The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2026, appearing elsewhere in this quarterly report on Form 10-Q (“Quarterly Report”), and with our audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2026 (our “Annual Report”). Our unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2026 were prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and presented in United States dollars ($). References to “MoonLake”, “we”, “us”, “our”, “our Company”, “the Company” and “our business” refer to MoonLake Immunotherapeutics and its consolidated subsidiaries. Special Note on Forward-Looking Statements This Quarterly Report contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report, including, without limitation, statements regarding the following, are forward-looking statements: our future results of operations and financial position, our expectations regarding industry trends, the sufficiency of our cash and cash equivalents, the anticipated sources and uses of cash, the anticipated investments in our business, our business strategy, expectations regarding our clinical programs and the plans and objectives of management for future operations and capital expenditures, and other information referred to in the sections titled “Business” and “Risk Factors” in our Annual Report and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and "Risk Factors" in this Quarterly Report. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “could”, “intend”, “target”, “project”, “contemplate”, “believe”, “estimate”, “predict”, “potential”, “might”, “possible”, or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report contains forward-looking statements that reflect our plans and strategy for our business and related financing, as well as expectations regarding the timing of regulatory submissions and potential commercialization for SLK (as defined below). Our actual results and the timing of events could differ materially from those anticipated in the forward-looking statements. These forward-looking statements are subject to a number of important risks, uncertainties and other factors that could cause actual results to differ materially from those in the forward-looking statements expressed or implied in this Quarterly Report. Such risks, uncertainties and other factors include, among others, the risks, uncertainties and factors set forth in the sections titled “Risk Factors” included in our Annual Report and this Quarterly Report and the following risks, uncertainties and factors: •our success in retaining or recruiting, or changes required in, our officers, key employees or directors; •factors relating to our business, operations and financial performance, including, but not limited to: •we are substantially dependent on the success of our novel tri-specific Nanobody®, Sonelokimab (“SLK”, also known as M1095/ALX 0761), which we license from Merck Healthcare KGaA, Darmstadt, Germany, an affiliate of Merck KGaA, Darmstadt, Germany (“MHKDG”); 24 •our ability to obtain regulatory approval for our products, and any related restrictions or limitations of any approved products; •competition and competitive pressures from other global companies in the industries in which we operate; •we have incurred significant losses since inception, and we expect to incur significant losses for the foreseeable future and may not be able to achieve or sustain profitability in the future; •our ability to manage our growth effectively; •the impact of adverse business and economic conditions including inflationary pressures, general economic slowdown or a recession, fluctuating interest rates, new or increased tariffs and other barriers to trade, changes in fiscal and monetary policy or government budget dynamics, the prospect of a shutdown of the United States federal government, and significant volatility in commodity prices, including the price of oil and the responses thereto; •while we have initiated and completed clinical trials, we have no products approved for commercial sale; •we require substantial additional capital to finance our operations, and if we are unable to raise such capital when needed or on acceptable terms, we may be forced to delay, reduce, and/or eliminate one or more of our development programs or future commercialization efforts; •our ability to renew existing contracts; •our limited operating history; •our ability to respond to general economic conditions; •securities litigation following periods of volatility in the marketplace or our share price; •the ability to adequately protect our intellectual property rights; and •the other factors described under the caption “Risk Factors” in our Annual Report, as may be updated in this Quarterly Report, and our other filings with the SEC. New risk factors emerge from time to time and it is not possible to predict all such risks, nor can we assess the impact of all such risks on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. There may be other factors that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed in “Risk Factors” in our Annual Report or “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in this Quarterly Report. You should read this Quarterly Report and the documents that we reference herein completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Overview We are a clinical stage biotechnology company advancing therapies to address significant unmet needs in inflammatory skin and joint diseases. We are currently a single asset company focused on the development of SLK, a novel tri-specific IL-17A and IL-17F inhibiting Nanobody, that we exclusively licensed from MHKDG and that has the potential, based on response levels seen in clinical trials, to drive disease modification in dermatology and rheumatology patients. SLK is a proprietary Nanobody that was discovered by Ablynx N.V., Belgium, a Sanofi company (“Ablynx”), and previously studied by MHKDG and Avillion LLP under a 2017 co-development agreement. The terms “Nanobody” and “Nanobodies” used herein are registered trademarks of Ablynx. Nanobodies are able to bind selectively to a specific antigen with high affinity. Nanobodies have a fraction of the molecular weight compared to traditional antibodies. They 25 offer a number of potential advantages over traditional monoclonal antibodies, including the potential to create multivalent molecules with enhanced ability to penetrate inflamed tissue, especially when containing an additional albumin binding domain such as SLK, an easier manufacturing process and a higher thermostability. We currently develop SLK in inflammatory diseases in dermatology and rheumatology where the pathophysiology is known to be driven by IL-17A and IL-17F. This group of diseases comprises our current target diseases, hidradenitis suppurativa (“HS”), psoriatic arthritis (“PsA”), axial spondyloarthritis (“axSpA”), palmoplantar pustulosis (“PPP”), and several other inflammatory conditions, including psoriasis (“PsO”). Our current target diseases affect millions of people worldwide, and we believe there is a need for improved treatment options. We believe that SLK has a differentiated mechanism of action and that its purposefully designed molecular characteristics, including its small size and its albumin binding site, facilitate deep tissue penetration in the skin and joints. We envision SLK as a key therapeutic alternative in our initial target indications and potentially in multiple other IL-17 driven inflammatory conditions. HS Trials and Plans for Commercial Launch In June 2026, we announced the week 52 results of the VELA-1 trial (M1095-HS-301) and VELA-2 trial (M1095-HS-302), marking the end of the parental trial time period. Week 52 data for SLK showed consistent and further improvement in all clinical scores, compared to week 16 data. Across VELA-1 and VELA-2, 67.2% of patients treated with SLK achieved HiSCR75 and 33.1% of patients achieved HiSCR100 at week 52 (n=396). The results were consistent across both trials (VELA-1: 68.3% HiSCR75, 31.2% HiSCR100; VELA-2: 66.0% HiSCR75, 35.1% HiSCR100). At week 52, 26.0% of patients (n=396) achieved an IHS4-100 response (VELA-1: 24.4%, VELA-2: 27.7%), reflecting inflammatory remission, defined as a 100% reduction in abscesses (A100), nodules (N100) and draining tunnels (DT100). The long-term results of the VELA program are higher than in previous Phase 3 HS programs with competing agents (using the same pooled, as observed, end of parental trial data analysis). The strong long-term clinical responses observed with SLK were accompanied by sustained improvements in Patient-Reported Outcomes, which we believe matter most to patients living with HS and their treating physicians. Patients treated with SLK consistently showed the largest reductions in the HS-specific Quality of Life score (HiSQOL) at week 52, with a -15.3 mean score difference between end of trial and baseline in VELA-1, and -14.8 in VELA-2 (as observed, n=395). The broader skin Dermatology Life Quality Index score confirmed the HiSQOL results and showed clinically meaningful response (≥4-point improvement from baseline) in 75.0% (VELA-1) and 69.4% (VELA-2) of patients (as observed, in patients with baseline DLQI ≥4, n=363). Responses for both these quality-of-life metrics were higher than previously demonstrated in competitor pivotal HS studies. In line with these data, 46.5% of patients experienced a marked reduction in pain, measured as at least a 3-point reduction from baseline in the worst skin pain numerical rating scale (VELA-1: 48.4%, VELA-2: 44.3%; as observed, in patients with baseline worst skin pain score of ≥3, n=241). In June 2026, we presented an interim analysis of the VELA-TEEN clinical trial (M1095-HS-304) based on the latest available data. The data showed rapid onset and high response rates in adolescent patients with HS. At week 24, ~68% of patients treated with SLK achieved HiSCR75, alongside ~86% achieving HiSCR50 and ~45% achieving HiSCR100 (as observed, n=22). HiSCR75 rates in VELA‑TEEN were higher than those observed in the adult VELA program at comparable time points, indicating a pronounced clinical response in adolescent patients with earlier stage disease. SLK was generally well tolerated in this vulnerable patient population, and no new safety signals were observed. We expect to announce final topline results from the VELA-TEEN clinical trial in the second half of 2026. The VELA trials are followed by an open-label extension for up to two years (the VELA-OLE trial (M1095-HS-303)). The comparisons above to results reported in other sponsors' clinical programs, and between our own trials, are not based on head-to-head studies. Differences in trial design, patient populations, endpoints, analysis methods, timing and trial conduct may materially affect the comparability of these results, and regulators, physicians, payors and investors may weigh or interpret them differently than we do. PsA Trials 26 In August 2026, we announced positive results from an analysis of the week 16 primary endpoint in the IZAR-1 trial (M1095-PSA-301) which met all clinical endpoints at week 16 for 60 mg SLK. 42.1% of biologic-naïve patients treated with SLK 60 mg with induction achieved an American College of Rheumatology 50 (ACR50) response at week 16, the primary endpoint of the trial. In addition, SLK demonstrated strong efficacy across multiple disease domains characteristic of PsA. Across key secondary clinical endpoints, 66.5% of patients achieved an American College of Rheumatology 20 (ACR20) response, and 41.2% achieved Minimal Disease Activity (MDA). In patients with concomitant skin involvement, 61% achieved a Psoriasis Area and Severity Index 90 (PASI90) response. Patients treated with SLK also demonstrated clinically meaningful improvements in patient-reported and physical outcomes. Mean change from baseline in Health Assessment Questionnaire Disability Index (HAQ-DI) was -0.427, while improvements were observed in SF-36 Physical Component Summary (PCS) with a score of 6.54. Consistent with the unblinding protocol defined with the FDA, topline disclosure at week 16 included absolute response levels and endpoint outcomes for the SLK 60 mg with induction arm. Comparative analyses versus placebo and detailed treatment arm data remain blinded until completion of the trial. We expect to complete enrollment for the IZAR-2 trial (M1095-PSA-302) in the third quarter of 2026. In addition, we expect results of the P-OLARIS trial (M1095-snSpA-202) to become available at the end of 2026 or early 2027. PPP Trials We expect to commence enrollment for the Phase 3 NOVA trial (M1095-PPP-301) in the second half of 2026. Financial Summary We do not have any product candidates approved for commercial sale, and we have not generated any revenue from product sales. Our ability to generate revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of SLK in one or more indications. We expect to continue to incur substantial expenses and operating losses for at least the next two years as we continue the development of SLK and prepare for commercial launches. We expect that operating losses will fluctuate notably from year to year depending on the timing of our planned clinical development programs, efforts to achieve regulatory approval, and planned marketing and sales expenditures to support a commercial launch. As of June 30, 2026, we had $537.0 million of cash, cash equivalents, and short-term marketable securities. Based on our current operating plan, we believe that we have sufficient capital to fund our operations and capital expenditures to mid-2028. Financial Operations Overview Revenue To date, we have not generated any revenue from product sales. If our development efforts for SLK are successful and result in regulatory approval or new license agreements with third parties, we may generate revenue in the future from product sales or milestone payments. However, there can be no assurance as to when we will generate such revenue, if at all. Operating Expenses Research and Development Expenses 27 Research and development expenses consist primarily of costs incurred for our research activities, including third-party license fees and efforts relating to the development of SLK. We expense research and development costs as incurred, which include: •employee-related expenses, including salaries, bonuses, benefits, share-based compensation, and other related costs for those employees involved in research and development efforts; •external research and development expenses incurred under agreements with contract research organizations as well as consultants that conduct our research program and development services; •costs incurred under collaboration agreements; •costs related to manufacturing material for our research program, clinical studies, and pre-launch inventory; •costs related to compliance with regulatory requirements; and •facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, utilities, and insurance. We estimate research and clinical trial expenses based on the services performed pursuant to contracts with research institutions, contract research organizations, and contract manufacturing organizations that conduct and manage research studies and clinical trials on our behalf based on actual time and expenses incurred by them or probable achievement of milestone events that are associated with contractually agreed milestone payments. We account for advance payments for goods and services that will be used in future research and development activities as expenses when the services have been performed or when the goods have been received rather than when the payment is made. We do not allocate employee costs, facilities costs, including depreciation, or other indirect costs to specific programs because these costs are deployed across multiple programs and, as such, are not separately classified. We use internal resources primarily for managing our research program, clinical development, and manufacturing activities. We expect to incur considerable research and development expenses for the foreseeable future as we continue the development and manufacturing partnerships for SLK, conduct research activities and potentially expand our pipeline by pursuing additional indications for SLK or including new product candidates in our portfolio. We cannot determine with certainty the timing of initiation, the duration, or the completion costs of current or future research studies and clinical trials of SLK due to the inherently unpredictable nature of research activities and clinical development. Clinical development timelines, the probability of success and the development costs can differ materially from expectations. We anticipate that we will make determinations as to which indications to pursue and how much funding to direct to each indication on an ongoing basis in response to the results of ongoing and future research studies and clinical trials, regulatory developments, and our ongoing assessments as to each indication’s commercial potential. Any changes in the outcome of any of these variables with respect to the development of SLK could mean a notable change in the costs and timing associated with its development. We may never succeed in achieving regulatory approval for SLK. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials or focus on other product candidates. For example, if the FDA, the EMA, or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect or if we experience delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time on the completion of SLK’s clinical development. General and Administrative Expenses General and administrative expense (“G&A”) consists primarily of employee related costs, including salaries, bonuses, benefits, share-based compensation and other related costs for our executive and administrative functions. G&A expense also includes professional services, including legal, accounting and audit services, and other consulting fees, as well as facility costs not otherwise included in research and development expenses, insurance and other general administrative expenses. 28 Based on our strategy, there are a number of factors that we expect will impact the level of research and development expenses, G&A expenses, and capital expenditures incurred by the business. These factors include: •Completing the development of SLK in our current focus indications, HS, PsA, axSpA and PPP — We expect to incur considerable research and development expenses and G&A expenses as we: (i) conduct clinical trials for SLK including the ongoing Phase 3 clinical trials in PsA and adolescent HS, the ongoing Phase 2 clinical trial in PsA, potential future Phase 3 clinical trials in PPP and axSpA, the ongoing open-label extension trials in HS, and potential future clinical trials of SLK in other indications; (ii) attract, hire and retain additional clinical, scientific, quality control, and administrative personnel; and (iii) add clinical, operational, financial and management information systems and personnel. •Strengthening the differentiation elements for future SLK patients — In parallel with our clinical trials, we expect to incur additional research expenditures as we conduct non-clinical research to continue refining our understanding of SLK/Nanobody biology and the potential impact in our selected and other therapeutic indications. •Preparing for commercialization of SLK — We have started preparing the BLA to seek approval of SLK in the United States in HS and adolescent HS. We expect to incur significant research and development and G&A expenses in this process, as we make milestone and commercial payments under the In-License Agreement, dated April 29, 2021, by and between MoonLake AG and MHKDG (the “In-License Agreement”) (based on regulatory filing acceptances, first commercial sales, and aggregate annual net sales) and as we establish a sales, marketing and distribution infrastructure to commercialize SLK including further establishing a presence in the United States. We expect to submit the BLA at the end of the third quarter of 2026 and, subject to FDA approval, we expect a commercial launch in the United States in the second half of 2027. •Building our manufacturing capabilities — We do not own or operate manufacturing facilities, and currently have no plans to establish any. We partner with third-party CMOs for both drug substance and finished drug product. We obtain our supplies from these manufacturers based on purchase orders. Therefore, we expect to incur research and development costs for the purchase of our supplies on an as needed basis to conduct our clinical trials. We have executed technology transfers for drug substance and drug product to commercial scale CMOs, and we have successfully manufactured Process Performance Qualification batches, but we may pursue additional technology transfers and process improvements. This is designed to allow us to scale up while SLK is in clinical development and advance potential commercial requirements. The improvement of our manufacturing capabilities will be important in driving efficiency, maintaining high standards of quality control, and ensuring that investigators, physicians, and patients have adequate access to our product candidates, if approved. We began stock-piling drug substance as pre-launch inventory during the third quarter of 2025 and expect to continue doing so throughout the rest of 2026. •Deepening our intellectual property portfolio to support our Nanobody technology and product candidates — We expect to continue to incur additional research and development expenditures as we continue extending our global intellectual property portfolio consisting of patents and patent applications, trade secrets, trademarks, and know-how to protect the product candidates developed from our Nanobody technology. We plan to expand our intellectual property portfolio as we continue to advance and develop existing product candidates. •Broadening our portfolio — We believe that there are other indications beyond HS, PsA, axSpA and PPP where SLK has the potential to represent a differentiated therapeutic alternative and we may initiate clinical trials of SLK in such other indications. In addition, to further enhance our overall potential and provide increased optionality, we may supplement our current strategy with the in-licensing or acquisition of additional product candidates for clinical development (beyond SLK), rather than discovering such candidates ourselves, which would lead to additional research and development expenses, G&A expenses, and capital expenditures. •Granting share-based compensation awards and vesting of existing plans — We expect to continue to grant awards to selected employees, directors and non-employees pursuant to the Amended and Restated 2022 Equity Incentive Plan (the “Equity Incentive Plan”). Further, we expect to continue to incur share-based compensation charges in connection with this plan. 29 We also expect to incur additional IT, legal, accounting, leasing, and other expenses as we continue to grow 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 and commercialization activities. We expect our existing cash and cash equivalents to be sufficient to advance the development of SLK in multiple indications, including the completion of all ongoing clinical trials and our planned Phase 3 clinical trial of SLK in PPP, to submit a BLA for SLK, and to support a first commercial launch of SLK in the United States, if approved. Clinical development involves a lengthy and expensive process with uncertain outcomes and is subject to risks described in Item 1A. Risk Factors, in our Annual Report, including that our non-clinical studies or clinical trials may not be conducted as planned or completed on schedule and may not satisfy the requirements of the FDA, EMA, or other comparable foreign regulatory authorities. If we are required to conduct additional preclinical studies or clinical trials of SLK beyond those that we currently contemplate, if we are delayed or unable to successfully complete clinical trials of SLK or other testing, or if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may require additional funding. Moreover, we may require additional capital to commercialize SLK and to discover, develop, obtain regulatory approval and commercialize any future product candidates, as applicable. We expect to finance future cash needs through public or private equity, additional debt, or product collaborations. Additional capital may not be available in sufficient amounts or on reasonable terms, if at all. The current market environment for small biotechnology companies, like us, and broader macroeconomic factors may preclude us from successfully raising additional capital. If we do not raise additional capital, we may not be able to expand our operations or otherwise capitalize on our business opportunities, our business and financial condition will be negatively impacted and we may need to: significantly delay, scale back or discontinue research and discovery efforts and the development or commercialization of SLK or any other product candidates or cease operations altogether; seek strategic alliances for research and development programs when we otherwise would not, or at an earlier stage than we would otherwise desire or on terms less favorable than might otherwise be available; or relinquish, or license on unfavorable terms, our rights to technologies or SLK or any other product candidates that we otherwise would seek to develop or commercialize ourselves. Foreign Currency Our functional currency is the United States dollar. Balances and transactions denominated in foreign currencies are converted as follows: monetary assets and liabilities are translated using exchange rates in effect at the balance sheet dates and non-monetary assets and liabilities are translated at historical exchange rates. Income and expenses are translated at the daily exchange rate on the respective transaction date. Gains or losses from foreign currency translations are included in the condensed consolidated statements of operations and comprehensive loss in “Other income, net”. We recognized a net foreign currency transaction loss of $294 thousand for the three months ended June 30, 2026, a net foreign currency transaction loss of $238 thousand for the six months ended June 30, 2026, and a foreign currency transaction gain of $378 thousand and $343 thousand for the three and six months ended June 30, 2025, respectively. 30 Results of Operations Comparison of the three months ended June 30, 2026 and 2025 (in thousands, except percentages) Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 Change Change % Operating expenses Research and development $ (50,221) $ (49,762) $ (459) 0.9 % General and administrative (11,439) (10,936) (503) 4.6 % Total operating expenses (61,660) (60,698) (962) 1.6 % Operating loss (61,660) (60,698) (962) 1.6 % Interest expense (2,632) (2,037) (595) 29.2 % Other income, net 2,577 6,779 (4,201) (62.0) % Loss before income tax (61,715) (55,956) (5,758) 10.3 % Income tax expense (90) (95) 4 (5.3) % Net loss (61,805) (56,051) (5,754) 10.3 % Net unrealized gain (loss) on marketable securities and short-term investments 16 (1,908) 1,924 (100.8) % Actuarial gain on employee benefit plans 292 13 279 2,146.2 % Other comprehensive income (loss) 308 (1,895) 2,203 (116.3) % Comprehensive loss $ (61,497) $ (57,946) $ (3,551) 6.1 % Research and Development Research and development expenses were $50.2 million for the three months ended June 30, 2026, compared to $49.8 million for the three months ended June 30, 2025. The increase of $0.5 million, or 0.9%, is primarily related to an increase of $3.7 million in expenses pertaining to clinical development trials with CROs, including the Phase 3 IZAR program in PsA and startup activities for the Phase 3 NOVA program in PPP, and an increase of $0.5 million in other research and development fees. The increase was partially offset by a decrease of $3.3 million in manufacturing, supply and logistics expenses through CMOs, primarily reflecting the net impact of lower clinical supply costs following the completion of certain clinical programs. The remaining offsetting decrease was driven by a decrease of $0.8 million in advisory and consulting expenses. General and Administrative General and administrative expenses were $11.4 million for the three months ended June 30, 2026, compared to $10.9 million for the three months ended June 30, 2025. The increase of $0.5 million, or 4.6%, is primarily related to an increase of $1.1 million in marketing and communications expenses related to pre-commercial activities. The increase was partially offset by a decrease of $0.9 million in other general and administrative expenses. 31 Interest Expense Interest expense was $2.6 million for the three months ended June 30, 2026, compared to $2.0 million for the three months ended June 30, 2025. The increase of $0.6 million, or 29.2%, is related to additional recognized interest on the First Amended Loan and Security Agreement (as defined below) and drawdown of a second debt tranche earlier in 2026. Other Income, Net Other income, net was $2.6 million for the three months ended June 30, 2026, compared to $6.8 million for the three months ended June 30, 2025. The decrease of $4.2 million, or (62.0)%, is primarily related to a decrease of $3.6 million in realized interest on cash held in bank and cash investments in short-term marketable debt securities and a decrease of $0.9 million in net realized currency gains. Other Comprehensive Income (Loss) Other comprehensive income was $0.3 million for the three months ended June 30, 2026, compared to other comprehensive loss of $1.9 million for the three months ended June 30, 2025. The decrease in other comprehensive loss of $2.2 million, or (116.3)%, is primarily related to the unrealized gains from investments in short-term marketable debt securities recorded in accumulated other comprehensive income during the three months ended June 30, 2026. 32 Comparison of the six months ended June 30, 2026 and 2025 (in thousands, except percentages) Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Change Change % Operating expenses Research and development $ (104,736) $ (86,221) $ (18,515) 21.5 % General and administrative (26,949) (21,962) (4,987) 22.7 % Total operating expenses (131,685) (108,183) (23,502) 21.7 % Operating loss (131,685) (108,183) (23,502) 21.7 % Interest expense (4,901) (2,056) (2,845) 138.4 % Other income, net 5,786 13,876 (8,091) (58.3) % Loss before income tax (130,800) (96,363) (34,437) 35.7 % Income tax expense (713) (248) (465) 187.5 % Net loss (131,513) (96,611) (34,902) 36.1 % Net unrealized gain (loss) on marketable securities and short-term investments 94 (4,664) 4,758 (102.0) % Actuarial gain (loss) on employee benefit plans (68) 108 (175) (163.0) % Other comprehensive income (loss) 26 (4,556) 4,582 (100.6) % Comprehensive loss $ (131,487) $ (101,167) $ (30,320) 30.0 % Research and Development Research and development expenses were $104.7 million for the six months ended June 30, 2026, compared to $86.2 million for the six months ended June 30, 2025. The increase of $18.5 million, or 21.5%, is primarily related to an increase of $8.2 million in expenses pertaining to clinical development trials with CROs, driven by higher costs from the Phase 3 IZAR program in PsA, partially offset by lower costs from the Phase 3 VELA program in HS, an increase of $7.0 million in share-based compensation and personnel-related costs to support research and development efforts, of which $6.3 million is a result of accelerated expense recognition due to a voluntary cancellation of unvested awards, and an increase of $3.2 million in manufacturing, supply and logistics expenses through CMOs, which is primarily related to the production of stockpiled pre-launch inventory. The increase was partially offset by a decrease of $0.6 million in consulting expenses. General and Administrative General and administrative expenses were $26.9 million for the six months ended June 30, 2026, compared to $22.0 million for the six months ended June 30, 2025. The increase of $5.0 million, or 22.7%, is primarily related to an increase of $6.1 million in share-based compensation and personnel-related costs, of which $4.8 million is a result of accelerated expense recognition due to a voluntary cancellation of unvested awards, and an increase of $1.3 million in 33 marketing and communications expenses related to pre-commercial activities. The increase was partially offset by a decrease of $2.5 million in legal and advisory expenses. Interest Expense Interest expense was $4.9 million for the six months ended June 30, 2026, compared to $2.1 million for the six months ended June 30, 2025. The increase of $2.8 million, or 138.4%, is related to additional recognized interest on the First Amended Loan and Security Agreement and drawdown of a second debt tranche earlier in 2026. Other Income, Net Other income, net was $5.8 million for the six months ended June 30, 2026, compared to $13.9 million for the six months ended June 30, 2025. The decrease of $8.1 million, or (58.3)%, is primarily related to a decrease of $7.9 million in realized interest on cash held in bank and cash investments in short-term marketable debt securities and a decrease of $0.9 million in net realized currency gains. Other Comprehensive Income (Loss) Other comprehensive income was $26 thousand for the six months ended June 30, 2026, compared to other comprehensive loss of $4.6 million for the six months ended June 30, 2025. The decrease in other comprehensive loss of $4.6 million, or (100.6)%, is primarily related to the unrealized gains from investments in short-term marketable debt securities recorded in accumulated other comprehensive income during the six months ended June 30, 2026. Liquidity and Capital Resources We have no products approved for commercial sale, have not generated any revenue from product sales, and cannot guarantee when or if we will generate any revenue from product sales. We expect our expenses and capital requirements to remain consistent with our current spending levels as we continue to: •contract with third parties, including CROs and CMOs, to support the clinical trials of SLK, including trials in HS, PsA, adolescent HS, PPP and axSpA, and to produce pre-launch inventory; •conduct other research and development activities related to SLK; •prepare for regulatory filing and commercialization of SLK; •attract, hire and retain additional management, scientific and administrative personnel; •maintain, protect and expand our intellectual property portfolio, including patents, trade secrets and know how; •implement operational, financial and management information systems; and •operate as a public company. For the six months ended June 30, 2026, we incurred a loss of $131.5 million, which includes non-cash items such as share-based compensation expense of $15.9 million, and cash outflow from operations of $121.8 million. As of June 30, 2026, we had a total of $537.0 million in cash, cash equivalents and short-term marketable securities. Based on our current operating plan, we believe our available cash, cash equivalents, and short-term marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements to mid-2028. We expect to incur notable expenses and operating losses for at least the next two years, assuming we continue the clinical development of, and seek regulatory approval for, SLK, and as we invest in its commercial launch. It is expected that operating losses will fluctuate significantly from year-to-year due to the timing of clinical development programs, efforts to achieve regulatory approval, and sales and marketing efforts. We may require additional funding to bring our product candidate to market and support our continuing operations. In addition, with a change in the presidential administration in 2025, there has been an economic policy shift towards increasing tariffs, which in turn has led and could lead to further retaliatory tariffs. These may have the potential to impact expenses as well as our ability to, 34 if ever, generate revenue or maintain profitability. Until such time that we can generate significant revenue from product sales or other sources, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, which may include income from collaborations, strategic partnerships, or marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. If we are unable to acquire additional capital or resources, we will be required to modify our operational plans to fund our operating expense requirements. Refer to “Risk Factors — Risks Related to Our Limited Operating History, Business, Financial Condition, and Results of Operations” in Item 1A. of our Annual Report for further details related to the risk of raising additional capital to fund our operations. Term Loan Facility In March 2025, we entered into a loan and security agreement (the “Original Loan and Security Agreement”) with Hercules Capital, Inc. (“Hercules”) and certain of its affiliates (collectively with Hercules, the “Lenders”) for an aggregate principal amount of $500.0 million, of which $300.0 million was fully committed subject to achievement of milestones (the “Original Credit Facility”). An initial tranche of $75.0 million (the “Tranche 1 Loan”) was funded under the Loan and Security Agreement on March 31, 2025 (the “Closing Date”). On February 20, 2026 (the “Amendment Closing Date”), we executed the First Amendment to the Loan and Security Agreement (the “First Amended Loan and Security Agreement” and, together with the Original Loan and Security Agreement, the “Loan and Security Agreement”) with, among others, Hercules, as administrative and collateral agent for the Lenders, which amended the Original Loan and Security Agreement. The Loan and Security Agreement provides for six non-dilutive senior secured term loan facilities in the aggregate principal amount of $500.0 million (the “Amended Credit Facility” and, together with the Original Credit Facility, the “Credit Facility”). A second tranche (the “Tranche 2 Loan”) in an aggregate principal amount of $25.0 million was fully funded on the Amendment Closing Date. In addition to the Tranche 1 Loan and Tranche 2 Loan, the Credit Facility provides for additional tranches as follows: a.Subject to our announcement that the IZAR-1 and IZAR-2 Phase 3 studies of SLK in patients with active psoriatic arthritis each achieved their protocol-specified primary endpoint and that the efficacy and safety data available together support the planned commercialization strategy and outlook of our Company (the “Tranche 3 Milestone”), a third tranche with additional term loans in an aggregate principal amount of up to $50.0 million, available on the Tranche 3 Milestone achievement date through the earlier of (i) 60 days following such date and (ii) March 15, 2027, b.Subject to our announcement that the VELA-1 and VELA-2 Phase 3 studies of SLK in adult patients with moderate to severe hidradenitis suppurativa each demonstrated clinically meaningful improvements across the 52-week endpoints with SLK having demonstrated an acceptable safety profile, which together support (x) the planned commercialization strategy and outlook of our Company and (y) the filing of the BLA for SLK with the FDA (together, the “Tranche 4 HS Milestone”), and immediately prior to the advance of a fourth tranche, we have closed the previous 10 consecutive trading days with a market capitalization of at least $1,500.0 million; provided that, the first trading day tested cannot be prior to the public announcement of the Tranche 4 HS Milestone (collectively with the Tranche 4 HS Milestone, the “Amended Tranche 4 Milestone”), this fourth tranche with additional term loans in an aggregate principal amount of up to $50.0 million, available on the Amended Tranche 4 Milestone achievement date through the earlier of (i) 60 days following the achievement of the Tranche 4 HS Milestone and (ii) December 15, 2026, c.Subject to our achievement of the Tranche 4 HS Milestone and the FDA’s approval of our submission of a BLA for SLK (the “Approval Milestone”) (collectively, the “Tranche 5 Milestone”), a fifth tranche with additional term loans in an aggregate principal amount of up to $100.0 million, available on the Tranche 5 Milestone achievement date through the earlier of (i) 60 days following such date and (ii) December 15, 2027, and d.Subject to approval by the Lenders’ in their discretion, a sixth tranche of additional term loans in an aggregate principal amount of up to $200.0 million. 35 In June 2026, we achieved the Tranche 4 HS Milestone. For each trading day since July 3, 2026, we have closed the previous 10 consecutive trading days following the achievement of the Tranche 4 HS Milestone with a market capitalization of at least $1,500.0 million. Therefore, we have achieved the Amended Tranche 4 Milestone and a fourth tranche with additional term loans is available to us until August 20, 2026 (provided that we maintain the Amended Tranche 4 Milestone market capitalization limit for 10 consecutive trading days prior to funding). The Amended Credit Facility matures on April 1, 2030 (the “Maturity Date”) and bears interest at an annual rate equal to the greater of (i) prime rate as reported in The Wall Street Journal plus 1.45% and (ii) 8.45% with the initial interest rate equal to 8.95%. As of June 30, 2026, the Amended Credit Facility bears interest at 8.45%. This rate is subject to a 0.25% reduction upon achievement of the Approval Milestone. Certain additional commitment and undrawn amount fees are also payable in connection with the Amended Credit Facility. The Amended Credit Facility does not provide for scheduled amortization payments during the term. All principal will be due on the Maturity Date. We may, at our option at any time, prepay all loans under the Amended Credit Facility by paying the principal balance, plus accrued and unpaid interest, subject to (i) a prepayment premium equal to a range of 0.0% to 2.0% and (ii) an end of term charge equal to a range of 4.25% to 6.95%, each based on when the prepayment occurs. If the Amended Credit Facility is repaid in full as a result of a change of our control, the prepayment premium shall be waived. The First Amended Loan and Security Agreement allows for us to satisfy a portion of the cash interest payments by capitalizing such interest payments as payment-in-kind (“PIK”). No PIK interest relating to the term loans has been recorded and included in the condensed consolidated balance sheets as of June 30, 2026. The First Amended Loan and Security Agreement contains customary covenants, such as financial covenants and certain events of default after which loans under the Amended Credit Facility may be due and payable immediately. We were in compliance with all covenants as of June 30, 2026. All obligations under the First Amended Loan and Security Agreement are secured on a first-priority basis, subject to certain exceptions, by security interests in substantially all of our assets and our material subsidiaries, including our intellectual property, and are guaranteed by our material subsidiaries, including foreign subsidiaries, subject to certain exceptions. We are permitted to use the proceeds of the Amended Credit Facility for working capital and general corporate purposes of us and our subsidiaries. Equity Offerings At-the-Market Offerings On August 31, 2023, we entered into a Sales Agreement with Leerink Partners (the “Sales Agreement”) through which we could issue and sell up to $350.0 million of our Class A Ordinary Shares (the “ATM Shares”), through Leerink Partners as our sales agent. The ATM Shares to be sold under the Sales Agreement are issued and sold pursuant to our shelf registration statement on Form S-3 (File No. 333-274286), which was declared effective by the SEC on September 11, 2023, and a prospectus supplement thereto filed with the SEC on August 31, 2023. As of June 30, 2026, there was $213.8 million remaining for future sales under the Sales Agreement. 36 During the three months ended June 30, 2026, we sold 2,427,619 Class A Ordinary Shares under the Sales Agreement at a weighted average share price of $18.55, for aggregate net proceeds of approximately $44.3 million, after deducting sales agent's commissions and transaction costs. For the three months ended June 30, 2025, there were no sales under the Sales Agreement. November 2025 Public Offering of Class A Ordinary Shares On November 5, 2025, we entered into an underwriting agreement with Leerink Partners as the underwriter, to issue and sell 7,142,857 Class A Ordinary Shares at a public offering price of $10.50 per share (the “2025 Offering”). The 2025 Offering closed on November 6, 2025, and net proceeds were $72.4 million, after deducting the underwriting discounts, commissions, and offering expenses in the amount of $2.6 million. June 2026 Public Offering of Class A Ordinary Shares, Pre-Funded Warrants and Over-Allotment Option On June 23, 2026, we entered into an underwriting agreement with Leerink Partners, as representative of the underwriters, to issue and sell 9,000,000 Class A Ordinary Shares at a public offering price of $20.00 per share (“2026 Offering Price”), and, in lieu of Class A Ordinary Shares to certain investors, pre-funded warrants (“Pre-Funded Warrants”) to purchase up to 1,000,000 Class A Ordinary Shares at a public offering price of $19.9999 per Pre-Funded Warrant (the “2026 Offering”). The 2026 Offering closed on June 25, 2026, and net proceeds were $189.8 million, after deducting underwriting discounts, commissions, and offering expenses in the amount of $10.2 million. The Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately and do not expire. Holders of the Pre-Funded Warrants will not be entitled to exercise any portion of any Pre-Funded Warrant which, upon giving effect to such exercise, would cause the aggregate number of Class A Ordinary Shares beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the number of Class A Ordinary Shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrants. Such percentage may be increased or decreased by the holder of the Pre-Funded Warrants to any other percentage not in excess of 19.99% upon at least 61 days’ prior notice from the holder to us. In connection with the 2026 Offering, we also granted the underwriters a 30-day option to purchase up to 1,500,000 additional Class A Ordinary Shares at the 2026 Offering Price less underwriting discounts and commissions (“Over-Allotment Option”). As of June 30, 2026, the Over-Allotment Option had not been exercised. On July 10, 2026, the underwriters exercised in full the Over-Allotment Option in connection with our 2026 Offering. The transaction closed on July 14, 2026. The gross proceeds from the exercise of the Over-Allotment Option were $30 million, before deducting any underwriting discounts and other offering expenses. 37 Cash Flows The following table summarizes our cash flows for the periods indicated. (in thousands) Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Change Change % Net cash used in operating activities $ (121,844) $ (92,670) $ (29,174) 31.5 % Net cash provided by investing activities 420 144,500 (144,080) (99.7) % Net cash provided by financing activities 265,266 73,122 192,144 262.8 % Effect of movements in exchange rates on cash held (454) 1,303 (1,757) (134.8) % Net increase in cash and cash equivalents $ 143,388 $ 126,255 $ 17,133 13.6 % Cash Flows from Operating Activities We did not generate any cash inflows from our operating activities. Our cash flows from operating activities are significantly influenced by our use of cash for operating expenses and working capital requirements, and we have historically experienced negative cash flows from operating activities as we invested in clinical research and related development. Net cash used in operating activities was $121.8 million and $92.7 million for the six months ended June 30, 2026 and 2025, respectively. The increase of net cash used in operating activities of $29.2 million was primarily driven by the increase in net loss of $34.9 million adjusted for non-cash items of $12.6 million. The remaining change of $6.9 million was related to the timing of receipts and payments in the ordinary course of business. Cash Flows from Investing Activities During the six months ended June 30, 2026, net cash provided by investing activities was $0.4 million, consisting predominantly of $118.2 million in proceeds received from maturities of short-term marketable debt securities with original maturities longer than three months, largely offset by $117.8 million related to the purchase of short-term marketable debt securities. During the six months ended June 30, 2025, net cash provided by investing activities was $144.5 million, consisting predominantly of $350.7 million in proceeds received from maturities of short-term marketable debt securities with original maturities longer than three months, partially offset by $206.2 million related to the purchase of short-term marketable debt securities. Cash Flows from Financing Activities During the six months ended June 30, 2026, net cash provided by financing activities was $265.3 million consisting primarily of $189.8 million in net proceeds from the shares sold under the 2026 Offering, $50.3 million in net proceeds from the shares sold under the Sales Agreement, $24.5 million in net proceeds from the First Amended Loan and Security Agreement and drawdown of a second debt tranche and $0.7 million in net proceeds from the options exercised under the Equity Incentive Plan. During the six months ended June 30, 2025, net cash provided by financing activities was $73.1 million consisting primarily of $73.0 million in net proceeds from the Original Loan and Security Agreement. 38 Contractual Obligations and Commitments The following summarizes our significant contractual obligations and other obligations as of June 30, 2026, which we generally expect to satisfy with cash on hand and the maturity of short-term marketable debt securities: (in thousands) Total Less than 1 year 1 to 5 Years More than 5 years Purchase obligations(1) $ 172,126 $ 116,612 $ 55,514 $ — Lease commitments(2) 2,150 1,334 816 — Long-term debt obligations(3) 139,107 7,863 131,244 — Total contractual obligations $ 313,383 $ 125,809 $ 187,574 $ — ____________ (1) Purchase obligations refer to an agreement to purchase goods or services that is enforceable and legally binding on the Company that specifies all significant terms. The figures presented primarily relate to contractual commitments towards contract manufacturing and contract research organizations. (2) We have committed ourselves to six leases, with terms that commenced on November 1, 2021, October 9, 2023, October 13, 2023, January 15, 2024, September 8, 2024 and June 1, 2026. These future lease commitments relate to the office leases for our headquarters in Zug, Switzerland, Cambridge, United Kingdom, Porto, Portugal, and New Jersey, United States and reflect minimum payments due. (3) We have committed ourselves to a long-term debt obligation, with a term that commenced on March 31, 2025. This debt obligation relates to the First Amended Loan and Security Agreement and reflects the expected payments due, including principal repayment, interest payments, and an end of loan term charge. Critical Accounting Policies and Estimates A summary of our critical accounting policies and estimates is presented in Part II, Item 7 of our Annual Report. There were no material changes to our critical accounting estimates during the six months ended June 30, 2026. Recently Issued Accounting Pronouncements Refer to Note 2 — Basis of Presentation and Significant Accounting Policies to the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent it has been made, of their potential impact on our financial condition and our results of operations and cash flows.