Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our (1) unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and (2) consolidated financial statements and related notes and management's discussion and analysis of financial condition and results of operations for the fiscal year ended December 31, 2025, included in our Fiscal 2025 10-K. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to "Pyxis Oncology," the "Company," "we," "us," and "our" refer to Pyxis Oncology, Inc. and its subsidiaries.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are often identified by the use of words such as "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "intend," "likely," "may," "might," "objective," "ongoing," "plan," "potential," "predict," "project," "should," "to be," "will," "would," or the negative or plural of these words, or similar expressions or variations, although not all forward-looking statements contain these words. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur and actual results could differ materially from those expressed or implied by these forward-looking statements.

Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled "Risk Factors" set forth in Part II, Item 1A. of this Quarterly Report on Form 10-Q and in our other filings with the SEC. These risks are not exhaustive. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Overview

Pyxis Oncology is a clinical-stage oncology company advancing a development strategy focused on addressing unmet medical needs in patients with solid tumors with an immediate focus on head and neck squamous cell carcinoma (HNSCC).

Our lead product candidate, micvotabart pelidotin (MICVO, formerly PYX-201), is an investigational novel antibody-drug conjugate (ADC) that uniquely targets the splice variant of fibronectin, extradomain-B of fibronectin (EDB+FN), a non-cellular structural component of the extracellular matrix (ECM) in the tumor microenvironment (TME). EDB+FN is an isoform of fibronectin present in tumors that is negligibly expressed in normal adult tissues and facilitates cancer progression by playing multiple roles including promoting cell proliferation, adhesion, and migration, activating the integrin signaling pathway, stimulating angiogenesis and vascular remodeling, driving epithelial-mesenchymal transition (EMT), and establishing the pre-metastatic niche. We believe EDB+FN is a compelling target for cancer therapeutics as the physiological expression of EDB+FN is very low in healthy adult tissues, yet it is found to be highly expressed in a variety of solid tumors.

Our ADC, MICVO, consists of a fully human IgG1 monoclonal antibody that is site-specifically conjugated to a cleavable linker with an optimized auristatin (Aur0101) microtubule inhibitor payload. Unlike conventional ADCs which bind to an antigen on the surface of a cancer cell, MICVO is designed to bind to EDB+FN in the tumor ECM, where extracellular proteases under acidic conditions cleave the linker to release the Aur0101 payload. The payload diffuses through the membrane of cancer cells to kill them directly, which is the first component of MICVO's three-pronged mechanism of action (MOA). The dying cancer cells release the payload which diffuses into nearby cancer cells and kills them via the bystander effect, representing the second component of MICVO's MOA. The dying cancer cells also release neoantigens which trigger immunogenic cell death (ICD), the final component of its MOA. Together with its purpose-built design and postulated three-pronged MOA, MICVO has the potential for improved stability and anti-tumor activity compared to conventional ADCs.

MICVO is currently being studied as monotherapy in recurrent and metastatic head and neck squamous cell carcinoma (R/M HNSCC) and in combination with KEYTRUDA® (pembrolizumab) in 1L/2L+ R/M HNSCC and other solid tumors.

MICVO Monotherapy

PYX-201-101 Phase 1 (Part 1) Monotherapy Dose Escalation Study

As part of our Phase 1 monotherapy study, referred to as PYX-201-101, we conducted a dose escalation study to evaluate MICVO monotherapy in patients with advanced solid tumors known to express EDB+FN. In November 2024, we reported positive preliminary results from the dose escalation study, which included a total of 80 patients dosed across nine solid tumor types at doses ranging from 0.3 mg/kg to 8 mg/kg, with a data cut-off of October 4, 2024. Of the nine solid tumor types included in the study, the strongest tumor regression response was observed in R/M HNSCC. Among the six efficacy evaluable heavily pre-treated patients with R/M HNSCC, the confirmed objective response rate (ORR) was 50% per RECIST v1.1 at the therapeutically active dose response range of 3.6 mg/kg - 5.4 mg/kg administered intravenously every three weeks (IV Q3W), including one confirmed complete response (CR) and two confirmed partial responses (PRs), with a disease control rate (DCR) of 100%. Based on observations from the dose-escalation study, 5.4 mg/kg IV Q3W presented an optimal benefit-risk profile within the efficacious dose range and was selected for dose expansion. Subsequent translational data indicated reduction in ctDNA TF after treatment with MICVO, particularly at the 5.4 mg/kg dose, supported a positive molecular response to MICVO, providing further validation of the dose selection strategy for dose expansion.

PYX-201-101 Phase 1 (Part 2) Monotherapy Dose Expansion in R/M HNSCC

In January 2025, we initiated the dose expansion portion (Part 2) of the Phase 1 PYX-201-101 monotherapy study to further evaluate MICVO as a monotherapy at a dose of 5.4 mg/kg IV Q3W and to assess preliminary efficacy in R/M HNSCC. The Part 2 dose-expansion phase includes the following two cohorts:

In December 2025, we reported positive preliminary data from our ongoing Phase 1 monotherapy study evaluating MICVO in patients with 2L+ R/M HNSCC, based on a data cut-off date of November 3, 2025, which included all R/M HNSCC patients dosed at 5.4 mg/kg total body weight (TBW) in Part 1 and in Part 2. As of the data cut-off, 18 R/M HNSCC patients had been treated and 13 patients were efficacy evaluable. All treated patients had received prior systemic therapy, with a median of three prior lines of therapy. All treated patients had received prior platinum-based and checkpoint inhibitor therapies while 67% of treated patients had received prior taxanes and 50% of treated patients had received prior EGFR-targeted therapies, specifically cetuximab. Among the 13 efficacy evaluable patients, the confirmed ORR was 46% (6/13, one patient confirmed response after November 3, 2025 data cut-off) per RECIST v1.1, including one confirmed complete response. Confirmed responses were observed in both dose-expansion cohorts, including patients previously treated with platinum-based therapy and anti-PD(L)1 therapy (Arm 1) and patients previously treated with an EGFR inhibitor and/or anti-PD(L)1 therapy (Arm 2), and were observed in patients regardless of HPV status. The preliminary data also showed a DCR of 92%, with 12 of 13 efficacy evaluable patients demonstrating significant tumor regression or tumor control.

Preliminary data reported in December 2025 indicated that MICVO was generally well tolerated. No Grade 4 ADC payload treatment-related adverse events (TRAEs) of interest were observed, and no Grade 5 events occurred. TRAEs were reported in 89% (16/18) of patients, with Grade ≥3 TRAEs reported in 56% (10/18) of patients. TRAEs leading to treatment discontinuation occurred in 28% (5/18) of patients. We observed a higher discontinuation rate and incidence of Grade ≥3 TRAEs in high body weight patients (defined as at least 10% above adjusted ideal body weight, or AIBW). In the preliminary dataset, all patients (5/5) who experienced TRAEs leading to treatment discontinuation had high body weight. Several approved ADCs have demonstrated comparable associations among patient body weight, systematic drug exposure, and tolerability profiles. Many of these ADCs, such as Padcev, Adcetris, and Elahere, have addressed such observations through dosing modifications that resulted in an improved tolerability profile while sustaining efficacy, including through capping the maximum allowable dose or employing AIBW dosing. We implemented a dose cap for higher body weight patients in December 2025 and continue to evaluate dosing strategies to optimize MICVO's benefit-risk profile. The Fall 2026 clinical update is expected to include analyses of the impact of dose capping on safety, tolerability, efficacy and initial durability.

MICVO Combination Therapy

In November 2024, we announced a Clinical Trial Collaboration and Supply Agreement with Merck & Co, Inc. or Merck (known as MSD outside of the United States and Canada), for a Pyxis Oncology-sponsored study of MICVO in combination with Merck's anti-PD-1 therapy, KEYTRUDA® (pembrolizumab). In January 2025, we initiated the Phase 1/2 combination study with KEYTRUDA®, PYX-201-102, and are actively enrolling and dosing patients in this study. PYX-201-102 is a Phase 1/2 open label, global, multicenter dose escalation and dose expansion study designed to evaluate the safety, tolerability, pharmacokinetics (PK), pharmacodynamics (PD) and preliminary efficacy of MICVO in combination with pembrolizumab in patients with advanced solid tumors. Patients with histologically or cytologically confirmed advanced solid tumors, including 1L R/M HNSCC, 2L+ R/M HNSCC, cervical cancer, gastric cancer, HR+/HER2- breast cancer, and locally advanced or metastatic triple-negative breast cancer (TNBC), are eligible to enroll.

PYX-201-102 Phase 1/2 Preliminary Combination Data in R/M HNSCC

In December 2025, we reported positive preliminary data from this study, evaluating MICVO at 3.6 mg/kg and 4.4 mg/kg IV Q3W, each administered in combination with a fixed 200 mg dose of pembrolizumab Q3W, in patients with 1L/2L+ R/M HNSCC. As of the data cut-off date of November 3, 2025, seven patients had been treated, including four patients at 3.6 mg/kg and three patients at 4.4 mg/kg of MICVO, each in combination with pembrolizumab. All treated patients had received prior systemic therapy, including four patients with 1L R/M HNSCC (median of one prior systemic therapy administered in the neoadjuvant or adjuvant setting) and three patients with 2L+ R/M HNSCC (median of three prior lines of therapy, some of which were administered prior to the R/M setting). Among the seven efficacy-evaluable patients, the confirmed ORR was 71% (5/7, one patient confirmed response after November 3, 2025 data cut-off) and the DCR was 100% (7/7), with all seven patients demonstrating meaningful tumor regression. Responses were observed across a range of PD-L1 combined positive scores (CPS), from CPS≥1 to CPS>20, and included responses in patients who had previously received checkpoint inhibitor treatment and had experienced disease progression while receiving checkpoint inhibitor treatment. Preliminary safety data indicated that MICVO in combination with pembrolizumab was generally well tolerated, with no Grade 3 or Grade 4 ADC payload TRAEs of interest and no Grade 5 events reported. TRAEs were reported in 86% (6/7) of patients. No TRAEs led to treatment discontinuation, and, as of the data cut-off date, no overlapping toxicities between MICVO and pembrolizumab (KEYTRUDA®) had been observed.

Recent Preclinical Data

In April 2026, we presented new preclinical data in a poster session at the American Association for Cancer Research (AACR) 2026 Annual Meeting in San Diego, California. The new preclinical data indicated that a mouse analogue of MICVO (maMICVO) demonstrates anti-tumor activity in a preclinical HNSCC model as monotherapy, and synergistic anti-tumor activity in combination with anti-mouse PD-1. The preclinical data are summarized below:

We believe the totality of our preliminary clinical and preclinical data supports MICVO's broad potential to address a significant unmet need for patients with R/M HNSCC regardless of HPV status or prior therapy and continued clinical development of both MICVO monotherapy expansion and combination therapy trials.

Our Clinical Pipeline

The following table summarizes our clinical pipeline

MICVO Monotherapy Pipeline

The dose expansion phase of our Phase 1, PYX-201-101 monotherapy study, is ongoing with the objective of further evaluating the preliminary safety, efficacy and durability signals observed with MICVO in R/M HNSCC at the 5.4mg/kg IV Q3W dose. In the first quarter of 2026, we completed target enrollment of approximately 40 patients, approximately 20 in each of two 2L+ R/M HNSCC cohorts, and we are actively treating patients in both cohorts. The dose expansion phase includes the following R/M HNSCC cohorts across sites in the United States (US), European Union (EU) and other countries:

We expect to report updated clinical data from both cohorts in Fall 2026. We believe this timeline allows for additional follow-up of 2L+ R/M HNSCC patients treated with MICVO at 5.4 mg/kg IV Q3W with a dose equivalent to or below a dose cap and will support detailed analyses of the impact of dose capping on safety, tolerability, efficacy and initial durability.

Dose capping and AIBW are both well-established approaches to modified weight-based dosing and have demonstrated improved tolerability without sacrificing clinical activity in studies of other ADCs. In December 2025, we implemented a dose cap for higher body weight patients. Based on internal PK simulation modeling indicating that MICVO exposure with dose capping and AIBW dosing are comparable, dose capping was prioritized for its operational simplicity and ease of implementation. A protocol amendment permitting AIBW dosing has since been approved, and AIBW dosing has begun in ongoing clinical studies. AIBW will be selected as a go-forward dose strategy only if it offers a superior profile to dose capping.

During the fourth quarter of 2025, we obtained feedback and alignment from the U.S. Food and Drug Administration (FDA) regarding the clinical trial design for a planned pivotal monotherapy study in 2L+ R/M HNSCC, which continues to inform our development strategy for MICVO in this setting.

MICVO Combination Therapy Pipeline

Our Phase 1/2 combination study with KEYTRUDA® (PYX-201-102) is ongoing and we are conducting the dose escalation phase of PYX-201-102 across multiple tumor types with the objective of identifying the Recommended Phase 2 Dose (RP2D) of MICVO in combination with pembrolizumab. We are currently enrolling and dosing patients across several dose levels between 3.6 mg/kg and 5.4 mg/kg of MICVO, in combination with pembrolizumab at the fixed dose of 200 mg IV Q3W, in order to accurately characterize the RP2D for MICVO in combination with pembrolizumab, subject to ongoing safety review, enrollment progress, and clinical data evaluation.

We anticipate reporting updated clinical data in the fourth quarter of 2026 from the ongoing PYX-201-102 Phase 1/2 dose escalation study evaluating MICVO in combination with KEYTRUDA®, with the update focused on patients with 1L R/M HNSCC.

Since our inception, we have focused substantially all of our resources on conducting research and development activities, undertaking preclinical studies and clinical trials, organizing and staffing our company, business planning, raising capital, establishing and maintaining our intellectual property portfolio and identifying potential product candidates. We do not have any products approved for sale and have not generated any revenue from product sales. We have incurred significant operating losses since our inception. We reported net losses of $48.6 million and $39.5 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $491.8 million, net equity of $11.4 million, and cash, cash equivalents and marketable debt securities of $33.0 million. Subsequent to June 30, 2026, we completed a private placement financing that generated gross proceeds of approximately $50.0 million (of which $10.0 million was received on June 30, 2026), before deducting placement agent fees and offering expenses, and expect the upfront proceeds from the financing to fund our operating expenses and capital expenditure requirements into the second quarter of 2027. We expect to continue to incur significant expenses and operating losses for the foreseeable future. We expect that our expenses and capital expenditures will increase substantially in connection with our ongoing activities. Our operations to date have been financed primarily through sale of equity securities and additional funding will be necessary to fund future clinical and preclinical activities.

Components of Our Results of Operations

Revenues

To date, we have not generated any revenues from product sales and do not expect to generate any revenues from product sales in the foreseeable future. We record revenues from research and development agreements, including amounts related to upfront receipt for license fees, royalties, milestones and other contingent receipts and fees for research and development services.

Our ability to generate product revenues will depend upon our ability to successfully develop, obtain regulatory approval and commercialize our product candidate. Due to the numerous risks and uncertainties associated with product development and regulatory approval, we are unable to predict the amount, timing or whether we will be able to obtain product revenues.

Costs and Operating Expenses

Cost of Revenues

The components of our cost of revenues are expenses directly attributable to revenues. During the three and six months ended June 30, 2026 and 2025, the Company has not incurred any costs with respect to revenue.

Research and Development Expenses

Research and development expenses consist of costs incurred for our research activities, including our discovery efforts and research work to support clinical development, and the development of our programs. Research and development expenses are separated into program-specific costs and unallocated costs.

Program-specific costs include:

Unallocated costs include:

We expense research and development costs as incurred. Non-refundable advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered, or the services rendered.

We expect that our research and development expenses will increase substantially in connection with our ongoing and planned preclinical and clinical development activities related to our product candidate in the near term and in the future. The successful development of our product candidate is highly uncertain. At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of our product candidate and we may never succeed in obtaining regulatory approval for our product candidate.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and personnel-related costs, including stock-based compensation, and severance for our personnel in executive, legal, finance and accounting, human resources and other administrative functions. General and administrative expenses also include professional fees for auditing, tax, and legal services, as well as insurance, board of director compensation, consulting, other administrative expenses and facility costs not otherwise included in research and development expenses.

Other Income, Net

Other income, net primarily consists of interest earned on our invested cash and cash equivalent balances, accretion of discounts associated with our marketable debt securities and sublease income under our sublease.

Results of Operations

Comparison of the Three Months Ended June 30, 2026 and 2025

The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025 (in thousands):

Milestone Revenue

We recognized no revenue for the three months ended June 30, 2026, compared to $2.8 million for the three months ended June 30, 2025. The prior-year revenue related to a regulatory milestone achieved under the Simcere out-licensing and collaboration agreement.

Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended June 30, 2026 and 2025 (in thousands):

Research and development expenses decreased by $1.1 million, from $17.1 million for the three months ended June 30, 2025 to $16.1 million for the three months ended June 30, 2026.

MICVO program-specific research and development costs decreased by $0.1 million, primarily due to $3.5 million increase in clinical trial-related expenses due to an increased number of patients dosed in the MICVO monotherapy and combination therapy trials, as well as an $1.1 million increase in preclinical studies, offset by a reduction of $4.7 million in manufacturing costs.

PYX-106 program-specific research and development costs decreased by $0.2 million, reflecting lower program-related expenses following the pause in clinical development of PYX-106-101 in December 2024.

Unallocated research and development costs decreased by $0.7 million, primarily due to lower research and development support costs of $0.4 million, decreased facilities and depreciation costs of $0.3 million, and decreased recruitment costs of $0.2 million, offset by an increase of $0.4 million in compensation costs.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the three months ended June 30, 2026 and 2025 (in thousands):

General and administrative expenses increased by $4.5 million, from $5.4 million for the three months ended June 30, 2025 to $9.9 million for the three months ended June 30, 2026. This increase was primarily attributable to a $4.4 million increase in personnel-related expenses, due to an increase in severance costs of $1.2 million and higher stock-based compensation expense of $2.6 million.

Other Income, Net

Other income, net for the three months ended June 30, 2026 and 2025 was $0.6 million and $1.7 million, respectively. The decrease of $1.1 million was due to lower interest and investment income and lower sublease income.

Results of Operations

Comparison of the six months ended June 30, 2026 and 2025

The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025 (in thousands):

Milestone Revenue

We recognized no revenue for the six months ended June 30, 2026, compared to $2.8 million for the six months ended June 30, 2025. The prior-year revenue related to a regulatory milestone achieved under the Simcere out-licensing and collaboration agreement.

Research and Development Expenses

The following table summarizes our research and development expenses for the six months ended June 30, 2026 and 2025 (in thousands):

Research and Development Expenses

Research and development expenses increased by $1.9 million, from $34.2 million for the six months ended June 30, 2025 to $36.0 million for the six months ended June 30, 2026.

MICVO program-specific research and development costs increased by $5.4 million, primarily due to $7.9 million increase in clinical trial-related expenses due to an increased number of patients dosed in the MICVO monotherapy and combination therapy trials, as well as an $1.9 million increase in preclinical studies, offset primarily by a reduction in manufacturing expense of $4.3 million.

PYX-106 program-specific research and development costs decreased by $0.7 million, reflecting lower program-related expenses following the pause in clinical development of PYX-106-101 in December 2024.

Unallocated research and development costs decreased by $2.5 million primarily due to decreased severance expense of $0.9 million, a reduction in other research and development support costs of $0.7 million and decreased employee recruitment costs of $0.6 million.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the six months ended June 30, 2026 and 2025 (in thousands):

General and administrative expenses increased by $3.0 million, from $11.3 million for the six months ended June 30, 2025 to $14.3 million for the six months ended June 30, 2026. This increase was primarily attributable to a $2.6 million increase in personnel-related expenses, primarily due to an increase in severance costs of $1.1 million and an increase in stock-based compensation expense of $0.9 million.

Other Income, Net

Other income, net for the six months ended June 30, 2026 and 2025 was $1.7 million and $3.4 million, respectively. The decrease of $1.7 million was primarily due to lower interest and investment income and lower sublease income.

Liquidity and Capital Resources

We had cash, cash equivalents and marketable debt securities of $33.0 million as of June 30, 2026, including $10.0 million from the Private Placement proceeds received in advance on June 30, 2026. For the three months ended June 30, 2026 and 2025, we had net losses of $25.3 million and $18.4 million, respectively. For the six months ended June 30, 2026 and 2025, we had net losses of $48.6 million and $39.5 million, respectively. As of June 30, 2026, we had an accumulated deficit of $491.8 million and net equity of $11.4 million.

On November 26, 2025, we filed a registration statement on Form S-3 with the SEC for the issuance of common stock, preferred stock, warrants, debt securities, rights and units with an aggregate offering price of up to $350.0 million. On December 9, 2025, the registration statement was declared effective by the SEC. The registration statement includes an at-the-market ("ATM") offering program for the sale of up to $150.0 million of shares of our common stock. During the three and six months ended June 30, 2026 and 2025, we did not sell any shares under the ATM program. As of June 30, 2026, we had $150.0 million of remaining capacity available under the ATM facility.

On July 2, 2026, we completed the Private Placement with certain accredited investors and issued and sold to the Purchasers an aggregate of (i) 19,600,153 shares of common stock at a purchase price of $2.551 per share, and (ii) common warrants to purchase up to an equal amount of shares of common stock at an exercise price of $3.289 per Common Warrant. The Common Warrants will be exercisable on or after the earlier of (i) the date on which we first publicly disclose clinical data from MICVO Phase 1 monotherapy study in 2L+ R/M HNSCC, or (ii)

October 1, 2026, and the Common Warrants will expire on July 2, 2029. We received upfront gross proceeds from the issuance of common stock under the Private Placement of approximately $50 million (of which $10.0 million was received on June 30, 2026), before deducting placement agent fees and offering expenses.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance further clinical trials for MICVO. The timing and amount of our funding requirements will depend on many factors, including:

Until such time, if ever, we can generate substantial product revenues, we expect to continue to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred 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 acquisitions, engaging in acquisition, merger or collaboration transactions, selling or licensing our assets, making capital expenditures, redeeming our stock, making certain investments or declaring dividends.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidate, or grant licenses on terms that may not be favorable to us. 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 product candidate that we would otherwise prefer to develop and market ourselves.

Cash Flows

The following table provides information regarding our cash flows for the periods presented (in thousands):

Operating Activities

During the six months ended June 30, 2026, net cash used in operating activities was $44.2 million, which consisted of our net loss of $48.6 million, partially offset by non-cash charges of $7.5 million and a net change in our operating assets and liabilities of $3.1 million. The non-cash charges of $7.5 million were primarily due to $6.7 million of stock-based compensation, $0.8 million of depreciation and amortization expense and $0.5 million of non-cash operating lease expense, partially offset by $0.4 million related to accretion of discounts on marketable debt securities. The net change in our operating assets and liabilities was primarily due to a decrease in accounts payable of $7.6 million, partially offset by an increase in accrued expenses and other current liabilities of $4.0 million, primarily related to the timing of vendor payments and services performed related to our ongoing clinical trials. Further, net changes in our operating assets and liabilities also consists of a reduction in operating lease liabilities of $0.8 million and an increase in prepaid expenses and other current assets of $1.5 million.

During the six months ended June 30, 2025, net cash used in operating activities was $39.8 million, which consisted of our net loss of $39.5 million and a net change in our operating assets and liabilities of $6.4 million, partially offset by non-cash charges of $6.0 million. The non-cash charges of $6.0 million were primarily due to $6.6 million of stock-based compensation and $1.1 million of depreciation and amortization expenses, offset by $2.0 million related to accretion of discounts on marketable debt securities. The net change in our operating assets and liabilities was primarily due to an increase in receivables by $3.0 million, prepaid expenses and other current assets by $2.5 million, a decrease in accrued expenses and other current liabilities by $4.7 million and an increase in accounts payable by $4.5 million primarily related to the timing of vendor payments and services performed related to our ongoing clinical trials.

Investing Activities

During the six months ended June 30, 2026, net cash provided by investing activities was $37.7 million, which consisted primarily of redemptions of marketable debt securities of $51.7 million, partially offset by purchases of marketable debt securities of $14.0 million.

During the six months ended June 30, 2025, net cash provided by investing activities was $31.1 million, which consisted primarily of redemptions of marketable debt securities of $123.6 million, partially offset by purchases of marketable debt securities of $92.5 million.

Financing Activities

During the six months ended June 30, 2026, net cash provided by financing activities was $10.0 million, which consisted primarily of proceeds received in advance of the Private Placement, partially offset by tax withholding payments related to net settlement of restricted common stock.

During the six months ended June 30, 2025, net cash used in financing activities was $0.1 million, which consisted primarily of tax withholding payments related to the net settlement of restricted common stock.

Outlook and Going Concern

As of June 30, 2026, we had approximately $33.0 million in cash, cash equivalents and marketable debt securities. Additionally, on July 2, 2026, we completed the Private Placement which resulted in gross proceeds of approximately $50 million (of which $10.0 million was received on June 30, 2026), before deducting placement agent commissions and offering expenses. We believe that our cash, cash equivalents and marketable debt securities as of June 30, 2026, along with the proceeds from the Private Placement will be sufficient to fund our operations into the second quarter of 2027. However, we have based this estimate on assumptions that may prove to be incorrect, and our operating plan may change as a result of many factors currently unknown to us. In addition, we may utilize our available capital resources sooner than we expect.

Our future cash flows are dependent on key variables such as our ability to secure additional sources of funding in the form of public or private financing of equity or debt or collaboration agreements or a combination of these. While we remain optimistic to obtain additional funding, the current available cash, cash equivalents and marketable debt securities, even after giving effect to the proceeds from the Private Placement, will not be sufficient to fund our operations over the next 12 months from the date of this Quarterly Report on Form 10-Q. This condition raises substantial doubt about our ability to continue as a going concern for one year from the date the unaudited condensed consolidated financial statements are issued.

Contractual Obligations and Commitments

Operating lease obligation

We lease an office and laboratory space in Boston, Massachusetts with lease payments that continue through December 31, 2032, and have scheduled rent increases each year of 3%. The remaining contractual fixed lease payments, over the term of the lease aggregate to $24.1 million. The operating lease obligation is discussed in Note 10, Leases to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

Other obligations

We enter into licensing and related agreements in the normal course of business. In accordance with these agreements, we are obligated to pay, among other items, future contingent payments, royalties, and sublicensing revenues in the future, as applicable. We have not included potential future payments due under these licensing and collaboration agreements in contractual obligations because the payment obligations under the agreements are contingent upon future events. Refer to Note 6, Licensing Agreements, to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

In addition, we enter into contracts in the normal course of business with CDMOs, CROs, and other third parties for preclinical work and clinical development related work. These contracts do not contain minimum purchase commitments and are cancelable by us upon prior written notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation. These payments are not included in the contractual obligations above as the amount and timing of such payments are not known.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission.

Critical Accounting Policies and Significant Judgments and Estimates

Our unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our unaudited condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our unaudited condensed consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

There have been no significant changes to our critical accounting policies and estimates as compared to those described in "Note 2 - Summary of Significant Accounting Policies" to our audited financial statements set forth in our Fiscal 2025 10-K.

Recent Accounting Pronouncements

For information with respect to recently issued accounting standards and the impact of these standards on our unaudited condensed consolidated financial statements, refer to Note 2, Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Jumpstart Our Business Startups Act

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We are also a "smaller reporting company," meaning that the market value of our shares held by non-affiliates is less than $700 million and our annual revenues were less than $100 million during the most recently completed fiscal year. We may rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and have reduced disclosure obligations regarding executive compensation, and, similar to emerging growth companies, if we are a smaller reporting company with less than $100 million in annual revenues, we would not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.