Quarterly Report for Quarter Ending September 30, 2025 (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 the section entitled "Risk Factors" and our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and the notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled "Risk Factors," our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the section entitled "Risk Factors" to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Our Company

We are a clinical-stage biotechnology company focused on the discovery and development of innovative engineered T cell therapies that have the potential to provide deep and durable, perhaps curative, responses with one-time administration for patients with autoimmune diseases. Our proprietary CABA®, or Cabaletta Approach to B cell Ablation, platform encompasses two strategies. Our CARTA, or Chimeric Antigen Receptor T cells for Autoimmunity, approach is designed to potentially reset the immune system. Our legacy CAART, or Chimeric AutoAntibody Receptor T cells, approach is designed to engineer T cells to selectively engage and eliminate only disease-causing B cells. We believe our CABA®platform has the potential to safely enable complete and durable responses for a broad range of autoimmune diseases and that it has potential applicability across dozens of autoimmune diseases that we have identified, evaluated and prioritized.

Resecabtagene autoleucel (rese-cel, formerly referred to as CABA-201) is a 4-1BB co-stimulatory domain-containing fully human CD19-CAR T construct designed to treat patients with a broad range of autoimmune diseases and our lead product candidate within the CARTA strategy. Rese-cel is designed to achieve transient and deep depletion of all B cells following a single, weight-based infusion of T cells that are engineered to express an antibody fragment that recognizes a B cell receptor expressed on the surface of all B cells. The construct is designed to allow for the deep elimination of all B cells, including all B cells that contribute to disease, with subsequent repopulation by healthy naïve B cells. This approach has the potential to reset the immune system and result in meaningful clinical responses without chronic therapy requirements in patients.

The United States Food and Drug Administration, or the FDA, granted clearance of our rese-cel Investigational New Drug, or IND, application for treatment of systemic lupus erythematosus, or SLE, in patients with active lupus nephritis, or LN, or active SLE without renal involvement in March 2023. We announced the FDA subsequently granted clearance of our rese-cel IND applications for treatment of idiopathic inflammatory myopathies, or myositis in May 2023, systemic sclerosis, or SSc in October 2023, generalized myasthenia gravis, or gMG in November 2023, and multiple sclerosis, or MS in January 2025. In May 2024, we announced that we are working with active clinical sites to incorporate the RESET-PVTMtrial as a sub-study within the Phase 1 DesCAARTesTMtrial following the submission of a protocol amendment, to evaluate rese-cel in patients with mucosal pemphigus vulgaris, or mPV, and mucocutaneous pemphigus vulgaris, or mcPV.

RESET-MyositisTM

The three adult myositis subtypes, dermatomyositis, or DM, anti-synthetase syndrome, or ASyS, and immune-mediated necrotizing myopathy, or IMNM, being evaluated in the RESET-MyositisTMPhase 1/2 clinical trial of rese-cel affect approximately 80,000 patients in the U.S. and approximately 85,000 patients in Europe. Myositis typically affects middle-aged individuals, particularly women, and disease is often refractory, despite existing therapies. In the United States, we believe approximately 20% to 25% of the prevalent population, or 16,000 to 20,000 people, would be potentially eligible patients for rese-cel.

The RESET-MyositisTMPhase 1/2 clinical trial, which is actively enrolling patients, is designed to treat six patients with DM, six patients with ASyS, six patients with IMNM, as well as six patients with juvenile idiopathic inflammatory myopathy, or JIIM, all in separate parallel cohorts, with a single weight-based dose of 1.0 x 106cells/kg. We announced the FDA granted Fast Track Designation for rese-cel for the treatment of patients with dermatomyositis and Orphan Drug Designation for rese-cel for the treatment of myositis in January and February 2024, respectively. In March 2024, we announced the FDA granted Rare Pediatric Disease designation for rese-cel for juvenile dermatomyositis. In May 2025, we announced the FDA granted Regenerative Medicine Advanced Therapy, or RMAT, to rese-cel for the treatment of myositis.

Based on clinical data presented in October 2025 at the American College of Rheumatology (ACR) Convergence 2025, we are initiating a DM/ASyS registrational cohort within the RESET-MyositisTMtrial. There are approximately 60,000 patients with DM in the U.S. who have IVIg as their only FDA-approved treatment option and approximately 15,000 patients with ASyS in the U.S. who have no FDA-approved treatment options. Consistent with the previously announced FDA alignment on registrational cohort design, which is based on several interactions with FDA regarding the registrational trial, including direct review and feedback on the registrational

trial protocol in August 2025, we are aligned on a registrational cohort with a 16-week primary endpoint of moderate or major TIS response while off immunomodulators and on no or low-dose steroids.

The planned size of 14 patients for the registrational cohort is based on the assumed treatment effect of rese-cel in DM/ASyS patients and an estimated background rate. The estimated background rate will be determined from an external myositis patient registry, as aligned with the FDA, and will include patients with similar inclusion criteria as those in the registrational DM/ASyS cohort. The registry protocol and the statistical analysis plan are expected to be submitted to the FDA this year.

Based on comprehensive literature review to estimate the background rate, the likelihood of an active, refractory myositis patient achieving moderate or major TIS response within 16 weeks and concurrently discontinuing all immunomodulators is expected to be less than 10%. Changes in the assumed background rate would result in a change in the number of rese-cel treated patients who would need to achieve the primary endpoint in the 14-patient registrational cohort. For example, if the background rate is 10%, then 5/14 patients would need to achieve the primary endpoint for a statistically positive study. If the background rate is 25%, then 8/14 patients would need to achieve the primary endpoint for a statistically positive study.

The registrational cohorts will evaluate the same single, weight-based infusion of rese-cel at 1 x 106cells/kg as used in the Phase 1/2 myositis cohorts. The FDA supported the use of pooled rese-cel safety data from across the entire RESETTMclinical trial program to supplement myositis specific safety data for the BLA submission in myositis and we aligned with the FDA on the size of the required safety database, which is expected to be approximately 100 autoimmune disease patients treated with the same single weight-based dose. We remain on track to initiate enrollment in the registrational DM/ASyS cohort in the fourth quarter of 2025 with expected BLA submission in 2027.

RESET-SLETM

SLE is a chronic, potentially severe, autoimmune disease, most commonly impacting young women between the ages of 15 and 40 with higher frequency and more severity in people of color, where the immune system attacks healthy tissue throughout the body. SLE affects an estimated up to 320,000 patients in the U.S., and 150,000 patients in Europe, with LN as the most common end-organ manifestation, affecting approximately 30-40% of SLE patients.

The RESET-SLETMPhase 1/2 clinical trial, which is actively enrolling patients, is designed to treat six SLE patients with active LN, and in a separate parallel cohort, six patients with active SLE without renal involvement, with a single weight-based dose of 1.0 x 106cells/kg. In May 2023, we announced the FDA granted Fast Track Designation for rese-cel in patients with SLE and LN. In March 2024, Health Canada issued a No Objection Letter in response to a Clinical Trial Application, or CTA, for the RESET-SLETMtrial, and in October 2024, the European Medicines Agency allowed a CTA submitted by Cabaletta for the RESET-SLETMtrial to proceed, enabling us to begin the process of activating clinical trial sites and pursuing patient enrollment in these geographies. We anticipate aligning with the FDA on the registrational cohort design for studies in SLE/LN in the fourth quarter of 2025.

RESET-SScTM

SSc is a rare and potentially fatal chronic autoimmune disease characterized by progressive skin and internal organ fibrosis that can be life-threatening, including interstitial lung disease, pulmonary hypertension, and scleroderma renal crisis. SSc affects approximately 90,000 patients in the U.S. and approximately 60,000 patients in Europe, typically middle-aged individuals, particularly women.

The actively enrolling RESET-SScTMPhase 1/2 clinical trial of rese-cel is designed to treat six patients with severe skin manifestations and six patients with severe organ involvement associated with SSc, each in separate parallel cohorts, with a single weight-based dose of 1.0 x 106cells/kg. We announced the FDA granted Fast Track Designation for rese-cel for SSc patients and Orphan Drug Designation for rese-cel for SSc in January and March 2024, respectively. We anticipate aligning with the FDA on the registrational cohort design for studies in SSc in the fourth quarter of 2025.

RESET-MGTM

MG is a rare autoimmune disease characterized by autoantibodies that interfere with signaling at the neuromuscular junction, leading to potentially life-threatening muscle weakness. The majority of patients with MG have autoantibodies known to be pathogenic based on their interference with proteins in the NMJ, of which the majority target AChR. gMG affects approximately 55,000 patients in the U.S. and approximately 100,000 patients in Europe. Symptoms of gMG include profound muscle weakness throughout the body, disabling fatigue, and potential shortness of breath due to respiratory muscle weakness, with risk for episodes of respiratory failure.

The actively enrolling RESET-MGTMPhase 1/2 clinical trial of rese-cel is designed to treat six patients with AChR-positive gMG and six patients with AChR-negative gMG, each in separate parallel cohorts, with a single weight-based dose of 1.0 x 106cells/kg.

In October 2025, we announced rese-cel was generally well tolerated across two AChR-positive and two AChR-negative patients (both seronegative; no anti-MuSK or anti-LRP4 antibodies). No CRS (cytokine release syndrome) occurred in three of four patients with grade 2 CRS occurring in AChR-pos-2 that resolved with no sequelae. As of the September 11, 2025 data cut-off, two evaluable patients (AChR-neg-1 and AChR-neg-2) remain off immunomodulatory medication and achieved significant improvements in

MG-ADL (with AChR-neg-1 achieving Minimal Symptom Expression). AChR-pos-1 is not evaluable due to use of a prohibited cytotoxic medication that may have inhibited CAR T activity and AChR-pos-2 has insufficient follow-up.

Both cohorts have been fully enrolled. We anticipate aligning with the FDA on the registrational cohort design for studies in MG in the first half of 2026.

RESET-PVTM

Pemphigus vulgaris, or PV, is an autoimmune disease that occurs when the immune system produces antibodies that attack a protein called desmoglein, or DSG. DSG normally enables skin cells and the cells lining the inside of your mouth, nose, throat, eyelids, etc. to bind tightly together. Disruption by the antibodies directed to DSG causes the painful blisters and erosions characteristic of PV. Approximately 15,000 patients in the U.S. and approximately 20,000 patients in Europe are affected by PV.

The ongoing RESET-PVTMtrial is designed to evaluate rese-cel as a monotherapy without preconditioning in patients with mucosal pemphigus vulgaris, or mPV, and mucocutaneous pemphigus vulgaris, or mcPV.

In October 2025, we announced rese-cel exhibited similar CAR T cell expansion and contraction kinetics relative to translational data reported from other RESETTMtrials with preconditioning. All three patients experienced substantial depletion of B cells within the first month post-infusion, with patients 2 and 3 achieving complete peripheral B cell depletion. In these two patients, rapid reduction in autoantibodies to desmoglein was observed and the increase in peak B cell activating factor (BAFF) was at the low end of the range of patients dosed with rese-cel plus preconditioning from pre-infusion through the latest follow-up, suggestive of potential deep B cell depletion in the tissue. Additional follow up will be required to determine if the initial clinical effects are durable and to determine if the findings can be replicated in other autoimmune diseases.

Rese-cel was generally well tolerated with no immune effector cell-associated neurotoxicity syndrome (ICANS) reported. After infusion, patient 1 experienced transient fever (grade 1 cytokine release syndrome). Patient 2 required a course of steroids for a disease flare in the first two weeks following infusion after discontinuing immunomodulators. This steroid course was less intense than a previous course that was administered for a flare prior to infusion where limited impact on disease was observed. The patient has tapered the steroid dose to below the pre-infusion baseline dose at 3 months post-infusion.

PDAI activity scores have formed the basis for recent regulatory approvals in PV, and total PDAI scores were also reported to be consistent with the PDAI activity scores in the late breaking clinical trial session. PDAI improvements were most significant in the two patients who seemed to experience complete peripheral B cell depletion. All three patients remain off immunomodulators through the data cut-off September 11, 2025.

RESET-MSTM

Multiple sclerosis is an autoimmune-mediated demyelinating disease of the central nervous system. The immune system attack on nerves in the brain and spinal cord impairs nerve electrical conduction, resulting in a range of symptoms including muscle weakness, sensory loss, visual impairment, incoordination, memory loss, fatigue, and walking difficulty. MS is classified into relapsing or progressive forms based on the pattern of clinical symptoms over time. MS affects approximately 750,000 patients in the U.S. and approximately 550,000 patients in Europe.

The RESET-MSTMtrial is a Phase 1/2 open-label, dose escalation study of rese-cel in subjects with relapsing and progressive forms of MS, evaluated in separate cohorts. In January 2025, we announced the FDA granted Fast Track Designation for rese-cel for relapsing and progressive forms of MS.

Manufacturing

Our manufacturing strategy is comprised of two stages. The initial stage is designed to leverage the extensive early-stage manufacturing expertise of our academic partners and contract development and manufacturing organizations, or CDMOs, for early development and clinical supply, and in parallel partner with commercially compliant CDMOs to support late-stage clinical studies and commercial production. Our aim is to achieve full manufacturing readiness through expanded CDMO relationships, establishment of our own manufacturing facilities, and/or through strategic partnership(s). For cell manufacturing, we have collaborated with the Clinical Cell and Vaccine Production Facility, or CVPF, at Penn. We have also collaborated with Minaris Advanced Therapies, LLC, or Minaris (f/k/a WuXi Advanced Therapies, Inc.), to serve as an additional and commercially compliant cell manufacturing partner for our RESETTMclinical trials. We also entered into a new technology transfer agreement and Development and Manufacturing Services Agreement in July 2024 and December 2024, respectively, with Lonza Houston Inc., or Lonza, to serve as one of our manufacturing partners for the global clinical development of rese-cel, including potential late-stage clinical trials and preparations for commercial readiness. Our manufacturing process at Lonza will be used for initiating registrational trial enrollment. For supply of lentiviral vector for the clinical and commercial manufacturing of rese-cel, we are currently working with Oxford Biomedica (UK) Limited, or Oxford, where we are advancing BLA readiness activities, and have previously manufactured lentiviral vector at the Children's Hospital of Philadelphia, or CHOP, and the University of Pennsylvania, or Penn.

As part of our innovative manufacturing strategy where we intend to increase scale, reduce cost of goods and improve patient experience, in November 2023, we partnered with Cellares Corp., or Cellares, to evaluate their automated manufacturing platform, the Cell ShuttleTM, through the Cellares Technology Adoption Program, or TAP. In August 2024, we expanded our partnership with Cellares to facilitate the potential to incorporate the Cellares manufacturing platform to support the RESETTMclinical program. In March 2025, we and Cellares announced the successful conclusion of the TAP on Cellares' Cell Shuttle™, facilitating the potential integration of the Cell ShuttleTMinto our clinical and commercial, if approved, manufacturing strategy for rese-cel.

We were incorporated in April 2017 and started principal operations in August 2018. Our operations to date have been financed primarily by proceeds from the sale of convertible notes and convertible preferred stock prior to our initial public offering, or IPO, and proceeds from the sale of our common stock in public equity offerings, including our IPO, "at-the-market" offerings and follow-on offerings of shares of our common stock and pre-funded warrants. As of September 30, 2025, we had $159.9 million in cash, cash equivalents and investments.

Recent Developments

ACR Clinical Data

In October 2025, we presented updated clinical and translational data from the RESETTMclinical trial programs, with a data cut-off of September 11, 2025. As of October 24, 2025, we have enrolled 76 patients at 77 clinical trial sites globally.

In the RESET-MyositisTMtrial, we presented complete adult Phase 1/2 clinical data from 6 patients in the combined DM/ASyS (4 DM and 2 ASyS syndrome) cohort and 6 patients in the IMNM cohort, in addition to 1 patient in the JIIM cohort. Regarding safety, 4 of 13 patients experienced fever, or grade 1 CRS, and no ICANS was observed.

All 4 DM/ASyS patients who met the key inclusion criteria for the registrational cohort with sufficient follow-up achieved immunomodulatory-free TIS responses of moderate or major improvement at week 16. Based on these clinical data, we are initiating a DM/ASyS registrational cohort within the RESET-MyositisTMtrial. There are approximately 60,000 patients with DM in the U.S. who have IVIg as their only FDA-approved treatment option and approximately 15,000 patients with ASyS in the U.S. who have no FDA-approved treatment options. Consistent with the previously announced FDA alignment on registrational cohort design, we expect to enroll 14 patients in the registrational cohort with a 16-week primary endpoint of moderate or major TIS response while off immunomodulators and on no or low-dose steroids. We remain on track to initiate enrollment in the registrational DM/ASyS cohort in the fourth quarter of 2025.

Two of 4 IMNM patients with sufficient follow-up achieved immunomodulatory-free TIS responses at week 24. In a subset of ASyS and IMNM patients with limited durability or response, rese-cel achieved complete B cell elimination and an apparent B cell reset, but did not lead to antibody clearance, suggesting CD19 long-lived plasma cells may be a clinically meaningful source for potentially pathogenic autoantibodies in these patients. Prior to the potential initiation of a registrational IMNM cohort, additional patients will be enrolled in the Phase 1/2 cohort with refined entry criteria and existing patients will be followed to further evaluate efficacy and durability in this patient population.

In the RESET-SScTMtrial, we presented preliminary Phase 1/2 clinical data from 6 patients, including 3 in the severe skin (SSc-Skin) cohort and 3 in the organ (SSc-Organ) cohort. Three of these 6 patients experienced low-grade CRS (grade 1 or 2) and one ICANS event was observed (grade 3, previously reported in March 2025).

All 4 patients with at least 3 months of follow-up achieved an rCRISS-25 response off immunomodulators and steroids. These initial data suggest the potential for rese-cel to reset the immune system in systemic sclerosis, allowing patients to achieve transformative clinical responses off all immunomodulators and glucocorticoids. We anticipate FDA alignment on the registrational cohort design in the fourth quarter of 2025.

In the RESET-SLETMtrial, we presented preliminary Phase 1/2 clinical data from 9 patients, including 5 patients in the non-renal SLE cohort and 4 patients in the LN cohort. Six of 9 patients experienced no CRS (grade 1 events were reported in 3 patients) and 8 of 9 patients experienced no ICANS (grade 4 in 1 patient, previously reported in August 2024). Three of 4 SLE patients with at least 3 months of follow-up achieved DORIS (definition of remission in SLE), and the fourth patient with pure class V LN achieved a complete renal response. Three of 4 LN patients with at least 3 months of follow-up showed renal response. All 9 patients were off all immunomodulators through the data cut-off of September 11, 2025. Patients across both cohorts achieved a median 8-point reduction in SLEDAI-2K and a significant reduction in anti-dsDNA antibodies was observed.

Based on the clinical responses observed in lupus following complete B cell depletion after administration of rese-cel with preconditioning, and with the initial data from 3 patients in RESET-PV™ showing that potentially complete B cell depletion is possible with a single, weight-based dose of rese-cel without the use of a fludarabine and cyclophosphamide lymphodepleting regimen, we are expanding this approach into lupus, which predominantly affects women of child-bearing potential. We are incorporating this new dose-escalation cohort into the RESET-SLETMtrial with initial clinical data anticipated in 2026.

Key Agreements

IASO Agreement

On October 7, 2022, we entered into an Exclusive License Agreement, or the IASO Agreement, with IASO. Pursuant to the IASO Agreement, we received an exclusive, worldwide license under certain IASO intellectual property to use a novel clinical-stage anti-CD19 binder to develop, manufacture, commercialize and otherwise exploit T cell products directed to CD19 for the purpose of diagnosis, prevention or treatment of any autoimmune or alloimmune indications in humans. IASO has the right of first negotiation if we desire to grant a third party an exclusive license to develop, manufacture, commercialize or otherwise exploit the licensed products in the Greater China region. Pursuant to the IASO Agreement, we and IASO have agreed, subject to certain exceptions, to refrain from engaging in certain competitive activities with respect to certain programs. As partial consideration for the exclusive license, IASO received an upfront payment of $2.5 million. IASO is also eligible to receive up to mid double digit millions in milestone payments based upon the achievement of specified pre-clinical, development and regulatory milestones, and up to an additional low triple digit millions in milestone payments based upon achievement of specified sales milestones, for a total consideration, inclusive of the upfront payment, of up to $162 million, along with tiered mid-single digit royalties on future net sales for licensed products that may result from the IASO Agreement. We also may sublicense through multiple tiers the rights granted to it by IASO under the IASO Agreement at any time, however, we must pay IASO a low double-digit percentage of any revenue obtained from sublicenses or options to third parties, subject to certain customary exclusions. The IASO Agreement will continue on a country-by-country, licensed product-by-licensed product basis until the expiration of the royalty term as identified in the IASO Agreement, unless earlier terminated. We and IASO may terminate the IASO Agreement for a material, uncured breach or insolvency of the other party. We may also terminate the IASO Agreement at will upon advance written notice and in the event IASO rejects the IASO Agreement due to bankruptcy-related matters. IASO may also terminate the IASO Agreement if we fail to achieve certain specified diligence milestones in a timely manner and/or if we commence any patent challenges with respect to the patents and patent applications relating to the licensed sequence, in each case upon advance written notice. A milestone payment of $1.5 million was paid to IASO in the first quarter of 2024 after the first patient in a rese-cel trial was dosed.

Oxford Biomedica

In December 2021, we entered into a Licence and Supply agreement, or LSA, with Oxford wherein the LSA grants us a non-exclusive license to Oxford's LentiVector® platform for its application in our DSG3-CAART program and puts in place a multi-year vector supply agreement. Under the terms of the agreement, we were required to pay Oxford an upfront fee, as well as costs associated with initial vector manufacturing activities. Oxford, is eligible to receive regulatory and sales milestones in the low tens of millions and royalties in the low single digits on net sales of products that incorporate the Oxford technology. We can terminate the agreement at will upon advance written notice and subject to certain manufacturing slot cancellation fees. In May 2023, we amended the LSA with Oxford to expand the license to include our rese-cel program for an upfront fee of $0.5 million and in August 2023, we entered into a vector supply agreement with Oxford, and a related second amendment to the LSA, for rese-cel with a total cost of up to approximately $5.0 million under the vector supply agreement. In February 2024, we and Oxford entered into a third amendment to the LSA to update the patent schedule. In June 2024, we and Oxford entered into a fourth amendment to the LSA eliminating royalties on net sales of products that incorporate the Oxford technology if Oxford manufactures the vector. In December 2024 and through July 2025, we and Oxford entered into work orders for certain process characterization and process performance qualification activities as part of commercial readiness activities. We can terminate the LSA or any work order under the LSA at will upon advance written notice and subject to certain cancellation fees.

Minaris Manufacturing Agreement

In January 2021, we entered into a Development and Manufacturing Services Agreement, or the Minaris Agreement, with Minaris to serve as an additional cell processing manufacturing partner for the MuSK-CAART Phase 1 clinical trial, or MusCAARTesTMtrial. The Minaris Agreement is scheduled to expire upon completion of Minaris' services related to MuSK-CAART and rese-cel. In August 2023, as amended in August 2024, we entered into an agreement with Minaris to serve as one of our manufacturing partners for the global clinical development of rese-cel in multiple indications, including potential late-stage clinical trials and commercial readiness activities for rese-cel. Under the August 2023 work orders, Minaris converted our non-dedicated suite to a dedicated suite for GMP manufacturing for our rese-cel and MuSK-CAART programs, or the Dedicated Suite, for an initial term of 18 months with two 18 month extensions at our sole option on six months' notice prior to the end of the term. In August 2024, we notified Minaris that we would extend the initial term by 18 months through August 2026. In addition, we agreed to certain monthly minimum runs. In August 2024, the 2023 work order related to GMP manufacturing was amended to reduce the minimum monthly runs through the end of 2024. In lieu of the original $1.5 million termination fee under the terms of the Minaris Agreement, we would incur up to a $1.08 million termination fee if we terminate both the rese-cel and MuSK-CAART work orders for any reason. We may terminate for convenience the Minaris Agreement or any work order with six months' prior written notice, however, we may not terminate the Dedicated Suite without

terminating both the MuSK-CAART and rese-cel GMP run work orders. Minaris may terminate the Minaris Agreement or any work order for convenience on 18 months' prior written notice, but such notice may not be effective prior to February 2028.

Lonza Manufacturing Agreement

In December 2024, we entered into a Development and Manufacturing Services Agreement, or the Lonza Agreement, with Lonza to serve as one of our manufacturing partners for the global clinical development of rese-cel in multiple indications, including potential late-stage clinical trials and preparations for commercial readiness. The Lonza Agreement has a term of five years and can be extended for an additional three year term upon notice to Lonza at least 18 months prior to the expiration of the Lonza Agreement. We can terminate the Lonza Agreement at will upon nine months advance written notice to Lonza subject to the terms of the Lonza Agreement. Lonza can terminate the Lonza Agreement at will upon 24 months advance written notice to us subject to the terms of the Lonza Agreement. Under the initial work order, Lonza will perform cell therapy manufacturing activities for our CAR-T cell therapy product, rese-cel, for an initial term of 12 months with the ability to extend the manufacturing period on a rolling basis subject to the terms of the Lonza Agreement and initial work order.

Amended and Restated License Agreement with the Trustees of the University of Pennsylvania and the Children's Hospital of Philadelphia

In August 2018, we entered into a license agreement with Penn, which was amended and restated in July 2019 to include CHOP, collectively, the Institutions, and collectively with such amendment, as amended in May 2020 and October 2021, the License Agreement, pursuant to which we obtained (a) a non-exclusive, non-sublicensable, worldwide research license to make, have made and use products in two subfields of use, (b) effective as of October 2018, an exclusive, worldwide, royalty-bearing license, with the right to sublicense, under certain of the Institutions' intellectual property to make, use, sell, offer for sale and import products in the same two subfields of use, and (c) effective as of October 2018, a non-exclusive, worldwide, royalty-bearing license, with limited rights to sublicense, under certain of Penn's know-how to make, have made, use, sell, offer for sale, import and have imported products in the same two subfields of use. Our rights are subject to the rights of the U.S. government and certain rights retained by the Institutions.

Unless earlier terminated, the License Agreement expires on the expiration or abandonment or other termination of the last valid claim in Penn's intellectual property licensed by us. We may terminate the License Agreement at any time for convenience upon 60 days' written notice. In the event of an uncured, material breach, Penn may terminate the License Agreement upon 60 days' written notice.

Master Translational Research Services Agreement

In October 2018, we entered into a Master Translational Research Services Agreement with Penn, or the Services Agreement, pursuant to which Penn agreed to perform certain services related to the research and development of the technology licensed to us under the License Agreement, as well as certain clinical, regulatory and manufacturing services. The Services Agreement will expire on the later of (i) October 19, 2021 or (ii) completion of the services for which we have engaged Penn under the Services Agreement. Either party may terminate this agreement with or without cause upon a certain number of days' prior written notice. The services encompassed by the Services Agreement are performed by different organizations at Penn pursuant to certain addenda to the Services Agreement, including the Center for Advanced Retinal and Ocular Therapeutics, or CAROT, Addendum, as amended in May 2020, and the CVPF Addendum.

In February 2023, we entered into a second Master Translational Research Services Agreement with Penn, or the CARTA Services Agreement, pursuant to which Penn agreed to perform certain research, development and manufacturing activities. The CARTA Services Agreement will expire on the later of (i) February 9, 2026 or (ii) completion of the services for which we have engaged Penn under the CARTA Services Agreement. Either party may terminate this agreement with or without cause upon a certain number of days' prior written notice. The services encompassed by the CARTA Services Agreement are performed by different organizations at Penn pursuant to certain addenda to the CARTA Services Agreement.

Components of Operating Results

Revenue

To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sales of products for several years, if at all. If our development efforts for our current or future product candidates are successful and result in marketing approval, we may generate revenue in the future from product sales. We cannot predict if, when or to what extent we will generate revenue from the commercialization and sale of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates.

We may also in the future enter into license or collaboration agreements for our product candidates or intellectual property, and we may generate revenue in the future from payments as a result of such license or collaboration agreements.

Operating Expenses

Research and Development

Our research and development expenses include:

We have not reported program costs since inception because historically we have not tracked or recorded our research and development expenses on a pre-clinical program-by-program basis. We use our personnel and infrastructure resources across the breadth of our research and development activities, which are directed toward identifying and developing product candidates.

We expense all research and development costs in the periods in which they are incurred. Costs for certain research and development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and third-party service providers.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, including investments in manufacturing, as our programs advance and we conduct clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result, 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 any of our product candidates.

Because of the numerous risks and uncertainties associated with product development, we cannot determine with certainty the duration and completion costs of the current or future preclinical studies and clinical trials or if, when, or to what extent we will generate revenues from the commercialization and sale of our product candidates. We may never succeed in achieving regulatory approval for our product candidates. The duration, costs and timing of preclinical studies and clinical trials and development of our product candidates will depend on a variety of factors, including:

We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected results from our preclinical studies and clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current and future preclinical and clinical product candidates. For example, if the FDA or another regulatory authority, were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or clinical trials, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development. We expect our research and development expenses to increase for the foreseeable future as we continue the development of product candidates.

General and Administrative Expenses

Our general and administrative expenses consist primarily of personnel costs, costs related to maintenance and filing of intellectual property, depreciation expense and other expenses for outside professional services, including legal, human resources, information technology, audit and accounting services. Personnel costs consist of salaries, benefits and stock-based compensation expense. We expect our general and administrative expenses to increase over the next several years to support our continued research and development activities, manufacturing activities, increased costs of operating as a public company and the potential commercialization of our product candidates. We anticipate our general and administrative costs will increase with respect to the hiring of additional personnel, developing commercial infrastructure, fees to outside consultants, lawyers and accountants, and increased costs associated with being a public company such as expenses related to services associated with maintaining compliance with Nasdaq listing rules and SEC requirements, insurance and investor relations costs.

Other Income

Other income consists of interest earned on our cash, cash equivalents and investments and amortization of bond discount or premium.

Interest Expense

Interest expense consists primarily of interest expense associated with finance lease arrangements.

Other Income, net

Other income, net primarily consists of foreign currency gains and losses and proceeds received from the sale of our Pennsylvania research and development tax credits.

Results of Operations for the three months ended September 30, 2025 and 2024

The following sets forth our results of operations for the three months ended September 30, 2025 and 2024:

Research and Development

Research and development expenses were $39.8 million for the three months ended September 30, 2025 compared to $26.3 million for the three months ended September 30, 2024. The table below summarizes our research and development expenses:

Specific changes in our research and development expenses year over year include a:

General and Administrative

General and administrative expenses were $6.8 million for the three months ended September 30, 2025 compared to $6.8 million for the three months ended September 30, 2024. General and administrative expenses were comparable to the prior quarter.

Interest Income

Interest income decreased by $0.6 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to lower cash, cash equivalents and investment balances earning interest, following the use of proceeds from the May 2023 financing and sales of common stock under the 2023 ATM Program in late 2023 and early 2024 and the timing of the June 2025 financing, which closed in mid-June 2025.

Interest Expense

Interest expense increased $0.6 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to finance lease arrangements related to embedded leases within our manufacturing agreements with Minaris and Lonza.

Other Income, net

Other Income, net increased $0.5 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to proceeds received from the sale of our Pennsylvania research and development tax credits.

Results of Operations for the nine months ended September 30, 2025 and 2024

The following sets forth our results of operations for the nine months ended September 30, 2025 and 2024:

Research and Development

Research and development expenses were $106.5 million for the nine months ended September 30, 2025 compared to $71.7 million for the nine months ended September 30, 2024. The table below summarizes our research and development expenses:

Specific changes in our research and development expenses year over year include a:

General and Administrative

General and administrative expenses were $23.1 million for the nine months ended September 30, 2025 compared to $19.7 million for the nine months ended September 30, 2024. The increase of $3.4 million in our general and administrative expenses include:

Interest Income

Interest income decreased by $3.4 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to lower cash, cash equivalents and investment balances earning interest, following the use of proceeds from the May 2023 financing and sales of common stock under the 2023 ATM Program in late 2023 and early 2024 and the timing of the June 2025 financing, which closed in mid-June 2025.

Interest Expense

Interest expense increased $1.4 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to finance lease arrangements related to embedded leases within our manufacturing agreements with Minaris and Lonza.

Other Income, net

Other Income, net increased $0.4 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to proceeds received from the sale of our Pennsylvania research and development tax credits.

Liquidity, Capital Resources and Going Concern

From our inception in April 2017 to the time of our initial public offering, or IPO, our operations were financed by proceeds of $86.4 million from the sale of convertible notes and our convertible preferred stock and proceeds of $71.0 million from the sale of common stock in our IPO. Since our IPO, we have generated cash from public offerings of our common stock and pre-funded warrants to purchase our common stock resulting in aggregate net proceeds of approximately $374.0 million. As of September 30, 2025, we had $159.9 million in cash, cash equivalents and investments which should enable us to fund our operations and capital expenditures into the second half of 2026. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.

We have incurred losses since our inception and, as of September 30, 2025, we had an accumulated deficit of $475.0 million. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding prepaid expenses and other current assets, accounts payable and accrued expenses.

Any product candidates we may develop may never achieve commercialization and we anticipate that we will continue to incur losses for the foreseeable future. We expect that our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. As a result, until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research, manufacturing and development services, costs relating to the build-out of our headquarters, laboratories and manufacturing facility, license payments or milestone obligations that may arise, laboratory and related supplies, clinical costs, manufacturing costs, legal and other regulatory expenses and general overhead costs.

We evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued. Based on our current operating plan, we believe there is substantial doubt about our ability to continue as a going concern for

at least twelve months following the filing of this Quarterly Report on Form 10-Q, and we will need to obtain additional funding. Our cash forecast contains estimates and assumptions based on success of ongoing clinical trials, and we cannot predict the amount or timing of all expenditures with certainty. We will continue to seek funds through equity offerings, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders' rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we will need to delay, reduce or terminate certain planned activities to reduce costs.

At-The-Market Offering Sales Agreement

On March 31, 2025, we converted the S-3ASR to an S-3 (File No. 333-278126) by post-effective amendments. This S-3 was declared effective on March 31, 2025. We had a Sales Agreement with TD Securities (USA) LLC, as successor to Cowen and Company, LLC, or TD Cowen, to provide for the offering, issuance and sale of up to an aggregate amount of $200.0 million of common stock from time to time in "at-the-market" offerings, or the 2024 ATM Program, pursuant to its S-3, and subject to the limitations thereof. On June 11, 2025, the 2024 ATM Program with TD Cowen was terminated. Prior to termination, we sold an aggregate of 2,609,865 shares pursuant to the 2024 ATM Program for total net proceeds of $7.7 million, consisting of $5.1 million in 2024 and $2.6 million in 2025.

On August 7, 2025, we filed a Registration Statement (File No. 333-289339) with the Securities and Exchange Commission, or the SEC, which was declared effective on August 15, 2025, or the 2025 Shelf Registration Statement, in relation to the registration of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof for the purposes of selling, from time to time, our common stock, debt securities or other equity securities in one or more offerings. We also simultaneously entered into a Sales Agreement with TD Cowen to provide for the offering, issuance and sale of up to an aggregate amount of $150.0 million of our common stock from time to time in "at-the-market" offerings, or the 2025 ATM Program, under the 2025 Shelf Registration Statement and subject to the limitations thereof, or the 2025 Sales Agreement. No shares have been sold pursuant to the 2025 ATM Program as of the date of this Quarterly Report on Form 10-Q.

June 2025 Financing

In June 2025, we issued (i) 39,200,000 shares of our common stock and accompanying warrants to purchase an aggregate of 39,200,000 shares of common stock (or pre-funded warrants in lieu thereof) and (ii) in lieu of common stock, to certain investors, pre-funded warrants to purchase an aggregate of up to 10,800,000 shares of our common stock and accompanying warrants to purchase an aggregate of 10,800,000 shares of common stock (or pre-funded warrants in lieu thereof), at an exercise price of $0.00001 per pre-funded warrant. The combined offering price of each share of common stock and accompanying common stock warrant was $2.00. The combined offering price of each pre-funded warrant and accompanying common stock warrant was $1.99999. The pre-funded warrants were exercisable immediately. The common stock and pre-funded warrants were sold in combination with an accompanying common stock warrant to purchase one share of common stock (or a pre-funded warrant in lieu thereof) for each share of common stock or pre-funded warrant sold. Each common stock warrant has an exercise price per share of $2.50. The common stock warrants are immediately exercisable from the date of issuance and will expire fifteen months from the date of issuance. Aggregate net proceeds were $93.6 million after deducting underwriting discounts and commissions and offering expenses. As of September 30, 2025, 4,800,000 pre-funded warrants had been exercised and 6,000,000 remain outstanding. As of September 30, 2025, no common stock warrants had been exercised.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical 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:

Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development activities. We currently have no credit facility or committed sources of capital. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated product development programs.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

Operating Activities

During the nine months ended September 30, 2025, cash used in operating activities of $95.7 million was attributable to our net loss of $125.9 million, partially offset by non-cash charges of $29.0 million for stock-based compensation charges, amortization of finance lease, non-cash operating lease expense, depreciation, accretion of operating lease liabilities and foreign currency exchange rates and a net change of $1.2 million in our net operating assets and liabilities.

During the nine months ended September 30, 2024, cash used in operating activities of $65.1 million was attributable to a net loss of $83.3 million and a net change of $1.3 million in our net operating assets and liabilities, partially offset by non-cash charges of $19.5 million primarily from stock-based compensation, non-cash lease expense and accretion of lease liabilities and depreciation.

Investing Activities

During the nine months ended September 30, 2025, cash used in investing activities of $100.0 million was attributable to $99.0 million of purchases of investments and $1.0 million of purchases of property and equipment.

During the nine months ended September 30, 2024, cash provided by investing activities of $35.2 million was attributable to $37.0 million from the maturity of short term investments, partially offset by purchases of $1.8 million of property and equipment.

Financing Activities

During the nine months ended September 30, 2025, cash provided by financing activities of $92.0 million was attributable to $93.5 million in sales of common stock, warrants and pre-funded warrants to purchase common stock, net of issuance costs paid, $2.6 million in sales of common stock from our ATM offering, net of sales agent commission and fees and $0.2 million from the purchases of shares under our 2019 Employee Stock Purchase Plan, or 2019 ESPP, offset by $4.3 million in principal payments on finance leases.

During the nine months ended September 30, 2024, cash provided by financing activities of $7.3 million was from $5.7 million in sales of common stock, net of issuance costs paid, and $1.6 million from the exercise of employee stock options and purchases of shares under our 2019 ESPP.

Contractual Obligations and Commitments

For a discussion of contractual obligations and other commitments affecting us, see the discussion under the heading "Management Discussion and Analysis of Financial Condition and Results of Operations - Contractual obligations and other commitments" included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 31, 2025.

There have been no material changes to the Company's contractual obligations and other commitments since December 31, 2024, except as otherwise described herein with respect to the Lonza Agreement.

Critical Accounting Policies and Significant Judgments and Estimates

The Critical Accounting Policies and Significant Judgments and Estimates included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 31, 2025, have not materially changed.

Smaller Reporting Company Status

We are a "smaller reporting company," as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. We would cease to be a smaller reporting company if we have a public float in excess of $250 million, or have annual revenues in excess of $100 million and a public float in excess of $700 million, determined on an annual basis. This status allows us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements please read Note 2, Summary of Significant Accounting Policies, to our unaudited condensed consolidated financial statements included in this report.