Shattuck Labs Inc.
08/11/2026 | Press release | Distributed by Public on 08/11/2026 04:58
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
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 appearing in this Quarterly Report on Form 10-Q, as well as the audited financial statements, notes and 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. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties, including but not limited to, statements of our plans, objectives, expectations and intentions. Our actual results or outcomes, and the timing of our results or outcomes, could differ materially from those discussed in these forward-looking statements. Risks, uncertainties and other factors that could cause or contribute to such differences include, but are not limited to, those discussed in the "Risk Factors" section of this Quarterly Report on Form 10-Q, in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2025 and in our other filings with the SEC. You should carefully read the "Cautionary Note About Forward-Looking Statements" of this Quarterly Report on Form 10-Q and the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2025 to gain an understanding of the important factors that could cause actual results or outcomes, and the timing of results or outcomes, to differ materially from the results or outcomes described below.
Overview
We are a clinical-stage biotechnology company pioneering the development of potentially first-in-class monoclonal and bispecific Death Receptor 3 ("DR3") blocking antibodies for the treatment of patients with inflammatory and immune-mediated diseases. Our expertise in protein engineering and the development of novel tumor necrosis factor ("TNF") receptor therapeutics come together in our lead program, SL-325, a potentially first-in-class DR3 blocking antibody designed to achieve a more complete blockade of the clinically validated DR3/TL1A pathway than TL1A blocking antibodies.
SL-325: Our Lead DR3 Blocking Antibody
SL-325 is a high-affinity DR3 blocking monoclonal antibody. DR3 is the sole known receptor for tumor necrosis factor like ligand 1A ("TL1A"). In our head-to-head preclinical studies, SL-325 blocked TL1A binding to DR3 better than sequence equivalents of leading TL1A blocking antibodies. We believe that the underlying biological differences in the expression of DR3 and TL1A, and the design characteristics of SL-325, may allow SL-325 to achieve best-in-mechanism clinical remission rates in patients with inflammatory bowel disease ("IBD") due to a more complete and durable blockade of the clinically validated DR3/TL1A pathway, and a potentially best-in-mechanism immunogenicity profile.
We have completed a single ascending dose ("SAD") and multiple ascending dose ("MAD") Phase 1 clinical trial evaluating SL-325 in healthy volunteers. The Phase 1 trial was a first-in-human, randomized, placebo-controlled trial evaluating the safety, tolerability, pharmacokinetics ("PK"), receptor occupancy ("RO"), pharmacodynamics ("PD"), and immunogenicity of SL-325 in healthy volunteers. The study enrolled 72 participants, across six SAD cohorts, with doses ranging from 0.1 mg/kg to 30.0 mg/kg, and three MAD cohorts, with doses ranging from 1 mg/kg to 10 mg/kg.
In June 2026, we shared the following data from our Phase 1 trial of SL-325. SL-325 was well-tolerated by all participants in the trial, with only mild (Grade 1) treatment-related adverse events observed in 12 participants. The favorable safety and tolerability profile is consistent with that of the TL1A class. In addition, no evidence of DR3 agonism was observed, confirming that SL-325 is a pure DR3 blocking antibody.
The PK profile for SL-325 demonstrated dose-proportional increases in Cmax and AUC across all dose levels, with an estimated half-life of approximately 16 days. Accumulation of SL-325 was observed with repeated dosing, at a ratio of 1.64-1.75. Complete inhibition of TL1A binding to DR3 was observed at all dose levels, including the lowest dose of 0.1 mg/kg. The durability of RO exceeded 1 month at all dose levels, and exceeded 76 days (the longest timepoint measured) at doses of 1 mg/kg or greater. Using our Phase 1 PK data, our PK and QSP modeling predicts that complete RO will be maintained for 90 days or longer at doses of 1 mg/kg or greater, which may enable quarterly maintenance dosing of SL-325 in patients with IBD.
Treatment emergent anti-drug antibodies ("ADA") were detected in 3.7% (2/54) of study participants, and ADA titers remained low in these individuals (maximum titers of 8 and 16). The validated ADA assay has a sensitivity of 5.0 ng/ml and drug tolerance of up to SL-325 concentrations of 160 µg/ml in the serum. Serum samples were tested over a time-course, to ensure that SL-325 concentrations were within the dynamic range of the assay for all study participants, and each participant has had at least three valid negative ADA assay results, including after the last dose. Collectively, these data position SL-325 as a potentially best-in-mechanism inhibitor of the TL1A/DR3 axis due to a superior immunogenicity profile. For reference, anti-TL1A antibodies (afimkibart, tulisokibart, SPY-002, and XmAb942) reported treatment emergent ADA in between 48-82% of study participants in similar Phase 1 healthy volunteer studies.
In addition, a high-concentration formulation of SL-325 has been developed, and the Phase 1 data indicate the potential feasibility of administering quarterly doses of SL-325 which maintain complete receptor occupancy in volumes compatible with a self-administered subcutaneous autoinjector pen device.
We expect to initiate RECEPTIVE-CD1, an international, randomized, placebo-controlled, double-blinded Phase 2b clinical trial evaluating SL-325 in patients with Crohn's Disease ("CD") in the third quarter of 2026. In this study, approximately 232 patients with moderately-to-severely active Crohn's disease (CDAI score between 220-450) will be randomized 1:1:1:1 to receive high-dose SL-325, middle-dose SL-325, low-dose SL-325 or placebo. The induction phase of treatment is expected to be 12 weeks, followed by a 38-week maintenance period, and patients will also be eligible for a long-term extension study thereafter using a treat-through design. Patients who are randomized to the placebo arm during induction will be eligible to switch to high-dose SL-325 after the 12-week induction period. The primary endpoint of the study is endoscopic response at 12 weeks, and the key secondary endpoint is clinical remission. Data from the induction portion of the trial are expected in the first half of 2028.
We believe that SL-325 could demonstrate superior efficacy to TL1A blocking antibodies in the RECEPTIVE-CD1 study as a result of two key advantages. First, TL1A blocking antibodies reported anti-drug antibody formation in 48-82% of subjects in similarly designed Phase 1 clinical trials where SL-325 had an ADA rate of 3.7%. In subsequent Phase 2 clinical trials, the leading TL1A blocking antibodies (tulisokibart, duvakitug and afimkibart) all demonstrated potentially best-in-disease clinical remission rates at the time of induction, however the absolute number of patients in clinical remission did not increase between induction and maintenance. We believe that this limitation is due to the underlying immunogenicity of anti-TL1A antibodies, leading to accelerated drug clearance and secondary non-response over time. Because SL-325 has a superior immunogenicity profile, we believe that improved remission rates could be observed both at the induction and maintenance time points relative to the TL1A class.
Second, DR3 is a more stably expressed target than TL1A. The complete and durable inhibition of TL1A binding observed in our Phase 1 study, at low doses of SL-325 is distinct from what has been reported for TL1A blocking antibodies. Instead, TL1A blocking antibodies lead to multi-log increases in the serum concentration of total TL1A, which may contribute to persistent signaling and incomplete suppression of DR3 activation, particularly in tissues. The RECEPTIVE-CD1 study may provide evidence that, in addition to an immunogenicity advantage, SL-325 could provide enhanced efficacy relative to TL1A blocking antibodies as a result of more complete suppression of DR3 activation.
We also plan to evaluate SL-325 in other inflammatory and immune-mediated diseases where the DR3/TL1A axis is implicated.
SL-846: Our Dual DR3 and IL-23 Receptor Blocking Bispecific Antibody
SL-846 is our lead bispecific product candidate and is designed to simultaneously bind to DR3 and to IL-23 receptors, blocking the interaction with TL1A and IL-23, respectively, while avoiding the risk of immune complex formation and resulting ADA challenges of the TL1A-based bispecifics.
SL-846 is an Fc-silenced, half-life extended, IgG1 bispecific antibody. Preclinical data demonstrated that SL-846 was equipotent, or more potent, than sequence equivalents of risankizumab and icotrokinra controls in multiple in vitro and cell-based potency assays. A GLP acute and chronic toxicology study in cynomolgus macaques investigating the safety, PK, RO and immunogenicity profile of SL-846 is currently underway.
As seen with TL1A directed monoclonal antibodies, two third-party TL1A-directed bispecific antibodies, AMG966 and RO7837195, have also demonstrated nearly 100% ADA formation following a single dose in Phase 1 clinical trials. The mechanism of ADA formation was reported to be secondary to immune complex formation for AMG966, which we believe could also be true for RO7837195. Both of these antibodies utilized monovalent, '1x1', bispecific antibody formats, similar to other TL1A directed bispecific antibodies which are continuing in clinical development, including XmAb412 and CLD-423. The emerging clinical data from TL1A-directed bispecific antibodies is similar to the prior failure of TNFα-directed bispecific antibodies, which we believe is because both TNFα and TL1A are soluble trimeric proteins found in the blood, and cause immunogenicity secondary to immune complex formation. We expect our DR3-directed bispecific antibodies to be less immunogenic than TL1A-directed bispecifics. DR3 may thus provide a differentiated target in a bispecific antibody format, potentially providing advantages over TL1A-directed bispecific antibodies. Additionally, development of bispecific antibodies may enable more efficient clinical development than is expected for multi-antibody coformulations, and may avoid some of the challenges associated with potential immunogenicity in certain coformulations.
We expect to share additional pre-clinical data, including data from our ongoing non-human primate toxicology study for SL-846, in the second half of 2026, and to share initial Phase 1 clinical data for SL-846 in 2027.
Overview of Operations
For the six months ended June 30, 2026 and 2025, our net loss was $29.9 million and $26.2 million, respectively. We have not been profitable since inception, and as of June 30, 2026, we had an accumulated deficit of $460.4 million and $208.3 million in cash and cash equivalents and short-term investments. We expect to continue to incur significant expenses and operating losses in the near term in connection with our ongoing activities, as we:
•initiate and advance through Phase 2 clinical development for our lead product candidate, SL-325, in Crohn's disease;
•initiate Phase 2 clinical development for SL-325 in additional potential indications, if any;
•initiate nonclinical studies and clinical trials for SL-846, including our planned Phase 1 clinical trial, and any additional product candidates that we may identify in the future, including other potential DR3 based bispecific antibodies targeting DR3 together with another biologically relevant target;
•manufacture sufficient quantities of bulk drug substance and drug product to support our ongoing and planned nonclinical studies and clinical trials;
•maintain our operational, financial, and management systems;
•retain key personnel and infrastructure to support our nonclinical development, research and manufacturing, and future clinical development efforts;
•utilize our in-house process development and manufacturing capabilities;
•continue to develop, perfect, and defend our intellectual property portfolio; and
•incur additional legal, accounting, or other expenses in operating our business, including the additional costs associated with operating as a public company and expenses incurred in connection with ongoing and future litigation, if any.
We do not expect to generate significant product revenue unless and until we successfully complete development and obtain regulatory and marketing approval of, and begin to sell, one or more of our product candidates, if ever, which we expect will take several years. We expect to spend a significant amount in development and marketing costs prior to such time. We may never succeed in achieving regulatory and marketing approval for our product candidates. We may obtain unexpected results from our nonclinical studies and clinical trials. We may elect to discontinue, delay, or modify nonclinical studies and clinical trials of our product candidates. We may be adversely affected by inflationary pressures and the macroeconomic environment, which are beyond our control. A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. Accordingly, until such time as we can generate significant product revenue, if ever, we expect to continue to seek private or public equity and debt financing, and/or additional collaborations with third parties, to meet our capital
requirements. There can be no assurance that such funding may be available to us on acceptable terms, or at all, or that we will be able to commercialize our product candidates. In addition, we may not be profitable even if we commercialize any of our product candidates.
Global Economic Considerations
The global macroeconomic environment is uncertain, and could be negatively affected by, among other things, inflation, slower growth or recession, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, instability or volatility in the global capital and credit markets, supply chain weaknesses, financial institution instability, changes to fiscal and monetary policy or government budget dynamics, military conflicts, and instability in the geopolitical environment. Such challenges have caused, and may continue to cause, recession fears, high interest rates, foreign exchange volatility, and inflationary pressures. At this time, we are unable to quantify the potential effects of this economic instability on our future operations.
Components of our Results of Operations
Operating Expense
Research and Development Expenses
Our research and development expenses consist primarily of costs incurred in connection with the discovery and development of our current and potential future product candidates. These expenses include:
•expenses incurred to conduct our clinical trials, including expenses associated with clinical trials of SL-325, future planned clinical trials of SL-846, and any potential product candidates we may advance in the future;
•costs of manufacturing nonclinical study and clinical trial materials, including the costs of raw materials required for manufacturing;
•process development activities to optimize manufacturing processes, including the development and validation of Phase 3 and commercial manufacturing processes and analytical methods;
•expenses incurred to conduct our nonclinical studies;
•employee-related expenses, including salaries, benefits, and stock-based compensation;
•laboratory materials and supplies used to support our research activities;
•fees paid to third parties who assist with research and development activities;
•expenses relating to regulatory activities, including filing fees paid to regulatory agencies; and
•allocated expenses for facility-related costs.
The following table summarizes our research and development expenses by product candidate:
|
Three Months Ended June 30,
|
Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||||||||
|
SL-325(1)
|
$ | 4,107 | $ | 2,604 | $ | 8,666 | $ | 4,833 | |||||||||||||||
|
SL-846(1)
|
1,679 | - | 2,213 | - | |||||||||||||||||||
| Other pipeline compounds | 589 | 1,153 | 1,335 | 4,393 | |||||||||||||||||||
| Internal costs, including personnel related benefits, facilities and depreciation | 5,325 | 4,923 | 10,432 | 9,373 | |||||||||||||||||||
| Total research and development cost | $ | 11,700 | $ | 8,680 | $ | 22,646 | $ | 18,599 | |||||||||||||||
1 Expenses for SL-325 and SL-846 that were incurred prior to nomination as a product candidate are included in "other pipeline compounds".
Research and development activities are central to our business model. We are focused on the preclinical and clinical development of SL-325 and SL-846 and other DR3 targeted assets, including SL-425, and conducting additional research on other potential product candidates. Product candidates in earlier stages of development
generally have lower development costs than those in later stages of development. In the third quarter of 2026, we anticipate initiating a Phase 2 clinical trial for SL-325, and continuing to advance SL-846 into Phase 1 clinical development in 2027. Additionally, we may initiate Phase 2 clinical trial(s) for SL-325 in indications outside of IBD. Accordingly, we expect an increase in research and development expenses year-over-year, as we incur incremental clinical trial expenses and additional costs associated with commensurate increases in our workforce to support these efforts.
The process of conducting the necessary nonclinical and clinical research to obtain regulatory approval is costly and time consuming. The actual probability of success for our product candidates may be affected by a variety of factors including:
•the safety and efficacy of our product candidates;
•nonclinical data for our product candidates;
•investment in our pipeline;
•competition;
•manufacturing capability; and
•commercial viability.
We may never succeed in achieving regulatory approval for any of our product candidates due to the uncertainties discussed above. We are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates, if ever.
General and Administrative Expense
General and administrative expense consists primarily of personnel expenses, including salaries, benefits, and stock-based compensation expense, for employees and consultants in executive, finance, accounting, legal, information technology, business development, and human resource functions. General and administrative expense also includes corporate facility costs, including rent, utilities, depreciation, and maintenance, not otherwise included in research and development expenses, as well as legal fees related to intellectual property, corporate, and litigation matters and fees for accounting and tax services.
If any of our current or future product candidates, including SL-325, continues to advance through clinical development, or obtains regulatory approval, we expect that we would incur increased expenses associated with building the appropriate general and administrative support for our increased research and development activities, or building a sales and marketing team.
Other Income
Other income consists of interest earned on our cash, cash equivalents and short-term investments, which consists of amounts held in a money market fund and government obligations as well as investment fees and realized gains or losses on short-term investments (if any).
Income Taxes
Since our inception, we have not recorded any income tax benefits for the net operating losses ("NOLs") we have incurred or for our research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our NOLs and tax credits will not be realized. Our capital loss and tax credit carryforwards as of December 31, 2025 began to expire in 2026. We have recorded a full valuation allowance against our deferred tax assets at each balance sheet date.
Results of Operations
Comparison of the Three Months Ended June 30, 2026 and 2025
The following table sets forth our results of operations for the three months ended June 30, 2026 and 2025.
|
Three Months Ended June 30,
|
Change | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | Dollar | Percentage | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||
| Revenue | $ | - | $ | - | $ | - | - | % | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 11,700 | 8,680 | 3,020 | 34.8 | % | ||||||||||||||||||
| General and administrative | 4,455 | 4,352 | 103 | 2.4 | % | ||||||||||||||||||
| Loss from operations | (16,155) | (13,032) | (3,123) | 24.0 | % | ||||||||||||||||||
|
Other income
|
1,003 | 574 | 429 | 74.7 | % | ||||||||||||||||||
|
Net loss
|
$ | (15,152) | $ | (12,458) | $ | (2,694) | 21.6 | % | |||||||||||||||
Research and Development Expense
Research and development expenses increased by $3.0 million, or 34.8%, to $11.7 million for the three months ended June 30, 2026 from $8.7 million for the three months ended June 30, 2025. The increase in research and development expenses was primarily a result of an increase of $3.2 million in clinical and non-clinical expenses for SL-325 and SL-846 and an increase of $0.4 million in compensation and related benefit expenses due to additional headcount to support a Phase 2 study in SL-325, partially offset by a decrease of $0.9 million as a result of the discontinuation of SL-172154.
General and Administrative Expense
General and administrative expenses were relatively flat for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Other Income
Other income increased by $0.4 million, or 74.7%, to $1.0 million for the three months ended June 30, 2026 from $0.6 million for the three months ended June 30, 2025. The increase was a result of increased overall balances in investments and funds held in our money market accounts as a result of our recent financings.
Results of Operations
Comparison of the Six Months Ended June 30, 2026 and 2025
The following table sets forth our results of operations for the six months ended June 30, 2026 and 2025.
| Six Months Ended June 30, | Change | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | Dollar | Percentage | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||
| Revenue | $ | - | $ | - | $ | - | - | % | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 22,646 | 18,599 | 4,047 | 21.8 | % | ||||||||||||||||||
| General and administrative | 9,053 | 8,822 | 231 | 2.6 | % | ||||||||||||||||||
| Loss from operations | (31,699) | (27,421) | (4,278) | 15.6 | % | ||||||||||||||||||
| Other income | 1,780 | 1,261 | 519 | 41.2 | % | ||||||||||||||||||
|
Net loss
|
$ | (29,919) | $ | (26,160) | $ | (3,759) | 14.4 | % | |||||||||||||||
Research and Development Expense
Research and development expenses increased by $4.0 million, or 21.8%, to $22.6 million for the six months ended June 30, 2026 from $18.6 million for the six months ended June 30, 2025. The increase in research and
development expenses was primarily due to an increase of $6.0 million in expenses related to clinical and pre-clinical activities for SL-325 and SL-846 and an increase of $1.1 million in compensation and related benefits due to added headcount in support of SL-325 and SL-846, partially offset by a decrease of $3.4 million as a result of the discontinuation of SL-172154.
General and Administrative Expense
General and administrative expenses were relatively flat for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Other Income
Other income increased by $0.5 million, or 41.2%, to $1.8 million for the six months ended June 30, 2026 from $1.3 million for the six months ended June 30, 2025. The increase was primarily a result of increased balances in investments and funds held in our money market accounts.
Liquidity and Capital Resources
Since our inception, our primary sources of liquidity have been generated by sales of our common stock, pre-funded warrants, common stock warrants, convertible preferred stock, and convertible notes, and through collaboration agreements. As of June 30, 2026, we had an accumulated deficit of $460.4 million and $208.3 million of cash and cash equivalents and short-term investments.
In August 2025, we issued and sold 15,225,158 shares of common stock, pre-funded warrants to purchase up to 37,410,188 shares of common stock, and accompanying common stock warrants to purchase up to 52,635,346 shares of common stock for gross proceeds of $45.7 million. During the six months ended June 30, 2026, 48,665,670 common stock warrants were exercised for gross proceeds of $52.8 million. Subsequently, in July 2026, we received an additional $4.2 million in gross proceeds when the remaining 3,841,622 common stock warrants were exercised in July 2026.
In January 2026, we entered into a sales agreement (the "Sales Agreement") with Leerink Partners LLC (the "Sales Agent"), pursuant to which we may offer and sell up to $75.0 million of shares of our common stock from time to time through our ATM Facility. The Sales Agent is generally entitled to compensation at a commission equal to up to 3.0% of the aggregate gross sales price per share sold under the Sales Agreement. For the six months ended June 30, 2026, we sold 5,000,000 shares of common stock at $4.28 per share for gross proceeds of $21.4 million.
In June 2026, we issued and sold 13,691,876 shares of common stock, including the full exercise of the underwriters' option to purchase an additional 2,812,500 shares, and pre-funded warrants to purchase up to 7,870,624 shares of common stock, in a public offering for gross proceeds of $86.2 million. The purchase price of shares of common stock was $4.00 and the purchase price of each pre-funded warrant was $3.999 which was the purchase price per share of common stock less the $0.0001 per share exercise price of the pre-funded warrants.
Capital Resources and Funding Requirements
Our primary uses of cash, cash equivalents and short-term investments are to fund our operations, which consist primarily of research and development expenditures related to our programs, product development costs, research expenses, administrative support, capital expenditures related to bringing in-house certain process development and manufacturing capabilities, and working capital requirements. We anticipate incurring additional net losses and negative cash flows from operations in the near future until such time, if ever, that we can generate significant sales of our product candidates currently in development. Our future funding requirements will depend on many factors, including:
•the scope, timing, progress and results of discovery, nonclinical development, laboratory testing, and clinical trials for our product candidates;
•the costs of process development and scale up of a commercially ready manufacturing process to support registrational clinical trials;
•the costs of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization;
•the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our product candidates;
•the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending other intellectual property-related claims;
•the costs and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies;
•the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing, distribution and storage capabilities, for any of our product candidates for which we receive marketing approval; and
•revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval.
Until we obtain regulatory approval to market our product candidates, if ever, we cannot generate revenues from sales of our products. Even if we are able to sell our products, we may not generate a sufficient amount of product revenues to finance our cash requirements. Accordingly, it will be necessary for us to seek to raise additional capital through equity offerings and/or debt financings or from other potential sources of liquidity, which may include new collaborations, licensing or other commercial agreements for one or more of our development programs or patent portfolios. There can be no assurance that such funding may be available to us on acceptable terms, or at all. The issuance of equity securities may result in dilution to stockholders and the issuance of debt securities may have rights, preferences and privileges senior to those of our common stock and the terms of any such debt securities could impose significant restrictions on our operations. The failure to raise funds as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies. Additionally, if additional funding is not secured when required, we may need to delay or curtail our operations until such funding is received, which would have a material and adverse impact on our business prospects and results of operations.
We believe that our cash, cash equivalents and short-term investments as of June 30, 2026 are sufficient to fund projected operations into 2029.
Cash Flows
The following table shows a summary of our cash flows for the periods indicated:
|
Six Months Ended June 30,
|
|||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| (unaudited) | |||||||||||
| Net cash used in operating activities | $ | (23,609) | $ | (22,463) | |||||||
| Net cash (used in) provided by investing activities | (121,098) | 15,600 | |||||||||
| Net cash provided by (used in) financing activities | 153,814 | (57) | |||||||||
| Net increase (decrease) in cash and cash equivalents | $ | 9,107 | $ | (6,920) | |||||||
Net Cash Used in Operating Activities
During the six months ended June 30, 2026, net cash used in operating activities was $23.6 million and primarily reflected our net loss of $29.9 million, partially offset by net noncash operating charges of $6.2 million for stock-based compensation, depreciation expense, accretion of investments, and non-cash operating lease expense and $0.3 million in net changes to our operating assets and liabilities. We expect to continue to use cash in our operating activities as we conduct our clinical trials and nonclinical studies, incur costs of manufacturing clinical trial and nonclinical study materials, and continue development activities to optimize our manufacturing processes.
During the six months ended June 30, 2025, net cash used in operating activities was $22.5 million and primarily reflected our net loss of $26.2 million and a $2.0 million net change in our operating assets and liabilities, partially offset by noncash charges of $5.7 million in stock-based compensation, depreciation expense, accretion of investments, and operating lease expense.
Net Cash (Used in) Provided by Investing Activities
During the six months ended June 30, 2026, net cash used in investing activities was $121.1 million, and primarily consisted of purchases of investments net of maturities of investments during the period.
During the six months ended June 30, 2025, net cash provided by investing activities was $15.6 million, and primarily consisted of investments that matured during the period.
Net Cash Provided by (Used In) Financing Activities
During the six months ended June 30, 2026, net cash provided by financing activities was $153.8 million and primarily consisted of proceeds from the sale of common stock, pre-funded warrants and common stock warrants for $100.8 million, the exercise of common stock warrants for $52.8 million and the exercise of stock options for $0.3 million.
During the six months ended June 30, 2025, net cash used in financing activities was $0.1 million and primarily consisted of taxes paid related to net share settlement of equity awards.
Contractual Obligations and Other Commitments
See Note 5 to our condensed financial statements found elsewhere in this Quarterly Report on Form 10-Q for additional disclosures. There have been no other material changes from the Contractual Obligations and Other Commitments disclosed in Note 6 and 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. We regularly evaluate our estimates and judgments, including those related to revenue recognition, the accrual for research and development expenses, and the valuation of stock-based awards. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values 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 those policies which require the most significant judgments and estimates in the preparation of our financial statements. We believe that the assumptions and estimates associated with our most critical accounting policies are those relating to revenue, accrued research and development costs and stock-based compensation.
There have been no material changes in our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in 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.
Recent Accounting Pronouncements
See Note 2 to our condensed financial statements found elsewhere in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our financial statements.
Smaller Reporting Company Status
We qualify as a "smaller reporting company" as defined in Rule 12b-2 under the Securities and Exchange Act of 1934, as amended (the "Exchange Act") and are permitted to make use of certain reduced disclosure requirements in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and certain other filings.
We will continue to be a smaller reporting company so long as (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million. As long as
we remain a smaller reporting company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.
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