Oruka Therapeutics, Inc.

Previous wording

Since our inception in February 2024, we have devoted substantially all of our resources to raising capital, organizing and staffing the company, business and scientific planning, conducting discovery and research activities, establishing arrangements with third parties for the manufacture of our programs and component materials, and providing general and administrative support for these operations. We do not have any programs approved for sale and have not generated any revenue from product sales. To date, we have funded our operations primarily with proceeds from the issuance of convertible preferred stock, common stock, a convertible note, pre-funded warrants, and the proceeds from the reverse recapitalization and merger, our Pre-Closing Financing and subsequent PIPE Financing (as defined and further described in “Recent Developments” below).

Current wording

Since our inception in February 2024, we have devoted substantially all of our resources to raising capital, organizing and staffing our company, business and scientific planning, conducting discovery and research activities, establishing and protecting our intellectual property portfolio, establishing arrangements with third parties for the manufacture of our programs and component materials, developing and progressing our pipeline, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales. To date, we have funded our operations primarily with proceeds from the issuance of convertible preferred stock, common stock, a convertible note, pre-funded warrants, and the proceeds from the reverse recapitalization and merger, our Pre-Closing Financing and subsequent PIPE Financing (as defined and further described in “Recent Developments” below).

Previous wording

Since our inception, we have incurred significant losses and negative cash flows from our operations. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of any programs we may develop. During the three months ended March 31, 2025, we generated net losses of $21.0 million and used net cash of $20.9 million for our operating activities.

Current wording

Since our inception, we have incurred significant losses and negative cash flows from our operations. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of any programs we may develop. During the three and six months ended June 30, 2025, we generated net losses of $24.6 million and $45.6 million, respectively, and for the six months ended June 30, 2025, we used net cash of $44.0 million for our operating activities.

Previous wording

We had cash, cash equivalents, and marketable securities of $373.0 million as of March 31, 2025. We expect that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operating plans for at least twelve months from the date of filing of this Quarterly Report. We expect to continue to incur substantial losses for the foreseeable future, and our transition to profitability will depend upon successful development, approval and commercialization of our product candidates and upon achievement of sufficient revenues to support our cost structure.

Current wording

We had cash, cash equivalents, and marketable securities of $351.5 million as of June 30, 2025. We expect that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operating plans for at least twelve months from the date of filing of this Quarterly Report. We expect to continue to incur substantial losses for the foreseeable future, and our transition to profitability will depend upon successful development, approval and commercialization of our product candidates and upon achievement of sufficient revenues to support our cost structure.

Previous wording

ORKA-001 is engineered with YTE half-life extension technology, a specific three amino acid change in the fragment crystallizable (“Fc”) domain to modify the pH-dependent binding to the neonatal Fc receptor. As a result, it has a pharmacokinetic profile designed to support a subcutaneous injection as infrequently as once or twice a year. In addition, emerging evidence suggests that IL-23 blockade can modify the disease biology of PsO, possibly leading to durable remissions and preventing the development of PsA. We believe that the expected characteristics of ORKA-001 increase its potential to deliver these disease-modifying benefits.

Current wording

ORKA-001 is engineered with YTE half-life extension technology, a specific three amino acid change in the fragment crystallizable (“Fc”) domain to modify the pH-dependent binding to the neonatal Fc receptor. As a result, it has a pharmacokinetic profile designed to support a subcutaneous injection as infrequently as once or twice per year. In addition, emerging evidence suggests that IL-23 blockade can modify the disease biology of PsO, possibly leading to durable remissions and preventing the development of PsA. We believe that the expected characteristics of ORKA-001 increase its potential to deliver these disease-modifying benefits.

Previous wording

We initiated the dosing of healthy volunteers in a Phase 1 trial of ORKA-001 in the fourth quarter of 2024. We expect to share interim data from the first-in-human trial in healthy volunteers, including initial pharmacokinetic data, in the third quarter of 2025. Additionally, we plan to initiate a Phase 2a proof-of-concept study in the second half of 2025 and expect to share efficacy and response duration data in the second half of 2026. Based on recent precedent for PsO, we anticipate that the entire development program from first-in-human to biologics license application (“BLA”) filing could take as little as six to seven years based on the averages for recently approved medicines. However, we have no control over the length of time needed for United States Food and Drug Administration (“FDA”) review, and this timeline could vary.

Current wording

In July 2025, the United States Food and Drug Administration (“FDA”) cleared our investigational new drug (“IND”) application and Health Canada cleared our Clinical Trial Application (“CTA”) for our Phase 2a trial of ORKA-001 in moderate-to-severe PsO, called EVERLAST-A. In the third quarter of 2025, we commenced dosing in a Phase 2a clinical trial of ORKA-001 in patients with moderate-to-severe PsO. We expect to share efficacy and response duration data from this study in the second half of 2026. Based on recent precedent for PsO, we anticipate that the entire development program from first-in-human to biologics license application (“BLA”) filing could take as little as six to seven years based on the averages for recently approved medicines. However, we have no control over the length of time needed for the FDA review, and this timeline could vary.

Previous wording

ORKA-002 is a high affinity, extended half-life mAb designed to target IL-17A and IL-17F (“IL-17A/F”). IL-17 inhibition has become central to the treatment of psoriatic diseases, including PsO and PsA, and has also shown efficacy in other I&I indications, such as hidradenitis suppurativa and axial spondyloarthritis. More recently, the importance of inhibiting the IL-17F isoform along with IL-17A has become appreciated, and dual blockade with the recently approved therapy Bimzelx (bimekizumab) has led to higher response rates in patients than blockade of IL-17A alone. ORKA-002 is designed to bind IL-17A/F at similar epitopes, or binding sites, and affinity ranges as bimekizumab, but incorporates half-life extension technology that could enable more convenient dosing intervals. We plan to initiate the dosing of healthy volunteers in a Phase 1 trial of ORKA-002 in the second quarter of 2025. We expect to share interim data from the first-in-human trial in healthy volunteers, including initial pharmacokinetic data, around year end 2025.

Current wording

ORKA-002 is a high affinity, extended half-life mAb designed to target IL-17A and IL-17F (“IL-17A/F”). IL-17 inhibition has become central to the treatment of psoriatic diseases, including PsO and PsA, and has also shown efficacy in other I&I indications, such as hidradenitis suppurativa and axial spondyloarthritis. More recently, the importance of inhibiting the IL-17F isoform along with IL-17A has become appreciated, and dual blockade with the recently approved therapy Bimzelx (bimekizumab) has led to higher response rates in patients than blockade of IL-17A alone. ORKA-002 is designed to bind IL-17A/F at similar epitopes, or binding sites, and affinity ranges as bimekizumab, but incorporates half-life extension technology that could enable more convenient dosing intervals. We initiated the dosing of healthy volunteers in a Phase 1 trial of ORKA-002 in the second quarter of 2025. We expect to share interim data from the first-in-human trial in healthy volunteers, including initial pharmacokinetic data, around year end 2025.

Previous wording

We view ORKA-002 and ORKA-001 as highly complementary. Patients with moderate-to-severe PsO that have purely skin manifestations are most often treated with IL-23 inhibitors due to the high efficacy and tolerability of this mechanism. However, for patients who also have joint involvement, or signs and symptoms of PsA, an IL-17 inhibitor is typically used due to its efficacy in addressing both skin and joint symptoms. In addition, IL-17 inhibitors are often used in patients with highly resistant skin symptoms that do not adequately resolve through treatment with an IL-23 inhibitor. Furthermore, we have the potential opportunity to administer ORKA-002 and ORKA-001 sequentially, called ORKA-021, to combine two features of each program: the rapid response of an IL-17 inhibitor with the ideal maintenance profile of an IL-23 inhibitor. We believe that ORKA-001 and ORKA-002 provide the potential to offer a highly compelling product profile for most patients with PsO and/or PsA, as well as the opportunity to address additional I&I indications.

Current wording

We view ORKA-002 and ORKA-001 as highly complementary. Patients with moderate-to-severe PsO that have purely skin manifestations are most often treated with IL-23 inhibitors due to the high efficacy and tolerability of this mechanism. However, for patients who also have joint involvement, or signs and symptoms of PsA, an IL-17 inhibitor is typically used due to its efficacy in addressing both skin and joint symptoms. In addition, IL-17 inhibitors are often used in patients with highly resistant skin symptoms that do not adequately resolve through treatment with an IL-23 inhibitor. Furthermore, we plan to pursue a sequential combination regimen of ORKA-002 followed by ORKA-001, called ORKA-021. ORKA-021 has the potential to combine the rapid response of an IL-17 inhibitor with the ideal maintenance profile of an IL-23 inhibitor in a single regimen. We believe that ORKA-001 and ORKA-002 provide the potential to offer a highly compelling product profile for most patients with PsO and/or PsA, as well as the opportunity to address additional I&I indications.

Previous wording

As stated above, in March 2024, we entered into two Antibody Discovery and Option Agreements with Paragon and Paruka Holding, LLC (“Paruka”) (each, an “Option Agreement”), pursuant to which we initiated certain research programs with Paragon focusing on discovering, generating, identifying and/or characterizing antibodies directed to a particular target, including for IL-23 and IL-17A/F for ORKA-001 and ORKA-002, respectively. In September 2024, we exercised our exclusive option to acquire certain rights to ORKA-001, and in December 2024, we entered into a corresponding license agreement with Paragon pursuant to which Paragon granted us a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting IL-23 in all fields other than the field of inflammatory bowel disease. In December 2024, we exercised our exclusive option to acquire certain rights to ORKA-002, and in February 2025, we entered into the corresponding license agreement with Paragon pursuant to which Paragon granted us a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting IL-17A/F in all fields (collectively, the “License Agreements”).

Current wording

In March 2024, we entered into two Antibody Discovery and Option Agreements with Paragon and Paruka Holding, LLC (“Paruka”) (each, an “Option Agreement”), pursuant to which we initiated certain research programs with Paragon focusing on discovering, generating, identifying and/or characterizing antibodies directed to a particular target, including for IL-23 and IL-17A/F for ORKA-001 and ORKA-002, respectively. In September 2024, we exercised our exclusive option to acquire certain rights to ORKA-001, and in December 2024, we entered into a corresponding license agreement with Paragon pursuant to which Paragon granted us a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting IL-23 in all fields other than the field of inflammatory bowel disease. In December 2024, we exercised our exclusive option to acquire certain rights to ORKA-002, and in February 2025, we entered into the corresponding license agreement with Paragon pursuant to which Paragon granted us a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting IL-17A/F in all fields (collectively, the “License Agreements”).

Previous wording

Pursuant to each of the two License Agreements, Paragon has agreed not to conduct any new campaigns that generate anti-IL-23 monospecific antibodies or anti-IL-17A/F monospecific antibodies in the respective agreed-upon fields. Each of the ORKA-001 and ORKA-002 License Agreements may be terminated on 60 days’ notice to Paragon, on material breach without cure, and on a party’s insolvency or bankruptcy to the extent permitted by law.

Current wording

Pursuant to each of the License Agreements, Paragon has agreed not to conduct any new campaigns that generate anti-IL-23 monospecific antibodies or anti-IL-17A/F monospecific antibodies in the respective agreed-upon fields. Each of the ORKA-001 and ORKA-002 License Agreements may be terminated on 60 days’ notice to Paragon, on material breach without cure, and on a party’s insolvency or bankruptcy to the extent permitted by law.

Previous wording

Pursuant to the terms of each of the ORKA-001 and ORKA-002 License Agreements, we are obligated to pay Paragon non-refundable milestone payments of up to $12.0 million under each respective agreement upon the achievement of certain clinical development milestones and up to $10.0 million under each respective agreement upon the achievement of certain regulatory milestones. In addition, we are obligated to pay Paragon a low single-digit percentage royalty for antibody products for each of ORKA-001 and ORKA-002. For each of the License Agreements, the royalty term ends on the later of (i) the last-to-expire licensed patent or our patent directed to the manufacture, use or sale of a licensed antibody in the country at issue or (ii) 12 years from the date of first sale of our product. There is also a royalty step-down if there is no Paragon patent in effect during the royalty term for each program.

Current wording

Pursuant to the terms of each of the License Agreements, we are obligated to pay Paragon non-refundable milestone payments of up to $12.0 million under each respective agreement upon the achievement of certain clinical development milestones and up to $10.0 million under each respective agreement upon the achievement of certain regulatory milestones. In addition, we are obligated to pay Paragon a low single-digit percentage royalty for antibody products for each of ORKA-001 and ORKA-002. For each of the License Agreements, the royalty term ends on the later of (i) the last-to-expire licensed patent or our patent directed to the manufacture, use or sale of a licensed antibody in the country at issue or (ii) 12 years from the date of first sale of our product. There is also a royalty step-down if there is no Paragon patent in effect during the royalty term for each program.

Previous wording

Pursuant to the License Agreements, as of March 31, 2025, we have incurred and expensed milestone payments of $4.0 million and $1.5 million for ORKA-001 and ORKA-002, respectively.

Current wording

Pursuant to the License Agreements, as of June 30, 2025, we have incurred and expensed milestone payments of $4.0 million for each of ORKA-001 and ORKA-002. Subsequent to the quarter end, we dosed the first patient in a Phase 2a clinical trial for ORKA-001. In the third quarter of 2025, we accrued for the additional milestone payment of $3.0 million under the ORKA-001 License Agreement, as it became probable that the milestone would be achieved.

Previous wording

Employee payroll and related expenses increased by $2.3 million, from $0.2 million for the period from February 6, 2024 (inception) to March 31, 2024 to $2.5 million for the three months ended March 31, 2025, as we continue hiring employees in our research and development organization. Stock-based compensation expenses increased by $2.9 million, from $0.1 million for the period from February 6, 2024 (inception) to March 31, 2024 to $3.0 million for the three months ended March 31, 2025. The increase in stock-based compensation expenses is related to $1.3 million of increase in Paruka warrant liability under the Options Agreement (“Paruka Warrant Obligation”) and $1.6 million related to the increase in employee awards. Facilities and allocated overhead expenses increased by $0.8 million, as we commenced using our leased office space from June 2024 and increased our research and development headcount.

Current wording

Personnel-related expenses increased by $2.4 million, from $0.9 million for the three months ended June 30, 2024 to $3.3 million for the three months ended June 30, 2025, as we continue hiring employees in our research and development organization. Stock-based compensation expense increased by $2.9 million, from $0.5 million for the three months ended June 30, 2024 to $3.4 million for the three months ended June 30, 2025. The increase in stock-based compensation expense is related to the $1.3 million increase in Paruka warrant liability under the Option Agreements and $1.6 million related to the increase in employee awards. Other research and development expenses increased by $0.8 million, from $0.2 million for the three months ended June 30, 2024 to $1.0 million for the three months ended June 30, 2025, primarily due to increases to facilities and allocated overhead expenses as we commenced using our leased Menlo Park office space from June 2024 and Waltham office from April 2025, as well as an increase in our research and development employee count.

Previous wording

Results of Operations for the Three Months Ended March 31, 2025 and the period from February 6 (inception) to March 31, 2024

Current wording

Comparison of the Six Months Ended June 30, 2025, and the period from February 6 (inception) to June 30, 2024

Previous wording

External CROs, CMOs and other third-party preclinical studies and clinical trials expenses increased by $8.7 million, from $4.9 million for the period from February 6, 2024 (inception) to March 31, 2024 to $13.6 million for the three months ended March 31, 2025. The increase is primarily related to increased CMO product development and manufacturing expenses, increase in our CRO expenses related to our ongoing clinical trials and toxicology studies, partially offset by reduction of research expenses incurred by Paragon.

Current wording

External research and development expenses, including CROs, CMOs and other third-party preclinical studies and clinical trials expenses increased by $8.0 million, from $22.0 million for the period from February 6, 2024 (inception) to June 30, 2024 to $30.0 million for the six months ended June 30, 2025. The increase is primarily related to increased CMO product development and manufacturing expenses, an increase in our CRO expenses related to our ongoing clinical trials and toxicology studies, partially offset by a reduction of research expenses incurred by Paragon.

Previous wording

General and administrative expenses increased by $3.5 million, from $1.7 million for the period from February 6, 2024 (inception) to March 31, 2024 to $5.2 million for the three months ended March 31, 2025. Employee payroll and related expenses increased by $2.8 million, from $0.8 million for the period from February 6, 2024 (inception) to March 31, 2024 to $3.6 million for the three months ended March 31, 2025, as a result of continued hiring of executives and administrative employees. Stock-based compensation expenses were less than $0.1 million and $1.9 million for the period from February 6, 2024 (inception) to March 31, 2024 and for the three months ended March 31, 2025, respectively. Expenses related to professional services increased by $0.7 million, from $0.7 million for the period from February 6, 2024 (inception) to March 31, 2024 to $1.4 million for the three months ended March 31, 2025, due to increased spending on consulting, insurance costs, recruiting, legal, audit, accounting and other services to support our growing operations as a public company and as we continue to expand our operations to support our business strategy and product development.

Current wording

Personnel-related expenses increased by $4.8 million, from $2.2 million for the period from February 6, 2024 (inception) to June 30, 2024 to $7.0 million for the six months ended June 30, 2025, as a result of continued hiring of executives and administrative employees. Stock-based compensation expense was $0.2 million and $3.6 million for the period from February 6, 2024 (inception) to June 30, 2024 and for the six months ended June 30, 2025, respectively.

Previous wording

Interest income from cash equivalents and marketable securities was $4.1 million for the three months ended March 31, 2025. No interest income was recorded for the period from February 6, 2024 (inception) to March 31, 2024.

Current wording

Interest income from cash equivalents and marketable securities was $7.9 million for the six months ended June 30, 2025. No interest income was recorded for the period from February 6, 2024 (inception) to June 30, 2024.

Previous wording

No interest expense was recorded during the three months ended March 31, 2025. Interest expense was $0.2 million for the period from February 6, 2024 (inception) to March 31, 2024 relating to the Convertible Note issued to Fairmount in March 2024.

Current wording

No interest expense was recorded during the six months ended June 30, 2025. Interest expense was $1.0 million for the period from February 6, 2024 (inception) to June 30, 2024 relating to the Convertible Note issued to Fairmount in March 2024.

Previous wording

As of March 31, 2025, we had $373.0 million of cash, cash equivalents, and marketable securities.

Current wording

As of June 30, 2025, we had $351.5 million of cash, cash equivalents, and marketable securities.

Previous wording

For the three months ended March 31, 2025, net cash used in operating activities was $20.9 million, which was primarily attributable to a net loss of $21.0 million and net changes in our operating assets and liabilities of $3.0 million, partially offset by net non-cash charges of $3.1 million. Net changes in our operating assets and liabilities were primarily comprised of a decrease of $5.2 million in related party accounts payable and other current liabilities and an increase of $2.3 million in accrued expenses and other current liabilities. Net non-cash charges primarily comprised of $4.9 million in stock-based compensation expense, partially offset by $1.8 million in net accretion of premiums and discounts on marketable securities.

Current wording

For the six months ended June 30, 2025, net cash used in operating activities was $44.0 million, which was primarily attributable to a net loss of $45.6 million and net changes in our operating assets and liabilities of $5.3 million, partially offset by net non-cash charges of $6.9 million. Net changes in our operating assets and liabilities were primarily comprised of a decrease of $5.9 million in related party accounts payable and other current liabilities and an increase of $1.2 million in accounts payable. Net non-cash charges primarily comprised of an increase of $10.0 million in stock-based compensation expense, partially offset by $3.3 million in net accretion of premiums and discounts on marketable securities.

Previous wording

From February 6, 2024 (inception) to March 31, 2024, net cash used in operating activities was $0.2 million and was primarily attributable to a net loss of $7.1 million, offset by a $6.1 million increase in related parties accounts payable and other current liabilities and a $0.8 million increase in accrued expenses and other current liabilities. The increase in amounts due to related parties and accrued expenses and other current liabilities was primarily due to an increase in Oruka’s business activity, as well as vendor invoicing and payments.

Current wording

From February 6, 2024 (inception) to June 30, 2024, net cash used in operating activities was $11.2 million, which was primarily attributable to a net loss of $29.3 million, partially offset by non-cash charges of $0.8 million and net cash provided by changes in operating activities of $17.3 million. Non-cash charges consisted of a $0.8 million increase in stock-based compensation expense. Net cash provided by changes in our operating activities primarily consisted of a $15.4 million increase in related parties accounts payable and other current liabilities, $2.0 million increase in accounts payable, $1.0 million increase in accrued interest, related party, $0.6 million increase in accrued expenses and other current liabilities, partially offset by a $1.7 million increase in prepaid expenses and other current assets.

Previous wording

For the three months ended March 31, 2025, net cash provided by investing activities was $42.9 million, which included $87.2 million in proceeds from maturities of marketable securities, partially offset by $44.3 million in purchases of marketable securities.

Current wording

For the six months ended June 30, 2025, net cash provided by investing activities was $47.7 million, which included $200.1 million in proceeds from maturities of marketable securities, offset by $152.3 million in purchases of marketable securities.

Previous wording

From February 6, 2024 (inception) to March 31, 2024, net cash provided by financing activities was $27.9 million, consisting of $2.9 million in net proceeds from the issuance of Series B Preferred Stock and $25.0 million in net proceeds from the issuance of the Convertible Note.

Current wording

From February 6, 2024 (inception) to June 30, 2024, net cash provided by financing activities was $26.3 million, consisting of $2.9 million of net proceeds from the issuance of Pre-Merger Oruka Series A Preferred Stock and $25.0 million of net proceeds from the issuance of the Convertible Note, partially offset by $1.6 million of payments in deferred offering costs.