Faeth Therapeutics, Inc.

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. We have funded our operations to date primarily with proceeds from the sale of our equity securities, including the 2026 Private Placement, and historically from borrowings of convertible debt.

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. We have funded our operations to date primarily with proceeds from the sale of our equity securities, including the 2026 Private Placement, and historically from borrowings of convertible debt.

Previous wording

If gedatolisib receives regulatory approval, it would become the first approved MNI therapy for HR+/HER2- advanced breast cancer and could establish a significant market position before PIKTOR completes clinical development. In that event, PIKTOR would need to demonstrate meaningful differentiation — whether through oral convenience, a favorable tolerability profile, broader patient applicability, or other clinical advantages — in order to compete effectively. There can be no assurance that PIKTOR will be able to demonstrate such differentiation. Furthermore, the PI3K/AKT/mTOR pathway is the subject of intense research, and new modalities or approaches could emerge that are superior to both gedatolisib and PIKTOR, rendering our competitive position obsolete.

Current wording

In July 2026, the FDA approved gedatolisib for the treatment of HR+/HER2-, PIK3CA wild-type metastatic breast cancer, making gedatolisib the first approved MNI therapy for HR+/HER2- advanced breast cancer and enabling it to establish a significant market position before PIKTOR completes clinical development. Accordingly, PIKTOR must demonstrate meaningful differentiation — whether through oral convenience, a favorable tolerability profile, broader patient applicability, or other clinical advantages — in order to compete effectively. There can be no assurance that PIKTOR will be able to demonstrate such differentiation. Furthermore, the PI3K/AKT/mTOR pathway is the subject of intense research, and new modalities or approaches could emerge that are superior to both gedatolisib and PIKTOR, rendering our competitive position obsolete.

Previous wording

In addition, if gedatolisib or another MNI receives regulatory approval and is incorporated into the standard of care for any of our target indications, regulatory authorities may require that future clinical trials of PIKTOR, including any registrational trials, use the newly approved MNI as part of the comparator arm rather than the current standard of care. Such a change could require us to conduct larger, more expensive, and longer clinical trials than currently planned, raise the efficacy threshold that PIKTOR must demonstrate to achieve regulatory approval, and materially increase our development costs and delay our anticipated development timelines. Even if we are able to demonstrate superiority or non-inferiority to a newly approved MNI, the cost, complexity, and duration of the required trials could substantially exceed our current projections, and we may need to raise additional capital to fund such trials. There can be no assurance that we would be able to obtain such additional capital on acceptable terms, or at all.

Current wording

In addition, if gedatolisib or another MNI that receives regulatory approval is incorporated into the standard of care for any of our target indications, regulatory authorities may require that future clinical trials of PIKTOR, including any registrational trials, use the newly approved MNI as part of the comparator arm rather than the current standard of care. Such a change could require us to conduct larger, more expensive, and longer clinical trials than currently planned, raise the efficacy threshold that PIKTOR must demonstrate to achieve regulatory approval, and materially increase our development costs and delay our anticipated development timelines. Even if we are able to demonstrate superiority or non-inferiority to a newly approved MNI, the cost, complexity, and duration of the required trials could substantially exceed our current projections, and we may need to raise additional capital to fund such trials. There can be no assurance that we would be able to obtain such additional capital on acceptable terms, or at all.

Previous wording

We anticipate that we will compete with Alpelisib, Inavolisib, Capivasertib, Everolimus and Temsirolimus, all of which are approved drugs that target the PI3K/AKT/mTOR pathway. In addition, we are aware of several additional product candidates in clinical development that could potentially pose a direct competitive threat to PIKTOR, particularly for the treatment of advanced HR+/HER2- breast cancer. These product candidates include Gedatolisib, an intravenous pan-PI3K + mTORC1/2 inhibitor from Celcuity, whose New Drug Application for HR+/HER2-, PIK3CA wild-type metastatic breast cancer was accepted by the FDA with Priority Review and a Prescription Drug User Fee Act goal date of July 17, 2026; Tersolisib, an oral mutant-specific PI3Kα inhibitor from Eli Lilly currently in Phase 3 trials for HR+/HER2- breast cancer; Zovegalisib, an oral mutant-selective PI3Kα inhibitor from Relay Therapeutics currently in Phase 3 trials for advanced HR+/HER2- breast cancer; Afuresertib, an oral pan AKT inhibitor from Laekna Therapeutics currently in Phase 3 trials for advanced HR+/HER2- breast cancer; Paxalisib, an oral brain penetrant PI3K/mTOR inhibitor from Kazia Therapeutics currently in Phase 3 trials in glioblastoma; SNV4818, an oral pan-mutant-selective PI3Kα inhibitor acquired by Novartis from Synnovation Therapeutics in March 2026, currently in Phase 1/2 trials for HR+/HER2- breast cancer and other solid tumors; and OKI-219, an oral mutant-specific PI3Kα inhibitor from OnKure Therapeutics, currently in Phase 1/2 trials for HR+/HER2- breast cancer and other solid tumors. In addition, on May 1, 2026, Celcuity announced positive topline results from the PIK3CA mutant cohort of its Phase 3 VIKTORIA-1 trial, with both the gedatolisib triplet (gedatolisib plus fulvestrant plus palbociclib) and the gedatolisib doublet (gedatolisib plus fulvestrant) demonstrating statistically significant and clinically meaningful improvements in progression-free survival. Celcuity has indicated that it intends to submit a supplemental New Drug Application to the FDA for the PIK3CA mutant indication, and that detailed data from both VIKTORIA-1 cohorts will be presented at the 2026 American Society of Clinical Oncology Annual Meeting in early June 2026. If gedatolisib receives marketing approval in either or both indications, it could establish a meaningful market position before PIKTOR completes clinical development. The two cohorts together cover a substantial portion of the HR+/HER2- advanced breast cancer patient population, which could narrow the addressable population for PIKTOR if gedatolisib achieves favorable approval and reimbursement. Our competitive thesis is that multi-node inhibition is a superior mechanism to provide deeper, more tolerable suppression of the PI3K/AKT/mTOR pathway than is currently available in approved therapeutics. If our thesis is incorrect, or if new modalities are developed that better suppress the PI3K/AKT/mTOR pathway, our business would be ma…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Priority Review and a Prescription Drug User Fee Act goal date of July 17, 2026; Tersolisib, an oral mutant-specific PI3Kα inhibitor from Eli Lilly currently in Phase 3 trials for HR+/HER2- breast cancer; Zovegalisib, an oral mutant-selective PI3Kα inhibitor from Relay Therapeutics currently in Phase 3 trials for advanced HR+/HER2- breast cancer; Afuresertib, an oral pan AKT inhibitor from Laekna Therapeutics currently in Phase 3 trials for advanced HR+/HER2- breast cancer; Paxalisib, an oral brain penetrant PI3K/mTOR inhibitor from Kazia Therapeutics currently in Phase 3 trials in glioblastoma; SNV4818, an oral pan-mutant-selective PI3Kα inhibitor acquired by Novartis from Synnovation Therapeutics in March 2026, currently in Phase 1/2 trials for HR+/HER2- breast cancer and other solid tumors; and OKI-219, an oral mutant-specific PI3Kα inhibitor from OnKure Therapeutics, currently in Phase 1/2 trials for HR+/HER2- breast cancer and other solid tumors. In addition, in July 2026, the FDA approved Celcuity’s gedatolisib, and in May 2026, Celcuity announced positive topline results from the PIK3CA mutant cohort of its Phase 3 VIKTORIA-1 trial, with both the gedatolisib triplet (gedatolisib plus fulvestrant plus palbociclib) and the gedatolisib doublet (gedatolisib plus fulvestrant) demonstrating statistically significant and clinically meaningful improvements in progression-free survival. Celcuity has indicated that it intends to submit a supplemental New Drug Application to the FDA for the PIK3CA mutant indication, and that detailed data from both VIKTORIA-1 cohorts will be presented at the 2026 American Society of Clinical Oncology Annual Meeting in early June 2026. Gedatolisib establish a meaningful market position before PIKTOR completes clinical development. The two cohorts together cover a substantial portion of the HR+/HER2- advanced breast cancer patient population, which could narrow the addressable population for PIKTOR if gedatolisib achieves favorable approval and reimbursement. Our competitive thesis is that multi-node inhibition is a superior mechanism to provide deeper, more tolerable suppression of the PI3K/AKT/mTOR pathway than is currently available in approved therapeutics. If our thesis is incorrect, or if new modalities are developed that better suppress the PI3K/AKT/mTOR pathway, our business would be materially and adversely impacted.

Previous wording

Several of these competing product candidates are in Phase 3 registrational trials with potential approval timelines that are ahead of our development timeline for PIKTOR. In particular, Celcuity has now reported positive topline Phase 3 results from both the PIK3CA wild-type cohort and the PIK3CA mutant cohort of its VIKTORIA-1 trial, has its New Drug Application for gedatolisib in HR+/HER2-, PIK3CA wild-type metastatic breast cancer under FDA Priority Review with a Prescription Drug User Fee Act goal date of July 17, 2026, and has announced its intention to file a supplemental New Drug Application for the PIK3CA mutant indication. If one or more competitors obtains regulatory approval and establishes a market position before we are able to enter the market, it could significantly diminish the commercial opportunity for PIKTOR, particularly if the approved product addresses the same patient population or demonstrates a superior safety or efficacy profile. Additionally, mutant-selective PI3Ka inhibitors being developed by Eli Lilly (tersolisib) and Relay Therapeutics (zovegalisib) are also in Phase 3 development and, if approved, could reduce the addressable market for PIKTOR by providing an alternative targeted approach for patients with PI3K-mutant tumors. Large pharmaceutical companies are making significant investments in the PI3K/AKT/mTOR space. For example, in March 2026, Novartis announced the acquisition of Synnovation Therapeutics’ pan-mutant-selective PI3Kα inhibitor program, including SNV4818, which is currently in Phase 1/2 clinical development for HR+/HER2- breast cancer. This and similar acquisitions could result in additional well-resourced competitors with established commercial infrastructure entering the market ahead of or concurrent with PIKTOR, which could significantly diminish our commercial opportunity.

Current wording

Several of these competing product candidates are in Phase 3 registrational trials with potential approval timelines that are ahead of our development timeline for PIKTOR. In particular, Celcuity has now reported positive topline Phase 3 results from both the PIK3CA wild-type cohort and the PIK3CA mutant cohort of its VIKTORIA-1 trial, had its New Drug Application for gedatolisib in HR+/HER2-, PIK3CA wild-type metastatic breast cancer approved by the FDA in July 2026, and has announced its intention to file a supplemental New Drug Application for the PIK3CA mutant indication. If one or more competitors obtains regulatory approval and establishes a market position before we are able to enter the market, it could significantly diminish the commercial opportunity for PIKTOR, particularly if the approved product addresses the same patient population or demonstrates a superior safety or efficacy profile. Additionally, mutant-selective PI3Ka inhibitors being developed by Eli Lilly (tersolisib) and Relay Therapeutics (zovegalisib) are also in Phase 3 development and, if approved, could reduce the addressable market for PIKTOR by providing an alternative targeted approach for patients with PI3K-mutant tumors. Large pharmaceutical companies are making significant investments in the PI3K/AKT/mTOR space. For example, in March 2026, Novartis announced the acquisition of Synnovation Therapeutics’ pan-mutant-selective PI3Kα inhibitor program, including SNV4818, which is currently in Phase 1/2 clinical development for HR+/HER2- breast cancer. This and similar acquisitions could result in additional well-resourced competitors with established commercial infrastructure entering the market ahead of or concurrent with PIKTOR, which could significantly diminish our commercial opportunity.

Previous wording

In addition, our Non-Essential Amino Acid Restriction (“NEAAR”) program, which seeks to restrict patient intake of specific non-essential amino acids to suppress tumor growth, represents a novel therapeutic approach for which there is limited regulatory precedent. Dietary interventions are not subject to the same well-established regulatory approval pathways as pharmaceutical products, and it is unclear how the FDA or comparable foreign regulatory authorities would evaluate a dietary regimen as a component of a cancer treatment regimen. Even if we are able to generate clinical evidence supporting the use of NEAAR in combination with our other product candidates, third-party payors may be unwilling to provide coverage or reimbursement for a prescribed dietary intervention, which could limit patient adoption and reduce any potential commercial value of the program.

Current wording

In addition, our NEAAR program, which seeks to restrict patient intake of specific non-essential amino acids to suppress tumor growth, represents a novel therapeutic approach for which there is limited regulatory precedent. Dietary interventions are not subject to the same well-established regulatory approval pathways as pharmaceutical products, and it is unclear how the FDA or comparable foreign regulatory authorities would evaluate a dietary regimen as a component of a cancer treatment regimen. Even if we are able to generate clinical evidence supporting the use of NEAAR in combination with our other product candidates, third-party payors may be unwilling to provide coverage or reimbursement for a prescribed dietary intervention, which could limit patient adoption and reduce any potential commercial value of the program.

Previous wording

Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future. For example, recent decisions raise questions regarding the award of patent term adjustment, or PTA, for patents in families where related patents have issued without PTA. Thus, it cannot be said with certainty how PTA will/will not be viewed in future and whether patent expiration dates may be impacted.

Current wording

The United States has enacted and implemented wide-ranging patent reform legislation. The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on actions by the U.S. Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future. For example, recent decisions raise questions regarding the award of patent term adjustment, or PTA, for patents in families where related patents have issued without PTA. Thus, it cannot be said with certainty how PTA will/will not be viewed in future and whether patent expiration dates may be impacted.

Previous wording

Securities litigation and stockholder activism, including proxy contests, could result in substantial costs and divert management’s and the Board’s attention and resources from our business. The potential of a proxy contest or other stockholder activism could interfere with our ability to execute on our strategic plan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retain qualified personnel, any of which could materially and adversely affect our business and operating results. Further, our share price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism.

Current wording

Securities litigation and stockholder activism, including proxy contests, could result in substantial costs and divert management’s and the Board of Director’s attention and resources from our business. The potential of a proxy contest or other stockholder activism could interfere with our ability to execute on our strategic plan, give rise to perceived uncertainties as to our future direction, result in the loss of potential business opportunities or make it more difficult to attract and retain qualified personnel, any of which could materially and adversely affect our business and operating results. Further, our share price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism.

Previous wording

Finally, in connection with the execution of the Agreement and Plan of Merger, or the Merger Agreement, dated as of February 17, 2026, by and among the Company, Sapphire First Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company, Sapphire Second Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, Faeth Subsidiary and Faeth HoldCo, certain of our directors and officers, as well as certain of the directors, officers and stockholders of Faeth Therapeutics, each as of immediately prior to the Acquisition, entered into lock-up agreements, pursuant to which each such stockholder will be subject to a 180-day lockup on the sale or transfer of shares of our common stock and Series B Preferred Stock held by each such stockholder, including those shares received by directors and officers in the Acquisition, subject to certain limited exceptions as set forth in such lock-up agreements. Upon expiration of this 180-day lockup period, these shares will become eligible for sale in the public market. Pursuant to the Merger Agreement and the registration rights agreement that we entered into pursuant to the 2026 Private Placement, we are obligated to prepare and file a resale registration statement with the SEC to register the resale of shares of our common stock underlying the Series B Preferred Stock and warrant to purchase shares of Series B Preferred Stock. We will use commercially reasonable efforts to cause this registration statement to be declared effected by the SEC. Once the registration statement is declared effective, the shares subject to the registration statement will no longer constitute restricted securities and may be sold freely in the public markets, subject to (i) the approval of the Company Stockholder Matters (as defined below), (ii) the approval of the Nasdaq Listing Application (as defined below) and (iii) any beneficial ownership limitations set by the holder of Series B Preferred Stock. If our stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after legal restrictions on resale lapse, the trading price of our common stock could decline.

Current wording

Finally, in connection with the execution of the Agreement and Plan of Merger, or the Merger Agreement, dated as of February 17, 2026, by and among the Company, Sapphire First Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company, Sapphire Second Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, Faeth Subsidiary and Faeth HoldCo, certain of our directors and officers, as well as certain of the directors, officers and stockholders of Faeth Therapeutics, each as of immediately prior to the Acquisition, entered into lock-up agreements, pursuant to which each such stockholder is subject to a 180-day lockup on the sale or transfer of shares of our common stock and Series B Preferred Stock held by each such stockholder, including those shares received by directors and officers in the Acquisition, subject to certain limited exceptions as set forth in such lock-up agreements. Upon expiration of this 180-day lockup period, these shares will become eligible for sale in the public market. Pursuant to the Merger Agreement and the registration rights agreement that we entered into pursuant to the 2026 Private Placement, filed a resale registration statement with the SEC to register the resale of shares of our common stock underlying the Series B Preferred Stock and warrant to purchase shares of Series B Preferred Stock, and such shares shares subject to the registration statement now no longer constitute restricted securities and may be sold freely in the public markets, subject to any beneficial ownership limitations set by the holder of Series B Preferred Stock. If our stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after legal restrictions on resale lapse, the trading price of our common stock could decline.

Previous wording

In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” (as defined under Section 382 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. Following the approval of the Company Stockholder Matters, the Acquisition will result in an ownership change for us and, accordingly, our NOL carryforwards and certain other tax attributes will be subject to limitations (or disallowance) on their use after approval of the Company Stockholder Matters. Faeth’s NOL carryforwards may also be subject to limitations as a result of prior shifts in equity ownership and/or the Acquisition. We may also have experienced an ownership change in the past, and may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which are outside our control. Furthermore, our ability to utilize NOLs of Faeth that we acquired as a result of the Acquisition may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities, including for state tax purposes. For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheet, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition.

Current wording

In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” (as defined under Section 382 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. Following the approval of the Company Stockholder Matters on June 10, 2026, the Acquisition resulted in an ownership change for us and, accordingly, our NOL carryforwards and certain other tax attributes may be subject to limitations (or disallowance) on their use. Faeth’s NOL carryforwards may also be subject to limitations as a result of prior shifts in equity ownership and/or the Acquisition. We may also have experienced an ownership change in the past, and may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which are outside our control. Furthermore, our ability to utilize NOLs of Faeth that we acquired as a result of the Acquisition may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities, including for state tax purposes. For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheet, even if we attain profitability, which could potentially result in increased future tax liability to us and could adversely affect our operating results and financial condition.

Previous wording

In addition to data privacy and security laws, we are and may in the future become bound by contractual obligations and industry standards related to data privacy and security, and our efforts to comply with such obligations may not be successful. We publish privacy policies and other statements regarding data privacy and security. Regulators are increasingly scrutinizing these statements, and if these statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading or

Current wording

In addition to data privacy and security laws, we are and may in the future become bound by contractual obligations and industry standards related to data privacy and security, and our efforts to comply with such obligations may not be successful. We publish privacy policies and other statements regarding data privacy and security. Regulators are increasingly scrutinizing these statements, and if these statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.