← Back to VERA filing summaryOriginal filing text · Part I
Item 2 — Management's Discussion and Analysis
Vera Therapeutics, Inc. · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and notes thereto and the related 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, filed with the U.S. Securities and Exchange Commission on February 26, 2026 (the Annual Report).
Forward-Looking Statements
In addition to historical financial information, this discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” under Part II, Item 1A below. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “should,” “will” or the negative of these terms or other similar expressions.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
Overview
We are a commercial-stage biotechnology company focused on the pursuit of truth in science to transform medicine in autoimmune disease, starting with the kidney. Our flagship commercial product is TRUTAKNATM (atacicept-vymj), an inhibitor of B-cell activating factor (BAFF) and A Proliferation-Inducing Ligand (APRIL) indicated to reduce proteinuria in adults with primary immunoglobulin A nephropathy (IgAN) at risk for disease progression. Beyond IgAN, we are evaluating additional diseases where the reduction of autoantibodies through inhibition of BAFF and APRIL may prove clinically meaningful.
On July 7, 2026, the U.S. Food and Drug Administration (FDA) granted accelerated approval to TRUTAKNA. The accelerated approval is based on a prespecified interim analysis of the ongoing ORIGIN Phase 3 trial (ORIGIN 3) in which participants treated with TRUTAKNA achieved a 46% reduction in proteinuria from baseline, with a statistically significant and clinically meaningful 42% reduction compared to placebo (p < 0.0001) at 36 weeks. In this registrational program, TRUTAKNA was generally well-tolerated. The final efficacy analysis from ORIGIN 3 is expected in the third quarter of 2026, followed by an anticipated supplemental Biologics License Application submission to the FDA expected in the fourth quarter of 2026 which could lead to potential full FDA approval of TRUTAKNA in 2027.
TRUTAKNA is a soluble recombinant fusion protein containing the human transmembrane activator and calcium-modulating cyclophilin ligand interactor (TACI) receptor that binds to BAFF and APRIL, the two key cytokines that activate B cells and drive IgAN pathophysiology. In IgAN, activated B cells produce both the antigen and associated antibodies that result in the production of damaging IgA immune complexes. The overlapping roles of BAFF and APRIL in activating B cells support the potential for TRUTAKNA as a disease-modifying therapy. TRUTAKNA is self-administered as an at home, small-volume (1 ml), 150 mg once-weekly autoinjector.
We believe that atacicept has pipeline-in-a-molecule potential, with potential application in multiple diseases. In the Phase 2 PIONEER clinical trial, for which we expect to report additional results in the fourth quarter of 2026, we are evaluating atacicept in a broader population of IgAN patients as well as other autoimmune kidney diseases, including primary membranous nephropathy (pMN), focal segmental glomerulosclerosis (FSGS) and minimal change disease (MCD), in patients with anti-phospholipase A2 receptor or anti-nephrin autoantibodies. Potential future indications include anti-neutrophil cytoplasmic antibody-associated vasculitis, lupus nephritis, Sjogren’s disease, systemic lupus erythematosus, systemic sclerosis, generalized myasthenia gravis, and idiopathic thrombocytopenic purpura.
We also hold worldwide, exclusive development and commercial rights to MAU868, a potentially first-in-class monoclonal antibody to treat reactivated BK virus infections, for which we completed a Phase 2 clinical trial in 2022. In January 2025, we acquired worldwide, exclusive development and commercial rights to VT-109, a novel, next-generation BAFF and APRIL inhibitor that is in preclinical development. We believe that our current pipeline programs leverage the deep expertise of our team and have strong potential commercial synergies.
We currently have only one product approved for commercial sale and expect to record limited revenue from product sales during the third quarter of 2026. Our ability to generate revenue sufficient to achieve profitability, if ever, will depend on the
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successful commercialization of our lead product and development of our product candidates, which we expect will take a number of years. We also do not own or operate, and currently have no plans to establish, any manufacturing facilities. We rely, and expect to continue to rely, on third parties for the manufacture of our lead product and product candidates. We believe that this strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment, and personnel while also enabling us to focus our expertise and resources on the successful commercialization of our lead product and development of our product candidates.
To date, we have funded our operations primarily through proceeds from the sale of shares of our common stock, redeemable convertible preferred stock, debt financing and convertible promissory notes. As of June 30, 2026, we had $499.2 million in cash, cash equivalents and marketable securities, compared to $714.6 million as of December 31, 2025.
We have incurred significant operating losses since the commencement of our operations. Our net losses were $109.5 million and $76.5 million for the three months ended June 30, 2026 and 2025, respectively, and we expect to incur significant and increasing losses for the foreseeable future as we commercialize our lead product and continue to advance our product candidates toward commercialization. Our net losses may fluctuate significantly from period to period, depending on the timing of expenditures on our research and development activities. As of June 30, 2026, we had an accumulated deficit of $991.4 million, compared to $760.9 million as of December 31, 2025. Our primary use of cash is to fund operating expenses, which consist of research and development and general and administrative expenditures. Cash used to fund operating expenses depends on the timing of when we pay these expenses, as reflected in the changes in our working capital balances.
We expect to continue to incur net operating losses in the near term, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. We expect our expenses and capital requirements will increase significantly in connection with our ongoing activities as we:
•initiate or continue nonclinical studies and clinical trials for our lead product and product candidates;
•seek regulatory approvals for any product candidates that successfully complete clinical trials;
•continue to scale up external manufacturing capacity with the aim of securing sufficient quantities to meet our capacity requirements for clinical trials and potential commercialization;
•establish a sales, marketing and distribution infrastructure to commercialize approved product candidates and related additional commercial manufacturing costs;
•develop, maintain, expand, protect and enforce our intellectual property portfolio, including patents, trade secrets, and know-how;
•acquire, develop or in-license other product candidates and technologies and further expand our clinical product pipeline;
•attract, develop and retain additional clinical, scientific, quality control, commercial, and manufacturing management and administrative personnel; and
•add clinical, operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts.
We also expect to increase the size of our administrative function to support the growth of our business. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.
We will require substantial additional funding to successfully commercialize our lead product, develop our product candidates and support our continuing operations. Until such time that we can generate significant revenue from product sales or other sources, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, which could include income from collaborations, strategic partnerships, or marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. We may be unable to raise additional funds or to enter into such agreements or arrangements on favorable terms, or at all. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. Our failure to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including requiring us to have to delay, reduce or eliminate our product development or commercialization efforts. Insufficient liquidity may also require us to relinquish rights to our lead product or product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. 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 provide assurance that we will ever be profitable or generate positive cash flow from operating activities.
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Geopolitical and Macroeconomic Developments
Due to geopolitical and macroeconomic events, including bank failures, tariffs and trade tensions, supply chain challenges, ongoing military conflicts, related sanctions, changes in U.S.-China relations, elevated inflation rates and the responses by central banking authorities to control such inflation, the U.S. and global financial markets experienced volatility, which has led to disruptions to trade, commerce, pricing stability, credit availability and supply chain continuity globally. As a result of these factors and other geopolitical and macroeconomic developments described in this Quarterly Report on Form 10-Q, our business and results of operations may be adversely affected.
Although we did not see a significant financial impact to our business operations as a result of recent geopolitical and macroeconomic developments during the three months ended June 30, 2026, there may be potential impacts to our business in the future that are highly uncertain and difficult to predict such as disruptions or restrictions in our supply chain, disruption or restrictions on our employees’ ability to travel, disruptions to or delays in ongoing non-clinical trials, clinical trials, third-party manufacturing supply and other operations, interruptions or delays in the operations of the FDA or other regulatory authorities, and continued elevated inflation and interest rates which may increase the cost of conducting business activities or cause changes in availability and cost of credit and impact our ability to raise capital and conduct business development activities. The ultimate impact of these geopolitical and macroeconomic developments, as well as any lasting effects on our business, is highly uncertain and subject to continued change, and we recognize that macroeconomic and geopolitical factors may continue to present unique challenges for us.
We believe that our existing cash, cash equivalents and marketable securities held as of June 30, 2026, will be sufficient to fund our planned operations and capital expenditure requirements for at least the next 12 months from the date of this Quarterly Report on Form 10-Q. However, should adverse geopolitical or macroeconomic events, such as those discussed above, any recession or depression associated with those events or other events described herein, continue for a prolonged period, our results of operations, financial condition, liquidity and cash flows could be materially impacted as a result of a lower likelihood of successfully commercializing our lead product and effectively developing our product candidates.
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 presented:
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 Change 2026 2025 Change
Operating expenses:
Research and development $ 60,080 $ 58,195 $ 1,885 $ 146,091 $ 99,473 $ 46,618
General and administrative 52,410 21,946 30,464 91,531 37,862 53,669
Total operating expenses 112,490 80,141 32,349 237,622 137,335 100,287
Loss from operations (112,490 ) (80,141 ) (32,349 ) (237,622 ) (137,335 ) (100,287 )
Other income (expense):
Interest income 5,348 6,320 (972 ) 11,703 13,226 (1,523 )
Interest expense (1,848 ) (1,874 ) 26 (3,671 ) (3,667 ) (4 )
Other (expense) income, net (483 ) (836 ) 353 (915 ) (449 ) (466 )
Total other income 3,017 3,610 (593 ) 7,117 9,110 (1,993 )
Net loss $ (109,473 ) $ (76,531 ) $ (32,942 ) $ (230,505 ) $ (128,225 ) $ (102,280 )
Research and Development Expenses
Research and development expenses represent a substantial portion of our operating expenses. Our research and development expenses consist primarily of direct and indirect expenses incurred in connection with the research and development of our lead product and product candidates. Direct expenses include costs incurred under agreements with third parties, including contract research organizations, contract drug manufacturing organizations and consultants directly related to our research and development of our lead product and product candidates, and license and milestone fees incurred as a result of our contractual obligations for our development candidates. Until we receive marketing approval for a product candidate, all drug manufacturing costs are expensed as research and development. Indirect expenses include employee compensation and other personnel-related expenses, including stock-based compensation, facilities and depreciation related to buildings and equipment used by research and development personnel and activities and other expenses.
Research and development expenses are recorded as expense in the period in which the related activities occurred, and payments we make prior to the receipt of goods or services to be used in research and development efforts are deferred as prepaid expenses until
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the goods or services are received and used. We accrue expenses for contract research and development as the related services are performed by monitoring the status of specified activities and billings received from our external service providers. These expenses are accrued based on estimates and are adjusted as actual expenses become known. The cost incurred in obtaining technology licenses, including initial and subsequent milestone payments incurred under our licensing agreements, are recorded as expense in the period in which they are incurred, as the licensed technology, method or process has no alternative future uses other than for our research and development activities. Where contingent milestone payments related to development-stage programs are due to third parties under license or other agreements, the milestone payment obligations are recognized as expense when achievement of the contingent milestone is probable, which is generally upon achievement of the milestone.
The following table summarizes our research and development expenses incurred during the respective periods:
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 Change 2026 2025 Change
Direct research and development expenses
Contract drug manufacturing $ 15,742 $ 23,498 $ (7,756 ) 46,197 $ 33,040 $ 13,157
Clinical trial expenses 15,633 12,636 2,997 29,229 23,880 5,349
Consulting and professional services 5,571 6,613 (1,042 ) 9,889 12,772 (2,883 )
License and milestone obligations — — — 15,100 750 14,350
Indirect research and development expenses
Employee compensation and related benefits 21,390 14,191 7,199 42,318 26,562 15,756
Facilities and other 1,744 1,257 487 3,358 2,469 889
Research and development expenses $ 60,080 $ 58,195 $ 1,885 $ 146,091 $ 99,473 $ 46,618
Research and development expenses increased by $1.9 million, or 3%, to $60.1 million in the three months ended June 30, 2026, from $58.2 million in the three months ended June 30, 2025, due to an increase of $7.2 million for employee compensation and related benefit expenses, including a $2.7 million increase in stock-based compensation expense, as a result of growth in research and development employee headcount, an increase of $3.0 million in clinical trial expenses mainly due to increased expenses for the PIONEER and ORIGIN EXTEND trials, and an increase of $0.5 million in facilities and other, including a $0.3 million increase in travel expenses supporting research and development activities, partially offset by a decrease of $7.8 million in contract drug manufacturing costs for clinical and potential commercial use and a decrease of $1.0 million in consulting and professional services, primarily related to advisory board and expert forum activities incurred in 2025.
Research and development expenses increased by $46.6 million, or 47%, to $146.1 million in the six months ended June 30, 2026, from $99.5 million in the six months ended June 30, 2025, due to an increase of $15.8 million for employee compensation and related benefit expenses, including a $5.7 million increase in stock-based compensation expense, as a result of growth in research and development employee headcount, an increase of $14.4 million in license and milestone expense related to current period recognition of a $15.0 million milestone payment due upon filing of the BLA, an increase of $13.2 million in contract drug manufacturing costs for clinical and potential commercial use, an increase of $5.3 million in clinical trial expenses mainly due to increased expenses for the PIONEER and ORIGIN EXTEND trials, and an increase of $0.9 million in facilities and other, including a $0.6 million increase in travel expenses supporting research and development activities, partially offset by a decrease of $2.9 million in consulting and professional services, primarily related to advisory board and expert forum activities incurred in 2025.
Prior to receiving accelerated approval from the FDA for TRUTAKNA on July 7, 2026, we recorded all manufacturing costs as research and development expenses as incurred, including costs for materials and work in process that we intend to use for commercial supply. From July 7, 2026 and onward, manufacturing costs incurred for commercial inventory will be capitalized as current assets and later recorded to expense as cost of sales in the periods in which sales of the related inventory are recognized.
We expect our research and development expenses to increase in future periods as we seek full regulatory approval of atacicept in IgAN in the U.S. and regulatory approval in other non-U.S. markets, conduct additional clinical trials of atacicept, and if we expand development of atacicept in other indications or product configurations, or advance other product candidates.
General and Administrative Expenses
General and administrative expenses consist primarily of compensation and personnel-related expenses, including stock-based compensation, for our personnel in executive management, legal, finance, human resources, corporate communications, sales and marketing and other administrative functions. General and administrative expenses also include professional fees paid for accounting, auditing, legal, tax and consulting services, and other general overhead costs to support our operations. General and administrative expenses are recorded as expense in the period in which they are incurred, and payments we make prior to the receipt of goods or
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services to be used for general and administrative purposes are deferred as prepaid expenses until the goods or services are received and used.
The following table summarizes our general and administrative expenses incurred during the respective periods:
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 Change 2026 2025 Change
Employee compensation and related benefits $ 27,153 $ 11,002 $ 16,151 $ 48,266 $ 19,387 $ 28,879
Commercial planning and medical affairs 15,297 3,811 11,486 23,924 5,147 18,777
Legal, accounting and audit fees 1,841 1,883 (42 ) 4,009 3,668 341
Software 1,520 868 652 2,764 1,191 1,573
Consultants, including non-employee director compensation 1,410 1,142 268 2,593 2,654 (61 )
Other 5,189 3,240 1,949 9,975 5,815 4,160
General and administrative expenses $ 52,410 $ 21,946 $ 30,464 $ 91,531 $ 37,862 $ 53,669
General and administrative expenses increased by $30.5 million, or 139%, to $52.4 million in the three months ended June 30, 2026, from $21.9 million in the three months ended June 30, 2025, primarily due to an increase of $16.2 million in employee compensation and related benefits expenses, including stock-based compensation, as a result of increased general and administrative employee headcount including sales personnel, an increase of $11.5 million in commercial planning and medical affairs expenses related to marketing, market research, market access, medical information, and health economics activities in preparation for the anticipated commercial launch of TRUTAKNA, an increase of $0.7 million in software expenses primarily supporting anticipated commercial operations, and an increase of $0.3 million in consulting expenses. The $1.9 million increase in other general and administrative expenses was primarily driven by increases of $1.2 million in corporate communications expenses and $0.9 million in business travel expenses, partially offset by decreases of $0.3 million in recruiting and placement expenses and $0.2 million in rent and facilities expenses.
General and administrative expenses increased by $53.7 million, or 142%, to $91.5 million in the six months ended June 30, 2026, from $37.9 million in the six months ended June 30, 2025, primarily due to an increase of $28.9 million in employee compensation and related benefits expenses, including stock-based compensation, as a result of increased general and administrative employee headcount including sales personnel, an increase of $18.8 million in commercial planning and medical affairs expenses related to marketing, market research, market access, medical information, and health economics activities in preparation for the anticipated commercial launch of TRUTAKNA, an increase of $1.6 million in software expenses to support scaling operations, and an increase of $0.3 million in legal, accounting, and audit expenses, partially offset by a decrease of $0.1 million in consulting expenses. The $4.2 million increase in other general and administrative expenses was primarily driven by increases of $1.9 million in corporate communications expenses, $1.6 million in business travel expenses, $0.6 million in recruiting and placement expenses, and $0.4 million in information technology expenses.
We expect our general and administrative expenses to increase in future periods as we scale up commercial manufacturing capacity, continue to build out a sales, marketing, and distribution infrastructure to support TRUTAKNA and any other approved product candidates, and provide general and administrative support for our operations.
Other Income, Net
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 Change 2026 2025 Change
Other income (expense):
Interest income $ 5,348 $ 6,320 $ (972 ) $ 11,703 $ 13,226 $ (1,523 )
Interest expense (1,848 ) (1,874 ) 26 (3,671 ) (3,667 ) (4 )
Other (expense) income, net (483 ) (836 ) 353 (915 ) (449 ) (466 )
Total other income, net $ 3,017 $ 3,610 $ (593 ) $ 7,117 $ 9,110 $ (1,993 )
Other income, net, decreased by $0.6 million, or 16%, to $3.0 million for the three months ended June 30, 2026, from $3.6 million in the three months ended June 30, 2025, primarily due to a decrease of $1.0 million in interest income resulting from lower average balances of marketable securities held during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, and a decrease in sublease income of $0.5 million due to the expiration of a sublease to a third-party in September 2025, partially offset by a decrease of $0.5 million in amortization of deferred debt issuance costs for unfunded loan commitments relating to the refinancing of the Oxford credit facility in June 2025.
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Other income, net, decreased by $2.0 million, or 22%, to $7.1 million for the six months ended June 30, 2026, from $9.1 million in the six months ended June 30, 2025, primarily due to a decrease of $1.5 million in interest income resulting from lower average balances of marketable securities held during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025 and a decrease in sublease income of $1.0 million due to the expiration of a sublease to a third-party in September 2025, partially offset by an increase of $0.2 million in currency exchange gains and losses and an increase of $0.3 million in unrealized gains and losses.
Liquidity and Capital Resources
To date, we have funded our operations primarily through proceeds from the sale of shares of our common stock, redeemable convertible preferred stock, debt financing and convertible notes. From our inception through June 30, 2026, we have raised aggregate net cash proceeds of approximately $1.3 billion from the issuance and sale of redeemable convertible preferred stock, convertible notes and common stock, and proceeds from our Loan Agreements with Oxford. Since the date of our incorporation, we have not generated any revenue from product sales and have incurred substantial operating losses and negative cash flows from operations.
In June 2025, we entered into an agreement to refinance our existing debt by replacing the existing $50.0 million in notes payable with $75.0 million in new notes payable. We received aggregate net proceeds of approximately $23.3 million, after deducting debt issuance costs.
In December 2025, we completed a follow-on public offering and issued 7,058,824 shares of common stock for net proceeds of approximately $281.3 million, after deducting underwriting fees and offering-related expenses.
In August 2025, we entered into a Sales Agreement (the Sales Agreement) with TD Securities (USA) LLC (TD Cowen). Under the Sales Agreement, we may offer and sell, from time to time, through TD Cowen as our sales agent and/or principal, shares of our common stock, having an aggregate offering amount of up to $200 million (the Shares). We are not obligated to sell Shares under the Sales Agreement. We will pay TD Cowen a commission of up to 3.0% of the gross sales proceeds of any Shares sold through TD Cowen under the Sales Agreement. As of June 30, 2026, there have been no sales under the Sales Agreement.
We use our cash to fund operations, primarily to fund our research and development efforts, including clinical trials, build a sales, marketing and distribution infrastructure to support commercial activities, establish and maintain our intellectual property portfolio, hire personnel, raise capital, and provide general and administrative support for these operations. Cash used to fund operating expenses is affected by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid assets.
We anticipate that we will continue to incur net losses for the foreseeable future as we continue research and development activities for our lead product and product candidates, hire additional staff, including clinical, commercial, operational, administrative and management personnel, and incur additional expenses associated with operating as a public company. We expect to incur significant expenses and operating losses for the foreseeable future as we continue to commercialize TRUTAKNA and advance our clinical development activities and our product candidate portfolio. We expect that our research and development and selling, general and administrative costs will increase substantially in connection with conducting additional clinical trials for our research programs, lead product, and product candidates, contracting with third parties to support nonclinical studies and clinical trials, expanding our intellectual property portfolio, scaling up external commercial manufacturing capacity, continuing to build a sales, marketing and distribution infrastructure to successfully commercialize TRUTAKNA and any other approved product candidates, and providing general and administrative support for our operations. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements, or other sources.
As of June 30, 2026, we had cash, cash equivalents and marketable securities of $499.2 million, as compared to $714.6 million as of December 31, 2025. We believe, based on our current operating plan, that our cash, cash equivalents and marketable securities as of June 30, 2026 will be sufficient to fund our planned operations and capital expenditure requirements for at least the next 12 months from the date of this Quarterly Report on Form 10-Q.
Cash Flows
The following table summarizes our cash flows for the periods indicated:
Six Months Ended June 30,
(dollars in thousands) 2026 2025
Net cash used in operating activities $ (206,753 ) $ (109,204 )
Net cash provided by (used in) investing activities (104,956 ) 43,861
Net cash provided by financing activities 5,860 21,818
Net decrease in cash and cash equivalents $ (305,849 ) $ (43,525 )
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Operating Activities
In the six months ended June 30, 2026, we used $206.8 million of cash in operating activities, attributable to a net loss of $230.5 million and an increase in our net operating assets and liabilities of $20.2 million, partially offset by $15.0 million in license fees attributable to investing activities and adjustments for non-cash charges of $28.9 million. Non-cash charges primarily consisted of $29.1 million of stock-based compensation and $1.3 million net in accretion and amortization of loan exit fees and costs, partially offset by non-cash interest income of $1.9 million related to amortization of discount on purchases of marketable securities. The change in our net operating assets and liabilities was primarily due to a decrease of $7.3 million in accounts payable, an increase of $14.6 million in prepaid expense and other current assets, and a decrease of $0.4 million in operating lease liabilities, partially offset by an increase of $2.1 million in accrued and other current liabilities.
In the six months ended June 30, 2025, we used $109.2 million of cash in operating activities, attributable to a net loss of $128.2 million, partially offset by adjustments for non-cash charges of $14.3 million, $0.8 million in license fees attributable to investing activities, and a decrease in our net operating assets and liabilities of $3.9 million. Non-cash charges primarily consisted of $17.2 million of stock-based compensation, non-cash interest income of $4.4 million related to amortization of discount on purchases of marketable securities, and a $0.9 million reduction in the carrying amount of operating lease right-of-use assets. The change in our net operating assets and liabilities was primarily due to an increase of $3.3 million in accrued and other current liabilities and an increase of $5.5 million in accounts payable, partially offset by an increase of $4.2 million in prepaid expense and other current assets and a decrease of $0.9 million in operating lease liabilities.
The increase in cash used in operating activities from the six months ended June 30, 2025 to the six months ended June 30, 2026 was primarily attributable to increased research and development and general and administrative expenses.
Investing Activities
In the six months ended June 30, 2026, our investing activities used $104.9 million of cash, primarily resulting from $308.6 million used for purchases of marketable securities and $15.0 million paid in license fees, partially offset by $218.9 million provided by maturities of marketable securities.
In the six months ended June 30, 2025, our investing activities provided $43.9 million of cash, primarily resulting from $232.3 million provided by maturities of marketable securities, partially offset by $187.3 million used for purchases of marketable securities.
Financing Activities
In the six months ended June 30, 2026, our financing activities provided $5.9 million of cash, resulting from proceeds from exercise of stock options and issuance of shares under our employee stock purchase plan.
In the six months ended June 30, 2025, our financing activities provided $21.8 million of cash, resulting from $23.3 million in net proceeds from borrowings from the initial funding under the 2025 Loan Agreement in June 2025, after repayment of borrowings under the 2021 Loan Agreement, $2.0 million in proceeds from exercise of stock options and issuance of shares under our employee stock purchase plan, and $3.5 million in payment of deferred issuance costs related to unfunded loan commitments under the 2025 Loan Agreement.
Material Cash Requirements
During the six months ended June 30, 2026, there were no material changes to our contractual obligations and commitments from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report.
2021 Loan Agreement
On December 17, 2021, we entered into a Loan and Security Agreement (the 2021 Loan Agreement) with a loan syndicate involving Oxford Finance LLC, Oxford Finance Credit Fund II LP (OFCF II), and Oxford Finance Credit Fund III LP (OFCF III). The 2021 Loan Agreement provided for term loans (collectively, the Loan) in an aggregate maximum principal amount of $50.0 million, of which $5.0 million was funded on December 17, 2021, $20.0 million was funded on November 4, 2022, and the remaining $25.0 million was funded in December 2023.
In March 2023, we opted to extend the final maturity date of the Loan from December 2026 to December 2027, based on positive Phase 2b clinical trial data of atacicept in IgAN, as provided in the 2021 Loan Agreement. We were required to make monthly interest-only payments for 60 months followed by full amortization through maturity.
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In June 2025, we refinanced our debt under the 2021 Loan Agreement by entering into a new non-revolving loan and security agreement, the proceeds of which were partially used to prepay the outstanding principal balance of the 2021 Loan Agreement in full. As a result, we no longer have any contractual obligations and commitments under the 2021 Loan Agreement.
2025 Loan Agreement
On June 2, 2025, we entered into a Loan and Security Agreement (the 2025 Loan Agreement) with a loan syndicate involving Oxford Finance, OFCF II, OFCF III, and Oxford Finance Credit Fund IV LP (OFCF IV) (collectively, Oxford). The 2025 Loan Agreement provides for term loans (collectively, the 2025 Loan) in an aggregate maximum principal amount of $500.0 million, of which $75.0 million was funded on June 4, 2025.
The 2025 Loan Agreement is scheduled to mature in June 2030, but the maturity date can be extended based on achievement of a revenue-based interest-only extension milestone as of the end of the initial interest-only period in August 2029. If the Company achieves this interest-only extension milestone, the maturity date and the end of the interest-only period will be extended to June 2031 and August 2030, respectively. We are required to make monthly interest-only payments for 49 months (or 61 months upon achievement of the revenue-based interest-only extension milestone mentioned above) followed by full amortization through maturity.
The 2025 Loan incurs interest at a floating per annum rate (based on the actual number of days elapsed divided by a year of 360 days) equal to the sum of (a) the greater of (i) the 1-Month CME Term Secured Overnight Financing Rate (SOFR) and (ii) 3.75%, plus (b) 4.95%.
We are permitted to prepay the 2025 Loan in full or in part at any time upon 10 business days’ written notice to Oxford, subject to payment of the applicable Prepayment Fee (as defined in (c) below). Upon the earliest to occur of the maturity date, acceleration of the 2025 Loan or prepayment of the 2025 Loan, we are required to make a final payment equal to 5.0% of the aggregate principal amount of the 2025 Loan (the Final Fee). Any prepayments of the 2025 Loan must be accompanied by (a) accrued and unpaid interest thereon, (b) the Final Fee and (c) prepayment fee of (i) 2.0% of the portion of the 2025 Loan being prepaid if the repayment is on or before June 4, 2027 or (ii) 1.0% of the portion of the 2025 Loan being prepaid if the repayment is after June 4, 2027 through June 4, 2028 (the Prepayment Fee). There is no Prepayment Fee for any prepayments occurring after June 4, 2028.
Our obligations under the 2025 Loan Agreement are secured by a security interest in substantially all of our assets, other than our intellectual property, which is subject to a negative pledge. The 2025 Loan Agreement contains two financial related covenants. Also included in the 2025 Loan Agreement are customary representations and covenants that, subject to exceptions, restrict our ability to, among other things: declare dividends or redeem or repurchase equity interests; incur additional liens; make loans and investments; incur additional indebtedness; engage in mergers, acquisitions, and asset sales; transact with affiliates; undergo a change in control; add or change business locations; and engage in businesses that are not related to our existing business.
Upon the occurrence of an event of default, a default interest rate of an additional 4.0% may be applied to the outstanding loan balances, and Oxford may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the 2025 Loan Agreement. Events of default under the 2025 Loan Agreement include customary events of default, including, but not limited to: (i) non-payment; (ii) failure to perform any obligation under the 2025 Loan Agreement and related documents; (iii) the occurrence of a material adverse change; (iv) bankruptcy and other insolvency events; (v) cross-defaults; and (vi) judgment defaults.
Critical Accounting Policies and Significant Judgments and Estimates
The discussion and analysis of our financial condition and results of operations is based on our unaudited condensed financial statements, which 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 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.
Our critical accounting policies are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Judgments and Estimates” in the Annual Report and the notes to our unaudited condensed financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. During the six months ended June 30, 2026, there were no material changes to our critical accounting policies and estimates from those discussed in the Annual Report.
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