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Item 2 — Management's Discussion and Analysis
Biomea Fusion, Inc. · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described, in or implied, by these forward-looking statements.
Overview
We are a clinical-stage diabetes and obesity medicines company focused on the development of novel small molecule therapies to treat and improve the lives of patients with metabolic diseases. A covalent small molecule drug is a synthetic compound that forms a permanent bond to its target protein and offers a number of potential advantages over conventional non-covalent drugs, including greater target selectivity, lower drug exposure, and the ability to drive a deeper, more durable response.
Our lead clinical program’s drug candidate, icovamenib, is currently being developed as an orally bioavailable, and selective, covalent inhibitor of menin, which serves as a checkpoint to prevent beta cell proliferation and is an important transcriptional regulator known to play a direct role in beta cell homeostasis. Icovamenib's potential in type 1 and type 2 diabetes as well as its impact in obesity is currently being investigated in two clinical and multiple preclinical studies. Our preclinical and clinical data to date support that inhibiting menin via icovamenib has the potential to enable the proliferation, preservation, and reactivation of healthy, functional beta cells capable of producing insulin, thereby leading to long-term glycemic control in patients with type 1 and type 2 diabetes.
In preclinical studies, the administration of icovamenib has produced a pronounced effect in preclinical models of diabetes, normalizing glucose levels during treatment and even after drug washout. In October 2025, we reported 52-week results from our Phase II COVALENT-111 trial of icovamenib in type 2 diabetes and most recently in April 2026, we reported topline results from our type 1 diabetes trial (COVALENT-112) of icovamenib in type 1 diabetes. As of June 30, 2026 icovamenib is now being evaluated across two ongoing Phase II clinical trials (COVALENT-211 and COVALENT-212) in type 2 diabetes.
With our strategic focus to become a diabetes and obesity medicines company, we discontinued our studies exploring icovamenib’s potential in oncology and plan to explore partnerships to further advance our oncology asset (BMF-500, a covalent inhibitor of FLT3), while concentrating internal resources on metabolic disorders.
In September 2025, we announced that BMF-650, our investigational, next-generation, oral small molecule glucagon-like peptide-1 GLP-1 receptor agonist (GLP-1 RA), received IND-clearance from the FDA. Our Phase I GLP-131 trial for BMF-650 in obese, otherwise healthy volunteers is ongoing, with topline results expected in the third quarter of 2026. With its unique pharmacokinetic profile, enhanced oral bioavailability, and potential for rapid, one-step dose escalation, we believe BMF-650 has the potential to provide a best-in-class therapeutic option for obesity.
Since commencing operations in 2017, we have devoted substantially all of our efforts and financial resources to conducting research and development activities, including drug discovery and preclinical studies and clinical trials, establishing and maintaining our intellectual property portfolio, the manufacturing of clinical and research material, organizing and staffing our company, business planning, raising capital and providing general and administrative support for these operations. We have not generated any revenue from product sales and, as a result, we have never been profitable and have incurred net losses since commencement of our operations.
As of June 30, 2026, we had an accumulated deficit of $469.8 million. We incurred net losses of $20.7 million and $50.0 million for the six months ended June 30, 2026 and 2025, respectively. Based on our current operating plan, we believe that our existing cash and cash equivalents, and restricted cash as of June 30, 2026, without any future financing, will only be sufficient to fund our operations into the second quarter of 2027. We expect to continue to incur significant expenses and operating losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities.
We do not expect to generate revenue from product sales unless and until we obtain regulatory approval for and commercialize a product candidate, and we cannot assure you that we will ever generate significant revenue or profits. We expect that our expenses will continue to increase for the foreseeable future. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase substantially if and as we:
•conduct our ongoing preclinical studies, our two Phase II clinical trials of icovamenib in type 2 diabetes and our Phase I clinical trial of BMF-650 in obese, otherwise healthy volunteers;
•seek marketing approvals for any product candidates that successfully complete clinical trials;
•continue our research and development efforts and submit additional INDs;
•experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges;
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•establish a sales, marketing and distribution infrastructure and scale-up manufacturing capabilities, whether alone or with third parties, to commercialize any product candidates for which we may obtain regulatory approval, if any;
•obtain, expand, maintain, enforce and protect our intellectual property portfolio;
•hire additional clinical, regulatory and scientific personnel; and
•operate as a public company.
We will need to raise additional capital in the future to fund our operations, including to conduct and complete clinical trials for any product candidates. If sufficient funds on acceptable terms are not available when needed, we could be required to significantly reduce our operating expenses and delay, reduce the scope of, or eliminate one or more of our development programs.
We currently rely, and expect to continue to rely, on third parties for the manufacture of our product candidates. All of our product candidates are novel small molecules and are manufactured in synthetic processes from available or custom synthesized starting materials. The chemistry is scalable and uses commonly available pharmaceutical equipment in the manufacturing process. We expect to continue to develop product candidates that can be produced cost-effectively at contract manufacturing facilities. In addition, we do not yet have a marketing or sales organization or commercial infrastructure. Accordingly, we will incur significant expenses to develop a marketing and sales organization and commercial infrastructure in advance of generating any product sales.
In April 2021, we completed our initial public offering (IPO) and issued an aggregate of 9,000,000 shares of our common stock at a price of $17.00 per share. Subsequent to the close, an additional 823,532 shares were issued in connection with the partial exercise by the underwriters of their option to purchase additional shares of common stock. In addition, immediately prior to the closing of the IPO, all outstanding shares of our convertible preferred stock automatically converted into 7,064,925 shares of common stock. Proceeds from the IPO, net of underwriting discounts and commissions and offering costs were $152.8 million. On April 3, 2023, we issued and sold 5,750,000 shares of common stock, which included 750,000 shares sold pursuant to the exercise of the underwriters’ over-allotment option, at a public offering price of $30.00 per share in an underwritten public offering pursuant to a shelf registration on Form S-3. Our net proceeds from the offering were $161.8 million, after deducting underwriting discounts and commissions and offering costs of $10.7 million. During the twelve months ended December 31, 2025, we issued 2,271,122 shares of our common stock for aggregate proceeds of $4.9 million, net of commissions and offering costs from our 2022 ATM Program. We did not issue any shares of common stock or receive any proceeds under our 2022 ATM Program during the six months ended June 30, 2026.
In June 2025, we issued and sold 19,450,000 shares of common stock at an offering price of $2.00 per share and, to a certain investor in lieu of common stock, pre-funded warrants to purchase up to 550,000 shares of common stock at an offering price of $1.9999 per share, and accompanying common warrants to purchase up to 23,000,000 shares of common stock at a per share exercise price of $2.50. In July 2025, in connection with the June 2025 underwritten public offering, the underwriters partially exercised their over-allotment option to purchase an additional 1,381,262 shares of common stock at an offering price of $2.00 per share. The aggregate gross proceeds from the offering, including the proceeds from the underwriters' over-allotment option, were approximately $42.8 million, before deducting underwriting discounts and commissions and offering costs.
In October 2025, we issued and sold 11,195,121 shares of common stock at an offering price of $2.05 per share and, to a certain investor in lieu of common stock, pre-funded warrants to purchase up to 1,000,000 shares of common stock at an offering price of $2.0499 per share and accompanying common warrants to purchase up to 14,024,389 shares of common stock at a per share exercise price of $2.50, which included the underwriters' partial exercise of their over-allotment option to purchase additional common warrants. The aggregate gross proceeds from the offering, including the proceeds from the underwriters' over-allotment option, were approximately $25.0 million, before deducting underwriting discounts and commissions and offering costs.
Components of Operating Results
Revenue
To date, we have not generated any revenue and do not expect to generate any revenue from the sale of products in the near future.
Operating Expenses
Research and Development
Our research and development expenses consist primarily of external and internal costs incurred in connection with the research and development of our research programs and product candidates.
External costs include:
•expenses incurred under agreements with third-party contract manufacturing organizations (CMOs), contract research organizations (CROs), research and development service providers, academic research institutions and consulting costs; and
•laboratory expenses, including supplies and services.
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Internal costs include:
•personnel-related expenses, including salaries, benefits and stock-based compensation for personnel in research and product development roles; and
•facilities and other allocated expenses, including expenses for rent and facilities maintenance, and depreciation.
We expense research and development costs in the periods in which they are incurred. Non-refundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and capitalized. The capitalized amounts are then expensed as the related goods are delivered and as services are performed. We track direct costs by stage of program, clinical or preclinical. However, we do not track indirect costs on a program specific or stage of program basis because these costs are deployed across multiple programs and, as such, are not separately classified.
We expect our research and development expenses to increase substantially during the next few years as we seek to initiate and complete clinical trials, pursue regulatory approval of icovamenib and advance BMF-650 through preclinical and clinical development. Predicting the timing or the final cost to complete our clinical program or validation of our manufacturing and supply processes is difficult and delays may occur because of many factors. The process of conducting the necessary preclinical and clinical research to obtain regulatory approval is costly and time-consuming. To the extent that our product candidates continue to advance into clinical trials, as well as advance into larger and later stage clinical trials, our expenses will increase substantially and may become more variable.
Our future research and development costs may vary significantly based on a wide variety of factors, such as:
•the scope, rate of progress, expense and results of our ongoing clinical trials, including our ongoing Phase II clinical trial of icovamenib in type 2 diabetes, enrollment in our Phase I clinical trial for BMF-650, including an additional cohort announced in June 2026, as well as any future preclinical development and clinical trials of our product candidates, and other research and development activities we may conduct;
•uncertainties in clinical trial design and the interpretation of clinical trial data;
•per participant trial costs;
•the duration, scope and number of trials required for approval;
•the number of sites included in the trials;
•the number of participants who participate in the trials;
•the countries in which the trials are conducted;
•the length of time required to enroll eligible participants;
•the drop-out or discontinuation rates of participants;
•the safety and efficacy profiles of our product candidates;
•the timing, receipt, and terms of any approvals from applicable regulatory authorities including the FDA and non-U.S. regulators;
•our ability to maintain a continued acceptable safety profile of our product candidates following approval, if any, of any of our product candidates;
•significant and changing government regulation and regulatory guidance;
•establishing clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that we or our third-party manufacturers are able to make product successfully;
•the impact of any business interruptions to our operations or to those of the third parties with whom we work in light of adverse global market conditions; and
•the extent to which we establish additional strategic collaborations or other arrangements.
A change in the outcome of any of these variables with respect to the development of any or our product candidates could significantly change the costs and timing associated with the development of that product candidate. The actual probability of success for our product candidates may be affected by a variety of factors, including the safety and efficacy of our product candidates, investment in our clinical programs, manufacturing capability and competition with other products and product candidates. As a result of these variables, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates. We may never succeed in achieving regulatory approval for any of our product candidates.
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General and Administrative
General and administrative expenses consist principally of personnel-related costs including payroll and stock-based compensation expense for personnel in executive, finance, human resources, business and corporate development, and other administrative functions, professional fees for legal, consulting, and accounting services, rent and other facilities costs, depreciation, and other general operating expenses not otherwise classified as research and development expenses.
We anticipate that our general and administrative expenses will increase substantially during the next few years as a result of staff expansion and additional occupancy costs, as well as costs associated with being a public company, including compliance with the rules and regulations of the SEC and those of any national securities exchange on which our securities are traded, higher legal and auditing fees, investor relations costs, higher insurance premiums and other compliance costs associated with being a public company. We also expect that our future intellectual property expenses may increase as we expand our product portfolio of product candidates due to advances in our research and development programs.
Change in fair value of common warrant liability
Change in fair value of common warrant liability consists of revaluation of the common warrants issued in connection with the June and October 2025 underwritten public offerings (see Note 5). The common warrants are re-measured at each balance sheet date.
Gain on sale of property and equipment
Gain on sale of property and equipment was $0.0 million and $0.5 million for the three and six months ended June 30, 2026, respectively. No gain on sale of property and equipment was recorded for the three and six months ended June 30, 2025. The gain in the current period was attributable to proceeds from the sale of laboratory equipment.
Interest and Other Income, Net
Interest and other income, net consists primarily of interest income earned on our cash and cash equivalents.
Results of Operations
Comparison of the three and six months ended June 30, 2026 and 2025
The following table summarizes our results of operations for the periods indicated (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
2026 2025 $ Change 2026 2025 $ Change
Operating expenses:
Research and development $ 9,142 $ 16,566 $ (7,424 ) $ 18,262 $ 39,463 $ (21,201 )
General and administrative 3,624 4,710 (1,086 ) 7,278 11,525 (4,247 )
Total operating expenses 12,766 21,276 (8,510 ) 25,540 50,988 (25,448 )
Loss from operations (12,766 ) (21,276 ) 8,510 (25,540 ) (50,988 ) 25,448
Change in fair value of common warrant liability 4,119 227 3,892 3,538 227 3,311
Gain on sale of property and equipment — — — 510 — 510
Interest and other income, net 319 309 10 749 759 (10 )
Net loss $ (8,328 ) $ (20,740 ) $ 12,412 $ (20,743 ) $ (50,002 ) $ 29,259
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Research and Development Expenses
The following table summarizes our research and development expenses incurred during the periods indicated (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
2026 2025 $ Change 2026 2025 $ Change
External costs:
Clinical research organization expenses
COVALENT - 101 $ — $ 926 $ (926 ) $ — $ 1,927 $ (1,927 )
COVALENT - 102 — (142 ) 142 — 472 (472 )
COVALENT - 103 204 859 (655 ) 502 1,598 (1,096 )
COVALENT - 111 — 1,093 (1,093 ) — 3,335 (3,335 )
COVALENT - 112 — 311 (311 ) — 813 (813 )
COVALENT - 211 1,523 — 1,523 2,266 — 2,266
COVALENT - 212 785 — 785 1,347 — 1,347
GLP - 131 798 — 798 2,223 — 2,223
Other clinical related expenses 1,217 843 374 2,001 3,330 (1,329 )
Preclinical activities related expenses 86 1,594 (1,508 ) 155 3,550 (3,395 )
Expenses related to manufacturing of clinical and research material 464 1,421 (957 ) 1,283 2,269 (986 )
Other external costs 557 1,899 (1,342 ) 1,239 4,471 (3,232 )
Internal costs:
Personnel-related expenses (including stock-based compensation) 3,159 5,693 (2,534 ) 6,523 13,520 (6,997 )
Facilities and other allocated expenses 349 2,069 (1,720 ) 723 4,178 (3,455 )
Total research and development expenses $ 9,142 $ 16,566 $ (7,424 ) $ 18,262 $ 39,463 $ (21,201 )
Research and development expenses decreased by $7.4 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease of $3.2 million in external costs was primarily driven by a decrease of $1.5 million related to preclinical and exploratory programs, a decrease of $1.3 million in other external costs related to consultants, advisors and other professional services to support our clinical studies, and a decrease of $1.0 million of manufacturing costs, offset by an increase of $0.6 million related to clinical activities. Personnel-related expenses decreased by $2.5 million, including stock-based compensation, due to a decrease in headcount. Facilities and other allocated expenses decreased by $1.7 million due to a decrease in rent and facilities-related costs.
Research and development expenses decreased by $21.2 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease of $10.7 million in external costs was primarily driven by a decrease of $3.1 million related to clinical activities, a decrease of $3.4 million related to preclinical and exploratory programs, a decrease of $3.2 million in other external costs related to consultants, advisors and other professional services to support our clinical studies, and a decrease of $1.0 million of manufacturing costs. Personnel-related expenses decreased by $7.0 million, including stock-based compensation, due to a decrease in headcount. Facilities and other allocated expenses decreased by $3.5 million due to a decrease in rent and facilities-related costs.
General and Administrative Expenses
General and administrative expenses decreased by $1.1 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily driven by a decrease of $0.9 million related to personnel-related expenses, including stock-based compensation, due to a decrease in headcount and a decrease of $0.1 million of corporate-related expenses. Facilities and other allocated expenses decreased by $0.1 million.
General and administrative expenses decreased by $4.2 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily driven by a decrease of $2.7 million related to personnel-related expenses, including stock-based compensation, due to a decrease in headcount and a decrease of $1.3 million of corporate-related expenses. Facilities and other allocated expenses decreased by $0.2 million.
Change in fair value of common warrant liability
Change in fair value of common warrant liability was $4.1 million for the three months ended June 30, 2026 and $0.2 million for the three months ended June 30, 2025, attributable to revaluation of the common warrants issued in connection with the June and October 2025 underwritten public offerings (see Note 5). The common warrants are re-measured at each balance sheet date.
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Change in fair value of common warrant liability was $3.5 million for the six months ended June 30, 2026 and $0.2 million for the six months ended June 30, 2025, attributable to revaluation of the common warrants issued in connection with the June and October 2025 underwritten public offerings (see Note 5). The common warrants are re-measured at each balance sheet date.
Gain on sale of property and equipment
Gain on sale of property and equipment was $0.0 million for the three months ended June 30, 2026 and June 30, 2025, respectively.
Gain on sale of property and equipment was $0.5 million for the six months ended June 30, 2026 and $0.0 million for the six months ended June 30, 2025. The gain in the current period was attributable to proceeds from the sale of laboratory equipment.
Interest and other income, net
Interest and other income, net was $0.3 million for the three months ended June 30, 2026 and June 30, 2025, respectively.
Interest and other income, net was $0.7 million for the six months ended June 30, 2026 compared to $0.8 million for the six months ended June 30, 2025. The decrease of $0.1 million was primarily due to lower interest rates earned on cash and cash equivalents balance.
Liquidity and Capital Resources
Liquidity
We have funded our operations primarily through the sale and issuance of shares of our common and convertible preferred stock, pre-funded and common warrants and the issuance of unsecured promissory notes from inception through December 2020, issuance of our common stock through our IPO in April 2021, our public offerings in March 2023, June 2025 and October 2025 and through sales under our 2022 ATM Program.
On October 14, 2022, we filed the 2022 Registration Statement with the SEC relating to the registration of up to an aggregate of $350.0 million in shares of our common stock, preferred stock, debt securities, warrants and units or any combination thereof. The 2022 Registration Statement was declared effective by the SEC on October 24, 2022. In April 2023, pursuant to the 2022 Registration Statement, we sold an aggregate of 5,750,000 shares of common stock at a price of $30.00 per share in an underwritten public offering for gross proceeds of $172.5 million, resulting in net proceeds of $161.8 million after deducting underwriting discounts and commissions, and offering costs. On August 5, 2025, we filed the 2025 Registration Statement with the SEC relating to the registration of up to an aggregate of $300.0 million in shares of our common stock, preferred stock, debt securities, warrants and units or any combination thereof to replace the 2022 Registration Statement. The 2025 Registration Statement was declared effective by the SEC on August 15, 2025.
In June 2025, we completed an underwritten public offering, in which we issued and sold 19,450,000 shares of common stock at an offering price of $2.00 per share and to a certain investor in lieu of common stock, pre-funded warrants to purchase up to 550,000 shares of common stock at an offering price of $1.9999 per share, and accompanying common warrants to purchase up to 23,000,000 shares of common stock at a per share exercise price of $2.50. Our net proceeds from the offering were approximately $37.2 million, after deducting underwriting discounts and commissions and offering costs of approximately $2.8 million. In July 2025, in connection with the June 2025 underwritten public offering, the underwriters partially exercised their over-allotment option to purchase an additional 1,381,262 shares of common stock at an offering price of $2.00 per share. The net proceeds from the offering pursuant to the over-allotment option were approximately $2.6 million, after deducting underwriting discounts and commissions and offering costs of approximately $0.2 million.
Additionally, we are party to an equity distribution agreement, dated November 25, 2022, with Piper Sandler with respect to the 2022 ATM Program, under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $100.0 million (which was included in the $350.0 million originally registered under the 2022 Registration Statement and is now included in the $300.0 million originally registered under the 2025 Registration Statement) through Piper Sandler as the sales agent. Through June 30, 2026, we have received aggregate proceeds from our 2022 ATM Program of $4.9 million, net of commissions and offering costs, pursuant to the issuance of 2,271,122 shares. As of June 30, 2026, we have $94.8 million available under the 2022 ATM Program.
In October 2025, we completed an underwritten public offering in which we issued and sold 11,195,121 shares of common stock at an offering price of $2.05 per share and, to a certain investor in lieu of common stock, pre-funded warrants to purchase up to 1,000,000 shares of common stock at an offering price of $2.0499 per share and accompanying common warrants to purchase up to 12,195,121 shares of common stock at a per share exercise price of $2.50. Our net proceeds from the offering, including the proceeds from the underwriter’s over-allotment option, were approximately $23.1 million, after deducting underwriting discounts and commissions and offering costs of approximately $1.9 million.
As of June 30, 2026, we had cash, cash equivalents, and restricted cash of $35.2 million and an accumulated deficit of $469.8 million. We have incurred substantial operating losses and have used cash in our operating activities since inception. Without any future financing, the current operating plan under the existing cash and cash equivalents, and restricted cash as of June 30, 2026, will only be
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sufficient to fund our operations into the second quarter of 2027. Our ability to continue as a going concern will require us to obtain additional financing to fund our operations and there can be no assurance that additional financing will be available to us or that such financing, if available, will be available on terms acceptable to us. Accordingly, there is substantial doubt about our ability to continue as a going concern.
Future Funding Requirements
We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We may seek to raise capital through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources. 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 scope, timing, progress, duration, costs and results of our clinical trials, drug discovery, preclinical development activities and laboratory testing for our product candidates;
•the number and scope of clinical programs we decide to pursue;
•the scope and costs of manufacturing development and commercial manufacturing activities;
•the extent to which we discover and develop additional product candidates;
•the cost, timing and outcome of regulatory review of our product candidates;
•the cost and timing of establishing sales and marketing capabilities, if any of our product candidates receive marketing approval;
•the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
•our ability to establish and maintain collaborations on favorable terms, if at all;
•licensing, or other arrangements into which we may enter in the future, including the timing of receipt of any milestone or royalty payments under these agreements;
•the timing, receipt and amount of sales from our potential products;
•our need and ability to hire additional management, scientific and medical personnel;
•our need to implement additional internal systems and infrastructure, including financial and reporting systems;
•our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates;
•the costs associated with being a public company;
•the cost associated with commercializing our product candidates, if they receive regulatory approval;
•our ability to establish and maintain strategic collaborations and other similar partnerships for the development and commercialization of our product candidates; and
•the impact of any global health emergency and adverse global economic conditions on our business, which may exacerbate the magnitude of the factors discussed above.
If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter may impose upon us additional 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 or additional equity that we raise may contain terms that are not favorable to us or our stockholders. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to others rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.
See the section of this Quarterly Report on Form 10-Q titled “Risk Factors” for additional risks associated with our substantial capital requirements.
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Summary Statement of Cash Flows
The following table sets forth the primary sources and uses of cash, cash equivalents, and restricted cash for each of the periods presented below (in thousands):
Six Months Ended
June 30,
2026 2025
Net cash provided by (used in):
Operating activities $ (21,697 ) $ (44,879 )
Investing activities 550 —
Financing activities 159 42,824
Net decrease in cash, cash equivalents, and restricted cash $ (20,988 ) $ (2,055 )
Net Cash Used in Operating Activities
Net cash used in operating activities was $21.7 million during the six months ended June 30, 2026 and consisted of a net loss of $20.7 million offset by a decrease in net assets of $0.1 million and non-cash adjustments of $0.8 million. The decrease in net assets consisted primarily of a decrease in prepaid expenses and other current assets of $1.0 million, a decrease in accrued expenses and other current liabilities of $0.1 million and a decrease in operating lease liabilities of $0.7 million, offset by an increase in other assets of $0.4 million and an increase in accounts payable of less than $0.1 million. Non-cash adjustments consisted primarily of stock-based compensation expense of $3.2 million, gain on sale of property and equipment of $0.5 million and a non-cash gain on the change in fair value of warrant liability of $3.5 million.
Net cash used in operating activities was $44.9 million during the six months ended June 30, 2025 and consisted of a net loss of $50.0 million offset by a decrease in net assets of $2.9 million and non-cash adjustments of $8.0 million. The decrease in net assets consisted primarily of a decrease in prepaid expenses and other current assets of $1.6 million, a decrease in other assets of $0.6 million, a decrease in accounts payable of $4.7 million and a decrease in operating lease liabilities of $1.7 million, offset by an increase in accrued expenses and other current liabilities of $1.3 million. Non-cash adjustments consisted primarily of stock-based compensation expense of $5.7 million, operating lease expense of $1.6 million, depreciation expense of $0.9 million and a non-cash loss on the change in fair value of warrant liability of $0.2 million.
Net Cash Provided by Investing Activities
Net cash provided by investing activities was $0.6 million during the six months ended June 30, 2026.
Net cash provided by investing activities was $0.0 million during the six months ended June 30, 2025.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $0.2 million during the six months ended June 30, 2026.
Net cash provided by financing activities was $42.8 million during the six months ended June 30, 2025, and primarily relates to net proceeds from issuances of common stock and pre-funded warrants under the public offering and our 2022 ATM Program.
Contractual Obligations
As of June 30, 2026, there have been no material changes from the contractual obligations and commitments as of December 31, 2025 previously disclosed in our Annual Report on Form 10-K filed with the SEC on March 24, 2026.
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Critical Accounting Policies, Significant Judgments and Use of Estimates
Our financial statements have been prepared in accordance with GAAP. The preparation of these unaudited 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 at the date of the unaudited condensed financial statements, as well as 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. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
Our critical accounting policies are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Annual Report on Form 10-K filed with the SEC on March 24, 2026
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and the notes to the financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. During the six months ended June 30, 2026, except as described in Note 2 to the unaudited condensed financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, there were no material changes to our critical accounting policies from those discussed in our Annual Report on Form 10-K filed with the SEC on March 24, 2026.
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