PALVELLA THERAPEUTICS, INC.
For the period ended Jun 30, 2026. Filed Aug 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 4, 2026
PVLA$175.92+12.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001193125-26-210463
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001193125-26-331574
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 149 previous paragraphs and 159 current paragraphs.
114 unchanged; 29 reworded; 14 added; 5 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
In April 2026, we submitted an application to the FDA for Breakthrough Therapy Designation for our cutaneous venous malformation program. Following the FDA’s recent decision in July 2026 to not grant the designation at this time, we are currently planning a resubmission incorporating TOIVA patient interview transcripts and new 24-week data.
Current report
In May 2026, at the 83rd Annual Meeting of the Society for Investigative Dermatology (“SID”), we presented new data from our Phase 2 TOIVA trial of QTORIN rapamycin for the treatment of cutaneous VMs demonstrating 100% of patients with bleeding at baseline demonstrated improvement on the Cutaneous Venous Malformations Investigator Global Assessment Bleeding scale (“cVM-IGA Bleeding”) at Week 12.
Current report
In May 2026, additional clinical data from our Phase 3 SELVA and Phase 2 TOIVA studies was presented by James Treat, MD at the International Society for the Study of Vascular Anomalies (“ISSVA”) World Congress 2026, which demonstrated that QTORIN rapamycin produced clinical improvements across multiple efficacy measures in patients with microcystic lymphatic malformations and cutaneous VMs.
Current report
In May 2026, a patent that we exclusively licensed from Yale University was granted by the United States Patent and Trademark Office, further supporting the QTORIN pitavastatin program for porokeratosis.
Current report
In May 2026, we completed a pre-NDA meeting with the FDA. The pre-NDA meeting addressed nonclinical, clinical pharmacology, and clinical information for the planned NDA and included an in-person discussion with FDA and receipt of official meeting minutes.
Current report
In June 2026, the FDA granted rolling review of our NDA for QTORIN rapamycin for the treatment of microcystic LMs. Rolling review is an FDA regulatory feature available to programs with Fast Track or Breakthrough Therapy designation and is intended to facilitate expedited FDA review of applications for therapies addressing serious conditions with unmet medical need.
Current report
In June 2026, we submitted the first module of our rolling NDA. We remain on track to submit the remaining modules and complete the NDA submission in the second half of 2026.
Current report
In May 2026, we presented new microcystic LM data from our Phase 3 SELVA study demonstrating that QTORIN rapamycin produced significant improvements across multiple efficacy measures in patients with microcystic LMs, at the ISSVA. 100% of participants (13/13) aged 6–11 years were rated as “Much Improved” (+2) or “Very Much Improved” (+3) on the Microcystic Lymphatic Malformation Investigator Global Assessment (mLM-IGA) scale at Week 24, with a mean improvement of +2.46 (p<0.001). 87% of participants (20/23) in SELVA with moderate or worse leaking/bleeding at baseline were rated as “Much Improved” (+2) or “Very Much Improved” (+3) on the mLM-IGA Leaking/Bleeding at Week 24, with a mean improvement of +2.48 (p<0.001). 100% of SELVA participants who completed the efficacy evaluation period (43/43) were at least somewhat satisfied with QTORIN™ rapamycin on the TSQM-9 overall satisfaction item at Week 24, with 84% reporting extremely satisfied, very satisfied, or satisfied. A blinded independent review demonstrated pre-treatment stability during the 8-week run-in period, followed by marked improvement on QTORIN™ rapamycin, supporting SELVA’s single-arm, baseline-controlled design.
Current report
In June 2026, we completed a pre-NDA meeting with the FDA which addressed nonclinical, clinical pharmacology, and clinical information for the planned NDA and included an in-person discussion with FDA and receipt of official meeting minutes. Subsequent to the pre-NDA meeting, the FDA granted rolling review of our NDA for QTORIN™ rapamycin for the treatment of microcystic lymphatic malformations.
Current report
In June 2026, we submitted the first module of our rolling NDA. We remain on track to submit the remaining modules and complete the NDA submission in the second half of 2026. We are preparing for a planned standalone U.S. commercial launch of QTORIN™ rapamycin for the treatment of microcystic lymphatic malformations in the first half of 2027, subject to obtaining FDA approval.
Current report
In May 2026, at the 83rd Annual Meeting of the Society for Investigative Dermatology (“SID”), we presented new data from our Phase 2 TOIVA trial of QTORIN rapamycin for the treatment of cutaneous VMs demonstrating 100% of patients with bleeding at baseline demonstrated improvement on the Cutaneous Venous Malformations Investigator Global Assessment Bleeding scale (“cVM-IGA Bleeding”) at Week 12 (+2.5 point mean improvement).
Current report
In May 2026, at the ISSVA World Congress 2026, James Treat, MD presented additional data from our Phase 2 TOIVA study demonstrating statistically significant improvements in both cVM-MCSS Height and cVM-MCSS Appearance at all time points measured, with increasing clinical response observed with longer duration of QTORIN rapamycin therapy.
Current report
After completing our Preliminary Breakthrough Therapy Designation Advice meeting with the FDA, we applied to the FDA for Breakthrough Therapy Designation in the second quarter of 2026. Following the FDA’s decision in July 2026 to not grant the designation at this time, we are currently planning a resubmission incorporating TOIVA patient interviews and new 24-week data.
Current report
We are planning for our End-of-Phase 2 meeting with FDA and expect to commence a Phase 3 pivotal study in the fourth quarter of 2026.
Removed paragraphs (5)
Previous report
In January 2026, we completed a Preliminary Breakthrough Therapy Designation Advice meeting with the FDA for our cutaneous venous malformation program. Based on that meeting, we submitted an application to the FDA for Breakthrough Therapy Designation in the second quarter of 2026.
Previous report
In February 2026, we announced positive topline results from SELVA, a Phase 3, single-arm, baseline-controlled study, which evaluated the safety and efficacy of QTORIN rapamycin for the treatment of microcystic LMs in patients 3 years and older. In March 2026, we submitted a pre-NDA meeting request to the FDA, which was subsequently granted. We anticipate the meeting to occur during the second quarter of 2026.
Previous report
In March 2026, we announced the launch of "BEYOND mLM," a new disease state awareness campaign and website, BEYONDmLM.com, designed to educate, engage, and empower patients, caregivers, and healthcare professionals about microcystic LMs.
Previous report
In 2026, we announced three senior leadership team appointments, Vimal Patel, PharmD as Senior Vice President of Medical Affairs, Jennifer J. McDonough as Senior Vice President of Market Access and Patient Services, and Kent Taylor as Senior Vice President of Sales.
Previous report
In January 2026, we completed a Preliminary Breakthrough Therapy Designation Advice meeting with the FDA. Based on that meeting, we submitted an application to the FDA for Breakthrough Therapy Designation in the second quarter of 2026. We plan to commence a Phase 3 pivotal study in the second half of 2026.
Reworded paragraphs (29)
Previous wording
We are a clinical-stage biopharmaceutical company whose vision is to become the leading rare disease biopharmaceutical company focused on developing and, if approved, commercializing novel therapies to treat patients suffering from serious, rare skin diseases and vascular malformations for which there are no FDA-approved therapies. We envision a future treatment paradigm in which individuals suffering from serious, rare skin diseases and vascular malformations, and the physicians treating those diseases, have significantly improved treatment options which address the underlying causes of those diseases. We intend to leverage our versatile QTORIN platform to minimize the challenges and timelines typically associated with generating novel topical product candidates that penetrate the deep layers of the skin to locally treat a broad spectrum of rare skin diseases and vascular malformations. Our lead product candidate, QTORIN 3.9% rapamycin anhydrous gel (“QTORIN rapamycin”), is currently in clinical development for microcystic lymphatic malformations (“microcystic LMs”) and cutaneous venous malformations (“cutaneous VMs”). We are also expanding our QTORIN rapamycin development program into clinically significant angiokeratomas. QTORIN rapamycin contains the active pharmaceutical ingredient (“API”) rapamycin, also known as sirolimus, which is an inhibitor of mTOR, a kinase that has been known to play a key role in cell growth and proliferation. We introduced a new QTORIN product candidate, QTORIN pitavastatin, for the treatment of disseminated superficial actinic porokeratosis (“DSAP”), which leverages our proprietary QTORIN platform and is designed to be the first pathogenesis-directed therapy for DSAP.
Current wording
We are a clinical-stage biopharmaceutical company whose vision is to become the leading rare disease biopharmaceutical company focused on developing and, if approved, commercializing novel therapies to treat patients suffering from serious, rare skin diseases and vascular malformations for which there are no FDA-approved therapies. We envision a future treatment paradigm in which individuals suffering from serious, rare skin diseases and vascular malformations, and the physicians treating those diseases, have significantly improved treatment options which address the underlying causes of those diseases. We intend to leverage our versatile QTORIN platform to minimize the challenges and timelines typically associated with generating novel topical product candidates that penetrate the deep layers of the skin to locally treat a broad spectrum of rare skin diseases and vascular malformations. Our lead product candidate, QTORIN 3.9% rapamycin anhydrous gel (“QTORIN rapamycin”), is currently in clinical development for microcystic lymphatic malformations (“microcystic LMs”), cutaneous venous malformations (“cutaneous VMs”), and clinically significant angiokeratomas. QTORIN rapamycin contains the active pharmaceutical ingredient (“API”) rapamycin, also known as sirolimus, which is an inhibitor of mTOR, a kinase that has been known to play a key role in cell growth and proliferation. We introduced a new QTORIN product candidate, QTORIN pitavastatin, for the treatment of disseminated superficial actinic porokeratosis (“DSAP”), which leverages our proprietary QTORIN platform and is designed to be the first pathogenesis-directed therapy for DSAP.
Previous wording
In February 2026, we received written feedback from the FDA on the proposed design of a Phase 2 study of approximately 10-20 patients to evaluate QTORIN rapamycin for the treatment of clinically significant angiokeratomas. In April 2026, we dosed our first patients in the Phase 2 LOTU trial, a baseline-controlled clinical study of QTORIN rapamycin administered topically once daily for the treatment of clinically significant angiokeratomas. Topline results are expected in the second half of 2027.
Current wording
In April 2026, we dosed our first patients in the Phase 2 LOTU trial, a baseline-controlled clinical study of QTORIN rapamycin administered topically once daily for the treatment of clinically significant angiokeratomas. Topline results are expected in the second half of 2027.
Previous wording
The primary endpoint, the mLM-IGA, is a 7-point clinician-assessed dynamic scale measuring change in disease severity from baseline ranging from “Very Much Worse” (-3) to “Very Much Improved” (+3). On the mLM-IGA in the ITT population (n=49), QTORIN rapamycin demonstrated a mean improvement of +2.13 points, meeting the study’s primary endpoint (p<0.001). Of the participants aged ≥ 6 who completed the efficacy evaluation period, 95% (41/43) demonstrated at least a 1-point improvement, and 86% (37/43) were either “Much Improved” (+2) or “Very Much Improved” (+3). In the 3- to 5-year-old cohort, one participant enrolled and was “Very Much Improved” (+3) on the mLM-IGA at Week 24.
Current wording
The primary endpoint, the microcystic lymphatic malformation Investigator Global Assessment (“mLM-IGA”), is a 7-point clinician-assessed dynamic scale measuring change in disease severity from baseline ranging from “Very Much Worse” (-3) to “Very Much Improved” (+3). On the mLM-IGA in the ITT population (n=49), QTORIN rapamycin demonstrated a mean improvement of +2.13 points, meeting the study’s primary endpoint (p<0.001). Of the participants aged ≥ 6 who completed the efficacy evaluation period, 95% (41/43) demonstrated at least a 1-point improvement, and 86% (37/43) were either “Much Improved” (+2) or “Very Much Improved” (+3). In the 3- to 5-year-old cohort, one participant enrolled and was “Very Much Improved” (+3) on the mLM-IGA at Week 24.
Previous wording
In March 2026, we submitted a pre-NDA meeting request to the FDA, which was subsequently granted. We anticipate the meeting to occur during the second quarter of 2026. We have received Breakthrough Therapy Designation, Fast Track Designation, and Orphan Drug Designation from the FDA for QTORIN rapamycin for the treatment of microcystic LMs. Orphan Drug Designation has also been granted by the European Medicines Agency. In addition, we have been awarded an FDA Products Clinical Trials Grant for up to $2.6 million supporting the SELVA Phase 3 study and have received $1.1 million to date.
Current wording
We have received Breakthrough Therapy Designation, Fast Track Designation, and Orphan Drug Designation from the FDA for QTORIN rapamycin for the treatment of microcystic LMs. Orphan Drug Designation has also been granted by the European Medicines Agency. In addition, we have been awarded an FDA Products Clinical Trials Grant for up to $2.6 million supporting the SELVA Phase 3 study and have received $1.1 million to date.
Previous wording
In December 2025, we announced positive topline efficacy results from TOIVA, a multicenter, single-arm, open-label, baseline-controlled, Phase 2 clinical trial designed to evaluate the safety and efficacy of QTORIN rapamycin for the treatment of cutaneous VMs. The study enrolled 16 participants, ages six and older, at leading vascular anomaly centers across the U.S. Key findings from among the study’s pre-specified efficacy endpoints at Week 12 demonstrated nominally statistically significant (p<0.001) improvements at Week 12 on several of the clinically relevant and important efficacy endpoints evaluated when compared to pre-treatment (baseline), including many of the static and impression of change global instruments evaluated, including the Overall Cutaneous VM Investigator Global Assessment (“Overall cVM-IGA”) (Table 5). The Overall cVM-IGA is a 7-point, clinician-assessed, single-item efficacy endpoint measuring change in severity from baseline, with the numeric rating scale ranging from “Very Much Worse” (-3) to “Very Much Improved” (+3). On the Overall cVM-IGA at Week 12, 73% (11/15) participants improved, with 67% (10/15) either “Much Improved” (+2) or “Very Much Improved” (+3). No trial participants (0/15) were “Minimally Worse” (-1), “Much Worse” (-2), or “Very Much Worse” (-3).
Current wording
In December 2025, we announced positive topline efficacy results from TOIVA, a multicenter, single-arm, open-label, baseline-controlled, Phase 2 clinical trial designed to evaluate the safety and efficacy of QTORIN rapamycin for the treatment of cutaneous VMs. The study enrolled 16 participants, ages six and older, at leading vascular anomaly centers across the U.S. Key findings from among the study’s pre-specified efficacy endpoints at Week 12 demonstrated nominally statistically significant (p<0.001) improvements at Week 12 on several of the clinically relevant and important efficacy endpoints evaluated when compared to pre-treatment (baseline), including many of the static and impression of change global instruments evaluated, including the Overall Cutaneous VM Investigator Global Assessment (“Overall cVM-IGA”). The Overall cVM-IGA is a 7-point, clinician-assessed, single-item efficacy endpoint measuring change in severity from baseline, with the numeric rating scale ranging from “Very Much Worse” (-3) to “Very Much Improved” (+3). On the Overall cVM-IGA at Week 12, 73% (11/15) participants improved, with 67% (10/15) either “Much Improved” (+2) or “Very Much Improved” (+3). No trial participants (0/15) were “Minimally Worse” (-1), “Much Worse” (-2), or “Very Much Worse” (-3).
Previous wording
Clinically significant angiokeratomas are superficial vascular malformations of lymphatic origin which can cause bleeding, pain, functional impairment, and risk of infection, with no tendency for spontaneous regression. Angiokeratomas were recently classified as an isolated lymphatic malformation in 2025 by the International Society for the Study of Vascular Anomalies (“ISSVA”). Current treatment options include potentially destructive procedural interventions that carry significant risks of pain, scarring, and recurrence. Despite the substantial disease burden, there are currently no FDA-approved treatments available for clinically significant angiokeratomas.
Current wording
Clinically significant angiokeratomas are superficial vascular malformations of lymphatic origin which can cause bleeding, pain, functional impairment, and risk of infection, with no tendency for spontaneous regression. Angiokeratomas were classified as an isolated lymphatic malformation in 2025 by ISSVA. Current treatment options include potentially destructive procedural interventions that carry significant risks of pain, scarring, and recurrence. Despite the substantial disease burden, there are currently no FDA-approved treatments available for clinically significant angiokeratomas.
Previous wording
In November 2025, we announced a new product candidate, QTORIN pitavastatin, for the treatment of disseminated superficial actinic porokeratosis (DSAP). QTORIN pitavastatin was developed leveraging our QTORIN platform.
Current wording
In November 2025, we announced a new product candidate, QTORIN pitavastatin, for the treatment of DSAP. QTORIN pitavastatin was developed leveraging our QTORIN platform.
Previous wording
Uncertainty in the global economy presents significant risks to our business. We are subject to continuing risks and uncertainties in connection with the current macroeconomic environment, including increases in inflation, increased U.S. trade tariffs and retaliatory tariffs, interest rate and currency rate fluctuations, new laws and regulations enacted by the Trump administration, including, but not limited to, the One Big Beautiful Bill Act, economic slowdown or recession, banking instability, monetary policy changes, and geopolitical factors, including the ongoing conflict between Russia and Ukraine, the current conflicts in Venezuela and the Middle East (including any escalation or expansion) and increasing tensions between China and Taiwan, rapid changes in our regulatory landscape in the United States, including significant staffing reductions and unexpected shifts in leadership of certain federal agencies, and an uncertain legislative environment and supply chain disruptions. While our management is closely monitoring the impact of the current macroeconomic conditions on all aspects of our business, including the impacts on its participants in its clinical trials, employees, suppliers, vendors and business partners, the ultimate extent of the impact on our business remains highly uncertain and will depend on future developments and factors that continue to evolve. Most of these developments and factors are outside our control and could exist for an extended period of time. Management will continue to evaluate the nature and extent of the potential impacts to our business, results of operations, liquidity and capital resources. For additional information, see Part I, Item 1A “Risk Factors” of our 2025 Form 10-K.
Current wording
U.S. trade tariffs and retaliatory tariffs, interest rate and currency rate fluctuations, new laws and regulations enacted by the Trump administration, including, but not limited to, the One Big Beautiful Bill Act, economic slowdown or recession, banking instability, monetary policy changes, and geopolitical factors, including the ongoing conflict between Russia and Ukraine, the current conflicts in Venezuela and the Middle East (including any escalation or expansion) and increasing tensions between China and Taiwan, rapid changes in our regulatory landscape in the United States, including significant staffing reductions and unexpected shifts in leadership of certain federal agencies, and an uncertain legislative environment and supply chain disruptions. While our management is closely monitoring the impact of the current macroeconomic conditions on all aspects of our business, including the impacts on its participants in its clinical trials, employees, suppliers, vendors and business partners, the ultimate extent of the impact on our business remains highly uncertain and will depend on future developments and factors that continue to evolve. Most of these developments and factors are outside our control and could exist for an extended period of time. Management will continue to evaluate the nature and extent of the potential impacts to our business, results of operations, liquidity and capital resources. For additional information, see Part I, Item 1A “Risk Factors” of our 2025 Form 10-K.
Previous wording
Our other (expense) income for the three months ended March 31, 2026 and 2025 primarily consists of: (i) non-cash interest (expense) income related to our obligation to make future royalty payments pursuant to the Amended Ligand Agreement, which was determined to be a debt instrument; (ii) fair value adjustments related to our obligation to make future milestone payments under the Amended Ligand Agreement, which was determined to be a derivative liability; (iii) fair value adjustments related to the CVRs, which met the definition of a derivative; and (iv) interest income, net.
Current wording
Our other (expense) income for the three and six months ended June 30, 2026 and 2025 primarily consists of: (i) non-cash interest (expense) income related to our obligation to make future royalty payments pursuant to the Amended Ligand Agreement, which was determined to be a debt instrument; (ii) fair value adjustments related to our obligation to make future milestone payments under the Amended Ligand Agreement, which was determined to be a derivative liability; (iii) fair value adjustments related to the CVRs, which met the definition of a derivative; and (iv) interest income, net.
Previous wording
Since May 2018, we have not recorded any income tax benefits for NOLs. We believe, based upon the weight of available evidence, that it is more likely than not that all of our NOLs and tax credits will not be realized. Accordingly, we have established a valuation allowance against such deferred tax assets for all periods since inception.
Current wording
Since May 2018, we have not recorded any income tax benefits for net operating losses (“NOLs”). We believe, based upon the weight of available evidence, that it is more likely than not that all of our NOLs and tax credits will not be realized. Accordingly, we have established a valuation allowance against such deferred tax assets for all periods since inception.
Previous wording
We had no provision for income taxes for the three months ended March 31, 2026 and 2025.
Current wording
We had no provision for income taxes for the three and six months ended June 30, 2026 and 2025.
Previous wording
Comparison of the Three Months Ended March 31, 2026 and 2025
Current wording
Comparison of the Three and Six Months Ended June 30, 2026 and 2025
Previous wording
Research and development expenses for the three months ended March 31, 2026 were $9.3 million, as compared to $4.1 million for the three months ended March 31, 2025. The increase in research and development expenses was primarily due to increased spending for clinical, manufacturing and controls (“CMC”) activities and costs resulting from increased headcount and consulting services in 2026.
Current wording
Research and development expenses for the three months ended June 30, 2026 were $12.5 million, as compared to $5.1 million for the three months ended June 30, 2025. Research and development expenses for the six months ended June 30, 2026 were $21.8 million, as compared to $9.2 million for the three months ended June 30, 2025. The increase in research and development expenses was primarily due to increased spending on clinical, manufacturing and controls (“CMC”) activities, the clinical development of QTORIN rapamycin for the treatment of angiokeratomas, costs associated with the submission of the first module of our rolling NDA, and costs resulting from increased headcount and consulting services in 2026.
Previous wording
General and administrative expenses for the three months ended March 31, 2026 were $5.5 million, as compared to $3.8 million for the three months ended March 31, 2025. The increase in general and administrative expenses was primarily due to increased headcount in 2026, as well as increased professional services related to operating as a publicly-traded company.
Current wording
General and administrative expenses for the three months ended June 30, 2026 were $8.9 million, as compared to $4.1 million for the three months ended June 30, 2025. General and administrative expenses for the six months ended June 30, 2026 were $14.5 million, as compared to $7.9 million for the six months ended June 30, 2025. The increase in general and administrative expenses was primarily due to increased headcount in 2026, as well as increased professional services related to operating as a publicly-traded company.
Previous wording
Total other (expense) income, net for the three months ended March 31, 2026 was $0.9 million, as compared to $0.3 million of expense for the three months ended March 31, 2025. The significant components of other (expense) income are more fully described below.
Current wording
Total other (expense) income, net for the three months ended June 30, 2026 was $0.5 million, as compared to $0.2 million of expense for the three months ended June 30, 2025. Total other (expense) income, net for the six months ended June 30, 2026 was $1.4 million, as compared to $0.5 million of expense for the six months ended June 30, 2025. The significant components of other (expense) income are more fully described below.
Previous wording
During the three months ended March 31, 2026, we recorded interest expense of approximately $2.0 million, as compared to approximately $1.2 million for the three months ended March 31, 2025. Interest expense recorded related to the change in fair value of our royalty agreement liability associated with the payout of $2.0 million to holders of CVRs in January 2026.
Current wording
During the three months ended June 30, 2026, we recorded interest expense of approximately $2.3 million, as compared to approximately $1.4 million for the three months ended June 30, 2025. During the six months ended June 30, 2026, we recorded interest expense of approximately $4.3 million, as compared to approximately $2.6 million for the six months ended June 30, 2025. Interest expense recorded in all periods related to the change in fair value of our royalty agreement liability.
Previous wording
During the three months ended March 31, 2026, we recorded a non-cash loss on derivative liabilities of approximately $0.1 million, as compared to approximately $0.1 million for the three months ended March 31, 2025. The non-cash loss recorded in all periods related to the change in fair value of our obligation to make future milestone payments under the Amended Ligand Agreement, which was determined to be a derivative liability.
Current wording
During the three months ended June 30, 2026 and 2025, we recorded a non-cash loss on derivative liabilities of approximately $0.1 million. During the six months ended June 30, 2026 and 2025, we recorded a non-cash loss on derivative liabilities of approximately $0.2 million. The non-cash loss recorded in all periods related to the change in fair value of our obligation to make future milestone payments under the Amended Ligand Agreement, which was determined to be a derivative liability.
Previous wording
During the three months ended March 31, 2026, we recorded non-cash income of approximately $0.2 million related to fair value adjustments related to the CVRs which were issued in 2024 in connection with the Business Combination and determined to be derivative liabilities.
Current wording
During the six months ended June 30, 2026, we recorded non-cash income of approximately $0.2 million related to fair value adjustments related to the CVRs which were issued in 2024 in connection with the Business Combination and determined to be derivative liabilities.
Previous wording
During the three months ended March 31, 2026, we recorded interest income $1.1 million, as compared to $0.8 million for the three months ended March 31, 2025. The increase was primarily due to increases in the average balances held in interest-bearing cash and money market funds.
Current wording
During the three months ended June 30, 2026, we recorded interest income, net of $2.0 million, as compared to $0.7 million for the three months ended June 30, 2025. During the six months ended June 30, 2026, we recorded interest income, net of $3.0 million, as compared to $1.4 million for the six months ended June 30, 2025. The increase during each of the three and six months ended June 30, 2026, as compared to the corresponding periods in 2025, was primarily due to increases in the average balances held in interest-bearing cash and money market funds.
Previous wording
As a result of the factors discussed above, our net loss applicable to common stockholders for the three months ended March 31, 2026 and 2025 was $15.8 million and $8.2 million, respectively.
Current wording
As a result of the factors discussed above, our net loss applicable to common stockholders for the three months ended June 30, 2026 and 2025 was $21.9 million and $9.5 million, respectively, and our net loss applicable to common stockholders for the six months ended June 30, 2026 and 2025 was $37.6 million and $17.7 million, respectively.
Previous wording
Since inception, we have incurred substantial losses, and have primarily funded our operations with proceeds from the Amended Ligand Agreement and the sale of debt and equity securities, including common stock, convertible preferred stock and convertible notes. During the three months ended March 31, 2026, we incurred a net loss of $15.8 million and reported net cash used in operating activities of $10.9 million. As of March 31, 2026, we had an accumulated deficit of $151.2 million and cash and cash equivalents and short-term investments of $261.9 million.
Current wording
Since inception, we have incurred substantial losses, and have primarily funded our operations with proceeds from the Amended Ligand Agreement and the sale of debt and equity securities, including common stock, convertible preferred stock and convertible notes. During the six months ended June 30, 2026, we incurred a net loss of $37.6 million and reported net cash used in operating activities of $23.7 million. As of June 30, 2026, we had an accumulated deficit of $173.1 million and cash and cash equivalents and short-term investments of $250.6 million. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and, to a lesser extent, general and administrative expenditures.
Previous wording
We have not generated product revenue or achieved profitability since our inception and expect to continue to incur net losses for the foreseeable future. As of March 31, 2026, we had approximately $261.9 million in cash and cash equivalents and short-term investments. Based on our current business plans, we believe that our existing cash and cash equivalents will be sufficient to fund our planned operations for at least the one year period following the date of the filing of this Quarterly Report on Form 10-Q. Moreover, we expect our losses to increase as we continue to advance our product candidates through clinical trials and regulatory submissions. We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates, which may not be currently contemplated in our planned operations. Furthermore, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company. Our primary uses of capital have been, and we expect will continue to be, compensation and related expenses, third-party clinical research, manufacturing and development services, license payments or milestone obligations that may arise, manufacturing costs, legal and other regulatory expenses and general overhead costs.
Current wording
We have not generated product revenue or achieved profitability since our inception and expect to continue to incur net losses for the foreseeable future. As of June 30, 2026, we had approximately $250.6 million in cash and cash equivalents and short-term investments. Based on our current business plans, we believe that our existing cash and cash equivalents will be sufficient to fund our planned operations for at least the one year period following the date of the filing of this Quarterly Report on Form 10-Q. Moreover, we expect our losses to increase as we continue to advance our product candidates through clinical trials and regulatory submissions. We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates and to build our commercial organization in preparation for the launch of our lead product candidate, QTORIN rapamycin for the treatment of microcystic LM, which is currently under review at the FDA, which may not be currently contemplated in our planned operations. Furthermore, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company. Our primary uses of capital have been, and we expect will continue to be, compensation and related expenses, third-party clinical research, manufacturing and development services, license payments or milestone obligations that may arise, manufacturing costs, legal and other regulatory expenses and general overhead costs.
Previous wording
The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025 (in thousands):
Current wording
The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025 (in thousands):
Previous wording
Net cash used in operating activities for the three months ended March 31, 2026 and 2025 consisted of net loss for the period adjusted for non-cash items and changes in components of operating assets and liabilities. The primary use of cash was to fund our operations related to the development of our product candidates, including general and administrative support, which increased due to greater research and development efforts in 2026, increased costs to operate as a public company, as well as the timing of payments and increase in accounts payable.
Current wording
Net cash used in operating activities for the six months ended June 30, 2026 and 2025 consisted of net loss for the period adjusted for non-cash items and changes in components of operating assets and liabilities. The primary use of cash was to fund our operations related to the development of our product candidates, including general and administrative support, which increased due to greater research and development efforts in 2026, increased costs to operate as a public company, as well as the timing of payments and increase in accounts payable.
Previous wording
For the three months ended March 31, 2026, net cash used in investing activities was $55.4 million, consisting of the purchase of marketable securities.
Current wording
For the six months ended June 30, 2026, net cash used in investing activities was $62.5 million, consisting of the purchase and maturities of marketable securities.
Previous wording
For the three months ended March 31, 2026, net cash provided by financing activities was $214.7 million, consisting of proceeds from the issuance of common stock in connection with the equity financing in February 2026, the payment to holders of CVRs in accordance with the CVR Agreement entered into immediately prior to closing of the Merger on December 13, 2024, and proceeds from the exercise of stock options.
Current wording
For the six months ended June 30, 2026, net cash provided by financing activities was $216.0 million, consisting of proceeds from the issuance of common stock in connection with the equity financing in February 2026, the payment to holders of CVRs in accordance with the CVR Agreement entered into immediately prior to closing of the Merger on December 13, 2024, and proceeds from the exercise of stock options.
Previous wording
For the three months ended March 31, 2025, net cash provided by financing activities was $1.2 million, consisting primarily of payments of transaction costs incurred in connection with the Business Combination and proceeds from the exercise of stock options.
Current wording
For the six months ended June 30, 2025, net cash used in financing activities was $0.9 million, consisting primarily of payments of transaction costs incurred in connection with the Business Combination and proceeds from the exercise of stock options.
Previous wording
During the three months ended March 31, 2026, there were no material changes outside the ordinary course of our business to our contractual obligations and cash requirements, as disclosed in our 2025 Form 10-K.
Current wording
During the six months ended June 30, 2026, there were no material changes outside the ordinary course of our business to our contractual obligations and cash requirements, as disclosed in our 2025 Form 10-K.
Previous wording
During the three months ended March 31, 2026, there were no material changes to our critical accounting policies or in the methodology used for estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Form 10-K.
Current wording
During the six months ended June 30, 2026, there were no material changes to our critical accounting policies or in the methodology used for estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Form 10-K.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
In June 2026, we announced the appointment of Matthew Pauls, J.D., M.B.A. to the Board of Directors.
Current report — wording carried from elsewhere
Uncertainty in the global economy presents significant risks to our business. We are subject to continuing risks and uncertainties in connection with the current macroeconomic environment, including increases in inflation, increased
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and, to a lesser extent, general and administrative expenditures.