GYRE THERAPEUTICS, INC.

Previous wording

In addition to historical information, this Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“the Exchange Act”). Forward-looking statements are identified by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “should,” “will,” or the negative of these terms or similar expressions. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other “forward-looking” information. These statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. For example, forward-looking statements include any statements regarding: the strategies, prospects, plans, expectations or objectives of management for future operations or the distribution of cash to Company stockholders, the benefits that may be derived from product candidates or the commercial or market opportunity in any target indication, our ability to protect intellectual property rights, our anticipated operations, financial position, revenues, costs or expenses, future economic conditions or performance, and statements of belief and any assumptions underlying any of the foregoing. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in this report in Part II, Item 1A — “Risk Factors,” and in Part I - Item 1A – “Risk Factors” in the Annual Report. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. These statements, like all statements in this Report, speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments. We caution investors that our business and financial performance are subject to substantial risks and uncertainties.

Current wording

In addition to historical information, this Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“the Exchange Act”). Forward-looking statements are identified by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “should,” “will,” or the negative of these terms or similar expressions. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other “forward-looking” information. These statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. For example, forward-looking statements include any statements regarding: the strategies, prospects, plans, expectations or objectives of management for future operations or the distribution of cash to Company stockholders, the benefits that may be derived from product candidates or the commercial or market opportunity in any target indication, our ability to protect intellectual property rights, our anticipated operations, financial position, revenues, costs or expenses, future economic conditions or performance, and statements of belief and any assumptions underlying any of the foregoing. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in this Quarterly Report in Part II, Item 1A — “Risk Factors,” and in Part I - Item 1A – “Risk Factors” in the Annual Report. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. These statements, like all statements in this Quarterly Report, speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments. We caution investors that our business and financial performance are subject to substantial risks and uncertainties.

Previous wording

In May 2026, we acquired Cullgen Inc., a Delaware corporation (“Cullgen”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated March 2, 2026 (the “Merger Agreement”), by and among the Company, Helix Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”), and Cullgen. Pursuant to the Merger Agreement, among other matters, Merger Sub merged with and into Cullgen, with Cullgen continuing as a wholly owned subsidiary of the Company and the surviving corporation of the merger (the “Merger”). The related transaction costs were expensed as incurred.

Current wording

In May 2026, we acquired Cullgen in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated March 2, 2026 (the “Merger Agreement”), by and among the Company, Helix Merger Sub Corp., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”), and Cullgen. Pursuant to the Merger Agreement, among other matters, Merger Sub merged with and into Cullgen, with Cullgen continuing as a wholly owned subsidiary of the Company and the surviving corporation of the merger (the “Merger”). The related transaction costs were expensed as incurred.

Previous wording

The CDE of the NMPA granted priority review status to the New Drug Application (“NDA”) for F351 in March 2026. On March 22, 2026, Gyre Pharmaceuticals submitted its NDA to the CDE of the NMPA to seek conditional approval for F351, the Company’s lead product candidate, for the treatment of CHB-induced liver fibrosis. On May 12, 2026, the Company announced that the NMPA accepted its NDA.

Current wording

The CDE of the NMPA granted priority review status to the New Drug Application (“NDA”) for F351 in March 2026. On March 22, 2026, Gyre Pharmaceuticals submitted its NDA to the CDE of the NMPA to seek conditional approval for F351, the Company’s lead product candidate, for the treatment of CHB-induced liver fibrosis. On May 12, 2026, the Company announced that the NMPA accepted its NDA. The Company believes a decision from the CDE of the NMPA could occur by the end of 2026 or in the first quarter of 2027.

Previous wording

On May 4, 2026, Gyre Therapeutics acquired Cullgen Inc. in an all-stock transaction valued at approximately $300 million, and Cullgen became a wholly owned subsidiary of Gyre. Upon the closing of this transaction, Cullgen's former Chief Executive Officer (“CEO”), Dr. Ying Luo, was appointed President and CEO of Gyre and joined Gyre's Board. Additionally, Yue Xiong, former Chief Scientific Officer (“CSO”) of Cullgen, was appointed CSO of Gyre, and Thomas Eastling, former Chief Financial Officer (“CFO”) of Cullgen, was appointed CFO of Gyre, and Ping Zhang was named Executive Chairman. The combined company remains headquartered in San Diego with subsidiaries in Beijing and Shanghai, roughly 740 employees, and numerous announced therapeutic programs spanning inflammation/pain and cancer.

Current wording

On May 4, 2026, Gyre Therapeutics acquired Cullgen Inc. in an all-stock transaction valued at approximately $300 million, and Cullgen became a wholly owned subsidiary of Gyre. Upon the closing of this transaction, Cullgen's former Chief Executive Officer (“CEO”), Dr. Ying Luo, was appointed President and CEO of Gyre and joined Gyre's Board. Additionally, Yue Xiong, former Chief Scientific Officer (“CSO”) of Cullgen, was appointed CSO of Gyre, Thomas Eastling, former Chief Financial Officer (“CFO”) of Cullgen, was appointed CFO of Gyre, and Ping Zhang was named Chairman. The combined company remains headquartered in San Diego with subsidiaries in Beijing and Shanghai, roughly 740 employees, and numerous announced therapeutic programs spanning inflammation/pain and cancer.

Previous wording

In December 2025, Cullgen completed a Phase 1 study (NCT06636500) that was a single-center, randomized, placebo-controlled, double-blind, single-ascending-dose/food-effect (with or without food) and multiple-ascending-dose trial that evaluated the safety, tolerability and PK characteristics of CG001419 in 78 healthy volunteers. The study was conducted in Australia after receiving ethics committee approval in early 2025. Results from the study showed that all doses were well-tolerated with no drug-related serious adverse events observed.

Current wording

In December 2025, Cullgen completed a Phase 1 study (NCT06636500) that was a single-center, randomized, placebo-controlled, double-blind, single-ascending-dose/food-effect (with or without food) and multiple-ascending-dose trial that evaluated the safety, tolerability and PK characteristics of CG001419 in 78 healthy volunteers. The study was conducted in Australia after receiving ethics committee approval in early 2025. Results from the study showed that all doses were well-tolerated with no drug-related serious adverse events observed. We are now planning a Phase 2 study to further evaluate CG001419 in cancer-induced bone pain (CIBP) or other metastatic cancer pain syndromes in China, which is expected to initiate in the first half of 2027.

Previous wording

Gyre acquired Cullgen’s second product candidate, CG009301, a highly selective degrader targeting the GSPT1 protein for the treatment of cancer, with development initially focused on hematologic malignancies. GSPT1 is a protein translation termination factor and plays a vital role in cancer cell survival and proliferation. Rapidly dividing hematologic cancer cells such as leukemia, including AML and acute lymphoblastic leukemia, high-risk myelodysplastic syndrome (“MDS”) and leukemia stem cells rely on GSPT1 to maintain protein synthesis during oncogenesis. These tumor cells are highly sensitive to GSPT1 depletion, which leads to impaired protein translation, activation of the integrated stress response and TP53-independent cell death. Cullgen initiated a Phase 1, dose-escalation trial in China of CG009301 in patients with high-risk hematologic malignancies in April 2025.

Current wording

Gyre acquired Cullgen’s second product candidate, CG009301, a highly selective degrader targeting the GSPT1 protein for the treatment of cancer, with development initially focused on hematologic malignancies. GSPT1 is a protein translation termination factor and plays a vital role in cancer cell survival and proliferation. Rapidly dividing hematologic cancer cells such as leukemia, including AML and acute lymphoblastic leukemia, high-risk myelodysplastic syndrome (“MDS”) and leukemia stem cells rely on GSPT1 to maintain protein synthesis during oncogenesis. These tumor cells are highly sensitive to GSPT1 depletion, which leads to impaired protein translation, activation of the integrated stress response and TP53-independent cell death. Cullgen initiated a Phase 1, dose-escalation trial in China of CG009301 in patients with high-risk hematologic malignancies in April 2025. We anticipate Phase 1 dose-escalation data to be available in the second half of 2027.

Previous wording

We are developing CG620953, a highly potent and selective dual degrader of Tyrosine kinase 2 (“TYK2”) and Janus kinase 1 (“JAK1”) while sparing JAK2. In preclinical studies, CG620953 demonstrated selective target degradation and outperformed commercialized TYK2 selective inhibitors in reducing disease activity. CG620953 also exhibits a favorable PK and safety profile, providing rationale for further evaluation in the clinic. We intend to submit an IND application for CG620953 in the first quarter of 2027.

Current wording

We are developing CG620953, a highly potent and selective dual degrader of Tyrosine kinase 2 (“TYK2”) and Janus kinase 1 (“JAK1”) while sparing JAK2. In preclinical studies, CG620953 demonstrated selective target degradation and outperformed commercialized TYK2 selective inhibitors in reducing disease activity. CG620953 also exhibits a favorable PK and safety profile, providing rationale for further evaluation in the clinic. We intend to submit an IND application for CG620953 in the United States or China around mid-2027.

Previous wording

We are developing a robust suite of DACs that target both solid tumors and hematological malignancies by pairing distinct protein degraders with tumor-specific antibodies. These preclinical DAC candidates demonstrate tumor associated antigen (“TAA”)-dependent cytotoxicityin vitro and drive potent, durable tumor regressionin vivo, including success in models resistant to standard therapies.

Current wording

We are developing a robust suite of DACs that target both solid tumors and hematological malignancies by pairing distinct protein degraders with tumor-specific antibodies. These preclinical DAC candidates demonstrate tumor associated antigen dependent cytotoxicityin vitro and drive potent, durable tumor regressionin vivo, including success in models resistant to standard therapies.

Previous wording

In May 2024, Gyre Pharmaceuticals entered into an agreement with Jiangsu Wangao Pharmaceuticals Co., Ltd. (the “Jiangsu Wangao Agreement”), effective from May 7, 2024 to May 6, 2035. Pursuant to the Jiangsu Wangao Agreement, Gyre Pharmaceuticals obtained the drug registration certificate for and became the marketing authorization holder of Etorel TM (nintedanib, ethanesulfonate soft capsules), a small-molecule drug for the treatment of IPF, SSc-ILD and progressive pulmonary fibrosis, within the PRC. The total minimum payments under the Jiangsu Wangao Agreement are Chinese Renminbi (“RMB”) 35.0 million, or approximately $5.1 million, based on the June 30, 2026 spot exchange rate. This includes an upfront transfer fee of RMB 15.0 million, or approximately $2.2 million, payable in three installments, and subsequent payments based on annual sales over eight years following the commencement of commercial sales. Additionally, Gyre Pharmaceuticals will bear the costs associated with relocating the production site to a designated location and will cover all expenses related to the manufacturing process. As of June 30, 2026, we had paid four installments totaling RMB 23.0 million, or approximately $3.4 million, based on the June 30, 2026 spot exchange rate.

Current wording

In May 2024, Gyre Pharmaceuticals entered into an agreement with Jiangsu Wangao Pharmaceuticals Co., Ltd. (the “Jiangsu Wangao Agreement”), effective from May 7, 2024 to May 6, 2035. Pursuant to the Jiangsu Wangao Agreement, Gyre Pharmaceuticals obtained the drug registration certificate for and became the marketing authorization holder of Etorel TM (nintedanib, ethanesulfonate soft capsules), a small-molecule drug for the treatment of IPF, SSc-ILD and PPF, within the PRC. The total minimum payments under the Jiangsu Wangao Agreement are Chinese Renminbi (“RMB”) 35.0 million, or approximately $5.2 million, based on the September 30, 2026 spot exchange rate. This includes an upfront transfer fee of RMB 15.0 million, or approximately $2.2 million, payable in three installments, and subsequent payments based on annual sales over eight years following the commencement of commercial sales. Additionally, Gyre Pharmaceuticals will bear the costs associated with relocating the production site to a designated location and will cover all expenses related to the manufacturing process. As of September 30, 2026, we had paid four installments totaling RMB 23.0 million, or approximately $3.4 million, based on the September 30, 2026 spot exchange rate.

Previous wording

On June 28, 2024, Gyre Pharmaceuticals entered into a partnership agreement as a limited partner and is obligated to pay $4.4 million for an 18.93% equity interest in the partnership. In April 2025, a new investor joined the partnership agreement, and as a result, Gyre Pharmaceuticals’ equity interest was adjusted to 18.35%. Pursuant to the partnership agreement, Gyre Pharmaceuticals, as a limited partner, shall not participate in any activities related to the management of the investment business. However, Gyre Pharmaceuticals may appoint a member to the advisory committee of the partnership.

Current wording

On June 28, 2024, Gyre Pharmaceuticals entered into a partnership agreement as a limited partner and is obligated to pay $4.5 million for an 18.93% equity interest in the partnership. In April 2025, a new investor joined the partnership agreement, and as a result, Gyre Pharmaceuticals’ equity interest was adjusted to 18.35%. Pursuant to the partnership agreement, Gyre Pharmaceuticals, as a limited partner, shall not participate in any activities related to the management of the investment business. However, Gyre Pharmaceuticals may appoint a member to the advisory committee of the partnership.

Previous wording

As of June 30, 2026 and December 31, 2025, our total investment into the partnership was $1.8 million and $1.7 million, respectively, and the carrying value of the Company’s long-term investment in this affiliate was $1.6 million and $1.6 million, respectively.

Current wording

As of September 30, 2026 and December 31, 2025, our total investment in the partnership was $1.8 million and $1.7 million, respectively, and the carrying value of our long-term investment in this affiliate was $1.6 million and $1.6 million, respectively.

Previous wording

During the three months ended June 30, 2026, we had a net loss of $14.3 million and net loss attributable to common stockholders of $11.7 million. For the six months ended June 30, 2026, we had net loss of $32.8 million and net loss attributable to common stockholders of $24.8 million. During the three months ended June 30, 2025, we had net loss of $2.2 million and net loss attributable to common stockholders of $2.0 million. For the six months ended June 30, 2025, we had net income of $2.7 million and net income attributable to common stockholders of $0.1 million. As of June 30, 2026, we had an accumulated deficit of $138.0 million and cash and cash equivalents of $43.3 million. As of December 31, 2025, we had an accumulated deficit of $112.6 million and cash and cash equivalents of $49.2 million.

Current wording

During the three months ended September 30, 2026, we had a net loss of $2.5 million and net loss attributable to common stockholders of $4.1 million. For the nine months ended September 30, 2026, we had net loss of $35.3 million and net loss attributable to common stockholders of $28.9 million. During the three months ended September 30, 2025, we had net income of $1.9 million and net income attributable to common stockholders of $1.0 million. For the nine months ended September 30, 2025, we had net income of $4.6 million and net income attributable to common stockholders of $1.2 million. As of September 30, 2026, we had an accumulated deficit of $142.0 million and cash and cash equivalents of $41.6 million. As of December 31, 2025, we had an accumulated deficit of $112.6 million and cash and cash equivalents of $49.2 million.

Previous wording

We also generate revenue through collaboration and license agreements with a strategic partner. Revenue consists of upfront nonrefundable payments and reimbursements for research and development services provided under the agreement and is recognized over time as the related research activities are performed.

Current wording

We also generate revenue through collaboration and license agreements with strategic partners. Revenue consists of upfront nonrefundable payments and reimbursements for research and development services provided under the agreement and is recognized over time as the related research activities are performed.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law, which introduced several U.S. income tax provisions that have and may continue to potentially impact our provision for income taxes. The provisions include, but are not limited to, the immediate expensing of domestic research and development expenses beginning in 2025, as well as a modification to the Global Intangible Low-Taxed Income effective in 2026. We have recognized the effects of the OBBBA provisions on our financial results to the extent they are applicable to the six months ended June 30, 2026. We will continue to evaluate the impact of the OBBBA on our unaudited condensed consolidated financial statements.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law, which introduced several U.S. income tax provisions that have impacted and may continue to impact our provision for income taxes. The provisions include, but are not limited to, the immediate expensing of domestic research and development expenses beginning in 2025, as well as a modification to the Global Intangible Low-Taxed Income effective in 2026. We have recognized the effects of the OBBBA provisions on our financial results to the extent they are applicable to the nine months ended September 30, 2026. We will continue to evaluate the impact of the OBBBA on our unaudited condensed consolidated financial statements.

Previous wording

Revenues for the three months ended June 30, 2026 and 2025 were $29.1 million and $29.7 million, respectively, representing a decrease of $0.6 million, or 2%. Gyre Pharmaceuticals revenue increased during the period, primarily driven by higher ETUARYTM sales volumes resulting from ETUARYTM focused marketing efforts, despite lower Contiva TM and Etorel TM product revenues earned following the implementation of China's national centralized procurement program. The increase was offset by a $3.0 million decrease in collaboration revenue from the Astellas Agreement which ended in March 2026, resulting in an overall decrease in revenues of $0.6 million, or 2%, compared to the prior-year period.

Current wording

Revenues for the three months ended September 30, 2026 and 2025 were $32.9 million and $32.7 million, respectively, representing an increase of $0.2 million, or 1%. Gyre Pharmaceuticals revenue increased during the period, primarily driven by higher ETUARYTM sales volumes resulting from ETUARYTM focused marketing efforts, despite lower Contiva TM and Etorel TM product revenues earned following the implementation of China's national centralized procurement program. The increase was offset by a net $1.6 million decrease in collaboration revenue primarily driven by the Collaboration, Option, and License Agreement with Astellas Pharma Inc. (the “Astellas Agreement”), which ended in March 2026.

Previous wording

Cost of revenues for the three months ended June 30, 2026 and 2025 were $2.2 million and $1.2 million, respectively. The $1.0 million, or 92%, increase was primarily driven by a $0.7 million increase in production costs associated with Etorel TM products, a $0.2 million increase in production costs for the ETUARYTM, and a $0.1 million increase in stock-based compensation expense.

Current wording

Cost of revenues for the three months ended September 30, 2026 and 2025 were $1.9 million and $1.6 million, respectively. The $0.3 million, or 20% increase, was primarily driven by a $0.5 million increase in production costs associated with Etorel TM products, partially offset by a $0.1 million decrease in production costs for ETUARYTM, and a $0.1 million decrease in tax and related surcharges.

Previous wording

Selling and marketing expenses decreased $1.4 million, or 9%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily attributable to a $2.5 million decrease in promotional and conference expenses as certain promotional objectives were achieved in the first quarter of 2026, reducing spending in the second quarter, partially offset by a $0.6 million increase in stock-based compensation expenses, and a $0.5 million increase in personnel-related costs, primarily due to increased sales commissions resulting from higher sales volumes during the second quarter of 2026.

Current wording

Selling and marketing expenses decreased $0.3 million, or 2%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The decrease was primarily attributable to a $1.1 million reduction in promotional and conference expenses, as certain promotional objectives were achieved during the first half of 2026, resulting in lower spending during the third quarter. This decrease was partially offset by a $0.4 million increase in personnel-related costs, primarily due to increased sales commissions resulting from higher sales volumes, and a $0.3 million increase in stock-based compensation expenses.

Previous wording

Research and development expenses increased by $10.8 million, or 129%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily related to a $4.7 million increase in external clinical research expenses, mainly contributed to the F351 Phase 3C experimental review expense; a $4.8 million increase for the milestone payment Gyre Pharmaceuticals owed to GNI related to China's NMPA acceptance of NDA for F351 as a treatment for CHB induced liver fibrosis; a $0.7 million increase in pre-clinical expenses, and a $0.6 million increase in facilities, depreciation and other expenses.

Current wording

Research and development expenses increased by $0.7 million, or 9%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily related to a $0.4 million increase in external clinical research expenses, mainly attributable to the F351 Phase 3C experimental review expense in connection with the China NMPA’s review of Gyre Pharmaceuticals’ NDA for F351, and a $0.5 million increase in facilities, depreciation and other expenses. The increase was partially offset by a $0.2 million decrease in pre-clinical research expenses, utilities, materials, and personnel-related expenses.

Previous wording

General and administrative expenses increased by $0.6 million, or 8%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by a $0.9 million increase in personnel costs related to the Company's internal restructuring, and a $0.2 million increase in miscellaneous expenses, partially offset by a $0.2 million decrease in stock-based compensation expenses and a $0.3 million decrease in professional fees.

Current wording

General and administrative expenses increased by $2.5 million, or 39%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily driven by a $0.9 million increase in personnel costs related to Gyre Pharmaceuticals’ internal restructuring, a $1.1 million increase in professional fees, a $0.2 million increase in miscellaneous expenses, and a $0.3 million increase in depreciation and amortization. The increase is partially offset by a $0.1 million decrease in stock-based compensation expenses.

Previous wording

For the three months ended June 30, 2026, $0.5 million in transaction costs were incurred in connection with the acquisition of Cullgen closed in early May 2026.

Current wording

For the three months ended September 30, 2026, $0.1 million in transaction costs were incurred in connection with the acquisition of Cullgen which closed in early May 2026.

Previous wording

Change in fair value of warrant liability decreased by $80 thousand, or 38%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was related to the remeasurement of the preferred stock warrants liability.

Current wording

Loss from remeasurement of the preferred stock warrants liability was $315 thousand for the three months ended September 30, 2026 compared with $23 thousand for the three months ended September 30, 2025. The change was related to the remeasurement of the preferred stock warrants liability.

Previous wording

Interest income decreased by $0.2 million, or 21%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was related to decreased interest rates on the Company's bank deposits.

Current wording

Interest income decreased by $0.4 million, or 38%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The decrease was related to lower average cash balances maintained in interest-bearing accounts during the three month period, as well as lower interest rates earned on the Company's bank deposits.

Previous wording

Benefit for income taxes was $0.2 million and provision for income taxes was $0.7 million for the three months ended June 30, 2026 and 2025, respectively. The change in income tax provision and effective tax rate was primarily due to the retrospective presentation of the common-control combination with Cullgen and increased research and development expenditures.

Current wording

Provision for income taxes was $0.7 million and $0.6 million for the three months ended September 30, 2026 and 2025, respectively. The increase was primarily attributable to a lower income tax benefit recognized by Cullgen due to the decrease in taxable income during the three months ended September 30, 2026.

Previous wording

Revenues for the six months ended June 30, 2026 and 2025 were $53.5 million and $60.3 million, respectively, representing a decrease of $6.8 millionor 11%. Revenue from Gyre Pharmaceuticals increased during the period, primarily driven by higher ETUARYTM sales volumes resulting from ETUARYTM focused marketing efforts, despite lower Contiva TM and Etorel TM product revenues following the implementation of China's national centralized procurement program. The overall increase in revenue from Gyre Pharmaceuticals is offset by a $9.6 million decrease in collaboration revenue under the Astellas Agreement which ended in March 2026.

Current wording

Revenues for the nine months ended September 30, 2026 and 2025 were $86.5 million and $93.0 million, respectively, representing a decrease of $6.5 million or 7.0%. Revenue from Gyre Pharmaceuticals increased by net $4.7 million during the period, primarily driven by higher ETUARYTM sales volumes resulting from ETUARYTM-focused marketing efforts, despite lower Contiva TM and Etorel TM product revenues following the implementation of China's national centralized procurement program. The overall increase in revenue from Gyre Pharmaceuticals was offset by a net $11.2 million decrease primarily driven by the collaboration revenue under the Astellas Agreement which ended in March 2026.

Previous wording

Cost of revenues for thesix months ended June 30, 2026 and 2025 was$3.4 million and $2.0 million, respectively. The $1.4 million, or 68%, increase was primarily attributable to higher Etorel TM product costs of $1.1 million and increased stock-based compensation expense of $0.3 million.

Current wording

Cost of revenues for the nine months ended September 30, 2026 and 2025 was $5.4 million and $3.7 million, respectively. The $1.7 million, or 47%, increase was primarily attributable to higher Etorel TM product costs.

Previous wording

Selling and marketing expenses increased by $1.9 million, or 7%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily attributable to a $1.6 million increase in stock-based compensation expense, and a $0.4 million increase in promotional and conference expenses, partially offset by a $0.1 million decrease in travel and other expense.

Current wording

Selling and marketing expenses increased by $1.6 million, or 4%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily attributable to a $1.9 million increase in stock-based compensation expense, partially offset by a $0.3 million decrease in promotional and conference and other expenses.

Previous wording

Research and development expenses increased by $14.2 million, or 86%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily related to an $8.9 million increase in external clinical research expenses, mainly contributed to the F351 Phase 3C experimental review expense; a $0.4 million increase in personnel-related expenses including stock-based compensation expenses, a $4.8 million increase for the milestone payment Gyre Pharmaceuticals owed to GNI related to China's NMPA acceptance of NDA for F351 as a treatment for CHB induced liver fibrosis; a $0.5 million increase in pre-clinical expenses, and a $0.4 million increase in materials and utilities expenses, partially offset by a $0.8 million decrease in facilities, depreciation and other expenses.

Current wording

Research and development expenses including related parties increased by $14.9 million, or 61%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily related to a $9.3 million increase in external clinical research expenses, mainly attributable to the F351 Phase 3C experimental review expense in connection with the China NMPA’s review of Gyre pharmaceuticals’ NDA for F351; a $4.8 million increase for the milestone payment Gyre Pharmaceuticals owed to an affiliate of GNI Group related to China's NMPA acceptance of the NDA for F351 as a treatment for CHB-induced liver fibrosis; a $0.4 million increase in pre-clinical expenses; a $0.4 million increase in materials and utilities expenses; and a $0.2 million increase in personnel-related expenses including stock-based compensation expenses. The increase was partially offset by a $0.2 million decrease in facilities, depreciation and other expenses.

Previous wording

General and administrative expenses increased by $2.6 million, or 17%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by a $2.7 million increase in personnel costs related to the Company's internal restructuring, a $0.9 million increase in miscellaneous expenses, a $0.6 million increase in stock-based compensation expenses, partially offset by a $1.6 million decrease in professional fees.

Current wording

General and administrative expenses increased by $5.0 million, or 23%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily driven by a $3.6 million increase in personnel costs related to Gyre Pharmaceuticals’ internal restructuring and Gyre’s severance expense associated with the acquisition of Cullgen, a $1.1 million increase in miscellaneous expenses, a $0.5 million increase in stock-based compensation expenses and $0.3 million increase in depreciation expenses, partially offset by a $0.4 million decrease in professional fees.

Previous wording

For the six months ended June 30, 2026, $3.8 million in transaction costs were incurred in connection with the termination of proposed merger between Cullgen and Pulmatrix, Inc. in February 2026, and $3.1 million were incurred related to the acquisition of Cullgen, which transaction closed in early May 2026, totaling $6.9 million.

Current wording

For the nine months ended September 30, 2026, $3.8 million in transaction costs were incurred in connection with the termination of the proposed merger between Cullgen and Pulmatrix, Inc. in February 2026 and $3.1 million in transaction costs were incurred related to the acquisition of Cullgen, which closed in early May 2026, totaling $6.9 million.

Previous wording

As of June 30, 2026, we had cash and cash equivalents of $43.3 million, short-term bank deposits of $14.1 million, short-term investment of $17.5 million, and long-term certificates of deposit of $28.4 million, which are available to fund operations, and an accumulated deficit of $138.0 million. Our net loss during the six months ended June 30, 2026 was $32.8 million, while cash used in operating activities was $13.5 million. We believe that our existing cash and cash equivalents, cash flows from operations, and access to capital markets will be sufficient to fund our operating activities and obligations for at least the next 12 months following the filing date of this Quarterly Report and thereafter for the foreseeable future.

Current wording

As of September 30, 2026, we had cash and cash equivalents of $41.6 million, short-term bank deposits of $15.8 million, short-term investments of $12.6 million, and long-term certificates of deposit of $28.8 million, which are available to fund operations, and an accumulated deficit of $142.0 million. Our net loss during the nine months ended September 30, 2026 was $35.3 million, while cash used in operating activities was $17.5 million. We believe that our existing cash and cash equivalents, cash flows from operations, and access to capital markets will be sufficient to fund our operating activities and obligations for at least the next 12 months following the filing date of this Quarterly Report and thereafter for the foreseeable future.

Previous wording

We expect to use cash provided by operating activities, short-term deposits, and long-term certificates of deposits, as well as potential cash issuances to meet our current and future financial obligations, including funding our operations, research and development activities, clinical pipelines, and capital expenditures. Our ability to make these payments depends on our future performance, which will be affected by financial, business, economic, regulatory, and other factors, many of which we cannot control. In addition, we anticipate that we will incur expenses related to and in connection with the integration between our business and Cullgen. Factors that may affect financing requirements include, but are not limited to:

Current wording

We expect to use cash provided by operating activities, short-term deposits, and long-term certificates of deposit, as well as potential cash issuances to meet our current and future financial obligations, including funding our operations, research and development activities, clinical pipelines, and capital expenditures. Our ability to make these payments depends on our future performance, which will be affected by financial, business, economic, regulatory, and other factors, many of which we cannot control. In addition, we anticipate that we will incur expenses related to and in connection with the integration between our business and Cullgen. Factors that may affect financing requirements include, but are not limited to:

Previous wording

our ability to successfully commercialize and to obtain regulatory approval for, and successfully commercialize our other or future product candidates;

Current wording

our ability to obtain regulatory approval for, and successfully commercialize our other or future product candidates;

Previous wording

Cash used in operating activities for the six months ended June 30, 2026 was $13.5 million, reflecting our net loss of $32.8 million and offset by non-cash items of $5.2 million, which was primarily driven by a $4.7 million increase in stock-based compensation. Additionally, $14.1 million cash provided by changes in net operating assets and liabilities was primarily driven by an $11.5 million decrease in receivables and prepaid and other assets, $4.8 million increase in related party payable, partially offset by an increase in inventories and a decrease in various payables and accrued liabilities.

Current wording

Cash used in operating activities for the nine months ended September 30, 2026 was $17.5 million, reflecting our net loss of $35.3 million and offset by non-cash items of $8.6 million, which was primarily driven by a $6.4 million in stock-based compensation, $2.6 million of depreciation and amortization, $1.5 million of noncash lease expense, and $0.6 million of accrued interest on short-term and long-term certificates of deposit, partially offset by a $2.9 million deferred income tax benefit. Additionally, $9.2 million of cash provided by changes in net operating assets and liabilities was primarily driven by a $4.9 million decrease in notes receivable, a $4.6 million increase in amounts due to related parties, a $2.4 million decrease in prepaid and other assets, and a $1.3 million increase in accounts payable, partially offset by a $1.6 million increase in inventories, a $1.2 million decrease in operating lease liabilities, a $0.4 million increase in accounts receivable, and a $0.8 million decrease in accrued expenses and other liabilities, including income tax payable..

Previous wording

Cash used in operating activities for the six months ended June 30, 2025 was $7.6 million, reflecting our net income of $2.7 million and non-cash charges of $1.6 million, which primarily included $1.9 million in stock-based compensation and $1.5 million in depreciation and amortization, partially offset by a $2.5 million change in the fair value of warrant liability. Additionally, $11.9 million cash used in changes in net operating assets and liabilities was primarily driven by a $8.2 million increase in accounts receivable, inventories, prepaid and other assets and a $10.5 million decrease in deferred revenue, income tax payable, and other operating lease liabilities, partially offset by a $3.9 million decrease in notes receivable and a $2.9 million increase in accounts payable and accrued liabilities.

Current wording

Cash used in operating activities for the nine months ended September 30, 2025 was $10.2 million, reflecting our net income of $4.6 million and non-cash charges of $3.5 million, which primarily included $3.3 million in stock-based compensation and $2.4 million in depreciation and amortization, partially offset by a $2.4 million change in the fair value of warrant liability and $1.0 million in deferred income taxes. Additionally, $18.3 million cash used in changes in net operating assets and liabilities was primarily driven by a $9.9 million increase in accounts receivable, inventories, prepaid and other assets and a $12.5 million decrease in deferred revenue, and other liabilities, including accrued expenses, income tax payable and operating lease liabilities, partially offset by a $3.7 million decrease in notes receivable and a $0.4 million increase in accounts payable.

Previous wording

The increase in cash used in operating activities for the six months ended June 30, 2026 compared with cash used in operating activities for the six months ended June 30, 2025 was primarily attributable to less cash received under the Astellas Agreement that ended in March 2026 combined with the transaction costs associated with the Merger that closed in May 2026, as well as overall higher spending in clinical and other research programs.

Current wording

The increase in cash used in operating activities for the nine months ended September 30, 2026 compared with cash used in operating activities for the nine months ended September 30, 2025 was primarily attributable to less cash received under the Astellas Agreement that ended in March 2026 combined with the transaction costs associated with the Merger that closed in May 2026, as well as overall higher spending in clinical and other research programs.

Previous wording

Cash provided by investing activities for the six months ended June 30, 2026 was $6.7 million, which consisted primarily of $13.0 million of proceeds from available-for-sale securities and $13.0 million of proceeds from the maturity of certificates of deposit, partially offset by $15.9 million in purchases of certificates of deposit, $1.0 million in acquisitions of intangible assets, $2.0 million in purchases of available-for-sale securities, and $0.4 million in purchases of property and equipment.

Current wording

Cash provided by investing activities for the nine months ended September 30, 2026 was $8.4 million, which consisted primarily of $17.2 million of proceeds from available-for-sale securities, $14.5 million of proceeds from the maturity of certificates of deposit, and $0.1 million of proceeds from sale of equipment, partially offset by $18.8 million in purchases of certificates of deposit, $1.1 million in acquisitions of intangible assets, $2.0 million in purchases of available-for-sale securities, and $1.4 million in purchases of property and equipment.

Previous wording

Cash provided by investing activities for the six months ended June 30, 2025 was $3.3 million, which consisted primarily of $23.2 million of proceeds from the maturity of certificates of deposit and $11.7 million of proceeds from available-for-sale securities, partially offset by $19.2 million in purchases of certificates of deposit, $11.2 million in purchases of available-for-sale securities, $0.7 million in acquisitions of intangible assets, and $0.5 million in purchases of property and equipment.

Current wording

Cash provided by investing activities for the nine months ended September 30, 2025 was $6.5 million, which consisted primarily of $27.2 million of proceeds from the maturity of certificates of deposit and $17.4 million of proceeds from available-for-sale securities, partially offset by $19.2 million in purchases of certificates of deposit, $16.5 million in purchases of available-for-sale securities, $1.2 million in purchases of property and equipment, $0.7 million in acquisitions of intangible assets, and $0.6 million in purchases of short-term investments.

Previous wording

Cash provided by financing activities for the six months ended June 30, 2026 was $13 thousand, primarily due to proceeds from stock options exercised, partially offset by listing expense.

Current wording

Cash provided by financing activities for the nine months ended September 30, 2026 was $0.2 million, primarily due to proceeds from stock options exercised, partially offset by listing expense.

Previous wording

Cash provided by financing activities for the six months ended June 30, 2025 was $21.6 million, primarily due to $23.0 million in proceeds from the issuance of common stock, $2.0 million in proceeds from the exercise of stock options, and $0.5 million in proceeds from the issuance of common stock under our ATM program with Jefferies LLC, partially offset by $2.1 million in payments of listing expenses and $1.8 million of cash used for deferred financing costs.

Current wording

Cash provided by financing activities for the nine months ended September 30, 2025 was $21.6 million, primarily due to $23.0 million in proceeds from the issuance of common stock, $2.0 million in proceeds from the exercise of stock options, and $0.5 million in proceeds from the issuance of common stock under our ATM program with Jefferies LLC, partially offset by $2.5 million in payments of listing expenses and $1.5 million of cash used for deferred financing costs.

Previous wording

Under PRC laws and regulations, Gyre Pharmaceuticals and Cullgen are subject to restrictions on foreign exchange and cross-border cash transfers, including to parent companies and U.S. stockholders. The ability to distribute earnings to the parent companies and U.S. stockholders is also limited. Current PRC regulations permit Gyre Pharmaceuticals to pay dividends to BJC only out of its accumulated profits as determined in accordance with PRC accounting standards and regulations. Amounts restricted include paid-in capital and the statutory reserves of Gyre Pharmaceuticals. The aggregate amounts of restricted capital and statutory reserves of the relevant subsidiaries not available for distribution were $131.6 million and $128.1 million as of June 30, 2026 and December 31, 2025. We do not expect the restrictions described above to have a material impact on our ability to meet our cash obligations.

Current wording

Under PRC laws and regulations, Gyre Pharmaceuticals and Cullgen are subject to restrictions on foreign exchange and cross-border cash transfers, including to parent companies and U.S. stockholders. The ability to distribute earnings to the parent companies and U.S. stockholders is also limited. Current PRC regulations permit Gyre Pharmaceuticals to pay dividends to BJC only out of its accumulated profits as determined in accordance with PRC accounting standards and regulations. Amounts restricted include paid-in capital and the statutory reserves of Gyre Pharmaceuticals. The aggregate amounts of restricted capital and statutory reserves of the relevant subsidiaries not available for distribution were $132.3 million and $128.1 million as of September 30, 2026 and December 31, 2025. We do not expect the restrictions described above to have a material impact on our ability to meet our cash obligations.