Caribou Biosciences Inc.
03/05/2026 | Press release | Distributed by Public on 03/05/2026 15:10
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes included in this Annual Report on Form 10-K. This discussion and analysis contain forward-looking statements, including statements regarding our intentions, plans, projections and expectations for our business. Forward-looking statements are based upon current beliefs, plans and expectations related to future events and our future financial performance and are subject to risks, uncertainties and assumptions. Our actual results and the timing of certain events could differ materially from those described in or implied by these forward-looking statements as a result of various factors, including those set forth the "Risk Factors" section in Part I, Item 1A of this Annual Report on Form 10-K. See also the Special Note Regarding Forward-Looking Statements section of this Annual Report on Form 10-K.
We are a clinical-stage Clustered Regularly Interspaced Short Palindromic Repeats ("CRISPR") genome-editing biopharmaceutical company dedicated to developing transformative therapies for patients with devastating diseases. Our genome-editing platform is based on our novel chRDNA (CRISPR hybrid RNA-DNA, or "chRDNA," pronounced "chardonnay") genome-editing technology, which enables more precise genome editing of allogeneic cell therapies.
Our allogeneic chimeric antigen receptor ("CAR") -T ("CAR-T") cell therapy product candidates are manufactured in advance with cells from healthy donors, with the goal of enabling broad patient access, rapid patient treatment, and increased manufacturing scale. Our allogeneic CAR-T cell therapy product candidates in clinical development are directed at established cell surface targets against which autologous CAR-T cell therapeutics have already demonstrated clinical proof of concept, CD19 and B cell maturation antigen ("BCMA"). We use our chRDNA technology to armor our cell therapy product candidates through genome-editing strategies, such as checkpoint disruption and immune cloaking, to enhance allogeneic CAR-T cell therapy activity against hematologic malignancies.
We are advancing two clinical-stage allogeneic CAR-T cell therapy product candidates for the treatment of patients with hematologic malignancies:
•Vispacabtagene regedleucel ("vispa-cel," formerly CB-010): an allogeneic anti-CD19 CAR-T cell therapy that has been evaluated in patients with relapsed or refractory B cell non-Hodgkin lymphoma ("r/r B-NHL") in our ANTLER phase 1 clinical trial
•CB-011: an allogeneic anti-BCMA CAR-T cell therapy that is being evaluated in patients with relapsed or refractory multiple myeloma ("r/r MM") in our CaMMouflage phase 1 clinical trial
Since our founding in 2011, we have devoted substantially all of our resources to organizing and staffing, business planning, raising capital, expanding our genome-editing platform technologies, developing our product candidates and building our pipeline, creating and maintaining our intellectual property portfolio, and establishing arrangements with third parties for the manufacture, testing, and clinical trial evaluations of our product candidates. We do not have any products approved for commercial sale and have not generated any revenue from product sales. We have incurred operating losses since commencement of our operations.
To date, we have primarily funded our operations through proceeds from the sales of our capital stock, revenue from our license and collaboration agreements, and proceeds from the sale of shares of Intellia Therapeutics, Inc. ("Intellia") common stock.
Our net losses for the years ended December 31, 2025, and 2024 were $148.1 million and $149.1 million, respectively. We had an accumulated deficit of $596.5 million as of December 31, 2025. Our net losses and operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of expenses associated with our clinical trials and nonclinical studies and our other research and development expenses. We anticipate that our expenses will increase substantially as we:
•progress our clinical trials for our vispa-cel and CB-011 cell therapy product candidates, particularly as we advance vispa-cel in our planned pivotal clinical trial;
•hire additional personnel, as needed;
•acquire or in-license intellectual property, new technologies, and/or additional product candidates;
•expand, maintain, enforce, and defend our intellectual property portfolio;
•seek regulatory and marketing approvals for our vispa-cel and CB-011 product candidates if our clinical trials are successful;
•expand manufacturing capabilities and supply chain capacity for our vispa-cel and CB-011 product candidates;
•experience any delays, challenges, or other issues associated with any of the above, including the failure of clinical trials meeting endpoints, generation of clinical trial data subject to differing interpretations, or the occurrence of potential safety issues or other development or regulatory challenges;
•make royalty, milestone, or other payments under current, and any future, in-license or assignment agreements with third parties;
•establish a sales, marketing, and distribution infrastructure to commercialize any product candidates for which we obtain marketing approval; and
•continue to operate as a public company, including defending against any future class action securities litigation.
We do not own or operate any manufacturing facilities. We use multiple contract manufacturing organizations ("CMOs") to individually manufacture, under current good manufacturing processes, our chRDNA guides, Cas9 and Cas12a proteins, plasmids, and adeno-associated virus serotype 6 ("AAV6") vectors used in the manufacture of our cell therapy product candidates as well as the CAR-T cell therapy product candidates themselves. We expect to continue to rely on our CMOs for manufacturing our clinical trial materials, and most of these CMOs have capabilities for commercial manufacturing. Additionally, we may decide to build our own manufacturing facility in the future to provide greater flexibility and control over our clinical or commercial manufacturing needs.
Because of the numerous risks and uncertainties associated with therapeutic product development, we may never achieve profitability and, unless and until we are able to develop and commercialize our product candidates, we will need to continue to raise additional capital. Until such time, if ever, that we can generate significant revenue from product sales, we expect to finance our operations through equity offerings (including our at-the-market equity offering program), debt financings, new strategic collaborations, structured or other non-dilutive financings, licensing arrangements, and/or other sources. We cannot provide any assurance that we will be successful in obtaining an adequate level of financing to support our business plans as needed on acceptable terms, or at all. If we raise additional funds through collaborations, new strategic collaborations, structured or other non-dilutive financings, or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise capital as and when needed or on attractive terms, we may have to significantly delay, reduce, or discontinue the development and commercialization of our product candidates or scale back or terminate our pursuit of new in-licenses and acquisitions.
Components of Results of Operations
Licensing and Collaboration Revenue
We have not generated any revenue from product sales to date and do not expect to generate any revenue from the sale of products in the foreseeable future. We cannot predict if, when, or to what extent we will generate revenue from the commercialization and sale of our product candidates if we succeed in obtaining regulatory approval for these product candidates.
To date, all of our revenue consists of licensing and collaboration revenue earned from collaboration and/or licensing agreements entered into with third parties, including related parties. Under these agreements, we license rights to certain intellectual property controlled by us. The terms of these arrangements typically include payments to us of one or more of the following: nonrefundable, upfront license fees or exclusivity fees; annual maintenance fees; regulatory and/or commercial milestone payments; research and development payments; and royalties on the net sales of products and/or services. Each of these payments results in licensing and collaboration revenue. Revenue under such licensing and collaboration agreements was $11.2 million and $10.0 million for the years ended December 31, 2025, and 2024, respectively. See Notes 5 and 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
For the foreseeable future, we expect substantially all our revenue will be generated from licensing and collaboration agreements.
Operating Expenses
Research and Development Expenses
Our research and development expenses consist of internal and external expenses incurred in connection with the development of our product candidates and our genome-editing platform technologies, and our in-licensing, assignment, and other third-party agreements.
External costs include:
•costs associated with acquiring technology and intellectual property licenses that have no alternative future uses, sublicensing revenues, and milestones;
•costs incurred in connection with the clinical development and manufacturing of our product candidates, including under agreements with CMOs, suppliers, contract research organizations ("CROs"), and clinical sites; and
•other research and development costs, including lab supplies, and consulting services.
Internal costs include:
•personnel-related costs, including salaries, benefits, and stock-based compensation expense, for our research and development personnel; and
•allocated facilities and other overhead expenses, including expenses for rent, facilities maintenance, and depreciation.
We expense research and development costs as incurred. Costs of certain activities are recognized based on an evaluation of the progress to completion of specific tasks. However, payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses and other current assets on our consolidated balance sheets. The capitalized amounts are recognized as expenses as the goods are delivered or as related services are performed. We separately track certain external costs on a program-by-program basis; however, we do not track costs that are deployed across our programs. We do not allocate internal costs as several of our departments support our programs and our payroll and other personnel expenses are not tracked on a program-by-program basis.
Clinical development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will increase substantially for the foreseeable future as we continue to implement our business strategy; advance our product candidates through clinical trials; conduct translational research to support our product candidates; seek regulatory approvals for our product candidates that successfully complete clinical trials; and hire additional personnel to support our clinical development efforts.
The successful development of our CAR-T product candidates is highly uncertain. Accordingly, at this time, we cannot reasonably estimate or know the nature, timing, and costs of the efforts that will be necessary to complete the development of our product candidates. We are also unable to predict when, if ever, we will generate revenue and material net cash inflows from the commercialization and sale of any of our product candidates for which we may obtain marketing approval. We may never succeed in achieving regulatory approval for any of our product candidates. The duration, costs, and timing of clinical trials, and development of our product candidates will depend on a variety of factors, including:
•sufficiency of our financial and other resources;
•acceptance of our CRISPR chRDNA genome-editing technology;
•ability to develop differentiating features so that our products have a competitive edge;
•establishment, maintenance, enforcement, and defense of our patents and other intellectual property rights;
•our ability to not infringe, misappropriate, or otherwise violate third-party intellectual property rights;
•successful enrollment in, and completion of, our clinical trials of our product candidates;
•data from our clinical trials that support an acceptable risk-benefit profile of our product candidates for the intended patient populations and that demonstrate safety and efficacy;
•entry into collaborations to further the development of our product candidates;
•successful development of our internal process development and transfer to CMOs;
•establishment and maintenance of agreements with CMOs and suppliers for clinical and commercial supplies and scaling up manufacturing processes and capabilities to support our clinical trials;
•receipt of timely responses and marketing approvals from applicable regulatory authorities;
•grant of nonpatent regulatory exclusivity for our product candidates;
•establishment of sales, marketing, and distribution capabilities necessary for commercialization of our product candidates if approved, whether by us or in collaboration with third parties;
•maintenance of a continued acceptable safety profile of our products post-approval;
•acceptance of our product candidates, if approved by the applicable regulatory authorities, by patients, the medical community, and third-party payors;
•ability of our products to compete with other therapies and treatment options;
•establishment and maintenance of healthcare coverage and adequate reimbursement; and
•expanded indications and patient populations for our products.
The following table summarizes our research and development expenses for the periods indicated:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| (in thousands) | |||||||||||||||||
| External costs: | |||||||||||||||||
|
Expenses related to licenses, sublicensing revenue, and milestones
|
$ | 2,720 | $ | 4,828 | $ | (2,108) | |||||||||||
|
Services provided by CROs, CMOs, and third parties that conduct preclinical studies and clinical trials on our behalf
|
46,183 | 49,261 | (3,078) | ||||||||||||||
| Other research and development expenses | 14,799 | 23,560 | (8,761) | ||||||||||||||
| Total external costs | 63,702 | 77,649 | (13,947) | ||||||||||||||
| Internal costs: | |||||||||||||||||
| Personnel-related expenses | 33,983 | 39,531 | (5,548) | ||||||||||||||
| Facilities and other allocated expenses | 11,754 | 12,973 | (1,219) | ||||||||||||||
| Total internal costs | 45,737 | 52,504 | (6,767) | ||||||||||||||
| Total research and development expenses | $ | 109,439 | $ | 130,153 | $ | (20,714) | |||||||||||
General and Administrative Expenses
Our general and administrative expenses consist primarily of personnel-related costs, intellectual property costs, consulting costs, and allocated overhead, including rent, equipment depreciation, and utilities. Personnel-related costs consist of salaries, benefits, and stock-based compensation expense for our general and administrative personnel. Intellectual property costs include expenses for filing, prosecuting, and maintaining patents and patent applications, including certain patents and patent applications that we license from third parties. We are entitled to receive reimbursement from third parties of a portion of the costs for filing, prosecuting, and maintaining certain patents and patent applications. We accrue for these reimbursements as the respective expenses are incurred and classify such reimbursements as a reduction of general and administrative expenses. During each of the years ended December 31, 2025, and 2024, we recorded $1.2 million of patent cost reimbursements as a reduction to general and administrative expenses.
We expect that our general and administrative expenses will increase in the future if our clinical trials are successful and if we prepare for potential commercialization of our product candidates, to support the growth and operations of a public company with late-stage clinical programs and potential commercial products.
Impairment Charges
Impairment charges consist of charges related to the strategic pipeline prioritization with workforce and cost reduction initiatives announced on April 24, 2025, and include impairment of our leasehold improvements, right of use assets, and lab equipment. See Note 15 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
Other (Expense) Income
Other (expense) income consists primarily of impairment of an equity investment, interest income earned on cash and marketable securities and the change in fair value of the Memorial Sloan Kettering Cancer Center ("MSKCC") success payments liability under the now-terminated Exclusive License Agreement, dated November 13, 2020, with MSKCC (as amended, "MSKCC Agreement").
Results of Operations
Comparison of the Years Ended December 31, 2025, and 2024
The following table summarizes our results of operations for the periods indicated:
| Years Ended December 31, | Change | ||||||||||||||||
| 2025 | 2024 | $ | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Licensing and collaboration revenue | $ | 11,159 | $ | 9,994 | $ | 1,165 | |||||||||||
| Operating expenses: | |||||||||||||||||
| Research and development | 109,439 | 130,153 | (20,714) | ||||||||||||||
| General and administrative | 37,914 | 46,457 | (8,543) | ||||||||||||||
|
Impairment charges
|
12,150 | - | 12,150 | ||||||||||||||
| Total operating expenses | 159,503 | 176,610 | (17,107) | ||||||||||||||
| Loss from operations | (148,344) | (166,616) | 18,272 | ||||||||||||||
| Other (expense) income | |||||||||||||||||
|
Impairment of equity investment
|
(9,158) | - | (9,158) | ||||||||||||||
| Other income, net | 8,827 | 17,502 | (8,675) | ||||||||||||||
| Total other (expense) income | (331) | 17,502 | (17,833) | ||||||||||||||
| Net loss before benefit from income taxes | (148,675) | (149,114) | 439 | ||||||||||||||
| Benefit from income taxes | (550) | (9) | (541) | ||||||||||||||
| Net loss | $ | (148,125) | $ | (149,105) | $ | 980 | |||||||||||
Licensing and Collaboration Revenue
The following table summarizes our revenue by licensee for the years ended December 31, 2025, and 2024:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| (in thousands) | |||||||||||||||||
|
Pfizer, related party(1)
|
2,487 | 2,487 | - | ||||||||||||||
| Edge, related party | - | 1,623 | (1,623) | ||||||||||||||
| Other licensees | 8,672 | 5,884 | 2,788 | ||||||||||||||
| Total licensing revenue | $ | 11,159 | $ | 9,994 | $ | 1,165 | |||||||||||
(1)Pfizer ceased to be a related party as of December 31, 2025.
Licensing and collaboration revenue increased by $1.2 million to $11.2 million for the year ended December 31, 2025, from $10.0 million for the year ended December 31, 2024. This increase is primarily due to a $2.8 million increase related to other licensees, which was partially offset by a $1.6 million decrease in revenue related to the issuance of additional shares of convertible preferred stock received as consideration to us under the Exclusive License Agreement for Veterinary Therapeutics (as amended, "Edge chRDNA License Agreement") with Edge Animal Health ("Edge") in the year ended December 31, 2024.
Research and Development Expenses
Research and development expenses decreased by $20.7 million to $109.4 million for the year ended December 31, 2025 from $130.2 million for the year ended December 31, 2024. This decrease was primarily due to (i) a decrease of $8.8 million in other research and development expenses primarily related to the reduction in workforce and strategic pipeline prioritization, (ii) a decrease of $5.5 million in personnel-related expenses related to the reduction in workforce and strategic pipeline prioritization, (iii) a net decrease of $3.1 million in external CMO and CRO activities, driven by a decrease of (a) $3.5 million due to timing of CMO activities, and an increase of (b) $0.4 million in CRO activities for our clinical trials, (iv) a decrease of $2.1 million in expenses related to licenses, sublicensing revenue, and milestones, and (v) a decrease of $1.2 million in other facilities and allocated expenses.
General and Administrative Expenses
General and administrative expenses decreased by $8.5 million to $37.9 million for the year ended December 31, 2025, from $46.5 million for the year ended December 31, 2024. This decrease was primarily related to a decrease of $4.7 million in legal expenses, including $3.9 million related to the accrual of a securities class action litigation settlement expense in 2024 and a decrease of $3.3 million in personnel-related expenses related to the reduction in workforce and strategic pipeline prioritization.
Impairment Charges
Impairment charges consist of charges related to the strategic pipeline prioritization with workforce and cost reduction initiatives announced on April 24, 2025, and include impairment of our leasehold improvements, right of use assets, and lab equipment. See Note 15 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
Other (Expense) Income
Total other (expense) income decreased by $17.8 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024.
Impairment of equity investment was $9.2 million related to our equity investment in Edge for the year ended December 31, 2025, compared to zero for the year ended December 31, 2024. See Note 3 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
Other income, net decreased by $8.7 million for the year ended December 31, 2025, compared to December 31, 2024. This decrease was primarily related to a $7.2 million decrease in interest income earned from marketable securities and a $1.4 million decrease in gain recognized related to the change in the fair value of the MSKCC success payments liability.
Benefit From Income Taxes
An income tax benefit of $0.6 million was recognized for the year ended December 31, 2025, which was primarily related to deferred federal and state taxes. An income tax benefit of less than $0.1 million was recognized for the year ended December 31, 2024, which was primarily related to deferred state taxes.
Liquidity, Capital Resources, and Capital Requirements
Sources of Liquidity
Since our inception through December 31, 2025, we have raised an aggregate net proceeds of $849.0 million to fund our operations through our initial public offering ("IPO"); sales of convertible preferred stock; a follow-on public offering; proceeds from our licensing, licensing and collaboration, service, and patent assignment agreements, including sales of Intellia stock; private placements; at-the-market equity offerings; and government grants.
As of December 31, 2025, we had cash, cash equivalents, and marketable securities of $142.8 million.
Shelf Registration Statements
On August 9, 2022, we filed a universal shelf registration statement on Form S-3 ("2022 Shelf Registration Statement") with the SEC, which allowed us to sell, from time to time, up to $400.0 million of common stock, preferred stock, debt securities, warrants, rights, or units comprised of any combination thereof (including the $100.0 million of common stock reserved under the 2022 Shelf Registration Statement for our at-the-market equity offering program described below).
On May 8, 2025, in anticipation of the expiration of the 2022 Shelf Registration Statement on August 16, 2025, we filed a new shelf registration statement on Form S-3 ("2025 Shelf Registration Statement"), which was declared effective by the SEC on May 14, 2025. Upon the effectiveness of the 2025 Shelf Registration Statement, the offering of securities under the 2022 Shelf Registration Statement was deemed terminated. Pursuant to the 2025 Shelf Registration Statement, we may, from time to time, sell up to $300.0 million of common stock, preferred stock, debt securities, warrants, rights, or units comprised of any combination thereof (including the $100.0 million of common stock reserved under the 2025 Shelf Registration Statement for our at-the-market equity offering program described below). As of December 31, 2025, we had $295.7 million available for sale under the 2025 Shelf Registration Statement.
At-the-Market Equity Offering Program
On August 9, 2022, we entered into an at-the-market Open Market Sale AgreementSM("ATM Sales Agreement") with Jefferies LLC ("Jefferies"), pursuant to which, on the terms and subject to the conditions and limitations set forth in the ATM Sales Agreement, from time to time, we could have issued and sold, through Jefferies, acting as sales agent, up to $100.0 million of our shares of common stock under the 2022 Shelf Registration Statement. Under the ATM Sales Agreement and the 2022 Shelf Registration Statement, we issued and sold an aggregate of 3,588,696 shares of our common stock at an average price per share of $4.71 for aggregate gross proceeds of $16.9 million ($16.2 million net of offering expenses).
With the effectiveness of the 2025 Shelf Registration Statement, we refreshed our at-the-market equity offering program under the ATM Sales Agreement. We may, from time to time, sell and issue shares of our common stock, through Jefferies as sales agent under the ATM Sales Agreement, having an aggregate offering price of up to $100.0 million in gross proceeds under the 2025 Shelf Registration Statement, 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 of 1933, as amended ("Securities Act"). Jefferies has agreed to use commercially reasonable efforts consistent with its normal sales and trading practices to sell shares from time to time, based on our instructions (including any price or size limits or other customary parameters or conditions we may impose).
During the year ended December 31, 2025, we sold 1,644,228 shares of our common stock, in a series of sales, at an average price of $2.60 per share, in accordance with the ATM Sales Agreement and the 2025 Shelf Registration Statement for aggregate gross proceeds of $4.3 million ($4.1 million net of offering expenses).
During the year ended December 31, 2024, we sold 3,420,061 shares of our common stock, in a series of sales, at an average price of $4.58 per share, in accordance with the ATM Sales Agreement and the 2022 Shelf Registration Statement for aggregate gross proceeds of $15.7 million ($15.2 million net of offering expenses).
As of December 31, 2025, $95.7 million of shares of our common stock remained available for sale under the 2025 Shelf Registration Statement pursuant to the ATM Sales Agreement.
Funding Requirements
We expect that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our current operating plan for at least the next 12 months from the date this Annual Report on Form 10-K is filed. We have based these estimates on our current assumptions, which may require future adjustments based on our ongoing business decisions.
We will continue to be dependent on equity financing, debt financing, collaboration and licensing arrangements, and/or other forms of capital raises, including structured or other non-dilutive financings, to fund operating expenses, including to fully fund our planned pivotal trial for vispa-cel, at least until we are able to generate significant positive cash flows from our operations. We have no current ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, except for our lease commitments and payments under certain of our license agreements as described in Notes 4 and Note 9, respectively, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Our primary use of cash is to fund operating expenses and research and development expenses, which primarily consist of expenditures related to clinical trials. 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 accounts payable, accrued expenses, and prepaid expenses.
Our future funding requirements will depend on many factors, including the following:
•the initiation, progress, timing, costs, and results of clinical trials for our product candidates;
•the clinical development plans we establish for these product candidates;
•the outcome, timing, and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities;
•potential impact of reductions in government spending and personnel;
•whether we enter into any collaboration agreements and the terms of any such agreements;
•the cost of filing and prosecuting our patent applications, and maintaining and enforcing our patents and other intellectual property rights;
•the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against our products after we receive regulatory approval;
•the effect of competing technological and market developments;
•the cost and timing of completion of commercial-scale outsourced manufacturing activities or the cost and timing of completion of clinical-scale and commercial-scale internal manufacturing activities;
•the cost of establishing sales, marketing, and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products;
•the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;
•the achievement of milestones or occurrence of other developments that trigger payments by or to third parties;
•our implementation of various computerized informational systems and efforts to enhance operational systems;
•the impact of public health crises or geopolitical events on our clinical development or operations;
•the impact of inflationary pressures and tariffs on the cost of our operations; and
•the costs of operating as a public company, including defending against any future class action securities litigation and shareholder derivative lawsuits.
Furthermore, our operating plans may change, and we expect to need additional funds to meet operational needs and capital requirements for our clinical trials and development of our product candidates.
Because of the numerous risks and uncertainties associated with therapeutic product development, we may never achieve profitability and, unless and until we are able to develop and commercialize our product candidates, we will need to continue to raise additional capital. Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity offerings (including our at-the-market equity offering program), debt financings, new collaborations, structured or other non-dilutive financings, licensing arrangements, and/or other sources. We cannot provide any assurance that we will be successful in obtaining an adequate level of financing to support our business plans as needed on acceptable terms, or at all. If we raise additional funds through new strategic collaborations or licensing arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams, or product candidates or grant licenses on terms that may not be favorable to us. Disruptions and volatility in the global and domestic capital markets resulting from heightened inflation, tariffs, capital market volatility, interest rate and currency rate fluctuations, artificial intelligence ("AI"), political and geopolitical tensions, government agency changes, any potential economic slowdown or recession, including trade wars or civil or political unrest (such as the ongoing war between Ukraine and Russia, conflicts in the Middle East, including the recent hostilities involving Iran, tension between China and Taiwan, geopolitical tensions in Europe, South America, and elsewhere) may increase the cost of capital and limit our ability to access capital. If we are unable to raise capital as and when needed or on attractive terms, we may have to significantly delay, reduce, or discontinue the development and commercialization of our product candidates or scale back or terminate our pursuit of new in-licenses and acquisitions.
Contractual Obligations and Commitments
We enter into contracts in the normal course of business with suppliers, CMOs, CROs, clinical trial sites, licensors, assignors, and the like. These agreements provide for termination at the request of either party generally with less than one-year's notice and, therefore, we believe that our non-cancelable obligations under these agreements are not material. Some of these agreements include contingent payments that will become payable if and when we achieve certain development, regulatory, clinical, and/or commercial milestones. As of December 31, 2025, the satisfaction and timing of such contingent payments is uncertain and is not reasonably estimable.
We have milestones, royalties, and/or other payments due to third parties under our existing license and assignment agreements. See Note 9 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. We cannot estimate when such payments will be due and none of these events is probable as of December 31, 2025.
Leases
We have two operating lease agreements for our laboratory and office space. As of December 31, 2025, we had lease payment obligations totaling $43.8 million, of which $4.8 million is due within 12 months.
Strategic Investment
On June 29, 2023, we entered into a Securities Purchase Agreement ("Securities Purchase Agreement") with Pfizer, Inc. ("Pfizer") pursuant to which we, in a private placement transaction, agreed to issue and sell to Pfizer 4,690,431 shares of our common stock, par value $0.0001 per share, at a purchase price of $5.33 per share, for aggregate gross proceeds of approximately $25.0 million ("Pfizer Investment"). The issuance and sale of the shares to Pfizer closed on June 30, 2023. We granted certain registration rights to Pfizer under the Securities Purchase Agreement covering the resale of the shares. Unless otherwise agreed by Pfizer, we have agreed to use the proceeds from the Pfizer Investment solely in connection with (i) the development program for our allogeneic anti-BCMA CAR-T cell therapy product candidate (CB-011) that is being evaluated in our CaMMouflage phase 1 clinical trial and/or (ii) any other single-targeted anti-BCMA CAR-T cell therapy using an anti-BCMA single-chain variable fragment ("scFv") owned or controlled by us (collectively, cell therapies described in clauses (i) and (ii) are referred to as a "BCMA Product Candidate"), for 36 months expiring on June 29, 2026.
On June 29, 2023, in connection with the Pfizer Investment, we and Pfizer also entered into an Information Rights Agreement, having a 36-month term and expiring on June 29, 2026. Under the Information Rights Agreement, we granted Pfizer a 30-calendar day right of first negotiation ("ROFN") if we commence or engage with any third party with respect to a potential grant of rights to develop and/or commercialize a BCMA Product Candidate, including, without limitation, a license agreement, a co-promotion/co-commercialization agreement, a profit share agreement, a joint venture agreement, or an asset sale agreement (a "Grant of Program Rights"). If we and Pfizer do not reach an agreement with respect to a Grant of Program Rights within the 30-day period, then we may pursue negotiations and enter into an agreement with any third party. If we and such third party do not reach agreement on the Grant of Program Rights within a specified time period, Pfizer's right of first negotiation will be reinstated. Under the Information Rights Agreement, we also granted Pfizer the right to designate one representative to serve on our scientific advisory board ("SAB"). Through an information sharing committee, we provide calendar quarter updates to Pfizer regarding the development program for a BCMA Product Candidate. Additionally, we agreed to provide Pfizer access to any preclinical or interim or final clinical data (including raw data) and results generated as part of the development program for a BCMA Product Candidate at the same time that we provide such data to a third party (other than to our service providers or the FDA or other regulatory authorities), subject to certain confidentiality exceptions.
Cash Flows
Comparison of the Years Ended December 31, 2025, and 2024
The following table summarizes our cash flows for the periods indicated:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | Change | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Cash used in operating activities | $ | (110,992) | $ | (138,200) | $ | 27,208 | |||||||||||
| Cash provided by investing activities | 102,238 | 86,607 | 15,631 | ||||||||||||||
| Cash provided by financing activities | 4,821 | 16,724 | (11,903) | ||||||||||||||
|
Net decrease in cash, and cash equivalents, and restricted cash
|
$ | (3,933) | $ | (34,869) | $ | 30,936 | |||||||||||
Cash Used in Operating Activities
Net cash used in operating activities was $111.0 million for the year ended December 31, 2025, compared to $138.2 million for the year ended December 31, 2024. This decrease was due to (i) changes in the components of net loss primarily related to (a) increase in non-cash charges primarily for impairment charges and impairment of equity investment incurred for the year ended December 31, 2025, and (b) decreases in research and development expenses and general and administrative expenses; and (ii) an increase in net changes in our operating assets and liabilities primarily related to increases in net changes in other assets, prepaid expenses and other current assets, and accounts payable partially offset by a decrease in net changes of accrued expenses and other current liabilities.
Cash Provided by Investing Activities
Net cash provided by investing activities was $102.2 million for the year ended December 31, 2025, compared to $86.6 million for the year ended December 31, 2024. The increase was primarily driven by lower cash utilized for purchases of marketable securities; partially offset by a decrease in proceeds from maturities of marketable securities.
Cash Provided by Financing Activities
Net cash provided by financing activities was $4.8 million for the year ended December 31, 2025, compared to $16.7 million for the year ended December 31, 2024. The decrease was primarily driven by lower proceeds from the issuance of common stock under the ATM Sales Agreement during the year ended December 31, 2025, compared to proceeds from the issuance of common stock under the ATM Sales Agreement during the year ended December 31, 2024.
Critical Accounting Policies and Significant Judgments and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our consolidated financial statements, as well as the reported expenses incurred during the reporting periods. These estimates and assumptions are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates and assumptions could occur in the future. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ from these estimates under different assumptions or conditions.
Although our significant accounting policies are described in more details in Note 2 to our consolidated financial statements included in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Revenue Recognition
We recognize revenue when a licensee or assignee, or a customer, obtains control of the promised goods or services (e.g., an intellectual property license), in an amount that reflects the consideration that we have received or expect to receive in exchange for those goods or services.
We apply judgment to determine whether agreements are within the scope of revenue for customers or other accounting guidance at an agreement's effective date. Our revenues are primarily derived through our license agreements and license and collaboration agreements. The terms of these types of agreements may include (i) licenses for our technology, (ii) research and development services, and (iii) services or obligations in connection with participation in research or governance committees. Payments to us under these arrangements typically include one or more of the following: nonrefundable upfront license or exclusivity fees; annual maintenance fees; regulatory and/or commercial milestone payments; research and development payments; and royalties on the net sales of licensed products and/or services.
We assess whether the promises in our arrangements with customers are considered as distinct performance obligations that should be accounted for separately. Judgment is required to determine whether the license to intellectual property is distinct from the research and development services or participation on steering committees.
If the license to intellectual property controlled by us is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues allocated to the license at the point in time when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are combined with other promises, we utilize our judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.
Certain of our license agreements have two performance obligations: a license and a material right for annual license renewals. Such license agreements require payments of non-refundable annual license fees by the licensees (referred to as maintenance fees in the license agreements), which are accounted for as material rights for license renewals. We recognize revenue when the license is delivered and the term commences. Revenue for the material right for license renewals is recognized at the point in time the annual license fee is paid by the licensee and the renewal period begins.
Our collaboration and license agreements may include contingent milestone payments. Such milestone payments are typically payable when the collaboration partner or licensee achieves certain predetermined clinical, regulatory, and/or commercial milestones. Milestone payments that are not within our or the licensee's control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. At each reporting date, we re-evaluate whether the milestones are considered probable of being achieved and estimate the amount to be included in the transaction price by using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price in such period of determination.
Our collaboration and license agreements may also include contingent payments related to sales-based milestones. Sales-based milestones are typically payable when annual sales of a covered product reach specified levels. Sales-based milestones are recognized at the later of when the associated performance obligation has been satisfied or when the sales occur. Unlike other contingency payments, such as regulatory milestones, sales-based milestones are not included in the transaction price based on estimates at the inception of the contract, but rather, are included when the sales or usage occur.
Accrued Research and Development Expenses
As part of the process of preparing our financial statements, we are required to estimate and accrue expenses. Research and development expenses are expensed as incurred. Research and development expenses include those for certain payroll and personnel; laboratory supplies; consulting; manufacturing; external clinical; and allocated overhead, including rent, equipment depreciation, and utilities.
We record accrued liabilities for estimated costs of research and development activities conducted by third-party CMOs, CROs, and other third-party service providers. We accrue for these costs based on factors such as estimates of the work completed and in accordance with service agreements established with these third-party service providers.
We make significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals. Although we do not expect our estimates to be materially different than the actual amounts incurred, the estimates for the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any one period. Our accrual is dependent, in part, upon the receipt of timely and accurate reporting from CROs, CMOs, and other third-party service providers. Variations in the assumptions used to estimate accruals including, but not limited to, the number of patients enrolled, the rate of patient enrollment and the actual services performed, may vary from our estimates, resulting in adjustments to clinical trial and manufacturing expenses in future periods. Changes in these estimates that result in material changes to our accruals could materially affect our financial condition and results of operations. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid expense accordingly.
Impairment of Long-Lived Assets
We review long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. In order to determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available. An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. Fair value may be determined using a market approach or income approach.
For asset groups where impairment is triggered, we use discounted cash flow models (an income approach) to estimate the fair values of the asset groups. The significant assumptions used in the discounted cash flow models include projected sublease income over the remaining lease terms, expected downtime prior to the commencement of executed or future subleases, and discount rates that reflect a market participant's assumptions in valuing the asset groups. Changes in these assumptions used could materially affect our financial condition and results of operations.
Recently Issued Accounting Pronouncements
See Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information regarding recently issued accounting pronouncements.
Emerging Growth Company and Smaller Reporting Company Status
We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 Act ("JOBS Act") and may remain an emerging growth company until the last day of our fiscal year following the fifth anniversary of the closing of our IPO (i.e., December 31, 2026). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this 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 we (i) are no longer an emerging growth company or (ii) 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 those of companies that comply with the new or revised accounting pronouncements as of public company effective dates.
We expect to use the extended transition period for any other new or revised accounting standards during the period in which we remain an emerging growth company.
We are also a "smaller reporting company." If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited consolidated financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
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