Korsana Biosciences, Inc.

Current report

The following summarizes the principal factors that make an investment in the Company speculative or risky, all of which are more fully described in the Risk Factors section below. This summary should be read in conjunction with the Risk Factors section and should not be relied upon as an exhaustive summary of the material risks facing our business. Some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past, and instead reflect our beliefs and opinions as to the factors, events or contingencies that could materially and adversely affect us in the future. The occurrence of any of these risks, could harm our business, financial condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this Quarterly Report and those we may make from time to time. You should consider all of the risk factors described in our public filings when evaluating our business.

Current report

Risk Factor Summary

Current report

Our business is subject to a number of risks that, if realized, could materially harm our business, prospects, financial condition and results of operations. The summary below is not exhaustive and is qualified by reference to the full set of risk factors set forth below. Some of the more significant risks and uncertainties we face include the following:

Current report

We will need to raise additional capital, and if we are unable to do so when needed, that could raise substantial doubt about our ability to continue as a going concern;

Current report

We are a preclinical-stage biotechnology company with a limited operating history on which to assess our business; we have not initiated, conducted, or completed any clinical trials, have no products approved for commercial sale, have historically incurred losses, and anticipate that we will continue to incur significant losses for the foreseeable future;

Current report

Our programs are in preclinical stages of development and may fail in development or suffer delays that materially and adversely affect their commercial viability. If we or our current or future collaborators are unable to complete development of or commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed;

Current report

We are substantially dependent on the success of our lead product candidate, KRSA-028, and our anticipated clinical trials of such product candidate may not be successful;

Current report

We currently rely on licensing arrangements with Paragon through the license agreement with Paragon entered into on June 8, 2026 with respect to our Aβ program (the “Paragon License Agreement”) and research collaborations with Paragon through the Paragon ADOA, the Paragon POA, and the Paragon Research Letter Agreement. If we are unable to maintain collaborations or licensing arrangements, or if our collaborations or licensing arrangements are not successful, our business could be negatively impacted;

Current report

Our intellectual property portfolio is at an early stage, and we do not currently own any issued patents or pending patent applications. Therefore, our ability to obtain and protect our patent rights, and protect other proprietary rights, is uncertain, exposing us to the possible loss of competitive advantage;

Current report

The regulatory approval processes of the U.S. Food and Drug Administration (the “FDA”) and other comparable foreign regulatory authorities are lengthy, time-consuming, and inherently unpredictable. If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for our product candidates, we will not be able to commercialize, or will be delayed in commercializing, our product candidates, and our ability to generate revenue will be materially impaired;

Current report

The market price of our common stock is expected to be volatile, and the market price of our common stock may drop;

Current report

Provisions in our articles of organization and bylaws and provisions under Massachusetts law could make an acquisition of us more difficult and may prevent attempts by our shareholders to replace or remove our management, and if our proposed redomestication to the Cayman Islands is effected, we will be governed by Cayman Islands law and our new memorandum and articles of association, provisions of which also have anti-takeover implications;

Current report

Holders of our Series B non-voting convertible preferred stock, no par value per share (“Series B Preferred Stock”), have the ability to significantly influence all matters submitted to our shareholders for approval, and the directors elected exclusively by such holders have the ability to control or significantly influence all matters submitted to our board of directors for approval; and

Current report

Risk Factors

Current report

We are a preclinical stage biotechnology company with a limited operating history on which to assess our business; we have not completed any clinical trials, and we have no products approved for commercial sale, which may make it difficult to evaluate our current business and likelihood of success and viability.

Current report

We are a preclinical stage biotechnology company with a limited operating history. Since our inception, we have incurred operating losses with no corresponding revenue and have utilized substantially all of our resources to identify and develop our product candidates, organize and staff our company, and provide other general and administrative support for our operations. We have no significant experience as a company in initiating, conducting, or completing preclinical studies or clinical trials. In part because of this lack of experience, we cannot be certain that our preclinical studies or clinical trials will begin or be completed on time, if at all. In addition, we have not yet demonstrated an ability to obtain regulatory approvals, manufacture a commercial-scale product, or arrange for a third party to do so on our behalf, or conduct sales, marketing, and distribution activities necessary for successful product commercialization. Consequently, any predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history.

Current report

In addition, as our business grows, we may encounter unforeseen expenses, restrictions, difficulties, complications, delays, and other known and unknown factors. We will need to transition at some point from a company with an early research and development focus to a company capable of supporting larger scale clinical trials and eventually commercial activities. We have not yet taken such steps and may not be successful in such a transition.

Current report

We will require substantial additional capital to finance our operations in the future. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce, and/or eliminate one or more of our development programs or future commercialization efforts.

Current report

Developing biotechnology products is a long, time-consuming, expensive, and uncertain process that takes years to complete. We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct preclinical studies and anticipated clinical trials of, and seek regulatory approval for, our product candidates, advance discovery efforts with respect to our research and development programs, and advance any future programs and product candidates that we may license. Even if one or more of the programs that we develop is approved for commercial sale, we anticipate incurring significant costs associated with sales, marketing, manufacturing, and distribution activities to launch any such product. Our expenses could increase beyond expectations if we are required by the FDA or other regulatory agencies to perform preclinical studies or clinical trials in addition to or more expansive than those that we currently anticipate. Because the design and outcome of our planned and anticipated clinical trials are highly uncertain, we cannot reasonably estimate the actual amount of funding that will be necessary to successfully complete the development and commercialization of any program we develop. Our future capital requirements depend on many factors, including but not limited to:

Current report

the scope, design, progress, results, and costs of discovery and preclinical and clinical development for our product candidates;

Current report

the costs and timing of completing clinical and commercial-scale manufacturing activities;

Current report

the success of our current or future collaborations, including our collaboration with Paragon and Paragon Laboratories pursuant to the Paragon ADOA and Paragon Research Letter Agreement, respectively, and the success of the Paragon License Agreement and any future license agreements we enter into with Paragon;

Current report

As a result, we will require substantial additional funding to continue our operations. As of September 30, 2026, we had $456.2 million in cash and cash equivalents. We expect that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements into 2029. However, we will still need to raise additional capital to continue to fund our operations in the future. If we are unable to raise additional capital when needed, that could raise substantial doubt about our ability to continue as a going concern.

Current report

We may be required to seek additional funds sooner than planned through public or private equity offerings, debt financings, collaborations and licensing arrangements, or other sources, and adequate additional financing may not be available to us on acceptable terms, or at all. Such financing may dilute our shareholders or the failure to obtain such financing may restrict our operating activities. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our business. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders will be diluted, and the terms may include liquidation or other preferences and anti-dilution protections that adversely affect the rights of our shareholders. Debt financing may result in the imposition of debt covenants, increased fixed payment obligations or other restrictions that may affect our business. If we raise additional funds through upfront payments or milestone payments pursuant to future collaborations with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us. Our ability to raise additional capital may be adversely impacted by global macroeconomic conditions and volatility in the credit and financial markets in the United States and worldwide. Our failure to raise capital as and when needed or on acceptable terms would have a negative impact on our financial condition and our ability to pursue our business strategy, and we may have to delay, reduce the scope of, suspend, or eliminate one or more of our product candidates, clinical trials, or future commercialization efforts or cease our operations.

Current report

In addition, as a result of our assumption of the Paragon ADOA in connection with the Merger, we are subject to the obligation to grant to Parasa on December 31, 2026, warrants to purchase a number of shares equal to 1.00% of our outstanding shares of common stock as of the date of the grant on a fully-diluted basis, with an exercise price equal to the fair market value of the underlying shares on the grant date. Such warrants granted will result in further dilution to all of our securityholders.

Current report

We expect to continue to incur losses for the foreseeable future and may not be able to achieve or sustain profitability in the future. We have no products approved for sale, have not generated any revenue from our product candidates, and may never generate revenue or become profitable.

Current report

Investment in biotechnology product development is a highly speculative undertaking and entails substantial upfront capital expenditures and significant risks that any product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, and become commercially viable. We have no products approved for commercial sale, have not generated any revenue from product sales to date, and continue to incur significant research and development and other expenses related to our ongoing operations. We do not expect to generate product revenue unless or until we successfully complete preclinical and clinical development and obtain regulatory approval for, and then successfully commercialize, at least one of our product candidates.

Current report

We incurred significant net losses in each period since we commenced operations in November 2024. We generated net losses of $35.7 million for the period from November 2024 (inception) to December 31, 2025 and net losses of $46.4 million and $77.3 million during the three and nine months ended September 30, 2026, respectively. As of September 30, 2026, we had an accumulated deficit of $113.0 million. We expect to continue to incur losses for the foreseeable future. Our operating expenses and net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase substantially if and as we:

Current report

advance our existing and future product candidates through preclinical and clinical development;

Current report

seek to identify additional product candidates;

Current report

seek, obtain, and maintain regulatory approvals for our product candidates;

Current report

make milestone payments to Paragon under the Paragon License Agreement and Paragon ADOA, and to Paragon Laboratories under the Paragon Research Letter Agreement, and under any additional future collaboration or license agreements that we enter into;

Current report

establish clinical and commercial-scale current good manufacturing practices (“cGMP”) capabilities through a third-party or our own manufacturing facility; and

Current report

operate as a public company.

Current report

In addition, our expenses will increase if, among other things, we are required by the FDA or other regulatory authorities to perform clinical trials or studies in addition to, or different than, those that we currently anticipate, there are any delays in initiating or completing our clinical trials or the development of any of our product candidates, or there are any third-party challenges to our intellectual property or we need to defend against any intellectual property-related claim.

Current report

Our failure to become profitable would decrease our value and could impair our ability to raise capital, maintain our research and development efforts, expand our business, and/or continue our operations. A decline in the value of our stock could also cause shareholders to lose all or part of their investment.

Current report

The development and commercialization of drugs is highly competitive. Our product candidates, if approved, will face significant competition and our failure to effectively compete may prevent us from achieving significant market penetration. We compete with a variety of multinational biopharmaceutical companies, specialized biotechnology companies, and emerging biotechnology companies, as well as academic institutions, governmental agencies, and public and private research institutions, among others. If approved for the treatment of patients with Alzheimer’s disease, KRSA-028 would compete with two anti-amyloid antibody therapies that have been approved by the FDA for treatment of early Alzheimer’s disease: lecanemab (Leqembi), marketed by Eisai and Biogen, and donanemab (Kisunla), marketed by Eli Lilly. We are aware of several companies with product candidates in clinical development for the treatment of patients with Alzheimer’s disease, including Roche (including Genentech, its wholly owned subsidiary), Lilly, Eisai, Biogen, AbbVie, Merck, Sanofi, Bristol Myers Squibb, Voyager Therapeutics, Denali Therapeutics, Acumen, Alzheon, AC Immune, Alnylam Pharmaceuticals, ChainGen, Akeso, and others. Several of these companies are developing anti-Aβ antibodies that, like KRSA-028, are designed to use transferrin receptor-mediated transport to increase brain exposure, including Roche’s trontinemab, which is being evaluated in Phase 3 clinical trials, and AbbVie’s ABBV-1758 and Denali Therapeutics’ DNL921, each of which is in early-stage clinical development. In addition, Lilly is evaluating remternetug, an antibody that, like KRSA-028, targets a pyroglutamate-modified form of Aβ, in Phase 3 clinical trials, including with subcutaneous administration. Many of the companies with which we are currently competing or will compete against in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and commercialization than we do, and are further along in the clinical development and/or commercialization process. Mergers and acquisitions in the pharmaceutical and biotechnology industry may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites, raising capital, enrolling patients in clinical trials, establishing and defending rights to intellectual property, as well as in acquiring technologies complementary to, or necessary for, our product candidates.

Current report

Our competitors have developed or are developing, and may in the future develop, product candidates or products competitive with our product candidates. Competitive therapeutic treatments include those that have already been approved and accepted by the medical community and any potential new treatments, including those currently under clinical development. Our success will depend partially on our ability to develop and commercialize products that have a competitive safety, efficacy, dosing, and/or presentation profile. Our commercial opportunity and success will be reduced or eliminated if competing products are (or are perceived to be) safer, more effective, less expensive, or have a more attractive dosing profile or presentation than the products we develop, or if competitors develop products or biosimilars that enter the market more quickly than us and gain market acceptance. Conversely, the lack of commercial success of other competing therapies may raise concerns about the financial viability of our product candidates.

Current report

In addition, because of the competitive landscape for Alzheimer’s disease, we may also face competition for establishing clinical trial sites and enrolling patients. Patient enrollment will depend on many factors, including if potential clinical trial patients choose to undergo treatment with approved products or enroll in competitors’ ongoing clinical trials for product candidates that are under development for the same indications as our product candidates. An increase in the number of approved products for the indications we are targeting with our product candidates will likely further exacerbate this competition. Our inability to enroll a sufficient number of patients could, among other impacts, delay our development timeline, which may further harm our competitive position.

Current report

Our programs are in the preclinical stages of development and may fail in development or suffer delays that materially and adversely affect our viability. If we or our future collaborators are unable to complete development of or commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.

Previous report

You should carefully review and consider the information regarding certain factors which could materially affect our business, financial condition or future results set forth under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and Part 1, Item 1A of our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026. There have been no material changes in our risk factors since our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026.