Zura Bio Ltd.

05/07/2026 | Press release | Distributed by Public on 05/07/2026 05:35

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements as of December 31, 2025, included in the 2025 Annual Report, and in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report.
In addition to historical information, this discussion and analysis contains forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those discussed in the section titled "Risk Factors" in our 2025 Annual Report, as supplemented by the risks and uncertainties described in "Risk Factors" Item I.A. Risk Factors in Part II of this Quarterly Report, that could cause actual results to differ materially from historical results or anticipated results. You should carefully read the information under "Cautionary Note Regarding Forward-Looking Statements" in this Quarterly Report. Unless the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to "Zura," "we," "us," and "our" refer to Zura Bio Limited, a Cayman Islands exempted company.
Overview
We are a clinical-stage biotechnology company developing novel and differentiated medicines for patients with autoimmune and inflammatory diseases, including serious and debilitating conditions with significant unmet medical need. These diseases are often chronic and biologically complex and difficult to treat, and many patients do not achieve durable disease control with currently available therapies.
We focus on immune-mediated diseases in which translational and clinical evidence supports the involvement of specific biological pathways in disease pathogenesis. We are currently advancing our lead product candidate in Phase 2 clinical trials and are evaluating development opportunities across our pipeline of clinical-stage antibody assets, with a focus on indications with unmet medical need and commercial potential.
Our lead product candidate, tibulizumab (ZB-106), is an immunoglobulin G single-chain variable fragment bispecific dual-antagonist antibody engineered by the fusion of TALTZ® (ixekizumab) and tabalumab. Tibulizumab is designed to neutralize interleukin-17 and B-cell activating factor, two cytokines implicated in autoimmune and inflammatory diseases.
In May 2025, we initiated TibuSHIELD, a global, randomized, double-blind, placebo-controlled Phase 2 clinical study evaluating tibulizumab in approximately 225 participants with moderate to severe hidradenitis suppurativa ("HS"). The study is designed to assess the safety, tolerability, and efficacy of tibulizumab in the relevant patient population. The study will evaluate tibulizumab over a 28-week period, which includes a 16-week efficacy assessment period followed by an optional open-label extension ("OLE") and a 12-week safety follow-up. The primary endpoint of the study is the percent change from baseline in total abscess and nodule ("AN") count at week 16. Secondary endpoints include the proportion of participants achieving HiSCR50 or HiSCR75, defined as at least a 50% or 75% reduction in AN count without an increase in abscesses or draining fistulas at week 16. Key safety assessments include the assessment of tolerability, and monitoring for adverse events. Topline results are expected to be available in the fourth quarter of 2026.
In December 2024, we initiated TibuSURE, a global, randomized, double-blind, placebo-controlled Phase 2 clinical study evaluating tibulizumab approximately 80 participants with early diffuse cutaneous systemic sclerosis. The study is designed to assess the safety, tolerability, and efficacy of tibulizumab in the relevant patient population. The study includes a 24-week efficacy period followed by a 28-week OLE. The primary endpoint is the modified Rodnan Skin Score. Key efficacy endpoints include lung disease, assessed by quantitative high-resolution computed tomography and forced vital capacity; physical function, measured by the Health Assessment Questionnaire-Disability Index; and the revised Combined Response Index in Systemic Sclerosis. Topline results are expected to be available in the first half of 2027.
We continue to evaluate potential indication expansion opportunities for tibulizumab. In addition, we are evaluating development and strategic options for other clinical-stage assets.
Torudokimab (ZB-880) is a fully human monoclonal antibody that neutralizes interleukin-33 ("IL-33"), an alarmin cytokine involved in inflammatory signaling, thereby inhibiting ST2-related inflammatory signaling. The IL-33/ST2 pathway has been implicated in inflammatory and immune-mediated diseases, including chronic obstructive pulmonary disease and asthma, and remains the subject of ongoing clinical and scientific investigation. Torudokimab was evaluated in
clinical studies prior to our in-licensing of the program, and we continue to monitor developments in the IL-33 pathway as we consider potential future development opportunities.
Crebankitug (ZB-168) is a fully human monoclonal antibody that binds and neutralizes the interleukin-7 receptor alpha chain, a shared receptor component of the interleukin-7 and thymic stromal lymphopoietin signaling pathways. Crebankitug has been evaluated in Phase 1 and Phase 1b clinical studies, and we are assessing potential therapeutic indications and future development strategies for this asset.
We have a limited operating history. Since our inception, our operations have focused on organizing and staffing our company, business planning, raising capital and entering into collaboration agreements for conducting manufacturing and research and development activities. Our lead product candidate is in the clinical testing stage; however, prior to the initiation of TibuSHIELD and TibuSURE in May 2025 and December 2024, respectively, we had not conducted any clinical trials. We do not have any product candidates approved for sale and have not generated any revenue from product sales. We have funded our operations primarily through private and public equity financings, having raised aggregate gross proceeds of approximately $421.5 million as of the date hereof.
Since our inception, we have incurred significant operating losses. Our net loss for the three months ended March 31, 2026 and 2025 was $24.2 million and $17.4 million, respectively. As of March 31, 2026, we had an accumulated deficit of $248.8 million. We anticipate that our expenses will increase significantly in connection with our ongoing and future activities, as we:
•continue to advance the preclinical and clinical development of our product candidates;
•conduct additional trials for our product candidates or future potential product candidates;
•scale up our clinical and regulatory capabilities;
•manufacture materials for clinical trials or potential commercial sales;
•hire additional personnel, including in the clinical, quality, regulatory, manufacturing, scientific and administrative functions;
•establish a commercialization infrastructure and scale up manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval;
•adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;
•seek regulatory approval for any product candidates that successfully complete clinical trials;
•maintain, expand and protect our intellectual property portfolio;
•add operational, financial, and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts; and
•incur additional legal, accounting, and other expenses in operating as a public company.
February 2026 Equity Offering
On February 24, 2026, we entered into an underwriting agreement with Leerink Partners LLC, Piper Sandler & Co. and Cantor Fitzgerald & Co., as representatives of the several underwriters listed therein, pursuant to which we sold 21,200,000 Class A Ordinary Shares (the "Shares"), par value $0.0001 per share, at a price to the public of $6.25 per share, which included 3,000,000 additional Class A Ordinary Shares sold upon exercise in full by the underwriters of their option to purchase additional shares of stock in the offering, along with pre-funded warrants (the "Pre-Funded Warrants") to purchase 1,800,000 Ordinary Shares at a price to the public of $6.249 per Pre-Funded Warrant, which represents the per share public offering price for the Shares less the $0.001 exercise price of each Pre-Funded Warrant (the "February 2026 Equity Offering"). The net proceeds from the February 2026 Equity Offering were approximately $134.6 million after deducting underwriting discounts and commissions and offering expenses. The February 2026 Equity Offering closed on February 26, 2026.
2023 Lilly License
On April 26, 2023, our consolidated subsidiary ZB17 LLC ("ZB17") entered into a license agreement (the "2023 Lilly License" and, together with the 2022 Lilly License (as defined below), the "Lilly Licenses") with Lilly, for an exclusive license to develop, manufacture and commercialize tibulizumab.
We are obligated to make payments to Lilly (a) for 4 development milestone payments up to an aggregate of $155.0 million, and sales milestone payments up to an aggregate of $440.0 million based on respective thresholds of net sales of products developed from tibulizumab; (b) over a multi-year period (twelve years, or upon the later expiration of regulatory exclusivity of tibulizumab in a country) for an annual earned royalty at a marginal royalty rate in the mid-single digits to low-double digits, with increasing rates depending on net sales in the respective calendar year, based on a percentage of sales within varying thresholds for a certain period of years (collectively, the "2023 Lilly Contingent Payments"). As of March 31, 2026, none of the 2023 Lilly Contingent Payments are due and accordingly will not be recorded in our financial statements until they are due.
2022 Lilly License
On December 8, 2022, our consolidated subsidiary, Z33 Bio Inc. ("Z33"), entered into a license agreement (the "2022 Lilly License") with Lilly pursuant to which Lilly granted Z33 an exclusive (even as to Lilly), royalty-bearing global license to develop, manufacture, and commercialize torudokimab.
We are obligated to make payments to Lilly for (a) 10 commercial, development and regulatory milestone payments up to an aggregate of $155.0 million and sales milestone payments up to an aggregate of $440.0 million based on respective thresholds of net sales of products developed from the licensed molecule; and (b) an annual earned royalty at a marginal royalty rate in the mid-single to low-double digits, with increasing royalty percentage rates based on Net Sales in the respective calendar year, based on a percentage of sales within varying thresholds for a certain period of the year (collectively, the "2022 Lilly Contingent Payments"). As of March 31, 2026, none of the 2022 Lilly Contingent Payments are due and accordingly will not be recorded in our financial statements until they are due.
Pfizer Agreement
On March 22, 2022, we entered into a license agreement and a Series A-1 Subscription and Shareholder's Agreement (collectively, the "Pfizer Agreement") with Pfizer. Under the Pfizer Agreement, we acquired a license for crebankitug.
We are obligated to make payments to Pfizer for (a) 11 remaining future development and regulatory milestone payments aggregating up to $69.0 million and sales milestone payments up to an aggregate of $525.0 million based on respective thresholds of net sales of products (developed from the licensed compound) (the "Products"), if any; and (b) an annual earned royalty at a marginal royalty rate in the mid-single digits to low double digits (less than 20%), based on thresholds of net sales of Products, if any (collectively, the "Pfizer Contingent Payments"). Royalties are payable on a country-by-country basis for a certain period of years or upon the later expiration of regulatory exclusivity of our Products in a country.
As of March 31, 2026, no Pfizer Contingent Payments are due and accordingly no Pfizer Contingent Payments will be recorded in our financial statements until they are due.
Impact of Global Economic Trends
Macroeconomic conditions, including uncertainties associated with the changes to and by the United States federal government administration, the ongoing conflicts in Iran and the broader Middle East, the ongoing conflict between Ukraine and Russia, conflicts in Mexico, international trade policies (including tariffs, sanctions, and trade barriers), economic slowdowns, public health crises, labor shortages, recessions or market corrections, supply chain disruptions, inflation and monetary policy shifts, liquidity concerns at, and failures of, banks and other financial institutions or other disruptions in the banking system or financing markets, rising interest rates and financial and credit market fluctuations, volatility in the capital markets or other evolving macroeconomic developments, continue to have direct and indirect impacts on our business and could in the future materially impact our results of operations and financial condition. Recent tariffs and trade restrictions have increased costs and complexity for many businesses, which may also have an adverse impact on our business. We continue to actively monitor the impact of these macroeconomic factors on our results of operations, financial condition and cash flows. The extent of the impact of these factors on our operational performance and financial condition, including our ability to execute our business strategies and initiatives in the expected timeframe, will depend on future developments, which are uncertain and cannot be predicted; however, any continued or renewed disruption resulting from these factors could negatively impact our business.
Components of Operating Results
Operating Expenses
Research and Development Expenses
Research and development ("R&D") expenses consist of all direct and indirect operating expenses incurred to support our clinical development, including research activities conducted in support of such programs, manufacturing activities, consulting fees for clinical and manufacturing advisory services, contract research organization ("CRO") costs, costs related to manufacturing materials for preclinical studies and clinical trials, payroll and benefits (including share-based compensation for employees supporting clinical and development activities), licensing fees, and data and study acquisition costs. Expenses are recognized as the related goods are delivered or the services are performed.
R&D expenses include the cost of in-process research and development ("IPR&D") assets purchased in an asset acquisition transaction. IPR&D assets are expensed provided that the acquired asset did not also include processes or activities that would constitute a "business" as defined under accounting principles generally accepted in the United States of America ("U.S. GAAP"), the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, has no established alternative future use. Acquired IPR&D payments, including upfront payments, transaction fees and subsequent pre-commercial milestone payments, are immediately expensed in the period in which they are incurred. Research and development costs incurred after the acquisition are expensed as incurred. R&D expenses also include the remeasurement of the research and development license consideration liability.
Research and development expenses could include:
External expenses:
•external research and development expenses incurred under agreements with CROs, investigative sites and consultants to conduct our clinical trials;
•costs related to manufacturing material for preclinical studies and clinical trials, including fees paid to contract manufacturing organizations ("CMOs");
•milestone payments under our licensing agreements;
•laboratory supplies and research materials;
•costs related to compliance with regulatory requirements; and
•facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, maintenance of facilities, insurance and equipment.
Internal expenses:
•employee-related expenses, including salaries, bonuses, benefits, share-based compensation and other related costs for those employees involved in research and development efforts.
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We plan to substantially increase our research and development expenses for the foreseeable future as we develop our product candidates and manufacturing processes and conduct discovery and research activities for our clinical programs. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future clinical trials of our product candidates due to the inherently unpredictable nature of clinical development. Clinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to how we pursue our product candidates and how much funding to direct to each program on an ongoing basis in response to the results of future clinical trials, regulatory developments and our ongoing assessments as to commercial potential. We will need to raise substantial additional capital in the future. Our clinical development costs are expected to increase as we commence,
continue and expand our clinical trial activities. Our future expenses may vary significantly each period based on factors such as:
•expenses incurred to conduct preclinical studies required to advance our product candidates into clinical trials;
•per patient clinical trial costs, which may vary based on the number of doses that patients receive;
•the number of patients who enroll in each clinical trial;
•the number of clinical trials required for approval;
•the number of sites included in the clinical trials;
•the countries in which the clinical trials are conducted;
•the length of time required to enroll eligible patients;
•the drop-out or discontinuation rates of patients;
•potential additional safety monitoring requested by regulatory agencies;
•the duration of patient participation in clinical trials and follow-up;
•the phase of development of the product candidate;
•third-party contractors failing to comply with regulatory requirements or meet their contractual obligations in a timely manner, or at all;
•the cost of insurance, including product liability insurance, in connection with clinical trials;
•regulators or institutional review boards requiring that we or our investigators suspend or terminate clinical development for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; and
•the efficacy and safety profile of our product candidates.
General and Administrative Expenses
General and administrative ("G&A") expenses primarily consist of professional fees for legal, accounting, and consulting costs relating to corporate matters, as well as salaries and related costs for personnel in executive and administrative functions and board of director fees, including share-based compensation.
We anticipate that our G&A expenses will increase in the future as we continue to support research and development activities and incur costs of operating as a public company. These costs include headcount to support expanded operations and infrastructure.
Additionally, we anticipate increased costs associated with maintaining compliance with Nasdaq rules and SEC requirements such as accounting, audit, legal and consulting services, as well as director and officer liability insurance, investor and public relations activities.
Results of Operations
Comparison of the Three months ended March 31, 2026 and 2025
The following table summarizes our results of operations for the periods presented (in thousands):
For the Three Months Ended
March 31, 		$ %
2026 2025 Change Change
Operating expenses:
Research and development $ 14,746 $ 10,474 $ 4,272 41 %
General and administrative 10,753 8,780 1,973 22 %
Total operating expenses 25,499 19,254 6,245 32 %
Loss from operations (25,499) (19,254) (6,245) (32) %
Other income, net:
Interest income (1,319) (1,817) 498 27 %
Other expense, net 43 5 38 *%
Total other income, net (1,276) (1,812) 536 30 %
Loss before income taxes (24,223) (17,442) (6,781) (39) %
Income tax benefit - - - - %
Net loss $ (24,223) $ (17,442) $ (6,781) (39) %
_________________________________________________
*Percentage change not meaningful
Operating Expenses
Research and development expenses:
The following table summarizes our research and development expenses for the periods presented (in thousands):
For the Three Months Ended
March 31, 		$ %
2026 2025 Change Change
External expenses:
Direct expenses by program:
Tibulizumab portfolio
Tibulizumab SSc program $ 3,200 $ 2,763 $ 437 16 %
Tibulizumab HS program 4,701 1,274 3,427 269 %
Tibulizumab general 2,929 3,706 (777) (21) %
Total Tibulizumab portfolio 10,830 7,743 3,087 40 %
Additional product candidates (torudokimab and crebankitug) 171 291 (120) (41) %
Unallocated expenses 573 456 117 26 %
Internal expenses:
Personnel expenses (including share-based compensation) 3,172 1,984 1,188 60 %
Total research and development expense $ 14,746 $ 10,474 $ 4,272 41 %
Research and development expenses increased by $4.3 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to:
•a $3.4 million and $0.4 million increase in costs as we advance our Phase 2 clinical trials evaluating tibulizumab in adults with HS and SSc, respectively, driven by costs incurred for CRO fees to support the conduct of our clinical trials; and
•a $1.2 million increase in compensation, including share-based compensation, driven by increased personnel in research and development functions.
This increase was partially offset by a $0.8 million decrease in costs for tibulizumab that was not specific to an indication, which was primarily driven by decreased manufacturing costs.
We anticipate that research and development expenses will continue to increase in the future as we conduct research and development activities.
General and administrative expenses:
General and administrative expenses increased by $2.0 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily due to an increase of $1.3 million in compensation expenses, including share-based compensation, for personnel in executive and administrative functions and our board of directors, and an increase of $0.6 million in professional fees to support our growing organization as we advance our Phase 2 clinical trials evaluating tibulizumab in SSc and HS.
Other Income, net
Interest income
Interest income decreased by $0.5 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. This is primarily due to lower interest rates, as well as a lower cash balance for the majority of the first quarter of 2026, as the proceeds from the February 2026 Equity Offering were not received until the end of February.
Other expense, net
Other expense, net remained relatively consistent for the three months ended March 31, 2026 and compared to the three months ended March 31, 2025.
Liquidity and Capital Resources
Overview
Since our inception, we have not reached successful commercialization of our product candidates or generated any revenue and expect to continue to incur significant operating losses and cash outflows for the foreseeable future. We will require ongoing financing in order to continue our research and development activities and may never become profitable. As of March 31, 2026, we had cash and cash equivalents of $225.6 million. We have funded our operations primarily through private and public equity financings, having raised aggregate gross proceeds of approximately $421.5 million as of the date hereof.
Our future operations are dependent upon our ability to finance our cash requirements, which will allow us to continue our research and development activities and the commercialization of our products. There can be no assurance that we will be successful in continuing to finance our operations.
Capital Requirements
To date, we have not generated revenue from any source, including the commercial sales of our approved drug products, and we do not expect to generate revenue from the commercial sales of our approved drug products for at least the next few years. If we fail to complete the development of our product candidates in a timely manner or fail to obtain their regulatory approval, our ability to generate future revenue will be adversely affected. We do not know when, or if, we will generate any revenue from the commercial sale of our approved drug products, and we do not expect to generate revenue from the commercial sales of our approved drug products unless and until we obtain regulatory approval of, and commercialize, our product candidates.
We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we continue the research and development, and seek marketing approval for our product candidates, as well as administrative costs associated with supporting our operations. In addition, if we obtain approval for any of our product candidates, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution. Furthermore, we expect to incur additional costs associated with operating as a public company.
We will also be responsible for significant future contingent payments to our licensors and other parties upon the achievement of certain development, regulatory, and sales milestones, as well as ongoing royalties on net commercial sales. The size and timing of these milestone payments will vary greatly depending upon a number of factors, and it is therefore difficult to estimate the total payments that could become payable to our licensors and other parties and when those payments would be due. If we achieve all of the milestones, we would be obligated to pay multimillion dollar development and regulatory milestone payments and sales milestone payments. We will be required to pay certain of these milestone payments prior to the time at which we are able to generate sufficient revenue, if any, from commercial sales of any of our product candidates. In addition to milestone payments, we are also required to pay ongoing royalties in the mid-single digits to low double-digits percentage range based upon thresholds of net sales of products.
Based on our current business plans, and after giving effect to the completion of the February 2026 Equity Offering, we believe that our existing cash and cash equivalents should be sufficient to fund our operating expenses and capital requirements through at least the end of 2028. Our estimate as to how long we expect our existing cash and cash equivalents to be able to fund our operating expenses and capital requirements is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Changing circumstances, some of which are beyond our control, could result in less cash available to us or cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
Because of the numerous risks and uncertainties associated with the research, development and commercialization of pharmaceutical drug products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:
•the extent to which we develop, in-license or acquire other product candidates and technologies;
•the costs and timing of process development and manufacturing scale-up activities associated with our product candidates and other programs as we advance them through preclinical and clinical development;
•the number and development requirements of product candidates that we may pursue;
•the costs, timing and outcome of regulatory review of our product candidates;
•the timing and amount of our milestone payments to our licensors and other parties;
•our headcount growth and associated costs as we expand our research and development capabilities and establish and expand our commercial infrastructure and operations;
•the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distributions, for any of our product candidates for which we receive marketing approval;
•royalty payments to our licensors and other parties;
•the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;
•the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; and
•the costs of operating as a public company.
Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of our product candidates that we do not expect to be commercially available in the near term, if at all, and are subject to successful
clinical development and regulatory approval. Accordingly, we may need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through securities or debt financing, the terms of these securities or this debt may restrict our ability to operate. Any financing, if available, may involve covenants limiting and restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, entering into profit-sharing or other arrangements or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise capital when needed or on acceptable terms, we could be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.
Cash Flows
For the
Three Months
Ended
March 31,
2026 2025
(in thousands)
Net cash used in operating activities $ (18,923) $ (11,063)
Net cash used in investing activities (13) (49)
Net cash provided by financing activities 135,123 5,183
Net increase (decrease) in cash and cash equivalents $ 116,187 $ (5,929)
Cash flows from operating activities
Net cash used in operating activities increased by $7.9 million to $18.9 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This was primarily due to an increase in our net loss of $6.8 million, which is driven by an increase in our operating costs.
Cash flows from investing activities
Net cash used in investing activities for each of the three months ended March 31, 2026 and 2025 was de minimis.
Cash flows from financing activities
Net cash provided by financing activities for the three months ended March 31, 2026 was $135.1 million, which related to net proceeds from the February 2026 Equity Offering, after underwriters' fees and discounts. Cash provided by financing activities for the three months ended March 31, 2025 was $5.2 million, which primarily related to net proceeds of $5.1 million, after placement agent commissions, from the sale of Class A Ordinary Shares under our ATM.
Contractual Obligations and Other Commitments
We have or will enter into agreements in the normal course of business with CROs, CMOs and other vendors for research and development services for operating purposes, which are generally cancelable upon written notice. Some third-party CMOs have intellectual property, such as patents and/or know-how with an annual fee and royalty-bearing license to their customers, that forms part of the manufacturing agreement.
Lonza License
In July 2022, we entered into a license agreement (the "Lonza License") with Lonza Sales AG ("Lonza") for a worldwide non-exclusive license for Lonza's gene expression system in exchange for varying considerations depending on a number of factors such as whether we enter further into manufacturing agreements with Lonza or with a third party, and whether we enter into sublicense agreements with third parties (including up to middle six-figure annual payments per sublicense upon commencement of a sublicense, as well as royalties of up to low-single digit percentages of net sales of certain products over a commercially standard double-digit multi-year term). The Lonza License will remain in effect until
terminated. We may terminate the Lonza License at any time upon 60 days' notice, with or without cause. Lonza may terminate the Lonza License for cause upon a breach by us or for other commercially standard reasons.
Pursuant to the terms of the Lonza License, we have a license fee of $0.4 million due to Lonza annually in the fourth quarter as a result of manufacturing drug substance with a third party other than Lonza since 2023.
WuXi Biologics License
In July 2023, we entered into a cell line license agreement (the "Cell Line License Agreement") with WuXi Biologics and its Affiliates ("WuXi Biologics") for certain of WuXi Biologics' know-how, cell line, and biological materials (the "WuXi Biologics Licensed Technology") to manufacture, have manufactured, use, sell and import certain products produced through the use of the cell line licensed by WuXi Biologics under the Cell Line License Agreement (the "WuXi Biologics Licensed Products"). If we manufacture all of our commercial supplies of bulk drug product for WuXi Biologics Licensed Products with a manufacturer other than WuXi Biologics or its affiliates, we are required to make royalty payments to WuXi Biologics in an amount equal to a fraction of a single digit percentage of global net sales of WuXi Biologics Licensed Products manufactured by a third-party manufacturer (the "Royalty"). If we manufacture part of our commercial supplies of the WuXi Biologics Licensed Products with WuXi Biologics or its affiliates, then the Royalty will be reduced accordingly on a pro rata basis. The Cell Line License Agreement will continue indefinitely unless terminated (i) by us upon three months' prior written notice and its payment of all undisputed amounts due to WuXi Biologics through the effective date of termination, (ii) by WuXi Biologics for a material breach by us that remains uncured for 30 days after written notice, or (iii) by WuXi Biologics if we fail to make a payment and such failure continues for 30 days after receiving notice of such failure. As of March 31, 2026, there are no payments currently due under the Cell Line License Agreement.
Critical Accounting Estimates
Management's discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP, and on a basis consistent with those accounting principles followed by us and disclosed in Note 2 to our most recent annual audited consolidated financial statements in the 2025 Annual Report. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.
There have been no material changes to our critical accounting policies and estimates since December 31, 2025. For a description of our critical accounting policies that affect our significant judgements and estimates used in preparation of our unaudited condensed consolidated financial statements, refer to Item 7 in "Management's Discussion and Analysis of Financial Condition and Results of Operations," contained in the 2025 Annual Report.
Recent Accounting Pronouncements
See Note 2 to our unaudited condensed consolidated financial statements located in "Part I - Financial Information, Item 1. Financial Statements" in this Quarterly Report for a description of recent accounting pronouncements applicable to our financial statements.
Emerging Growth Company and Smaller Reporting Company Status
In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Upon closing of the Business Combination, we remained an emerging growth company and may elect to extend the transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
In addition, as an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
•being permitted to present only two years of audited financial statements in addition to any required unaudited interim financial statements, with correspondingly reduced disclosure in the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations";
•an exception from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended;
•reduced disclosure about our executive compensation arrangements in our periodic reports, proxy statements and registration statements; and
•exemptions from the requirements of holding non-binding advisory votes on executive compensation or golden parachute arrangements, and an exemption from compliance with the requirements of the Public Company Accounting Oversight Board regarding the communication of critical audit matters in the auditor's report on financial statements.
We would cease to qualify as an emerging growth company on the date that is the earliest of: (i) December 31, 2026, (ii) the last day of the fiscal year in which we have more than $1.235 billion in total annual gross revenues, (iii) the date on which we are deemed to be a "large accelerated filer" under the rules of the SEC, which means the market value of our Class A Ordinary Shares that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, or (iv) the date on which we have issued more than $1.0 billion of non-convertible debt over the prior three-year period. We may choose to take advantage of some but not all of these reduced reporting burdens. We have taken advantage of certain reduced reporting requirements in this Quarterly Report. Accordingly, the information contained herein may be different than you might obtain from other public companies in which you hold equity interests.
We are also a "smaller reporting company" as defined under the Securities Act and Securities Exchange Act of 1934, as amended (the "Exchange Act"). We may continue to be a smaller reporting company so long as either (i) the market value of Class A Ordinary Shares held by non-affiliates is less than $250.0 million or (ii) our annual revenue was less than $100.0 million during the most recently completed fiscal year and the market value of Class A Ordinary Shares held by non-affiliates is less than $700.0 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in the 2025 Annual Report and have reduced disclosure obligations regarding executive compensation, and, similar to emerging growth companies, if we are a smaller reporting company under the requirements of (ii) above, we would not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
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