Tectonic Therapeutic, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. The following discussion contains forward-looking statements that are based upon current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” and elsewhere in this Quarterly Report. Please also see the section titled “Cautionary Note Regarding Forward-Looking Statements.” All brand names or trademarks appearing in this report are the property of their respective holders.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). The following discussion contains forward-looking statements that are based upon current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” and elsewhere in this Quarterly Report. Please also see the section titled “Cautionary Note Regarding Forward-Looking Statements.” All brand names or trademarks appearing in this report are the property of their respective holders.

Previous wording

We are a clinical-stage biotechnology company focused on the discovery and development of therapeutic proteins and antibodies that modulate the activity of GPCRs. The discovery of biologics that can modulate GPCRs has historically been quite challenging. We have developed a proprietary technology platform called GEODe™, with the aim of addressing these challenges to enable the discovery and development of GPCR-targeted biologic medicines that can modify the course of disease. We focus on areas of significant unmet medical need, often where therapeutic options are poor or nonexistent, as these are areas where new medicines have the potential to improve patient quality of life or extend duration of life.

Current wording

We are a clinical-stage biotechnology company focused on the discovery and development of therapeutic proteins and antibodies that modulate the activity of G-protein coupled receptors (“GPCRs”). The discovery of biologics that can modulate GPCRs has historically been quite challenging. We have developed a proprietary technology platform called GEODe™, with the aim of addressing these challenges to enable the discovery and development of GPCR-targeted biologic medicines that can modify the course of disease. We focus on areas of significant unmet medical need, often where therapeutic options are poor or nonexistent, as these are areas where new medicines have the potential to improve patient quality of life or extend duration of life.

Previous wording

The ongoing APEX Phase 2 clinical trial is a global, 24-week, placebo-controlled trial designed to evaluate the safety and efficacy of TX45 administered subcutaneously (“SC”) in subjects with Pulmonary Hypertension (“PH”) in Heart Failure with Preserved Ejection Fraction (“HFpEF”), known as PH-HFpEF, enriched for combined pre- and post-capillary pulmonary hypertension (“CpcPH”). We dosed our first subject in the APEX Phase 2 clinical trial in October 2024. Subjects were randomized to 300 mg SC (2 ml injection) once monthly of TX45, 300 mg SC once every other week of TX45, or placebo. Change from baseline in pulmonary vascular resistance (“PVR”) in the PVR>3 population is the primary endpoint of the trial. The trial is designed to enrich for patients with a PVR>3 aiming for 70% of patients enrolled. In July 2026, the Independent Data Monitoring Committee (“IDMC”) met to review unblinded safety and efficacy data from the TX45 APEX Phase 2 clinical trial, including approximately 80% of the expected patient exposure. The IDMC recommended the continuation of the study without modification. In June 2026, we completed enrollment in the APEX Phase 2 clinical trial, having enrolled 191 patients across 14 countries, with approximately 72% of enrolled patients in the enriched population of CpcPH patients with a PVR>3 WU at baseline. We expect topline results from the APEX clinical trial early in the first quarter of 2027.

Current wording

The ongoing APEX Phase 2 clinical trial is a global, 24-week, placebo-controlled trial designed to evaluate the safety and efficacy of TX45 administered subcutaneously (“SC”) in subjects with Pulmonary Hypertension (“PH”) in Heart Failure with Preserved Ejection Fraction (“HFpEF”), known as PH-HFpEF, enriched for combined pre- and post-capillary pulmonary hypertension (“CpcPH”). We dosed our first subject in the APEX Phase 2 clinical trial in October 2024. Subjects were randomized to 300 mg SC (2 ml injection) once monthly of TX45, 300 mg SC once every other week of TX45, or placebo. Change from baseline in pulmonary vascular resistance (“PVR”) in the CpcPH PVR>3 population is the primary endpoint of the trial. The trial is designed to enrich for patients with a PVR>3, aiming for 70% of patients enrolled.

Previous wording

In March 2026, the first patient was screened in the 16-week, open label, repeat dose, Phase 2 clinical trial to evaluate TX45’s safety and hemodynamic effects in up to 25 subjects with PH associated with Interstitial Lung Disease (“ILD”), known as PH-ILD (Group 3 PH). PH-ILD is an orphan disease with limited treatment options and a high mortality rate. We believe TX45’s mechanism is well suited to PH-ILD’s disease pathophysiology because of its pulmonary vasodilation, anti-inflammatory, beneficial remodeling and anti-fibrotic activity. In patients with PH-ILD, elevation in PVR and mean pulmonary arterial pressure (“mPAP”) has been associated with increased mortality. In the Phase 1b trial in both CpcPH-HFpEF and CpcPH-HFrEF, TX45 resulted in significant reductions in mPAP and PVR as well as improvements in other hemodynamic endpoints. The TX45 PH-ILD Phase 2 trial will initiate at a dose of TX45 300 mg every four weeks administered SC with a primary efficacy endpoint of change from baseline in PVR at Week 16.

Current wording

In March 2026, the first patient was screened in ALPINE, our 16-week, open-label, multinational, repeat-dose Phase 2a clinical trial to evaluate TX45’s safety and efficacy in up to 25 patients with PH associated with Interstitial Lung Disease (“ILD”), known as PH-ILD (Group 3 PH). PH-ILD is an orphan disease with limited treatment options and a high mortality rate. We believe TX45’s mechanism is well suited to PH-ILD’s disease pathophysiology because of its pulmonary vasodilation, anti-inflammatory, beneficial remodeling and anti-fibrotic activity. In patients with PH-ILD, elevation in PVR and mean pulmonary arterial pressure (“mPAP”) has been associated with increased mortality. In the Phase 1b trial in patients with CpcPH and either HFpEF or Heart Failure with Reduced Ejection Fraction (“HFrEF”), TX45 resulted in significant reductions in mPAP and PVR as well as improvements in other hemodynamic endpoints. Dosing of TX45 is initiated at 300 mg SC once monthly, with the primary efficacy endpoint being change from baseline in PVR at Week 16. In October 2026, we dosed the first PH-ILD patient in the TX45 ALPINE Phase 2a clinical trial, with interim topline results expected in the second half of 2027.

Previous wording

Our second lead product candidate, TX2100, is being evaluated for the treatment of Hereditary Hemorrhagic Telangiectasia (“HHT”), the second most common genetic bleeding disorder with no approved therapy. TX2100 is a VHH-Fc fusion antagonist antibody that binds to APJ (also known as the apelin receptor; APLNR), a GPCR that mediates signaling by the pro-angiogenic peptide hormone apelin. A rodent surrogate of TX2100 demonstrated reductions in arteriovenous malformation (“AVM”) formation, bleeding, and anemia across the neonatal anti-BMP9/10 immunoblocked model and the more severe, adult inducible ALK1 knockout mouse model of HHT, supporting disease-modifying activity through APJ antagonism. TX2100 was further evaluated in non-human primates in IND-enabling GLP toxicology studies, including a 13-week repeat-dose study. In these studies, TX2100 was well tolerated at doses up to 100 mg/kg/week, with no treatment-related or target-related toxicities identified and no effects observed on cardiovascular, respiratory, neurological, renal, metabolic, or hematologic parameters. A formulation supporting subcutaneous dosing has been established, and drug substance and drug product manufacturing under Good Manufacturing Practice (“GMP”) have been completed to support initiation of a Phase 1a clinical trial. In February 2026, we randomized the first subject in the Phase 1a healthy volunteer clinical trial for TX2100. As of June 2026, six single dose cohorts of healthy volunteers have been dosed. We expect to report topline results from the ongoing Phase 1a trial of TX2100 in healthy volunteers by the end of the third quarter of 2026. Assuming acceptable PK in the Phase 1a trial, a Phase 1b clinical trial to explore the safety and efficacy (hematological support, hemoglobin, and epistaxis) of TX2100 in patients with hematologic-support dependent HHT and a Phase 2 clinical trial in patients with moderate to severe HHT are planned in early 2027.

Current wording

Our second lead product candidate, TX2100, is being evaluated for the treatment of Hereditary Hemorrhagic Telangiectasia (“HHT”), the second most common genetic bleeding disorder with no approved therapy. TX2100 is a VHH-Fc fusion antagonist antibody that binds to APJ (also known as the apelin receptor; APLNR), a GPCR that mediates signaling by the pro-angiogenic peptide hormone apelin. A rodent surrogate of TX2100 demonstrated reductions in arteriovenous malformation (“AVM”) formation, bleeding, and anemia across the neonatal anti-BMP9/10 immunoblocked model and the more severe, adult inducible ALK1 knockout mouse model of HHT, supporting disease-modifying activity through APJ antagonism. TX2100 was further evaluated in non-human primates in Investigational New Drug (“IND”)-enabling good laboratory practice (“GLP”) toxicology studies, including a 13-week repeat-dose study. In these studies, TX2100 was well tolerated at doses up to 100 mg/kg/week, with no treatment-related or target-related toxicities identified and no effects observed on cardiovascular, respiratory, neurological, renal, metabolic, or hematologic parameters. A formulation supporting subcutaneous dosing has been established, and drug substance and drug product manufacturing under Good Manufacturing Practice (“GMP”) have been completed to support initiation of a Phase 1a clinical trial. In February 2026, we randomized the first subject in the Phase 1a healthy volunteer clinical trial for TX2100.

Previous wording

employee-related expenses, including salaries, bonuses, benefits and stock-based compensation, for employees engaged in research and development functions;

Current wording

employee-related expenses, including salaries, bonuses, benefits and non-cash stock-based compensation, for employees engaged in research and development functions;

Previous wording

General and administrative expenses consist primarily of employee-related costs, including salaries, bonuses, benefits and stock-based compensation, for our personnel in executive, finance and information technology, and other administrative functions. General and administrative expenses also include professional fees for legal, accounting, and consulting services, insurance costs, facilities and information technology expenses, investor relations and public company compliance costs, and other general corporate overhead. As a clinical-stage company, our general and administrative expenses are driven in part by the costs required to support our research and development activities and to operate as a public company.

Current wording

General and administrative expenses consist primarily of employee-related costs, including salaries, bonuses, benefits and non-cash stock-based compensation, for our personnel in executive, finance and information technology, and other administrative functions. General and administrative expenses also include legal fees, including those related to intellectual property and patent matters, professional fees for accounting and consulting services, insurance costs, facilities and information technology expenses, investor relations and public company compliance costs, and other general corporate overhead. As a clinical-stage company, our general and administrative expenses are driven in part by the costs required to support our research and development activities and to operate as a public company.

Previous wording

The following tables summarize our results of operations for the three months ended June 30, 2026 and 2025 (in thousands, except percentages):

Current wording

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

Previous wording

Research and development expenses increased by $8.7 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily attributable to $8.8 million in higher CRO and CDMO costs related to our ongoing Phase 2 clinical trials of TX45, and a $2.7 million increase in Platform development and unallocated expenses, principally driven by higher employee-related expenses. The increase in employee-related expenses reflected higher non-cash stock-based compensation expense, driven by incremental equity awards granted to new hires and ongoing annual employee grants, and higher payroll and related costs associated with the continued expansion of our research and development team in support of our pipeline programs. These increases were partially offset by a $2.8 million decrease in costs related to our TX2100 program, primarily due to CDMO costs incurred in the prior-year period for the production of drug substance.

Current wording

Research and development expenses increased by $0.5 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase was primarily attributable to a $1.4 million increase in platform development and unallocated expenses, principally driven by higher employee-related expenses. The increase in employee-related expenses reflected higher non-cash stock-based compensation expense, driven by incremental equity awards granted to new hires and ongoing annual employee grants, and higher payroll and related costs associated with the continued expansion of our research and development team in support of our pipeline programs. This increase was partially offset by a $0.6 million decrease in costs related to our TX2100 program, primarily due to CDMO costs incurred in the prior-year period for production of drug substance. This was further offset by a $0.4 million decrease in our TX45 program related to clinical supply costs incurred in the prior-year period for site activation and enrollment.

Previous wording

General and administrative expenses increased by $1.0 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily attributable to higher employee-related expenses. The increase in employee-related expenses was driven by higher non-cash stock-based compensation expense, reflecting incremental equity awards granted to employees, including new hires and ongoing annual grants.

Current wording

General and administrative expenses increased by $1.1 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily attributable to higher employee-related expenses. The increase in employee-related expenses was driven by higher non-cash stock-based compensation expense, reflecting incremental equity awards granted to employees, including new hires and ongoing annual grants.

Previous wording

Interest income decreased by $1.4 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily due to lower cash and cash equivalents.

Current wording

Interest income decreased by $0.8 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily due to lower cash and cash equivalents.

Previous wording

The following tables summarize our results of operations for the six months ended June 30, 2026 and 2025 (in thousands, except percentages):

Current wording

The following table summarizes our results of operations for the nine months ended September 30, 2026 and 2025 (in thousands, except percentages):

Previous wording

Research and development expenses increased by $0.9 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily attributable to $1.4 million in higher CRO and CDMO costs related to our ongoing Phase 2 clinical trials of TX45 and a $1.6 million increase in platform development and unallocated expenses, principally driven by higher employee-related expenses. The increase in employee-related expenses reflected higher non-cash stock-based compensation expense, driven by incremental equity awards granted to new hires and ongoing annual employee grants, and higher payroll and related costs associated with the continued expansion of our research and development team in support of our pipeline programs. These increases were partially offset by a $2.1 million decrease in costs related to our TX2100 program, primarily due to CDMO costs incurred in the prior-year period for the production of drug substance.

Current wording

Research and development expenses increased by $9.2 million for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase was primarily attributable to $8.4 million in higher CRO and CDMO costs related to our ongoing Phase 2 clinical trials of TX45, and a $4.2 million increase in platform development and unallocated expenses, principally driven by higher employee-related expenses. The increase in employee-related expenses reflected higher non-cash stock-based compensation expense, driven by incremental equity awards granted to new hires and ongoing annual employee grants, and higher payroll and related costs associated with the continued expansion of our research and development team in support of our pipeline programs. These increases were partially offset by a $3.4 million decrease in costs related to our TX2100 program, primarily due to CDMO costs incurred in the prior-year period for the production of drug substance.

Previous wording

General and administrative expenses increased by $2.2 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily attributable to higher employee-related expenses. The increase in employee-related expenses was driven by higher non-cash stock-based compensation expense, reflecting incremental equity awards granted to employees, including new hires and ongoing annual grants, and higher expense resulting from annual merit increases and other employee-related compensation costs.

Current wording

General and administrative expenses increased by $3.2 million for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily attributable to higher employee-related expenses. The increase in employee-related expenses was driven by higher non-cash stock-based compensation expense, reflecting incremental equity awards granted to employees, including new hires and ongoing annual grants, and higher payroll and related costs resulting from annual merit increases and other employee-related compensation costs.

Previous wording

Interest income decreased by $1.6 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to lower cash and cash equivalents.

Current wording

Interest income decreased by $2.4 million for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily due to lower cash and cash equivalents.

Previous wording

Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and clinical development of our research programs and product candidates. We expect that our research and development and general and administrative costs will increase in connection with conducting additional preclinical studies and clinical trials for our current and future research programs and product candidates, contracting with CROs and CDMOs to support preclinical studies and clinical trials, expanding our intellectual property portfolio, and providing general and administrative support for our operations. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources.

Current wording

Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and clinical development of our research programs and product candidates. We expect that our research and development and general and administrative costs will increase in connection with conducting additional preclinical studies and clinical trials for our current and future research programs and product candidates, contracting with CROs and

Previous wording

We do not currently have any approved products and have never generated any revenue from product sales. We have funded our operations primarily through the sale and issuance of common stock, convertible equity instruments, and proceeds from prior corporate transactions. We currently have an effective shelf registration statement on Form S-3 filed with the SEC, which we may use to offer from time to time any combination of common stock, preferred stock, debt securities, and warrants up to an aggregate amount of $400 million. Of this amount, we have the ability to sell up to $100 million of additional shares of our common stock to the public through an at the market offering program (“ATM”). During the six months ended June 30, 2026, the Company sold 432,306 shares of its common stock under the ATM at an average price per share of $30.89 for gross proceeds of $13.4 million and net proceeds of $13.1 million after deducting commissions and offering expenses of $0.3 million. During the three months ended June 30, 2026, the Company sold 389,806 shares of its common stock under the ATM at an average price per share of $30.75 for gross proceeds of $12.0 million and net proceeds of $11.7 million after deducting commissions and offering expenses of $0.3 million.

Current wording

We do not currently have any approved products and have never generated any revenue from product sales. We have funded our operations primarily through the sale and issuance of common stock, convertible equity instruments, and proceeds from prior corporate transactions. We currently have an effective shelf registration statement on Form S-3 filed with the Securities and Exchange Commission (the “SEC”), which we may use to offer from time to time any combination of common stock, preferred stock, debt securities, and warrants up to an aggregate amount of $400 million. Of this amount, up to $100 million of our common stock may be sold through an at-the-market offering program (the “ATM”), of which $63.9 million remained available as of September 30, 2026. During the three months ended September 30, 2026, we sold 660,492 shares of our common stock under the ATM at an average price per share of $34.45 for gross proceeds of $22.7 million and net proceeds of $22.3 million after deducting commissions and offering expenses of $0.4 million. During the nine months ended September 30, 2026, we sold 1,092,798 shares of our common stock under the ATM at an average price per share of $33.05 for gross proceeds of $36.1 million and net proceeds of $35.4 million after deducting commissions and offering expenses of $0.7 million.

Previous wording

As of June 30, 2026, we had $227.1 million in cash and cash equivalents and an accumulated deficit of $270.3 million. Based on our current business plans, management believes that our cash, cash equivalents and marketable securities on hand at June 30, 2026 are sufficient to meet our operating requirements for at least the next 12 months from the issuance of the consolidated financial statements included in this Quarterly Report. However, our estimates are based on assumptions that may prove to be incorrect, and we could exhaust our capital resources sooner than expected. We may require additional funding to support our research programs, clinical development, and general corporate operations. There can be no assurance that additional financing, whether through public or private equity, debt, collaborations, or licensing arrangements, will be available on acceptable terms, or at all.

Current wording

As of September 30, 2026, we had $234.7 million in cash and cash equivalents and an accumulated deficit of $291.6 million. Based on our current business plans, management believes that our cash and cash equivalents on hand at September 30, 2026 are sufficient to meet our operating requirements for at least the next 12 months from the issuance of the condensed consolidated financial statements included in this Quarterly Report. However, our estimates are based on assumptions that may prove to be incorrect, and we could exhaust our capital resources sooner than expected. We may require additional funding to support our research programs, clinical development, and general corporate operations. There can be no assurance that additional financing, whether through public or private equity, debt, collaborations, or licensing arrangements, will be available on acceptable terms, or at all.

Previous wording

The following table shows a summary of our cash flows for the six months ended June 30, 2026 and 2025:

Current wording

The following table shows a summary of our cash flows for the nine months ended September 30, 2026 and 2025 (in thousands):

Previous wording

Net cash used in operating activities was $39.9 million for the six months ended June 30, 2026. Cash used in operations was primarily used to fund development of our product candidates, resulting in a net loss of $47.5 million, partially offset by non-cash charges of $8.8 million. Changes in operating assets and liabilities, including the timing of vendor payments and lease repayments, had an effect of $1.1 million on cash used in operating activities.

Current wording

Net cash used in operating activities was $54.8 million for the nine months ended September 30, 2026. Cash used in operations was primarily used to fund development of our product candidates, resulting in a net loss of $68.9 million, partially offset by non-cash charges of $13.7 million. Changes in operating assets and liabilities, including the timing of vendor payments and lease repayments, had an effect of $0.4 million on cash used in operating activities.

Previous wording

Net cash used in operating activities was $27.8 million for the six months ended June 30, 2025. Cash used in operating activities was primarily used to fund our operations to develop our product candidates, resulting in a net loss of $35.9 million partially offset by non-cash charges of $6.5 million and changes in operating assets and liabilities related to the timing of the vendor payments of $1.6 million.

Current wording

Net cash used in operating activities was $45.6 million for the nine months ended September 30, 2025. Cash used in operating activities was primarily used to fund our operations to develop our product candidates, resulting in a net loss of $54.9 million and changes in operating assets and liabilities related to the timing of the vendor payments of $1.0 million partially offset by non-cash charges of $10.3 million.

Previous wording

Net cash used in or provided by investing activities during the six months ended June 30, 2026 and 2025 was nominal and related to the purchase and sale of property and equipment.

Current wording

Net cash used in investing activities during the nine months ended September 30, 2026 and 2025 was nominal and related to the purchase and sale of property and equipment.

Previous wording

Net cash provided by financing activities was $12.5 million for the six months ended June 30, 2026, primarily due to net proceeds of $13.1 million received from shares sold under the ATM offset by payments for employee taxes related to the net share settlement of equity awards, whereby a portion of vested shares was withheld to satisfy employees’ tax withholding obligations of $0.5 million.

Current wording

Net cash provided by financing activities was $35.0 million for the nine months ended September 30, 2026, primarily due to net proceeds of $35.4 million received from shares sold under the ATM and $0.6 million in proceeds from the exercise of stock options offset by payments for employee taxes related to the net share settlement of equity awards, whereby a portion of vested shares was withheld to satisfy employees’ tax withholding obligations of $0.6 million.

Previous wording

Net cash provided by financing activities was $174.0 million for the six months ended June 30, 2025, primarily due to net proceeds of $173.1 million from the sale of shares in a private offering and $1.2 million in proceeds from the exercise of stock options.

Current wording

Net cash provided by financing activities was $173.5 million for the nine months ended September 30, 2025, primarily due to net proceeds of $173.1 million from the sale of shares in a private placement and $1.2 million in proceeds from the exercise of stock options.

Previous wording

We have lease obligations for certain office and laboratory space and laboratory equipment under non-cancelable operating and finance leases. The leases expire at various times through 2029. Minimum lease payments under these agreements are $1.3 million for the remainder of 2026, $1.9 million in 2027, $2.0 million in 2028, and $0.2 million in 2029. These amounts reflect enforceable obligations under non-cancelable contracts and do not include commitments that can be terminated without significant penalty.

Current wording

We have lease obligations for certain office and laboratory space and laboratory equipment under non-cancelable operating and finance leases. The leases expire at various times through 2029. Minimum lease payments under these agreements are $0.6 million for the remainder of 2026, $1.9 million in 2027, $2.0 million in 2028, and $0.2 million in 2029. These amounts reflect enforceable obligations under non-cancelable contracts and do not include commitments that can be terminated without significant penalty.