Zura Bio Ltd

Previous wording

In addition to historical information, this discussion and analysis contains forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those discussed in the section titled “Risk Factors” in our 2025 Annual Report, as supplemented by the risks and uncertainties described in “Risk Factors” Item I.A. Risk Factors in Part II of this Quarterly Report, that could cause actual results to differ materially from historical results or anticipated results. You should carefully read the information under “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “Zura,” “we,” “us,” and “our” refer to Zura Bio Limited, a Cayman Islands exempted company.

Current wording

In addition to historical information, this discussion and analysis contains forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those discussed in the section titled “Risk Factors” in our 2025 Annual Report, as supplemented by the risks and uncertainties described in “Risk Factors” Item I.A. Risk Factors in Part II of this Quarterly Report, that could cause actual results to differ materially from historical results or anticipated results. You should carefully read the information under “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” and “our” refer to Zura Bio Limited, a Cayman Islands exempted company.

Previous wording

We are a clinical-stage biotechnology company developing novel and differentiated medicines for patients with autoimmune and inflammatory diseases, including serious and debilitating conditions with significant unmet medical need. These diseases are often chronic and biologically complex and difficult to treat, and many patients do not achieve durable disease control with currently available therapies.

Current wording

We are a clinical-stage biotech company developing novel and differentiated medicines to meaningfully improve the lives of patients with serious and debilitating autoimmune and inflammatory diseases, including those with significant unmet medical need. These diseases are often chronic and biologically complex, and many patients do not achieve durable disease control with currently available therapies.

Previous wording

Our lead product candidate, tibulizumab (ZB-106), is an immunoglobulin G single-chain variable fragment bispecific dual-antagonist antibody engineered by the fusion of TALTZ® (ixekizumab) and tabalumab. Tibulizumab is designed to neutralize interleukin-17 and B-cell activating factor, two cytokines implicated in autoimmune and inflammatory diseases.

Current wording

Our lead product candidate, tibulizumab (ZB-106), is a bispecific dual-antagonist antibody engineered by the fusion of tabalumab with a single-chain variable fragment (scFv) derived from ixekizumab (Taltz®). Tibulizumab is designed to neutralize interleukin-17 and B-cell activating factor, two cytokines implicated in autoimmune and inflammatory diseases.

Previous wording

In May 2025, we initiated TibuSHIELD, a global, randomized, double-blind, placebo-controlled Phase 2 clinical study evaluating tibulizumab in approximately 225 participants with moderate to severe hidradenitis suppurativa (“HS”). The study is designed to assess the safety, tolerability, and efficacy of tibulizumab in the relevant patient population. The study will evaluate tibulizumab over a 28-week period, which includes a 16-week efficacy assessment period followed by an optional open-label extension (“OLE”) and a 12-week safety follow-up. The primary endpoint of the study is the percent change from baseline in total abscess and nodule (“AN”) count at week 16. Secondary endpoints include the proportion of participants achieving HiSCR50 or HiSCR75, defined as at least a 50% or 75% reduction in AN count without an increase in abscesses or draining fistulas at week 16. Key safety assessments include the assessment of tolerability, and monitoring for adverse events. Topline results are expected to be available in the fourth quarter of 2026.

Current wording

In May 2025, we initiated TibuSHIELD, a global, randomized, double-blind, placebo-controlled Phase 2 clinical study evaluating tibulizumab in participants with moderate to severe hidradenitis suppurativa (“HS”). Enrollment in TibuSHIELD is complete, exceeding the initial enrollment target with 247 participants. The study is designed to assess the safety, tolerability, and efficacy of tibulizumab in the relevant patient population. The study will evaluate tibulizumab over a 32-week period, which includes a 16-week efficacy assessment period followed by a 16-week optional open-label extension (“OLE”). The primary endpoint of the study is the percent change from baseline in total abscess and nodule (“AN”) count at week 16. Secondary endpoints include the proportion of participants achieving HiSCR50 or HiSCR75, defined as at least a 50% or 75% reduction in AN count without an increase in abscesses or draining fistulas at week 16. Topline results are expected to be available in the fourth quarter of 2026.

Previous wording

In December 2024, we initiated TibuSURE, a global, randomized, double-blind, placebo-controlled Phase 2 clinical study evaluating tibulizumab approximately 80 participants with early diffuse cutaneous systemic sclerosis. The study is designed to assess the safety, tolerability, and efficacy of tibulizumab in the relevant patient population. The study includes a 24-week efficacy period followed by a 28-week OLE. The primary endpoint is the modified Rodnan Skin Score. Key efficacy endpoints include lung disease, assessed by quantitative high-resolution computed tomography and forced vital capacity; physical function, measured by the Health Assessment Questionnaire-Disability Index; and the revised Combined Response Index in Systemic Sclerosis. Topline results are expected to be available in the first half of 2027.

Current wording

In December 2024, we initiated TibuSURE, a global, randomized, double-blind, placebo-controlled Phase 2 clinical study evaluating tibulizumab in participants with early diffuse cutaneous systemic sclerosis. Enrollment in TibuSURE is complete, exceeding the initial enrollment target with 91 participants. The study is designed to assess the safety, tolerability, and efficacy of tibulizumab in the relevant patient population. The study will evaluate tibulizumab over a 52-week period, which includes a 24-week efficacy period followed by a 28-week optional OLE. The primary endpoint is the modified Rodnan Skin Score. Key efficacy endpoints include lung disease, assessed by quantitative high-resolution computed tomography and forced vital capacity; physical function, measured by the Health Assessment Questionnaire-Disability Index; and the revised Combined Response Index in Systemic Sclerosis. Topline results are expected to be available in the first half of 2027.

Previous wording

We continue to evaluate potential indication expansion opportunities for tibulizumab. In addition, we are evaluating development and strategic options for other clinical‑stage assets.

Current wording

In addition, we are evaluating further development and strategic options for tibulizumab and our other clinical‑stage assets.

Previous wording

Crebankitug (ZB‑168) is a fully human monoclonal antibody that binds and neutralizes the interleukin‑7 receptor alpha chain, a shared receptor component of the interleukin‑7 and thymic stromal lymphopoietin signaling pathways. Crebankitug has been evaluated in Phase 1 and Phase 1b clinical studies, and we are assessing potential therapeutic indications and future development strategies for this asset.

Current wording

Crebankitug (ZB‑168) is a fully human monoclonal antibody that neutralizes the interleukin‑7 receptor alpha chain, a shared receptor component of the interleukin‑7 and thymic stromal lymphopoietin signaling pathways. Crebankitug has been evaluated in Phase 1 and Phase 1b clinical studies, and we are assessing potential therapeutic indications and future development strategies for this asset.

Previous wording

We have a limited operating history. Since our inception, our operations have focused on organizing and staffing our company, business planning, raising capital and entering into collaboration agreements for conducting manufacturing and research and development activities. Our lead product candidate is in the clinical testing stage; however, prior to the initiation of TibuSHIELD and TibuSURE in May 2025 and December 2024, respectively, we had not conducted any clinical trials. We do not have any product candidates approved for sale and have not generated any revenue from product sales. We have funded our operations primarily through private and public equity financings, having raised aggregate gross proceeds of approximately $421.5 million as of the date hereof.

Current wording

We have a limited operating history. Since our inception, our operations have focused on organizing and staffing our company, business planning, raising capital, and entering into collaboration agreements for conducting manufacturing, clinical trials and other research and development activities. Our lead product candidate is in the clinical testing stage; however, prior to the initiation of TibuSHIELD and TibuSURE in May 2025 and December 2024, respectively, we had not conducted any clinical trials. We do not have any product candidates approved for sale and have not generated any revenue from product sales. We have funded our operations primarily through private and public equity financings, having raised aggregate gross proceeds of approximately $421.5 million as of the date hereof.

Previous wording

Since our inception, we have incurred significant operating losses. Our net loss for the three months ended March 31, 2026 and 2025 was $24.2 million and $17.4 million, respectively. As of March 31, 2026, we had an accumulated deficit of $248.8 million. We anticipate that our expenses will increase significantly in connection with our ongoing and future activities, as we:

Current wording

Since our inception, we have incurred significant operating losses. Our net loss for the three and six months ended June 30, 2026 was $26.3 million and $50.5 million, respectively. As of June 30, 2026, we had an accumulated deficit of $275.1 million. We anticipate that our expenses will increase significantly in connection with our ongoing and future activities, as we:

Previous wording

On February 24, 2026, we entered into an underwriting agreement with Leerink Partners LLC, Piper Sandler & Co. and Cantor Fitzgerald & Co., as representatives of the several underwriters listed therein, pursuant to which we sold 21,200,000 Class A Ordinary Shares (the “Shares”), par value $0.0001 per share, at a price to the public of $6.25 per share, which included 3,000,000 additional Class A Ordinary Shares sold upon exercise in full by the underwriters of their option to purchase additional shares of stock in the offering, along with pre-funded warrants (the “Pre-Funded Warrants”) to purchase 1,800,000 Ordinary Shares at a price to the public of $6.249 per Pre-Funded Warrant, which represents the per share public offering price for the Shares less the $0.001 exercise price of each Pre-Funded Warrant (the “February 2026 Equity Offering”). The net proceeds from the February 2026 Equity Offering were approximately $134.6 million after deducting underwriting discounts and commissions and offering expenses. The February 2026 Equity Offering closed on February 26, 2026.

Current wording

In February 2026, we sold 21,200,000 Class A Ordinary Shares (the “Shares”), par value $0.0001 per share, at a price to the public of $6.25 per share, along with pre-funded warrants (the “Pre-Funded Warrants”) to purchase 1,800,000 Class A Ordinary Shares at a price to the public of $6.249 per Pre-Funded Warrant, which represents the per share public offering price for the Shares less the $0.001 exercise price of each Pre-Funded Warrant (the “February 2026 Equity

Previous wording

On April 26, 2023, our consolidated subsidiary ZB17 LLC (“ZB17”) entered into a license agreement (the “2023 Lilly License” and, together with the 2022 Lilly License (as defined below), the “Lilly Licenses”) with Lilly, for an exclusive license to develop, manufacture and commercialize tibulizumab.

Current wording

On April 26, 2023, our consolidated subsidiary ZB17 LLC entered into a license agreement with Lilly, to develop, manufacture and commercialize tibulizumab.

Previous wording

On December 8, 2022, our consolidated subsidiary, Z33 Bio Inc. (“Z33”), entered into a license agreement (the “2022 Lilly License”) with Lilly pursuant to which Lilly granted Z33 an exclusive (even as to Lilly), royalty-bearing global license to develop, manufacture, and commercialize torudokimab.

Current wording

On December 8, 2022, our consolidated subsidiary, Z33 Bio Inc. (“Z33”), entered into a license agreement with Lilly to develop, manufacture, and commercialize torudokimab.

Previous wording

On March 22, 2022, we entered into a license agreement and a Series A-1 Subscription and Shareholder’s Agreement (collectively, the “Pfizer Agreement”) with Pfizer. Under the Pfizer Agreement, we acquired a license for crebankitug.

Current wording

On March 22, 2022, we entered into a license agreement and a Series A-1 Subscription and Shareholder’s Agreement (collectively, the “Pfizer Agreement”) with Pfizer to develop, manufacture, and commercialize crebankitug.

Previous wording

We are obligated to make payments to Pfizer for (a) 11 remaining future development and regulatory milestone payments aggregating up to $69.0 million and sales milestone payments up to an aggregate of $525.0 million based on respective thresholds of net sales of products (developed from the licensed compound) (the “Products”), if any; and (b) an annual earned royalty at a marginal royalty rate in the mid-single digits to low double digits (less than 20%), based on thresholds of net sales of Products, if any (collectively, the “Pfizer Contingent Payments”). Royalties are payable on a country-by-country basis for a certain period of years or upon the later expiration of regulatory exclusivity of our Products in a country.

Current wording

We are obligated to make payments to Pfizer for (a) 11 remaining future development and regulatory milestone payments aggregating up to $69.0 million and sales milestone payments up to an aggregate of $525.0 million based on respective thresholds of net sales of products (developed from the licensed compound) (the “Products”), if any; and (b) an annual earned royalty at a marginal royalty rate in the mid-single digits to low double digits (less than 20%), based on thresholds of net sales of Products, if any (collectively, the “Pfizer Contingent Payments”). As of June 30, 2026, none of the Pfizer Contingent Payments are due and accordingly will not be recorded in our financial statements until they are due.

Previous wording

•per patient clinical trial costs, which may vary based on the number of doses that patients receive;

Current wording

•per patient clinical trial costs, which may vary based on the number of doses that patients receive and the number of visits for the trials;

Previous wording

This increase was partially offset by a $0.8 million decrease in costs for tibulizumab that was not specific to an indication, which was primarily driven by decreased manufacturing costs.

Current wording

•a $4.8 million increase in costs for tibulizumab that was not specific to an indication, primarily driven by increased drug manufacturing costs;

Previous wording

•a $3.4 million and $0.4 million increase in costs as we advance our Phase 2 clinical trials evaluating tibulizumab in adults with HS and SSc, respectively, driven by costs incurred for CRO fees to support the conduct of our clinical trials; and

Current wording

•a $2.7 million and $2.8 million increase in costs as we advance our Phase 2 clinical trials evaluating tibulizumab in adults with HS and SSc, respectively, driven by costs incurred for CRO fees to support the conduct of our clinical trials; and

Previous wording

•a $1.2 million increase in compensation, including share-based compensation, driven by increased personnel in research and development functions.

Current wording

•a $3.3 million increase in compensation, including share-based compensation, driven by increased personnel in research and development functions.

Previous wording

General and administrative expenses increased by $2.0 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily due to an increase of $1.3 million in compensation expenses, including share-based compensation, for personnel in executive and administrative functions and our board of directors, and an increase of $0.6 million in professional fees to support our growing organization as we advance our Phase 2 clinical trials evaluating tibulizumab in SSc and HS.

Current wording

General and administrative expenses increased by $1.2 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The increase was primarily due to an increase in compensation expenses, including share-based compensation, for personnel in executive and administrative functions and our board of directors, and an increase in professional fees to support our growing organization as we advance our Phase 2 clinical trials evaluating tibulizumab in SSc and HS.

Previous wording

Interest income decreased by $0.5 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. This is primarily due to lower interest rates, as well as a lower cash balance for the majority of the first quarter of 2026, as the proceeds from the February 2026 Equity Offering were not received until the end of February.

Current wording

Interest income decreased by $0.3 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. This is primarily due to lower interest rates, as well as a lower cash balance for the majority of the first quarter of 2026, as the proceeds from the February 2026 Equity Offering were not received until the end of February.

Previous wording

Since our inception, we have not reached successful commercialization of our product candidates or generated any revenue and expect to continue to incur significant operating losses and cash outflows for the foreseeable future. We will require ongoing financing in order to continue our research and development activities and may never become profitable. As of March 31, 2026, we had cash and cash equivalents of $225.6 million. We have funded our operations primarily through private and public equity financings, having raised aggregate gross proceeds of approximately $421.5 million as of the date hereof.

Current wording

Since our inception, we have not reached successful commercialization of our product candidates or generated any revenue and we expect to continue to incur significant operating losses for the foreseeable future. We will require ongoing financing in order to continue our research and development activities and may never become profitable. As of June 30, 2026, we had cash and cash equivalents of $205.1 million. We have funded our operations primarily through private and public equity financings, having raised aggregate gross proceeds of approximately $421.5 million as of the date hereof.

Previous wording

We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we continue the research and development, and seek marketing approval for our product candidates, as well as administrative costs associated with supporting our operations. In addition, if we obtain approval for any of our product candidates, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution. Furthermore, we expect to incur additional costs associated with operating as a public company.

Current wording

We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we continue research and development, and seek marketing approval for our product candidates, as well as administrative costs associated with supporting our operations. In addition, if we obtain approval for any of our product candidates, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution. Furthermore, we expect to incur additional costs associated with operating as a public company.

Previous wording

Based on our current business plans, and after giving effect to the completion of the February 2026 Equity Offering, we believe that our existing cash and cash equivalents should be sufficient to fund our operating expenses and capital requirements through at least the end of 2028. Our estimate as to how long we expect our existing cash and cash equivalents to be able to fund our operating expenses and capital requirements is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Changing circumstances, some of which are beyond our control, could result in less cash available to us or cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

Current wording

Based on our current business plans, we believe that our existing cash and cash equivalents should be sufficient to fund our operating expenses and capital requirements through at least the end of 2028. Our estimate as to how long we expect our existing cash and cash equivalents to be able to fund our operating expenses and capital requirements is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Changing circumstances, some of which are beyond our control, could result in less cash available to us or cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

Previous wording

•the number and development requirements of product candidates that we may pursue;

Current wording

•the number of and development requirements for product candidates that we may pursue;

Previous wording

Net cash used in operating activities increased by $7.9 million to $18.9 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This was primarily due to an increase in our net loss of $6.8 million, which is driven by an increase in our operating costs.

Current wording

Net cash used in operating activities increased by $12.7 million to $39.8 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This was primarily due to an increase in our net loss of $17.1 million, which is driven by an increase in our operating costs.

Previous wording

Net cash used in investing activities for each of the three months ended March 31, 2026 and 2025 was de minimis.

Current wording

Net cash used in investing activities for each of the six months ended June 30, 2026 and 2025 was de minimis.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2026 was $135.1 million, which related to net proceeds from the February 2026 Equity Offering, after underwriters’ fees and discounts. Cash provided by financing activities for the three months ended March 31, 2025 was $5.2 million, which primarily related to net proceeds of $5.1 million, after placement agent commissions, from the sale of Class A Ordinary Shares under our ATM.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2026 was $135.6 million, which related primarily to net proceeds from the February 2026 Equity Offering, after underwriters’ fees and discounts. Cash provided by financing activities for the six months ended June 30, 2025 was $5.1 million, which primarily related to net proceeds, after placement agent commissions, from the sale of Class A Ordinary Shares under our ATM.

Previous wording

There have been no material changes to our critical accounting policies and estimates since December 31, 2025. For a description of our critical accounting policies that affect our significant judgements and estimates used in preparation of our unaudited condensed consolidated financial statements, refer to Item 7 in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained in the 2025 Annual Report.

Current wording

There have been no material changes to our critical accounting policies and estimates since December 31, 2025. For a description of our critical accounting policies that affect our significant judgments and estimates used in preparation of our unaudited condensed consolidated financial statements, refer to Item 7 in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained in the 2025 Annual Report.

Previous wording

In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Upon closing of the Business Combination, we remained an emerging growth company and may elect to extend the transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

Current wording

In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We remain an emerging growth company and may elect to extend the transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards.

Previous wording

We are also a “smaller reporting company” as defined under the Securities Act and Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller reporting company so long as either (i) the market value of Class A Ordinary Shares held by non-affiliates is less than $250.0 million or (ii) our annual revenue was less than $100.0 million during the most recently completed fiscal year and the market value of Class A Ordinary Shares held by non-affiliates is less than $700.0 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in the 2025 Annual Report and have reduced disclosure obligations regarding executive compensation, and, similar to emerging growth companies, if we are a smaller reporting company under the requirements of (ii) above, we would not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

Current wording

We are also a “smaller reporting company” as defined under the Securities Act and Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller reporting company so long as either (i) the market value of Class A Ordinary Shares held by non-affiliates is less than $250.0 million or (ii) our annual revenue was less than $100.0 million during the most recently completed fiscal year and the market value of Class A Ordinary Shares held by non-affiliates is less than $700.0 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report and have reduced disclosure obligations regarding executive compensation, and, similar to emerging growth companies, if we are a smaller reporting company under the requirements of (ii) above, we would not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.