Immunic Inc.
05/13/2026 | Press release | Distributed by Public on 05/13/2026 04:37
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (the "Quarterly Report"). This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in "Risk Factors" included elsewhere in this Quarterly Report. As used in this Quarterly Report, unless the context suggests otherwise, "we," "us," our" or "the Company" refer to Immunic, Inc. and its subsidiaries.
Forward-Looking Statements
In addition to historical information, this Quarterly Report includes forward-looking statements within the meaning of federal securities laws. Forward-looking statements are subject to certain risks and uncertainties, many of which are beyond our control. Such statements include, but are not limited to, statements preceded by, followed by or that otherwise include the words, "believe," "may," "might," "can," "could," "will," "would," "should," "estimate," "continue," "anticipate," "intend," "seek," "plan," "project," "expect," "potential," "predicts," or similar expressions and the negatives of those terms.
Forward-looking statements discuss matters that are not historical facts. Our forward-looking statements involve assumptions that, if they ever materialize or prove correct, could cause our results to differ materially from those expressed or implied by such forward-looking statements. In this Quarterly Report, for example, we make forward-looking statements, among others, regarding our development programs, potential strategic options; financial estimates and projections; and the sufficiency of our capital resources to fund our operations.
The inclusion of any forward-looking statements in this Quarterly Report should not be regarded as a representation that any of our plans will be achieved. Our actual results may differ from those anticipated in our forward-looking statements as a result of various factors, including those noted below under the caption "Part II, Item 1A-Risk Factors," and the risk factors
described in our most recent Annual Report on Form 10-K filed with the SEC (the "2025 Annual Report"), and the differences may be material. These risk factors include, but are not limited to statements relating to our development programs and the targeted diseases; the potential for vidofludimus calcium and IMU-856 to safely and effectively target diseases; the nature, strategy and focus of the Company; expectations regarding our capitalization and financial resources; the development, timing and commercial potential of any product candidates of the Company; and our ability to attract and retain certain personnel important to our ongoing operations and to maintain effective internal control over financial reporting.
Although our forward-looking statements reflect the current good faith judgment of our management, these statements are based only on facts and factors currently known by us. As a result, investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and we undertake no obligation to revise or update such statements to reflect events or circumstances after the date hereof, except as required by law.
Overview
Immunic, Inc. ("Immunic," "we," "us," "our" or the "Company") is a late-stage biotechnology company pioneering the development of novel oral therapies for neurologic diseases. We are headquartered in New York City with our research and development operations in Gräfelfing near Munich, Germany. We had approximately 95 employees as of April 30, 2026.
We are pursuing clinical development of orally administered, small molecule programs, each of which has unique features intended to directly address the unmet needs of patients with serious chronic inflammatory and autoimmune diseases. These include the vidofludimus calcium (IMU-838) program, which is in Phase 3 clinical development for patients with relapsing multiple sclerosis ("RMS"), and which has shown therapeutic activity in Phase 2 clinical trials in patients suffering from
relapsing-remitting multiple sclerosis ("RRMS"), progressive multiple sclerosis ("PMS") and other diseases; the IMU-856 program, which is targeted to regenerate bowel epithelium and restore intestinal barrier function, which could potentially be applicable in numerous gastrointestinal diseases, such as celiac disease, inflammatory bowel disease ("IBD"), and Graft-versus-Host-Disease ("GvHD"); and the IMU-381 program, which comprises next-generation molecules in preclinical testing for neurologic, gastrointestinal and other autoimmune diseases leveraging our nuclear receptor-related 1 ("Nurr1") platform.
The following table summarizes the potential indications, clinical targets and clinical development status of our three product candidates:
Our most advanced drug candidate, vidofludimus calcium (IMU-838), is being tested in ongoing multiple sclerosis ("MS") trials as part of its overall clinical development program in order to support potential regulatory approvals for patients with MS in major markets.
The Phase 3 ENSURE program of vidofludimus calcium in RMS, comprising twin studies evaluating efficacy, safety, and tolerability of vidofludimus calcium versus placebo, is currently ongoing. In October 2024, we announced a positive outcome of an interim analysis of the ENSURE program, with an unblinded Independent Data Monitoring Committee ("IDMC") confirming that the predetermined futility criteria have not been met and recommending that both ENSURE trials should continue without changes, including no need for a potential increase of the sample size. In June 2025, we announced completion of enrollment for both ENSURE trials. Each of the trials enrolled adult patients with active RMS at more than 100 sites in 15 countries. In total, 1,121 patients in ENSURE-1 and 1,100 patients in ENSURE-2 have been randomized in a double-blinded fashion to either 30 mg daily doses of vidofludimus calcium or placebo. The top-line data for both ENSURE trials is expected by the end of 2026. Although we currently believe that this goal is achievable, it is dependent on numerous factors, most of which are not under our direct control and can be difficult to predict. We plan to periodically review this assessment and provide updates of material changes as appropriate.
Our Phase 2 CALLIPER trial of vidofludimus calcium in PMS was designed to corroborate vidofludimus calcium's neuroprotective potential and to evaluate the clinical efficacy, safety and tolerability of vidofludimus calcium in a broad set of PMS patients to determine the suitability of advancing to a confirmatory Phase 3 program. In 2025, we announced the results from the CALLIPER trial, showing substantial and medically relevant reductions in 24-week confirmed disability worsening ("24wCDW") across patient populations and subgroups without evidence of focal inflammation; substantial and statistically significant data regarding 24-week confirmed disability improvement ("24wCDI"); and reductions in the annualized rate of thalamic brain volume loss and volume of new or enlarging T2 lesions. The data also confirmed the favorable safety and tolerability profile of vidofludimus calcium already observed in previous clinical trials.
If approved, we believe that vidofludimus calcium, with combined neuroprotective, anti-inflammatory, and antiviral effects as well as a favorable safety and tolerability profile, has the potential to be a unique treatment option targeted to the complex pathophysiology of MS. Preclinical data showed that vidofludimus calcium activates the neuroprotective transcription factor Nurr1, which is associated with direct neuroprotective effects and may enhance the potential benefit for patients. Additionally, vidofludimus calcium is a selective inhibitor of the enzyme dihydroorotate dehydrogenase ("DHODH"), which is a key enzyme in the metabolism of overactive immune cells and virus-infected cells. This mechanism is associated with the anti-inflammatory and antiviral effects of vidofludimus calcium. We believe that the combined mechanisms of vidofludimus
calcium are unique in the MS space and support the therapeutic performance observed in our Phase 2 EMPhASIS trial in RRMS patients and in our Phase 2 CALLIPER trial in PMS patients. Vidofludimus calcium has shown a consistent pharmacokinetic, safety and tolerability profile in clinical trials reported, to date, and has already been exposed to more than 3,400 human subjects and patients in either of the drug's formulations.
IMU-856 is an orally available and systemically acting small molecule modulator that targets Sirtuin 6 ("SIRT6"), a protein which serves as a transcriptional regulator of intestinal barrier function and regeneration of bowel epithelium. Based on preclinical data, we believe this compound may represent a unique treatment approach, as the mechanism of action targets the restoration of the intestinal barrier function and bowel wall architecture in patients suffering from gastrointestinal diseases such as celiac disease, IBD, GvHD and other intestinal barrier function associated diseases. Based on preclinical investigations demonstrating no suppression of immune cells, IMU-856 may have the potential to maintain immune surveillance for patients during therapy, which would be an important advantage versus immunosuppressive medications and may allow the potential for combination with available treatments in multiple gastroenterological diseases.
Data from a Phase 1b clinical trial in celiac disease patients during periods of gluten-free diet and gluten challenge demonstrated positive effects for IMU-856 over placebo in four key dimensions of celiac disease pathophysiology: protection of the gut architecture, improvement of patients' symptoms, biomarker response, and enhancement of nutrient absorption. IMU-856 was also observed to be safe and well-tolerated in this trial. In a post hoc analysis of this Phase 1b clinical trial, IMU-856 demonstrated a dose-dependent increase of endogenous glucagon-like peptide-1 ("GLP-1") levels. IMU-856 also showed a dose-dependent reduction of body weight gain and food consumption in preclinical in vivo testing.
We are currently exploring strategic alternatives for the IMU-856 program and are open to discussing potential financing, licensing or partnering options with interested parties.
We have selected the IMU-381 program to leverage our Nurr1 platform for neurologic, gastrointestinal and other autoimmune diseases. The platform comprises next-generation molecules, including a series of chemical derivatives, with improved overall properties. The IMU-381 program is currently in preclinical testing.
Additional research and development activities remain ongoing through preclinical research examining the potential to treat a broad set of neuroinflammatory, autoimmune, and viral diseases with new molecules leveraging our chemical and pharmacological research platform as well as generating intellectual property in these areas. We are also exploring several options to possibly support further development of certain assets and technologies, including a potential spin-off into a new company and potential licensing transactions. Through our wholly-owned subsidiary Gliomic Therapeutics Inc., we are pursuing the use of new compounds in brain cancers leveraging our expertise in DHODH inhibition.
We expect to continue to lead most of our research and development activities from our Gräfelfing, Germany location, where dedicated scientific, regulatory, clinical and medical teams conduct their activities. Due to these teams' key relationships with local and international service providers and academic partners, we anticipate that this should result in more timely and cost-effective execution of our development programs. In addition, we are using our subsidiary in Melbourne, Australia to perform research and development activities in the Australasia region. We also conduct preclinical work in our laboratory in Martinsried, Germany and in Halle/Saale, Germany and through a collaboration with the Fraunhofer Institute.
Our business, operating results, financial condition and growth prospects are subject to significant risks and uncertainties, including delays in clinical trials, the failure of our clinical trials to meet their endpoints, failure to obtain regulatory approval and failure to obtain needed additional funding on acceptable terms, if at all, to complete the development and commercialization of our three development programs.
Strategy
We are focused on the development of new molecules that maximize the therapeutic benefits for patients by uniquely addressing biologically relevant immunological targets. We take advantage of our established research and development infrastructure and operations in Germany and Australia to more efficiently develop our product candidates in indications of high unmet need and where the product candidates have the potential to elevate the standard of care for the benefit of patients. Given the mechanisms of action and the data generated for our product candidates, to date, we continue to execute on the clinical development of our programs for established indications as well as explore additional indications where patients could potentially benefit from the unique profiles of each product candidate.
We are currently focused on maximizing the potential of our development programs through the following strategic initiatives:
•Executing the ongoing Phase 3 ENSURE clinical trials of vidofludimus calcium in RMS.
•Preparation of a Phase 3 clinical program of vidofludimus calcium in primary progressive MS, following the successful completion of the Phase 2 CALLIPER clinical trial in PMS and feedback from healthcare authorities.
•Exploring strategic alternatives for the IMU-856 development program.
•Continuing preclinical research to complement the existing clinical activities, explore additional indications for potential future development and generating additional molecules for potential future development.
•Facilitating readiness for potential commercial launch of our product candidates, if regulatory approvals are received, through targeted and stage-appropriate pre-commercial activities.
•Evaluating potential strategic collaborations for each product candidate in order to complement our existing research and development capabilities and to facilitate potential commercialization of these product candidates by taking advantage of the resources and capabilities of strategic collaborators in order to enhance the potential and value of each product candidate.
Liquidity and Financial Condition
Immunic has no products approved for commercial sale and has not generated any revenue from product sales. We have never been profitable and have incurred operating losses in each year since inception in 2016. The Company has an accumulated deficit of approximately $641.2 million as of March 31, 2026 and $608.6 million as of December 31, 2025. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
We expect to incur significant expenses and increasing operating losses for the foreseeable future as we initiate and continue the development of our product candidates and add personnel necessary to advance our pipeline of product candidates. We expect that our operating losses will fluctuate significantly from quarter-to-quarter and year-to-year due to timing of development programs.
From inception through March 31, 2026, the Company raised net cash of approximately $684.9 million from private and public offerings of preferred stock, common stock, pre-funded warrants and tranche rights. As of March 31, 2026, we had cash and cash equivalents of approximately $186.6 million. With these funds we expect to be able to fund our operations beyond twelve months from the date of the issuance of the accompanying consolidated financial statements.
Key Status Updates
February 2026 Private Placement
Securities Purchase Agreement
On February 12, 2026, we entered into a securities purchase agreement (the "February Securities Purchase Agreement") with certain accredited investors (the "February Investors"), pursuant to which we agreed to issue and sell, in a private placement (the "February 2026 Offering"), pre-funded warrants (the "February 2026 Pre-Funded Warrants", and the shares of Common Stock issuable upon exercise of the February 2026 Pre-Funded Warrants, the "February 2026 Pre-Funded Warrant Shares") to purchase up to one share of Common Stock at a price of $0.001, with each February 2026 Pre-Funded Warrant accompanied by a warrant to purchase (i) a share of Common Stock or (ii) a pre-funded warrant to purchase a share of Common Stock (collectively, the "February 2026 Common Warrants" and together with the February 2026 Pre-Funded Warrants, the "February 2026 Warrants", and the shares of Common Stock issuable upon exercise of the February 2026 Common Warrants, the "February 2026 Common Warrant Shares", and together with the February 2026 Pre-Funded Warrant Shares, the "February 2026 Warrant Shares").
The purchase price for each February 2026 Pre-Funded Warrant and accompanying February 2026 Common Warrant was $8.73. Each February 2026 Pre-Funded Warrant is immediately exercisable at a price of $0.001 per share. Each February 2026 Common Warrant is exercisable at a price $8.73 per share (subject to adjustment as set forth therein) following the completion of the Reverse Stock Split until the earlier of (i) 30 trading days following the date of our initial public announcement of topline data from its Phase 3 ENSURE trials (for the avoidance of doubt, the later date of the initial public announcement of topline data from ENSURE-1 or ENSURE-2, if announced separately) (the "Topline Data Announcement"), (ii) immediately upon the exercise of the February 2026 Pre-Funded Warrants if such exercise of February 2026 Pre-Funded Warrants is prior to the Topline Data Announcement, provided that if the February 2026 Pre-Funded Warrant is not exercised in full, the February 2026 Common Warrant expires proportionally only to the extent the Pre-Funded Warrant is exercised, and (iii) February 17, 2031.
The Offering closed on February 17, 2026 (the "February 2026 Closing Date").
The Company issued 22,907,600 February 2026 Pre-Funded Warrant Shares. The aggregate gross proceeds to the Company from the issuance and sale of the February 2026 Warrants was $200 million, before deducting fees paid to the placement agents and financial advisors of the Company of $12.7 million, for net proceeds of $187.3 million.
As compensation in connection with the February 2026 Offering, we agreed to pay the placement agents a fee equal to 6% of the aggregate gross proceeds received by us (i) upon the issuance of the February 2026 Warrants at closing and (ii) upon the cash exercise of the February 2026 Common Warrants.
The Offering
The securities issued in the February 2026 Offering have not been registered under the Securities Act, and until so registered the securities may not be offered or sold absent registration or availability of an applicable exemption from registration. There is no established public trading market for the February 2026 Warrants, and we do not intend to list such securities on any national securities exchange or nationally recognized trading system. On April 2, 2026, we filed a registration statement on Form S-3 (File No. 333-294855) to register the Registrable Securities for resale by the February Investors, which registration statement was amended on April 30, 2026, and declared effective by the SEC on May 4, 2026.
Royalty Exchange Agreement
As previously disclosed, on June 3, 2025, the Company issued Series B Common Stock Warrants to purchase up to an aggregate of 8,666,667 shares of Common Stock (or prefunded warrants to purchase shares of Common Stock) in an underwritten public offering (the "Series B Warrants"). On February 12, 2026, in conjunction with our February 2026 Private Placement, the Company entered into a purchase and sale agreement (the "Royalty Exchange Agreement") with certain Series B Warrant holders who had purchased a predetermined number of Series B Warrants (each a "Participating Series B Holder") and BVF Partners, L.P. ("BVF"), acting as royalty interest agent (the "Warrant Exchange"). The Participating Series B Holders were also required to participate in the February private placement in order to participate in the Warrant Exchange.
Pursuant to the Royalty Exchange Agreement, the Participating Series B Holders exchanged an aggregate of 5,108,700 Series B Warrants for a pro rata share of an aggregate 5% synthetic royalty on future sales of the Company's vidofludimus calcium program in any country (the "Royalty Interests"). The pro rata share for each Participating Series B Holder is equal to the number of Series B Warrants exchanged by such Participating Series B Holder divided by the number of Series B Warrants exchanged by all Participating Series B Holders (expressed as a percentage). Royalty Interests will be due and payable quarterly by the Company to the Participating Series B Holders following the First Commercial Sale (as defined in the Royalty Exchange Agreement). The Company determined that the Royalty Interests do not meet the criteria for recognition as a liability. The Company will recognize amounts payable under the Royalty Interests when they become probable and estimable.
On the Closing Date, Series B Warrants to purchase up to an aggregate of 5,108,700 shares of Common Stock were surrendered by Participating Series B Holders and cancelled in exchange for the Royalty Interests. As this exchange occurred as part of an equity financing with the participating investor on the Closing Date, the effect of the exchange was reflected as an equity issuance cost net within additional paid in capital.
Special Meeting and Reverse Stock Split
On April 14, 2026, we held a Special Meeting of Stockholders (the "Special Meeting"). At the Special Meeting, our stockholders voted to authorize our Board of Directors, in its discretion, to amend our certificate of incorporation, as amended and restated, to effect a reverse stock split of all of the outstanding shares of the Common Stock, at a ratio in the range of 1-for-10 to 1-for-30, with such ratio to be determined by the Board. Following the Special Meeting, the Board approved a reverse stock split of our issued and outstanding Common Stock, at a ratio of 1-for-10 shares, which became effective April 27, 2026 (the "Reverse Stock Split"). All share amounts in this document have been adjusted retroactively to reflect the reverse stock split.
Changes to the Board of Directors - Appointment of Director
On February 12, 2026, our Board of Directors (the "Board"), following the recommendation of the Nominating and Corporate Governance Committee of the Board (the "Committee"), appointed Thor Nagel, an Analyst with BVF, to the Board until the 2026 annual meeting of stockholders as a Class III director or until his respective successors are duly elected and qualified.
Changes to the Board of Directors - Appointment of Chair
On February 12, 2026, following the recommendation of the Committee, the Board appointed Simona Skerjanec, a member of the Board since July 2024, to serve as Interim Chairperson of the Board. Dr. Duane Nash, former Chairman, remains a member of the Board.
Changes to the Board of Directors - Resignation of Director
On February 12, 2026, Maria Törnsén resigned as a member of the Board in connection with the February Offering. The resignation of Ms. Törnsén was not the result of any disagreement with the Company on any matter relating to the Company's operations, policies, or practices. The Board and the Company are deeply grateful for Ms. Törnsén's service, dedication, and contributions to the Company.
CEO Search
Our Co-Founder and Chief Executive Officer, Dr. Daniel Vitt, and the Board have begun a search for a new CEO with deep commercial expertise in the MS space to lead Immunic through its next stage of growth and into commercialization. Subsequently, Dr. Vitt plans to transition to a new senior executive role focused on strengthening the Company's scientific strategy and driving portfolio advancement. He will continue to support the organization in this capacity and as a member of the Board of Directors.
Regained Compliance with Nasdaq Minimum Bid Price Requirement
On April 1, 2026, we announced that we received written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq") on March 27, 2026, informing us that we have regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market.
According to the Notice, we have regained compliance with the minimum bid price requirement, because the closing bid price of our common stock was at $1.00 per share or greater for at least 20 consecutive business days, satisfying the Nasdaq requirement on March 26, 2026. As a result, the matter was closed.
Jon Congleton Joined the Board of Directors
On March 31,2026, we announced the appointment of Jon Congleton, a seasoned biopharmaceutical executive with nearly 40 years of experience spanning drug development, commercialization and corporate leadership, to our Board of Directors, effective March 27, 2026. In connection with his appointment as a director, Mr. Congleton received an inaugural grant of options to purchase up to a total of 50,000 shares of the Company's common stock, effective March 27, 2026, which vest on a monthly basis over a three-year period.
Grant of Key European Patent Protecting Relevant Dosing Regimens for Vidofludimus Calcium
On March 10, 2026, we announced that the European Patent Office ("EPO") has granted a key European patent, EP3713554, directed to label-relevant dosing regimens of vidofludimus calcium. The patent is expected to provide protection for vidofludimus calcium in Europe into 2038, and may be eligible for a Supplementary Protection Certificate (SPC), which could extend market exclusivity potentially into 2043. This patent was previously granted by the United States Patent and Trademark Office (USPTO) in 2023.
The claims broadly protect vidofludimus and its salt, solvate and free acid forms, in all label-relevant dosing regimens. This protection extends beyond a specific salt form, meaning that even alternative salts or forms will fall within the scope of the patent if used according to the label.
Presented Additional Phase 2 CALLIPER Trial Data for Vidofludimus Calcium at the ACTRIMS Forum 2026
On February 4, 2026, we announced the presentation of additional data from our Phase 2 CALLIPER trial of vidofludimus calcium in patients with PMS at the Americas Committee for Treatment and Research in Multiple Sclerosis ("ACTRIMS") Forum 2026. The findings presented in two poster presentations provide additional evidence of vidofludimus calcium's effects on key biological drivers of disease progression, including antiviral immune responses linked to Epstein-Barr virus ("EBV") and magnetic resonance imaging ("MRI") markers of both acute-focal and chronic-compartmentalized inflammation. The findings further reinforce our belief that vidofludimus calcium has the potential to address underlying mechanisms of disease progression in MS patients.
Retention Bonus Agreement
On April 7, 2026, we entered into a Retention Bonus Agreement with Daniel Vitt, Ph.D., our Chief Executive Officer. The Agreement was entered into in connection with our commencement of a search for a new Chief Executive Officer, and Dr. Vitt's potential transition to a "C-Suite" role that is focused on strengthening our scientific strategy and driving portfolio advancement after a new Chief Executive Officer is hired.
Pursuant to the Agreement, subject to Dr. Vitt's continued employment with the Company through the ninety-first (91st) day after a new Chief Executive Officer is hired by the Company, Dr. Vitt shall be entitled to receive a retention bonus equal to $670,000, less applicable withholdings and payroll deductions. The Retention Bonus will be paid in one lump sum on the first regularly scheduled pay date after the Retention Date, subject to the terms and conditions of the Agreement.
If the Company terminates Dr. Vitt's employment without "Cause" or Dr. Vitt resigns for "Good Reason" prior to the Retention Date, the Company will pay the Retention Bonus within five (5) days of such termination or resignation, as applicable. If the Retention Bonus is paid, the amount will be credited against any cash severance payment that would otherwise become due under the U.S. Employment Agreement or the Service Agreement dated December 18, 2023, by and between Dr. Vitt and Immunic AG, as a result of any involuntary termination of employment.
Appointment of Michael A. Panzara, M.D., M.P.H., as Chief Medical Officer
Effective April 24, 2026, Michael A. Panzara, M.D., M.P.H., was appointed as our Chief Medical Officer. Dr. Panzara will lead our development organization, including clinical development, medical affairs, and regulatory affairs, and will be a critical partner to the Chief Executive Officer and the Board of Directors in defining and driving the overall company strategy. Dr. Panzara brings over 25 years of global neurology experience to Immunic. Dr. Panzara succeeds Andreas Muehler, M.D., M.B.A.
In connection with his appointment as Chief Medical Officer, Dr. Panzara entered into an employment agreement with the Company, dated as of April 24, 2026 (the "Panzara Employment Agreement"). Pursuant to the Panzara Employment Agreement, Dr. Panzara will receive a yearly base salary of $600,000, subject to periodic review and adjustments made by the Company, and be eligible for a yearly bonus amount of not less than 50% of the yearly base salary upon achievement of certain individual and company goals. In addition, the Company will pay Dr. Panzara a signing bonus in the aggregate amount of $125,000, $75,000 payable in the first month and $50,000 payable after six months of employment.
On April 23, 2026, effective April 24, 2026, the Compensation Committee of the Board approved a grant to Dr. Panzara of an initial equity option to purchase 300,000 shares of common stock of the Company under the Immunic, Inc. 2026 Inducement Equity Compensation Plan (the "Panzara Options"). The Panzara Options were granted as an inducement material to Dr. Panzara's commencement of employment pursuant to NASDAQ Listing Rule 5635(c)(4). The Panzara Options will be time vested, with one half vesting on the one-year anniversary of April 24, 2026 and one half vesting in equal monthly installments over a period of twenty-four (24) months thereafter. The exercise price of the options is the closing price of the Company's common stock on the date the Panzara Options were approved by the Compensation Committee.
Resignation of Andreas Muehler, M.D., M.B.A.
On April 27, 2026, Andreas Muehler, M.D., M.B.A., resigned as the Chief Medical Officer of the Company. The resignation of Dr. Muehler was not the result of any disagreement with the Company on any matter relating to the Company's operations, policies, or practices. The Board and the Company are deeply grateful for Dr. Muehler's service, dedication, and contributions to the Company.
In connection with Dr. Muehler's resignation as Chief Medical Officer, the Company entered into a Transition, Separation, and Consulting Agreement with Dr. Muehler, dated April 27, 2026 (the "Separation Agreement"). Pursuant to the Separation Agreement, Dr. Muehler's employment with the Company as Chief Medical Officer terminated on April 27, 2026, and Dr. Muehler's title was changed to Senior Medical Officer. Dr. Muehler also agreed to resign from the Executive Board of Immunic AG, a wholly owned subsidiary of the Company, on or before April 30, 2026 (the "Separation Date"). Dr. Muehler served as Senior Medical Officer through the Separation Date. From the date of the Separation Agreement to the Separation Date, (a) the Company agreed to pay Dr. Muehler all accrued salary earned through the Separation Date, subject to standard payroll deductions and withholdings, and (b) Immunic AG agreed to pay Dr. Muehler all accrued salary earned under the service agreement dated December 18, 2023, by and between Immunic AG and Dr. Muehler (the "Service Agreement"), through the Separation Date, subject to standard payroll deductions and withholdings.
Commencing on the Separation Date, Dr. Muehler will serve as a consultant to the Company for an initial period of ten (10) months, providing consulting services on an as-needed basis for up to twenty (20) hours per month, in exchange for a monthly retainer of $10,000. In addition, the Company agreed to provide Dr. Muehler with severance benefits, including a lump sum payment equal to twelve (12) months of Dr. Muehler's base salary, a pro-rated bonus for fiscal 2026, provided that such bonus will be determined by the Company in the ordinary course and will be paid (to the extent determined to have been earned by the Company) when such bonus is paid to employees of the Company, and a lump sum payment from Immunic AG equal to twelve (12) months of Dr. Muehler's fixed annual salary under the Service Agreement, subject to Dr. Muehler's execution of a release of claims in favor of the Company and compliance with the terms of the Separation Agreement. Additionally, 100% of Dr. Muehler's outstanding equity awards vested as of the Separation Date. Dr. Muehler will have three (3) years following Separation Date to exercise any vested equity awards
Components of Results of Operations
Revenue
To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts for our product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales. We cannot predict if, when, or to what extent we will generate revenue from the commercialization and sale of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates or achieving market acceptance and commercial success for any product that does receive regulatory approval.
Research and Development Expenses
Research and development expenses consist of costs associated with our research activities, including our product discovery efforts and the development of our product candidates. Our research and development expenses include:
•external research and development expenses and milestone payments incurred under arrangements with third parties, such as contract research organizations, contract manufacturing organizations, collaborations with partners, consultants, and our scientific advisors; and
•internal personnel expenses.
We expense research and development costs as incurred. Non-refundable advance payments for goods and services that will be used in future research and development activities are capitalized as prepaid expenses and expensed when the service has been performed or when the goods have been received.
Since our inception in March 2016, we have spent a total of approximately $485.6 million in research and development expenses through March 31, 2026.
These costs primarily include external development expenses and internal personnel expenses for the three development programs, vidofludimus calcium, IMU-856 and IMU-381. We have spent the majority of our research and development resources on vidofludimus calcium, our lead development program, for clinical trials in MS and UC.
Our research and development expenses are expected to increase in the foreseeable future as we continue to conduct ongoing research and development activities, initiate new preclinical and clinical trials and build our pipeline of product candidates. Our research and development expenses may also increase in the foreseeable future due to the current inflationary environment as well as supply chain shortages and tariffs, which result in increased costs. The process of conducting clinical trials and preclinical studies necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving regulatory approval for any of our product candidates.
Successful development of product candidates is highly uncertain and may not result in approved products. Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict. We anticipate that we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to the development and regulatory success of each product candidate, and ongoing assessments as to each product candidate's commercial potential.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel expenses, professional fees for legal, accounting, tax and business consulting services, insurance premiums and stock-based compensation.
Other Income (Expense)
Interest Income
Interest income consists of interest earned on our money market funds and bank accounts which are a portion of our cash and cash equivalents balance.
Other Income (Expense), Net
Other income (expense) primarily consists of a German Government research and development grant in 2025.
Results of Operations
Comparison of the Three Months Ended March 31, 2026 and 2025
The following table summarizes our operating expenses for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | (unaudited) | ||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | $ | 25,626 | $ | 21,533 | $ | 4,093 | 19 | % | |||||||||||||||
| General and administrative | 7,609 | 5,292 | 2,317 | 44 | % | ||||||||||||||||||
| Total operating expenses | $ | 33,235 | $ | 26,825 | $ | 6,410 | 24 | % | |||||||||||||||
| Loss from operations | (33,235) | (26,825) | (6,410) | 24 | % | ||||||||||||||||||
| Other income: | |||||||||||||||||||||||
| Interest income | 760 | 183 | $ | 577 | 315 | % | |||||||||||||||||
| Other income (expense), net | (113) | 1,169 | $ | (1,282) | (110) | % | |||||||||||||||||
| Total other income | 647 | 1,352 | $ | (705) | (52) | % | |||||||||||||||||
| Net loss | $ | (32,588) | $ | (25,473) | $ | (7,115) | 28 | % | |||||||||||||||
Research and development expenses increased by $4.1 million during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase reflects (i) a $2.9 million increase in external development costs related to the vidofludimus calcium program, (ii) a $1.0 million increase in personnel expenses, $0.7 million of which was related to non-cash stock compensation and (iii) a $0.2 million increase related costs across numerous categories.
General and administrative expenses increased by $2.3 million during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase was due to (i) a $2.0 million increase related to personnel expenses, of which $1.8 million was related to non-cash stock compensation, (ii) a $0.2 million increase in legal and consultancy expenses, (iii) a $0.2 million increase in marketing expenses, which was partially offset by a $0.1 million decrease related to costs across numerous categories.
Interest income increased $0.6 million during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. This is due to a higher average cash balance as a result of the February 2026 Private Placement.
Other income (expense) decreased by $1.3 million during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was primarily attributable to (i) a $1.1 million grant income of the German Federal Ministry of Finance recognized in the first quarter 2025 and no grant income in 2026 and (ii) a $0.2 million decrease across numerous categories.
Liquidity and Capital Resources
Liquidity and Financial Condition
We have no products approved for commercial sale and have not generated any revenue from product sales. We have never been profitable and have incurred operating losses in each year since inception in 2016. We have an accumulated deficit of approximately $641.2 million as of March 31, 2026 and $608.6 million as of December 31, 2025. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future as we initiate and continue the preclinical and clinical development of our product candidates and add personnel necessary to operate as a company with an advanced clinical pipeline of product candidates. To the extent additional funds are necessary to meet long-term liquidity needs as we continue to execute our business strategy, we anticipate that they will be obtained through the incurrence of indebtedness, additional equity financings, product licensing or a combination of these potential sources of funds, although we can provide no assurance that these sources of funding will be available on reasonable terms, if at all.
From inception through March 31, 2026, we have raised net cash of approximately $684.9 million from private and public offerings of preferred stock, common stock, prefunded warrants and tranche rights. As of March 31, 2026, we had cash and cash equivalents of approximately $186.6 million. With these funds we expect to be able to fund our operations beyond twelve months from the date of the issuance of the accompanying consolidated financial statements.
In November 2023, we filed a shelf registration statement on Form S-3 (the "2023 Shelf Registration Statement"). The 2023 Shelf Registration Statement permits the offering, issuance and sale of up to $250.0 million of common stock, preferred stock, warrants, debt securities, and/or units in one or more offerings and in any combination of the foregoing. The 2023 Registration Statement was declared effective on May 31, 2024. Unsold securities from the expired 2020 Shelf Registration Statement can continue to be sold under the 2023 Shelf Registration Statement. As a result of the April 2025 Offering and May 2025 Offering, the total amount available under the 2023 Shelf Registration Statement was reduced by $70.1 million to $262.2 million as of March 31, 2026. The Company can also use the unused amount (currently $80 million) of the available ATM as additional shelf availability.
In May 2024, we filed a Prospectus Supplement to the 2023 Shelf Registration Statement for the offering, issuance and sale of up to a maximum aggregate offering price of $80.0 million of common stock that may be issued and sold under an at-the-market sales agreement with Leerink Partners LLC as agent ("May 2024 ATM"), which rolls over the $80.0 million of unsold common stock from the May 2022 ATM. We intend to use the net proceeds from the May 2024 ATM to continue to fund the ongoing clinical development of our product candidates and for other general corporate purposes, including funding existing and potential new clinical programs and product candidates. The May 2024 ATM will terminate upon the earlier of (i) the issuance and sale of all of the shares through Leerink Partners LLC on the terms and subject to the conditions set forth in the May 2024 ATM or (ii) termination of the May 2024 ATM as otherwise permitted thereby. The May 2024 ATM may be terminated at any time by either party upon ten days' prior notice, or by Leerink Partners LLC at any time in certain circumstances, including the occurrence of a material adverse effect on us. As of March 31, 2026, $80.0 million in capacity remains under the May 2024 ATM.
We agreed to pay Leerink Partners LLC a commission equal to 3.0% of the gross proceeds from the sales of common shares pursuant to the May 2024 ATM and have agreed to provide Leerink Partners LLC with customary indemnification and contribution rights.
We did not have any ATM activity during the three months ended March 31, 2026 and 2025.
Equity Offerings
February 2026 Private Placement
Securities Purchase Agreement
On February 12, 2026, we entered into a securities purchase agreement (the "February Securities Purchase Agreement") with certain accredited investors (the "February Investors"), pursuant to which we agreed to issue and sell, in a private placement (the "February 2026 Offering"), pre-funded warrants (the "February 2026 Pre-Funded Warrants", and the shares of Common Stock issuable upon exercise of the February 2026 Pre-Funded Warrants, the "February 2026 Pre-Funded Warrant Shares") to purchase up to one share of Common Stock at a price of $0.001, with each February 2026 Pre-Funded Warrant
accompanied by a warrant to purchase (i) a share of Common Stock or (ii) a pre-funded warrant to purchase a share of Common Stock (collectively, the "February 2026 Common Warrants" and together with the February 2026 Pre-Funded Warrants, the "February 2026 Warrants", and the shares of Common Stock issuable upon exercise of the February 2026 Common Warrants, the "February 2026 Common Warrant Shares", and together with the February 2026 Pre-Funded Warrant Shares, the "February 2026 Warrant Shares").
The purchase price for each February 2026 Pre-Funded Warrant and accompanying February 2026 Common Warrant was $8.73. Each February 2026 Pre-Funded Warrant is immediately exercisable at a price of $0.001 per share. Each February 2026 Common Warrant is exercisable at a price $8.73 per share (subject to adjustment as set forth therein) following the completion of the Reverse Stock Split until the earlier of (i) 30 trading days following the date of our initial public announcement of topline data from its Phase 3 ENSURE trials (for the avoidance of doubt, the later date of the initial public announcement of topline data from ENSURE-1 or ENSURE-2, if announced separately) (the "Topline Data Announcement"), (ii) immediately upon the exercise of the February 2026 Pre-Funded Warrants if such exercise of February 2026 Pre-Funded Warrants is prior to the Topline Data Announcement, provided that if the February 2026 Pre-Funded Warrant is not exercised in full, the February 2026 Common Warrant expires proportionally only to the extent the Pre-Funded Warrant is exercised, and (iii) February 17, 2031.
The Offering closed on February 17, 2026 (the "February 2026 Closing Date").
The Company issued 22,907,600 February 2026 Pre-Funded Warrant Shares. The aggregate gross proceeds to the Company from the issuance and sale of the February 2026 Warrants was $200 million, before deducting fees paid to the placement agents and financial advisors of the Company of $12.7 million, for net proceeds of $187.3 million.
As compensation in connection with the February 2026 Offering, we agreed to pay the placement agents a fee equal to 6% of the aggregate gross proceeds received by us (i) upon the issuance of the February 2026 Warrants at closing and (ii) upon the cash exercise of the February 2026 Common Warrants.
The Offering
The securities issued in the February 2026 Offering have not been registered under the Securities Act, and until so registered the securities may not be offered or sold absent registration or availability of an applicable exemption from registration. There is no established public trading market for the February 2026 Warrants, and we do not intend to list such securities on any national securities exchange or nationally recognized trading system. On April 2, 2026, we filed a registration statement on Form S-3 (File No. 333-294855) to register the Registrable Securities for resale by the February Investors, which registration statement was amended on April 30, 2026, and declared effective by the SEC on May 4, 2026.
Royalty Exchange Agreement
As previously disclosed, on June 3, 2025, the Company issued Series B Common Stock Warrants to purchase up to an aggregate of 8,666,667 shares of Common Stock (or prefunded warrants to purchase shares of Common Stock) in an underwritten public offering (the "Series B Warrants"). On February 12, 2026, in conjunction with our February 2026 Private Placement, the Company entered into a purchase and sale agreement (the "Royalty Exchange Agreement") with certain Series B Warrant holders who had purchased a predetermined number of Series B Warrants (each a "Participating Series B Holder") and BVF Partners, L.P. ("BVF"), acting as royalty interest agent (the "Warrant Exchange"). The Participating Series B Holders were also required to participate in the February private placement in order to participate in the Warrant Exchange.
Pursuant to the Royalty Exchange Agreement, the Participating Series B Holders exchanged an aggregate of 5,108,700 Series B Warrants for a pro rata share of an aggregate 5% synthetic royalty on future sales of the Company's vidofludimus calcium program in any country (the "Royalty Interests"). The pro rata share for each Participating Series B Holder is equal to the number of Series B Warrants exchanged by such Participating Series B Holder divided by the number of Series B Warrants exchanged by all Participating Series B Holders (expressed as a percentage). Royalty Interests will be due and payable quarterly by the Company to the Participating Series B Holders following the First Commercial Sale (as defined in the Royalty Exchange Agreement). The Company determined that the Royalty Interests do not meet the criteria for recognition as a liability. The Company will recognize amounts payable under the Royalty Interests when they become probable and estimable.
On the Closing Date, Series B Warrants to purchase up to an aggregate of 5,108,700 shares of Common Stock were surrendered by Participating Series B Holders and cancelled in exchange for the Royalty Interests. As this exchange occurred as part of an equity financing with the participating investor on the Closing Date, the effect of the exchange was reflected as an equity issuance cost net within additional paid in capital.
April 2025 Offering
On April 9, 2025, we entered into a securities purchase agreement with certain institutional and accredited investors relating to the issuance and sale of an aggregate of 566,667 shares of our Common Stock (the "April 2025 Shares"). The purchase price per share was $9.00 for aggregate gross proceeds of approximately $5.1 million. The offer and sale of the shares is referred to herein as the "April 2025 Offering." The April 2025 Offering closed on April 10, 2025.
In addition, on April 9, 2025, the Company entered into a placement agency agreement with Titan Partners Group LLC, a division of American Capital Partners, LLC (the "Placement Agent"), relating to the April 2025 Offering. Pursuant to the Placement Agency Agreement, the Company agreed to pay the Placement Agent a cash fee of 6.0% of the gross proceeds from the April 2025 Offering raised from investors and to reimburse the Placement Agent for certain costs incurred in connection therewith. Additionally, upon the closing of the April 2025 Offering, the Company agreed to issue to the Placement Agent, or its designees, warrants to purchase up to an aggregate of 28,333 shares of common stock, representing 5.0% of the shares sold in the April 2025 Offering (the "Placement Agent Warrants"). The Placement Agent Warrants are exercisable, in whole or in part, for five years from the anniversary of the Placement Agency Agreement, at an initial exercise price per share of common stock of $11.25, which is equal to 125% of the price per share to investors in the April 2025 Offering. The Placement Agent Warrants and the shares of common stock underlying the Placement Agent Warrants were offered pursuant to the exemptions from registration provided in Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder.
The net proceeds to the Company from the April 2025 Offering, after deducting commissions and the Company's offering expenses, was approximately $4.7 million.
The April 2025 shares were registered under the Securities Act, on the Company's Registration Statement on Form S-3 (Registration No. 333-275717), previously filed with the SEC, and declared effective on May 31, 2024.
May 2025 Equity Offering
On May 28, 2025, we entered into an underwriting agreement (the "May 2025 Underwriting Agreement") with Leerink Partners LLC, for the issuance and sale of (i) pre-funded warrants to purchase an aggregate of 8,666,667 shares of Common stock (the "May 2025 Pre-Funded Warrants"), (ii) accompanying series A warrants to purchase an aggregate of 8,666,667 shares of Common Stock (or Pre-Funded Warrants) (the "Series A Warrants"), and (iii) accompanying series B warrants to purchase an aggregate of 8,666,667 shares of Common Stock (or Pre-Funded Warrants) (the "Series B Warrants") (the "May 2025 Offering"). The price per May 2025 Pre-Funded Warrant and accompanying Series A Warrant and Series B Warrant was $7.499.
Each Pre-Funded Warrant is immediately exercisable for one share of Common Stock at an exercise price of $0.001 per share and will expire when exercised in full. The Series A Warrants were exercisable for one share of Common Stock at an exercise price of $7.50 per share. All of the Series A Warrants expired as of March 31, 2026. Each Series B Warrant is exercisable for one share of Common Stock at an exercise price of $7.50 per share and will expire five years from the date of issuance. The holder of the Pre-Funded Warrants and Series B Warrants may also satisfy its obligation to pay the exercise price through a "cashless exercise," in which the holder receives the net value of such warrant in shares of Common Stock determined according to the formula set forth in the applicable warrant.
The aggregate proceeds from the May 2025 Offering were approximately $65 million before deducting underwriting discounts and commissions and offering expenses payable by the Company in connection with the May 2025 Offering. On February 17, 2026, as part of the February 2026 Private Placement, 5,108,700 warrants were exchanged for the right to share a 5% royalty. On March 10, 2026, 200,000 of the Series B warrants were exercised for $1.4 million in net cash proceeds, resulting in 3,357,967 Series B Warrants outstanding as of March 31, 2026. The Company may receive up to an aggregate of approximately $25.2 million of additional gross proceeds if the remaining Series B Warrants are exercised in full for cash. Pursuant to the Placement Agency Agreement, the Company agreed to pay the Placement Agent a cash fee of 6.0% of the gross proceeds from the May 2025 Offering raised from investors and to reimburse the Placement Agent for certain costs incurred in connection therewith.
Future Capital Requirements
As noted above, we have not generated any revenue from product sales and we do not know when, or if, we will generate any revenue from product sales. We will not be able to generate any revenue from product sales unless and until we obtain
regulatory approval for and commercialize any of our product candidates. We expect our expenses to continue to increase as we continue the ongoing research, development, manufacture and clinical trials of, and seek regulatory approval for, our product candidates. We also incur additional costs associated with operating as a public company. In addition, subject to obtaining regulatory approval of any of our product candidates, we anticipate that we will need substantial additional funding in connection with our continuing operations.
Our future expenses and capital requirements are difficult to forecast and will depend on many factors, including, but not limited to:
•the timing and structure of any strategic options and transactions, if any;
•personnel-related expenses, including salaries, benefits, stock-based compensation expense and other compensation expenses related to retention and termination of personnel;
•the scope, progress, duration, results and costs of research and development and ongoing clinical trials;
•the cost and timing of future regulatory submissions;
•the cost and timing of developing and validating the manufacturing processes for any potential product candidates;
•the cost and timing of any commercialization activities, including reimbursement, marketing, sales and distribution costs;
•our ability to establish new collaborations, licensing or other arrangements and the financial terms of such agreements;
•the number and characteristics of any future product candidates we pursue;
•the costs involved with being a public company;
•the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patents, including litigation costs and the outcome of such litigation;
•the cost, timing and outcome of any future litigation; and
•the timing, receipt and amount from the sales of, or royalties on, any future products.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of stock offerings, debt financings, strategic alliances, collaborations and licensing arrangements. We do not expect to achieve revenue from product sales prior to the use of all the net proceeds from our public and private offerings to date. We do not have any committed external source of funds. Additional funds may not be available on acceptable terms, if at all. To the extent that we raise additional capital through the sale of equity securities, the ownership interest of our stockholders will be diluted and it may be on terms that are not favorable to us or our stockholders. Sales of equity securities will also be more difficult for at least the foreseeable future because of general volatility in the equity markets for companies like us. Debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt or other terms that are not favorable to us or our stockholders. Also, the cost of debt financing has increased due to the rise in interest rates over the past few years. If we raise additional funds through collaborations and licensing arrangements with third parties, we would expect to relinquish substantial rights to our technologies or our future products, or grant licenses on terms that may not be favorable to us. If we were to complete a merger, or other business combination, we may relinquish all control over the organization and could experience detrimental tax effects. If we are unable to raise adequate funds, we may have to curtail our product development programs and liquidate some or all of our assets. Any of these factors could harm our operating results and could result in substantial declines in the trading price of our common stock.
As of March 31, 2026, we had approximately $186.6 million in cash and cash equivalents.
Cash Flows
The following table shows a summary of our cash flows for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | (unaudited) | ||||||||||
| Cash (used in) provided by: | |||||||||||
| Operating activities | $ | (17,301) | $ | (21,776) | |||||||
| Investing activities | $ | (2) | $ | (47) | |||||||
| Financing activities | $ | 188,642 | $ | - | |||||||
Operating activities
During the three months ended March 31, 2026, operating activities used $17.3 million of cash. The use of cash primarily resulted from our net loss of $32.6 million adjusted for non-cash charges of $4.7 million primarily related to stock-based compensation of $4.5 million and non-cash lease expense of $0.2 million and a $10.6 million net increase in our operating assets and liabilities. Changes in our operating assets and liabilities during the three months ended March 31, 2026 consisted primarily of a net increase of $5.2 million in other current assets and prepaid expenses and $5.6 million in accounts payable and other accrued expenses.
During the three months ended March 31, 2025, operating activities used $21.8 million of cash. The use of cash primarily resulted from (i) our net loss of $25.5 million adjusted for non-cash charges of $2.2 million related to $2.0 million for stock-based compensation, $0.1 million related to non-cash lease expense, and $0.1 million related to depreciation and (ii) a $1.5 million net increase in our operating assets and liabilities. Changes in our operating assets and liabilities during the three months ended March 31, 2025 consisted primarily of a net increase of $2.4 million in accounts payable and other accrued expenses partially offset by $0.8 million decrease in our other current assets and prepaid expenses.
Investing activities
During the three months ended March 31, 2026, net investing activities used $2,000 due to the purchase of property and equipment.
During the three months ended March 31, 2025, net investing activities used $47,000 due to the purchase of property and equipment.
Financing Activities
Net cash provided by financing activities was $188.6 million during the three months ended March 31, 2026 primarily consisting of net cash proceeds of $187.3 from the February 2026 Private Placement and $1.4 million from the exercise of a portion of the Series B warrants.
There was no cash provided by financing activities for the three months ended March 31, 2025.
Off-Balance Sheet Arrangements
Through March 31, 2026, we have not entered into and did not have any relationships with unconsolidated entities or financial collaborations, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purpose.
Other Commitments and Obligations
See Note 2 - "Summary of Significant Accounting Policies - Collaboration Arrangements of the Notes to the condensed consolidated financial statements regarding the Company's obligations under the option agreement with Daiichi Sankyo, which includes the potential payment of future development, regulatory and sales milestone payments, as well as royalties related to IMU-856.
Maturities of the operating lease obligation are as follows as of March 31, 2026:
| 2026 | $ | 272,000 | ||||||
| 2027 | 88,000 | |||||||
| 2028 | 85,000 | |||||||
| 2029 | - | |||||||
| 2030 | - | |||||||
| Thereafter | - | |||||||
| Total | 445,000 | |||||||
| Interest | (24,000) | |||||||
| Present value of obligation | $ | 421,000 | ||||||
Contractual Obligations
As of March 31, 2026, the Company has non-cancelable contractual obligations under certain agreements related to its development programs vidofludimus calcium and IMU-856 totaling approximately $1.0 million, all of which is expected to be paid in 2026.
Royalty Payable
Pursuant to the Royalty Exchange Agreement, the Participating Series B Holders exchanged an aggregate of 5,108,700 Series B Warrants for a pro rata share of an aggregate 5% synthetic royalty on future sales of the Company's vidofludimus calcium program in any country.
Legal Proceedings
The Company is not currently a party to any litigation, nor is it aware of any pending or threatened litigation, that it believes would materially affect its business, operating results, financial condition or cash flows. However, its industry is characterized by frequent claims and litigation including securities litigation, claims regarding patent and other intellectual property rights and claims for product liability. As a result, in the future, the Company may be involved in various legal proceedings from time to time.
Critical Accounting Policies and Estimates
Our unaudited condensed consolidated financial statements are prepared in conformity with U.S. GAAP. 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 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. We have reviewed these critical accounting policies and related disclosures with the Audit Committee of our Board.
Recently Issued Accounting Standards
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures to improve the disclosures about a public entity's expenses and provide more detailed information about the types of expenses in commonly presented expense captions such as inventory purchases, employee compensation, depreciation and intangible asset amortization. The disclosure requirements may be applied prospectively for the current year or retrospectively for all prior periods presented in the financial statements during the year of adoption. The effective date for the standard is for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements.
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