MoonLake Immunotherapeutics

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2026, appearing elsewhere in this quarterly report on Form 10-Q (“Quarterly Report”), and with our audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2026 (our “Annual Report”). Our unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2026 were prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and presented in United States dollars ($).

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements as of and for the nine months ended September 30, 2026, appearing elsewhere in this quarterly report on Form 10-Q (“Quarterly Report”), and with our audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2026 (our “Annual Report”). Our unaudited condensed consolidated financial statements as of and for the nine months ended September 30, 2026 were prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and presented in United States dollars ($).

Previous wording

In June 2026, we announced the week 52 results of the VELA-1 trial (M1095-HS-301) and VELA-2 trial (M1095-HS-302), marking the end of the parental trial time period. Week 52 data for SLK showed consistent and further improvement in all clinical scores, compared to week 16 data. Across VELA-1 and VELA-2, 67.2% of patients treated with SLK achieved HiSCR75 and 33.1% of patients achieved HiSCR100 at week 52 (n=396). The results were consistent across both trials (VELA-1: 68.3% HiSCR75, 31.2% HiSCR100; VELA-2: 66.0% HiSCR75, 35.1% HiSCR100). At week 52, 26.0% of patients (n=396) achieved an IHS4-100 response (VELA-1: 24.4%, VELA-2: 27.7%), reflecting inflammatory remission, defined as a 100% reduction in abscesses (A100), nodules (N100) and draining tunnels (DT100). The long-term results of the VELA program are higher than in previous Phase 3 HS programs with competing agents (using the same pooled, as observed, end of parental trial data analysis). The strong long-term clinical responses observed with SLK were accompanied by sustained improvements in Patient-Reported Outcomes, which we believe matter most to patients living with HS and their treating physicians. Patients treated with SLK consistently showed the largest reductions in the HS-specific Quality of Life score (HiSQOL) at week 52, with a -15.3 mean score difference between end of trial and baseline in VELA-1, and -14.8 in VELA-2 (as observed, n=395). The broader skin Dermatology Life Quality Index score confirmed the HiSQOL results and showed clinically meaningful response (≥4-point improvement from baseline) in 75.0% (VELA-1) and 69.4% (VELA-2) of patients (as observed, in patients with baseline DLQI ≥4, n=363). Responses for both these quality-of-life metrics were higher than previously demonstrated in competitor pivotal HS studies. In line with these data, 46.5% of patients experienced a marked reduction in pain, measured as at least a 3-point reduction from baseline in the worst skin pain numerical rating scale (VELA-1: 48.4%, VELA-2: 44.3%; as observed, in patients with baseline worst skin pain score of ≥3, n=241).

Current wording

In June 2026, we announced the week 52 results of the VELA-1 trial (M1095-HS-301) and VELA-2 trial (M1095-HS-302), marking the end of the parental trial time period. Week 52 data for SLK showed consistent and further improvement in all clinical scores, compared to week 16 data. Across VELA-1 and VELA-2, 67.2% of patients treated with SLK achieved HiSCR75 and 33.1% of patients achieved HiSCR100 at week 52 (n=396). The results were consistent across both trials (VELA-1: 68.3% HiSCR75, 31.2% HiSCR100; VELA-2: 66.0% HiSCR75, 35.1% HiSCR100). At week 52, 26.0% of patients (n=396) achieved an IHS4-100 response (VELA-1: 24.4%, VELA-2: 27.7%), reflecting inflammatory remission, defined as a 100% reduction in abscesses (A100), nodules (N100) and draining tunnels (DT100). The long-term results of the VELA program are higher than in previous Phase 3 HS programs with competing agents (using the same pooled, as observed, end of parental trial data analysis). The strong long-term clinical responses observed with SLK were accompanied by sustained improvements in Patient-Reported Outcomes, which we believe matter most to patients living with HS and their treating physicians. Patients treated with SLK consistently showed the largest reductions in the HS-specific Quality of Life score (HiSQOL) at week 52, with a -15.3 mean score difference between end of trial and baseline in VELA-1, and -14.8 in VELA-2 (as observed, n=395). The broader skin Dermatology Life Quality Index (“DLQI”) score confirmed the HiSQOL results and showed clinically meaningful response (≥4-point improvement from baseline) in 75.0% (VELA-1) and 69.4% (VELA-2) of patients (as observed, in patients with baseline DLQI ≥4, n=363). Responses for both these quality-of-life metrics were higher than previously demonstrated in competitor pivotal HS studies. In line with these data, 46.5% of patients experienced a marked reduction in pain, measured as at least a 3-point reduction from baseline in the worst skin pain numerical rating scale (VELA-1: 48.4%, VELA-2: 44.3%; as observed, in patients with baseline worst skin pain score of ≥3, n=241).

Previous wording

In June 2026, we presented an interim analysis of the VELA-TEEN clinical trial (M1095-HS-304) based on the latest available data. The data showed rapid onset and high response rates in adolescent patients with HS. At week 24, ~68% of patients treated with SLK achieved HiSCR75, alongside ~86% achieving HiSCR50 and ~45% achieving HiSCR100 (as observed, n=22). HiSCR75 rates in VELA‑TEEN were higher than those observed in the adult VELA program at comparable time points, indicating a pronounced clinical response in adolescent patients with earlier stage disease. SLK was generally well tolerated in this vulnerable patient population, and no new safety signals were observed. We expect to announce final topline results from the VELA-TEEN clinical trial in the second half of 2026.

Current wording

In June 2026, we presented an interim analysis of the VELA-TEEN clinical trial (M1095-HS-304) based on the latest available data. The data showed rapid onset and high response rates in adolescent patients with HS. At week 24, ~68% of patients treated with SLK achieved HiSCR75, alongside ~86% achieving HiSCR50 and ~45% achieving HiSCR100 (as observed, n=22). HiSCR75 rates in VELA‑TEEN were higher than those observed in the adult VELA program at comparable time points, indicating a pronounced clinical response in adolescent patients with earlier stage disease. SLK was generally well tolerated in this vulnerable patient population, and no new safety signals were observed. We expect to complete the VELA-TEEN clinical trial in the fourth quarter of 2026 and to announce final topline results in the first quarter of 2027.

Previous wording

We expect to complete enrollment for the IZAR-2 trial (M1095-PSA-302) in the third quarter of 2026. In addition, we expect results of the P-OLARIS trial (M1095-snSpA-202) to become available at the end of 2026 or early 2027.

Current wording

In September 2026, we completed enrollment for the IZAR-2 trial (M1095-PSA-302). We expect to announce initial topline results following a predefined unblinding protocol in the first quarter of 2027. In addition, we expect results of the P-OLARIS trial (M1095-snSpA-202) to become available in early 2027.

Previous wording

We expect to commence enrollment for the Phase 3 NOVA trial (M1095-PPP-301) in the second half of 2026.

Current wording

We expect to commence enrollment for the Phase 3 NOVA trial (M1095-PPP-301) in November 2026.

Previous wording

We do not have any product candidates approved for commercial sale, and we have not generated any revenue from product sales. Our ability to generate revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of SLK in one or more indications. We expect to continue to incur substantial expenses and operating losses for at least the next two years as we continue the development of SLK and prepare for commercial launches. We expect that operating losses will fluctuate notably from year to year depending on the timing of our planned clinical development programs, efforts to achieve regulatory approval, and planned marketing and sales expenditures to support a commercial launch.

Current wording

We do not have any product candidates approved for commercial sale, and we have not generated any revenue from product sales. Our ability to generate revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of SLK in one or more indications. We expect to continue to incur substantial expenses and operating losses for at least the next two years as we continue the development of SLK and invest in commercial launches. We expect that operating losses will fluctuate notably from year to year depending on the timing of our planned clinical development programs, efforts to achieve regulatory approval, and planned marketing and sales expenditures to support a commercial launch.

Previous wording

As of June 30, 2026, we had $537.0 million of cash, cash equivalents, and short-term marketable securities. Based on our current operating plan, we believe that we have sufficient capital to fund our operations and capital expenditures to mid-2028.

Current wording

As of September 30, 2026, we had $498.5 million of cash, cash equivalents, and short-term marketable debt securities. Based on our current operating plan, we believe that we have sufficient capital to fund our operations and capital expenditures to mid-2028.

Previous wording

We estimate research and clinical trial expenses based on the services performed pursuant to contracts with research institutions, contract research organizations, and contract manufacturing organizations that conduct and manage research studies and clinical trials on our behalf based on actual time and expenses incurred by them or probable achievement of milestone events that are associated with contractually agreed milestone payments.

Current wording

We estimate research and clinical trial expenses based on the services performed pursuant to contracts with research institutions, contract research organizations (“CROs”), and contract manufacturing organizations (“CMOs”) that conduct and manage research studies and clinical trials on our behalf based on actual time and expenses incurred by them or probable achievement of milestone events that are associated with contractually agreed milestone payments.

Previous wording

Any changes in the outcome of any of these variables with respect to the development of SLK could mean a notable change in the costs and timing associated with its development. We may never succeed in achieving regulatory approval for SLK. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials or focus on other product candidates. For example, if the FDA, the EMA, or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect or if we experience delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time on the completion of SLK’s clinical development.

Current wording

Any changes in the outcome of any of these variables with respect to the development of SLK could mean a notable change in the costs and timing associated with its development. We may never succeed in achieving regulatory approval for SLK. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials or focus on other product candidates. For example, if the FDA, the European Medicines Agency (“EMA”), or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect or if we experience delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time on the completion of SLK’s clinical development.

Previous wording

•Completing the development of SLK in our current focus indications, HS, PsA, axSpA and PPP —We expect to incur considerable research and development expenses and G&A expenses as we: (i) conduct clinical trials for SLK including the ongoing Phase 3 clinical trials in PsA and adolescent HS, the ongoing Phase 2 clinical trial in PsA, potential future Phase 3 clinical trials in PPP and axSpA, the ongoing open-label extension trials in HS, and potential future clinical trials of SLK in other indications; (ii) attract, hire and retain additional clinical, scientific, quality control, and administrative personnel; and (iii) add clinical, operational, financial and management information systems and personnel.

Current wording

•Completing the development of SLK in our current focus indications, HS, PsA, axSpA, and PPP —We expect to incur considerable research and development expenses and G&A expenses as we: (i) conduct clinical trials for SLK including the ongoing Phase 3 clinical trials in PsA and adolescent HS, the ongoing Phase 2 clinical trial in PsA, the planned Phase 3 clinical trial in PPP, potential future Phase 3 clinical trials in axSpA, the ongoing open-label extension trials in HS, and potential future clinical trials of SLK in other indications; (ii) attract, hire, and retain additional clinical, scientific, quality control, and administrative personnel; and (iii) add clinical, operational, financial, and management information systems and personnel.

Previous wording

•Preparing for commercialization of SLK— We have started preparing the BLA to seek approval of SLK in the United States in HS and adolescent HS. We expect to incur significant research and development and G&A expenses in this process, as we make milestone and commercial payments under the In-License Agreement, dated April 29, 2021, by and between MoonLake AG and MHKDG (the “In-License Agreement”) (based on regulatory filing acceptances, first commercial sales, and aggregate annual net sales) and as we establish a sales, marketing and distribution infrastructure to commercialize SLK including further establishing a presence in the United States. We expect to submit the BLA at the end of the third quarter of 2026 and, subject to FDA approval, we expect a commercial launch in the United States in the second half of 2027.

Current wording

•Preparing for commercialization of SLK— We have submitted a BLA to the FDA seeking approval of SLK in the United States in HS and adolescent HS. We expect to incur significant G&A expenses as we establish a sales, marketing, and distribution infrastructure to commercialize SLK including further establishing a presence in the United States. In addition, we expect to incur milestone and commercial payments under the in-license agreement, dated April 29, 2021, by and between MoonLake AG and MHKDG (the “In-License Agreement”) (based on regulatory filing acceptances, first commercial sales, and aggregate annual net sales). Subject to FDA approval, we expect a commercial launch in the United States in the second half of 2027.

Previous wording

•Building our manufacturing capabilities — We do not own or operate manufacturing facilities, and currently have no plans to establish any. We partner with third-party CMOs for both drug substance and finished drug product. We obtain our supplies from these manufacturers based on purchase orders. Therefore, we expect to incur research and development costs for the purchase of our supplies on an as needed basis to conduct our clinical trials. We have executed technology transfers for drug substance and drug product to commercial scale CMOs, and we have successfully manufactured Process Performance Qualification batches, but we may pursue additional technology transfers and process improvements. This is designed to allow us to scale up while SLK is in clinical development and advance potential commercial requirements. The improvement of our manufacturing capabilities will be important in driving efficiency, maintaining high standards of quality control, and ensuring that investigators, physicians, and patients have adequate access to our product candidates, if approved. We began stock-piling drug substance as pre-launch inventory during the third quarter of 2025 and expect to continue doing so throughout the rest of 2026.

Current wording

•Building our manufacturing capabilities — We do not own or operate manufacturing facilities and currently have no plans to establish any. We partner with third-party CMOs for both drug substance and finished drug product. We obtain our supplies from these manufacturers based on purchase orders. Therefore, we expect to incur research and development costs for the purchase of our supplies on an as-needed basis to conduct our clinical trials. We have executed technology transfers for drug substance and drug product to commercial scale CMOs, and we have successfully manufactured Process Performance Qualification batches, but we may pursue additional technology transfers and process improvements. This is designed to allow us to scale up while SLK is in clinical development and advance potential commercial requirements. The improvement of our manufacturing capabilities will be important in driving efficiency, maintaining high standards of quality control, and ensuring that investigators, physicians, and patients have adequate access to our product candidates, if approved. We began stockpiling drug substance as pre-launch inventory during the third quarter of 2025 and expect to continue doing so until the expected launch in the second half of 2027.

Previous wording

We expect our existing cash and cash equivalents to be sufficient to advance the development of SLK in multiple indications, including the completion of all ongoing clinical trials and our planned Phase 3 clinical trial of SLK in PPP, to submit a BLA for SLK, and to support a first commercial launch of SLK in the United States, if approved. Clinical development involves a lengthy and expensive process with uncertain outcomes and is subject to risks described in Item 1A. Risk Factors, in our Annual Report, including that our non-clinical studies or clinical trials may not be conducted as planned or completed on schedule and may not satisfy the requirements of the FDA, EMA, or other comparable foreign regulatory authorities. If we are required to conduct additional preclinical studies or clinical trials of SLK beyond those that we currently contemplate, if we are delayed or unable to successfully complete clinical trials of SLK or other testing, or if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may require additional funding. Moreover, we may require additional capital to commercialize SLK and to discover, develop, obtain regulatory approval and commercialize any future product candidates, as applicable. We expect to finance future cash needs through public or private equity, additional debt, or product collaborations. Additional capital may not be available in sufficient amounts or on reasonable terms, if at all. The current market environment for small biotechnology companies, like us, and broader macroeconomic factors may preclude us from successfully raising additional capital.

Current wording

We expect our existing cash, cash equivalents, and short-term marketable debt securities to be sufficient to advance the development of SLK in multiple indications, including the completion of all ongoing clinical trials and our planned Phase 3 clinical trial of SLK in PPP, and to support a first commercial launch of SLK in the United States, if approved. Clinical development involves a lengthy and expensive process with uncertain outcomes and is subject to risks described in Item 1A. Risk Factors, in our Annual Report, including that our non-clinical studies or clinical trials may not be conducted as planned or completed on schedule and may not satisfy the requirements of the FDA, EMA, or other comparable foreign regulatory authorities. If we are required to conduct additional preclinical studies or clinical trials of SLK beyond those that we currently contemplate, if we are delayed or unable to successfully complete clinical trials of SLK or other testing, or if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may require additional funding. Moreover, we may require additional capital to commercialize SLK and to discover, develop, obtain regulatory approval, and commercialize any future product candidates, as applicable. We expect to finance future cash needs through public or private equity, additional debt, or product collaborations. Additional capital may not be available in sufficient amounts or on reasonable terms, if at all. The current market environment for small biotechnology companies, like us, and broader macroeconomic factors may preclude us from successfully raising additional capital.

Previous wording

Gains or losses from foreign currency translations are included in the condensed consolidated statements of operations and comprehensive loss in “Other income, net”. We recognized a net foreign currency transaction loss of $294 thousand for the three months ended June 30, 2026, a net foreign currency transaction loss of $238 thousand for the six months ended June 30, 2026, and a foreign currency transaction gain of $378 thousand and $343 thousand for the three and six months ended June 30, 2025, respectively.

Current wording

Gains or losses from foreign currency translations are included in the condensed consolidated statements of operations and comprehensive loss in “Other income, net”. We recognized a net foreign currency transaction loss of $212 thousand and $450 thousand for the three and nine months ended September 30, 2026, respectively, a net foreign currency transaction loss of $267 thousand for the three months ended September 30, 2025, and a net foreign currency transaction gain of $75 thousand for the nine months ended September 30, 2025.

Previous wording

Other income, net was $2.6 million for the three months ended June 30, 2026, compared to $6.8 million for the three months ended June 30, 2025. The decrease of $4.2 million, or (62.0)%, is primarily related to a decrease of $3.6 million in realized interest on cash held in bank and cash investments in short-term marketable debt securities and a decrease of $0.9 million in net realized currency gains.

Current wording

Other income, net was $3.6 million for the three months ended September 30, 2026, compared to $4.1 million for the three months ended September 30, 2025. The decrease of $0.5 million, or (11.3)%, is primarily related to a decrease of $0.8 million in realized interest on cash held in banks and cash investments in short-term marketable debt securities.

Previous wording

Other comprehensive income was $0.3 million for the three months ended June 30, 2026, compared to other comprehensive loss of $1.9 million for the three months ended June 30, 2025. The decrease in other comprehensive loss of $2.2 million, or (116.3)%, is primarily related to the unrealized gains from investments in short-term marketable debt securities recorded in accumulated other comprehensive income during the three months ended June 30, 2026.

Current wording

Other comprehensive income was $1.7 million for the three months ended September 30, 2026, compared to other comprehensive loss of $0.2 million for the three months ended September 30, 2025. The decrease in other comprehensive loss of $1.9 million, or (770.9)%, is primarily related to the unrealized gains from investments in short-term marketable debt securities recorded in accumulated other comprehensive income during the three months ended September 30, 2026.

Previous wording

Research and development expenses were $104.7 million for the six months ended June 30, 2026, compared to $86.2 million for the six months ended June 30, 2025. The increase of $18.5 million, or 21.5%, is primarily related to an increase of $8.2 million in expenses pertaining to clinical development trials with CROs, driven by higher costs from the Phase 3 IZAR program in PsA, partially offset by lower costs from the Phase 3 VELA program in HS, an increase of $7.0 million in share-based compensation and personnel-related costs to support research and development efforts, of which $6.3 million is a result of accelerated expense recognition due to a voluntary cancellation of unvested awards, and an increase of $3.2 million in manufacturing, supply and logistics expenses through CMOs, which is primarily related to the production of stockpiled pre-launch inventory. The increase was partially offset by a decrease of $0.6 million in consulting expenses.

Current wording

Research and development expenses were $173.6 million for the nine months ended September 30, 2026, compared to $146.9 million for the nine months ended September 30, 2025. The increase of $26.8 million, or 18.2%, is primarily related to an increase of $17.0 million in accrued regulatory milestone license fees to MHKDG for expected acceptance of the Company's BLA submission, an increase of $6.8 million in share-based compensation and personnel-related costs to support research and development efforts, of which $6.3 million is a result of accelerated expense recognition due to a voluntary cancellation of unvested awards, an increase of $6.0 million in manufacturing, supply, and logistics expenses through CMOs, which is primarily related to the production of stockpiled pre-launch inventory, an increase of $1.4 million in clinical development expenses, and an increase of $1.7 million in other research and development fees. The increase was partially offset by a decrease of $5.4 million in non-clinical CRO expenses and a decrease of $0.7 million in consulting expenses.

Previous wording

General and administrative expenses were $26.9 million for the six months ended June 30, 2026, compared to $22.0 million for the six months ended June 30, 2025. The increase of $5.0 million, or 22.7%, is primarily related to an increase of $6.1 million in share-based compensation and personnel-related costs, of which $4.8 million is a result of accelerated expense recognition due to a voluntary cancellation of unvested awards, and an increase of $1.3 million in marketing and communications expenses related to pre-commercial activities. The increase was partially offset by a decrease of $2.5 million in legal and advisory expenses.

Current wording

General and administrative expenses were $37.9 million for the nine months ended September 30, 2026, compared to $32.8 million for the nine months ended September 30, 2025. The increase of $5.2 million, or 15.8%, is primarily related to an increase of $6.4 million in share-based compensation and personnel-related costs, of which $4.8 million is a result of accelerated expense recognition due to a voluntary cancellation of unvested awards. The increase was partially offset by a decrease of $0.9 million in advisory, legal, and other general and administrative expenses.

Previous wording

Other income, net was $5.8 million for the six months ended June 30, 2026, compared to $13.9 million for the six months ended June 30, 2025. The decrease of $8.1 million, or (58.3)%, is primarily related to a decrease of $7.9 million in realized interest on cash held in bank and cash investments in short-term marketable debt securities and a decrease of $0.9 million in net realized currency gains.

Current wording

Other income, net was $9.4 million for the nine months ended September 30, 2026, compared to $17.9 million for the nine months ended September 30, 2025. The decrease of $8.6 million, or (47.7)%, is primarily related to a decrease of $8.7 million in realized interest on cash held in banks and cash investments in short-term marketable debt securities.

Previous wording

Other comprehensive income was $26 thousand for the six months ended June 30, 2026, compared to other comprehensive loss of $4.6 million for the six months ended June 30, 2025. The decrease in other comprehensive loss of $4.6 million, or (100.6)%, is primarily related to the unrealized gains from investments in short-term marketable debt securities recorded in accumulated other comprehensive income during the six months ended June 30, 2026.

Current wording

Other comprehensive income was $1.7 million for the nine months ended September 30, 2026, compared to other comprehensive loss of $4.8 million for the nine months ended September 30, 2025. The decrease in other comprehensive loss of $6.5 million, or (135.0)%, is primarily related to the net unrealized gains from investments in short-term marketable debt securities recorded in accumulated other comprehensive income during the nine months ended September 30, 2026.

Previous wording

For the six months ended June 30, 2026, we incurred a loss of $131.5 million, which includes non-cash items such as share-based compensation expense of $15.9 million, and cash outflow from operations of $121.8 million. As of June 30, 2026, we had a total of $537.0 million in cash, cash equivalents and short-term marketable securities. Based on our current operating plan, we believe our available cash, cash equivalents, and short-term marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements to mid-2028.

Current wording

For the nine months ended September 30, 2026, we incurred a loss of $211.1 million, which includes non-cash items such as share-based compensation expense of $18.7 million, and cash outflow from operations of $185.2 million. As of September 30, 2026, we had a total of $498.5 million in cash, cash equivalents, and short-term marketable debt securities. Based on our current operating plan, we believe our available cash, cash equivalents, and short-term debt marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements to mid-2028.

Previous wording

We expect to incur notable expenses and operating losses for at least the next two years, assuming we continue the clinical development of, and seek regulatory approval for, SLK, and as we invest in its commercial launch. It is expected that operating losses will fluctuate significantly from year-to-year due to the timing of clinical development programs, efforts to achieve regulatory approval, and sales and marketing efforts. We may require additional funding to bring our product candidate to market and support our continuing operations. In addition, with a change in the presidential administration in 2025, there has been an economic policy shift towards increasing tariffs, which in turn has led and could lead to further retaliatory tariffs. These may have the potential to impact expenses as well as our ability to, if ever, generate revenue or maintain profitability. Until such time that we can generate significant revenue from product sales or other sources, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, which may include income from collaborations, strategic partnerships, or marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. If we are unable to acquire additional capital or resources, we will be required to modify our operational plans to fund our operating expense requirements. Refer to“Risk Factors — Risks Related to Our Limited Operating History, Business, Financial Condition, and Results of Operations”in Item 1A. of our Annual Report for further details related to the risk of raising additional capital to fund our operations.

Current wording

We expect to incur notable expenses and operating losses for at least the next two years, assuming we continue the clinical development of SLK, and as we invest in its commercial launch. It is expected that operating losses will fluctuate significantly from year to year due to the timing of clinical development programs, efforts to achieve regulatory approval, and sales and marketing efforts. We may require additional funding to bring our product candidate to market and support our continuing operations. In addition, with a change in the presidential administration in 2025, there has been an economic policy shift towards increasing tariffs, which in turn has led and could lead to further retaliatory tariffs. These may have the potential to impact expenses as well as our ability to, if ever, generate revenue or maintain profitability. Until such time that we can generate significant revenue from product sales or other sources, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, which may include income from collaborations, strategic partnerships, or marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. If we are unable to acquire additional capital or resources, we will be required to modify our operational plans to fund our operating expense requirements. Refer to“Risk Factors — Risks Related to Our Limited Operating History, Business, Financial Condition, and Results of Operations”in Item 1A. of our Annual Report for further details related to the risk of raising additional capital to fund our operations.

Previous wording

In March 2025, we entered into a loan and security agreement (the “Original Loan and Security Agreement”) with Hercules Capital, Inc. (“Hercules”) and certain of its affiliates (collectively with Hercules, the “Lenders”) for an aggregate principal amount of $500.0 million, of which $300.0 million was fully committed subject to achievement of milestones (the “Original Credit Facility”). An initial tranche of $75.0 million (the “Tranche 1 Loan”) was funded under the Loan and Security Agreement on March 31, 2025 (the “Closing Date”).

Current wording

On March 31, 2025 (the “Closing Date”), we entered into a loan and security agreement (the “Original Loan and Security Agreement”) with Hercules Capital, Inc. (“Hercules”) and lenders party thereto (the “Lenders”) for an aggregate principal amount of $500.0 million, of which $300.0 million was fully committed subject to achievement of milestones (the “Original Credit Facility”).

Previous wording

On February 20, 2026 (the “Amendment Closing Date”), we executed the First Amendment to the Loan and Security Agreement (the “First Amended Loan and Security Agreement” and, together with the Original Loan and Security Agreement, the “Loan and Security Agreement”) with, among others, Hercules, as administrative and collateral agent for the Lenders, which amended the Original Loan and Security Agreement. The Loan and Security Agreement provides for six non-dilutive senior secured term loan facilities in the aggregate principal amount of $500.0 million (the “Amended Credit Facility” and, together with the Original Credit Facility, the “Credit Facility”). A second tranche (the “Tranche 2 Loan”) in an aggregate principal amount of $25.0 million was fully funded on the Amendment Closing Date. In addition to the Tranche 1 Loan and Tranche 2 Loan, the Credit Facility provides for additional tranches as follows:

Current wording

On February 20, 2026 (the “First Amendment Closing Date”), we executed the First Amendment to the Loan and Security Agreement (the “First Amendment”) with, among others, Hercules, as administrative and collateral agent for the Lenders, which amended the Original Loan and Security Agreement.

Previous wording

b. Subject to our announcement that the VELA-1 and VELA-2 Phase 3 studies of SLK in adult patients with moderate to severe hidradenitis suppurativa each demonstrated clinically meaningful improvements across the 52-week endpoints with SLK having demonstrated an acceptable safety profile, which together support (x) the planned commercialization strategy and outlook of our Company and (y) the filing of the BLA for SLK with the FDA (together, the “Tranche 4 HS Milestone”), and immediately prior to the advance of a fourth tranche, we have closed the previous 10 consecutive trading days with a market capitalization of at least $1,500.0 million; provided that, the first trading day tested cannot be prior to the public announcement of the Tranche 4 HS Milestone (collectively with the Tranche 4 HS Milestone, the “Amended Tranche 4 Milestone”), this fourth tranche with additional term loans in an aggregate principal amount of up to $50.0 million, available on the Amended Tranche 4 Milestone achievement date through the earlier of (i) 60 days following the achievement of the Tranche 4 HS Milestone and (ii) December 15, 2026,

Current wording

d. Subject to our announcement that the VELA-1 and VELA-2 Phase 3 studies of SLK in adult patients with moderate to severe hidradenitis suppurativa each demonstrated clinically meaningful improvements across the 52-week endpoints with SLK having demonstrated an acceptable safety profile, which together support (x) the planned commercialization strategy and outlook of our Company and (y) the filing of the BLA for SLK with the FDA (together, the “Tranche 4 HS Milestone”), and immediately prior to the advance of a fourth tranche, we have closed the previous 10 consecutive trading days with a market capitalization of at least $1,500.0 million; provided that, the first trading day tested cannot be prior to the public announcement of the Tranche 4 HS Milestone (collectively with the Tranche 4 HS Milestone, the “Amended Tranche 4 Milestone”), this fourth tranche (the “Tranche 4 Loan”) with additional term loans in an aggregate principal amount of up to $50.0 million, available on the Amended Tranche 4 Milestone achievement date through the earlier of (i) 60 days following the achievement of the Tranche 4 HS Milestone and (ii) December 15, 2026, e. Subject to our achievement of the Tranche 4 HS Milestone and the FDA’s approval of our submission of a BLA for SLK (the “Approval Milestone”) (collectively, the “Tranche 5 Milestone”), a fifth tranche with additional term loans in an aggregate principal amount of up to $100.0 million, available on the Tranche 5 Milestone achievement date through the earlier of (i) 60 days following such date and (ii) December 15, 2027, and

Previous wording

d. Subject to approval by the Lenders’ in their discretion, a sixth tranche of additional term loans in an aggregate principal amount of up to $200.0 million.

Current wording

f. Subject to approval by the Lenders in their discretion, a sixth tranche (the “Tranche 6 Loan”) of additional term loans in an aggregate principal amount of up to $200.0 million (increased to up to $250.0 million following the expiration of the Tranche 4 Loan availability period).

Previous wording

In June 2026, we achieved the Tranche 4 HS Milestone.

Current wording

On June 21, 2026, we achieved the Tranche 4 HS Milestone. We did not draw the Tranche 4 Loan during the applicable availability period. Following expiration of that period during the three months ended September 30, 2026, the undrawn $50.0 million Tranche 4 Loan commitment was added to the Tranche 6 Loan commitment under the Loan and Security Agreement.

Previous wording

The Amended Credit Facility matures on April 1, 2030 (the “Maturity Date”) and bears interest at an annual rate equal to the greater of (i) prime rate as reported in The Wall Street Journal plus 1.45% and (ii) 8.45% with the initial interest rate equal to 8.95%. As of June 30, 2026, the Amended Credit Facility bears interest at 8.45%. This rate is subject to a 0.25% reduction upon achievement of the Approval Milestone. Certain additional commitment and undrawn amount fees are also payable in connection with the Amended Credit Facility.

Current wording

The Credit Facility matures on April 1, 2030 (the “Maturity Date”) and bears interest at an annual rate equal to the greater of (i) prime rate as reported in The Wall Street Journal plus 1.45% and (ii) 8.45% with the initial interest rate equal to 8.95%. As of September 30, 2026, the Credit Facility bears interest at 8.45%. This rate is subject to a 0.25% reduction upon achievement of the Approval Milestone. Certain additional commitment and undrawn amount fees are also payable in connection with the Credit Facility.

Previous wording

The Amended Credit Facility does not provide for scheduled amortization payments during the term. All principal will be due on the Maturity Date. We may, at our option at any time, prepay all loans under the Amended Credit Facility by paying the principal balance, plus accrued and unpaid interest, subject to (i) a prepayment premium equal to a range of 0.0% to 2.0% and (ii) an end of term charge equal to a range of 4.25% to 6.95%, each based on when the prepayment occurs. If the Amended Credit Facility is repaid in full as a result of a change of our control, the prepayment premium shall be waived.

Current wording

The Credit Facility does not provide for scheduled amortization payments during the term. All principal will be due on the Maturity Date. We may, at our option at any time, prepay all loans under the Credit Facility by paying the principal balance, plus accrued and unpaid interest, subject to (i) a prepayment premium equal to a range of 0.0% to 2.0% and (ii) an end of term charge equal to a range of 4.25% to 6.95%, each based on when the prepayment occurs. If the Credit Facility is repaid in full as a result of a change of our control, the prepayment premium shall be waived.

Previous wording

The First Amended Loan and Security Agreement allows for us to satisfy a portion of the cash interest payments by capitalizing such interest payments as payment-in-kind (“PIK”). No PIK interest relating to the term loans has been recorded and included in the condensed consolidated balance sheets as of June 30, 2026.

Current wording

The Loan and Security Agreement allows for us to satisfy a portion of the cash interest payments by capitalizing such interest payments as payment-in-kind (“PIK”). No PIK interest relating to the term loans has been recorded and included in the condensed consolidated balance sheets as of September 30, 2026.

Previous wording

The First Amended Loan and Security Agreement contains customary covenants, such as financial covenants and certain events of default after which loans under the Amended Credit Facility may be due and payable immediately. We were in compliance with all covenants as of June 30, 2026.

Current wording

The Loan and Security Agreement contains customary covenants, such as financial covenants and certain events of default after which loans under the Credit Facility may be due and payable immediately. We were in compliance with all covenants as of September 30, 2026.

Previous wording

All obligations under the First Amended Loan and Security Agreement are secured on a first-priority basis, subject to certain exceptions, by security interests in substantially all of our assets and our material subsidiaries, including our intellectual property, and are guaranteed by our material subsidiaries, including foreign subsidiaries, subject to certain exceptions.

Current wording

All obligations under the Loan and Security Agreement are secured on a first-priority basis, subject to certain exceptions, by security interests in substantially all of our assets and our material subsidiaries, including our intellectual property, and are guaranteed by our material subsidiaries, including foreign subsidiaries, subject to certain exceptions.

Previous wording

We are permitted to use the proceeds of the Amended Credit Facility for working capital and general corporate purposes of us and our subsidiaries.

Current wording

We are permitted to use the proceeds of the Credit Facility for working capital and general corporate purposes of us and our subsidiaries.

Previous wording

On August 31, 2023, we entered into a Sales Agreement with Leerink Partners (the “Sales Agreement”) through which we could issue and sell up to $350.0 million of our Class A Ordinary Shares (the “ATM Shares”), through Leerink Partners as our sales agent. The ATM Shares to be sold under the Sales Agreement are issued and sold pursuant to our shelf registration statement on Form S-3 (File No. 333-274286), which was declared effective by the SEC on September 11, 2023, and a prospectus supplement thereto filed with the SEC on August 31, 2023. As of June 30, 2026, there was $213.8 million remaining for future sales under the Sales Agreement.

Current wording

On August 31, 2023, we entered into a Sales Agreement with Leerink Partners, which was amended on August 10, 2026 by Amendment No. 1 to Sales Agreement (as amended, the “Sales Agreement”), pursuant to which we may issue and sell our Class A Ordinary Shares from time to time through Leerink Partners as our sales agent. Prior to August 10, 2026, sales under the Sales Agreement were made pursuant to our shelf registration statement on Form S-3 (File No. 333-274286), which was declared effective by the SEC on September 11, 2023, and a related prospectus supplement covering up to $350.0 million of Class A Ordinary Shares. On August 10, 2026, we filed an automatic shelf registration statement on Form S-3 (File No. 333-298192), which included a prospectus supplement covering the offer and sale of up to $300.0 million of Class A Ordinary Shares under the Sales Agreement, all of which remained available as of September 30, 2026.

Previous wording

During the three months ended June 30, 2026, we sold 2,427,619 Class A Ordinary Shares under the Sales Agreement at a weighted average share price of $18.55, for aggregate net proceeds of approximately $44.3 million, after deducting sales agent's commissions and transaction costs. For the three months ended June 30, 2025, there were no sales under the Sales Agreement.

Current wording

During the nine months ended September 30, 2026, we sold 2,764,178 Class A Ordinary Shares under the Sales Agreement at a weighted average share price of $18.52, for aggregate net proceeds of approximately $50.3 million, after deducting sales agent's commissions and transaction costs. For the three months ended September 30, 2026, there were no sales under the Sales Agreement.

Previous wording

On November 5, 2025, we entered into an underwriting agreement with Leerink Partners as the underwriter, to issue and sell 7,142,857 Class A Ordinary Shares at a public offering price of$10.50 per share (the “2025 Offering”). The 2025 Offering closed on November 6, 2025, and net proceeds were $72.4 million, after deducting the underwriting discounts, commissions, and offering expenses in the amount of$2.6 million.

Current wording

On November 5, 2025, we entered into an underwriting agreement with Leerink Partners as the underwriter, to issue and sell 7,142,857 Class A Ordinary Shares at a public offering price of $10.50 per share (the “2025 Offering”). The 2025 Offering closed on November 6, 2025, and net proceeds were $72.4 million, after deducting the underwriting discounts, commissions, and offering expenses in the amount of $2.6 million.

Previous wording

In connection with the 2026 Offering, we also granted the underwriters a 30-day option to purchase up to 1,500,000 additional Class A Ordinary Shares at the 2026 Offering Price less underwriting discounts and commissions (“Over-Allotment Option”). As of June 30, 2026, the Over-Allotment Option had not been exercised.

Current wording

In connection with the 2026 Offering, we also granted the underwriters a 30-day option to purchase up to 1,500,000 additional Class A Ordinary Shares at the 2026 Offering Price less underwriting discounts and commissions (“Over-Allotment Option”). On July 10, 2026, the underwriters exercised in full the Over-Allotment Option. The transaction closed on July 14, 2026. The net proceeds from the exercise of the Over-Allotment Option were $28.5 million, after deducting underwriting discounts and other offering expenses in the amount of $1.5 million.

Previous wording

Net cash used in operating activities was $121.8 million and $92.7 million for the six months ended June 30, 2026 and 2025, respectively. The increase of net cash used in operating activities of $29.2 million was primarily driven by the increase in net loss of $34.9 million adjusted for non-cash items of $12.6 million. The remaining change of $6.9 million was related to the timing of receipts and payments in the ordinary course of business.

Current wording

Net cash used in operating activities was $185.2 million and $137.2 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in net cash used in operating activities of $48.0 million was primarily driven by the increase in net loss of $43.8 million adjusted for non-cash items of $12.4 million. The remaining change of $16.7 million was related to the timing of receipts and payments in the ordinary course of business.

Previous wording

During the six months ended June 30, 2026, net cash provided by investing activities was $0.4 million, consisting predominantly of $118.2 million in proceeds received from maturities of short-term marketable debt securities with original maturities longer than three months, largely offset by $117.8 million related to the purchase of short-term marketable debt securities. During the six months ended June 30, 2025, net cash provided by investing activities was $144.5 million, consisting predominantly of $350.7 million in proceeds received from maturities of short-term marketable debt securities with original maturities longer than three months, partially offset by $206.2 million related to the purchase of short-term marketable debt securities.

Current wording

During the nine months ended September 30, 2026, net cash used in investing activities was $58.3 million, consisting predominantly of $206.1 million related to the purchase of short-term marketable debt securities, partially offset by $147.8 million in proceeds received from maturities of short-term marketable debt securities with original maturities longer than three months. During the nine months ended September 30, 2025, net cash provided by investing activities was $232.9 million, consisting predominantly of $439.1 million in proceeds received from maturities of short-term marketable debt securities with original maturities longer than three months, partially offset by $206.2 million related to the purchase of short-term marketable debt securities.

Previous wording

During the six months ended June 30, 2026, net cash provided by financing activities was $265.3 million consisting primarily of $189.8 million in net proceeds from the shares sold under the 2026 Offering, $50.3 million in net proceeds from the shares sold under the Sales Agreement, $24.5 million in net proceeds from the First Amended Loan and Security Agreement and drawdown of a second debt tranche and $0.7 million in net proceeds from the options exercised under the Equity Incentive Plan. During the six months ended June 30, 2025, net cash provided by financing activities was $73.1 million consisting primarily of $73.0 million in net proceeds from the Original Loan and Security Agreement.

Current wording

During the nine months ended September 30, 2026, net cash provided by financing activities was $292.2 million consisting primarily of $189.8 million in net proceeds from the shares sold under the 2026 Offering, $50.3 million in net proceeds from the shares sold under the Sales Agreement, $28.5 million in net proceeds from the exercise of the Over-Allotment Option, $24.5 million in net proceeds from the Loan and Security Agreement and drawdown of a second debt tranche, and $0.7 million in net proceeds from the options exercised under the Equity Incentive Plan, partially offset by $1.5 million related to a stamp duty paid on a capital injection. During the nine months ended September 30, 2025, net cash provided by financing activities was $73.6 million consisting primarily of $73.0 million in net proceeds from the Original Loan and Security Agreement.