Kailera Therapeutics, Inc.

Previous wording

Since our inception in May 2024, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, acquiring intellectual property rights, and conducting research and development activities for our product candidates. We do not have any products approved for sale and have not generated any revenue from any sources, including product sales. Through the issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, we have funded our operations primarily with proceeds from the sale and issuance of shares of our convertible preferred stock, the issuance of convertible promissory notes, which converted into shares of convertible preferred stock, and proceeds from the sale and issuance of our common stock as part of our initial public offering.

Current wording

Since our inception in May 2024, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, acquiring intellectual property rights, and conducting research and development activities for our product candidates. We do not have any products approved for sale and have not generated any revenue from any sources, including product sales. Through the issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, we have funded our operations primarily with proceeds from the sale and issuance of shares of our convertible preferred stock, the issuance of convertible promissory notes, which converted into shares of convertible preferred stock, and the sale and issuance of common stock as part of our initial public offering.

Previous wording

Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or future product candidates. Our net loss was $78.9 million and $18.0 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $447.5 million. We expect to continue to incur significant expenses and recognize operating losses for at least the next several years as we advance our product candidates through later stage clinical development and seek regulatory approval of our product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates.

Current wording

Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or future product candidates. Our net loss was $190.2 million for the six months ended June 30, 2026. As of June 30, 2026, we had an accumulated deficit of $558.8 million. We expect to continue to incur significant expenses and recognize operating losses for at least the next several years as we advance our product candidates through later stage clinical development and seek regulatory approval of our product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates.

Previous wording

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations with proceeds from outside sources, with a majority of such proceeds to be derived from sales of equity securities. As we continue to pursue our business plan, we expect to finance our operations through a combination of equity offerings, debt financings, or other capital sources, including current or potential future collaborations, licenses, and other similar arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

Current wording

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time, if ever, that we can generate product revenue sufficient to achieve profitability, we expect to finance our operations with proceeds from outside sources, with a majority of such proceeds to be derived from sales of equity securities. As we continue to pursue our business plan, we expect to finance our operations through a combination of equity offerings, debt financings, royalty financings or other capital sources, including current or potential future collaborations, licenses, and other similar arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

Previous wording

As of March 31, 2026, we had cash, cash equivalents and marketable securities of $581.9 million. We believe that the cash, cash equivalents and marketable securities on hand as of March 31, 2026, together with the $718.8 million of gross proceeds raised in our initial public offering subsequent to March 31, 2026, will be sufficient to fund our operations into mid-2028. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and capital resources.”

Current wording

As of June 30, 2026, we had cash, cash equivalents and marketable securities of $1,171.8 million. We believe that the cash, cash equivalents and marketable securities on hand as of June 30, 2026 will be sufficient to fund our operations into mid-2028. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and capital resources.”

Previous wording

The following table summarizes our results of operations for the period from Three Months Ended March 31, 2026 and 2025 (in thousands):

Current wording

The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025 (in thousands):

Previous wording

Research and development expenses increased by $60.7 million from $10.1 million for the three months ended March 31, 2025 to $70.9 million for the three months ended March 31, 2026. The increase was primarily driven by product candidate development and the related nonclinical, clinical, and contract manufacturing costs associated with our portfolio of injectable and oral development programs, as well as an increase in headcount, resulting in an increase in personnel-related expenses, including stock-based compensation, to support our ongoing research and development activities.

Current wording

Research and development expenses increased by $81.5 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily driven by product candidate development and the related nonclinical, clinical, and contract manufacturing costs associated with our portfolio of injectable and oral development programs, as well as an increase in headcount, resulting in an increase in personnel-related expenses, including stock-based compensation expense, to support our ongoing research and development activities.

Previous wording

General and administrative expenses increased $3.5 million from $10.3 million for the three months ended March 31, 2025 to $13.8 million for the three months ended March 31, 2026. The increase was driven primarily by an increase in headcount, resulting in increases in personnel-related expenses of $1.0 million, stock-based compensation expenses of $1.7 million, and increases in professional service costs as we continue to expand our operations.

Current wording

General and administrative expenses increased by $9.2 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily driven by the expansion of our operations, resulting in increases in professional service costs and personnel-related expenses, including an increase of $4.6 million in stock-based compensation expenses.

Previous wording

Interest income for the three months ended March 31, 2026 and 2025 was $5.7 million and $1.7 million, respectively, which related to interest earned from our cash equivalents and marketable securities balances. The increase in interest income was primarily driven by higher cash equivalents and marketable securities balances.

Current wording

Interest income increased by $7.9 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily driven by higher cash equivalents and marketable securities balances.

Previous wording

Other income, net for the three months ended March 31, 2026 and 2025 was $0.1 million and $0.8 million, respectively. Other income, net for the three months ended March 31, 2026 consisted primarily of miscellaneous income unrelated to our core operations. Other income, net for the three months ended March 31, 2025 consisted primarily of income due to the change in fair value of the preferred stock tranche right liability.

Current wording

Other income, net increased by $0.5 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Other income, net for the three months ended June 30, 2026 primarily consisted of miscellaneous income unrelated to our core operations. Other income, net for the three months ended June 30, 2025 primarily consisted of expense due to the change in fair value of our convertible promissory notes issued in May 2025, partially offset by income due to the change in fair value of the preferred stock tranche right liability.

Previous wording

Since our inception, we have not generated revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from our operations. As of March 31, 2026, we had cash, cash equivalents and marketable securities of $581.9 million and an accumulated deficit of $447.5 million. Through March 31, 2026, we have funded our operations primarily with proceeds from the sale and issuance of shares of our convertible preferred stock and the issuance of convertible promissory notes, which converted into shares of convertible preferred stock. Subsequent to March 31, 2026, we received $718.8 million of gross proceeds raised in our initial public offering.

Current wording

Since our inception, we have not generated revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from our operations. As of June 30, 2026, we had cash, cash equivalents and marketable securities of $1,171.8 million and an accumulated deficit of $558.8 million. Through June 30, 2026, we have funded our operations primarily with proceeds from the sale and issuance of shares of convertible preferred stock, the issuance of convertible promissory notes, which converted into shares of convertible preferred stock and the sale and issuance of common stock as part of our initial public offering.

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

During the three months ended March 31, 2026, operating activities used $68.3 million of cash, cash equivalents and restricted cash, primarily due to our net loss of $78.9 million, offset by a $7.5 million net decrease in our operating assets and liabilities and non-cash charges of $3.1 million. The changes in operating assets and liabilities primarily related to a net increase in accrued expenses of $9.4 million, partially offset by a net increase in non-current clinical deposits of $1.1 million. Non-cash changes consisted primarily of $3.9 million in stock-based compensation expense, partially offset by $1.2 million in accretion of discounts on our investment portfolio.

Current wording

During the six months ended June 30, 2026, operating activities used $145.8 million of cash, cash equivalents and restricted cash, primarily due to our net loss of $190.2 million, offset by a $34.2 million net decrease in our operating assets and liabilities and non-cash charges of $10.1 million. The changes in operating assets and liabilities primarily related to a net increase in accrued expenses and other current liabilities of $24.4 million, a net increase in accounts payable of $11.8 million and a net decrease in other non-current assets of

Previous wording

During the three months ended March 31, 2025, operating activities used $18.2 million of cash, cash equivalents and restricted cash, primarily due to our net loss of $18.0 million, and a net increase of $1.0 million in our operating assets and liabilities, partially offset by non-cash charges of $0.8 million. The changes in operating assets and liabilities primarily related to a net increase in prepaid expenses and other current assets of $2.7 million, partially offset by a net increase in accounts payable and accrued expenses of $1.7 million. Non-cash changes consisted primarily of $1.5 million in stock-based compensation expense, partially offset by $0.8 million in changes in the fair value of the preferred stock tranche right liability.

Current wording

During the six months ended June 30, 2025, operating activities used $44.4 million of cash, cash equivalents and restricted cash, primarily due to our net loss of $46.9 million, offset by a net decrease of $0.4 million in our operating assets and liabilities and non-cash charges of $2.1 million. The changes in operating assets and liabilities primarily related to a net increase in accrued expenses and other current liabilities of $7.2 million and a net increase in prepaid expenses and other current assets of $6.2 million. Non-cash changes primarily consisted of $3.2 million in stock-based compensation expense and $1.0 million in changes in the fair value of the convertible promissory notes, partially offset by $1.4 million in changes in the fair value of the preferred stock tranche right liability and by $1.0 million in net accretion of discounts on our investment portfolio.

Previous wording

During the three months ended March 31, 2026, investing activities provided $22.8 million in cash, cash equivalents and restricted cash consisting of maturities of investments of $71.3 million, partially offset by purchases of investments of $48.4 million.

Current wording

During the six months ended June 30, 2026, investing activities used $548.2 million in cash, cash equivalents and restricted cash consisting of purchases of investments of $738.3 million, partially offset by maturities of investments of $190.1 million.

Previous wording

During the three months ended March 31, 2025, investing activities used $54.4 million in cash, cash equivalents and restricted cash consisting of purchases of investments of $54.4 million.

Current wording

During the six months ended June 30, 2025, investing activities used $128.6 million in cash, cash equivalents and restricted cash consisting of purchases of investments of $136.6 million, partially offset by maturities of investments of $8.0 million.

Previous wording

During the three months ended March 31, 2026, financing activities used $3.0 million in cash, cash equivalents and restricted cash consisting of $3.0 million in payments of deferred offering costs related to our initial public offering, partially offset by $0.1 million in proceeds from the exercise of stock options.

Current wording

During the six months ended June 30, 2026, financing activities provided $664.0 million in cash, cash equivalents and restricted cash consisting of $668.4 million in net proceeds received from the initial public offering after deducting commissions and underwriting discounts, $0.5 million in proceeds from the exercise of stock options, offset by $4.9 million in payments of deferred offering costs related to our initial public offering.

Previous wording

We believe that the cash, cash equivalents and marketable securities on hand as of March 31, 2026, together with the $718.8 million of gross proceeds raised in our initial public offering subsequent to March 31, 2026, will be sufficient to fund our operations into mid-2028. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Current wording

We believe that the cash, cash equivalents and marketable securities on hand as of June 30, 2026 will be sufficient to fund our operations into mid-2028. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Previous wording

During the three months ended March 31, 2026, there were no material changes to our critical accounting estimates or in the methodology used for estimates from those described in “Management’s discussion and analysis of financial condition and results of operations” for the year ended December 31, 2025 included in the Prospectus.

Current wording

During the six months ended June 30, 2026, there were no material changes to our critical accounting estimates or in the methodology used for estimates from those described in “Management’s discussion and analysis of financial condition and results of operations” for the year ended December 31, 2025 included in the Prospectus, except as noted below.

Previous wording

JOBS Act for the implementation of new or revised accounting standards. We have elected to use the extended transition period for complying with new or revised accounting standards and, as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. We intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of our initial public offering, or December 31, 2031, or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.235 billion in annual revenue, we have more than $700.0 million in market value of our stock held by non-affiliates (and we have been a public company for at least 12 months and have filed one annual report on Form 10-K) or we issue more than $1.0 billion of non-convertible debt securities over a three-year period.

Current wording

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. We may take advantage of these exemptions until we are no longer an emerging growth company. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. We have elected to use the extended transition period for complying with new or revised accounting standards and, as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. We intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of our initial public offering, or December 31, 2031, or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.235 billion in annual revenue, we have more than $700.0 million in market value of our stock held by non-affiliates (and we have been a public company for at least 12 months and have filed one annual report on Form 10-K) or we issue more than $1.0 billion of non-convertible debt securities over a three-year period.