Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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

You should read the following discussion of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q.

Overview

We are a clinical-stage biotechnology company advancing a pipeline of novel therapies designed to treat cancer and extend patients' lives. Our clinical pipeline includes two clinical-stage product candidates, the CD47 blocker evorpacept and an epidermal growth factor receptor (EGFR)-targeted antibody drug candidate (ADC) ALX2004. Our lead product, evorpacept, has demonstrated potential to serve as a cornerstone therapy upon which the future of immuno-oncology can be built. Evorpacept is currently being evaluated in combination with trastuzumab and chemotherapy in patients with metastatic HER2-positive breast cancer in the Phase 2 ASPEN-Breast clinical trial and is also being studied in clinical trials with other targeted anti-cancer antibodies. Cancer cells leverage CD47, a cell surface protein, as a "don't eat me" signal to evade macrophage phagocytosis. We are developing evorpacept to be a next-generation checkpoint inhibitor designed to have a high affinity for CD47 and to avoid the limitations caused by hematologic toxicities inherent in other CD47 blocking approaches. Our second pipeline candidate, ALX2004, is a novel EGFR-targeted antibody-drug conjugate with a differentiated mechanism of action entered into a Phase 1 clinical trial in August 2025.

Evorpacept is a next-generation CD47 blocking therapeutic that we believe has significantly enhanced properties compared to competing CD47 blocking approaches. Evorpacept is a fusion protein that combines a high-affinity CD47 binding domain with a proprietary inactivated Fc domain. The CD47 binding domain of evorpacept is an affinity enhanced extracellular domain of SIRPα, a protein found on myeloid cells such as macrophages, that is the natural receptor to CD47. We have engineered the Fc domain of evorpacept so that it does not provide a pro-phagocytic signal while still maintaining an antibody-like half-life for the molecule. We believe our inactive Fc approach improves tolerability when compared to other CD47 blocking approaches that have an Fc domain that engages activating receptors on macrophages, causing phagocytosis and death of healthy cells in addition to cancer cells.

Evorpacept's design has several additional advantages that we believe will make it broadly applicable to treating a number of oncology indications. Due to the inactive Fc, evorpacept is specifically designed for use in combination with other anti-cancer agents that provide a positive immune-stimulating signal. We believe evorpacept has a favorable tolerability profile that may enable higher dosing levels, increased tumor penetration, and greater combination potential with other leading anti-cancer agents.

We are focused on evorpacept development with the standard-of-care agents that provide a stimulatory signal to the innate immune system. We are combining evorpacept with anti-cancer targeted antibodies with an active Fc domain, where evorpacept enables the Fc-mediated antibody dependent phagocytosis that is impaired by the expression of CD47 on cancer cells.

Data from the randomized ASPEN-06 Phase 2 clinical trial supports the clinical validation of this mechanism of action. ASPEN-06 evaluates the contribution of evorpacept to HERCEPTIN® (trastuzumab) plus standard of care (CYRAMZA®(ramucirumab) + paclitaxel) (Evo-TRP), versus trastuzumab, ramucirumab, and paclitaxel (TRP) in second line or later human epidermal growth factor receptor 2 (HER2)-positive gastric/gastroesophageal junction (GEJ) cancer, where all patients had received an anti-HER2 agent in prior lines of therapy. The full data set was previously presented. Results from a pre-planned exploratory analysis will be presented at the Society for Immunotherapy of Cancer (SITC) Annual Meeting:

Evorpacept has been combined in clinical trials with multiple anti-cancer antibodies in addition to trastuzumab. Our earlier ASPEN-01 Phase 1 positive data in combination with rituximab in non-Hodgkin lymphoma (NHL) and the recent clinical data of our investigator-sponsored trial (IST) collaborator from the ongoing Phase 1/2 IST of evorpacept in combination with rituximab and lenalidomide patients with relapsed refractory B-cell NHL (R/R B-NHL) provide additional support for the clinical validation of this mechanism of action and support exploring combinations of evorpacept with other anti-cancer antibodies.

Our second product candidate is ALX2004, a novel EGFR-targeted ADC. ALX2004 was created from our proprietary linker-payload platform and fully designed and developed in-house by our scientists. ALX2004 comprises a matuzumab-derived affinity-selected EGFR antibody backbone engineered for optimal activity as an antibody drug conjugate (ADC), a proprietary topoisomerase I inhibitor payload with enhanced bystander effect, and a linker with enhanced stability. EGFR is clinically validated as a therapeutic target with several U.S. Food and Drug Administration (FDA)-approved targeted antibodies and small molecules. However, there are currently no approved EGFR-targeted ADCs and early-generation attempts to develop EGFR-targeted ADCs were limited by drug design, on-target off-tumor toxicities and toxicity of older generation payloads.

We are engaged in the following clinical programs, collaborations, and investigator-sponsored trials:

Evorpacept

Combination with the HER2-targeted antibody trastuzumab

Combination with the EGFR-targeted antibody cetuximab

Collaborations and Investigator-Sponsored Trials (ISTs)

Combination with the HER2-targeted bispecific, zanidatamab, and HER2-targeted ADC, fam-trastuzumab deruxtecan-nxki

Combination with the CD20-targeted antibody rituximab

Combination with the CD38-targeted antibody isatuximab-irfc

Combination with PD-1/PD-L1 immune checkpoint inhibitor

Dendritic cells are also inhibited by the interaction of SIRPα with CD47. Activated dendritic cells present neoantigens to T-cells that, once activated, will kill cancer cells when the PD-1/PD-L1 inhibitory interaction is blocked by T-cell checkpoint inhibitors such as pembrolizumab.

ALX2004

Since our founding, we have devoted substantially all of our resources to developing evorpacept, identifying and advancing preclinical programs, including the initiation and advancement of clinical trials of ALX2004, scaling up manufacturing, conducting clinical trials and providing general and administrative support for these operations. We have no products approved for marketing and we have never received any revenue from drug product sales.

From inception through September 30, 2025, we have raised an aggregate of $643.5 million to fund our operations, of which $175.1 million were net proceeds from sales of our convertible preferred stock, $5.8 million were net proceeds from borrowings under a term loan, $169.5 million were net proceeds from our initial public offering, $194.9 million were net proceeds from our follow-on offering in December 2020, $9.3 million were net proceeds from borrowings under the Loan Agreement (as defined below), $58.9 million were net proceeds from our follow-on offering in October 2023, and $30.0 million were net proceeds from our at-the-market (ATM) offering. For more information on the funding of our operations since inception, see section titled "-Liquidity and Capital Resources; Plan of Operations-Funding Requirements" included elsewhere in this Quarterly Report on Form 10-Q.

We have incurred net losses in each year since inception. Our net losses were $22.1 million and $30.7 million for the three months ended September 30, 2025 and 2024, respectively, and $78.8 million and $105.7 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $700.0 million. Substantially all of our operating losses are a result of expenses incurred in connection with our research and development programs, primarily evorpacept, and from general and administrative expenses associated with our operations.

We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We expect our expenses will increase substantially in connection with our ongoing activities, as we:

Nasdaq Minimum Bid Price Compliance

On April 23, 2025, we received a written notice (Notice), from the Listing Qualifications Staff (Staff) of The Nasdaq Stock Market LLC (Nasdaq) notifying us that we had not been in compliance with the minimum bid price requirement for continued listing on the Nasdaq Global Select Market set forth in Nasdaq Listing Rule 5450(a)(1) for a period of 30 consecutive business days. The Notice had no immediate effect on the listing of our common stock on the Nasdaq Global Select Market, subject to our compliance with the other listing requirements of Nasdaq. In September 2025, we received written confirmation from the Staff of Nasdaq that we had regained compliance with the minimum bid price requirement for continued listing on the Nasdaq Global Select Market, as the closing bid price of our common stock had been at $1.00 per share or greater for ten consecutive business days.

Components of Results of Operations

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for the development of our lead product candidate, evorpacept, and the initiation and advancement of ALX2004, which include:

We expense research and development costs as incurred. Nonrefundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and capitalized. The capitalized amounts are then expensed as the related goods are delivered or as services are performed. We record accruals for estimated costs of research, preclinical studies, clinical trials and manufacturing development, which are a significant component of research and development expenses. We determine the estimated costs through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fees to be paid for such services.

Our research and development expenses consist primarily of costs associated with the development of our lead product candidate, evorpacept, and the initiation and advancement of clinical trials of ALX2004, and include external costs, such as fees paid to consultants, central laboratories, contractors, collaborators, CMOs and CROs in connection with our preclinical and clinical development activities.

Almost all of our research and development expenses to date have been related to the clinical development of our lead product candidate, evorpacept, and the initiation and advancement of clinical trials of ALX2004. We expect to incur significant research and development expenses in the foreseeable future as we continue to invest in research and development activities related to progress on our existing product candidates. As our product candidates advance into later stages of development, we begin to conduct larger clinical trials. The process of conducting the necessary clinical trials to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates.

The successful development of our current and future product candidates is highly uncertain. This is due to numerous risks and uncertainties, including the following:

A change in the outcome of any of these variables with respect to the development of our product candidates may significantly impact the costs and timing associated with the development of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates.

Research and development activities are essential to our business model. There are numerous factors associated with the successful commercialization of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact the success, cost or timing of our clinical development programs.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related expenses, business development expenses, facilities expenses, depreciation and amortization expenses and professional services expenses, including legal, human resources, audit, accounting and tax-related services, and directors and officers liability insurance premiums. Personnel and related costs consist of salaries, benefits and stock-based compensation expenses. Facilities costs consist of rent and maintenance of facilities.

We anticipate that our general and administrative expenses will decrease as a result of the completed reduction in workforce. Other factors that may affect general administrative expenses include inflationary pressures, higher costs of consulting, legal, tax and regulatory-related services associated with maintaining compliance with stock exchange listing and Securities and Exchange Commission (SEC) requirements, audit and investor relations costs, director and officer insurance premiums and other costs associated with being a public company.

Impairment Charge

Impairment charge consists of impairment of long-lived assets.

Interest Income

Our interest income consists primarily of interest income on cash, cash equivalents and investments.

Interest Expense

Our interest expense consists primarily of interest expense on the term loan, amortization of deferred debt issuance costs, and interest related to finance leases.

Other Income (Expense), Net

Our other income (expense), net consists primarily of realized foreign currency transaction gains and losses.

Results of Operations and Net Loss

The following table summarizes our results of operations for the three months and nine months ended September 30, 2025 and 2024 (in thousands):

Research and Development Expenses

The following table summarizes our research and development (R&D) expenses incurred for the three months and nine months ended September 30, 2025 and 2024 (in thousands):

R&D expenses decreased by $9.0 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily attributable to a decrease of $2.6 million in clinical and development costs primarily due to manufacturing of clinical trial materials, the majority of which was completed in early 2024, to support active clinical trials for our lead product candidate, evorpacept, a decrease of $3.5 million in stock-based compensation expense due to terminations from the reduction in workforce as well as modification from the December 2024 option exchange, a decrease of $3.2 million in personnel and related costs primarily driven by the reduction in workforce in Q1 2025, and a decrease of $1.9 million in preclinical costs due to pipeline prioritization strategy. These decreases were offset by an increase of $2.1 million in other research costs due to a $2.5 million development milestone met related to ScalmiBio.

R&D expenses decreased by $33.5 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was primarily attributable to a decrease of $18.1 million in clinical and development costs primarily due to manufacturing of clinical trial materials, the majority of which was completed in early 2024, to support active clinical trials for our lead product candidate, evorpacept, a decrease of $9.6 million in stock-based compensation expense due to terminations from the reduction in workforce as well as modification from the December 2024 option exchange, a decrease of $3.2 million in preclinical costs due to pipeline prioritization strategy, and a decrease of $3.6 million in personnel and related costs primarily driven by the reduction in workforce in Q1 2025. These decreases were offset by an increase of $0.9 million in other research costs due to an increase of $1.5 million in development milestone met related to ScalmiBio compared to the prior period offset by decreases in facility and IT costs allocated to R&D from a decrease in headcount as a result of the reduction in workforce.

General and Administrative Expenses

The following table summarizes our general and administrative (G&A) expenses incurred for the three months and nine months ended September 30, 2025 and 2024 (in thousands):

G&A expenses decreased by $1.0 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily attributable to a decrease of $0.9 million in stock-based compensation expense due to terminations from the reduction in workforce as well as modification from the December 2024 option exchange and a decrease of $0.2 million in other G&A costs from legal consulting costs.

G&A expenses decreased by $0.5 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was primarily attributable to a decrease of $1.8 million in stock-based compensation expense due to terminations from the reduction in workforce as well as modification from the December 2024 option exchange and a decrease of $0.1 million in other G&A costs from legal consulting costs. This was offset by an increase of $1.3 million in personnel and related costs primarily driven by severance costs from the reduction in workforce.

Impairment Charge

Impairment charge increased by zero and $3.2 million for the three months and nine months ended September 30, 2025. In May 2025, we made a decision to sublease our leased property in Palo Alto and are actively marketing the leased property for sublease. We recorded long-lived asset impairment charge based on the performed impairment analysis.

Interest Income

Interest income decreased by $1.5 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 and by $4.1 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decreases were primarily attributable to lower cash and investment balances during 2025 as compared to 2024.

Interest Expense

Interest expense remained flat for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, as well as for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 due to similar interest rates during the periods.

Other Income (Expense), Net

Other income (expense), net remained flat for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, as well as for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Liquidity and Capital Resources; Plan of Operations

Sources of Liquidity

Since our inception, we have incurred significant operating losses and have not generated any product revenue. We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all, subject to regulatory and marketing approval of any of our product candidates. To date, we have funded our operations with proceeds from the sales of shares of our common stock and convertible preferred stock and borrowings under our term loan. As of September 30, 2025, we had cash, cash equivalents and investments of $66.5 million.

Funding Requirements

We have incurred losses and negative cash flows from operations since inception and anticipate that we will continue to incur net losses for the foreseeable future. As of September 30, 2025, we had an accumulated deficit of $700.0 million. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials for our product candidates in development. In addition, we expect to incur additional costs associated with operating as a public company. Management recognizes the need to raise additional capital to fully implement its business plan. The timing and amount of such future capital requirements are difficult to forecast and will depend on many factors, including:

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. Other than a loan and security agreement (as amended, the Loan Agreement) we entered into with Oxford Finance LLC, Oxford Finance Credit Fund II LP, and Silicon Valley Bank (SVB) (collectively, the Lenders), for a secured term loan facility of up to $100.0 million in October 2022, we do not have any committed external source of funds. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide. To the extent that we raise additional capital through the sale of equity or convertible debt securities, a stockholder's ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect one's 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 or capital expenditures 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 drug candidates 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 or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts or grant rights to develop and market drug candidates that we would otherwise prefer to develop and market ourselves.

In July 2020, we completed our initial public offering pursuant to a registration statement on Form S-1. In the initial public offering, we issued and sold an aggregate of 9,775,000 shares of common stock, including the underwriters' exercise in full of their overallotment option, under the registration statement at a public offering price of $19.00 per share. Net proceeds were approximately $169.5 million, after deducting underwriting discounts and commissions of $13.0 million and offering-related expenses of $3.2 million.

In December 2020, we completed our follow-on public offering pursuant to a registration statement on Form S-1. In the follow-on public offering, we issued and sold an aggregate of 2,737,000 shares of common stock, including the underwriters' exercise in full of their overallotment option, under the registration statement at a public offering price of $76.00 per share. Net proceeds were approximately $194.9 million, after deducting underwriting discounts and commissions of $12.5 million and offering-related expenses of $0.7 million.

In December 2021, we entered a sales agreement (as amended, Sales Agreement) with Cantor Fitzgerald & Co. and Credit Suisse Securities (USA) LLC (Credit Suisse), under which we may offer and sell our common stock, having aggregate gross proceeds of up to $150.0 million, from time to time through them as our sales agents in our ATM offering program. In March 2022, we filed a universal shelf registration statement (2022 Shelf Registration Statement) with the SEC, which was declared effective by the SEC on May 31, 2022. In August 2023, we entered into an amendment to the Sales Agreement to include UBS Securities LLC as an additional sales agent and to remove Credit Suisse as a sales agent.

In October 2022, we entered into the Loan Agreement as described above. Upon closing of the Loan Agreement, we drew $10.0 million. Under the original terms of the Loan Agreement, we had the right to draw an additional $40.0 million through the end of 2023. A further $50.0 million was potentially available to us, $25.0 million upon the achievement of pre-determined development milestones and $25.0 million at the Lenders' sole discretion. For a description of the terms of the Loan Agreement, see "Note 7. Term Loan" to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. On May 31, 2023, we entered into a second amendment to the Loan Agreement. The primary purpose of the second amendment was to reduce the percentage of the amount required to be held in our collateral account with SVB-First Citizens from 100% to not less than 50% of the aggregate dollar value of all our collateral accounts.

In March 2023, SVB was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) to act as receiver. The FDIC created Silicon Valley Bridge Bank, N.A. (SVBB) as successor to SVB. First Citizens BancShares, Inc. (First Citizens Bank) acquired SVBB from the FDIC and operates SVBB as Silicon Valley Bank, a division of First Citizens Bank (SVB-First Citizens). While we have cash in operating accounts with SVB, the majority of our cash, cash equivalents and investments are deposited in custodial accounts held by U.S. Bank for which SVB Asset Management is the investment advisor. There has been no material negative impact to our cash liquidity as a result of the closure of SVB or the subsequent acquisition of SVBB by First Citizens Bank. Under the Loan Agreement, 50% of the funding comes from SVB, one of the three Lenders. Given the SVBB acquisition by First Citizens Bank, SVB-First Citizens will continue to fulfill SVB's obligations under the Loan Agreement.

In October 2023, we completed an underwritten follow-on public offering pursuant to the 2022 Shelf Registration Statement (the October 2023 Offering). In the follow-on public offering, we issued and sold an aggregate of 8,663,793 shares of common stock, including the underwriters' exercise in full of their overallotment option of 1,293,103 shares of common stock, and, in lieu of common stock to certain investors, pre-funded warrants to purchase 1,250,000 shares of common stock at a public offering price of $6.38 per share and $6.379 per pre-funded warrant. Net proceeds were approximately $58.9 million, after deducting underwriting discounts and commissions of $3.8 million and offering-related expenses of $0.6 million. As of September 30, 2025, no shares underlying the pre-funded warrants had been exercised.

In December 2023, we entered into a third amendment to the Loan Agreement. The primary purpose of the third amendment was to (i) extend the draw period for the first tranche loans from December 31, 2023 to June 30, 2024, (ii) add as a condition for the funding of any first tranche loans after the effective date of the amendment, requirement that the Phase 2 portion of the ASPEN-06 study in gastric/GEJ cancer either remains ongoing or the achievement of a milestone related to the development of the ASPEN-06 study, and (iii) add a contingency fee in the amount of $0.6 million to the Lenders if the Company prepays any of the loans under the Loan Agreement other than in connection with refinancing of the Loan Agreement with the Lenders and their affiliates.

We decided not to draw down on any portion of the $40.0 million available to us under the Loan Agreement by the deadline of June 30, 2024. As a result of this decision, the $40.0 million was added to the $25.0 million available upon the achievement of pre-determined development milestones for a total of $65.0 million available, split equally between each of the two tranches. We did not achieve all of the requirements needed to gain access to each of the two tranches available upon the achievement of pre-determined development milestones by the deadline of December 31, 2024. As a result, only the $25.0 million tranche available at the Lenders' sole discretion was available to us as of September 30, 2025.

On March 6, 2025, we filed a shelf registration statement with the SEC that became effective on April 24, 2025 (the 2025 Shelf Registration Statement). The 2025 Shelf Registration Statement replaced the 2022 Shelf Registration Statement and registered the unsold securities from the 2022 Shelf Registration Statement, including those available under the ATM program. From December 2021 to September 30, 2025, we sold an aggregate of 2,404,855 shares of common stock under our Sales Agreement for net proceeds of $30.0 million, after deducting commissions. We may terminate this ATM program and the Sales Agreement at any time, pursuant to its terms.

We believe our existing cash, cash equivalents and investments will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027. Additionally, the Company also has the ability to further utilize the ATM program. We have based these estimates on assumptions in which actuals may materially differ, and we could utilize our available capital resources sooner than we expect.

Cash Flows

The following table presents a summary of the net cash flow activity for the nine months ended September 30, 2025 and 2024 (in thousands):

Operating Activities

In the nine months ended September 30, 2025, net cash used in operating activities of $65.2 million was attributable to a net loss of $78.8 million and a change in our net operating assets and liabilities of $0.4 million, offset by non-cash charges of $14.1 million. The change in operating assets and liabilities was primarily due to (i) an increase in accounts payable, payable and accrued liabilities due to related party, and accrued expenses and other current liabilities of $6.1 million primarily due to timing of invoices and payments, (ii) a decrease in prepaid and other current assets of $0.7 million, (iii) a decrease in other non-current liabilities of $1.5 million and (iv) an increase in other assets of $5.7 million. Non-cash charges consisted primarily of stock-based compensation expense of $9.9 million, non-cash lease costs of $1.3 million, depreciation and amortization costs of $0.6 million, and impairment charge of $3.2 million offset by net amortization of premiums and accretion of discounts on investments of $1.1 million.

In the nine months ended September 30, 2024, net cash used in operating activities of $89.9 million was attributable to a net loss of $105.7 million and a change in our net operating assets and liabilities of $3.7 million, offset by non-cash charges of $19.5 million. The change in operating assets and liabilities was primarily due to (i) a decrease in accounts payable and accrued expenses and other current liabilities of $2.8 million primarily due to timing of invoices and payments, (ii) a decrease in other assets of $2.2 million, (iii) an increase in prepaid and other current assets of $1.4 million and (iv) a decrease in other non-current liabilities of $1.6 million. Non-cash charges consisted primarily of stock-based compensation expense of $21.2 million, non-cash lease costs of $1.3 million, and depreciation and amortization costs of $0.7 million offset by net amortization of premiums and accretion of discounts on investments of $3.9 million.

Investing Activities

In the nine months ended September 30, 2025, net cash provided by investing activities of $71.4 million was attributable to cash received for maturities of investments of $117.1 million offset by purchases of short-term and long-term investments of $45.6 million and purchases of property and equipment of $0.2 million.

In the nine months ended September 30, 2024, net cash provided by investing activities of $53.1 million was attributable to cash received for maturities of investments of $156.4 million offset by purchases of short-term and long-term investments of $103.0 million and purchases of property and equipment of $0.4 million.

Financing Activities

In the nine months ended September 30, 2025, net cash used in financing activities of $0.3 million was attributable to principal payments on finance leases of $0.7 million offset by proceeds from our ATM offering program of $0.4 million.

In the nine months ended September 30, 2024, net cash provided by financing activities of $30.5 million was attributable to proceeds from our ATM offering program of $29.3 million, proceeds from the exercise of stock options under equity incentive plans of $1.6 million, and proceeds from issuance of common stock pursuant to employee stock purchase plan of $0.3 million, offset by principal payments on finance leases of $0.8 million.

Off-Balance Sheet Arrangements

During the period presented, we did not have, nor do we currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Critical Accounting Estimates

Our management's discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ significantly from these estimates under different assumptions or conditions.

Our significant accounting policies and critical accounting estimates are more fully described in the notes to our audited consolidated financial statements and in the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates," respectively, in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies and estimates from those discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 6, 2025.

Recent Accounting Pronouncements

See "Note 2. Significant Accounting Policies - Recent Accounting Pronouncements" to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information.