Quince Therapeutics, Inc.
For the period ended Jun 30, 2026. Filed Aug 14, 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 14, 2026
QNCX$31.73+8.1%Stored close · as of Oct 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001193125-26-217098
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001193125-26-352201
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 93 previous paragraphs and 139 current paragraphs.
44 unchanged; 33 reworded; 57 added; 14 removed; 2 previous and 5 current paragraphs rearranged.
Tables are not compared: 3 previous and 5 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 (57)
Current report
Unless otherwise indicated, all share and per share information has been retroactively adjusted to reflect the 1-for-10 reverse stock split of our common stock that became effective on April 10, 2026 (the “April 2026 Reverse Stock Split”) and the 1-for-20 reverse stock split of our common stock that became effective on June 29, 2026 (the “June 2026 Reverse Stock Split” and, together with the April 2026 Reverse Stock Split, the “Reverse Stock Splits”).
Current report
We are a clinical-stage biopharmaceutical company developing a novel disease modifying therapeutic to address the significant unmet medical need associated with pulmonary disorders with few, if any, treatment options available.
Current report
On May 18, 2026, we completed the acquisition of Orphai Therapeutics, LLC, a clinical-stage biotechnology company developing a novel disease modifying therapeutic to address the significant unmet medical need associated with pulmonary disorders with few, if any, treatment options available, in accordance with the terms of the Agreement and Plan of Merger, dated May 17, 2026 (the “Merger Agreement”), by and among the Company, Orphai, and the other parties thereto (the “Orphai Acquisition”). The acquisition brought into our pipeline Orphai’s lead asset, LAM-001, a proprietary investigational inhaled dry powder formulation of rapamycin whose differentiated characteristics may permit treatment of pulmonary conditions associated with dysfunctional mammalian target of rapamycin activity.
Current report
Under the terms of the Merger Agreement, we assumed options to purchase Orphai common stock and were converted into options to purchase an aggregate of 1,308,804 shares of common stock, which options are subject to exercise restrictions prior to obtaining approval during a special meeting of stockholders. In addition, we issued to holders of Orphai warrants (the "Acquisition Warrants") to purchase an aggregate of 10,964.505 shares of Series C Preferred Stock (or 570,169 shares on an as-converted-to-common basis, and without giving effect to any beneficial ownership limitations), at an exercise price of $996.90 per share of Series C Preferred Stock (or $19.17 per share on an as-converted-to-common basis, as adjusted for the June 2026 Reverse Stock Split).
Current report
On May 18, 2026, concurrent with the Orphai Acquisition, we entered into a securities purchase agreement (the “May 2026 Securities Purchase Agreement”) for a private placement financing with new and returning investors to raise up to $187.0 million in gross proceeds, which includes $115.0 million in gross upfront proceeds, net of $11.4 million of offering costs, commissions, legal and other expenses for net proceeds from the offering of $103.6 million and up to an additional approximately $72.0 million upon exercise of accompanying warrants (with an additional up to $11.0 million in gross proceeds available upon the exercise of warrants issued to former Orphai stockholders), in which the investors were issued approximately 144,200.633 shares of our Series C non-voting convertible preferred stock (the “Series C Preferred Stock”) (convertible into an aggregate of 7,498,447 shares of common stock, without giving effect to any beneficial ownership limitations) at a price of $797.50 per share and accompanying warrants (the “Financing Warrants”) to purchase up to 72,100.322 shares of Series C Preferred Stock (or 3,749,231 shares on an as-converted-to-common basis and without giving effect to any beneficial ownership limitations) at an exercise price of $996.90 per share (or $19.17 per share on an as-converted-to-common basis, as adjusted for the June 2026 Reverse Stock Split) (the “May 2026 Financing”). For additional information on the Orphai Acquisition and the May 2026 Financing, see Note 3 to our unaudited condensed consolidated financial statements.
Current report
Following the acquisition, our lead product candidate is LAM-001. We are currently evaluating the use of LAM-001 as a treatment for patients with pulmonary hypertension associated with interstitial lung disease (“PH-ILD”) and for patients with bronchiolitis obliterans syndrome post lung transplant (“BOS”), both severe, progressive and often life-threatening indications with few therapeutic alternatives of significant clinical benefit. In our recently completed Phase 2a trial, which enrolled patients with pulmonary arterial hypertension as well as patients with PH-ILD and sarcoidosis associated pulmonary hypertension (“SAPH”), LAM-001 achieved clinically relevant improvement across multiple established endpoints, including pulmonary vascular resistance, six-minute walking distance and functional class. A Phase 2b trial of LAM-001 is ongoing, evaluating 75 patients with PH-ILD, with data expected in the first quarter of 2028. A fully enrolled Phase 2 trial of LAM-001 in BOS is currently ongoing, with results anticipated in the first quarter of 2027. In addition, we expect to initiate a Phase 2 trial to evaluate the use of LAM-001 as a treatment for sarcoidosis-associated pulmonary hypertension in late 2026, with data expected in the fourth quarter of 2028.
Current report
We anticipate that our research and development expenses will increase from current levels due to the Orphai Acquisition and the increase in headcount as the size of our business and research and development operations grows to support additional research and development activities.
Current report
We anticipate that our general and administrative expenses will increase from current levels due to the Orphai Acquisition and the increase in headcount as the size of our business and research and development operations grows to support additional research and development activities.
Current report
Acquired in-process research and development
Current report
Acquired in-process research and development expense consists of the fair value of in-process research and development ("IPR&D") acquired in connection with the Orphai Acquisition. As the acquired in-process research and development was determined to have no alternative future use, it was expensed on the acquisition date, in accordance with ASC 730. We do not expect to recognize acquired in-process research and development expense in future periods unless we complete additional acquisitions.
Current report
Gain on Orphai Acquisition
Current report
Gain on Orphai Acquisition represents the excess of the fair value of the net assets acquired, including IPR&D acquired, and net liabilities assumed in connection with the Orphai Acquisition over the fair value of consideration transferred, recognized as of the acquisition date.
Current report
Warrant Issuance Costs
Current report
Warrant issuance costs consist of expenses incurred in connection with the Financing Warrants, which are classified as liabilities.
Current report
Business Combination
Current report
The costs for LAM-001 development increased by $0.8 million during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, due to the Orphai Acquisition as a result of the start-up costs of LAM-001.
Current report
General and administrative expenses increased by $13.3 million to $16.6 million for the three months ended June 30, 2026, from $3.3 million for the three months ended June 30, 2025. The increase in general and administrative expenses was primarily due to $9.1 million in allocated stock-based compensation and personnel related expenses primarily due to the assumptions of the Orphai historical options upon acquisition, an increase of $4.4 million in consulting and professional costs related to activities related to restructuring and the Orphai Acquisition, offset by $0.2 million related to other professional and administrative costs.
Current report
For the three months ended June 30, 2026, the fair value adjustment for contingent consideration decreased by $0.5 million as we recorded a fair value adjustment for contingent consideration as a result of the clinical readout of the Phase 3 NEAT study in January 2026.
Current report
For the three months ended June 30, 2026, the fair value adjustment for the debt decreased by $0.5 million primarily due to the settlement of the loan with the EIB in March 2026.
Current report
For the three months ended June 30, 2026, we recorded an increase of $9.0 million fair value adjustment for warrants primarily due to the issuance of the Acquisition and Financing Warrants, exercise of the Pre-Funded Warrants, cancellation of the Common warrants, and changes in the price of the underlying stock.
Current report
Other Expense, net
Current report
We recorded a tax expense of $75 thousand and $67 thousand for the three months ended June 30, 2026 and 2025, respectively. The tax expense was primarily due to the current-period Italian income tax expense.
Current report
Comparison of the six months ended June 30, 2026 to the six months ended June 30, 2025
Current report
Research and development expenses were $12.3 million for the six months ended June 30, 2026, compared to $14.7 million for the six months ended June 30, 2025, a decrease of $2.4 million.
Current report
The costs for LAM-001 development increased by $0.8 million during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, due to the Orphai Acquisition as a result of the start-up costs of LAM-001.
Current report
General and Administrative Expenses
Current report
Interest income increased by $27 thousand for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The change was due to increased yields on our investment portfolio and increased average balances.
Current report
Income Tax Benefit (Expense)
Current report
We have incurred net losses from operations since our inception. As of June 30, 2026, we had an accumulated deficit of $500.0 million. While we generated a net income in the three months ended March 31, 2026, we do not expect to generate product revenue unless and until we obtain marketing approval for and commercialize a product candidate, and we cannot assure you that we will ever generate significant revenue or profits. We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, initiate clinical trials of, and potentially seek marketing approval for, our product candidates. In addition, we expect to continue to incur significant costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses. The timing and amount of our operating expenditures will depend largely on:
Current report
the initiation, progress, timing, costs and results of current and future preclinical studies and clinical trials for our current and future product candidates;
Current report
the cost and timing of the manufacture of additional clinical trial material as well as any costs related to the scale-up of manufacturing activities;
Current report
the costs to seek regulatory approvals for any product candidates that successfully complete clinical trials;
Current report
the need to hire additional clinical, quality assurance, quality control and other scientific personnel;
Current report
the number and characteristics of product candidates that we develop or may in-license;
Current report
the outcome, timing and cost of meeting and maintaining compliance with regulatory requirements;
Current report
the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
Current report
the terms of any collaboration agreements we may choose to enter into, including the achievement of milestones or occurrence of other developments that trigger payments under any license or collaboration agreements we might have at such time;
Current report
the cost associated with the expansion of our operational, financial and management systems and increased personnel, including personnel to support our operations as a public company; and
Current report
the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize.
Current report
Concurrent with the Orphai Acquisition, in May 2026, we completed the May 2026 Financing, providing $115.0 million in upfront proceeds, with the potential to receive up to an additional $72.0 million in gross proceeds upon the exercise of the Financing Warrants (with an additional up to $11.0 million in gross proceeds available upon the exercise of warrants issued to former Orphai stockholders). The Series C Preferred Stock is subject to automatic conversion into common stock upon the third business day following our receipt of stockholder approval in accordance with Nasdaq Listing Rules, subject to certain beneficial ownership limitations. The Certificate of Designation of Preferences, Rights and Limitations of the Series C Non-Voting Convertible Preferred Stock (the “Certificate of Designation”) provides that, at any time following the earlier of (i) stockholder approval or (ii) six months after the initial issuance of the Series C Preferred Stock, if we fail to timely deliver shares of common stock to a converting holder in accordance with the terms of the Certificate of Designation, such holder may require us to pay cash in an amount equal to the fair value of the undelivered shares. As a result, we concluded that the proceeds received from the May 2026 Financing cannot be relied upon to mitigate conditions that raise substantial doubt because the availability of those proceeds is subject to conditions that are not entirely within our control. The conversion of the Series C Preferred Stock into common stock and therefore removal of the requirement to make cash payment based on the value of the undelivered shares is subject to the vote of our stockholders.
Showing the first 40 of 57 passages. Open the source sections for the rest.
Removed paragraphs (14)
Previous report
We are a late-stage biotechnology company dedicated to unlocking the power of a patient’s own biology for the treatment of rare diseases. Our proprietary AIDE technology is an innovative drug/device combination platform that uses an automated process to encapsulate a drug into a patient’s own red blood cells. Red blood cells have several characteristics that make them an excellent vehicle for drug delivery, including better safety and tolerability, enhanced tissue distribution, reduced immunogenicity, and prolongation of circulating half-life. Our AIDE technology is designed to harness many of these benefits to allow for new and improved therapeutic options for patients living with high unmet medical needs. eDSP is the first product in development that leverages our AIDE technology and is composed of DSP encapsulated in autologous red blood cells targeted to treat a rare pediatric neurodegenerative disease, A-T. DSP is a corticosteroid well-described for its anti-inflammatory properties, but is also coupled with serious adverse events, including adrenal suppression. eDSP is designed to maintain the well-described efficacy of DSP while reducing or eliminating the significant adverse events that accompany chronic corticosteroid treatment. The altered biodistribution, pharmacokinetics, and pharmacodynamics of eDSP enabled by autologous red blood cells may, therefore, improve the safety profile, and maintain or increase the desired therapeutic effect of DSP.
Previous report
In the NEAT study, our pivotal Phase 3 international, multicenter, randomized, double-blind, placebo-controlled study (n=105), the primary endpoint, which measured the change from baseline to last efficacy visit at month six using the Rescored modified International Cooperative Ataxia Rating Scale (RmICARS) compared to placebo, did not reach statistical significance. The mean change from baseline to month six was 0.94 in the active arm compared to 2.24 in the placebo arm (difference -1.30) with a p-value of 0.0851. Furthermore, the study did not meet its key secondary endpoint of improvement in Clinical Global Impression of Severity (CGI-S) measured from baseline to month six with a p-value of 0.522. eDSP was generally well tolerated and there were no clinically meaningful safety concerns identified. The most common adverse events reported in the eDSP arm included pruritis and pyrexia. Based on the results of the NEAT clinical trial, eDSP does not appear to be an effective treatment for A-T and we will be unable to continue development of eDSP in this or other therapeutic indications. We have no other current product candidates and are currently focused on preserving cash while we evaluate available strategic alternatives.
Previous report
Recent Development
Previous report
Strategic Alternatives
Previous report
On February 9, 2026, we engaged LifeSci Capital as our exclusive financial advisor to assist in restructuring activities and an evaluation of strategic alternatives aimed at maximizing shareholder value. Based on our initial evaluation, we plan to focus our efforts with respect to strategic alternatives, including effecting a reverse merger. We do not currently have any agreements or commitments to effect any such transactions and may not be able to execute such transactions on terms favorable to us and our stockholders, or at all. While we may also sell assets relating to our previous product candidates, we do not expect to receive any meaningful consideration from such sale, if any.
Previous report
In order to fund our current efforts to pursue strategic alternatives, including a reverse merger, we intend to obtain additional funding through available financing sources, which may include additional public offerings of common stock, including sales of common stock, under a Controlled Equity Offering SM Sales Agreement, dated December 18, 2024, with Cantor Fitzgerald & Co. and H.C. Wainwright & Co., LLC, or private financing of debt or equity. If we are successful in obtaining any such additional funding, we may use all or a portion of the net proceeds to repay outstanding liabilities, as well as for general corporate purposes and to support our activities with respect to strategic alternatives, including effecting a reverse merger. There can be no guarantee that we will be able to obtain such additional funding on terms favorable to the Company or our stockholders, or at all.
Previous report
We recently completed our NEAT clinical trial for our lead drug candidate, eDSP, which did not meet primary or secondary endpoints. Based on the results of the NEAT clinical trial, eDSP does not appear to be an effective treatment for A-T and we will be unable to continue development of eDSP in this or other therapeutic indications. We have no other current product candidates and do not have sufficient resources to pursue further research and development activities. With cash and cash equivalents of $18.2 million as of March 31, 2026 and net proceeds of approximately $5.4 million by issuing 2,510,000 shares of common stock under the ATM program that we raised after March 31, 2026. We do not believe that our cash and cash equivalents balance as of the date of this filing will be sufficient to fund operations for the twelve months following the filing of this Quarterly Report on Form 10-Q, and we will need to obtain additional funding. However, there can be no assurance that we will be able to obtain additional funding on acceptable terms, if at all.
Previous report
Fair Value Adjustment for Debt
Previous report
Fair Value Adjustment for Warrants
Previous report
Interest Income
Previous report
Facilities and other research and development expenses decreased by $23 thousand for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025 primarily due to a decrease in rent, storage and facilities expenses.
Previous report
Fair Value Adjustment for Debt
Previous report
Fair Value Adjustment for Warrants
Previous report
Interest Income
Reworded paragraphs (33)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes, included in “Part I. Item 1. Financial Statements” of this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations, and intentions, that are based on the beliefs of our management. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company,” “Quince,” “we,” “us,” and “our” refer to Quince Therapeutics, Inc. and its consolidated subsidiaries.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes, included in “Part I. Item 1. Financial Statements” of this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations, and intentions, that are based on the beliefs of our management. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, as well as our Amendment No. 2 to Current Report on Form 8-K filed with the SEC on July 30, 2026. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company,” “Quince,” “we,” “us,” and “our” refer to Quince Therapeutics, Inc. and its consolidated subsidiaries, including Orphai Therapeutics, for periods after the Orphai Acquisition.
Previous wording
Results of Phase 3 NEAT clinical trial of eDSP for A-T
Current wording
Prior to the Orphai Acquisition, our business was focused on developing our proprietary Autologous Intracellular Drug Encapsulation (“AIDE”) technology for the treatment of Ataxia-Telangiectasia (“A-T”) through our encapsulated dexamethasone sodium phosphate encapsulated in patient's own red blood cells (“eDSP”) product candidate. In January 2026, we completed our pivotal Phase 3 NEAT clinical trial of eDSP for the treatment of A-T. As previously disclosed, the primary endpoints of the NEAT trial did not reach statistical significance. Based on the results of the NEAT trial, we determined that we would no longer continue development of eDSP in this or other therapeutic indications, and we are currently considering next steps for the eDSP program and our other assets.
Previous wording
We have incurred net losses from operations since our inception. As of March 31, 2026, we had an accumulated deficit of $424.5 million. While we generated a net income of $35.9 million in the three months ended March 31, 2026, we do not expect to generate revenue unless and until we complete a reverse merger or other strategic transaction and the post-transaction company generates revenue, and we cannot assure you that a transaction will be completed or that the combined company will ever generate significant revenue or profits.
Current wording
We have incurred net losses from operations since our inception. As of June 30, 2026, we had an accumulated deficit of $500.0 million. While we generated a net income in the three months ended March 31, 2026, we do not expect to generate product revenue unless and until we obtain marketing approval for and commercialize a product candidate, and we cannot assure you that we will ever generate significant revenue or profits. We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, initiate clinical trials of, and potentially seek marketing approval for, our product candidates. In addition, we expect to continue to incur significant costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses.
Previous wording
Finite-lived intangible asset consist primarily of the tradename and is amortized on a straight-line basis over their estimated useful lives. Indefinite lived intangible assets are not amortized, Intangible assets related to IPR&D acquired in a business combination or an acquisition that are used in IPR&D shall be considered indefinite lived until the completion or abandonment of the associated research and development efforts. IPR&D is not amortized but is tested for impairment annually or when events or circumstances indicate that the fair value may be below the carrying value of the asset. If the carrying value of the assets is not expected to be recovered, the assets are written down to their estimated fair values.
Current wording
Finite-lived intangible asset consists primarily of the tradename and is amortized on a straight-line basis over their estimated useful lives. Indefinite lived intangible assets are not amortized. Intangible assets related to IPR&D acquired in a business combination or an acquisition that are used in IPR&D shall be considered indefinite lived until the completion or abandonment of the associated research and development efforts. IPR&D is not amortized but is tested for impairment annually or when events or circumstances indicate that the fair value may be below the carrying value of the asset. If the carrying value of the assets is not expected to be recovered, the assets are written down to their estimated fair values. As a result of the clinical readout of the Phase 3 NEAT study in January 2026, which led us to discontinue development of eDSP, several of the assumptions used in determining the initial fair value changed including expected cash flows and thus triggered the need for an interim impairment assessment. As a result, the fair value was determined to be significantly below its carrying value and we recognized a total impairment charge of $67.8 million for for indefinite and finite-lived intangible assets during the six months ended June 30, 2026.
Previous wording
We record fair value adjustment for contingent consideration primarily due to the expected timing of achieving various milestones, and the passage of time related to the contingent consideration earnout resulting from the EryDel Acquisition. Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations.
Current wording
We record fair value adjustment for contingent consideration primarily due to the expected timing of achieving various milestones, and the passage of time related to the contingent consideration earnout resulting from the acquisition of EryDel on October 20, 2023 (the "EryDel Acquisition"). Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations. As a result of the clinical readout of the Phase 3 NEAT study in January 2026, which led us to discontinue development of eDSP, the criteria for the contingent consideration payments will not be met, resulting in the related liability being reduced to zero.
Previous wording
We record fair value adjustment for debt primarily due to the passage of time and the interest accrued for the loan with the EIB.
Current wording
We record fair value adjustment for debt primarily due to the passage of time and the interest accrued for the loan with the European Investment Bank ("EIB"). In March 2026, the EIB agreed to a full settlement of all obligations associated with the loan with a single payment of 4.8 million euros ($5.5 million) which was paid on March 30, 2026.
Previous wording
We record fair value adjustment for warrant liability calculated using the Black-Scholes option pricing model, adjustments are due to changes in the Company’s stock price, the expected term, volatility, risk-free interest rate, and expected dividends.
Current wording
We record fair value adjustment for warrant liability calculated using the Black-Scholes option pricing model, adjustments are due to changes in our stock price, the expected term, volatility, risk-free interest rate, and expected dividends.
Previous wording
Interest income consists primarily of interest earned on our short-term and long-term investments portfolio.
Current wording
Interest income consists primarily of interest earned on our short-term investments portfolio.
Previous wording
Of our policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of subjective and complex judgment, involving critical accounting estimates and assumptions impacting our condensed consolidated financial statements:
Current wording
Of our policies, the following are considered critical to an understanding of our condensed consolidated financial statements as they require the application of subjective and complex judgment, involving critical accounting estimates and assumptions impacting our condensed consolidated financial statements:
Previous wording
Research and development expenses were $6.8 million for the three months ended March 31, 2026, compared to $8.1 million for the three months ended March 31, 2025, a decrease of $1.3 million.
Current wording
Research and development expenses were $5.5 million for the three months ended June 30, 2026, compared to $6.6 million for the three months ended June 30, 2025, a decrease of $1.1 million.
Previous wording
Our personnel related costs increased by $0.7 million during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, mainly as a result of an increase of $0.1 million in allocated stock-based compensation costs and a $0.6 million increase in other personnel related expenses, including severance costs related to personnel separation.
Current wording
Our personnel related costs increased by $3.6 million during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, mainly as a result of an increase of $2.7 million in allocated stock-based compensation costs and a $0.9 million increase in other personnel related expenses, including costs related to Orphai Acquisition and severance costs related to personnel separation.
Previous wording
Interest income decreased by $0.2 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The change was due to decreased yields on our investment portfolio and decreased average balances.
Current wording
Interest income increased by $0.3 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The change was due to increased yields on our investment portfolio and increased average balances.
Previous wording
Other income (expense), net increased by $1.8 million for the three months ended March 31, 2026 primarily due to unrealized gains from foreign currency translation.
Current wording
Other income (expense), net increased by $0.2 million for the three months ended June 30, 2026 primarily due to unrealized gains from foreign currency translation.
Previous wording
The costs for eDSP development decreased by $2.3 million compared to the same period from the prior year due to the ramping down related to our Phase 3 NEAT clinical trial and OLE as well as a gain on the settlement of accounts payable. This decrease was primarily due to a gain on settlement of accounts payable of $2.6 million, of which $2.4 million related to eDSP, as well as a decrease in clinical trial costs of $1.8 million, a decrease in eDSP consulting of $0.4 million, and a decrease in manufacturing costs of $0.3 million, offset by an increase of R&D expenses of $2.4 million related to the reserve and adjustment for R&D tax credits and $0.2 million of other R&D expenses.
Current wording
The costs for eDSP development decreased by $7.9 million compared to the same period from the prior year due to the ramping down related to our Phase 3 NEAT clinical trial and OLE as well as a gain on the settlement of accounts payable. This decrease was primarily due to a gain on settlement of accounts payable of $3.7 million as well as a decrease in clinical trial costs of $5.3 million, a decrease in eDSP consulting of $1.5 million, and a decrease in manufacturing costs of $0.6 million, offset by an increase of R&D expenses of $3.2 million related to the reserve and adjustment for R&D tax credits.
Previous wording
General and administrative expenses decreased by $0.5 million to $4.3 million for the three months ended March 31, 2026, from $4.8 million for the three months ended March 31, 2025. The decrease in general and administrative expenses is primarily due to $0.6 million in allocated stock-based compensation and personnel related expenses, offset by an increase of $0.1 million in consulting and professional costs related to the restructuring activities.
Current wording
General and administrative expenses increased by $12.8 million to $20.9 million for the six months ended June 30, 2026, from $8.1 million for the six months ended June 30, 2025. The increase in general and administrative expenses was primarily due to $8.5 million in allocated stock-based compensation and personnel related expenses primarily due to the assumptions of the Orphai historical options upon acquisition, and an increase of $4.3 million in consulting and professional costs related to the restructuring activities.
Previous wording
As of March 31, 2026, we conducted an impairment analysis of our intangible asset IPR&D and tradename that resulted from the purchase of EryDel Acquisition in October 2023. We conducted a quantitative analysis which resulted in our fair value being significantly below our current carrying value due to the assumptions changing as a result of the Phase III NEAT study in January 2026. As a result of the analyses, we recorded a non-cash intangible asset impairment charge of $67.8 million for three months ended March 31, 2026.
Current wording
During the six months ended June 30, 2026, we conducted an impairment analysis of our intangible asset IPR&D and tradename that resulted from the EryDel Acquisition in October 2023. We conducted a quantitative analysis which resulted in our fair value being significantly below our current carrying value due to the assumptions changing as a result of the Phase 3 NEAT study in January 2026. As a result of the analyses, we recorded a non-cash intangible asset impairment charge of $67.8 million for the six months ended June 30, 2026.
Previous wording
For the three months ended March 31, 2026, we recorded a $64.3 million fair value adjustment for contingent consideration as a result of the clinical readout of the Phase III NEAT study in January 2026.
Current wording
For the six months ended June 30, 2026, we recorded a $64.3 million fair value adjustment for contingent consideration as a result of the clinical readout of the Phase 3 NEAT study in January 2026.
Previous wording
For the three months ended March 31, 2026, we recorded a $12.2 million fair value adjustment for the debt primarily due to the settlement of the loan with the EIB.
Current wording
For the six months ended June 30, 2026, we recorded a $12.2 million fair value adjustment for the debt primarily due to the settlement of the loan with the EIB in March 2026.
Previous wording
For the three months ended March 31, 2026, we recorded a $31.1 million fair value adjustment for warrants primarily due to timing of issuance of the warrants and change in the price of our common stock.
Current wording
For the six months ended June 30, 2026, we recorded an increase of $40.1 million in fair value adjustment for warrants primarily due to timing of issuance of the Acquisition and Financing Warrants and change in the price of our common stock.
Previous wording
We recorded $5.3 million of tax benefit for the three months ended March 31, 2026 and tax expense of $47 thousand for the three months ended March 31, 2025. Tax benefit is primarily driven by the release of unrecognized tax benefit related to the 2025 intercompany sale of intellectual property.
Current wording
We recorded $5.3 million of tax benefit for the six months ended June 30, 2026 and tax expense of $0.1 million for the six months ended June 30, 2025. The tax benefit was primarily related to discrete release of uncertain tax position liabilities associated with certain intellectual property following changes in facts and circumstances in the six months ended June 30, 2026 that affected the valuation of the intellectual property.
Previous wording
We have not generated any revenue and we have never been profitable. To date, we have financed our operations primarily through the issuance and sale of our securities. From inception through March 31, 2026, we received net proceeds of approximately $337.1 million from the issuance of redeemable convertible preferred stock, convertible promissory notes, common warrants, pre-funded warrants, and common stock.
Current wording
We have not generated any revenue and we have never been profitable. To date, we have financed our operations primarily through the issuance and sale of our securities. From inception through June 30, 2026, we received net proceeds of approximately $345.7 million from the issuance of redeemable convertible preferred stock, convertible promissory notes, common warrants, pre-funded warrants, and common stock.
Previous wording
We evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued. We have incurred losses and generated negative operating cash flows since our inception and anticipate that we will continue to incur losses for at least the next several years. In January 2026, we ceased clinical development of eDSP as the primary and secondary endpoints did not achieve statistical significance in our Phase 3 NEAT clinical trial. As of March 31, 2026, we had cash and cash equivalents of $18.2 million. Based on our current operating plan, we believe that our cash and cash equivalents balance as of the date of this filing will not be sufficient to fund operations and capital expenditures for the twelve months following the filing of this Quarterly Report on Form 10-Q, and we will need to obtain additional funding. We intend to obtain additional funding through available financing sources which may include additional public offerings of common stock, including sales of common stock, under a Controlled Equity Offering SM Sales Agreement, dated December 18, 2024, with Cantor Fitzgerald & Co. and H.C. Wainwright & Co., LLC, and/or private financing of debt or equity. Management’s belief with respect to our ability to fund operations is based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, we may need to seek additional funding sooner than would otherwise be expected. There can be no assurance that we will be able to obtain additional funding on acceptable terms, if at all. Because of the uncertainty in securing additional funding and the insufficient amount of cash and cash equivalent resources, we concluded that substantial doubt exists with respect to our ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.
Current wording
We evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that our unaudited condensed consolidated financial statements are issued.
Previous wording
If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. While we have engaged a financial advisor to support our board of directors in exploring strategic transactions, there can be no assurance that we will be able to engage in a strategic alternative transaction, including a reverse merger, or even if we do so, that any such transaction will result in favorable terms and conditions for us or our stockholders. If we are unable to execute a strategic transaction, may be required to pursue a reorganization proceeding under applicable bankruptcy or insolvency laws, including under Chapters 7 or 11 of the U.S. Bankruptcy Code.
Current wording
Until such time, if ever, as we can generate product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.
Previous wording
On December 18, 2024, we entered into a Controlled Equity Offering SM Sales Agreement, with Cantor Fitzgerald & Co. and H.C. Wainwright & Co., LLC, or the Agents, relating to the sale of shares of our common stock, par value $0.001 per share. In accordance with the terms of this agreement, we may offer and sell up to $21.9 million of shares of common stock. In October 2025, we increased the total amount available under the ATM program to $75.0 million.
Current wording
On December 18, 2024, we entered into a Controlled Equity Offering SM Sales Agreement, with Cantor Fitzgerald & Co. and H.C. Wainwright & Co., LLC (the "Agents"), relating to the sale of shares of our common stock. In accordance with the terms of this agreement, we could offer and sell up to $21.9 million of shares of common stock. In October 2025, we increased the total amount available under the ATM program to $75.0 million.
Previous wording
During the three months ended March 31, 2026, we utilized our ATM program to raise net proceeds of approximately $15.0 million by issuing 8,018,500 shares of common stock. As of March 31, 2026, $53.1 million remained available to be sold under the ATM program.
Current wording
During the three and six months ended June 30, 2026, we utilized our ATM program to raise net proceeds of approximately $5.4 million and $20.3 million by issuing 125,500 shares and 526,435 shares of common stock, respectively. As of June 30, 2026, $47.5 million remained available to be sold under the ATM program.
Previous wording
On June 12, 2025, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”), with certain institutional investors (the “Investors”) and certain members of our management (together with the Investors, the “Purchasers”) pursuant to which we issued and sold to the Purchasers in a private placement (the “Private Placement”): (i) 667,193 shares (the “Shares”) of our common stock, par value $0.001 per share, as adjusted for the Reverse Stock Split (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 200,000 shares of common stock, as adjusted for the Reverse Stock Split, and (iii) accompanying warrants to purchase up to an aggregate of 867,193 shares of common stock (the “Common Warrants”), as adjusted for the Reverse Stock Split, for aggregate gross proceeds of approximately $11.5 million (excluding up to approximately $10.4 million of aggregate gross proceeds that may be received in the future upon the cash exercise in full of the Common Warrants issued in the Private Placement), before deducting placement agent fees and other expenses payable by us. Each Share and each Pre-Funded Warrant sold pursuant to the Securities Purchase Agreement was accompanied by one Common Warrant. The combined purchase price of each Share and accompanying Common Warrant was $13.25 (which included $1.25 per Common Warrant in accordance with the rules and regulations of Nasdaq). The combined purchase price of each Pre-Funded Warrant and accompanying Common Warrant was $13.24 (equal to the combined purchase price per Share and accompanying Common Warrant, minus $0.01).
Current wording
On June 12, 2025, we entered into a Securities Purchase Agreement (the “June 2025 Securities Purchase Agreement”), with certain institutional investors (the “Investors”) and certain members of our management (together with the Investors, the “Purchasers”) pursuant to which we issued and sold to the Purchasers in a private placement (the “Private Placement”): (i) 33,360 shares (the “Shares”) of our common stock, (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of 10,000 shares of common stock, and (iii) accompanying warrants to purchase up to an aggregate of 43,360 shares of common stock (the “Common Warrants”), for aggregate gross proceeds of approximately $11.5 million (excluding up to approximately $10.4 million of aggregate gross proceeds that may be received in the future upon the cash exercise in full of the Common Warrants issued in the Private Placement), before deducting placement agent fees and other expenses payable by us. Each Share and each Pre-Funded Warrant sold pursuant to the Securities Purchase Agreement was accompanied by one Common Warrant. The combined purchase price of each Share and accompanying Common Warrant was $265.00 (which included $25.00 per Common Warrant in accordance with the rules and regulations of Nasdaq). The combined purchase price of each Pre-Funded Warrant and accompanying Common Warrant was $264.80 (equal to the combined purchase price per Share and accompanying Common Warrant, minus $0.20).
Previous wording
In connection with the acquisition of EryDel on October 20, 2023, we guaranteed the EIB Loan. The EIB Loan was amended and restated as of the acquisition date. The EIB Loan provides for maximum borrowings of 30.0 million euro through four tranches; tranche A, 3.0 million euro; tranche B, 7.0 million euro; tranche C, 10.0 million euro; and tranche D, 10.0 million euro. Each tranche is subject to conditions precedent related to our business and capitalization. Only tranches A and B were drawn. All amounts under tranche A and B were payable on their maturity date of August 2026. Interest accrued at fixed rates for each tranche and both principal and interest was payable on the maturity date for each tranche (with the exception of 2% cash interest which was accrued and payable quarterly during fiscal year 2025 pursuant to the terms of the Amendment (as defined below), which correspondingly reduced the deferred interest rate accruing during such period). The fixed rates ranged from 7.0% to 9.0% per annum.
Current wording
In connection with the acquisition of EryDel on October 20, 2023, we guaranteed the EIB Loan. The EIB Loan was amended and restated as of the acquisition date. The EIB Loan provided for maximum borrowings of 30.0 million euro through four tranches; tranche A, 3.0 million euro; tranche B, 7.0 million euro; tranche C, 10.0 million euro; and tranche D, 10.0 million euro. Each tranche was subject to conditions precedent related to our business and capitalization. Only tranches A and B were drawn. All amounts under tranche A and B were payable on their maturity date of August 2026. Interest accrued at fixed rates for each tranche and both principal and interest was payable on the maturity date for each tranche (with the exception of 2% cash interest which was accrued and payable quarterly during fiscal year 2025 pursuant to the terms of the Amendment (as defined below), which correspondingly reduced the deferred interest rate accruing during such period). The fixed rates ranged from 7.0% to 9.0% per annum.
Previous wording
Net cash used in operating activities decreased by $2.0 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to lower operating payments driven by decreased clinical development activities. Net cash used in operating activities was $7.6 million for the three months ended March 31, 2026. Cash used in operating activities was primarily due to our net income of $35.9 million for the period, adjusted for $41.2 million of non-cash items, including $31.1 million change in the fair value of warrants, $1.3 million in stock-based compensation, $64.3 million change in the fair value of contingent consideration liabilities, $12.2 million change in the fair value of the EIB Loan, $2.6 million in gain on settlement of accounts payable, $67.8 million non-cash impairment on intangible assets, and a net increase in our operating assets of $1.8 million and a net increase in our accounts payable, and accrued expenses and other current liabilities of $0.6 million.
Current wording
Net cash used in operating activities decreased by $5.5 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to lower operating payments driven by decreased clinical development activities. Net cash used in operating activities was $26.5 million for the six months ended June 30, 2026. Cash used in operating activities was primarily due to our net loss of $39.6 million for the period, adjusted for $23.0 million of non-cash items, including $67.8 million non-cash impairment on intangible assets, $64.3 million change in the fair value of contingent consideration liabilities, $59.0 million acquired in-process research and development from the Orphai Acquisition, $35.6 million change in the fair value of warrants, $13.4 million in stock-based compensation, $12.2 million change in the fair value of the EIB Loan, $3.7 million in gain on settlement of accounts payable, and a net increase in our operating assets of $1.1 million and a net increase in our accounts payable, and accrued expenses and other current liabilities of $8.9 million.
Previous wording
Cash provided by investing activities was $12.0 million for the three months ended March 31, 2026, primarily related to the proceeds from maturities of short-term investments.
Current wording
Cash provided by investing activities was $20.0 million for the six months ended June 30, 2026, primarily related to the proceeds from maturities of short-term investments of $12.0 million and the net cash assumed in the Orphai Acquisition of $8.0 million.
Previous wording
Cash provided by investing activities was $10.9 million for the three months ended March 31, 2025, primarily related to the maturities of short-term investments of $13.0 million, and the purchase of investments of $2.0 million.
Current wording
Cash provided by investing activities was $16.9 million for the six months ended June 30, 2025, primarily related to the maturities of short-term investments of $31.0 million, and the purchase of investments of $13.8 million.
Previous wording
Cash provided by financing activities was $9.4 million for the three months ended March 31, 2026, which consisted of $15.0 million from the issuance of common stock in connection with the ATM offerings and the repayment of debt of $5.5 million.
Current wording
Cash provided by financing activities was $118.4 million for the six months ended June 30, 2026, which consisted of $103.6 million of proceeds from the issuance of Series C Preferred Stock and Financing Warrants pursuant to the May 2026 Private Placement, $20.3 million from the issuance of common stock in connection with the ATM offerings, offset by the repayment of debt of $5.5 million.
Previous wording
Cash used in financing activities was $0.1 million for the three months ended March 31, 2025, which consisted of net proceeds from the exercise of stock options in the period.
Current wording
Cash used in financing activities was $14.5 million for the six months ended June 30, 2025, which consisted of gross proceeds of $11.5 million from the issuance of common stock, common warrants, and pre-funded warrants in connection with June 2025 Private Placement, $2.9 million from the issuance of common stock in connection with the ATM offerings, and $0.2 million from the exercise of stock options in the period.
Previous wording
We enter into contracts in the normal course of business with third party contract organizations for clinical trials, non-clinical studies and testing, manufacturing, and other services and products for operating purposes. The amount and timing of the payments under these contracts varies based upon the timing of the services. We have recorded accrued expense of approximately $3.4 million in our condensed consolidated balance sheet for expenditures incurred by these vendors as of March 31, 2026. Our cancellable future operating expense commitments based on existing contracts as of March 31, 2026 is immaterial. These obligations will be satisfied in the normal course of business, but generally no longer than 12 months. In March 2026, we entered into a Settlement Agreement with the EIB to settle our outstanding obligations in full with a single payment of 4.8 million euros ($5.5 million). Following such payment, all of our obligations to the EIB were satisfied and discharged. Additionally, in March 2026, it was determined that the criteria for the contingent consideration payouts will not be met, resulting in the related liability being reduced to zero. As of March 31, 2026, the fair value of warrants issued in connection with the private placement is $0.7 million.
Current wording
We enter into contracts in the normal course of business with third party contract organizations for clinical trials, non-clinical studies and testing, manufacturing, and other services and products for operating purposes. The amount and timing of the payments under these contracts varies based upon the timing of the services. We have recorded accrued expense of approximately $3.9 million in our condensed consolidated balance sheets for expenditures incurred by these vendors as of June 30, 2026. Our cancellable future operating expense commitments based on existing contracts as of June 30, 2026 is $2.5 million. These obligations will be satisfied in the normal course of business, but generally no longer than 12 months. In March 2026, we entered into a Settlement Agreement with the EIB to settle our outstanding obligations in full with a single payment of 4.8 million euros ($5.5 million). Following such payment, all of our obligations to the EIB were satisfied and discharged. Additionally, in March 2026, it was determined that the criteria for the contingent consideration payouts will not be met, resulting in the related liability being reduced to zero. As of June 30, 2026, the fair value of warrants issued in connection with the June 2025 and May 2026 private placements is $6.3 million.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The costs for eDSP development decreased by $5.4 million compared to the same period from the prior year due to the ramping down related to our Phase 3 NEAT clinical trial and Open-Label Extension Clinical Trial ("OLE") as well as a gain on the settlement of accounts payable. This decrease was primarily due to a gain on settlement of accounts payable of $1.1 million, as well as a decrease in clinical trial costs of $3.5 million, a decrease in eDSP consulting of $1.1 million, and a decrease in manufacturing costs of $0.2 million, offset by an increase of R&D expenses of $0.5 million related to the reserve and adjustment for R&D tax credits.
Current report — wording carried from elsewhere
The following sets forth our results of operations for the six months ended June 30, 2026 and 2025 (in thousands, except for percentages):
Current report — wording carried from elsewhere
Research and Development Expenses(in thousands, except for percentages):
Current report — wording carried from elsewhere
Personnel related costs increased by $4.3 million during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, mainly as a result of an increase of $2.9 million in allocated stock-based compensation costs and a $1.4 million increase in other personnel related expenses, including costs related to Orphai Acquisition and severance costs related to personnel separation.
Current report — wording carried from elsewhere
Other income (expense), net increased by $2.0 million for the six months ended June 30, 2026, primarily due to unrealized gains from foreign currency translation.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Fair Value Adjustment for Contingent Consideration
Previous report — wording carried elsewhere
Fair Value Adjustment for Contingent Consideration