Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

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

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties, such as our plans, objectives, expectations, intentions and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section entitled "Risk Factors" included elsewhere in this Quarterly Report on Form 10-Q, as supplemented by our subsequent filings with the SEC.

Overview

We are a clinical stage biotechnology company discovering and developing allogeneic gamma delta T cell therapies for autoimmune diseases and cancer. We are advancing a pipeline of "off-the-shelf" gamma delta T cells, engineered with chimeric antigen receptors (CARs), to facilitate durable activity in patients.

Our approach to activate, engineer and manufacture allogeneic gamma delta T cell product candidates derived from the peripheral blood cells of unrelated donors allows us to generate new product candidates in a rapid and cost-efficient manner. Our allogeneic "off-the-shelf" manufacturing process is designed to allow product from unrelated donors to be stored and sold on demand to treat patients without inducing a graft versus host immune response. This is in contrast to products based on alpha beta T cells, which either must be manufactured for each patient from his or her own T cells, or require significant gene editing to manufacture if the T cells are derived from donors that are unrelated to the patient.

Our lead product candidate, prula-cel, a first-in-class allogeneic gamma delta T cell therapy expressing a CAR targeting CD20, is being developed for the potential treatment of autoimmune diseases. We are also pursuing ADI-212, a next-generation gene-edited and armored clinical candidate designed to target prostate-specific membrane antigen (PSMA). ADI-212 is engineered to express a novel CAR binder designed to support enhanced tolerability and tumor-specific recognition. It integrates membrane-tethered IL-12 armoring and CRISPR/Cas9 mediated disruption of subunit 12 of the mediator complex (MED12) to enhance potency in solid tumors and to deliver multiple anti-tumor mechanisms of action to the tumor microenvironment. We aim to submit a new regulatory submission, such as an Investigational New Drug (IND) application or equivalent every 12-18 months.

Prula-cel

We are advancing patient enrollment in our Phase 1 program of prula-cel across multiple autoimmune diseases. In December 2023, the U.S. Food and Drug Administration (FDA) cleared our IND application for prula-cel in lupus nephritis (LN) and has subsequently authorized the evaluation of prula-cel in systemic lupus erythematosus (SLE), systemic sclerosis (SSc), anti-neutrophil cytoplasmic autoantibody associated vasculitis (AAV), idiopathic inflammatory myopathies (IIM) and stiff person syndrome (SPS) within the Company's Phase 1 clinical trial. In November 2025, we reached alignment with the FDA to allow LN and SLE patients to be dosed with prula-cel in the outpatient setting in ongoing and future clinical trials. Prula-cel has received Fast Track Designation by the FDA for the potential treatment of relapsed/refractory class III or class IV LN, refractory SLE with extrarenal involvement and for SSc.

We believe the favorable safety profile, cellular kinetics and B cell depletion in peripheral blood and secondary lymphoid tissue demonstrated with prula-cel clinical experience to date is favorable for development in autoimmune diseases. We believe the potential market opportunity for prula-cel in B cell mediated autoimmune diseases is substantial based on the prevalence in the U.S., EU5, China and Japan of greater than 1.7 million patients with autoimmune diseases where CAR-T cell therapy has demonstrated clinical proof-of-concept, including SLE (which includes LN), SSc, IIM and SPS.

In October 2025, we announced positive preliminary results from seven SLE and LN patients dosed in our ongoing Phase 1 trial of prula-cel in autoimmune diseases as of the August 31, 2025 data cut-off date. We plan to meet with the FDA in the second quarter of 2026 to inform potential pivotal trial design. Subject to regulatory clearance to proceed, we expect to initiate start up activities for a potential pivotal program in LN or LN and SLE patients in the second half of 2026. We plan to provide a clinical update for this trial in LN and SLE patients in mid-2026, including data from at least 20 patients with a

minimum of six months of follow up, with an additional update in the second half of 2026. We expect to provide a clinical update in patients with SSc in the second half of 2026.

We are also advancing a Phase 1 trial of prula-cel in patients with treatment-refractory rheumatoid arthritis (RA). The study is evaluating prula-cel using two conditioning regimens: cyclophosphamide alone and cyclophosphamide with fludarabine, to explore the potential to reduce the need for conditioning. We plan to provide a clinical update on this trial in the second half of 2026.

ADI-212

We are advancing ADI-212, a next-generation gene-edited and armored clinical candidate designed to target prostate-specific membrane antigen. ADI-212 is engineered to express a novel CAR binder designed to support enhanced tolerability and tumor-specific recognition. It integrates membrane-tethered IL-12 (mbIL-12) armoring and CRISPR/Cas9 mediated disruption of subunit 12 of the mediator complex (MED12) to enhance potency in solid tumors and deliver multiple anti-tumor mechanisms of action within the tumor microenvironment. We expect to submit a regulatory filing for ADI-212 for the treatment of metastatic castration-resistant prostate cancer (mCRPC) in the third quarter of 2026. Subject to regulatory clearance to proceed with a clinical trial, we plan to initiate patient enrollment in the fourth quarter of 2026. We believe the potential market opportunity for ADI-212 in mCRPC is significant based on the prevalence in the U.S., EU5, China and Japan of approximately 75,000 patients with second or third line advanced disease.

Additional Early-Stage Programs (CAR and Other Technologies)

Our pipeline also includes additional early-stage gamma delta T cell therapy programs for autoimmune diseases, hematological malignancies and solid tumors. Additionally, we have ongoing preclinical programs and activities focused on a differentiated in vivo CAR-T platform targeting heme malignancies.

Financial Operations Overview

Revenue

We have no products approved for commercial sale and do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for our product candidates, which we expect will not be for at least several years, if ever.

Expenses

Research and Development

Research and development expenses, which consist primarily of costs incurred in connection with the development of our product candidates, are expensed as incurred. Research and development expenses consist primarily of:

We allocate our external costs by product candidate. We do not allocate our internal costs by product candidate as a significant amount of internal research and development expenses are not tracked by product candidate, and we believe the allocation of such costs would be arbitrary and would not provide a meaningful assessment as we have used our employee and infrastructure resources across multiple product candidate research and development programs.

We are focusing substantially all of our resources on the development of our product candidates. At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of our product candidates. We are also unable to predict when, if ever, material net cash inflows will

commence from sales of our product candidates. The duration, costs, and timing of clinical trials and development of our product candidates will depend on a variety of factors, including:

A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans.

Adequate funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. If we are unable to raise additional funds when needed, we may be required to delay, reduce or terminate some or all of our development programs and clinical trials or we may also be required to sell or license to other rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves. If we are required to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that limit our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders, which could materially affect our business and financial condition.

General and Administrative

General and administrative expenses consist principally of payroll and personnel expenses, including salaries and bonuses, benefits and stock-based compensation expenses, professional fees for legal, consulting, accounting and tax services, allocated overhead expenses, including rent, equipment, depreciation, information technology costs and utilities, and other general operating expenses not otherwise classified as research and development expenses.

We anticipate that our general and administrative expenses will increase for the foreseeable future due to expenses related to operating as a public company, including expenses related to personnel costs, expanded infrastructure and higher consulting, legal and accounting services costs associated with complying with the applicable Nasdaq and SEC requirements, investor relations costs and director and officer insurance premiums.

Interest Income

Interest income consists primarily of interest earned on our cash, cash equivalents, restricted cash and short-term investments in treasury securities.

Interest Expense

Interest expense consists primarily of interest on finance lease liabilities.

Other Expense, Net

Other expense, net primarily consists of state franchise and capital taxes not related to income.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table summarizes our results of operations for the periods indicated (in thousands, except percentages):

Research and development

(1) Employee related costs, including salaries, benefits, bonuses, and stock-based compensation expenses for research and development employees.

(2) Professional fees and allocated facility-related costs, such as rent, utilities, insurance, repairs and maintenance, depreciation and amortization, information technology costs and general support services.

Research and development expenses decreased by $5.3 million, or 23%, during the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in research and development expenses was primarily due to a $3.6 million decrease in payroll and personnel expenses due to lower headcount, a $1.4 million decrease in expenses related to lab supplies and materials, a $0.5 million decrease related to lower CRO expenses and a $0.2 million decrease in allocated facility-related expenses. The decrease was partially offset by a $0.4 million increase in professional fees.

General and administrative

General and administrative expenses decreased by $3.0 million, or 42%, during the three months ended March 31, 2026 as compared to the same period in 2025. The decrease in general and administrative expenses was due to a decrease in payroll and personnel related expenses of $1.4 million primarily related to a decrease in stock-based compensation and lower headcount, a $1.0 million decrease in allocated facility-related expenses and a $0.6 million decrease in professional fees.

Interest income

Interest income decreased by $0.3 million, or 20% during the three months ended March 31, 2026 as compared to the same period in 2025, which was primarily due to lower interest rates and lower cash balances for the period.

Other expense, net

Other expense, net decreased by less than $0.1 million, or 158%, during the three months ended March 31, 2026 as compared to the same period in 2025. This was due to a decrease in state franchise taxes and realized losses related to foreign exchange rates.

Liquidity and Capital Resources

Sources of Liquidity

We have historically funded our operations primarily through a collaboration and licensing arrangement, public and private placements of equity securities and debt, and cash received in our merger with resTORbio, Inc.

In January 2024, we raised aggregate net proceeds of approximately $19.3 million through the JonesTrading ATM Program. In March 2024, we terminated the JonesTrading ATM Program and entered into the Jefferies ATM Program. As of March 31, 2026, no shares of common stock have been sold through the Jefferies ATM Program.

On January 22, 2024, we entered into an underwriting agreement (the Underwriting Agreement) with Jefferies LLC (Jefferies) and Guggenheim Securities, LLC (Guggenheim), as representatives of the underwriters, related to an underwritten public offering (the Offering) of shares of our common stock and, in lieu of common stock to certain investors, pre-funded warrants to purchase shares of our common stock. We received net proceeds from the Offering, after deducting the underwriting discount and commissions and other estimated offering expenses, of approximately $91.7 million. We may receive nominal proceeds, if any, from the exercise of the pre-funded warrants.

On October 7, 2025, we entered into an underwriting agreement with Jefferies and Guggenheim, as representatives of the underwriters, related to an underwritten registered direct offering (the 2025 Offering) of shares of our common stock, and, in lieu of our common stock to an investor, pre-funded warrants to purchase shares of our common stock. We received net proceeds from the 2025 Offering, after deducting the underwriting discount and commissions and other estimated offering expenses, of approximately $74.8 million. We may receive nominal proceeds, if any, from the exercise of the 2025 Pre-Funded Warrants.

As of March 31, 2026, we had cash, cash equivalents and short-term investments of $137.6 million and restricted cash of $2.9 million held in cash collateral accounts. We expect that our cash, cash equivalents and short-term investments will be sufficient to fund our forecasted operating expenses, capital expenditure requirements and debt service payments for at least the next twelve months from the issuance of our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

Future Funding Requirements

We have incurred losses since inception and have incurred losses of $20.2 million and $28.2 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $634.9 million.

As of March 31, 2026, we had cash, cash equivalents, and short-term investments in treasury securities of $137.6 million. We believe that our cash, cash equivalents and short-term investments in treasury securities will be sufficient for us to fund our operations for at least twelve months from the issuance date of our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. We have based these estimates on assumptions that may prove to be wrong, and we could deplete our available capital resources sooner than we expect. Because of the risks and uncertainties associated with research, development, and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements.

All of our revenue to date has been generated from a collaboration and license agreement (the Regeneron Agreement) with Regeneron Pharmaceuticals, Inc, (Regeneron). We do not expect to generate any significant product revenue until we obtain regulatory approval of and commercialize any of our product candidates or enter into additional collaborative agreements with third parties, and we do not know when, or if, either will occur. We expect to continue to incur significant losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates and begin to commercialize any approved products. We are subject to all of the risks typically related

to the development of new product candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.

We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We may seek to raise capital through private or public equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing. We anticipate that we will need to raise substantial additional capital, the requirements for which will depend on many factors, including:

A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans. Adequate funding may not be available to us on acceptable terms or at all.

Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials or we may also be required to sell or license to other rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves. If we are required to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that limit our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders, which could materially affect our business and financial condition.

See the section of this Quarterly Report on Form 10-Q titled "Risk Factors" for additional risks associated with our substantial capital requirements.

Summary Statement of Cash Flows

The following table sets forth the primary sources and uses of our cash and cash equivalents for each of the periods presented below (in thousands):

Cash Flows from Operating Activities

Net cash used in operating activities was $21.5 million for the three months ended March 31, 2026. Cash used in operating activities consisted of net loss partially offset by non-cash adjustments of $2.6 million, and a net decrease in operating assets and liabilities of $3.8 million. Non-cash items primarily included depreciation and amortization of $1.3 million, stock-based compensation expense of $1.3 million, non-cash lease expense of $0.7 million and a net amortization of premiums and accretion discounts on investments of $0.8 million. The net change in assets and liabilities was primarily due to a decrease in accounts payable of $1.8 million, a net decrease in accrued and other current and non-current liabilities of $1.1 million, a decrease in operating lease liability of $0.8 million and a decrease in prepaid expenses of $0.1 million offset by an increase in other current assets of less than $0.1 million.

Net cash used in operating activities was $25.4 million for the three months ended March 31, 2025. Cash used in operating activities consisted of net loss partially offset by non-cash adjustments of $4.5 million and a net decrease in operating assets and liabilities of $1.7 million. Non-cash items primarily included depreciation and amortization of $1.7 million, stock-based compensation expense of $3.2 million, non-cash lease expense of $0.8 million and a net amortization of premiums and accretion discounts on investments of $1.2 million. The net change in assets and liabilities was primarily due to a net decrease in accrued and other current and non-current liabilities of $2.2 million and a decrease in operating lease liability of $1.0 million. The decrease in operating assets and liabilities was partially offset by a $0.8 million increase in prepaid expenses and other current assets and a $0.6 million increase in accounts payable.

Cash Flows from Investing Activities

Net cash provided by investing activities was $18.9 million for the three months ended March 31, 2026, which consisted of $39.0 million related to maturities of short-term treasury securities, net of $20.1 million of purchases of short-term treasury securities and less than $0.1 million of purchases of lab equipment and leasehold improvements for our Good Manufacturing Practice (GMP) cell processing suite at 1000 Bridge Parkway.

Net cash used in investing activities was $2.9 million for the three months ended March 31, 2025, which consisted of $34.4 million of purchases of short-term treasury securities and $1.5 million of purchases of lab equipment and leasehold improvements for our Good Manufacturing Practice (GMP) cell processing suite at 1000 Bridge Parkway. We received $33.0 million related to the maturities of short-term treasury securities.

Cash Flows from Financing Activities

Net cash used by financing activities was $0.1 million for the three months ended March 31, 2026 and March 31, 2025 and consisted of $0.1 million cash paid for taxes withheld on the net share settlement of equity awards for both years.

Critical Accounting Estimates

Our management's discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reported periods and related disclosures. These estimates and assumptions, including those related to accruals for CDMO, CRO and research and development expenses, and equity-based compensation are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur

in the future. These critical estimates and assumptions are based on our historical experience, our observance of trends in the industry, and various other factors that are believed to be reasonable under the circumstances and form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from our estimates under different assumptions or conditions. A summary of our significant accounting policies is contained in Note 2 of our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. There have been no material changes in our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 12, 2026.

Smaller Reporting Company

We are a "smaller reporting company" as defined in the Exchange Act. As a smaller reporting company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable, in general, to public companies that are not smaller reporting companies. These provisions include (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act of 2002, as amended; (ii) scaled executive compensation disclosures; and (iii) the option to provide only two years of audited financial statements, instead of three years.

We will continue to be a smaller reporting company for as long as we continue to have (i) less than $250 million in market value of our shares held by non-affiliates as of the last business day of our second fiscal quarter or (ii) less than $100 million of annual revenues in our most recent fiscal year completed before the last business day of our second fiscal quarter and a market value of our shares held by non-affiliates of less than $700 million as of the last business day of our second fiscal quarter.

We may choose to take advantage of some but not all of these exemptions. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock. We have elected to avail ourselves of the exemption for the delayed adoption of certain accounting standards and, therefore, are not subject to the same new or revised accounting standards as other public companies that are not smaller reporting companies.

Recently Issued and Adopted Accounting Pronouncements

See the section titled "Summary of Significant Accounting Policies" in Note 2 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.