, dated June 13, 2025, between the Company and Zaiming. It is directed to CDH6 (cadherin-6 or K-cadherin), a promising anti-tumor target, using a unique binding epitope designed to have increased tumor binding compared to competing candidates. It also features Zaiming’s proprietary topoisomerase 1 inhibitor (TOPOi) payload, designed for broad anti-tumor activity while offering fast systemic clearance to enlarge the therapeutic window. Preclinical studies have demonstrated robust anti-tumor activity across multiple solid tumor models and a promising safety profile in toxicology models.

Current wording

Our product candidate SIM0505 is a novel ADC candidate developed by Zaiming to which we acquired the global rights (excluding China, Hong Kong, Macau and Taiwan) to develop, manufacture, and commercialize under the License Agreement, dated June 13, 2025, between the Company and Zaiming. It is directed to CDH6 (cadherin-6 or K-cadherin), a promising anti-tumor target, using a unique binding epitope designed to have increased tumor binding compared to competing candidates. It also features Zaiming’s proprietary topoisomerase 1 inhibitor (TOPOi) payload, designed for broad anti-tumor activity while offering fast systemic clearance to enlarge the therapeutic window. Preclinical studies have demonstrated robust anti-tumor activity across multiple solid tumor models and a promising safety profile in toxicology models.

Previous wording

Zaiming is currently investigating SIM0505 in China for the treatment of solid tumors, including ovarian, endometrial, non-small cell lung and renal. In December 2024, Zaiming received clearance from the U.S. Food and Drug Administration (the “FDA”) for its Investigational New Drug (“IND”) for a Phase 1 clinical trial for treating multiple cancers. Following the FDA's assignment of the IND to NextCure in June 2025, the Company successfully dosed the first U.S. patient in its ongoing Phase 1 trial of SIM0505 in October 2025. In April 2026, the FDA granted Fast Track Designation to SIM0505 for the treatment of patients with platinum-resistant ovarian cancer. In May 2026, we announced the initiation of the dose optimization phase for SIM0505, targeting gynecologic cancers through the treatment of patients with platinum-resistant ovarian cancer. On June 1, 2026 we presented interim Phase 1 dose escalation data from the ongoing global study for SIM0505 at the 2026 American Society of Clinical Oncology (ASCO) Annual Meeting. The data, which included 59 heavily pre-treated patients with advanced solid tumors enrolled in the United States and China, demonstrated an objective response rate of 55% in evaluable gynecologic cancer patients treated within the therapeutic dose range of 4.8 mg/kg to 8.0 mg/kg, including objective response rates of 52.9% in ovarian cancer and 66.7% in uterine serous carcinoma patients, with a generally manageable safety profile.

Current wording

Zaiming is currently investigating SIM0505 in China for the treatment of solid tumors, including ovarian, endometrial, non-small cell lung and renal. In December 2024, Zaiming received clearance from the FDA for its IND for a Phase 1 clinical trial for treating multiple cancers. Following the FDA's assignment of the IND to NextCure in June 2025, the Company successfully dosed the first U.S. patient in its ongoing Phase 1 trial of SIM0505 in October 2025. In April 2026, the FDA granted Fast Track Designation to SIM0505 for the treatment of patients with platinum-resistant ovarian cancer. In May 2026, we announced the initiation of the dose optimization phase for SIM0505, targeting gynecologic cancers through the treatment of patients with platinum-resistant ovarian cancer. On June 1, 2026 we presented interim Phase 1 dose escalation data from the ongoing global study for SIM0505 at the 2026 American Society of Clinical Oncology (ASCO) Annual Meeting. The data, which included 59 heavily pre-treated patients with advanced solid tumors enrolled in the United States and China, demonstrated an objective response rate of 55% in evaluable gynecologic cancer patients treated within the therapeutic dose range of 4.8 mg/kg to 8.0 mg/kg, including objective response rates of 52.9% in ovarian cancer and 66.7% in uterine serous carcinoma patients, with a generally manageable safety profile.

Previous wording

On July 14, 2026, NextCure announced it had informed all U.S. clinical trial sites to stop screening, consenting, enrolling, and delivering first doses to new patients in the SIM0505 study. NextCure also announced that it no longer intended to expand the clinical site footprint for SIM0505 into Europe and Canada.

Current wording

On July 14, 2026, we announced that we had informed all U.S. clinical trial sites to stop screening, consenting, enrolling, and delivering first doses to new patients in the SIM0505 study. We also announced that we no longer intended to expand the clinical site footprint for SIM0505 into Europe and Canada.

Previous wording

Our product candidate LNCB74 is designed as a state-of-the-art B7-H4 targeted ADC to kill tumors. B7-H4, a clinically validated target, is a cell surface protein expressed on multiple tumor types including breast, ovarian, and endometrial cancers. LNCB74 will be positioned with both potential improved safety and efficacy compared to other ADCs targeting B7-H4. Preclinical studies demonstrated potent tumor killing in disease models and a favorable safety profile. LNCB74 is being advanced under a November 2022 Research Collaboration and Co-Development Agreement with LigaChem.

Current wording

LNCB74 is a B7-H4-targeted antibody-drug conjugate ("ADC") that was being co-developed by the Company and LigaChem pursuant to a November 2022 Research and Collaboration and Co-Development Agreement. B7-H4 is a cell surface protein expressed on multiple tumor types, including breast, ovarian and endometrial cancers. Prior to the transition of the program to LigaChem, preclinical studies demonstrated potent anti-tumor activity and a favorable safety profile, and the program advanced into a Phase 1 clinical trial.

Previous wording

On July 14, 2026, we announced that we had informed LigaChem that we have opted-out of continued cost-sharing for LNCB74. Our specific decision with respect to LNCB74 is not based on any negative safety or efficacy finding or any dispute with LigaChem. On August 6, 2026, the Company and LigaChem entered into a Transition and Continuation Agreement, pursuant to which, effective July 1, 2026, the Company ceased co-funding the LNCB74 program and LigaChem assumed responsibility for 100% of program costs. The Company agreed to provide certain transition support, including support for the ongoing clinical trial and transfer of program-related materials, regulatory documentation, vendor agreements, inventory and related records, for which LigaChem will reimburse the Company for certain full-time equivalent support costs. As per the terms of the LigaChem Agreement, LigaChem as Sole Developing Party will pay the Company certain developmental, regulatory and commercial milestones and single-digit royalties on future net sales of LNCB74. The parties also agreed to resolve amounts owed under the prior 50-50 cost-sharing arrangement for costs incurred through June 30, 2026.

Current wording

On July 14, 2026, we announced that we had informed LigaChem that we had elected to discontinue participation in the cost-sharing arrangement for LNCB74. Our decision with respect to LNCB74 was not based on any negative safety or efficacy finding and was not the result of any dispute with LigaChem. On August 6, 2026, the Company and LigaChem entered into a transition and continuation agreement (the “Transition and Continuation Agreement”) pursuant to which, effective July 1, 2026, the Company ceased co-funding the LNCB74 program and LigaChem assumed responsibility for 100% of program costs. The Company agreed to provide certain transition support, including support for the ongoing clinical trial and transfer of program-related materials, regulatory documentation, vendor agreements, inventory and related records, for which LigaChem reimburses the Company for certain full-time equivalent support costs.

Previous wording

In addition, we continue to evaluate strategic alternatives for our legacy development programs and assets. We are seeking opportunities to partner, license, divest, monetize or otherwise realize value from our clinical and pre-clinical stage programs. We may pursue such opportunities through partnering arrangements, licensing transactions, asset sales, third-party financings or other strategic transactions. In connection with the proposed merger with Avere Therapeutics, certain of our legacy assets are expected to be included within the contingent value right structure established for the benefit of pre-merger NextCure stockholders. There can be no assurance that any such transaction will be completed or that any resulting proceeds will be realized.

Current wording

In addition, we continue to evaluate strategic alternatives for our legacy development programs and assets. We are seeking opportunities to partner, license, divest, monetize or otherwise realize value from our clinical and pre-clinical stage programs. We may pursue such opportunities through partnering arrangements, licensing transactions, asset sales, third-party financings or other strategic transactions. In connection with the proposed Merger with Avere, certain of our legacy assets will be included within the contingent value right ("CVR") structure established for the benefit of pre-Merger NextCure stockholders. These assets include SIM0505 and the Company's retained economic interests under the LigaChem Agreement, including development, regulatory and commercial milestone payments and royalty payments relating to LNCB74. There can be no assurance that any such payments will be received or that any resulting proceeds will become payable to CVR holders.

Previous wording

To date, we have not generated any revenue from product sales and have financed our operations primarily through proceeds from public offerings of our common stock, with private placements of our common and preferred stock and with upfront fees received under our former research and development collaboration agreement. Since inception through June 30, 2026, we raised approximately $446 million in gross proceeds from the sale of equity instruments and had received a $25 million upfront payment from our former collaboration partner. We have never been profitable and have incurred net losses since the commencement of our operations. Our net loss for the three months ended June 30, 2026 and 2025, was $14. 9 million and $26.8 million, respectively. Our net loss for the six months ended June 30, 2026 and 2025, was $24.7 million and $37.8 million, respectively. As of June 30, 2026, we had an accumulated deficit of $461 million, primarily as a result of research and development and general and administrative expenses. We do not expect to generate product revenue unless and until we obtain marketing approval for and commercialize a product candidate, and we cannot make assurances that we will ever generate significant revenue or profits.

Current wording

To date, we have not generated revenue from product sales and have financed our operations primarily through public and private offerings of equity securities and upfront payments received under prior collaboration arrangements. Since inception through September 30, 2026, we have raised approximately $446 million in gross proceeds from equity financings and received a $25 million upfront payment under a former collaboration agreement.

Previous wording

On July 14, 2026, we entered into a definitive merger agreement with Avere Therapeutics, a privately held biotechnology company. If completed, the transaction is expected to result in a reverse merger in which Avere equity holders will own the substantial majority of the combined company, while existing NextCure stockholders will retain a minority ownership interest and will receive contingent value rights tied to the potential monetization of certain legacy NextCure assets. The proposed transaction represents a significant strategic shift and is expected to redefine the operations, development priorities and financial profile of the combined company.

Current wording

On July 14, 2026, we entered into the Merger Agreement with Avere, a privately held biotechnology company focused on oral therapies for IL-23-driven inflammatory diseases. If completed, the transaction is expected to result in a reverse merger in which Avere equity holders are expected to own a substantial majority of the combined company, while existing NextCure stockholders are expected to retain a minority ownership interest and receive contingent value rights tied to the potential future monetization of certain legacy NextCure assets.

Previous wording

In connection with the proposed merger with Avere Therapeutics, we approved a restructuring plan intended to significantly reduce operating expenses and align our organization with the anticipated strategy of the combined company. The restructuring includes a substantial reduction of our workforce and the wind-down of certain activities related to our legacy oncology development programs. We expect to incur restructuring and severance costs associated with these actions, substantially all of which are expected to be recognized during 2026.

Current wording

In connection with the proposed Merger, we implemented a restructuring plan intended to significantly reduce operating expenses and align our organization with our anticipated needs pending completion of the transaction. The restructuring included a substantial reduction in workforce, termination of all facility leases, disposition of substantially all manufacturing, laboratory and facility-related assets, and the wind-down of sponsored development activities. We expect restructuring-related payments to be substantially completed during 2026.

Previous wording

Research and development activities have historically been central to our business model. On July 14, 2026, we entered into a definitive merger agreement with Avere Therapeutics and announced a restructuring plan that includes the wind-down of certain of our legacy oncology development activities. As a result, we expect research and development expenses associated with our legacy programs to decline significantly as restructuring activities are implemented, although we may continue to incur limited expenses related to the maintenance, transition, disposition or potential partnering of our legacy assets pending completion of the proposed merger.

Current wording

Research and development activities have historically been central to our business model. On July 14, 2026, we entered into the Merger Agreement with Avere and announced a restructuring plan that includes the wind-down of certain of our legacy oncology development activities. As a result, we expect research and development expenses associated with our legacy programs to decline significantly, although we may continue to incur limited expenses associated with program close-out activities, transition support obligations, maintenance of intellectual property and regulatory assets, and efforts to partner, license or otherwise monetize our legacy assets.

Previous wording

Following execution of the Transition and Continuation Agreement with LigaChem on July 31, 2026, the Company no longer funds development of the LNCB74 program. Accordingly, future research and development expenses associated with the program are expected to decline significantly and may consist primarily of temporary transition support activities reimbursable by LigaChem.

Current wording

Following execution of this Transition and Continuation Agreement, the Company no longer funds development of the LNCB74 program. On October 6, 2026, the transfer of the LNCB74 investigational new drug application and related regulatory responsibilities to LigaChem was completed. Accordingly, future research and development expenses associated with LNCB74 are expected to consist primarily of temporary transition support activities, substantially all of which are expected to be reimbursable by LigaChem.

Previous wording

General and administrative expenses consist primarily of personnel-related costs, including payroll and stock-based compensation, for personnel in executive, finance, human resources, business and corporate development and other administrative functions, professional fees for legal, intellectual property, consulting and accounting services, rent and other facility-related costs, depreciation and other general operating expenses not otherwise classified as research and development expenses. General and administrative expenses also include all patent-related costs incurred in connection with filing and prosecuting patent applications, which are expensed as incurred.

Current wording

General and administrative expenses consist primarily of personnel-related costs, including payroll and stock-based compensation, for personnel in executive, finance, human resources, business and corporate development and other administrative functions, professional fees for legal, intellectual property, consulting and accounting services, rent, facility exit costs and other facility-related costs, depreciation and other general operating expenses not otherwise classified as research and development expenses. General and administrative expenses also include all patent-related costs incurred in connection with filing and prosecuting patent applications, which are expensed as incurred.

Previous wording

In connection with the proposed merger with Avere Therapeutics and related restructuring activities, we expect to incur additional general and administrative expenses, including professional fees associated with the proposed transaction, severance costs, retention payments, legal and accounting expenses and other costs associated with the wind-down of certain legacy operations. These expenses may fluctuate significantly until the proposed merger is completed or otherwise terminated.

Current wording

In connection with the proposed Merger with Avere and related restructuring activities, we expect to incur additional general and administrative expenses, including professional fees associated with the proposed transaction, severance costs, retention payments, legal and accounting expenses, facility exit costs and other costs associated with the wind-down of certain legacy operations. These expenses may fluctuate significantly until the proposed Merger is completed or otherwise terminated.

Previous wording

Asset impairment charges reflect the write-down of long-lived assets, including right-of-use assets, that are considered impaired under ASC 360.

Current wording

Restructuring and asset impairment charges, net reflect the gain on lease termination, gains on the sale of fixed assets and the write-down of long-lived assets, including right-of-use assets and property and equipment, when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable under ASC 360.

Previous wording

Other income, net consists primarily of interest income earned on marketable securities.

Current wording

Other income, net consists primarily of interest income.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Current wording

Comparison of the Three and Nine Months Ended September 30, 2026 and 2025

Previous wording

We do not allocate personnel-related costs, including stock-based compensation costs, or other indirect costs to specific programs, as they are deployed across multiple projects under development and discovery and, as such, are separately classified as internal research and development expenses in the table above.

Current wording

We do not allocate personnel-related costs, including stock-based compensation expense, or other indirect costs to specific programs because such resources are deployed across multiple research and development activities. Accordingly, these costs are classified as internal research and development expenses in the table above.

Previous wording

General and administrative expenses in future periods may increase as a result of transaction-related costs associated with the proposed merger, including legal, accounting, advisory, severance and other restructuring-related expenses.

Current wording

General and administrative expenses in future periods may fluctuate as a result of costs associated with the proposed Merger and related restructuring activities, including legal, accounting, advisory, retention, severance and other transition-related expenses.

Previous wording

Other income, net for the three months ended June 30, 2026 decreased by $0.3 million compared to the three months ended June 30, 2025, due to lower interest income as a result of lower investable cash.

Current wording

Other income, net for the three months ended September 30, 2026 decreased by $0.2 million compared to the three months ended September 30, 2025. The decrease was primarily attributable to lower interest income resulting from lower average cash and investment balances.

Previous wording

Other income, net for the six months ended June 30, 2026 decreased by $0.6 million compared to the six months ended June 30, 2025, due to lower interest income as a result of lower investable cash.

Current wording

Other income, net for the nine months ended September 30, 2026 decreased by $0.9 million compared to the nine months ended September 30, 2025. The decrease was primarily attributable to lower interest income resulting from lower average cash and investment balances.

Previous wording

Since inception through June 30, 2026, we have raised approximately $446 million in gross proceeds from the sale of equity instruments and had received a $25 million upfront payment from our former collaboration partner.

Current wording

Since inception through September 30, 2026, we have raised approximately $446 million in gross proceeds from the sale of equity instruments and received a $25 million upfront payment from our former collaboration partner.

Previous wording

On June 13, 2025, we entered into a License Agreement with Zaiming, a biopharmaceutical company based in China (see Note 3, License Agreement, to our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q, for more information). In connection with the License Agreement, the Company also entered into a Subscription Agreement (the “Subscription Agreement”) pursuant to which the Company issued and sold to Simcere Zaiming, Inc., a Delaware corporation and an affiliate of Zaiming, in a private placement, an aggregate of 338,636 shares (the “Shares”) of our common stock, at a price of approximately $5.904 per share for an aggregate purchase price of $2.0 million.

Current wording

entered into a Subscription Agreement (the “Subscription Agreement”) pursuant to which the Company issued and sold to Simcere Zaiming, Inc., a Delaware corporation and an affiliate of Zaiming, in a private placement, an aggregate of 338,636 shares (the “Shares”) of our common stock, at a price of approximately $5.904 per share for an aggregate purchase price of $2.0 million.

Previous wording

On November 12, 2025, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional and accredited investors (each, a “Purchaser” and collectively, the “Purchasers”) for a private placement of an aggregate of (i) 708,428 shares (the “Shares”) of the Company’s common stock at a purchase price of $8.52 per share, and (ii) pre-funded warrants to purchase up to an aggregate of 1,815,049 shares of common stock at a purchase price of $8.519 per pre-funded warrant, which represents the per share purchase price of the Shares less the $0.001 per share exercise price for each pre-funded warrant. The pre-funded warrants are exercisable at any time after the date of issuance and will not expire. The offering closed on November 14, 2025. Proceeds from the offering, net of placement agent’s fees and other offering expenses, were $20.3 million. The Company issued 117,371 shares of common stock upon the exercise of pre-funded warrants during the year ended December 31, 2025 and 456,855 shares of common stock upon the exercise of pre-funded warrants during the three months ended June 30, 2026. As of June 30, 2026, pre-funded warrants to purchase up to an aggregate of 1,240,823 shares of common stock remained outstanding.

Current wording

On November 12, 2025, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional and accredited investors (each, a “Purchaser” and collectively, the “Purchasers”) for a private placement of an aggregate of (i) 708,428 Shares of the Company’s common stock at a purchase price of $8.52 per share, and (ii) pre-funded warrants to purchase up to an aggregate of 1,815,049 shares of common stock at a purchase price of $8.519 per pre-funded warrant, which represents the per share purchase price of the Shares less the $0.001 per share exercise price for each pre-funded warrant. The pre-funded warrants are exercisable at any time after the date of issuance and will not expire. The offering closed on November 14, 2025. Proceeds from the offering, net of placement agent’s fees and other offering expenses, were $20.3 million. The Company issued 117,371 shares of common stock upon the exercise of pre-funded warrants during the year ended December 31, 2025 and 965,283 shares of common stock upon the exercise of pre-funded warrants during the nine months ended September 30, 2026. As of September 30, 2026, pre-funded warrants to purchase up to an aggregate of 732,395 shares of common stock remained outstanding.

Previous wording

On December 19, 2025, we entered into an at-the-market offering agreement (the “Wainwright ATM Agreement”) with H.C. Wainwright & Co., LLC (the “Agent”), pursuant to which we may sell, from time to time, up to an aggregate sales price of $14.5 million of its common stock, through the Agent. Actual sales will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of the common stock, capital needs and determinations by us of the appropriate sources of funding for the Company. During the six months ended June 30, 2026, 99,446 shares of common stock were sold under the Wainwright ATM Agreement for net proceeds of approximately $1.2 million.

Current wording

On December 19, 2025, we entered into an at-the-market offering agreement (the “Wainwright ATM Agreement”) with H.C. Wainwright & Co., LLC (the “Agent”), pursuant to which we may sell, from time to time, up to an aggregate sales price of $14.5 million of our common stock, through the Agent. Actual sales will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of the common stock, capital needs and determinations by us of the appropriate sources of funding for the Company. During the nine months ended September 30, 2026, 99,446 shares of common stock were sold under the Wainwright ATM Agreement for net proceeds of approximately $1.2 million.

Previous wording

We expect to incur expenditures in the foreseeable future primarily associated with supporting our remaining obligations related to legacy programs, implementing restructuring activities, pursuing strategic alternatives for legacy assets and completing the proposed merger transaction. The nature and magnitude of future expenditures will depend significantly on whether and when the proposed merger is completed.

Current wording

We expect future expenditures to be primarily associated with supporting our remaining obligations under existing collaboration and licensing arrangements, implementing and completing restructuring activities, maintaining and pursuing opportunities to monetize legacy assets and intellectual property, satisfying our obligations as a public company and completing the proposed Merger. The amount and timing of future expenditures will depend significantly on whether and when the proposed Merger is completed.

Previous wording

The Company's future liquidity requirements and capital resources are expected to be significantly affected by the proposed merger with Avere Therapeutics and the related restructuring activities announced on July 14, 2026. Completion of the proposed merger remains subject to stockholder approval and other customary closing conditions and there can be no assurance that the merger or the related financing transactions will be completed. If the proposed merger is not completed, the Company will be required to seek additional financing, pursue strategic alternatives for its legacy assets, further reduce operating expenses, or take other actions to preserve liquidity. Any such financing or strategic transaction may not be available on acceptable terms, or at all, and could result in significant dilution to existing stockholders, restrictions on operations, or the disposition of assets on terms that may not be favorable to the Company.

Current wording

Completion of the proposed Merger remains subject to stockholder approval and other customary closing conditions, and there can be no assurance that the Merger or related financing transactions will be completed. If the Merger is not completed, we may be required to seek additional financing, pursue strategic alternatives for our legacy assets, further reduce operating expenses or take other actions to preserve liquidity. Our ability to continue operations and satisfy our obligations will depend on our ability to successfully execute these strategic initiatives and obtain additional sources of capital, if necessary.

Previous wording

On July 14, 2026, in connection with the proposed merger with Avere Therapeutics the Company approved a restructuring plan designed to reduce operating expenses and wind down certain legacy operations. The restructuring includes a substantial workforce reduction and related severance obligations. The Company currently estimates restructuring charges of approximately $2.4 million, consisting primarily of employee severance and related costs. Additional transaction-related costs are expected to be incurred in connection with the proposed merger. As a result, future cash flows may differ materially from historical trends presented below.

Current wording

On July 14, 2026, in connection with the proposed Merger with Avere, the Company approved a restructuring plan designed to reduce operating expenses and wind down certain legacy operations. The restructuring included a substantial workforce reduction, termination of all facility leases, disposition of substantially all manufacturing, laboratory and facility-related assets and related severance obligations. The Company currently estimates restructuring charges of approximately $2.4 million, consisting primarily of employee severance and related costs. Additional transaction-related costs are expected to be incurred in connection with the proposed Merger. As a result, future cash flows may differ materially from historical trends presented below.

Previous wording

Net cash used in operating activities was $23.1 million for the six months ended June 30, 2026, which was primarily the result of our net loss of $24.7 million and $4.9 million used by net changes in operating assets and liabilities, partially offset by non-cash charges for asset impairment of $5.1 million, depreciation of $0.6 million and stock-based compensation of $0.6 million. Net cash used in operating activities was $35.7 million for the six months ended June 30, 2025, which was primarily the result of our net loss of $37.8 million, and $1.1 million used by net changes in operating assets and liabilities, partially offset by non-cash charges for depreciation of $1.3 million and stock-based compensation of $2.0 million.

Current wording

Net cash used in operating activities was $35.2 million for the nine months ended September 30, 2026, primarily due to our net loss of $31.5 million and a $5.1 million use of cash resulting from changes in operating assets and liabilities. These uses were partially offset by non-cash asset impairment charges of $5.1 million, depreciation expense of $0.6 million and stock-based compensation expense of $0.8 million. Net cash used in operating activities also reflected non-cash gains of approximately $3.8 million and cash payment of $1.7 million associated with the termination of facility lease obligations and the sale of assets.

Previous wording

Net cash provided by investing activities for the six months ended June 30, 2026 was $11.1 million, which was entirely due to net proceeds from sales and maturities of marketable securities. Net cash provided by investing activities for the six months ended June 30, 2025 was $10.9 million, which was entirely due to net proceeds from sales and maturities of marketable securities

Current wording

Net cash provided by investing activities for the nine months ended September 30, 2026 was $16.6 million, which was due to net proceeds of $15.9 million from sales and maturities of marketable securities and $0.7 million from the sale of fixed assets. Net cash provided by investing activities for the nine months ended September 30, 2025 was $19.6 million, which was entirely due to net proceeds from sales and maturities of marketable securities, partially offset by purchases of marketable securities.

Previous wording

Net cash provided by financing activities was $1.3 million for the six months ended June 30, 2026 primarily representing the sale of 99,446 shares of stock under the Wainwright ATM Agreement. Net cash provided by financing activities was $2.0 million for the six months ended June 30, 2025 representing sales of stock issued in connection with the Subscription Agreement, dated as of June 13, 2025, between the Company and Zaiming.

Current wording

Net cash provided by financing activities was $2.0 million for the nine months ended September 30, 2025, representing proceeds from the sale of common stock issued pursuant to the Subscription Agreement dated June 13, 2025 between the Company and Zaiming.

Previous wording

We also have potential contingent payment obligations upon the achievement by us of clinical, regulatory, and commercial events, as applicable, or royalty payments that we may be required to make under license agreements we have entered into with various entities pursuant to which we have in-licensed intellectual property, including the License Agreement with Zaiming. The timing and amount (if any) of any such payments cannot be reasonably estimated at this time.

Current wording

We may be required to make future milestone, royalty and other contingent payments under license and collaboration agreements, including the License Agreement with Zaiming. Because the achievement and timing of the underlying triggering events are uncertain, the timing and amount of such payments, if any, cannot be reasonably estimated at this time.

Previous wording

Other than the proposed merger with Avere Therapeutics, the related restructuring plan and the Amendments entered into in July and August 2026 that provides for the potential early termination of certain leased premises, there have been no material changes to our contractual obligations during the three months ended June 30, 2026, as compared to those disclosed in our 2025 Annual Report and subsequent Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

Current wording

Other than the proposed Merger with Avere, the related restructuring plan, the termination of the Company's facility leases and the Transition and Continuation Agreement with LigaChem, there have been no material changes to the Company's contractual obligations during the nine months ended September 30, 2026 as compared to those disclosed in the Company's 2025 Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q.

Previous wording

Our condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP”. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. The most significant assumptions used in the financial statements are the underlying assumptions used in valuing share-based compensation, including the fair value of our common stock in periods before our initial public offering. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent

Current wording

Our condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP”. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. The most significant assumptions used in the financial statements are the underlying assumptions used in valuing share-based compensation, including the fair value of our common stock in periods before our initial public offering. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

Previous wording

During the three months ended June 30, 2026, there were no material changes to our critical accounting policies as reported in our 2025 Annual Report.

Current wording

During the three months ended September 30, 2026, there were no material changes to our critical accounting policies as reported in our 2025 Annual Report. However, during 2026 management was required to make significant judgments related to the recoverability of long-lived assets in connection with the Company's restructuring activities and reduction in operating footprint. See Note 8, Restructuring and Asset Impairment for more information regarding the impairment assessment performed under ASC 360.