Compass Therapeutics, Inc.

Previous wording

The following discussion of the financial condition and results of operations of Compass Therapeutics, Inc. should be read in conjunction with the financial statements and the notes to those statements included in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2025. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risk, uncertainties and assumptions. You should read the“Risk Factors”* section of this Quarterly Report on Form 10-Q and the*“Risk Factors”* section included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024**, for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.*

Current wording

The following discussion of the financial condition and results of operations of Compass Therapeutics, Inc. should be read in conjunction with the financial statements and the notes to those statements included in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2025. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risk, uncertainties and assumptions. You should read the“Risk Factors”* section of this Quarterly Report on Form 10-Q and the*“Risk Factors”* section included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024**, for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.*

Previous wording

Our pipeline comprises three clinical product candidates and one candidate in investigational new drug application (“IND”) enabling studies. Our lead product candidate, tovecimig (formerly known as CTX-009), is a bispecific antibody targeting Delta-like ligand 4 (“DLL4”), a ligand of Notch-1, and vascular endothelial growth factor A (“VEGF-A”). Simultaneous blockade of the VEGF-A and the Notch pathways is known to turn productive angiogenesis into non-productive angiogenesis, which leads to tumor shrinkage and apoptosis. CTX-471, is an agonistic antibody targeting a member of the tumor necrosis factor receptor superfamily member 9 (TNFRSF9), also known as CD-137, a co-stimulatory receptor which is mostly expressed on activated, but not on resting, T-cells and NK cells. CTX-8371, is a bispecific antibody targeting the programmed cell death protein-1 (“PD-1”), an inhibitory immune checkpoint receptor and its ligand PD-L1, two validated immune-oncology targets. In addition, we are in the process of IND enabling studies with CTX-10726, a bispecific antibody targeting PD-1 and VEFG-A. For a more detailed description, see our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Current wording

Our pipeline comprises three clinical product candidates and one candidate in investigational new drug application (“IND”) enabling studies. Our lead product candidate, tovecimig (formerly known as CTX-009), is a bispecific antibody targeting Delta-like ligand 4 (“DLL4”), a ligand of Notch-1, and vascular endothelial growth factor A (“VEGF-A”). Simultaneous blockade of the VEGF-A and the Notch pathways is known to turn productive angiogenesis into non-productive angiogenesis, which leads to tumor shrinkage and apoptosis. CTX-471, is an agonistic antibody targeting a member of the tumor necrosis factor receptor superfamily member 9 (TNFRSF9), also known as CD-137, a co-stimulatory receptor which is mostly expressed on activated, but not on resting, T-cells and NK cells. CTX-8371, is a bispecific antibody targeting the programmed cell death protein-1 (“PD-1”), an inhibitory immune checkpoint receptor and its ligand PD-L1, two validated immune-oncology targets. In addition, we are in the process of IND enabling studies with CTX-10726, a bispecific antibody targeting PD-1 and VEFG-A. For a more detailed description and developments related to our pipeline, see our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and subsequent Quarterly Reports on Form 10-Q for the three months ended March 31, 2025 and June 30, 2025.

Previous wording

Tovecimig (DLL4 x VEGF-A bispecific) Phase 2/3 study in patients with BTC shows decreasing rate of OS events

Current wording

*Data from tovecimig (DLL4 x VEGF-A bispecific) Phase 2/3 study in patients with Biliary Tract Cancer (*BTC) expected late Q1 2026

Previous wording

We are planning to initiate cohort expansions in patients with non-small cell lung cancer (“NSCLC”) and triple-negative breast cancer. This cohort expansion is based on two deep responses observed in the CTX-8371 Phase 1 dose-escalation study, with one of five patients with NSCLC achieving complete resolution of all measurable target tumor lesions, and one of three patients with TNBC achieving over 90% reduction in target tumor lesions. We expect to initiate this part of the study in the fourth quarter of 2025, with data reported in 2026. We are currently enrolling the fifth and final dose level in the dose-escalation study with no dose-limiting toxicities observed to date. Detailed results are expected to be presented at a medical meeting in the fourth quarter of 2025.

Current wording

The fifth and final dosing level in the Phase 1 dose-escalation study of CTX-8371 has been fully enrolled. A new response was observed in this cohort in a third indication, in addition to previously reported responses in patients with non-small cell lung cancer (NSCLC) and triple-negative breast cancer (TNBC). No dose-limiting toxicities were observed at any dose level, potentially differentiating the safety profile of CTX-8371 from currently approved checkpoint inhibitors. We now expect to present full topline data, including data from this fifth cohort, at a medical meeting in the first half of 2026. We are also planning to initiate cohort expansions in patients with NSCLC and TNBC this quarter, based on the previously disclosed responses.

Previous wording

We have funded our operations primarily with proceeds from the sale of our equity securities. Through June 30, 2025, we have received $430 million in gross proceeds from the sale of equity securities.

Current wording

We have funded our operations primarily with proceeds from the sale of our equity securities. Through September 30, 2025, we have received $568 million in gross proceeds from the sale of equity securities.

Previous wording

We have incurred significant operating losses since inception and have not generated any revenue from the sale of products and we do not expect to generate any revenue from the sale of products in the near future, if at all. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our treatments and any future product candidates. Our net losses were $19.9 million and $13.1 million for the three months ended June 30, 2025 and 2024, respectively. Our net losses were $36.5 million and $23.9 million for the six months ended June 30, 2025 and 2024, respectively. We had an accumulated deficit of $401.2 million on June 30, 2025. We expect to continue to incur significant expenses for at least the next several years as we advance through clinical development, develop additional product candidates and seek regulatory approval of any product candidates that complete clinical development. In addition, if we obtain marketing approval for any product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates.

Current wording

We have incurred significant operating losses since inception and have not generated any revenue from the sale of products and we do not expect to generate any revenue from the sale of products in the near future, if at all. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our treatments and any future product candidates. Our net losses were $14.3 million and $10.5 million for the three months ended September 30, 2025 and 2024, respectively. Our net losses were $50.8 million and $34.3 million for the nine months ended September 30, 2025 and 2024, respectively. We had an accumulated deficit of $415.5 million on September 30, 2025. We expect to continue to incur significant expenses for at least the next several years as we advance through clinical development, develop additional product candidates and seek regulatory approval of any product candidates that complete clinical development. In addition, if we obtain marketing approval for any product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates.

Previous wording

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity and debt financings, or other capital sources, which may include collaborations with other companies or other strategic transactions. As of June 30, 2025, we had $101 million in cash, cash equivalents and marketable securities. We expect that such cash resources will enable us to fund our operating expenses and capital expenditure requirements into 2027. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, reduce or eliminate the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

Current wording

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity and debt financings, or other capital sources, which may include collaborations with other companies or other strategic transactions. As of September 30, 2025, we had $220 million in cash, cash equivalents and marketable securities. We expect that such cash resources will enable us to fund our operating expenses and capital expenditure requirements into 2028. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, reduce or eliminate the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

Previous wording

Research and development expenses increased by $5.2 million, or 47%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Manufacturing expenses increased $5.7 million, primarily related to tovecimig and CTX-10726.

Current wording

Research and development expenses increased by $4.2 million, or 49%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Research and development expenses related to our new pipeline candidate, CTX-10726, was $4.6 million.

Previous wording

Other income decreased by $0.8 million or 40% for the three months ended June 30, 2025 as compared to the same period in 2024. Other income consisted exclusively of interest income, which decreased based on a lower cash and marketable securities balance.

Current wording

Other income decreased by $0.2 million or 11% for the three months ended September 30, 2025 as compared to the same period in 2024. Other income consisted exclusively of interest income, which decreased based on a lower average balance of cash and marketable securities.

Previous wording

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

There was no licensing revenue for the three months ended June 30, 2025. Licensing revenue was $850 thousand for the three months ended June 30, 2024. The licensing revenue consisted of a $1 million milestone payment from Elpiscience for completing a Phase 1 trial in China. This license revenue is reported net of a 15% sublicense royalty due ABL Bio (see footnote 11 of the financial statements in this Quarterly Report on Form 10-Q for further information on this sublicense agreement).

Current wording

There was no licensing revenue for the nine months ended September 30, 2025. Licensing revenue was $850 thousand for the nine months ended September 30, 2024. The licensing revenue consisted of a $1 million milestone payment from Elpiscience for completing a Phase 1 trial in China. This license revenue is reported net of a 15% sublicense royalty due ABL Bio (see footnote 11 of the financial statements in this Quarterly Report on Form 10-Q for further information on this sublicense agreement).

Previous wording

Research and development expenses increased by $8.8 million, or 42%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. Manufacturing expenses increased $8.2 million, primarily related to tovecimig and CTX-10726.

Current wording

Research and development expenses increased by $13 million, or 44%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. Manufacturing expenses increased $11.2 million, primarily related to tovecimig and CTX-10726. In addition, IND-enabling costs related to CTX-10726 were $1.9 million.

Previous wording

General and administrative expenses increased $1.6 million, or 20% for the six months ended June 30, 2025 as compared to the same period in 2024. This increase primarily came from an increase of $1.6 million of share-based compensation expense.

Current wording

General and administrative expenses increased $1.0 million, or 8% for the nine months ended September 30, 2025 as compared to the same period in 2024. This increase primarily came from an increase of $0.6 million of market research and commercial preparation costs.

Previous wording

Other income decreased by $1.4 million or 36% for the six months ended June 30, 2025 as compared to the same period in 2024. Other income consisted exclusively of interest income which decreased based on a lower cash and marketable securities balance.

Current wording

Other income decreased by $1.6 million or 29% for the nine months ended September 30, 2025 as compared to the same period in 2024. Other income consisted exclusively of interest income which decreased based on a lower average balance of cash and marketable securities.

Previous wording

Since our inception, we have devoted substantially all of our efforts to organizing and staffing our Company, business planning, raising capital, research and development activities, building our intellectual property portfolio and providing general and administrative support for these operations. We have funded our operations primarily with proceeds from the sale of our equity securities. Through June 30, 2025, we have received $430 million in gross proceeds from the sale of equity securities. As of June 30, 2025, we had cash, cash equivalents and marketable securities of $101 million.

Current wording

Since our inception, we have devoted substantially all of our efforts to organizing and staffing our Company, business planning, raising capital, research and development activities, building our intellectual property portfolio and providing general and administrative support for these operations. We have funded our operations primarily with proceeds from the sale of our equity securities. Through September 30, 2025, we have received $568 million in gross proceeds from the sale of equity securities. As of September 30, 2025, we had cash, cash equivalents and marketable securities of $220 million.

Previous wording

During the six months ended June 30, 2025, we used $25.0 million of cash in operating activities, resulting from our net loss of $36.5 million partially offset by the change in operating assets and liabilities of $5.5 million and non-cash charges of $5.9 million (primarily from share-based compensation expense of $5.3 million).

Current wording

During the nine months ended September 30, 2025, we used $35.9 million of cash in operating activities, resulting from our net loss of $50.8 million partially offset by the change in operating assets and liabilities of $7.7 million and non-cash charges of $7.2 million (primarily from share-based compensation expense of $6.5 million).

Previous wording

During the six months ended June 30, 2024, we used $24.6 million of cash in operating activities, resulting from our net loss of $23.9 million minus the change in operating assets and liabilities of $4.7 million, partially offset by non-cash charges of $3.9 million (primarily from share-based compensation expense of $4.1 million).

Current wording

During the nine months ended September 30, 2024, we used $35.7 million of cash in operating activities, resulting from our net loss of $34.3 million minus the change in operating assets and liabilities of $7.7 million, partially offset by non-cash charges of $6.3 million (primarily from share-based compensation expense of $6.3 million).

Previous wording

During the six months ended June 30, 2025, $5.2 million of cash was provided by investing activities related to the net sale of marketable securities. During the six months ended June 30, 2024, $2.4 million of cash was provided by investing activities, related to the net sale of marketable securities.

Current wording

During the nine months ended September 30, 2025, $90.0 million of cash was used in investing activities related to the net purchases of marketable securities. During the nine months ended September 30, 2024, $31.4 million of cash was provided by investing activities, related to the net sale of marketable securities.

Previous wording

During the six months ended June 30, 2025, $0.8 million of cash was used in financing activities due to taxes paid by the company for settlement of RSU shares. During the six months ended June 30, 2024, $17.4 million of cash was provided by financing activities. This primarily included $17.6 million of net cash from sale of common stock under an ATM Agreement, after issuance costs.

Current wording

During the nine months ended September 30, 2025, $128.5 million of cash was provided by financing activities due to the issuance of common shares. During the nine months ended September 30, 2024, $17.4 million of cash was provided by financing activities. This primarily included $17.6 million of net cash from sale of common stock under an ATM Agreement, after issuance costs.