← Back to MAZE filing summaryOriginal filing text · Part I
Item 2 — Management's Discussion and Analysis
Maze Therapeutics, Inc. · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
View complete filing on SEC EDGAR ↗This is the extracted source text from the SEC filing. Formatting may differ from the original document.
The following discussion should be read in conjunction with the unaudited condensed financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q; and the sections entitled “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 25, 2026, or 2025 Form 10-K.
Overview
We are a clinical-stage biopharmaceutical company harnessing the power of human genetics to develop novel, small molecule precision medicines for patients living with kidney and metabolic diseases. We are advancing a pipeline using our Compass platform, which allows us to identify and characterize genetic variants associated with health and disease and then determine how these drive risk for and protection against disease in specific patient groups through a process we refer to as variant functionalization. Our Compass platform has been purpose-built to inform all phases of our drug discovery and development process through clinical trial design. We are currently advancing two wholly-owned clinical programs, MZE829 and MZE782, each of which represents a novel precision medicine-based approach. Our goal is to bring novel precision medicines to patients with kidney and metabolic diseases, which is where we believe we can maximize our impact on human health.
Our most advanced program, MZE829, is an oral, small molecule, dual-mechanism inhibitor of apolipoprotein L1, or APOL1, for the treatment of patients with APOL1-mediated kidney disease, or AMKD, a genetically defined sub-set of chronic kidney disease, or CKD, for which there is no approved treatment today. We initiated a Phase 2 trial of MZE829 in November 2024 and dosed our first patient in February 2025. In March 2026, we announced positive topline clinical proof of concept data from our Phase 2 trial of MZE829 in patients with AMKD, in which we enrolled 15 patients. The results demonstrated that treatment with MZE829 led to a clinically meaningful mean reduction in proteinuria, as measured by urinary albumin-to-creatinine ratio. MZE829 was generally well tolerated, with no serious adverse events or severe treatment-related adverse events reported. We plan to continue enrollment in the Phase 2 trial and anticipate reporting additional data from this trial in late 2026 or early 2027. In addition, we plan to initiate a pivotal trial of MZE829 in the first half of 2027, subject to regulatory feedback.
Our second program, MZE782, is an oral, small molecule inhibitor for the treatment of patients with phenylketonuria, or PKU, an inherited metabolic disorder, and for the treatment of patients with CKD. In September 2025, we reported results from our Phase 1 clinical trial of MZE782, in which we enrolled 112 healthy adult volunteers. MZE782 was well tolerated across all doses in all cohorts and demonstrated a favorable pharmacokinetics profile after single and multiple oral doses. MZE782 produced dose-dependent increases in 24-hour urinary excretion of the neutral amino acids phenylalanine and glutamine across both single ascending dose and multiple ascending dose cohorts, confirming target engagement and SLC6A19 inhibition. We also observed dose-dependent changes in estimated glomerular filtration rate in healthy individuals with MZE782, similar to those seen with SGLT2 inhibitors, suggesting a potential beneficial effect on kidney physiology in CKD patients. In August 2026, we announced that the Phase 2 proof-of-concept trial of MZE782 in patients with PKU has initiated and we anticipate reporting topline data from this trial in 2027. We plan to initiate a Phase 2 proof-of-concept trial of MZE782 in patients with CKD in the first half of 2027.
Since our inception, we have focused substantially all of our efforts and financial resources on research and development activities for our programs and on establishing arrangements and collaborations with third parties for the development of our therapeutic candidates. To date, we have not generated any revenue from product sales and have financed our operations primarily through sales of our equity and convertible promissory notes, debt financing, as well as one-time, nonrefundable upfront payments we received pursuant to the license agreements we entered into with several biotechnology companies in 2024, including the exclusive license agreement with Shionogi & Company, Ltd., or Shionogi. We do not expect to generate any revenue from commercial sales for the foreseeable future. We expect to continue incurring significant operating losses for the foreseeable future due to the cost of research and development, clinical trials, preclinical studies and the regulatory approval process for our therapeutic candidates.
18
We have incurred significant losses and negative cash flows from operations and we expect to incur significant and increasing losses for the foreseeable future as a result of our continued research and development activities. During the three and six months ended June 30, 2026, we incurred a net loss of $44.7 million and $68.9 million, respectively. During the three and six months ended June 30, 2025, we incurred a net loss of $33.7 million and $66.5 million, respectively. As of June 30, 2026, we had an accumulated deficit of $558.5 million and do not expect positive cash flows from operations for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities, as well as upon revenue from our license agreements. We expect our research and development expenses to significantly increase in connection with the conduct of planned clinical trials for our lead programs, MZE829 and MZE782, further development of our Compass platform, planned preclinical studies, and potential Investigational New Drug Applications, or INDs, and clinical trials for future therapeutic candidates. We will also incur substantial additional expenses as we seek to expand our intellectual property portfolio, including through potential in-licensing opportunities, and hire additional personnel as we scale up our operations. In addition, we expect to incur additional costs associated with operating as a public company.
As of June 30, 2026, we had cash, cash equivalents and marketable securities of $494.9 million. Since our inception, we have financed our operations primarily through issuances of our equity and convertible promissory notes, debt financing, and license agreements with biotechnology companies.
We will require substantial additional capital to develop our therapeutic candidates and fund operations for the foreseeable future. Until such time as we can generate sufficient revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings, debt financings, collaborations and licensing agreements.
Adequate additional financing may not be available to us on favorable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. If we are unable to raise capital when needed or on favorable terms, we could be forced to delay, reduce or eliminate our clinical and preclinical development, research and development programs, our commercialization plans or other operations. The amount and timing of our future funding requirements will depend on many factors including the pace and results of our development efforts. We cannot assure that we will ever be profitable or generate positive cash flows from operating activities.
We selectively pursue strategic collaborations related to the development of certain targets, therapeutic programs, or disease areas where we believe third-party expertise or resources could be beneficial. In 2020, we formed a spin-out company, Broadwing Bio LLC, or Broadwing, with Alloy Therapeutics, Inc., or Alloy, to develop therapeutic antibody therapies for ANGPTL7 and another undisclosed target in ophthalmic diseases, informed by our Compass platform. As of June 30, 2026, we owned approximately 48% of the outstanding equity of Broadwing, and we expect our ownership to be significantly diluted upon the conversion of outstanding convertible notes issued by Broadwing. We retain certain opt-in rights to jointly develop and commercialize certain therapeutic candidates developed through Broadwing with Alloy. We are not involved in the development of Broadwing’s therapeutic candidate.
Exclusive license agreement with Shionogi
In March 2024, we entered into an exclusive license agreement, or the License Agreement, with Shionogi, pursuant to which we granted Shionogi an exclusive, worldwide, sublicensable license to research, develop, manufacture and commercialize MZE001 and certain other small molecule compounds modulating glycogen synthase 1, or the Licensed Products. As consideration for the licensed rights and the transfer of know-how and materials, we received an upfront payment of $150.0 million in May 2024 upon the effectiveness of the License Agreement. The License Agreement also requires that Shionogi pay us up to $275.0 million in the aggregate in milestone payments upon the completion of certain clinical development and regulatory milestones and up to $330.0 million in the aggregate in milestone payments if certain sales milestones are achieved. In April 2026, we received $20.0 million following the achievement of a clinical development milestone upon dosing of the first patient in Shionogi's Phase 2 study of MZE001 in patients with Pompe disease. The License Agreement also requires that Shionogi pay us tiered royalties ranging from percentages in the low double-digits to twenty on net sales of Licensed Products, subject to certain deductions.
19
The License Agreement will expire on a Licensed-Product by Licensed-Product and country-by-country basis upon the expiration of the royalty term for such Licensed Product, which will be the latest of the date when there are no remaining valid claims covering the applicable Licensed Product, the expiration of regulatory exclusivity for the applicable Licensed Product, or 11 years after the first commercial sale of the applicable Licensed Product, subject to earlier termination by the parties. As of June 30, 2026, we estimate that the last patent right for the only currently issued patent licensed under the License Agreement will expire in 2042, without giving effect to any potential patent term extensions, patent term adjustments, or future patents that may or may not issue with respect to the Licensed Products. Upon expiration of the License Agreement, the licenses granted to Shionogi will become fully paid-up, perpetual, irrevocable and royalty-free. Shionogi may terminate the License Agreement for convenience following a notice period and either party may terminate the License Agreement for bankruptcy or an uncured material breach. Upon termination of the License Agreement by Shionogi for convenience or by us for Shionogi’s bankruptcy or uncured material breach, Shionogi will grant us a non-exclusive, worldwide license under certain patent rights and know-how controlled by Shionogi as of the effective date of termination, solely as necessary to research, develop, manufacture and commercialize the Licensed Products in any field, and Shionogi will assign to us all regulatory materials and regulatory approvals relating to the Licensed Products. In consideration for these reversion rights, we would be required to pay to Shionogi reversion royalties on any sales of the Licensed Products determined based on the stage of clinical development of the applicable Licensed Product at the time of termination, ranging from percentages in the low-to-mid single digits if termination occurs on or after the achievement of certain Phase 2 clinical trial milestones and high single digit to mid-teens if termination occurs on or after the achievement of certain Phase 3 clinical milestones. Our obligation to pay these reversion royalties would expire on a Licensed-Product by Licensed-Product and country-by-country basis upon the latest of the date when there are no remaining valid claims covering the applicable Licensed Product, the expiration of regulatory exclusivity for the applicable Licensed Product, or ten years after the first commercial sale of the applicable Licensed Product.
Components of results of operations
License revenue
We recognize revenue from the various license agreements we have entered into as the identified performance obligations under these arrangements are satisfied. We are also eligible to receive future non-refundable, non-creditable milestone payments upon the achievement of certain development, regulatory, and commercial milestones. Additionally, we are also eligible to receive certain royalties on net sales of products developed under the license agreements.
Operating expenses
Our operating expenses since inception have consisted solely of research and development expenses and general and administrative expenses.
Research and development expenses
Our research and development expenses consist primarily of external and internal expenses incurred in connection with our research activities and preclinical and clinical development programs. These expenses include, but are not limited to:
•salaries, benefits and other employee-related costs, including stock-based compensation expense, for personnel engaged in research and development functions;
•fees paid to vendors that conduct certain research and development activities on our behalf;
•fees paid to contract manufacturing organizations, or CMOs, in connection with the production of research products and clinical trial materials;
•fees paid to clinical research organizations, or CROs, in connection with clinical trials as well as preclinical and toxicology studies;
•other expenses associated with laboratory supplies and other materials;
•professional service fees for consulting and related services; and
•facility costs, depreciation, and other expenses, which include expenses for rent and maintenance of facilities.
We recognize research and development expenses as incurred. Nonrefundable advance payments for goods or services to be used in future research and development activities are capitalized and expensed as the related goods are received or services are performed. Direct external research and development costs are recorded to the specific programs they support. Internal research and development costs, including personnel, facility and laboratory supplies, are utilized across multiple research and development programs and are therefore not directly attributable to any single program.
20
At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, MZE829, MZE782 and any of our other potential therapeutic candidates.
Our research and development expenses may vary significantly based on a variety of factors, such as:
•the timing and progress of clinical development activities for our therapeutic candidates;
•the timing and progress of preclinical development activities;
•the number and scope of preclinical and clinical programs we decide to pursue;
•our ability to hire clinical, regulatory, manufacturing, quality assurance and scientific personnel;
•potential additional trials requested by regulatory agencies;
•the costs and fees associated with the discovery, acquisition or in-license of our products or technologies, including to maintain and expand our Compass platform;
•our ability to establish clinical manufacturing capabilities or secure adequate supply of product from third-party manufacturers;
•the extent to which we establish additional strategic collaborations or other arrangements; and
•the impact of any business interruptions to our operations or to those of the third parties with whom we work.
A change in the outcome of any of these and other variables with respect to the development of any of our therapeutic candidates could significantly change the costs and timing associated with the development of such therapeutic candidate. We expect that our research and development expenses will continue to increase substantially for the foreseeable future as we continue to identify and develop potential additional therapeutic candidates and as our existing therapeutic candidates, including MZE829 and MZE782, move into later stages of clinical development, which typically have higher development costs than those in earlier stages of clinical development or preclinical development due to the increased size and duration of later-stage clinical trials.
The process of conducting the necessary preclinical and clinical research and development to obtain regulatory approval is costly and time-consuming and the successful development of our therapeutic candidates is highly uncertain. The actual probability of success for our therapeutic candidates may be affected by a variety of factors. We may never succeed in achieving regulatory approval for any of our therapeutic candidates. Further, a number of factors, including those outside of our control, could adversely impact the timing and duration of our therapeutic candidates’ development, which could increase our research and development expenses.
General and administrative expenses
General and administrative expenses consist primarily of personnel-related costs, including salaries, bonuses, benefits, and stock-based compensation expense, for personnel in executive, finance, accounting, corporate development, and other administrative functions. General and administrative expenses also include legal fees, professional fees paid for accounting, auditing, consulting, tax, and investor relations services, insurance costs, and facility costs not otherwise included in research and development expenses, and public company expenses such as costs associated with compliance with the rules and regulations of the Securities and Exchange Commission, or SEC, and Nasdaq.
We expect that our general and administrative expenses will continue to increase significantly in the foreseeable future as additional administrative personnel and services are required to manage these functions associated with being a public company and as our pipeline of therapeutic candidates expands.
Total other income, net
Total other income, net, primarily consists of interest income earned on our cash, cash equivalents and marketable securities and interest expense recognized on the loan and security agreement, or the Hercules Loan Agreement, with certain lenders and Hercules Capital, Inc. We expect total other income, net to increase as a result of additional interest income on the proceeds received from the initial term loan of $40.0 million under the Hercules Loan Agreement and the net proceeds of approximately $144.6 million from the underwritten registered offering completed in April 2026, which is expected to be partially offset by interest expense recognized on the Hercules Loan Agreement. However, other income, net may vary each reporting period depending on our average cash deposits, money market fund and other investment balances during the period, prevailing market interest rates and the amount of interest expense incurred under the Hercules Loan Agreement.
21
Results of operations
Comparisons of the three and six months ended June 30, 2026 and 2025
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
(in thousands) (in thousands)
License revenue $ — $ — $ — $ 20,000 $ — $ 20,000
Operating expenses:
Research and development 34,940 28,108 6,832 69,088 55,688 13,400
General and administrative 13,095 8,366 4,729 25,500 16,187 9,313
Total operating expenses 48,035 36,474 11,561 94,588 71,875 22,713
Loss from operations (48,035 ) (36,474 ) (11,561 ) (74,588 ) (71,875 ) (2,713 )
Other income (expense):
Interest and other income, net 4,239 2,795 1,444 7,450 5,410 2,040
Interest expense (931 ) — (931 ) (1,797 ) — (1,797 )
Total other income, net 3,308 2,795 513 5,653 5,410 243
Net loss $ (44,727 ) $ (33,679 ) $ (11,048 ) $ (68,935 ) $ (66,465 ) $ (2,470 )
License revenue
We recognized no license revenue for the three months ended June 30, 2026 and $20.0 million in license revenue for the six months ended June 30, 2026. We recognized no license revenue for the three and six months ended June 30, 2025. License revenue recognized in 2026 was related to achievement of a clinical development milestone upon dosing of the first patient in Shionogi's Phase 2 study of MZE001 in patients with Pompe disease under the License Agreement with Shionogi.
Research and development expenses
Research and development expenses were $34.9 million and $28.1 million for the three months ended June 30, 2026 and 2025, respectively. The increase of $6.8 million between the comparative three month periods was primarily due to an increase of $4.3 million in personnel-related costs due to an increase in headcount and higher non-cash stock-based compensation expense, an increase of $3.2 million related to progression of our clinical development of the MZE829 program and an increase of $0.9 million related to our discovery research and other programs, partially offset by a $1.4 million decrease related to the MZE782 program primarily due to higher costs incurred in 2025 for the Phase 1 clinical trial in healthy adult volunteers that completed in 2025.
Research and development expenses were $69.1 million and $55.7 million for the six months ended June 30, 2026 and 2025, respectively. The increase of $13.4 million between the comparative six month periods was primarily due to an increase of $7.9 million in personnel-related costs due to an increase in headcount and higher non-cash stock-based compensation expense, an increase of $5.7 million related to progression of our clinical development of the MZE829 program and an increase of $0.9 million related to our discovery research and other programs, partially offset by a $0.5 million decrease related to the MZE782 program primarily due to higher costs incurred in 2025 for the Phase 1 clinical trial in healthy adult volunteers that completed in 2025 and a $0.6 million decrease in lab supplies and other costs.
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
(in thousands) (in thousands)
Direct external research and development expenses by program:
MZE829 $ 8,444 $ 5,199 $ 3,245 $ 15,540 $ 9,823 $ 5,717
MZE782 3,177 4,582 (1,405 ) 8,471 8,948 (477 )
Discovery research and other programs 3,596 2,742 854 6,641 5,752 889
Internal research and development expenses:
Personnel-related 14,875 10,609 4,266 28,866 20,953 7,913
Facilities, lab supplies and other 4,848 4,976 (128 ) 9,570 10,212 (642 )
Total research and development expenses $ 34,940 $ 28,108 $ 6,832 $ 69,088 $ 55,688 $ 13,400
22
General and administrative expenses
General and administrative expenses were $13.1 million and $8.4 million for the three months ended June 30, 2026 and 2025, respectively. The increase of $4.7 million between the comparative three month periods was primarily due to an increase in personnel-related costs due to an increase in headcount and higher non-cash stock-based compensation expense.
General and administrative expenses were $25.5 million and $16.2 million for the six months ended June 30, 2026 and 2025, respectively. The increase of $9.3 million between the comparative six month periods was primarily due to an increase of $8.0 million in personnel-related costs due to an increase in headcount and higher non-cash stock-based compensation expense and an increase of $0.7 million for professional services.
Total other income, net
Total other income, net was $3.3 million and $2.8 million for the three months ended June 30, 2026 and 2025, respectively. The increase of $0.5 million between the comparative three months periods primarily reflects an increase in interest income as a result of higher cash, cash equivalent, and marketable securities balances held during the three months ended June 30, 2026 resulting from the net proceeds received from the underwritten registered offering completed in April 2026 and proceeds from the initial term loan funded under the Hercules Loan Agreement in February 2026, partially offset by interest expense recognized on the Hercules Loan Agreement.
Total other income, net was $5.7 million and $5.4 million for the six months ended June 30, 2026 and 2025, respectively. The increase of $0.3 million between the comparative six months periods primarily reflects an increase in interest income as a result of higher cash, cash equivalent, and marketable securities balances held during the six months ended June 30, 2026 resulting from the net proceeds received from the underwritten registered offering completed in April 2026 and proceeds from the initial term loan funded under the Hercules Loan Agreement in February 2026, partially offset by interest expense recognized on the Hercules Loan Agreement.
Liquidity and capital resources
Liquidity
Since our inception, we have not generated any revenue from product sales and we do not expect to generate any revenue from commercial sales for the foreseeable future, if at all. We have incurred significant operating losses and negative cash flows from operations. We anticipate that we will continue to incur net losses for the foreseeable future. To date, we have financed our operations primarily through sales of our equity and convertible promissory notes, debt financing, as well as one-time, nonrefundable upfront payments we received pursuant to the license agreements we entered into with several biotechnology companies in 2024, including the exclusive license agreement with Shionogi. As of June 30, 2026, we had cash, cash equivalents and marketable securities of $494.9 million and an accumulated deficit of $558.5 million.
In February 2026, we entered into an Open Market Sale Agreement with Jefferies LLC, serving as sales agent, with respect to an at-the-market offering program pursuant to which we may elect to issue and sell shares of our common stock having an aggregate offering price of up to $200.0 million, or the 2026 Sale Agreement, in such quantities and on such minimum price terms as we set from time to time through our sales agent. We have agreed to pay our sales agent an aggregate commission equal to up to 3.0% of the gross proceeds of the sales under the agreement. To date, no sales of common stock have occurred under the 2026 Sale Agreement.
Additionally, in February 2026, we entered into the Hercules Loan Agreement which provides for a senior secured term loan facility in an aggregate principal amount of up to $200.0 million. An initial term loan of $40.0 million was funded under the Hercules Loan Agreement and an aggregate of $160.0 million in additional term loans commitments will be available to us through February 2031, so long as we satisfy certain conditions precedent. The final tranche of $50.0 million is subject to approval by the lenders’ investment committee. The facility has a maturity date of February 1, 2031, and may be prepaid at any time, subject to prepayment premiums. This senior secured term facility will accrue interest at an annual rate determined by reference to the Prime Rate as reported in the Wall Street Journal, with interest rate floors that range from 7.95% to 9.25% depending on the tranche. The Hercules Term Loan Facility provides for payment of interest only until (a) 48 months after the Closing Date or (b) if certain performance and financing milestones are satisfied, 60 months after the Closing Date. Accrued interest on the Term Loans is payable on the first business day of each month. In connection with the Hercules Loan Agreement, we terminated an existing loan and security agreement with another bank that provided us with a line of credit of up to $50.0 million. We did not draw down any funds from this terminated debt facility. See Note 10, Loan and security agreements, of this Quarterly Report on Form 10-Q for further discussion of the Hercules Loan Agreement.
23
In April 2026, we completed an underwritten registered offering pursuant to which we issued and sold an aggregate of 5,540,000 shares of our common stock at a purchase price of $23.50 per share and pre-funded warrants to purchase up to an aggregate of 850,000 shares of our common stock, or the 2026 Pre-Funded Warrants, at a purchase price of $23.499 per pre-funded warrant, which represents the per share offering price for the shares of common stock less a $0.001 per share exercise price for each pre-funded warrant, resulting in net proceeds of approximately $144.6 million, after deducting underwriting discounts and commissions and estimated offering expenses, or the Underwritten Registered Offering. See Note 6, Capital structure, of this Quarterly Report on Form 10-Q for further discussion of the Underwritten Registered Offering.
Based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least one year from the date of this Quarterly Report on Form 10-Q. We have based this estimate on our current assumptions, which may prove to be wrong, and we may exhaust our available capital resources sooner than we expect.
Funding requirements
We do not expect to generate any meaningful future revenue unless and until we obtain regulatory approval and commercialize any of our current or future therapeutic candidates, including MZE829 and MZE782, or receive additional potential revenue from the achievement of milestones and royalties under our existing license agreements or potential additional partnerships, and we do not know when, or if at all, that will occur. We will continue to require additional capital to develop our therapeutic candidates and fund operations for the foreseeable future. Our primary uses of cash are to fund our operations, which consist primarily of research and development expenses related to our programs, and to a lesser extent, general and administrative expenses. We expect our expenses to continue to increase in connection with our ongoing activities as we continue to develop MZE829, MZE782 and our other discovery and preclinical programs, seek to broaden the pipeline of our product candidates and further develop our Compass platform. In addition, we expect to incur additional costs associated with operating as a public company.
We may seek to raise capital through equity or debt financings, license and collaboration agreements or other arrangements, or through other sources of financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. We anticipate that we will need to raise substantial additional capital, the requirements of which will depend on many factors, including:
•the costs associated with the type, scope, progress and results of research and discovery, preclinical development, laboratory testing and clinical trials for our current or future therapeutic candidates, including MZE829 and MZE782;
•the extent to which we develop, in-license or acquire other pipeline therapeutic candidates or technologies;
•the number and development requirements of other therapeutic candidates that we may pursue, and other indications for our current therapeutic candidates that we may pursue;
•the costs related to entering into partnerships or other arrangements with third parties;
•the costs, timing and outcome of obtaining regulatory approvals of our current or future therapeutic candidates we may pursue;
•the costs and fees associated with the discovery, acquisition or in-license of our products or technologies, including to maintain and expand our Compass platform;
•the scope and costs of making arrangements with third-party manufacturers for preclinical, clinical and commercial supplies of our current or future therapeutic candidates;
•the scope and costs involved in growing our organization to the size needed to allow for the research, development and potential commercialization of our current or future therapeutic candidates;
•the cost associated with commercializing any approved therapeutic candidates, including establishing sales, marketing and distribution capabilities;
•the cost associated with completing any post-marketing studies or trials required by the U.S. Food and Drug Administration, or FDA, or other regulatory authorities;
•the revenue, if any, received from commercial sales of our current or future therapeutic candidates, if any are approved;
•the costs associated with addressing any potential interruptions or delays resulting from factors related to overall global affairs, such as conflicts overseas;
24
•the costs and timing of preparing, filing and prosecuting patent applications, maintaining, defending and enforcing our intellectual property and proprietary rights and defending intellectual property-related claims that we may become subject to, including any litigation costs and the outcome of such litigation;
•the costs associated with potential product liability claims, including the costs associated with obtaining insurance against such claims and with defending against such claims; and
•our ability to establish and maintain collaboration arrangements on favorable terms, if at all and the timing and amount of any milestone, royalty or other payments we are required to make or are eligible to receive under such collaborations, if any.
If we raise additional funds by issuing equity securities, our stockholders will experience dilution. If we raise additional capital through debt financing, we may be subject to covenants that restrict our operations including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments, and engage in certain merger, consolidation or asset sale transactions. Any debt financing that we raise or additional equity that we issue may contain terms that are not favorable to us or our stockholders.
If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our proprietary technology, future revenue streams, research programs or therapeutic candidates, including granting licenses to our proprietary technologies, on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or collaborations, strategic alliances or licensing arrangements with third parties when needed, we may be required to delay, limit, reduce and/or terminate our product development programs or any future commercialization efforts or grant rights to develop and market therapeutic candidates that we would otherwise prefer to develop and market ourselves.
Contractual obligations and commitments
We have an operating lease for a facility in South San Francisco, California with office and laboratory space, which serves as our corporate headquarters. The lease terminates in November 2030 and provides for one option to extend the lease term for an additional period of eight years.
We have entered into consortium agreements with the University of Helsinki to access genomic information from patient samples and genetic and paired clinical data. As of June 30, 2026, we are obligated to pay $3.5 million under these agreements through the year ended December 31, 2027.
We are obligated to make principal loan payments, interest payments and pay an end of term charge under the Hercules Loan Agreement. See Note 10, Loan and security agreements, of this Quarterly Report on Form 10-Q for further discussion of the Hercules Loan Agreement.
We enter into contracts in the normal course of business with third-party contract organizations for preclinical trials, non-clinical trials and testing, and other services and products for operating purposes. These contracts generally provide for termination following a certain period after notice.
Cash flows
Comparisons of the six months ended June 30, 2026 and 2025
The following table sets forth the primary sources and uses of cash, cash equivalents, and restricted cash for the periods presented below:
Six Months Ended June 30,
2026 2025 Change
(in thousands)
Net cash used in operating activities $ (54,166 ) $ (59,568 ) $ 5,402
Net cash used in investing activities (122,231 ) (692 ) (121,539 )
Net cash provided by financing activities 189,793 127,990 61,803
Net increase in cash, cash equivalents and restricted cash $ 13,396 $ 67,730 $ (54,334 )
25
Net cash used in operating activities
Net cash used in operating activities was $54.2 million and $59.6 million for the six months ended June 30, 2026 and 2025, respectively. The net cash used in operating activities for the six months ended June 30, 2026 was primarily due to our net loss of $68.9 million combined with a net change in our operating assets and liabilities of $4.6 million, offset by $19.3 million in non-cash charges such as depreciation, stock-based compensation, lease expense and amortization of debt discount and debt issuance costs. The net cash used in operating activities for the six months ended June 30, 2025 was primarily due to our net loss of $66.5 million combined with a net change in our operating assets and liabilities of $2.5 million, offset by $9.4 million in non-cash charges such as depreciation, stock-based compensation and lease expense.
Net cash used in investing activities
Net cash used in investing activities was $122.2 million and $0.7 million for the six months ended June 30, 2026 and 2025. The net cash used in investing activities for the six months ended June 30, 2026 consisted of purchases of marketable securities of $186.0 million and purchases of property and equipment of $0.2 million, offset by maturities of marketable securities of $64.0 million. Net cash used in investing activities for the six months ended June 30, 2025 consisted of purchases of property and equipment of $0.7 million.
Net cash provided by financing activities
Net cash provided by financing activities for the six months ended June 30, 2026 was $189.8 million, which consisted of net proceeds of approximately $144.6 million from the issuance of common stock and 2026 Pre-Funded Warrants pursuant to the Underwritten Registered Offering, net proceeds of $38.5 million from the Hercules Loan Agreement, $5.8 million from the exercise of stock option awards and $1.0 million from the issuance of common stock under the 2025 Employee Stock Purchase Plan. For the six months ended June 30, 2025, net cash provided by financing activities was $128.0 million, which consisted of net proceeds of approximately $127.8 million from the issuance of common stock pursuant to our initial public offering, $0.6 million from the issuance of common stock under the 2025 Employee Stock Purchase Plan and $0.1 million from the exercise of stock option awards, offset by the payment of $0.5 million for the success fee under the loan and security agreement with Banc of California.
Critical accounting policies, significant judgments and use of estimates
Our significant accounting policies are described in detail in the notes to our condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q. We described the accounting policies that we believe involve a significant level of estimation and uncertainty, which could have a material impact on our financial condition or results of operations and are therefore deemed critical accounting policies, in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March, 25, 2026. There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2026.
Our condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. The preparation of these condensed financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Emerging growth company status
We are an emerging growth company, or EGC. The Jumpstart Our Business Startups Act of 2012, or the JOBS Act permits companies with EGC status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. We have elected to use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an EGC or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates.
26
In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an EGC, we intend to rely on such exemptions, we are not required to, among other things:(i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended; (ii) provide all of the compensation disclosure that may be required of non-EGCs under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.
We will remain an EGC under the JOBS Act until the earliest of (i) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (ii) the date we qualify as a “large accelerated filer,” as defined under Rule 12b-2 of the Exchange Act, (iii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years, or (iv) the last day of our first fiscal year following the fifth anniversary of the closing of our initial public offering.
Recent accounting pronouncements
See Note 2, Summary of significant accounting policies, to our unaudited condensed financial statements included in Part 1, Item 1, “Financial Statements (Unaudited),” of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our business.
27