Jade Biosciences Inc.
08/10/2026 | Press release | Distributed by Public on 08/10/2026 05:22
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the related notes included in Part 1 - Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 (this "Quarterly Report"). The following discussion contains forward-looking statements that reflect our current plans, estimates and beliefs and involve risks and uncertainties. Words such as "may," "might," "will," "would," "shall," "objective," "intend," "target," "should," "could," "can," expect," "anticipate," "believe," "design," "estimate," "forecast," "predict," "potential," "plan," "seek," or "continue" and variations of such words and any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, and similar expressions are intended to identify forward-looking statements. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Our actual results and the timing of events could differ materially from those discussed in the forward-looking statements as a result of various factors. Factors that could cause or contribute to these differences include, but are not limited to, those discussed in the section of this Quarterly Report titled "Risk Factors" and elsewhere in this Quarterly Report. These and many other factors could affect our future financial and operating results. We undertake no obligation to update any forward-looking statement to reflect events after the date of this Quarterly Report. As used in this Quarterly Report, unless the context suggests otherwise, "we," "us," "our," "the Company," or "Jade," refer to Jade Biosciences, Inc. and its consolidated subsidiaries, taken as a whole.
Overview
We are a clinical-stage biopharmaceutical company developing novel biologic therapies for patients living with autoimmune diseases. Our goal is to improve meaningfully upon the existing treatment paradigm through the delivery of improved dosing and convenience, a comparable safety profile, and potentially increased clinical activity. Our approach is to discover and efficiently develop biologics that address emerging targets supported by third-party clinical data and that overcome shortcomings of existing product candidates in development, such as potency, bioavailability, formulation, and pharmacokinetic properties.
Our lead product candidate, JADE101, is a monoclonal antibody ("mAb") targeting a cytokine called "A PRoliferation Inducing Ligand" ("APRIL") that modulates plasma cell survival and immunoglobulin production, which we are initially developing for the treatment of IgA nephropathy ("IgAN"). Our second product candidate is JADE201, a mAb targeting B cell activating factor receptor ("BAFF-R") with potential for the treatment of multiple autoimmune disorders. Our third product candidate is JADE301, a mAb targeting interferon beta ("IFN-β") initially being developed for the treatment of dermatomyositis ("DM").
JADE101 - anti-APRIL antibody
JADE101 is a subcutaneously administered ("SQ") extended half-life mAb initially being developed for the treatment of IgAN.
Phase 1 Trial in Healthy Volunteers
In August 2025, we initiated a Phase 1 trial of JADE101 in healthy volunteers. The JADE101 Phase 1 trial is a double-blind, placebo-controlled study and consists of single-ascending SQ doses of JADE101 in healthy volunteers. Eight healthy volunteers, six treated with JADE101 and two treated with placebo, were enrolled in each cohort, for a total of 32 healthy adult subjects in the trial. Evaluated doses included single SQ administrations of 175 mg, 350 mg, 700 mg, and 1,400 mg.
In June 2026, we announced positive interim safety, pharmacokinetic, and pharmacodynamic data from this trial, in which JADE101 demonstrated meaningful IgA reductions reaching approximately 70% from baseline sustained at 12 weeks at the 700 mg dose; this dose is anticipated to reflect the steady-state IgA responses in IgAN patients with the planned JADE101 dosing strategy and support the potential for an every 12 week ("Q12W") dosing interval. Greater than 70% IgA reductions were simulated at steady-state with a single SQ injection of 350 mg of JADE101 Q12W following one 700 mg induction dose.
Single SQ doses of JADE101 up to 1,400 mg were well tolerated with an observed safety profile generally consistent with the anti-APRIL class as of the April 14, 2026 data cutoff.
JUNIPER Phase 2 Trial in IgAN Patients
In May 2026, we announced dosing of our first patient in the JUNIPER Phase 2 clinical trial, an open-label study evaluating JADE101 in patients with IgAN, which is expected to enroll approximately 30 participants. Participants are expected to receive a 700 mg induction dose of JADE101 at treatment onset followed by maintenance doses of 350 mg starting at Week 4 and subsequently either every 8 weeks (n=15) or every 12 weeks (n=15).
The primary objectives of the trial are to evaluate the safety and tolerability of JADE101. Secondary and exploratory objectives include changes in 24-hour urine protein-to-creatinine ratio ("UPCR-24"), including the proportion of participants achieving UPCR-24 levels below 0.5 g/day and 0.3 g/day, renal function as measured by estimated glomerular filtration rate, and hematuria resolution over time. Interim clinical data are anticipated in 2027.
We plan to initiate a registrational Phase 3 clinical trial in the first half of 2027, pending feedback and requirements from the U.S. Food and Drug Administration.
JADE201 - anti-BAFF-R antibody
JADE201 is an SQ extended half-life mAb targeting BAFF-R with potential for the treatment of multiple autoimmune disorders. It is designed to have a dual mechanism of action: first, via enhanced effector function, by directly killing B cells through antibody-dependent mechanisms, and second, by inhibiting BAFF signaling to block a critical activation and survival pathway for B cells. JADE201 incorporates half-life extension technology, which has the potential to significantly prolong its duration of action, by maintaining pharmacologic activity throughout the dosing interval.
Phase 1 Trial in Rheumatoid Arthritis
In May 2026, we announced dosing of our first patient in a Phase 1 clinical trial of JADE201 in patients with rheumatoid arthritis. This Phase 1 trial has a randomized, placebo-controlled, single ascending dose design. The trial is expected to enroll approximately 36 participants across six cohorts. Six participants, five treated with JADE201 and one treated with placebo, are expected to be enrolled in each cohort of the trial.
The trial aims to establish safety, tolerability, and pharmacokinetics. We will also measure biomarkers such as BAFF-R occupancy, soluble BAFF levels, and immunophenotype B cell subpopulations by flow cytometry to assess the depth and duration of depletion. Because rheumatoid arthritis patients respond rapidly to B cell depletion, we will also incorporate exploratory efficacy measures, such as Disease Activity Score-28 ("DAS28") which may provide additional insight into JADE201's therapeutic potential even at this early stage. We expect to report interim clinical data from this trial in 2027, which are expected to inform indication prioritization and a focused clinical development strategy.
JADE301 - anti IFN-β antibody
JADE301 is an SQ extended half-life mAb targeting Interferon beta ("IFN-β") initially being developed for DM, a debilitating autoimmune disease that affects approximately 50,000 adults in the United States. JADE301 is designed to directly and specifically inhibit activity of IFN-β to quiet immune activation, muscle and skin damage, while avoiding broad inhibition of multiple cytokine-signaling pathways.
Phase 1 Trial in Healthy Volunteers
We plan to initiate a Phase 1 trial of JADE301 in healthy volunteers in the fourth quarter of 2026. The JADE301 Phase 1 trial will be a double-blind, placebo-controlled study consisting of single-ascending SQ doses of JADE301 in healthy volunteers. Eight healthy volunteers, six treated with JADE301 and two treated with placebo, are expected to be enrolled in each cohort, and we expect to enroll approximately 24 healthy adult subjects in the trial.
We expect to report interim data from the Phase 1 trial of JADE301 in the second half of 2027.
Financial Overview
Since our inception, we have devoted substantially all of our resources to raising capital, organizing and staffing our company, business and scientific planning, conducting discovery and research activities, establishing and protecting our intellectual property portfolio, establishing arrangements with third parties for the manufacture of our product candidates and component materials, developing and progressing our pipeline, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales. To date, we have funded our operations primarily with proceeds from the issuance of convertible preferred stock, a convertible note, and common stock and pre-funded warrants in underwritten offerings, private placements and through our ATM program.
We have incurred operating losses since inception. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of any programs we may develop.
As of June 30, 2026, we had an accumulated deficit of $270.5 million. For the six months ended June 30, 2026, we used net cash of $67.7 million for our operating activities. We have generated net losses of $55.8 million and $96.1 million for the three and six months ended June 30, 2026.
As of June 30, 2026, we had cash and cash equivalents, and investments of $461.2 million. We expect that our existing cash and cash equivalents, and investments, will be sufficient to fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance date of our unaudited condensed consolidated financial statements for the period ended June 30, 2026.
Recent Developments - Equity Offerings
The following summarizes our equity offerings for the six months ended June 30, 2026.
Underwritten Offering
On June 5, 2026 we completed an underwritten a public offering of 11,500,000 shares of our common stock, including 1,500,000 shares sold pursuant to the underwriters' full exercise of their option to purchase additional shares. The shares of common stock were sold to the public at a price of $15.00 per share. The gross proceeds from the offering, before deducting the underwriting discounts and commissions and other offering expenses, were $172.5 million.
ATM Facility
During the six months ended June 30, 2026, we sold 1,319,738 shares of common stock under our at the market offering program ("ATM Offering") for gross proceeds of $29.9 million less issuance costs of $0.6 million.
Components of Results of Operations
Operating Expenses
Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.
Research and Development
Research and development expenses consist primarily of costs incurred in connection with the research and development of our programs. These expenses include:
•
external research and development expenses incurred under agreements with third parties that conduct research and development activities on our behalf, including services rendered under the Antibody Discovery and Option Agreement (the "Paragon Option Agreement") with Paragon Therapeutics, Inc. ("Paragon") and Parade Biosciences Holding, LLC ("Parade"), with respect to JADE101 for the selected target APRIL, JADE201 for the selected target BAFF-R and JADE301, for the selected target IFN-β;
•
external expenses incurred under agreements with third parties, contract research organizations ("CROs"), as well as investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development services, costs related to compliance with quality and regulatory requirements, costs of laboratory supplies and acquiring and developing preclinical and clinical trial materials, including expenses associated with our third-party manufacturers; and
•
personnel-related expenses, including recruiting costs, salaries, bonuses, benefits and equity-based compensation expense.
We expense research and development costs as incurred. For the three and six months ended June 30, 2026, we recognized $13.0 million and $17.3 million of expenses, respectively, in connection with services provided by Paragon under the Paragon Option Agreement and the JADE101 License Agreement as well as the Parade warrants in our condensed consolidated statement of operations and comprehensive loss compared to $3.9 million and $11.7 million of expenses, respectively, for the three and six months ended June 30, 2025. We track direct costs on a program specific basis. Indirect internal costs are applied broadly across multiple programs rather than to any single program, and as such, are not separately classified.
Research and development activities are central to our business model. We expect that our research and development expenses will increase significantly for the foreseeable future as we continue to identify and develop product candidates, particularly as more of our product candidates move into clinical development and later stages of clinical development. The successful development of any of our product candidates or product candidates we may develop in the future is highly uncertain. Preclinical and clinical development timelines, the probability of success and total development costs can differ materially from expectations. We anticipate that we will
make determinations as to which product candidates and indications to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments, and our ongoing assessments as to each product candidate's commercial potential. Therefore, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development and commercialization of any of our product candidates. This is due to the numerous risks and uncertainties associated with developing product candidates, many of which are outside of our control. We may never succeed in obtaining regulatory approval for any of our product candidates.
Our future research and development expenses may vary significantly based on a wide variety of factors such as:
•
the number and scope, rate of progress, expense and results of preclinical activities and clinical trials;
•
per participant trial costs;
•
the number of trials required for approval;
•
the number of sites included in the trials;
•
the countries in which the trials are conducted;
•
the length of time required to enroll eligible participants;
•
the number of participants that participate in the trials;
•
the number of doses that participants receive;
•
the drop-out or discontinuation rates of participants;
•
the potential additional safety monitoring requested by regulatory agencies;
•
the duration of subject participation in the trials and follow-up;
•
the cost and timing of manufacturing our product candidates;
•
the phase of development of our candidates;
•
the extent of changes in government regulation and regulatory guidance;
•
the efficacy and safety profiles of our product candidates;
•
the timing, receipt, and terms of any approvals from applicable regulatory authorities; and
•
the extent to which we establish collaboration, license, or other arrangements.
A change in the outcome of any of these variables with respect to development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate.
General and Administrative
General and administrative expenses consist primarily of personnel-related expenses, including recruiting costs, salaries, bonuses, benefits, and equity-based compensation, for individuals in our executive, finance, operations, human resources, legal, business development and other administrative functions. Other significant general and administrative expenses include legal fees relating to corporate matters and patent-related activities, insurance costs, information technology, and professional and consulting fees associated with accounting, audit, tax and investor and public relations.
We expect that our general and administrative expenses will increase substantially for the foreseeable future as we increase our headcount to support our expected growth. We also incurred and expect to continue to incur increased expenses associated with operating as a public company, including increased costs of accounting, audit, legal, regulatory and tax related services associated with maintaining compliance with SEC requirements, additional director and officer insurance costs, and investor and public relations costs. We also expect to incur additional intellectual property-related expenses as we file patent applications to protect innovations arising from our research and development activities.
Other Income (Expense)
Other income primarily relates to interest income. Other expense primarily relates to unrealized gain/loss on foreign exchange transactions. Change in fair value of convertible notes payable relates to the fair value adjustment related to our previously outstanding convertible notes.
Income Taxes
We have recorded a full valuation allowance against our domestic net deferred tax assets at each balance sheet date, as we believe it is more likely than not that the benefit won't be realized due to our cumulative losses generated to date and expectation of future losses.
Results of Operations for the Three Months ended June 30, 2026 and June 30, 2025:
The following table summarizes our interim condensed consolidated statement of operations and comprehensive loss for the periods presented (in thousands):
|
Three Months Ended |
Three Months Ended |
Change |
||||||||||
|
Operating expenses |
||||||||||||
|
Research and development(1) |
$ |
50,065 |
$ |
22,547 |
$ |
27,518 |
||||||
|
General and administrative(2) |
8,851 |
5,231 |
3,620 |
|||||||||
|
Total operating expenses |
58,916 |
27,778 |
31,138 |
|||||||||
|
Loss from operations |
(58,916 |
) |
(27,778 |
) |
(31,138 |
) |
||||||
|
Other income (expense): |
||||||||||||
|
Interest income |
3,228 |
1,828 |
1,400 |
|||||||||
|
Change in fair value of convertible notes payable(3) |
- |
(6,184 |
) |
6,184 |
||||||||
|
Other expense |
(62 |
) |
- |
(62 |
) |
|||||||
|
Total other income (expense), net |
3,166 |
(4,356 |
) |
7,522 |
||||||||
|
Net loss before income tax expense |
(55,750 |
) |
(32,134 |
) |
(23,616 |
) |
||||||
|
Income tax expense |
(15 |
) |
- |
(15 |
) |
|||||||
|
Net loss |
$ |
(55,765 |
) |
$ |
(32,134 |
) |
$ |
(23,631 |
) |
|||
(1) Includes related party amounts of $13.0 million for the three months ended June 30, 2026 and $3.9 million for the three months ended June 30, 2025.
(2) Includes no related party amounts for the three months ended June 30, 2026 and $0.1 million for the three months ended June 30, 2025.
(3) Includes no related party amounts for the three months ended June 30, 2026 and $1.3 million for the three months ended June 30, 2025.
Research and Development Expenses
The following table summarizes our research and development expenses incurred for the periods presented (in thousands):
|
Three Months Ended |
Three Months Ended |
Change |
||||||||||
|
External research and development costs: |
||||||||||||
|
JADE101(1) |
$ |
14,978 |
$ |
7,249 |
$ |
7,729 |
||||||
|
JADE201(2) |
6,104 |
8,356 |
(2,252 |
) |
||||||||
|
JADE301(3) |
10,105 |
926 |
9,179 |
|||||||||
|
Other research and development costs: |
||||||||||||
|
Personnel-related (including stock-based compensation)(4) |
16,775 |
5,710 |
11,065 |
|||||||||
|
Other (including general allocated shared costs, licenses, insurance and regulatory) |
2,103 |
306 |
1,797 |
|||||||||
|
Total research and development expenses |
$ |
50,065 |
$ |
22,547 |
$ |
27,518 |
||||||
(1)
Includes related party amounts of $3.0 million for the three months ended June 30, 2026 and $0.6 million for the three months ended June 30, 2025.
(2)
Includes related party amounts of $2.5 million for the three months ended June 30, 2026 and $0.8 million for the three months ended June 30, 2025.
(3)
Includes related party amounts of $0.4 million for the three months ended June 30, 2026 and $0.9 million for the three months ended June 30, 2025.
(4)
Includes related party amounts of $7.1 million for the three months ended June 30, 2026 and $1.5 million for the three months ended June 30, 2025.
Research and development expenses were $50.1 million for the three months ended June 30, 2026 and consisted primarily of the following:
•
$15.0 million in JADE101 costs including $5.8 million related to chemistry, manufacturing and controls, $3.9 million in milestone payments, $4.5 million related to costs incurred in the early stages of our clinical trials, and $0.8 million in other general research and development costs;
•
$6.1 million in JADE201 costs including a $2.5 million milestone fee related to first patient first dosing in the JADE201 Phase 1 clinical trial, $1.9 million in the early stages of our clinical trials, $0.9 million related to chemistry, manufacturing and controls, and $0.8 million in other general research and development costs;
•
$10.1 million in JADE301 costs including $5.6 million in chemistry, manufacturing and controls, $4.0 million in toxicology studies, and $0.5 million in other general research and development costs;
•
$16.8 million of personnel-related costs related to recruiting costs, salaries, benefits, and other compensation-related costs, of which $3.5 million related to stock-based compensation expense, and an additional $7.1 million related to stock-based compensation expense related to the pre-funded warrants issuable to Parade under the Paragon Option Agreement (the "Parade Warrants"); and
•
$2.1 million of other research and development expenses.
Research and development expenses were $22.5 million for the three months ended June 30, 2025 and consisted primarily of the following:
•
$7.2 million in JADE101 costs including $3.3 million related to chemistry, manufacturing and controls, $2.1 million related to toxicology studies, and $1.8 million in other general research and development costs;
•
$8.4 million in JADE201 costs including $5.2 million related to chemistry, manufacturing and controls, $2.3 million related to toxicology studies, and $0.9 million in other general research and development costs;
•
$0.9 million in costs related to JADE301;
•
$5.7 million personnel-related costs related to recruiting costs, salaries, benefits, and other compensation-related costs, of which $1.1 million related to stock-based compensation expense, and an additional $1.5 million related to stock-based compensation expense related to the Parade Warrants; and
•
$0.3 million in other general research and development expenses.
General and Administrative Expenses
The following table summarizes our total general and administrative expenses for the periods presented (in thousands):
|
Three Months Ended |
Three Months Ended |
Change |
||||||||||
|
Professional, consulting and other fees(1) |
$ |
3,164 |
$ |
2,113 |
$ |
1,051 |
||||||
|
Personnel-related (including stock-based compensation) |
5,687 |
3,118 |
2,569 |
|||||||||
|
Total general and administrative expenses |
$ |
8,851 |
$ |
5,231 |
$ |
3,620 |
||||||
(1)
Includes no related party amounts for the three months ended June 30, 2026 and $0.1 million for the three months ended June 30, 2025.
General and administrative expenses were $8.9 million for three months ended June 30, 2026 and consisted primarily of the following:
•
$5.7 million of personnel-related costs related to recruiting costs, salaries, benefits and other compensation-related costs, including stock-based compensation of $3.0 million; and
•
$3.2 million of professional and consulting fees associated with accounting, audit, investor and public relations and legal fees.
General and administrative expenses were $5.2 million for three months ended June 30, 2025 and consisted primarily of the following:
•
$1.9 million of professional and consulting fees associated with accounting, audit, investor and public relations and legal fees; and
•
$3.1 million of personnel-related costs related to recruiting costs, salaries, benefits and other compensation-related costs, including stock-based compensation of $1.4 million.
Results of Operations for the Six Months ended June 30, 2026 and June 30, 2025:
The following table summarizes our interim condensed consolidated statement of operations and comprehensive loss for the periods presented (in thousands):
|
Six Months Ended |
Six Months Ended |
Change |
||||||||||
|
Operating expenses |
||||||||||||
|
Research and development(1) |
$ |
86,118 |
$ |
42,570 |
$ |
43,548 |
||||||
|
General and administrative(2) |
16,243 |
8,592 |
7,651 |
|||||||||
|
Total operating expenses |
102,361 |
51,162 |
51,199 |
|||||||||
|
Loss from operations |
(102,361 |
) |
(51,162 |
) |
(51,199 |
) |
||||||
|
Other income (expense): |
||||||||||||
|
Interest income |
6,330 |
2,443 |
3,887 |
|||||||||
|
Change in fair value of convertible notes payable(3) |
- |
(21,584 |
) |
21,584 |
||||||||
|
Other expense |
(71 |
) |
- |
(71 |
) |
|||||||
|
Total other income (expense), net |
6,259 |
(19,141 |
) |
25,400 |
||||||||
|
Net loss before income tax expense |
(96,102 |
) |
(70,303 |
) |
(25,799 |
) |
||||||
|
Income tax expense |
(31 |
) |
- |
(31 |
) |
|||||||
|
Net loss |
$ |
(96,133 |
) |
$ |
(70,303 |
) |
$ |
(25,830 |
) |
|||
(1) Includes related party amounts of $17.3 million for the six months ended June 30, 2026 and $11.7 million for the six months ended June 30, 2025.
(2) Includes related party amounts of $0.2 million for the six months ended June 30, 2026 and $0.1 million for the six months ended June 30, 2025.
(3) Includes no related party amounts for the six months ended June 30, 2026 and $4.6 million for the six months ended June 30, 2025.
Research and Development Expenses
The following table summarizes our research and development expenses incurred for the periods presented (in thousands):
|
Six Months Ended |
Six Months Ended |
Change |
||||||||||
|
External research and development costs: |
||||||||||||
|
JADE101(1) |
$ |
30,401 |
17,016 |
13,385 |
||||||||
|
JADE201(2) |
8,981 |
13,510 |
(4,529 |
) |
||||||||
|
JADE301(3) |
16,027 |
1,659 |
14,368 |
|||||||||
|
Other research and development costs: |
||||||||||||
|
Personnel-related (including stock-based compensation)(4) |
27,423 |
9,662 |
17,761 |
|||||||||
|
Other |
3,286 |
723 |
2,563 |
|||||||||
|
Total research and development expenses |
$ |
86,118 |
$ |
42,570 |
$ |
43,548 |
||||||
(1) Includes related party amounts of $3.0 million for the six months ended June 30, 2026 and $2.0 million for the six months ended June 30, 2025.
(2) Includes related party amounts of $3.5 million for the six months ended June 30, 2026 and $5.7 million for the six months ended June 30, 2025.
(3) Includes related party amounts of $1.0 million for the six months ended June 30, 2026 and $1.7 million for the six months ended June 30, 2025.
(4) Includes related party amounts of $9.8 million for the six months ended June 30, 2026 and $2.5 million for the six months ended June 30, 2025.
Research and development expenses were $86.1 million for the six months ended June 30, 2026 and consisted primarily of the following:
•
$30.4 million in JADE101 costs including $18.3 million related to chemistry, manufacturing and controls, $6.3 million related to costs incurred in the early stages of our clinical trials, $3.9 million in milestone payments, and $1.9 million in other general research and development costs;
•
$9.0 million in JADE201 costs including $2.5 million milestone fee related to dosing our first patient in the JADE201 Phase 1 clinical trial, $1.0 million of research and development expense related to a non-refundable, non-creditable fee paid to Paragon to obtain exclusive rights to develop a bispecific antibody directed to a specific target combination for JADE201, $2.6 million in early clinical spend, $1.1 million in toxicology studies, $1.1 million related to chemistry, manufacturing and controls, and $0.7 million in other general research and development costs;
•
$16.0 million in JADE301 costs including $10.4 million in chemistry, manufacturing and controls, $4.5 million in toxicology studies and $1.1 million in other general research and development costs;
•
$27.4 million of personnel-related costs related to recruiting costs, salaries, benefits, and other compensation-related costs, of which $5.7 million related to stock-based compensation expense, and an additional $9.8 million related to stock-based compensation expense related to the Parade Warrants; and
•
$3.3 million of other research and development expenses.
Research and development expenses were $42.6 million for the six months ended June 30, 2025 and consisted primarily of the following:
•
$17.0 million in JADE101 costs including $8.6 million related to chemistry, manufacturing and controls, $5.0 million related to costs of toxicology studies, $1.1 million in in-vivo studies, $0.8 million related to Paragon development fees, and $1.5 million in other general research and development costs;
•
$13.5 million in JADE201 costs including $5.7 million related to chemistry, manufacturing and controls, $2.3 million related to costs of toxicology studies, $1.6 million in in-vivo studies, $1.5 million in milestone fees due to Paragon, and $2.4 million in other general research and development costs;
•
$1.7 million in JADE301 costs primarily associated with early discovery and exploration;
•
$9.7 million of personnel-related costs related to recruiting costs, salaries, benefits, and other compensation-related costs, of which $1.7 million related to stock-based compensation expense, and an additional $2.5 million related to stock-based compensation expense related to the Parade Warrants; and
•
$0.7 million in other research and development expenses.
General and Administrative Expenses
The following table summarizes our total general and administrative expenses for the periods presented (in thousands):
|
Six Months Ended |
Six Months Ended |
Change |
||||||||||
|
Professional, consulting and other fees(1) |
$ |
5,258 |
$ |
3,765 |
$ |
1,493 |
||||||
|
Personnel-related (including stock-based compensation) |
10,985 |
4,827 |
6,158 |
|||||||||
|
Total general and administrative expenses |
$ |
16,243 |
$ |
8,592 |
$ |
7,651 |
||||||
(1) Includes related party amount of $0.2 million for the six months ended June 30, 2026 and $0.1 million for the six months ended June 30, 2025.
General and administrative expenses were $16.2 million for six months ended June 30, 2026 and consisted primarily of the following:
•
$11.0 million of personnel-related costs related to recruiting costs, salaries, benefits and other compensation-related costs, including stock-based compensation of $5.5 million; and
•
$5.3 million of professional and consulting fees associated with accounting, audit, investor and public relations and legal fees.
General and administrative expenses were $8.6 million for six months ended June 30, 2025 and consisted primarily of the following:
•
$3.4 million of professional and consulting fees associated with accounting, audit, investor and public relations and legal fees;
•
$4.8 million of personnel-related costs related to recruiting costs, salaries, benefits and other compensation-related costs, including stock-based compensation of $2.1 million;
•
$0.3 million of legal fees related to patent-related activities; and
•
less than $0.1 million of other general and administrative expenses.
Liquidity and Capital Resources
Sources of Liquidity
Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we continue the preclinical and clinical development of our product candidates. We have not yet commercialized any products and we do not expect to generate revenue from sales of products for several years, if at all. To date, we have funded our operations primarily with proceeds from the issuance of convertible notes ("Convertible Notes"), from which we received gross proceeds of $95.0 million, $557.5 million in gross proceeds from various equity financings, and $29.9 million in gross sales through our ATM Offering. As of June 30, 2026, we had cash and cash equivalents, and investments of $461.2 million.
On October 6, 2025, we entered into a Securities Purchase Agreement (the "Purchase Agreement") for the October 2025 PIPE with certain investors (the "Purchasers"). Pursuant to the Purchase Agreement, the Purchasers purchased, for an aggregate purchase price of approximately $135 million, (i) an aggregate of 13,368,164 shares (the "Common Shares") of our common stock at a price per
share of $9.14, and (ii) pre-funded warrants (the "Pre-Funded Warrants") to purchase an aggregate of 1,402,092 shares of our common stock at a purchase price of $9.1399 per Pre-Funded Warrant, which represents the per share purchase price of the Common Shares less the $0.0001 per share exercise price for each Pre-Funded Warrant. Net proceeds from the October 2025 PIPE were approximately $126.4 million, which was net of issuance costs of $8.6 million. The Pre-Funded Warrants are exercisable at any time after the date of issuance. A holder of Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99% or 9.99%, as applicable, of the number of shares of our common stock outstanding immediately after giving effect to such exercise. A holder of Pre-Funded Warrants may increase or decrease this percentage to a percentage not in excess of 19.99% by providing at least 61 days' prior notice to us.
On December 13, 2025, we entered into a Securities Purchase Agreement for the December 2025 PIPE with an investor. The closing of the December 2025 PIPE occurred on December 16, 2025. The investor purchased an aggregate of 3,214,286 shares of our common stock at a purchase price of $14.00 per share, for net proceeds of approximately $43.9 million, which was net of issuance costs of $1.1 million.
On May 7, 2026, we entered into an Open Market Sale AgreementSM (the "Sales Agreement") with Jefferies LLC (the "Sales Agent"), under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $200.0 million in "at the market" offerings through the Sales Agent. Sales of the shares of common stock, are made at prevailing market prices at the time of sale or as otherwise agreed with the Sales Agent. The Sales Agent will receive a commission from us of up to 3.0% of the gross proceeds of any shares of common stock sold under the Sales Agreement. Sales of our common stock made pursuant to the Sales Agreement are made under our shelf registration statement on Form S-3 which was filed with the U.S. Securities and Exchange Commission (the "SEC") on May 7, 2026 and was declared effective by the SEC on May 15, 2026. We are not obligated to sell, and the Sales Agent is not obligated to buy or sell, any shares of our common stock under the Sales Agreement. As of June 30, 2026 we have sold 1,319,738 shares under the Sales Agreement for total net proceeds of $29.3 million. As of June 30, 2026, we had $170.1 million available for future sales of common stock under the Sales Agreement.
On June 5, 2026, we completed an underwritten public offering for 11,500,000 shares of our common stock at a share price of $15.00 for net proceeds of approximately $161.6 million, net of aggregate underwriting discounts and commissions and expenses of $10.9 million.
Cash Flows
The following table summarizes our cash flows for the periods presented (in thousands):
|
Six Months Ended |
Six Months Ended |
|||||||
|
Net cash used in operating activities |
$ |
(67,737 |
) |
$ |
(38,916 |
) |
||
|
Net cash used in investing activities |
(106,102 |
) |
(136 |
) |
||||
|
Net cash provided by financing activities |
192,728 |
190,608 |
||||||
|
Effect of exchange rates on cash and cash equivalents |
(77 |
) |
- |
|||||
|
Net increase in cash and cash equivalents |
$ |
18,812 |
$ |
151,556 |
||||
Net Cash Used in Operating Activities
For the six months ended June 30, 2026, net cash used in operating activities was $67.7 million, which was primarily attributable to a net loss of $96.1 million, partially offset by non-cash charges of $20.2 million and changes in operating assets and liabilities of $8.1 million. Non-cash charges consisted of $21.0 million increase in stock-based compensation expense partially offset by accretion/amortization of investments of $0.9 million. Net cash provided by changes in our operating activities consisted of a change of $5.8 million related to accrued expenses and other current liabilities, $2.6 million change to prepaid expenses and other current assets and $4.4 million change in accounts payable, partially offset by a $4.7 million decrease in related party accrued expenses. The increase in accrued expenses and other current liabilities was primarily due to an increase in our business activity and vendor invoicing and payments. The decrease in prepaid expenses and other current assets was primarily due to a decrease in our prepaid research and development balance due to our ongoing clinical trials.
For the six months ended June 30, 2025, net cash used in operating activities was $38.9 million, which was primarily attributable to a net loss of $70.3 million, partially offset by non-cash charges of $27.9 million and changes in operating assets and liabilities of $3.5 million. Non-cash charges consisted of a $21.6 million increase in the fair value of convertible notes payable and $6.4 million increase in stock-based compensation expense. Net cash provided by changes in our operating activities consisted of a $4.9 million increase in accounts payable and a change of $2.9 million related to accrued expenses and other current liabilities, partially offset by a $3.1 million decrease in related party accrued expenses and other current liabilities and a $1.4 million increase in prepaid expenses. The increase in accounts payable, accrued expenses and other current liabilities was primarily due to an increase in
our business activity and vendor invoicing and payments. The increase in prepaid expenses and other current assets was primarily due to prepaid research and development expenses with our contract research organization as well as prepaid contracts for our directors and officers liability insurance.
Net Cash Used in Investing Activities
For the six months ended June 30, 2026, net cash used in investing activities was $106.1 million, which was driven by purchases of investments.
For the six months ended June 30, 2025, net cash used in investing activities was $0.1 million, which was driven by purchases of leasehold improvements related to the lease of our Canadian office space.
Net Cash Provided by Financing Activities
For the six months ended June 30, 2026, net cash provided by financing activities was $192.7 million which primarily related to proceeds from the June public offering and sales under the ATM Offering.
For the six months ended June 30, 2025, net cash provided by financing activities was $190.6 million, which primarily related to the $205.0 million in gross proceeds from the Pre-Closing Financing (as defined below) partially offset by $14.5 million of deferred offering costs.
Future Funding Requirements
As of June 30, 2026, we had cash and cash equivalents, and investments of $461.2 million. We expect that our existing cash and cash equivalents, and investments, will be sufficient to fund our operating plans for at least twelve months from the issuance of the condensed consolidated financial statements for the period ended June 30, 2026.
To date, we have not generated any revenue from product sales. We do not expect to generate revenue from product sales unless and until we successfully complete preclinical and clinical development of, receive regulatory approval for, and commercialize a product candidate. We do not know when, or if, that will occur. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and studies and initiate and conduct clinical trials. In addition, if we obtain regulatory approval for any programs, we expect to incur significant expenses related to product sales, marketing, and distribution to the extent that such sales, marketing and distribution are not the responsibility of potential collaborators. Additionally, we expect to incur additional costs associated with operating as a public company.
Our funding requirements and timing and amount of our operating expenditures will depend on many factors, including, but not limited to:
•
the rate of progress in the development of our existing and future research and development and discovery-related development of our JADE101, JADE201 and JADE301 programs, including potential expansion into additional indications;
•
the scope, progress, results and costs of additional research programs and product candidates and discovery-related activities and preclinical studies for those programs;
•
our ability to successfully file investigational new drug applications or comparable foreign applications and obtain authorization to commence our planned clinical trials or future clinical trials;
•
the costs of enrollment and successful completion of clinical trials;
•
the costs necessary to pursue positive results from our future clinical trials that support a finding of safety and effectiveness, an acceptable risk-benefit profile in the intended populations and a competitive efficacy, safety and half-life profile;
•
the costs of hiring research and development, clinical, manufacturing and commercial personnel;
•
the costs of adding operational, financial and management information systems and personnel;
•
the costs necessary to obtain regulatory approvals, if any, for any approved products in the United States and other jurisdictions, and the costs of post-marketing studies that could be required by regulatory authorities in jurisdictions where approval is obtained;
•
the costs of developing, maintaining and enhancing sustainable, scalable, reproducible and transferable clinical and commercial-scale cGMP capabilities through a third-party or our own manufacturing facility for our programs;
•
the costs and timing of future commercialization activities, including establishing sales, marketing and distribution infrastructure to commercialize any product candidates, for any of our product candidates for which we receive regulatory approval;
•
the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;
•
the costs and timing of preparing, maintaining, expanding, enforcing, defending and protecting our intellectual property rights and protection or regulatory exclusivity for any products we may develop and defending any intellectual property-related claims;
•
the timing and payment of milestone, royalty or other payments we must make pursuant to our existing and potential future collaborations and licensing arrangements with third parties;
•
the costs we incur in maintaining business operations;
•
the costs associated with being a public company, including costs of audit, legal, regulatory and tax- related services associated with maintaining compliance with an exchange listing and SEC requirements, director and officer insurance premiums and investor and public relations costs;
•
the effect of competing technological and market developments; and
•
the extent to which we acquire or invests in businesses, products and technologies, including entering into licensing or collaboration arrangements for programs.
Identifying potential programs and product candidates and conducting preclinical studies and clinical trials is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our programs, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if ever. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives.
Until such a time we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. Adequate additional funds may not be available to us on acceptable terms, or at all. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. Additional 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 debt, making capital expenditures or declaring dividends and may require the issuance of warrants, which could potentially dilute ownership interests.
If we raise additional funds through strategic collaborations or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product 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 when needed, we may be required to delay, limit or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates to third parties that we would otherwise prefer to develop and market ourself.
Contractual Obligations and Other Commitments
We enter into contracts in the normal course of business with CROs, contract manufacturing organizations ("CMOs"), and with other vendors for preclinical research studies, clinical trials, manufacturing, and other services and products for operating purposes. These contracts generally provide for termination on notice or may have a potential termination fee if the contract is cancelled within a specified time, and therefore, are cancellable contracts. We do not expect any such contract terminations and did not have any non-cancellable obligations under these agreements for the periods presented. See Notes 10,11, and 12 to the condensed consolidated financial statements included in Part I - Item 1 of this Quarterly Report for further information on our contractual lease obligations for our office in Vancouver, Canada, and other commitments, including the potential development and sales milestone payments and royalty payments we may be required to make under the Paragon Option Agreement, JADE101 License Agreement, JADE201 License Agreement, JADE301 License Agreement and Parade warrant.
Critical Accounting Policies and Significant Judgments and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with 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 condensed consolidated financial statements, as well
as the reported revenues recognized and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are described in more detail in Note 2 to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q and Note 2 to our audited consolidated financial statements and the related notes thereto beginning on page F-9 of our Annual Report filed on Form 10-K with the SEC on March 6, 2026, we believe the following accounting policies used in the preparation of our condensed consolidated financial statements require the most significant judgments and estimates.
Research and Development Contract Costs Accruals
We record the costs associated with research studies and manufacturing development as incurred. These costs are a significant component of our research and development expenses, with a substantial portion of our ongoing research and development activities conducted by third-party service providers, including CROs and CMOs, and our related party, Paragon.
We accrue for expenses resulting from obligations under the Paragon Option Agreement between Paragon, Parade, and us and agreements with CROs, CMOs, and other outside service providers for which payment flows do not match the periods over which materials or services are provided to us. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with Paragon, CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. We make significant judgments and estimates in determining the accrual balance in each reporting period. In the event advance payments are made to Paragon, a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset which will be expensed as the contracted services are performed. Changes in these estimates that result in material changes to our accruals could materially affect our results of operations. For the periods presented, we have not experienced any material deviations between accrued and actual research and development expenses.
Stock-Based Compensation
We measure stock-based awards granted to employees, directors, and non-employees in the form of stock options to purchase shares of our common stock, based on their fair value on the date of the grant using the Black-Scholes model. We measure restricted common stock awards using the difference, if any, between the purchase price per share of the award and the fair value of our common stock at the date of grant. Compensation expense for those awards is recognized using the straight-line method over the requisite service period, which is generally the vesting period of the respective award for employees. Compensation expense for awards to non-employees with service-based vesting conditions is recognized in the same manner as if we had paid cash in exchange for the goods or services, which is generally over the vesting period of the award. We account for forfeitures as they occur. We classify our stock-based compensation expenses in the same manner in which the award recipient's payroll costs are classified or in which the award recipient's service payments are classified.
The Black-Scholes model uses inputs that are determined by our board of directors on the date of grant and assumptions we make for the volatility of stock-based awards, the expected term of stock-based awards, the risk-free interest rate for a period that approximates the expected term of our stock-based awards and our expected dividend yield. We have historically been a private company and lack company-specific historical and implied volatility information of our stock. Therefore, we estimate our expected stock volatility based on the historical volatility of a representative group of public companies in the biotechnology industry for a term equal to the remaining time of the expected term. The expected term of our stock options has been determined utilizing the "simplified" method for awards that qualify as "plain-vanilla" stock options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the options on the date of measurement. We have estimated a 0% dividend yield based on the expected dividend yield and the fact that we have never paid, and do not expect to pay, any cash dividends in the foreseeable future. See Note 8 to the condensed consolidated financial statements included in Part I - Item 1 of this Quarterly Report for information concerning certain of the specific assumptions we used in applying the Black-Scholes model to determine the estimated fair value of our stock options granted in the periods presented.
Determination of Fair Value of Common Stock
A public trading market for our common stock was established in connection with the completion of the Merger (described below) and the Nasdaq listing of our common stock. As such, it is no longer necessary for our board of directors to estimate the fair
value of our share awards in connection with our accounting for granted share-based awards or other such awards we may grant, as the fair value of our common stock and share-based awards is determined based on the quoted market price of our common stock.
On April 28, 2025, we consummated the previously announced merger transaction (the "Merger") pursuant to that certain Agreement and Plan of Merger, dated as of October 30, 2024, by and among Jade Biosciences, Inc., a private Delaware corporation ("Pre-Merger Jade"), Aerovate Therapeutics, Inc., a Delaware corporation ("Aerovate") and certain subsidiaries of Aerovate. In connection with the Merger, Aerovate changed its name to "Jade Biosciences, Inc."
Prior to the Merger, our pre-Merger common stock valuations were prepared by a third-party valuation firm using a hybrid method, including an option pricing method ("OPM"). The OPM treats common stock and preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company's securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceed the value of the preferred stock liquidation preferences at the time of the liquidity event, such as a strategic sale or a merger. The hybrid method is a probability-weighted expected return method ("PWERM"), where the equity value in one or more of the scenarios is calculated using an OPM. The PWERM is a scenario-based methodology that estimates the fair value of common stock based upon an analysis of future values for a company, assuming various outcomes. The common stock value is based on the probability-weighted present value of expected future investment returns considering each of the possible outcomes available as well as the rights of each class of stock. The future value of the common stock under each outcome is discounted back to the valuation date at an appropriate risk-adjusted discount rate and probability weighted to arrive at an indication of value for the common stock. A discount for lack of marketability of the common stock is then applied to arrive at an indication of value for the common stock.
The assumptions underlying these valuations represented management's best estimate, which involved inherent uncertainties and the application of management's judgment. As a result, if our pre-Merger common stock valuations had used significantly different assumptions or estimates, the fair value of our pre-Merger incentive shares and our share-based compensation expense could have been materially different.
Convertible Notes
Immediately prior to the effective time of the Merger, shares of common stock of Pre-Merger Jade ("Pre-Merger Jade common stock") and pre-funded warrants of Pre-Merger Jade ("Pre-Merger Jade pre-funded warrants") were issued pursuant to the conversion of the Convertible Notes based on the aggregate principal amount of $95.0 million plus unpaid accrued interest divided by the conversion price in connection with the conversion of Convertible Notes into shares of Pre-Merger Jade pre-funded warrants (the "Pre-Closing Financing"). As of December 31, 2025, there are no Convertible Notes outstanding. At the effective time of the Merger, the Pre-Merger Jade shares and warrants issued upon conversion of the Convertible Notes (including accrued interest) automatically converted into 9,433,831 shares of Jade Common Stock and 4,289,744 Jade pre-funded warrants.
Prior to the Closing, we accounted for our Convertible Notes under Accounting Standard Codification ("ASC") No. 815, Derivatives and Hedging ("ASC 815"). Under ASC 815, the election can be made at the inception of a financial instrument to account for the instrument under ASC No. 825, Fair Value Measurements and Disclosures (Including the Fair Value Option) ("ASC 825" and the "Fair Value Option"). We performed an analysis of all of the terms and features of the Convertible Notes and have elected to address simplification and cost-benefit considerations to use the Fair Value Option to account for the Convertible Notes as we have identified embedded derivatives, such as automatic conversion upon closing of the Next Equity Financing and automatic conversion upon the event of a Corporate Transaction, both of which required bifurcation and separate accounting. The Convertible Notes were remeasured at fair value at each balance sheet date until conversion. Changes to the fair value of the Convertible Notes were recorded in other expense in the condensed consolidated statement of operations and comprehensive loss. There were no changes in fair value caused by instrument-specific credit risk. The analysis of the fair value of the Convertible Notes contained inherent assumptions related to the market interest rate, instrument-specific credit risk, the probability of alternate financing, change of control, initial public offering, maturity extension, and payment at original maturity. Due to the use of significant unobservable inputs, the overall fair value measurement of the Convertible Notes were classified as Level 3 while the Convertible Notes were outstanding.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact Jade's financial position, results of operations or cash flows is disclosed in Note 2 to the condensed consolidated financial statements included in Part I - Item 1 of this Quarterly Report
Off-Balance Sheet Arrangements
As of June 30, 2026, we did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
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