Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information set forth under our consolidated financial statements and the notes to those financial statements included elsewhere in this Annual Report. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. See "Special Note Regarding Forward-Looking Statements." Our actual results may differ materially from those contained in or implied by any forward-looking statements as a result of various factors, including, but not limited to, the risks and uncertainties described under "Risk Factors" elsewhere in this Annual Report.

Certain amounts in the following discussion and analysis may not add due to rounding, and all percentages have been calculated using unrounded amounts.

Overview

We are a clinical-stage biotechnology company focused primarily on developing novel pharmaceuticals to treat cardiometabolic diseases. We have two programs focused primarily on the treatment of MASH and obesity.

While we focus our financial resources and management's attention on the development of vanoglipel (DA-1241) and DA-1726, we also have four legacy therapeutic programs designed to impact a range of indications in viral, neurodegenerative and cardiometabolic diseases, which we are not planning to advance development on and have, or continue to consider for, out-licensing and divestiture opportunities. In 2024, we entered into an exclusive out-license agreement with MThera to provide MThera with the rights to one of our legacy therapeutic program, NB-01, for the treatment of painful diabetic neuropathy.

Our operations consisted principally of performing R&D activities, which include preclinical development and clinical trials, and raising capital. Our activities are subject to significant risks and uncertainties, such as failing to secure additional funding before sustainable revenues and profit from operations are achieved. For more information on our business and product candidates, see Part I, Item 1. Business of this Annual Report.

Recent developments

Common stock reverse stock split

In December 2025, we completed a one-for-eleven reverse stock split of our common stock (the "Reverse Stock Split"). As a result, every eleven shares of our issued and outstanding common stock were combined, converted and changed into one share of our common stock. Any fraction of a share of our common stock that was created as a result of the Reverse Stock Split was rounded down to the next whole share and the stockholder received cash equal to the market value of the fractional share, determined by multiplying such fraction by the closing sales price of our common stock as reported on Nasdaq on the last trading day before the Reverse Stock Split. The Reverse Stock Split was approved by our stockholders at the annual meeting of stockholders in June 2025. At the annual meeting, the stockholders approved a proposal to amend our certificate of incorporation to affect a reverse split of our outstanding common stock at a ratio in the range of one-for-five to one-for-thirty to be determined at the discretion of our Board. In November 2025, our Board approved the Reverse Stock Split.

The Reverse Stock Split did not impact the number of authorized shares of common stock, which remains at 100,000,000 shares. For the Reverse Stock Split, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options and warrants to purchase shares of our common stock, the number of shares issuable upon vesting of restricted stock units ("RSUs") and the number of shares reserved for issuance pursuant to our equity incentive compensation plans.

In this Annual Report, including the accompanying consolidated financial statements and the notes to the consolidated financial statements, the number of shares of common stock and per share data have been adjusted to give effect to the Reverse Stock Split for all periods presented. Additionally, since the common stock par value was unchanged, the amounts for common stock and additional paid-in capital have been adjusted to give effect to the Reverse Stock Split for all periods presented.

Key operating information

R&D expenses

R&D expenses consist primarily of costs incurred in connection with the development of our product candidates. These expenses include:

Direct costs

Indirect costs

We recognize external development costs based on an evaluation of the progress toward completion of specific tasks using information provided to us by our service providers. This process involves reviewing contracts and purchase orders, communicating with our clinical research staff to identify services that have been performed on our behalf, and estimating the level of service provided and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. Nonrefundable advance payments for goods or services to be received in the future for use in R&D activities are recorded as prepaid expenses. Such amounts are recognized as an expense when the goods have been delivered or the services have been performed, or when it is no longer expected that the goods will be delivered, or the services rendered.

Our direct R&D expenses consist primarily of external costs, such as fees paid to CROs, CMOs, research laboratories and outside consultants in connection with our clinical development, quality assurance and quality control processes, manufacturing, and clinical development activities. Our direct R&D expenses also include fees incurred under third-party license agreements, including the Shared Services Agreement with Dong-A ST (related party). We utilize our employee and infrastructure resources across multiple R&D projects. We do not allocate employee costs and costs associated with our facilities, including depreciation or other indirect costs, to specific product candidates because these costs are deployed across multiple programs and, as such, are not separately classified. We utilize internal resources to manage CRO and CMO activities. These employees work across multiple programs. Our direct R&D expenses consist of (i) expenses attributable to our product candidates and (ii) certain other R&D expenses, including clinical, non-clinical and preclinical services or other R&D expenses that are not attributable to a single product candidate. Our indirect R&D expenses consist of (i) employment-related expenses for compensation and benefits, which are internal costs and (ii) consulting expenses.

Clinical development activities are central to our business model. We do not believe that our historical costs are indicative of the future costs associated with these programs, nor do they represent the costs of future programs we may initiate. Product candidates in later stages of clinical development generally have higher development costs than those in preclinical development or in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We have some control over the timing of these expenses, but costs may be difficult to control once clinical trials have commenced.

The successful development and commercialization of our product candidates are highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates. Additionally, because of the risks inherent in novel treatment discovery and development, we cannot reasonably estimate or know:

A change in the outcome of any of these variables with respect to the development of our product candidates could significantly change the costs and timing associated with the development of that product candidate.

G&A expenses

G&A expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. G&A expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor and public relations, accounting, and audit services.

We anticipate that our G&A expenses will increase in the future as a result of accounting, audit, legal, regulatory, compliance, and director and officer insurance costs as we pursue the development of our product pipeline, as well as investor and public relations expenses associated with being a public company.

Income taxes

We have had significant pre-tax losses since our inception, and we have not yet generated revenues and face significant challenges to becoming profitable. Accordingly, we recorded a valuation allowance on the deferred tax assets attributable to the NOL we have incurred in each year or for our earned R&D credits. We will continue to monitor all positive and negative evidence until we believe it is more likely than not that the valuation allowance is no longer necessary, resulting in an income tax benefit in the period such determination is made.

We have U.S. federal NOL carryforwards, and these carryforwards will not expire. We also have state NOL carryforwards, and these carryforwards will begin to expire in 2042, if not utilized.

Net loss

We have incurred significant operating losses since our inception. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future product candidates. To date, we have not generated any revenue from product sales, collaborations with other companies, government grants or any other source, and do not expect to generate any revenue in the foreseeable future.

Accumulated deficit

We have an accumulated deficit, and we expect to continue to incur significant expenses and increasing operating losses for at least the next several years. We expect that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we:

Results of Operations

2025 compared to 2024

The following table summarizes our results of operations for 2025 and 2024 (in thousands, except share and per share amounts):

Operating expenses and loss from operations

Our total operating expenses and loss from operations for 2025 were $13.7 million, a decrease of $15.1 million, or 52.4%, compared to 2024. This decrease was attributable to lower R&D and G&A expenses for 2025. Our R&D expenses were $6.8 million for 2025, a decrease of $14.8 million, or 68.4%, compared to 2024. Our G&A expenses were $6.9 million for 2025, a decrease of $0.4 million, or 4.8%, compared to 2024. The following table summarizes our R&D expenses for 2025 and 2024 (in thousands):

The $14.8 million decrease in R&D expenses reflects decreased R&D activities related to the Phase 2a clinical trial for vanoglipel (DA-1241) and decreased activities related to the Phase 1 clinical trial for DA-1726 as compared to 2024. Specifically, the decrease in R&D expenses was primarily attributable to (i) $10.8 million in lower direct R&D expenses related to vanoglipel (DA-1241) product development, (ii) $3.9 million in lower direct R&D expenses related to DA-1726 product development, and (iii) $0.2 million in lower direct other R&D costs. These decreases were partially offset by $0.1 million in higher indirect consulting expenses and a slight increase in indirect employee compensation and benefits. The credit amount for direct vanoglipel (DA-1241) costs in 2025 includes a credit of $1.2 million in connection with the close-out of the clinical trial with the CRO. Included in direct R&D costs were expenses totaling $3.4 million and $4.9 million for 2025 and 2024, respectively, related to investigational drug manufacturing, non-clinical and preclinical costs incurred under the Shared Services Agreement with Dong-A ST (related party).

Our G&A expenses were $6.9 million for 2025, a decrease of $0.4 million, or 4.8%, compared to 2024. This decrease in G&A expenses was primarily attributable to $0.7 million in lower consulting expenditures, $0.1 million in lower insurance, and $0.2 million in lower other G&A expenses. These decreases were partially offset by $0.5 million in higher legal and professional fees and $0.1 million in higher employee compensation and benefits.

Total other income

Our total other income for 2025 was $0.7 million, a decrease of $0.5 million, or 39.6%, compared to 2024. This decrease was attributable to $0.4 million in lower interest income, net, due to lower balances of cash and cash equivalents and lower interest rates, and $0.1 million in lower gain from the change in fair value of warrant liabilities due to the impact of our common stock's volatile stock price during the last few years.

Provision for income taxes

Our effective tax rate for 2025 and 2024 was zero percent as we have recorded a full valuation allowance for the income tax benefits attributable to our pre-tax losses.

Net loss

For 2025, we had a net loss of $13.0 million, or $7.35 per share of basic and diluted common stock, compared to a net loss of $27.6 million, or $39.13 per share of basic and diluted common stock for 2024.

Going concern

As reflected in the consolidated financial statements, we had $10.3 million in cash and cash equivalents as of December 31, 2025. We have experienced net losses and negative cash flows from operating activities since our inception and had an accumulated deficit of $148.8 million as of December 31, 2025. We have incurred a net loss of $13.0 million and net cash used in operating activities of $15.7 million for 2025. Due in large part to ongoing clinical trials, we expect to continue to incur net losses and negative cash flows from operating activities for the foreseeable future. These conditions raise substantial doubt about our ability to continue as a going concern within one year from the issuance of our consolidated financial statements in Part II, Item 8. Financial Statements and Supplementary Data.

We believe that our existing cash and cash equivalents, together with the proceeds from the underwritten public offering in January 2026, will be sufficient to fund our operations into the fourth quarter of 2026. We plan to continue to fund our operations through equity offerings, debt financing, the exercise of existing warrants, or other sources, potentially including collaborations, out-licensing and other similar arrangements. However, there can be no assurance that we will be able to obtain any sources of financing on acceptable terms, or at all, or that the warrants issued in previously consummated offerings will be exercised. To the extent that we can raise additional funds by issuing equity securities or in the event our existing warrants are exercised, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct our business. If we are unable to raise additional capital, we may slow down or stop our ongoing and planned clinical trials until such time as additional capital is raised and this may have a material adverse effect on the Company.

The determination as to whether we can continue as a going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our consolidated financial statements have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of our assets and the satisfaction of our liabilities in the normal course of business.

Liquidity and capital resources

Our primary use of cash is to fund our R&D activities. We have funded our operations primarily through public offerings of our common stock and private placements of equity and convertible securities. As of December 31, 2025, we had cash totaling $10.3 million. We maintain cash at financial institution that at times may exceed the Federal Deposit Insurance Corporation insured limits of $0.25 million per bank. To date, we have not experienced any losses related to these funds. Our cash equivalents consist principally of bank money market accounts and these securities are carried at cost, which approximates market value.

Private Placement

In May 2025, we closed on a private placement offering with Dong-A ST, a related party, and Dong-A Holdings, an affiliate company of Dong-A ST, and received net proceeds of $9.1 million, net of placement agent cash fees of $0.4 million and related offering expenses of $0.5 million. The private placement offering was comprised of (i) 861,758 shares of our common stock for a purchase price of $7.81 per share and (ii) 418,651 pre-funded warrants to purchase up to an equivalent number of shares of our common stock for a purchase price of $7.799 per pre-funded warrant. Each pre-funded warrant had an exercise price of $0.011 per share and were fully exercised as of June 30, 2025.

At the market offering

In November 2025, we entered into an At The Market Offering Agreement (the "ATM Sales Agreement") with Ladenburg Thalmann & Co. Inc., as sales agent and/or principal ("Ladenburg"), pursuant to which we may offer and sell, from time to time through or to Ladenburg, shares of our common stock having an aggregate offering price of up to $2.3 million (the "ATM Program"). The offer and sale of the shares of common stock pursuant to the ATM Program is made pursuant to a shelf registration statement on Form S-3 and the related prospectus (File No. 333-278646) filed with the SEC on April 12, 2024, and declared effective by the SEC on April 23, 2024, as supplemented by a prospectus supplement to be filed with the SEC on November 6, 2025 pursuant to Rule 424(b) under the Securities Act.

Pursuant to the ATM Sales Agreement, Ladenburg may sell the shares by any method permitted by law deemed to be an "at the market offering" as defined in Rule 415(a)(4) of the Securities Act. We are not obligated to make any sales of the shares under the ATM Sales Agreement. The offering of shares pursuant to the ATM Sales Agreement will terminate upon the termination of the ATM Sales Agreement by Ladenburg or us, as permitted therein. We are obligated to pay Ladenburg an aggregate sales agent commission of 3.0% of the gross sales price of the shares sold pursuant to the ATM Sales Agreement. We will also reimburse Ladenburg for certain specified expenses in connection with entering into the ATM Sales Agreement, which contains customary representations and warranties and conditions to the placements of the shares pursuant thereto. In November 2025, we sold 106,788 shares of common stock under the ATM Program and received net proceeds of $0.9 million, net of sales agent commission and related offering expenses. As of December 31, 2025, we have $1.1 million remaining under the ATM Program in which we may offer and sell shares of our common stock.

For additional information, see "Note 7. Stockholders' equity" to the consolidated financial statements included elsewhere in this Annual Report.

January 2026 Public Offering

In January 2026, we closed on an underwritten public offering, pursuant to which we issued and sold, (i) 1,006,870 Class A Units, with each Class A Unit consisting of (A) one share of common stock, (B) 1.5 Series C Common Warrants to purchase 1.5 shares of common stock, and (C) 1.5 Series D Common Warrants to purchase 1.5 shares of common stock, at a price of $3.10 per Class A Unit, and (ii) 1,998,704 Class B Units, with each Class B Unit consisting of (A) one pre-funded warrant to purchase one share of common stock, (B) 1.5 Series C Common Warrants to purchase 1.5 shares of common stock, and (C) 1.5 Series D Common Warrants to purchase 1.5 shares of common stock, at a purchase price of $3.099 per Class B Unit. Each pre-funded warrant has an exercise price of $0.001 per share and is immediately exercisable and will expire when exercised in full. Each Series C Common Warrant and Series D Common Warrant has an exercise price of $3.10 per whole share of common stock, subject to certain adjustments, are immediately exercisable, and will expire on January 16, 2031 and January 16, 2028, respectively. Under the Series C Common Warrant and the Series D Common Warrant, we may not affect the exercise of any such warrants, and a holder will not be entitled to exercise any portion of any such warrants, which, upon giving effect to such exercise, would cause the aggregate number of shares of common stock beneficially owned by the holder (together with its affiliates) to exceed the beneficial ownership limitation contained therein. We received gross proceeds of $9.3 million, prior to deducting underwriting discounts and commissions and offering expenses.

Cash Flows

The principal use of cash in operating activities is to fund our current expenditures in support of our R&D activities and clinical development activities. Financing activities currently represent the principal source of our cash flow.

The following table reflects the major categories of cash flows for each of the periods presented (in thousands).

Net cash used in operating activities was $15.7 million for 2025 and consisted of net loss of $13.0 million and net cash used by change in operating assets and liabilities of $2.9 million, partially offset by adjustments for non-cash charges totaling $0.2 million, which was primarily attributable to $0.4 million of stock-based compensation costs and $0.2 million gain from change in fair value of warrant liabilities. Net cash used in operating activities was $24.7 million for 2024 and consisted of net loss of $27.6 million, partially offset by net cash provided by change in operating assets and liabilities of $2.6 million and non-cash charges totaling $0.3 million, which was primarily attributable to $0.5 million of stock-based compensation and $0.2 million gain from change in fair value of warrant liabilities.

Net cash used in investing activities, related to the purchases of property equipment, was less than $0.1 million for 2025 and 2024.

Net cash provided by financing activities was $10.0 million for 2025, which primarily consisted of proceeds of $10.0 million from the 2025 private placement offering and $1.2 million from the ATM Program. Partially offsetting these cash inflows were cash outflows for the payment of $0.9 million of issuance costs in connection with the 2025 private placement offering and $0.4 million of issuance costs in connection with the at the market offering. Net cash provided by financing activities was $18.3 million for 2024, which primarily consisted of proceeds of $20.0 million from the 2024 private placement offering, partially offset by the payment of $1.7 million of issuance costs in connection with the 2024 private placement offering.

For additional details, see the consolidated statements of cash flows in the consolidated financial statements included elsewhere in this Annual Report.

Contractual obligations, purchase commitments and employment agreements

Contractual obligations

We entered into a non-cancelable operating lease for our corporate headquarters in Cambridge, Massachusetts. For additional information, see "Note 6. Commitments and contingencies" to the consolidated financial statements included in this Annual Report.

In the ordinary course of business, we enter into agreements with third parties that include indemnification provisions, which, in our judgment, are normal and customary for companies in our industry sector. These agreements are typically with business partners, clinical sites, and suppliers. Pursuant to these agreements, we generally agree to indemnify, hold harmless, and reimburse indemnified parties for losses suffered or incurred by the indemnified parties with respect to our products or product candidates, use of such products or product candidates, or other actions taken or omitted by us. The maximum potential amount of future payments we could be required to make under these indemnification provisions is sometimes unlimited. We have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of liabilities relating to these provisions is minimal. Accordingly, we have no liabilities recorded for these provisions as of December 31, 2025 and 2024.

In the normal course of business, we may be confronted with issues or events that may result in contingent liability. These generally relate to lawsuits, claims, environmental actions, or the actions of various regulatory agencies. We consult with counsel and other appropriate experts to assess the claim. If, in our opinion, we have incurred a probable loss, an estimate is made of the loss and the appropriate accounting entries are reflected in our financial statements.

We are party to license agreements with respect to certain of our product candidates that would obligate us to pay royalties with respect to revenue from such product candidates and milestone payments upon achievement of certain development milestones. As of the date hereof, we do not expect to achieve such milestones in the near term, but we would have to obtain additional capital to pay such milestone payments.

Additional information regarding contingent payments and license agreements is in "Note 5. Related party" and "Note 6. Commitments and contingencies" to the consolidated financial statements included in this Annual Report.

Purchase commitments

Information regarding purchase commitments is in "Note 6. Commitments and contingencies" to the consolidated financial statements included in this Annual Report.

Employment agreements

Information regarding employment agreements is in "Note 6. Commitments and contingencies" to the consolidated financial statements included in this Annual Report.

Critical Accounting Estimates

Our consolidated financial statements included in this Annual Report have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses, and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. The most significant estimates in our consolidated financial statements relate to clinical trial costs and accruals, classification of warrants as derivative liability or equity, and the fair value of stock-based compensation and warrants. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known.

Our critical accounting estimates and judgments relate to the following items: (i) cash forecast for conclusion about MetaVia's ability to continue as a going concern, (ii) conclusion on the classification of warrants based on the underlying warrant and transaction agreements, and (iii) clinical trial costs and accruals. Our cash forecast for the 12-month period from the filing date of this Annual Report utilizes current cash balance less estimated payments for future clinical trials and G&A costs plus forecasted cash inflows. Our estimates and judgments used in clinical trial costs and accruals are described below.

Accrual for R&D costs related to clinical trial activities

As part of the process of preparing our consolidated financial statements, we are required to record an accrual for R&D costs related to clinical trial activities. This process involves reviewing open contracts and purchase orders, communicating with applicable personnel to identify services that have been performed on our behalf and estimating the level of service provided and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. Certain of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some service providers require advance payments. We make estimates of our accrued and prepaid expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of these estimates with the service providers and make adjustments, if necessary. Examples of estimated accrued R&D expenses include fees paid to:

We base the expense recorded related to external R&D on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CMOs and CROs that supply, conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.

Recent accounting pronouncements

Information regarding (i) adoption of new accounting standards during 2025 and (ii) accounting standards issued but not yet adopted is included in "Note 1. Business, basis of presentation, new accounting standards and summary of significant accounting policies" to the consolidated financial statements included in this Annual Report.

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