Instil Bio, Inc.

Current report

There are no material changes to the risk factors set forth in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025.

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RISK FACTORS

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Risks Associated with Our Business

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•We have incurred significant losses since our inception. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability.

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•We have a limited operating history and no history of completing any clinical trial or commercializing any product, which may make it difficult for an investor to evaluate the success of our business to date and to assess our future viability.

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•We will need substantial additional funding to meet our financial obligations and to pursue our business objectives, including clinical development of ‘2510. If we are unable to raise capital when needed, we could be forced to delay further development of our product candidates, including ‘2510, or curtail our planned operations and the pursuit of our strategy.

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•Our lead product candidate, ‘2510, as well as our other product candidates, are currently in early-stage clinical development. If we are unable to successfully develop, receive regulatory approval for and commercialize ‘2510, or successfully develop any other product candidates, or experience significant delays in doing so, our business will be harmed.

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•The regulatory approval processes of the U.S. Food and Drug Administration, or FDA, Medicines and Healthcare Products Regulatory Agency, or MHRA, European Medicines Agency, or EMA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable. If we are not able to obtain required regulatory approval for our product candidates, our business will be substantially harmed.

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•Our collaborator, ImmuneOnco, is conducting clinical trials for ‘2510 in China, and the FDA and similar foreign regulatory authorities outside of China may not accept data from such trials to support registration studies and regulatory approval.

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•The competitive landscape for bispecific antibodies targeting PD-1/PD-L1 and VEGF has become increasingly crowded and many of our competitors have far superior resources and capabilities.

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•Success in preclinical studies or earlier clinical trials may not be indicative of results in future clinical trials. Our product candidates may not have favorable results in later clinical trials, if any, or receive regulatory approval.

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•Biologics are complex and difficult to manufacture. We have been relying on ImmuneOnco and its third-party contract and development manufacturer, or CDMO, in China, to manufacture clinical supplies of ‘2510, and we intend to rely on third parties to produce clinical supply and commercial supplies of any approved product. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or any approved products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

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•We have, and we may in the future, engage in strategic transactions to acquire or in-license additional new product candidates or technologies, and we may not be successful in developing and commercializing any product candidates we acquire or in-license, including ‘2510.

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•We face significant competition from other biotechnology and pharmaceutical companies, and from non-profit institutions, which may result in others discovering, developing or commercializing products before or more successfully than we do.

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•If we or our licensors are unable to obtain and maintain sufficient patent protection for our product candidates, or if the scope of the patent protection is not sufficiently broad, third parties, including our competitors, could develop and commercialize products similar or identical to ours, and our ability to commercialize our product candidates may be adversely affected.

Previous report

•We are subject to a variety of stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, policies and other obligations related to data privacy and data security, and our actual or perceived failure to comply with them could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits and other adverse business consequences.

Previous report

We have incurred significant losses since our inception. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability.

Previous report

Since our inception, we have incurred significant net losses, and we expect to continue to incur significant expenses and operating losses for the foreseeable future. Our net losses were $63.2 million and $62.2 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $718.3 million. We have financed our operations with $719.0 million in net proceeds raised in our initial public offering, private placements of convertible preferred stock, rental income, and offerings under our ATM Program to date. We have no products approved forcommercialization and have never generated any revenue from product sales.

Previous report

All of our product candidates are in early-stage clinical development. We expect to continue to incur significant expenses and operating losses over the next several years. We expect that it could be many years, if ever, before we have a commercialized product. Our net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will continue to be significant as we:

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•pursue clinical development of ‘2510 and undertake any other development efforts pursuant to the license and collaboration agreement with ImmuneOnco, or the IO Collaboration Agreement;

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•seek regulatory approval for any product candidates that successfully complete clinical trials;

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•scale up our clinical and regulatory capabilities;

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•rely on collaborators or other third parties to manufacture current good manufacturing practices, or cGMP, material for clinical trials or potential commercial sales;

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•seek to potentially license-in or otherwise acquire additional new product candidates, as well as potentially initiate and complete clinical trials of new product candidates;

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•establish a commercialization infrastructure and develop internal and external manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval;

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•hire clinical, manufacturing quality control, regulatory, manufacturing and scientific and administrative personnel;

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•incur legal, accounting and other expenses in operating as a public company.

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To date, we have not generated any revenue from product sales. To become and remain profitable, we must succeed in developing and eventually commercializing product candidates that generate significant revenue. This will require us to be successful in a range of challenging activities, including completing preclinical testing and clinical trials of our product candidates, obtaining regulatory approval, and manufacturing, marketing and selling any product candidates for which we may obtain regulatory approval, as well as discovering and developing additional product candidates. We are only in the preliminary stages of most of these activities and all of our product candidates are in early-stage development. We may never succeed in these activities and, even if we do, may never generate any revenue or revenue that is significant enough to achieve profitability.

Previous report

We have a limited operating history and no history of completing any clinical trial or commercializing any product, which may make it difficult for an investor to evaluate the success of our business to date and to assess our future viability.

Previous report

We are a biopharmaceutical company with a limited operating history. Since we commenced operations in 2019, we have not yet demonstrated our ability to successfully complete any clinical trials, obtain regulatory approvals, manufacture a product on a commercial scale, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful commercialization. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing products.

Previous report

We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives. For example, from late 2022 through 2024, we implemented several strategic reprioritizations and restructurings of our preclinical and clinical development programs and elected to discontinue our tumor infiltrating lymphocyte development program and our ITIL-168 and ITIL-306 clinical trials. As part of these various restructurings, we have significantly reduced our workforce. We may experience unforeseen delays or other challenges as a result of these actions, which could adversely impact our timelines and operations and, ultimately, our ability to develop product candidates for potential commercialization. We will need to develop clinical, manufacturing, regulatory and commercial capabilities, and we may not be successful in doing so.

Previous report

We will need substantial additional funding to meet our financial obligations and to pursue our business objectives, including clinical development of ‘2510. If we are unable to raise capital when needed, we could be forced to delay further development of our product candidates, including ‘2510, or curtail our planned operations and the pursuit of our strategy.

Previous report

Our operations have consumed substantial amounts of cash since inception. Developing our in-licensed product candidates, including ‘2510, conducting preclinical testing and clinical trials and developing manufacturing operations for our product candidates is a time-consuming, identifying and potentially acquiring or in-licensing additional new product candidates, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. We expect to continue to incur significant expenses and operating losses over the next several years as we conduct clinical trials of our product candidates, seek to potentially license-in or otherwise acquire additional new product candidates, initiate future clinical trials of our product candidates, advance our preclinical programs, build our manufacturing capabilities, and seek marketing approval for any product candidates that successfully complete clinical trials. In addition, our product candidates, if approved, may not achieve commercial success. Our revenue, if any, will be derived from sales of products that we do not expect to be commercially available for a number of years, if at all. If we obtain marketing approval for any product candidates that we develop or otherwise acquire, we expect to incur significant commercialization expenses related to product sales, marketing, distribution and manufacturing. We also expect to continue to incur significant expenses associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in order to continue our operations.

Previous report

As of September 30, 2025, we had cash, cash equivalents, restricted cash, marketable securities and long-term investments of $83.4 million, which consists of $5.8 million in cash and cash equivalents, approximately $0.3 million in restricted cash, $73.9 million in marketable securities and $3.4 million in long-term investments. We believe that our existing cash, cash equivalents, marketable securities and long-term investments will be sufficient to fund our operating expenses and capital requirements beyond 2026. This estimate is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we expect. Changes may occur beyond our control that would cause us to consume our available capital before that time, including changes in and progress of our development activities, acquisitions of additional product candidates, and changes in regulation. Our future capital requirements will depend on many factors, including:

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•the scope, progress, cost and results of clinical development of ‘2510 outside of China;

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•the scope, progress, cost and results of our collaboration with ImmuneOnco;

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•the extent to which we develop, in-license or otherwise acquire additional product candidates and technologies for our product candidate pipeline;

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•our ability to complete a potential sale of our Tarzana, California facility in an amount sufficient to repay the secured debt encumbering the facility;

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•our cost of human capital as we expand our capabilities;

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We will require additional capital to achieve our business objectives. Additional funds may not be available on a timely basis, on favorable terms, or at all, and such funds, if raised, may not be sufficient to enable us to continue to implement our long-term business strategy. Further, our ability to raise additional capital may be adversely impacted by worsening global economic conditions and the disruptions to and volatility in the credit and financial markets in the United States and worldwide, including those resulting from the ongoing armed conflicts in Ukraine, and in the Middle East, U.S.-China trade and political tensions, heightened inflation and fluctuations in interest rates, tariffs, recent and potential future bank failures and supply chain disruptions, among other geopolitical and macroeconomic factors. If we are unable to raise sufficient additional capital, we could be forced to delay further development of our technologies or product candidates or curtail our planned operations and the pursuit of our strategy.

Previous report

Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to technologies or product candidates.