Faeth Therapeutics, Inc.

Previous wording

We are a clinical-stage biotechnology company focused on improving outcomes for cancer patients through multi-node inhibition of critical oncogenic pathways. On February 17, 2026, we completed the Acquisition of Faeth Therapeutics, a clinical-stage biotechnology company developing multi-node therapies targeting tumor metabolism and signaling, and received $200 million in gross proceeds from the 2026 Private Placement from a broad syndicate of institutional investors. The acquisition brought Faeth's lead asset, PIKTOR, a proprietary investigational all-oral combination of serabelisib and sapanisertib that inhibits multiple nodes of the PI3K/AKT/mTOR pathway, into our pipeline. For additional information regarding the terms of the acquisition and the concurrent financing, see Note 3 to the condensed consolidated financial statements.

Current wording

We are a clinical-stage biotechnology company focused on improving outcomes for cancer patients through multi-node inhibition of critical oncogenic pathways. On February 17, 2026, we completed the acquisition of Faeth Therapeutics, a clinical-stage biotechnology company developing multi-node therapies targeting tumor metabolism and signaling (the “Acquisition”), and received $200 million in gross proceeds from the 2026 Private Placement from a broad syndicate of institutional investors. Effective June 15, 2026, we changed our corporate name from Sensei Biotherapeutics, Inc. to Faeth Therapeutics, Inc. The acquisition brought Faeth's lead asset, PIKTOR, a proprietary investigational all-oral combination of serabelisib and sapanisertib that inhibits multiple nodes of the PI3K/AKT/mTOR pathway, into our pipeline. For additional information regarding the terms of the acquisition and the concurrent financing, see Note 3 to the condensed consolidated financial statements.

Previous wording

Following the Acquisition, our lead program is PIKTOR, an oral multi-node inhibitor of the PI3K/AKT/mTOR pathway in development for endometrial and breast cancer. The PI3K/AKT/mTOR pathway is dysregulated in up to 50% of all solid tumors, making it one of the most prevalent therapeutic targets in oncology. Our core thesis is that simultaneously suppressing multiple pathway nodes can produce deeper, more durable tumor suppression than approved therapies that target only a single node. PIKTOR is currently being evaluated in an ongoing Phase 2 trial in second-line advanced endometrial cancer (Study FTH-PIK-201), with topline data anticipated in the second half of 2026, and in April 2026 the first patient was dosed in our Phase 1b/2 trial in HR+/HER2- advanced breast cancer (Study FTH-PIK-101), from which we expect to report interim data in 2027. We believe the $200 million in gross financing proceeds, together with our existing cash, cash equivalents and marketable securities, will be sufficient to fund operations through these key clinical milestones.

Current wording

Following the Acquisition, our lead program is PIKTOR, an oral multi-node inhibitor of the PI3K/AKT/mTOR pathway in development for endometrial and breast cancer. The PI3K/AKT/mTOR pathway is dysregulated in up to 50% of all solid tumors, making it one of the most prevalent therapeutic targets in oncology. Our core thesis is that simultaneously suppressing multiple pathway nodes can produce deeper, more durable tumor suppression than approved therapies that target only a single node. PIKTOR is currently being evaluated in an ongoing Phase 2 trial in second-line advanced endometrial cancer (Study FTH-PIK-201), with topline data anticipated by year-end. Additionally, in April 2026 the first patient was dosed in our Phase 1b/2 trial in HR+/HER2- advanced breast cancer (Study FTH-PIK-101), from which we expect to report interim data in 2027. We believe the $200 million in gross financing proceeds, together with our existing cash, cash equivalents and marketable securities, will be sufficient to fund operations through these key clinical milestones.

Previous wording

We have incurred significant operating losses since our inception and expect to continue to incur losses for the foreseeable future. Our net loss was $170.2 million and $6.9 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $453.4 million and cash, cash equivalents and marketable securities of $202.8 million, which includes $183.1 million in net proceeds received in the 2026 Private Placement. The increase in our net loss for the three months ended March 31, 2026 compared to the same prior year period was primarily attributable to $133.0 million of acquired in-process research and development expense recognized in connection with the Acquisition of Faeth Therapeutics, as well as increased research and development and general and administrative expenses resulting from the integration of Faeth's operations, including stock-based compensation expense related to the accelerated vesting of Faeth employee stock options and related tax gross-up payments.

Current wording

We have incurred significant operating losses since our inception and expect to continue to incur losses for the foreseeable future. Our net loss was $186.2 million and $11.8 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $469.4 million and cash, cash equivalents and marketable securities of $186.4 million, which includes $183.1 million in net proceeds received in the 2026 Private Placement. The increase in our net loss for the six months ended June 30, 2026 compared to the same prior year period was primarily attributable to $133.0 million of acquired in-process research and development expense recognized in connection with the Acquisition, as well as increased research and development and general and administrative expenses resulting from the integration of Faeth's operations, including stock-based compensation expense related to the accelerated vesting of Faeth employee stock options and related tax gross-up payments.

Previous wording

employee-related expenses, including salaries, benefits and stock-based compensation, severance costs and other related costs for those employees engaged in the research and development function;

Current wording

employee-related expenses, including salaries, bonuses, benefits and stock-based compensation, severance costs and other related costs for those employees engaged in the research and development function;

Previous wording

We expense all research and development costs in the periods in which they are incurred. Costs for certain research and development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and third-party service providers.

Current wording

We expense all research and development costs in the periods in which they are incurred. Costs for certain research and development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and third-party service providers. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense when the goods have been delivered or the services have been performed, or when it is no longer expected that the goods will be delivered or the services rendered.

Previous wording

We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. Product commercialization will take several years and significant additional development costs.

Current wording

Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals. We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. Product commercialization will take several years and significant additional development costs.

Previous wording

Research and development expenses were $18.0 million for the three months ended March 31, 2026, compared to $3.7 million for the three months ended March 31, 2025. The increase of $14.2 million was primarily driven by the inclusion of Faeth Therapeutics operations following the February 2026 acquisition, contributing $1.8 million of research and development costs including preclinical, clinical trial, and chemistry, manufacturing and controls (or "CMC") related expenses, $4.8 million of non-cash stock-based compensation expense and $9.1 million of non-recurring tax gross-up payments related to the accelerated vesting of Faeth options, and $0.7 million of stock-based compensation from inducement grants issued to Faeth employees, partially offset by a $2.2 million decrease in legacy Sensei research and development spending.

Current wording

Research and development expenses were $27.1 million for the six months ended June 30, 2026, compared to $6.3 million for the six months ended June 30, 2025. The increase of $20.9 million was primarily driven by the inclusion of development costs of PIKTOR following the February 2026 acquisition, contributing $6.1 million of research and development costs including preclinical, clinical trial, and CMC related expenses, significant non-recurring costs associated with the Acquisition including $4.8 million of non-cash stock-based compensation expense and $9.1 million of non-recurring tax gross-up payments related to the accelerated vesting of Faeth options, along with $3.3 million of higher personnel costs, including stock-based compensation and incentives, partially offset by a $2.4 million decrease in legacy Sensei programs research and development expenses.

Previous wording

We expect research and development expenses in future periods to be lower than those incurred during the three months ended March 31, 2026, which included significant non-recurring costs associated with the Acquisition, including stock-based compensation expense related to the accelerated vesting of Faeth employee stock options and tax gross-up payments. However, we expect our ongoing research and development expenses to increase significantly as we advance PIKTOR through our ongoing Phase 2 trial in advanced endometrial cancer and our recently initiated Phase 1b/2 trial in HR+/HER2- advanced breast cancer, and as we expand preclinical and CMC activities for our broader pipeline.

Current wording

We expect research and development expenses in future periods to be lower than those incurred during the six months ended June 30, 2026, which included significant non-recurring costs associated with the Acquisition, including stock-based compensation expense related to the accelerated vesting of Faeth employee stock options and tax gross-up payments. However, we expect our ongoing research and development expenses to increase significantly as we advance PIKTOR through our ongoing Phase 2 trial in advanced endometrial cancer and our recently initiated Phase 1b/2 trial in HR+/HER2- advanced breast cancer, and as we expand preclinical and CMC activities for our broader pipeline.

Previous wording

General and administrative expenses were $19.7 million for the three months ended March 31, 2026, compared to $3.5 million for the three months ended March 31, 2025. The increase of $16.2 million was primarily driven by acquisition-related charges consisting of $6.2 million of non-cash stock-based compensation expense and $6.5 million of non-recurring tax gross-up payments related to the accelerated vesting of Faeth options, $2.5 million of transaction costs, $0.6 million of Faeth operating costs, $0.8 million related to inducement grants issued to Faeth employees and $0.2 million related to assumed options, partially offset by a $0.6 million reduction in legacy Sensei expenses.

Current wording

General and administrative expenses were $28.9 million for the six months ended June 30, 2026, compared to $6.2 million for the six months ended June 30, 2025. The increase of $22.7 million was primarily driven by acquisition-related charges consisting of $6.2 million of non-cash stock-based compensation expense and $6.5 million of non-recurring tax gross-up payments related to the accelerated vesting of Faeth options, $2.5 million of transaction costs, $2.3 million of Faeth operating costs, and $4.5 million of higher personnel costs, including stock-based compensation and incentives, along with a $0.7 million increase primarily due to integration-related professional fees.

Previous wording

We expect our general and administrative expenses in future periods to be lower than those incurred during the three months ended March 31, 2026, which included significant non-recurring costs associated with the Acquisition, including stock-based compensation expense related to the accelerated vesting of Faeth employee stock options and transaction costs. However, we expect our ongoing general and administrative expenses to remain significantly higher than our pre-Acquisition levels as a result of the integration of Faeth Therapeutics' operations, including personnel costs associated with the expanded workforce and the support of our broader product pipeline, as well as additional costs associated with operating as a larger public company, including consulting, legal, tax-related services, accounting, investor relations, and insurance premiums.

Current wording

We expect our general and administrative expenses in future periods to be lower than those incurred during the six months ended June 30, 2026, which included significant non-recurring costs associated with the Acquisition, including stock-based compensation expense related to the accelerated vesting of Faeth employee stock options and transaction costs. However, we expect our ongoing general and administrative expenses to remain significantly higher than our pre-Acquisition levels as a result of the integration of Faeth Therapeutics' operations, including personnel costs associated with the expanded workforce and the support of our broader product pipeline, as well as additional costs associated with operating as a larger public company, including consulting, legal, tax-related services, accounting, investor relations, and insurance premiums.

Previous wording

Acquired in-process research and development expense was $133.0 million for the three months ended March 31, 2026, with no comparable expense in the prior year period. The charge was recognized in connection with the acquisition of Faeth Therapeutics in February 2026 and represents the fair value of acquired IPR&D assets that had no alternative future use as of the acquisition date. See Note 3 to our unaudited condensed consolidated financial statement included elsewhere in this Quarterly Report for additional information regarding the acquisition.

Current wording

Acquired in-process research and development expense was $133.0 million for the six months ended June 30, 2026, with no comparable expense in the prior year period. The charge was recognized in connection with the Acquisition in February 2026 and represents the fair value of acquired IPR&D assets that had no alternative future use as of the acquisition date. See Note 3 to our unaudited condensed consolidated financial statement included elsewhere in this Quarterly Report for additional information regarding the acquisition.

Previous wording

We have not generated any product revenue and have incurred net losses and negative cash flows from our operations. As of March 31, 2026, we had cash, cash equivalents and marketable securities of $202.8 million. We have financed our operations through sales of our common stock, redeemable convertible preferred stock and convertible debt. Through the date of this Quarterly Report, we have raised an aggregate of $123.4 million of gross proceeds from private placements of our equity and convertible debt securities and net proceeds of $138.5 million from our IPO in February 2021 and an additional $183.1 million in net proceeds received in the 2026 Private Placement. Our net loss was $170.2 million and $6.9 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $453.4 million. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures and general and administrative expenditures.

Current wording

We have not generated any product revenue and have incurred net losses and negative cash flows from our operations. As of June 30, 2026, we had cash, cash equivalents and marketable securities of $186.4 million. We have financed our operations through sales of our common stock, redeemable convertible preferred stock and convertible debt. Through the date of this Quarterly Report, we have raised an aggregate of $123.4 million of gross proceeds from private placements of our equity and convertible debt securities and net proceeds of $138.5 million from our IPO in February 2021 and an additional $183.1 million in net proceeds received in the 2026 Private Placement. Our net loss was $186.2 million and $11.8 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $469.4 million. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures and general and administrative expenditures.

Previous wording

We expect our cash requirements to increase as we advance PIKTOR through multiple clinical trials following the Acquisition of Faeth Therapeutics, including our ongoing Phase 2 trial in advanced endometrial cancer and our recently initiated Phase 1b/2 trial in HR+/HER2- advanced breast cancer, and we believe our existing cash, cash equivalents and marketable securities of $202.8 million are sufficient to fund operations through topline data readouts from both studies.

Current wording

We expect our cash requirements to increase as we advance PIKTOR through multiple clinical trials following the Acquisition, including our ongoing Phase 2 trial in advanced endometrial cancer and our recently initiated Phase 1b/2 trial in HR+/HER2- advanced breast cancer, and we believe our existing cash, cash equivalents and marketable securities of $186.4 million are sufficient to fund operations through topline data readouts from both studies.

Previous wording

The following table summarizes our sources and uses of cash for each of the periods below:

Current wording

The following table summarizes our sources and uses of cash for each of the periods below (in thousands):

Previous wording

During the three months ended March 31, 2026, net cash used in operating activities was $10.7 million, primarily resulting from our $170.2 million net loss partially offset by a $13.3 million increase in our operating assets and liabilities and increases in non-cash charges of $146.2 million, primarily related to $133.0 million of acquired in-process research and development from the acquisition of Faeth Therapeutics, $12.9 million of stock compensation expense and $0.4 million of non-cash lease expense partially offset by $0.1 million of accretion on marketable securities. The change in operating assets and liabilities was primarily related to a $10.7 million decrease in prepaid expenses related to tax gross-up expenses for the accelerated vesting of options and a $2.6 million increase in accrued compensation and employee benefits related to unpaid tax gross-up expenses for the accelerated vesting of options.

Current wording

During the six months ended June 30, 2026, net cash used in operating activities was $26.4 million, primarily resulting from our $186.2 million net loss partially offset by a $9.8 million increase in our operating assets and liabilities and increases in non-cash charges of $150.0 million, primarily related to $133.0 million of acquired in-process research and development from the Acquisition, $17.4 million of stock compensation expense and $0.7 million of non-cash lease expense partially offset by $1.1 million of accretion on marketable securities. The change in operating assets and liabilities was primarily related to a $10.3 million decrease in prepaid expenses $0.2 million increase in accounts payable and accrued liabilities and a $0.1 million increase in other assets offset by a $0.8 million decrease in operating lease liabilities.

Previous wording

During the three months ended March 31, 2025, net cash used in operating activities was $7.1 million, primarily resulting from our $6.9 million net loss and a $0.9 million decrease in our operating assets and liabilities partially offset by increases in non-cash charges of $0.6 million, primarily related to $0.5 million of stock compensation expense and $0.4 million of non-cash lease expense, partially offset by $0.3 million of accretion on marketable securities.

Current wording

During the six months ended June 30, 2025, net cash used in operating activities was $13.0 million, primarily resulting from our $11.8 million net loss and a $2.3 million decrease in our operating assets and liabilities partially offset by increases in non-cash charges of $1.1 million, primarily related to $0.8 million of non-cash lease expense and $0.7 million of stock compensation expense, partially offset by $0.4 million of accretion on marketable securities.

Previous wording

During the three months ended March 31, 2026, net cash used in investing activities was $31.4 million, primarily due to $43.9 million in purchases of short-term investments, partially offset by $6.5 million in cash assumed from the acquisition of Faeth and $6.0 million in maturities of short-term investments.

Current wording

During the six months ended June 30, 2026, net cash used in investing activities was $139.5 million, primarily due to $158.6 million in purchases of short-term investments, partially offset by $12.6 million in maturities of short-term investments and $6.5 million in cash assumed from the Acquisition.

Previous wording

During the three months ended March 31, 2025, net cash provided by investing activities was $7.2 million, primarily due to $13.5 million in maturities of short-term investments, partially offset by $6.3 million in purchases of short-term investments.

Current wording

During the six months ended June 30, 2025, net cash provided by investing activities was $15.9 million, primarily due to $24.5 million in maturities of short-term investments and $0.2 million of proceeds from the sale of property and equipment, partially offset by $8.8 million in purchases of short-term investments.

Previous wording

During the three months ended March 31, 2026, net cash provided by financing activities was $185.8 million, primarily consisting of $200.0 million proceeds from the issuance of Series B Preferred Stock, $1.0 million from the exercise of options into common stock, partially offset by $15.1 million of issuance costs from the private placement issuance of Series B Preferred Stock and $0.1 million of principal payments under our financing leases.

Current wording

During the six months ended June 30, 2026, net cash provided by financing activities was $184.1 million, primarily consisting of $200.0 million proceeds from the issuance of Series B Preferred Stock, $1.1 million from the exercise of options into common stock, partially offset by $16.9 million of issuance costs from the private placement issuance of Series B Preferred Stock and $0.1 million of principal payments under our financing leases.

Previous wording

During the three months ended March 31, 2025, net cash used in financing activities was $0.2 million, primarily consisting of $0.2 million of principal payments under our financing leases.

Current wording

During the six months ended June 30, 2025, net cash used in financing activities was $0.4 million, primarily consisting of $0.5 million of principal payments under our financing leases, partially offset by $0.1 million of proceeds from the sale of financing lease assets.

Previous wording

We have operating lease arrangements for our corporate offices, lab facilities and an executive residence. As part of our adoption of ASC 842, we recorded operating ROU assets and operating lease liabilities for these leases as of January 1, 2022. As of March 31, 2026, we had operating lease payment obligations of $1.0 million, with $1.0 million payable for the remainder of 2026. See Note 7 in our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional information.

Current wording

We have operating lease arrangements for our corporate offices and lab facilities. As of June 30, 2026, we had operating lease payment obligations of $0.6 million, with $0.5 million payable for the remainder of 2026. See Note 7 in our condensed consolidated financial statements included elsewhere in this Form 10-Q for additional information.

Previous wording

We define our critical accounting policies as those accounting principles that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. During the three months ended March 31, 2026, we acquired in-process research and development intangible assets in connection with the Faeth Therapeutics merger, which represents a new critical accounting policy not previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 30, 2026. Except for this addition, there were no other significant changes to our critical accounting policies which are included in our Annual Report on Form 10-K.

Current wording

We define our critical accounting policies as those accounting principles that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. During the six months ended June 30, 2026, we acquired in-process research and development intangible assets in connection with the Faeth Therapeutics merger, which represents a new critical accounting policy not previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 30, 2026. Except for this addition, there were no other significant changes to our critical accounting policies which are included in our Annual Report on Form 10-K.