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 of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report and the audited financial statements and notes thereto as of and for the year ended December 31, 2025 and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 5, 2026. 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, includes forward-looking statements that involve substantial risks and uncertainties. As a result of many factors, including those factors set forth in Part II, Item 1A. "Risk Factors" of this Quarterly Report, 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. For further information regarding our forward-looking statements, see "Cautionary Note Regarding Forward-Looking Statements" in this Quarterly Report.

Unless the context requires otherwise, references in this Quarterly Report to "we," "us," and "our" refer to Climb Bio, Inc. and its wholly owned subsidiaries.

Overview

We are a clinical-stage biotechnology company committed to developing potential best-in-class therapeutics that address significant unmet need for patients living with immune-mediated diseases. We have built our pipeline by strategically acquiring or in-licensing product candidates that we believe have clear biological rationale, well-defined development pathways, and the potential to address multiple indications.

We are developing our product candidates for multiple immune-mediated diseases, as summarized in the pipeline figure below.

We acquired the rights to our product candidates through license and asset purchase agreements. We have worldwide rights to develop and commercialize budoprutug for all indications, except for oncology. We have rights to develop and commercialize CLYM116 for all indications worldwide outside of mainland China, Hong Kong, Macau, and Taiwan (Greater China).

Our lead product candidate, budoprutug, is a clinical-stage anti-CD19 monoclonal antibody (mAb) designed to deplete CD19-positive B cells. CD19 plays a mechanistic role across all stages of B-cell development, and emerging clinical evidence continues to support the importance of CD19 in immune-mediated diseases. By targeting CD19, budoprutug has the potential to provide rapid, profound, and durable reductions in B cells and pathogenic autoantibodies, which may allow for a disease-modifying therapeutic approach. We have focused our initial development strategy for budoprutug on primary membranous nephropathy (pMN), immune thrombocytopenia (ITP), and systemic lupus erythematosus (SLE), which we believe each offer a strong mechanistic rationale for CD19-directed therapy.

In March 2025, we received clearance from the FDA for a Phase 2, dose range finding clinical trial of budoprutug in pMN, known as PrisMN. We have initiated our Phase 2 clinical trial of budoprutug in pMN patients with persistent proteinuria despite optimized renin-angiotensin-aldosterone system (RAAS) inhibition in multiple countries and are actively enrolling patients. PrisMN, an open-label, dose-ranging Phase 2 clinical trial, is designed to further evaluate safety, pharmacokinetics (PK), pharmacodynamics (PD) (including B cells, anti-PLA2R (Phospholipase A2 Receptor) and total immunoglobulin), and preliminary efficacy, including complete and partial remission, and to identify a dose to carry forward into Phase 3. The FDA granted budoprutug orphan-drug designation for the treatment of pMN in January 2023 and FastTrack Designation for pMN in April 2026. We expect to have initial data, including B-cell and anti-PLA2R data from the low dose cohort (200 mg at 12-24 weeks) in the Phase 2 clinical trial in pMN in the fourth quarter of 2026.

Separately, in March 2025, we received clearance from the FDA for an open-label, dose-escalation Phase 1b/2a clinical trial of budoprutug in patients with ITP to evaluate safety, tolerability, PK, PD, and preliminary efficacy, including B cell depletion and platelet counts. We have also received regulatory clearance for this trial in multiple countries outside the United States, and we continue to activate sites and enroll and dose patients. Results from this trial are expected to provide a deeper understanding of budoprutug activity and dosing and will inform future development efforts in ITP and other immune-mediated diseases. We expect to have initial B-cell and platelet data from the low dose cohort (250 mg at 24 weeks) in the Phase 1b/2a clinical trial in ITP in June 2026, with additional data from the higher dose cohort[s] anticipated by the end of 2026.

In October 2024, we received FDA clearance for a Phase 1b clinical trial of budoprutug in moderate to severe SLE. We are actively enrolling patients in this global, open-label, dose-escalation Phase 1b trial. In this trial, a single dose of budoprutug will be administered in moderate to severe SLE patients to evaluate safety, tolerability, PK, PD, and preliminary efficacy, including B-cell depletion, autoantibody levels, and clinical activity. We expect to have initial B-cell data from the global Phase 1b clinical trial in SLE in the fourth quarter of 2026.

In December 2025, we received clearance of our IND to initiate a separate, parallel Phase 1b/2a clinical trial in SLE patients in China, which will complement our ongoing global Phase 1b clinical trial and also seek to enroll SLE patients who have lupus nephritis (LN). We expect to enroll the first patient in this study in the second quarter of 2026. The data from these trials in SLE are expected to provide insights into budoprutug activity and will also help to inform future development efforts for our program broadly.

The above described clinical trials of budoprutug in pMN, ITP and SLE utilize an intravenous (IV) formulation of budoprutug. In parallel, we are advancing a high-concentration subcutaneous (SC) formulation of budoprutug, which may offer a differentiated convenience profile and potential commercial advantage. In September 2025, we initiated a Phase 1 clinical trial of the SC formulation of budoprutug in healthy volunteers in Australia. We have completed dosing and announced topline data from this trial in May 2026. The SC formulation of budoprutug was generally well-tolerated and resulted in robust B-cell depletion, which was similar to the IV formulation at matched doses. These results support the continued development of the SC formulation, and we plan to initiate a multiple dose study in autoimmune disease patients to evaluate full B-cell depleting doses and optimal dosing regimen.

In addition to budoprutug, we are developing CLYM116, a next generation anti-APRIL (A PRoliferation-Inducing Ligand) mAb for the treatment of patients with immunoglobulin A nephropathy (IgAN) and other B-cell mediated diseases. CLYM116 is a highly potent, Fc-engineered antibody that prevents APRIL signaling by potently blocking the binding of APRIL to its receptors and promoting lysosomal APRIL degradation through a pH-dependent bind-and-release 'sweeper' mechanism. Through this unique binding profile and half-life extending Fc-engineering, CLYM116 has the potential to enable deep and durable inhibition of APRIL signaling and IgA production. In October 2025, we received clearance for our CTA in Australia to initiate a Phase 1 clinical trial of CLYM116 in healthy volunteers. We initiated the Phase 1 clinical trial in healthy volunteers in November 2025 and are actively enrolling subjects. We intend to present PK and PD modeling data from nonhuman primates to humans, as well as initial safety data from the ongoing Phase 1 study in healthy volunteers and anticipate having initial PK/PD data from this Phase 1 trial in mid-2026.

Separately, our partner, Mabworks, received clearance for their IND in December 2025 and initiated a Phase 1/2 clinical trial of CLYM116 in China designed to evaluate the safety, tolerability, PK, and PD in healthy volunteers and IgAN patients.

Since our inception, we have primarily funded our operations with proceeds from the sale and issuance of shares of our redeemable convertible preferred stock, our initial public offering (IPO), and the sale and issuance of shares in private placements of shares of our common stock and pre-funded warrants to certain institutional investors. We do not have any products approved for sale and have not generated any revenue from product sales since our inception. Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of our product candidates, if approved. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities. We expect to continue to incur operating losses for the foreseeable future and will need to raise substantial additional capital in the future. Until such time, if ever, as we can generate significant revenue from product sales, we may finance our operations through equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. Adequate funding may not be available when needed or on terms acceptable to us, or at all.

If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations. Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. Our ability to raise additional funds may be adversely impacted by the potential worsening of global economic conditions and the recent disruptions to, and volatility in, worldwide credit and financial markets, resulting from increased volatility in the trading prices for shares in the biopharmaceutical industry, or otherwise. Further, imposition of tariffs and other trade restrictions by the U.S., as well as reciprocal trade restrictions imposed by other countries, could adversely affect global economies, financial markets and the overall environment in which we do business, as further described in Part I, Item 1A, "Risk Factors" of this Annual Report on Form 10-K.

Cash, cash equivalents, and marketable securities were $146.3 million as of March 31, 2026. Based on its current operating plan, the Company expects this balance to fund operations into 2028, excluding the gross proceeds received from the April 2026 Private Placement (as defined below). The Company is currently evaluating the impact of the recently completed financing on its operating plan and expects to provide updated cash runway guidance at a later date. We have based our current estimate on assumptions that may prove to be wrong and that may change following our evaluation of our operating plan. We could use our available capital resources sooner than we currently anticipate, in which case we would be required to obtain additional financing, which may not be available to us on acceptable terms, or at all. See "-Liquidity and Capital Resources".

2026 Private Placement

On April 27, 2026, we entered into a securities purchase agreement (the Securities Purchase Agreement) with certain institutional accredited investors (the Investors), including an affiliate of RA Capital Management L.P., pursuant to which we issued and sold to the Investors in a private placement an aggregate of 9,481,000 shares of our common stock at a price of $9.50 per share and, to certain Investors in lieu of shares, pre-funded warrants to purchase 2,106,000 shares of our common stock at a price of $9.4999 per pre-funded warrant (the 2026 Private Placement). The 2026 Private Placement closed on April 29, 2026. The Company received aggregate gross proceeds from the 2026 Private Placement of approximately $110.0 million, before deducting placement agent fees and offering expenses.

Components of Operating Results

Operating Expenses

Our operating expenses consist of research and development expenses and general and administrative expenses.

Research and Development

Research and development expenses consist of costs incurred for our research and development activities, including development of our product candidates, budoprutug and CLYM116, and our previous product candidates, ETX-123 and ETX-155, consisting primarily of the following:

Our direct research and development expenses are tracked on a program-by-program basis and consist primarily of external costs, such as fees paid to CDMOs, CROs, consultants and contractors, in connection with our nonclinical and clinical development activities. We do not allocate employee costs, costs associated with facility expenses, or other indirect costs, to specific programs because these costs are deployed across multiple product development programs and, as such, are not separately classified.

We expect our research and development expenses to increase substantially for the foreseeable future as we conduct our ongoing research and development activities. The process of conducting nonclinical studies, acquiring drug product supply, and conducting clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for budoprutug, CLYM116, or any product candidate we may develop.

The timelines and costs associated with research and development activities are uncertain and can vary significantly among product candidates and development programs due to the inherently unpredictable nature of nonclinical and clinical development. We anticipate that we will make determinations as to which indications to pursue in connection with our clinical development of budoprutug, CLYM116, or any product candidates we may develop and how much funding to direct to each such indication on an ongoing basis in response to nonclinical and clinical results, regulatory developments, and ongoing assessments as to each such indication's commercial potential. Our future research and development costs may vary significantly and differ materially from expectations, and a change in the outcome of variables with respect to the development of budoprutug, CLYM116, or any product candidates we may develop could significantly change the costs and timing associated with such development. See the section titled "Risk Factors-Risks Related to our Financial Position and Need for Additional Capital."

General and Administrative

Our general and administrative expenses consist primarily of personnel-related expenses such as salaries, bonuses, benefits, stock-based compensation, and termination benefits, for our personnel in executive, finance and accounting, legal, human resources, business development, information technology and other administrative functions. Other significant general and administrative expenses include legal fees relating to corporate matters and intellectual property, professional fees for accounting, audit, regulatory, tax and consulting services, insurance costs, as well as investor and public relations costs.

We expect that our general and administrative expenses will increase for the foreseeable future, including increases in headcount as we continue to support our growth strategy and, if any product candidates receive marketing approval, commercialization activities, as well as to support our operations generally.

Other Income (Expense)

Interest Income

Our interest income consists of interest earned on our cash, cash equivalents and marketable securities, including amortization of purchase premiums and accretion of discounts of marketable securities.

Foreign Currency Gain (Loss)

Our foreign currency gain (loss) consists of foreign exchange gains and losses resulting from remeasurement of foreign currency transactions to the U.S. Dollar.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table sets forth our results of operations (in thousands):

Operating Expenses

Research and Development

The following table sets forth our research and development expenses (in thousands):

Research and development expenses decreased from $17.3 million for the three months ended March 31, 2025 to $9.4 million for the three months ended March 31, 2026. The decrease was due primarily to the $9.0 million upfront payment and associated transaction costs made during the three months ended March 31, 2025 in connection with the Mabworks Agreement and our license of CLYM116 with no similar payment made during the three months ended March 31, 2026. This decrease related to the CLYM116 program was offset by $1.1 million of nonclinical and clinical costs incurred during the three months ended March 31, 2026 for which there were no similar costs incurred during the three months ended March 31, 2025.

The decrease in spend of $0.8 million related to the budoprutug program was driven primarily by a decrease in nonclinical and chemistry, manufacturing and controls costs of $3.0 million offset by increased costs of $2.2 million as we advanced our clinical trials of budoprutug in pMN, ITP and SC formulation of budoprutug in healthy volunteers.

The decrease in legacy programs was primarily due to certain programs, ETX-123 and ETX-155, that are no longer being pursued.

Personnel-related expenses increased by $0.6 million due primarily to increased headcount, partially offset by a decrease in stock-based compensation expenses of $0.3 million. The increase in other research and development expenses of $0.4 million was primarily due to consulting and regulatory expenditures incurred for non-specific programs.

General and Administrative

General and administrative expenses increased by $0.1 million from $5.7 million for the three months ended March 31, 2025 to $5.8 million for the three months ended March 31, 2026. The increase was due primarily to higher personnel-related expenses of $0.3 million from increased headcount and higher consulting fees of $0.1 million, partially offset by a decrease in legal fees of $0.3 million. General and administrative expenses for the three months ended March 31, 2026 and 2025 included stock-based compensation expense of $1.0 million and $1.1 million, respectively.

Other Income (Expense)

Interest Income

Interest income decreased from $2.3 million for the three months ended March 31, 2025 to $1.5 million for the three months ended March 31, 2026, due primarily to lower invested balances during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

Foreign Currency (Loss)

Foreign currency (loss) was not material in either of the three months ended March 31, 2026 or 2025.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have primarily funded our operations with proceeds from the sale and issuance of shares of our redeemable convertible preferred stock, our IPO, the sale and issuance of shares of our common stock and pre-funded warrants to purchase shares of our common stock in private placements including the 2026 Private Placement. We have not generated any revenue from product sales or otherwise. We have incurred net losses from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. As of March 31, 2026, we had cash, cash equivalents and marketable securities of $146.3 million.

In March 2025, we entered into an Equity Distribution Agreement (the Distribution Agreement) with Oppenheimer & Co. Inc., as agent (Oppenheimer), pursuant to which we may offer and sell shares of our common stock from time to time through Oppenheimer having an aggregate offering price of up to $22.4 million in an at the market offering. During the three months ended March 31, 2026, we did not issue and sell any shares of our common stock pursuant to the Distribution Agreement.

Cash Flows

The following table sets forth our cash flows (in thousands):

Operating activities

For the three months ended March 31, 2026, net cash used in operating activities was $14.4 million, resulting from our net loss of $13.7 million and cash used by changes in our operating assets and liabilities of $2.1 million, partially offset by $1.4 million in non-cash charges. Cash used by changes in our operating assets and liabilities primarily consisted of a decrease in accounts payable and accrued expenses and other current liabilities of $1.4 million and $1.5 million, respectively, partially offset by an increase of prepaid expenses and other current assets of $0.9 million.

For the three months ended March 31, 2025, net cash used in operating activities was $15.4 million, resulting from our net loss of $20.8 million, partially offset by $1.5 million in non-cash charges and $3.9 million from cash provided by changes in our operating assets and liabilities. Cash provided by changes in our operating assets and liabilities primarily consisted of increases in prepaid expenses and other current assets and accrued expenses and other liabilities of $1.9 million and $2.0 million, respectively.

Investing activities

For the three months ended March 31, 2026, net cash used in investing activities was $13.0 million, consisting primarily of purchases of $44.9 million of marketable securities, partially offset by $31.9 million in proceeds received from maturities of marketable securities.

For the three months ended March 31, 2025, net cash used by investing activities was $42.8 million, consisting primarily of purchases of $58.8 million of marketable securities, partially offset by $16.0 million in proceeds received from maturities of marketable securities.

Financing activities

For the three months ended March 31, 2026, there was an immaterial amount of cash provided by financing activities due to the exercise of stock options.

For the three months ended March 31, 2025, there were no financing activities.

Funding Requirements

Cash, cash equivalents, and marketable securities were $146.3 million as of March 31, 2026. Based on our current operating plan, we expect this balance to fund operations into 2028, excluding the gross proceeds received from the April 2026 Private Placement. The Company is currently evaluating the impact of the recently completed financing on its operating plan and expects to provide updated cash runway guidance at a later date. We have based our current estimate on assumptions that may prove to be wrong and that may change following our evaluation of our operating plan. We could exhaust our available capital resources sooner than we expect. We anticipate that our expenses will increase for the foreseeable future as we continue to advance our current product candidates and any product candidates we may develop, expand our corporate infrastructure, and incur costs associated with potential commercialization.

We are subject to all of the risks typically related to the development of biopharmaceutical candidates, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business. Our future funding requirements will depend on many factors, including the following:

Furthermore, 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 expenditures. Until such time, if ever, as we can generate substantial revenue from product sales, we may finance our operations through equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.

Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or our product candidates or grant licenses on terms that may not be favorable to us and may reduce the value of our common stock. Our failure to raise capital or enter into such other arrangements 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 additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts, or grant rights to develop and market budoprutug, CLYM116, or any product candidates we may develop even if we would otherwise prefer to develop and market such product candidates ourselves.

Contractual Commitments and Obligations

There have been no material changes to our cash requirements from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Critical Accounting Policies and Estimates

This 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 accounting principles generally accepted in the United States (U.S. GAAP). The preparation of our unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and notes to the unaudited condensed consolidated financial statements. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions and conditions.

There have been no material changes to our critical accounting policies and estimates from those disclosed in our audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025 included in our Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements Not Yet Adopted

See Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report.

Emerging Growth Company Status

We are an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for emerging growth companies include an exemption from the requirement to provide an auditor's report on internal controls over financial reporting pursuant to the Sarbanes-Oxley Act, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation, and less extensive disclosure about our executive compensation arrangements. We have elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that (i) we are no longer an emerging growth company or (ii) we affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. We will cease to be an emerging growth company on December 31, 2026.