Cartesian Therapeutics, Inc.

Previous wording

We are a clinical-stage biotechnology company pioneering cell therapies for the treatment of autoimmune diseases. Unlike DNA cell therapies, our cell therapy method degrades naturally over time without integrating into the cell’s genetic material. Therefore, our cell therapies are distinguished by their capacity to be dosed repeatedly like conventional drugs, administered in an outpatient setting, and given without pre-treatment chemotherapy required with many conventional cell therapies. In our Phase 2b clinical trial in patients with myasthenia gravis, or MG, a chronic autoimmune disease that causes disabling muscle weakness and fatigue, we observed that our lead product candidate, Descartes-08, generated a deep and durable clinical benefit, with 83% of participants maintaining improvements in MG severity scales considered clinically meaningful by expert consensus at six months and sustained improvements in MG severity scales considered clinically meaningful by expert consensus at 12 months. Durability of response in MG is commonly measured over a period of 26 to 52 weeks, and maintenance of response over that period is considered durable.

Current wording

We are a clinical-stage biotechnology company pioneering cell therapy for the treatment of autoimmune diseases. Unlike DNA cell therapies, our cell therapy method degrades naturally over time without integrating into the cell’s genetic material. Therefore, our cell therapy is distinguished by its capacity to be dosed repeatedly like conventional drugs, administered in an outpatient setting, and given without pre-treatment chemotherapy required with many conventional cell therapies. In our Phase 2b clinical trial in patients with myasthenia gravis, or MG, a chronic autoimmune disease that causes disabling muscle weakness and fatigue, we observed that our lead product candidate, Descartes-08, generated a deep and durable clinical benefit, with 83% of participants maintaining improvements in MG severity scales considered clinically meaningful by expert consensus at six months and sustained improvements in MG severity scales considered clinically meaningful by expert consensus at 12 months. Durability of response in MG is commonly measured over a period of 26 to 52 weeks, and maintenance of response over that period is considered durable.

Previous wording

Except for the year ended December 31, 2022, we have incurred significant operating losses since our inception. We incurred a net loss of $17.7 million and $56.8 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $709.8 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we:

Current wording

We have incurred significant operating losses since our inception. We incurred a net loss of $1.8 million and $43.0 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $693.9 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we:

Previous wording

•advance Descartes-08 for MG into Phase 3 development;

Current wording

•continue to advance Descartes-08 for MG through Phase 3 development;

Previous wording

The following table presents our research and development expenses for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table presents our research and development expenses for the three and six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

Other income, net consists of non-operating income and non-operating expenses.

Current wording

Other (expense) income, net consists of non-operating income and non-operating expenses.

Previous wording

For the three months ended March 31, 2025, our research and development expenses were$14.7 million, compared to$9.7 million for thethree months ended March 31, 2024, an increase of $5.0 million. The decrease in expenses for legacy Selecta programs was primarily related to decreased expenses for Xork as a result of the termination of the Astellas Agreement in 2024.

Current wording

For the three months ended June 30, 2025, our research and development expenses were$14.9 million, compared to$12.7 million for thethree months ended June 30, 2024, an increase of $2.2 million. The decrease in expenses for legacy Selecta programs was primarily related to decreased expenses for Xork as a result of the termination of the License and Development Agreement, or the Astellas Agreement, with Audentes Therapeutics, Inc., doing business as Astellas Gene Therapies, or

Previous wording

The increase in expenses for Descartes-08 for MG was primarily related to the expenses for the Phase 2b trial and the activities associated with the Phase 3 AURORA trial. The increase in our expenses for early stage programs was primarily related to increased manufacturing operations expenses. The increases in our research and development employee expenses and stock-based compensation expense were primarily a result of headcount growth.

Current wording

Astellas in 2024. The increase in expenses for Descartes-08 for MG was primarily related to the expenses for the ongoing Phase 3 AURORA trial. The increase in our expenses for early stage programs was primarily related to increased discovery expenses and manufacturing operations expenses. The increases in our research and development employee expenses and stock-based compensation expense were primarily a result of headcount growth.

Previous wording

Interest income for the three months ended March 31, 2025 was $2.0 million, compared to $1.2 million for the three months ended March 31, 2024, an increase of $0.8 million. The increase in interest income was due to increased investment balance.

Current wording

Interest income for the three months ended June 30, 2025 was $1.7 million, compared to $1.2 million for the three months ended June 30, 2024, an increase of $0.5 million. The increase in interest income was due to increased cash and cash equivalents balance.

Previous wording

For the three months ended March 31, 2025, we recognized $1.8 million of income from the decrease in the fair value of warrant liabilities, compared to $1.0 million of income from the decrease in the fair value of warrant liabilities for the three months ended March 31, 2024, an increase of $0.8 million. Fair value of warrant liabilities was determined utilizing the Black-Scholes valuation methodology. The decrease in warrant value was primarily driven by a decrease in the per-share price of our common stock and the expiration of the warrants we issued in 2019 during the year ended December 31, 2024.

Current wording

For the three months ended June 30, 2025, we recognized $0.7 million of income from the decrease in the fair value of warrant liabilities, compared to $3.9 million charge from the increase in the fair value of warrant liabilities for the three months ended June 30, 2024, an increase of $4.6 million. Fair value of warrant liabilities was determined utilizing the Black-Scholes valuation methodology. The decrease in warrant value was primarily driven by a decrease in the per-share price of our common stock and the expiration of the warrants we issued in 2019 during the year ended December 31, 2024.

Previous wording

For the three months ended March 31, 2025, we recognized $0.3 million of income from the decrease in the fair value of the CVR liability, compared to $39.3 million of expense associated with the increase in the fair value of the CVR liability for the three months ended March 31, 2024, an increase of $39.6 million. The fair value of the CVR liability was determined utilizing a Monte Carlo simulation model. The decrease in the fair value of the CVR liability was primarily due to changes in interest rates.

Current wording

For the three months ended June 30, 2025, we recognized $35.3 million of income from the decrease in the fair value of the CVR liability, compared to $2.5 million of income from the decrease in the fair value of the CVR liability for the three months ended June 30, 2024, an increase of $32.8 million. The fair value of the CVR liability was determined utilizing a Monte Carlo simulation model. The decrease in the fair value of the CVR liability was primarily due to changes in the timing of anticipated payments.

Previous wording

During the three months ended March 31, 2025, we recognized no other income, net, compared to $0.5 million for the three months ended March 31, 2024. The decrease was primarily due to a decrease in sublease income. The terms of our subleases expired during the year ended December 31, 2024.

Current wording

During the three months ended June 30, 2025, we recognized less than $0.1 million other expense, net, compared to $0.3 million other income, net for the three months ended June 30, 2024. The decrease was primarily due to a decrease in sublease income. The terms of our subleases expired during the year ended December 31, 2024.

Previous wording

Net loss for three months ended March 31, 2025 was $17.7 million as compared to net loss of $56.8 million for the three months ended March 31, 2024, a decrease of $39.1 million The change was primarily due to expenses associated with the change in the fair value of the CVR liability and the change in the fair value of the Series A Preferred Stock forward contract liability during the three months ended March 31, 2024.

Current wording

Net income for three months ended June 30, 2025 was $15.9 million as compared to net income of $13.8 million for the three months ended June 30, 2024, an increase of $2.1 million The change was primarily due to income associated with the change in the fair value of the CVR liability and the change in the fair value of the warrant liabilities, partially offset by the decrease in collaboration revenue during the three months ended June 30, 2025.

Previous wording

During the three months ended March 31, 2025, we recognized $0.4 million of collaboration and license revenue, compared to $5.8 million for the three months ended March 31, 2024, a decrease of $5.4 million. The decrease was primarily due to a recognition of the remaining deferred revenue under the License and Development Agreement, or the Astellas Agreement, with Audentes Therapeutics, Inc., or Astellas, upon notice of termination during the three months ended March 31, 2024.

Current wording

During the six months ended June 30, 2025, we recognized $0.4 million of collaboration and license revenue, compared to $39.1 million for the six months ended June 30, 2024, a decrease of $38.7 million. The decrease was primarily due to a decrease in revenue recognized under the Sobi License resulting from the $30.0 million unconstrained development milestone recognized during the six months ended June 30, 2024 and a decrease for revenue recognized under the Astellas Agreement upon notice of termination during the six months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, ourgeneral and administrative expenses were$8.3 million, compared to$9.5 million for thethree months ended March 31, 2024, a decrease of $1.2 million. The decrease in cost was primarily the result of reductions in expenses in professional fees incurred in connection with the Merger.

Current wording

For the six months ended June 30, 2025, ourgeneral and administrative expenses were$15.6 million compared to$16.5 million for thesix months ended June 30, 2024, a decrease of $0.9 million. The decrease in cost was primarily the result of expenses incurred for professional fees incurred in connection with the Merger.

Previous wording

The remaining Series A Preferred Stock forward contract liability was settled during the three months ended March 31, 2024. As such, no change in the fair value of the Series A Preferred Stock forward contract liability is reflected in our unaudited consolidated financial statements for the three months ended March 31, 2025.

Current wording

The remaining Series A Preferred Stock forward contract liability was settled during the six months ended June 30, 2024. As such, no change in the fair value of the Series A Preferred Stock forward contract liability is reflected in our unaudited consolidated financial statements for the six months ended June 30, 2025.

Previous wording

Except for net income for the year ended December 31, 2022, we have incurred recurring net losses since our inception. We expect that we will continue to incur losses and that such losses will increase for the foreseeable future. We expect that our research and development and general and administrative expenses will continue to increase and, as a result, we will need additional capital to fund our operations, which we may raise through a combination of equity offerings, debt financings, third-party funding, potential royalty and/or milestone monetization transactions and other collaborations and strategic alliances.

Current wording

We have incurred recurring net losses since our inception. We expect that we will continue to incur losses and that such losses will increase for the foreseeable future. We expect that our research and development and general and administrative expenses will continue to increase and, as a result, we will need additional capital to fund our operations, which we may raise through a combination of equity offerings, debt financings, third-party funding, potential royalty and/or milestone monetization transactions and other collaborations and strategic alliances.

Previous wording

Our cash, cash equivalents, and restricted cash were $182.1 million as of March 31, 2025, of which $1.7 million was restricted cash related to lease commitments.

Current wording

Our cash, cash equivalents, and restricted cash were $162.1 million as of June 30, 2025, of which $1.7 million was restricted cash related to lease commitments.

Previous wording

On December 13, 2024, we and Leerink Partners LLC entered into a Sales Agreement, or the Sales Agreement. Under the Sales Agreement, we may issue and sell shares of our common stock, from time to time, through Leerink Partners LLC or aggregate gross sales proceeds of up to $100.0 million. During the three months ended March 31, 2025, we sold no shares of our common stock pursuant to the Sales Agreement.

Current wording

On December 13, 2024, we and Leerink Partners LLC entered into a Sales Agreement, or the Sales Agreement. Under the Sales Agreement, we may issue and sell shares of our common stock, from time to time, through Leerink Partners LLC or aggregate gross sales proceeds of up to $100.0 million. During the six months ended June 30, 2025, we sold no shares of our common stock pursuant to the Sales Agreement.

Previous wording

On November 13, 2023, we entered into the 2023 Securities Purchase Agreement with (i) Dr. Timothy A. Springer, a member of our Board of Directors; (ii) TAS Partners LLC, an affiliate of Dr. Springer, and (iii) Seven One Eight Three Four Irrevocable Trust, a trust associated with Dr. Murat Kalayoglu, a co-founder and the former chief executive officer of Old Cartesian, who joined our Board of Directors effective immediately after the effective time of the Merger, providing for the 2023 Private Placement. In the 2023 Private Placement, we issued and sold an aggregate of 149,330.115 shares of Series A Preferred Stock for an aggregate purchase price of $60.25 million, of which 50,189.789 shares of Series A Preferred Stock were issued and sold in the year ended December 31, 2023 for gross proceeds of $20.25 million, and 99,140.326 shares of Series A Preferred Stock were issued and sold during the three months ended March 31, 2024 for gross proceeds of $40.0 million.

Current wording

Cartesian, who joined our Board of Directors effective immediately after the effective time of the Merger, providing for the 2023 Private Placement. In the 2023 Private Placement, we issued and sold an aggregate of 149,330.115 shares of Series A Preferred Stock for an aggregate purchase price of $60.25 million, of which 50,189.789 shares of Series A Preferred Stock were issued and sold in the year ended December 31, 2023 for gross proceeds of $20.25 million, and 99,140.326 shares of Series A Preferred Stock were issued and sold during the three months ended March 31, 2024 for gross proceeds of $40.0 million.

Previous wording

As of March 31, 2025, we had an accumulated deficit of $709.8 million. We anticipate operating losses to continue for the foreseeable future due to, among other things, costs related to research, development of our product candidates, conducting preclinical studies and clinical trials, and our administrative organization. We will require substantial additional financing to fund our operations and to continue to execute our strategy, and we will pursue a range of options to secure additional capital.

Current wording

As of June 30, 2025, we had an accumulated deficit of $693.9 million. We anticipate operating losses to continue for the foreseeable future due to, among other things, costs related to research, development of our product candidates, conducting preclinical studies and clinical trials, and our administrative organization. We will require substantial additional financing to fund our operations and to continue to execute our strategy, and we will pursue a range of options to secure additional capital.

Previous wording

We are under agreement to lease approximately 32,294 square feet of laboratory and office space in Watertown, Massachusetts through May 2028. Remaining lease payments from March 31, 2025 through the end of the lease term total approximately $9.0 million. Payments made and remaining obligations on this lease liability were subject to potential reimbursement through deductions to CVR distributions as described in Note 7 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report and were reimbursed in the March 2025 CVR distribution.

Current wording

We are under agreement to lease approximately 32,294 square feet of laboratory and office space in Watertown, Massachusetts through May 2028. Remaining lease payments from June 30, 2025 through the end of the lease term total approximately $8.3 million. Payments made and remaining obligations on this lease liability were subject to potential reimbursement through deductions to CVR distributions as described in Note 7 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report and were reimbursed in the March 2025 CVR distribution.

Previous wording

In November 2023, in connection with the Merger, we acquired two leases for office and laboratory space in Gaithersburg, Maryland, which expire in January 2027. Annualized rent is approximately $0.3 million and remaining lease payments from March 31, 2025 through the end of the lease term total approximately $0.6 million.

Current wording

In November 2023, in connection with the Merger, we acquired two leases for office and laboratory space in Gaithersburg, Maryland, which expire in January 2027. Annualized rent is approximately $0.3 million and remaining lease payments from June 30, 2025 through the end of the lease term total approximately $0.5 million.

Previous wording

In February 2024, we entered into an agreement to lease approximately 19,199 square feet of integrated manufacturing and office space in Fredericksburg, Maryland. In May 2024, we entered into an amendment to lease an additional approximately 7,842 square feet at the same site. In August 2024, we entered into a second amendment to lease an additional approximately 2,009 square feet at the same site. In March 2025, we entered into a third amendment to lease an additional approximately 6,439 square feet at the same site. The leases expire coterminously in June 2031. Annualized base rent under the leases is approximately $1.2 million and is subject to annual increases in accordance with the terms of the lease agreement. The leases provide for a tenant improvement allowance of $0.8 million. Remaining lease payments total $9.7 million through the end of the lease term.

Current wording

In February 2024, we entered into an agreement to lease approximately 19,199 square feet of integrated manufacturing and office space in Frederick, Maryland. In May 2024, we entered into an amendment to lease an additional approximately 7,842 square feet at the same site. In August 2024, we entered into a second amendment to lease an additional approximately 2,009 square feet at the same site. In March 2025, we entered into a third amendment to lease an additional approximately 6,439 square feet at the same site. The leases expire coterminously in June 2031. Annualized base rent under the leases is approximately $1.2 million and is subject to annual increases in accordance with the terms of the lease agreement. The leases provide for a tenant improvement allowance of $0.8 million. Remaining lease payments total $9.4 million through the end of the lease term.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2025 was $23.1 million compared to $15.9 million for the three months ended March 31, 2024. The increase in cash used in operating activities of $7.2 million was primarily due to $16.0 million of net loss, adjusted for non-cash items, and $7.1 million of cash used in changes in operating assets and liabilities, in each case during the three months ended March 31, 2025 compared to $9.5 million of net loss, adjusted for non-cash items, and $6.4 million of cash used in changes in operating assets and liabilities during the three months ended March 31, 2024.

Current wording

Net cash used in operating activities for the six months ended June 30, 2025 was $40.6 million compared to $30.4 million for the six months ended June 30, 2024. The increase in cash used in operating activities of $10.2 million was primarily due to $32.0 million of net loss, adjusted for non-cash items, and $8.6 million of cash used in changes in operating assets and liabilities, in each case during the six months ended June 30, 2025 compared to $8.1 million of net loss, adjusted for non-cash items, and $38.5 million of cash used in changes in operating assets and liabilities during the six months ended June 30, 2024.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2025 was $1.1 million compared to $0.6 million in the same period in 2023, a decrease of $0.5 million. The net cash used in investing activities for the three months ended March 31, 2025 and 2024 consisted primarily of purchases of property and equipment.

Current wording

Net cash used in investing activities for the six months ended June 30, 2025 was $3.7 million compared to $2.2 million in the same period in 2024, a decrease of $1.5 million. The net cash used in investing activities for the six months ended June 30, 2025 and 2024 consisted primarily of purchases of property and equipment.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2025 was $8.0 million compared to net cash provided by financing activities of $43.0 million for the three months ended March 31, 2024, a decrease of $51.0 million. The net cash used in financing activities in the three months ended March 31, 2025 was primarily the result of payments for the CVR distribution. The net cash provided by financing activities in the three months ended March 31, 2024 was primarily the result of proceeds of the 2023 Private Placement.

Current wording

Net cash used in financing activities for the six months ended June 30, 2025 was $8.0 million compared to net cash provided by financing activities of $43.2 million for the six months ended June 30, 2024, a decrease of $51.2 million. The net cash used in financing activities in the six months ended June 30, 2025 was primarily the result of payments for the CVR distribution. The net cash provided by financing activities in the six months ended June 30, 2024 was primarily the result of proceeds of the 2023 Private Placement.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities in our consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions. During the three months ended March 31, 2025, there were no material changes to our critical accounting policies from those described in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities in our consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions. During the three and six months ended June 30, 2025, there were no material changes to our critical accounting policies from those described in our Annual Report on Form 10-K for the year ended December 31, 2024.