Kailera Therapeutics, Inc.

Notes to condensed consolidated financial statements (unaudited)

1. Nature of the business

Kailera Therapeutics, Inc. (the “Company” or “Kailera”) is an advanced clinical-stage biotechnology company focused on elevating the next era of obesity care by advancing a diversified pipeline to provide options for people living with obesity no matter where they are in their treatment journey.

Risks and Uncertainties

The Company was incorporated in May 2024 and is subject to risks and uncertainties common to early-stage companies in the biopharmaceutical industry, including but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations, reliance on third-party organizations for the discovery, manufacturing, clinical support of its product candidates, and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive nonclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities.

There can be no assurance that the Company’s research and development efforts will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees and consultants.

Initial Public Offering

On April 20, 2026, the Company completed its initial public offering, in which it issued and sold an aggregate of 44,921,875 shares of its common stock (inclusive of 5,859,375 shares pursuant to the full exercise of the underwriters’ overallotment option) at a public offering price of $16.00 per share. The Company received aggregate net proceeds of $662.0 million after deducting commissions, underwriting discounts and other offering costs.

Liquidity and Going Concern

Through September 30, 2026, the Company has funded its 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 its initial public offering. The Company has incurred losses since its inception, including a net loss of$285.8 million for the nine months ended September 30, 2026. In addition, as of September 30, 2026, the Company had an accumulated deficit of$654.5 million. The Company expects to continue to generate operating losses for the near future. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations. The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies, and could require it to significantly delay, scale back or discontinue the development and commercialization of one or more of its product candidates. There can be no assurance that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all.

The Company believes the cash, cash equivalents and marketable securities on hand of$1,037.6 million as of September 30, 2026 will be sufficient to fund its operations and capital expenditure requirements for at least twelve months from the date these condensed consolidated financial statements are issued.

2. Summary of significant accounting policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Kailera Therapeutics, Inc., and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Unaudited interim financial information

The condensed consolidated balance sheet as of December 31, 2025 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited financial statements as of September 30, 2026 and for the three and nine months ended September 30, 2026 and 2025 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the Company’s audited financial statements included in its final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on April 17, 2026 (the “Prospectus”). The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the Company’s financial position as of September 30, 2026, and the results of operations for the three and nine months ended September 30, 2026 and 2025 and cash flows for the nine months ended September 30, 2026. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2026 or any other period.

Significant Accounting Policies

As of September 30, 2026, the Company’s significant accounting policies, which are described in Note 2 of the Notes to the Consolidated Financial Statements for the year ended December 31, 2025 included in the Prospectus related to the initial public offering filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, have not changed, except as noted below.

For stock-based awards issued to employees, non-employees, and members of the Company’s board of directors (the “Board”) for their services on the Board, the Company measures the estimated fair value of the stock-based award on the date of grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. The Company issues stock-based awards with service-based vesting conditions and records the expense for these awards using the straight-line method. The Company issues performance-based awards and records the expense for these awards over the expected vesting term and recognizes expense only if it is probable the performance-based conditions will be achieved. The Company issues stock-based awards with market-based vesting conditions and recognizes expense as the requisite service is rendered by the employee, regardless of when, if ever, the market-based vesting conditions are satisfied. The Company accounts for forfeitures as they occur.

The Company classifies stock-based compensation expense in its condensed consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s cash compensation costs are classified.

The fair value of each stock option award with either service-based vesting conditions or performance-based conditions is estimated on the date of grant using the Black-Scholes option pricing model. As there is limited trading history of its common stock, the Company determined the volatility for awards granted based on an analysis of reported data for a group of guideline companies that issued options with substantially similar terms. The expected volatility has been determined using a weighted average of the historical volatility measures of this group of guideline companies. The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The Company has not paid, and does not anticipate paying, cash dividends on its common stock; therefore, the expected dividend yield is assumed to be zero.

The fair value of each stock option award with market-based vesting conditions is estimated on the date of grant using a Monte Carlo simulation model.

Emerging growth company status and smaller reporting company status

The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the "JOBS Act"), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. The Company may take advantage of these exemptions until the Company is 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. The Company has elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of its initial public offering, or December 31, 2031, or such earlier time that it is no longer an emerging growth company. The Company would cease to be an emerging growth company if it has more than $1.235 billion in annual revenue, if it has more than $700.0 million in market value of our stock held by non-affiliates (and it has been a public company for at least 12 months and has filed one annual report on Form 10-K) or the Company issues more than $1.0 billion of non-convertible debt securities over a three-year period.

As of the date of the issuance of these financial statements, the Company is also a “smaller reporting company”, meaning that the market value of the Company's stock held by non-affiliates is less than $700 million and its annual revenue was less than $100 million during the most recently completed fiscal year. The Company may continue to be a smaller reporting company if either (i) the market value of its stock held by non-affiliates is less than $250 million or (ii) its annual revenue is less than $100 million during the most recently completed fiscal year and the market value of its stock held by non-affiliates is less than $700 million. If the Company is a smaller reporting company at the time it ceases to be an emerging growth company, the Company may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company the Company may choose to present only the two most recent fiscal years of audited financial statements in its Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Recently issued and adopted accounting pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed below, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). The amendments in ASU 2024-03 require public entities to disclose specified information about certain costs and expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within those fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (“ASU 2025-06”). The amendments change (i) the criteria regarding the timing of the capitalization of costs for internal-use software and (ii) the accounting for website development costs. The amendments are effective for annual periods beginning after December 15, 2027. The Company is currently evaluating the impact of the amendments on its condensed consolidated financial statements.

In September 2025, the FASB issued ASU 2025-07, Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (“ASU 2025-07”). The guidance refines the scope of ASC Topic 815, Derivatives and Hedging, to clarify which contracts are subject to derivative accounting. The guidance also provides clarification under ASC 606 for share-based payments from a customer in a revenue contract. The Company adopted the standard on a modified retrospective basis as of January 1, 2026. As a result of the new derivative scope exception created by the standard, certain previously identified derivatives no longer meet the criteria for derivative accounting. These derivatives did not have any fair value as of December 31, 2025, and therefore no amounts are recognized related to the adoption of the standard. The guidance of ASU 2025-07 related to share-based noncash consideration received in exchange for the transfer of goods or services to a customer did not have any impact on the Company's condensed consolidated financial statements upon adoption.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”). ASU 2025-12 addresses suggestions received from stakeholders on the ASC and to make other incremental improvements to U.S. GAAP. The update represents changes to the ASC that (1) clarify, (2) correct errors, or (3) make minor improvements. The amendments make the ASC easier to understand and apply. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

3. Marketable securities

The following table summarizes the amortized cost and estimated fair value of the Company’s investments, which are considered to be available-for-sale investments, and were included in marketable securities and long-term marketable securities (in thousands):

Certain short-term marketable securities with original maturities of less than 90 days are included in cash and cash equivalents on the consolidated balance sheets and are not included in the tables above. As of September 30, 2026, all short-term marketable securities had contractual maturities within one year and all long-term marketable securities had contractual maturities between one to two years.

As of September 30, 2026 and December 31, 2025, the Company held 144 and 12 securities, respectively, that were in an unrealized loss position, with a total fair market value of $922.5 million and $79.0 million, respectively. As of September 30, 2026 and December 31, 2025, there wereno available-for-sale securities in a continuous unrealized loss position for greater than 12 months. The Company evaluated its securities for potential impairment and considered the decline in market value to be primarily attributable to current economic and market conditions. Additionally, the Company does not intend to sell the investments in an unrealized loss position and does not expect it will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity. Given the Company’s intent and ability to hold such investments until recovery, and the lack of a significant change in credit risk for these investments, the Company does not consider these investments to be impaired and there wereno allowances for credit losses as of September 30, 2026 and as of December 31, 2025.

4. Fair value of financial assets and liabilities

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

For the nine months ended September 30, 2026, there wereno transfers between Level 1, Level 2 and Level 3.

5. Prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following (in thousands):

6. Leases

In March 2025, the Company executed a new, seven-year, non-cancellable operating lease agreement for approximately 39,500 square feet of office spacein Waltham, Massachusetts for its corporate headquarters. The lease commenced in October 2025, following completion of construction to prepare the premises for the Company’s intended use. The lease provided for base rent of $2.2 million for the first year, which will increase by approximately 2% each year. The Company’s lease payments also include real estate taxes and other operating expenses allocable to the leased premises, which exceed base year amounts. The Company has theoption to extend the lease for one additional five-year term with base rent calculated on the then-market rate. In accordance with the lease agreement, the Company maintained a letter of credit of $0.8 million, which is refundable at the end of the lease term. As of September 30, 2026, the underlying cash balance collateralizing this letter of credit was classified as restricted cash (non-current) on the condensed consolidated balance sheets based on the release date of the restrictions of this cash. In connection with the new lease agreement, the Company amended its previous lease in Waltham, Massachusetts to extend the lease term to end shortly after the lease commencement date of its new lease agreement, which occurred in the fourth quarter of 2025.

Upon commencement of the lease for its corporate headquarters, the Company recognized operating lease liabilities of $10.6 million, based on an expected contractual obligation of $15.9 million and an incremental borrowing rate of 12.0% and recognized a right-of-use asset of $10.6 million.

The following table summarizes the effect of lease costs in the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):

For the nine months ended September 30, 2026 and 2025, the Company made cash payments for operating leases of $1.7 million and $0.4 million, respectively.

The following table summarizes the future minimum lease payments due under operating leases as of September 30, 2026 (in thousands):

The total lease liabilities are presented on the Company’s consolidated balance sheets based on maturity dates. As of September 30, 2026, $1.1 million is classified under “operating lease liabilities, current” for the portion due within twelve months, and $8.9 million is classified under “operating lease liabilities, non-current.”

As of September 30, 2026, the weighted average remaining lease term was 6.1 years and the weighted average incremental borrowing rate used to determine the operating lease liability was 12%.

7. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

8. Convertible preferred stock

As of September 30, 2026, the authorized capital stock of the Company included 10,000,000 shares of $0.00001 par value preferred stock, of which there wereno shares issued or outstanding.

As of December 31, 2025, the preferred stock consisted of the following:

On April 20, 2026, the Company completed its initial public offering and all outstanding shares of convertible preferred stock were converted into 84,596,391 shares of common stock.

9. Common stock

As of September 30, 2026, the authorized capital stock of the Company included 800,000,000 shares of common stock, $0.00001 par value with 129,684,183 shares of common stock issued and outstanding. As of December 31, 2025, the authorized capital stock of the Company included 105,384,000 shares of common stock, $0.00001 par value, with 19,048 shares of common stock issued and outstanding.

On April 20, 2026, the Company completed its initial public offering in which it issued and sold an aggregate of 44,921,875 shares of its common stock (inclusive of 5,859,375 shares pursuant to the full exercise of the underwriters’ overallotment option) at a public offering price of $16.00 per share. The Company received aggregate net proceeds of $662.0 million after deducting commissions, underwriting discounts and other offering costs.

As part of the initial public offering, all outstanding shares of convertible preferred stock were converted into 84,596,391 shares of common stock. The certificate of incorporation was also amended and restated which, among other things, adjusted the number of authorized shares to 800,000,000 shares and 10,000,000 shares of common stock and preferred stock, respectively.

Each share of common stock entitles the holder toone vote, together with the holders of the preferred stock. Common stockholders are entitled to receive dividends, subject to the preferential dividend rights of the preferred stock. Through September 30, 2026, no cash dividends have been declared or paid.

As of September 30, 2026 and December 31, 2025, the Company has reserved the following shares of common stock for future issuance:

10. Stock-based compensation

Incentive Plans

The Company’s 2024 Equity Incentive Plan (the “2024 Plan”) provides for the Company to sell or issue common stock or restricted stock, or to grant incentive stock options or nonqualified stock options for the purchase of common stock, to employees, directors and consultants of the Company. The 2024 Plan is administered by the Board, or its delegee.

On April 16, 2026, in connection withthe Company's initial public offering, the Company adopted the 2026 Incentive Award Plan (the "2026 Plan"), which provides for the issuance of cash and equity awards. The number of shares initially available for issuance under awards granted pursuant to the 2026 Plan was 14,011,037 shares. The 2026 Plan provides that, on the first day of each calendar year beginning on and including January 1, 2027 and ending on and including January 1, 2036, the number of shares available for issuance under the 2026 Plan shall be increased by that number of shares equal to the lesser of (a)5% of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the Board. Following the adoption of the 2026 Plan, any shares subject to an award issued under the 2024 Plan or the 2026 Plan that expires, lapses or is terminated, exchanged for or settled in cash, surrendered, repurchased, or canceled without having been fully exercised/settled, will become available for future grant under the 2026 Plan. As of September 30, 2026,9,156,475 shares remained available for future grant under the 2026 Plan.

The exercise prices, vesting and other restrictions are determined at the discretion of the Board, or its delegee, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the common stock on the date of grant and the term of the stock option may not be greater thanten years. The Company generally grants stock-based awards with service conditions only (“service-based” awards) which generally vest over three orfour years. The Company also has granted performance-based awards which vest upon the achievement of specified events and market condition awards which vest upon the satisfaction of certain market-based conditions. Stock options generally expire afterten years.

Employee Stock Purchase Plan

On April 16, 2026, in connection with the Company's initial public offering, the Company adopted the 2026 Employee Stock Purchase Plan (the "ESPP"), which provides for the issuance of up to 1,295,482 shares of common stock. The ESPP provides that, on the first day of each calendar year beginning on and including January 1, 2027 and ending on and including January 1, 2036, the number of shares available for issuance under the ESPP shall be increased by that number of shares equal to the lesser of (a)1% of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the Board.

Stock option activity

The following table summarizes the Company’s stock option activity during thenine months ended September 30, 2026:

The aggregate intrinsic value of stock options is calculated as the amount by which the fair value of the Company's common stock exceeds the exercise prices of the underlying stock options. The intrinsic value of stock options exercised during the three and nine months ended September 30, 2026 was $0.8 million and $2.0 million, respectively. There wereno stock options exercised during thethree and nine months ended September 30, 2025.

The weighted-average grant-date fair value of the Company’s stock options granted for the three and nine months ended September 30, 2026 was $13.52 and $10.69, respectively. The weighted-average grant-date fair value of the Company’s stock options granted for thethree and nine months ended September 30, 2025 was $3.85 and $3.81, respectively.

Stock option valuation

The Company uses the Black-Scholes model to value its stock option grants that vest based on the passage of time or the achievement of certain performance criteria and expenses the related compensation cost using the straight-line method over the vesting period. The assumptions that the Company used to determine the grant-date fair value of stock options granted during thethree and nine months ended September 30, 2026 and 2025 were as follows, presented on a weighted-average basis:

During the three and nine months ended September 30, 2026, the Company also granted stock options that vest upon the achievement of certain share price thresholds. The Company accounted for these stock options as market condition awards and used the Monte Carlo valuation model to determine the fair value of the stock options and an expense recognition period of approximately 1.3 years. As of September 30, 2026, there were a total of 1,302,000 market condition stock options outstanding.

Stock-based compensation expense was allocated as follows (in thousands):

As of September 30, 2026, total unrecognized compensation cost related to the unvested stock-based awards was$92.3 million, which is expected to be recognized over a weighted-average period of 2.7 years.

11. Net loss per share

For purposes of the diluted net loss per share calculation, stock options, unvested restricted stock and convertible preferred stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for the periods presented. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The following potentially dilutive common stock equivalents, presented based on amounts outstanding at the period end, were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

12. Commitments and contingencies

Legal proceedings

The Company, from time to time, may be party to litigation arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the nine months ended September 30, 2026 and 2025, and, to the best of its knowledge, no material legal proceedings are currently pending or threatened as of September 30, 2026.

Significant agreements

Hengrui license and collaboration agreement

In May 2024, the Company entered into a license and collaboration agreement (the “Hengrui License Agreement”) with Jiangsu Hengrui Pharmaceuticals Co., Ltd. (“Hengrui”). Upon execution of the Hengrui License Agreement, the Company paid $100.0 million in cash as a non-refundable upfront payment and incurred a $10.0 million technology transfer fee, which was paid in December 2024. The Company also issued 5,677,603 shares of Series A-2 convertible preferred stock. The fair value of these shares was accounted for as additional consideration for the acquired license.

Under the terms of the Hengrui License Agreement, the Company obtained the exclusive right to develop, manufacture and commercialize specified programs worldwide, excluding China, Hong Kong, Macau, and Taiwan (the “Territory”). The Company is obligated to use commercially reasonable efforts to advance these programs. The Company may not pursue development of any competitive products, as defined in the Hengrui License Agreement, for a period of two years. The Company also has a right of first refusal on certain programs that are under development by Hengrui as well as options to license specified new form products and combination products developed by Hengrui.

Hengrui must provide certain transition and data sharing services and must also manufacture clinical materials on behalf of the Company upon request. The Company is responsible for all costs of developing and commercializing the programs in the Territory.

The Company is obligated to make clinical and regulatory milestone payments of up to an aggregate of $200.0 million. In addition, the Company is obligated to make commercial milestone payments of up to an aggregate of $5.7 billion. The Company is also obligated to make tiered royalty payments ranging from mid-single digit to low-tens based on a percentage of net sales by the Company.

If the Company elects to receive rights to the specified new form products or combination products, the Company must make option exercise payments of either a mid-seven figure amount or low-eight figure amount, which may be refundable with respect to combination products in certain circumstances.

The Company accounted for the arrangement as an asset acquisition of in-process research and development technology. No expenses were incurred or payments made, under the arrangement, during the nine months ended September 30, 2026 and 2025. All other future payments will be recognized upon achievement.

13. Related party transactions

In May 2024, the Company entered into the Hengrui License Agreement. As partial consideration for this arrangement, the Company issued shares of Series A-2 convertible preferred stock, which represented 19.9% of the outstanding capital stock of the Company at issuance, on a fully-diluted basis.

In addition, as part of the agreement with Hengrui, Hengrui has agreed to provide the Company with manufacturing services and supplies. In connection with these services, the Company recognized $0.6 million and $2.1 million in research and development expenses for thethree and nine months ended September 30, 2026, respectively. The Company didnot recognize material research and development expenses in connection with these services during thethree months ended September 30, 2025. During the nine months ended September 30, 2025, the Company recognized $0.7 million in research and development expenses in connection with these services. Amounts due to Hengrui by the Company in connection with these services totaled $2.2 million and $0.2 million as of September 30, 2026 and December 31, 2025, respectively, which amounts were included in accrued expenses on the consolidated balance sheets.

14. Segment reporting

The Company operates and manages its business as asingle operating segment for the purposes of assessing performance and making operating decisions. The Company’s current focus is on the development of a broad, advanced, and differentiated portfolio of clinical-stage injectable and oral therapies for the treatment of obesity. The Company hasone reportable segment. The determination of reportable segments is based on the Chief Operating Decision Maker's ("CODM") use of financial information provided for the purpose of assessing performance and making operating decisions. The Company's CODM is its Chief Executive Officer.

The CODM assesses performance for the segment based on net loss. The measure of segment assets is reported on the balance sheet as total assets.

To date, the Company has not generated any product revenue. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and, ultimately, seeks regulatory approval. As such, the CODM uses cash forecast models in deciding how to invest into the segment. Such cash forecast models are reviewed to assess the entity-wide operating results and performance. Net loss is used to monitor budget versus actual results. Monitoring budgeted versus actual results is used in assessing performance of the segment, along with cash forecast models.

The table below summarizes the expense categories reviewed by the CODM for thethree and nine months ended September 30, 2026 and 2025 (in thousands):

External research and development is allocated to the Company’s programs, and includes nonclinical, clinical trial, contract manufacturing, non-employee consultant and contractor, and other research and development costs.

Unallocated research and development includes external costs that are not program specific primarily related to consultant and contractor costs, in addition to research and development allocated rent expense and depreciation.

General and administrative includes external costs related to the Company’s executive, finance, legal, and other administrative functions, such as professional fees for legal, patent, consulting, accounting, audit and tax services. General and administrative also includes information technology costs and general and administrative allocated rent expense and depreciation.

Internal costs includes salaries and related costs, including stock-based compensation, for employees.

15. Subsequent events

The Company has completed an evaluation of all subsequent events after September 30, 2026 through the issuance of the unaudited condensed consolidated financial statements, to ensure that these condensed consolidated financial statements include appropriate disclosure of events both recognized in the condensed consolidated financial statements as of September 30, 2026, and events which occurred subsequently but were not recognized in the condensed consolidated financial statements. No subsequent events have occurred that would require recognition in the unaudited condensed consolidated financial statements or disclosure in the accompanying notes.