Verastem, Inc.: Form 10-Q for the period ended Jun 30, 2026

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for our fiscal year ended December 31, 2025. Please also refer to the sections under headings “Forward-Looking Statements” and “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for our fiscal year ended December 31, 2025.

OVERVIEW

We are a biopharmaceutical company committed to developing and commercializing new medicines to improve the lives of patients diagnosed with challenging RAS/MAPK pathway-driven cancers. We market AVMAPKI FAKZYNJA CO-PACK (avutometinib capsules; defactinib tablets) in the United States (“U.S.”), the first treatment specifically FDA-approved for adults with KRAS-mutated LGSOC who have received prior systemic therapy.

Our pipeline includes clinical-stage programs, preclinical research programs and externally partnered research programs. Our focus is on novel small molecule drugs developed both as monotherapy and in combination, which inhibit critical signaling pathways in cancer that promote cancer cell survival and tumor growth, including targeting RAS directly with KRAS G12D inhibition, targeting the pathway downstream with RAF/MEK inhibition, and targeting the parallel pathway that drives resistance with FAK inhibition. Our goal is to expeditiously develop and deliver transformative therapies that truly change outcomes for people living with RAS/MAPK pathway-driven cancers.

COMMERCIAL PRODUCTS

AVMAPKI FAKZYNJA CO-PACK

AVMAPKI FAKZYNJA CO-PACK is the first treatment specifically approved by the FDA for adults with KRAS-mutated recurrent LGSOC who have received prior systemic therapy. AVMAPKI (avutometinib) inhibits MEK kinase activity while also blocking the compensatory reactivation of MEK by upstream RAF. RAF and MEK proteins are regulators of the RAS/RAF/MEK/ERK (MAPK) pathway. Blocking RAF and/or MEK activates FAK, a key mediator of drug resistance. FAKZYNJA (defactinib) is a FAK inhibitor and together, the avutometinib and defactinib combination was designed to provide a more complete blockade of the signaling that drives the growth and drug resistance of RAS/MAPK pathway-dependent tumors.

The combination is being evaluated in an ongoing international Phase 3 trial, RAMP 301, in recurrent LGSOC with or without a KRAS mutation. The trial was fully enrolled, as of December 2025, and serves as a confirmatory study for the initial indication and has the potential to expand the indication regardless of KRAS mutation status. The results will also be leveraged for potential geographic expansion. We expect to report a topline readout of the primary endpoint in the RAMMP 301 trial in middle of 2027.

• In April 2026, we announced new two-year median follow up data from the Phase 2 RAMP 201 trial that demonstrated durable benefit of avutometinib plus defactinib across both KRAS-mutant and KRAS wild-type recurrent LGSOC patients, with discontinuation rates due to adverse events remaining consistent with the primary analysis, presented at the Society of Gynecologic Oncology 2026 Annual Meeting on Women’s Cancers. A new exposure-response analysis further demonstrated that the approved dose and schedule of avutometinib plus defactinib achieve the optimal therapeutic effect.
• In June 2026, we announced positive updated results from the RAMP 205 Phase 1b/2a recommended phase 2 dose cohort of 29 patients evaluating avutometinib plus defactinib in combination with gemcitabine and nab-paclitaxel in first-line metastatic pancreatic ductal carcinoma (PDAC). As of the June 5, 2026 data cutoff (median follow-up of 9.8 months) the combination achieved a 52% confirmed objective response rate (cORR), with both an 86% overall survival rate and 68% progression-free survival rate at six months. The combination demonstrated a consistent

safety profile with no new safety signals. Nine patients remain on treatment, and follow-up continues as survival data matures.

• In July 2026, updated data from the RAMP 201 Japan study were presented at the Annual Meeting of the Japanese Society of Gynecologic Oncology (JSGO). As of May 29, 2026, 16 efficacy-evaluable patients with recurrent LGSOC had received avutometinib plus defactinib, with a median follow up of 12.4 months. The combination achieved a 44% overall response rate and a 94% disease control rate across all patients. Response rates were 71% in patients with KRAS-mutated tumors and 22% in those with KRAS wild-type tumors, with disease control rates of 100% and 89%, respectively. Overall, 94% of patients experienced tumor shrinkage, and 11 of 16 patients remained on treatment at the data cutoff.

CLINICAL PIPELINE

VS-7375, an Oral KRAS G12D (ON/OFF) Inhibitor

VS-7375 is a potential best-in-class, potent, and selective oral KRAS G12D dual ON/OFF inhibitor. VS-7375 has a differentiated profile compared to other RAS inhibitors. Based on preclinical data, VS-7375 offers dual, potent inhibition of both ON and OFF states of KRAS G12D. We believe this correlates with better in vivo efficacy and durability versus ON-only RAS inhibitors. VS-7375 has demonstrated a high affinity for KRAS G12D with long residence time (18-24 hours) in preclinical models. We believe this correlates with a more rapid and durable suppression of pERK signaling (which controls growth and cell survival) when compared to other ON-only KRAS G12D inhibitors in tumor cell lines. The selective inhibition of VS-7375 to KRAS G12D has shown, in preclinical models, to spare T cell proliferation to maintain a normal healthy immune response, versus a RAS-multi-inhibitor, which impairs T cell proliferation at increasing concentrations of drug. The once daily (“QD”) oral dosing of VS-7375 achieves exposures corresponding to maximal tumor regressions across preclinical models for pancreatic, lung and colorectal cancers. Verastem announced in April 2025 that the U.S. Investigational New Drug (“IND”) application for (VS-7375-101) was cleared and initiated a Phase 1/2 clinical trial in June 2025 in patients with advanced KRAS G12D mutant solid tumors, including PDAC, non-small cell lung cancer (“NSCLC”) and colorectal cancer (“CRC”).

In April 2026 we branded the trials as the VS-7375 TARGET-D Clinical Trial Program. TARGET-D 101 (VS-7375-101) is a Phase 1/2 dose escalation, dose expansion and combination-evaluation trial. In the TARGET-D 101 Phase 1/2 study, the Company cleared multiple monotherapy dose levels, including the 1200 mg QD dose with no dose-limiting toxicities (“DLTs”) and no major toxicities. Patients continue to be evaluated at the 1200 mg QD dose level. The Company also cleared multiple dose levels in combination with cetuximab with no DLTs. The Company completed targeted enrollment in patients with pancreatic and lung cancer monotherapy cohorts and the colorectal cancer combination cohort with cetuximab in the Phase 1/2 study. Following feedback from the FDA, the Company amended its Phase 1/2 trial protocol to separate out disease-specific Phase 2 registration-directed trials for KRAS G12D mutated second line (“2L”) PDAC, 2L/ third line (“3L”) NSCLC and 2L or later CRC.

• In June 2026, we announced during an R&D event preliminary update and progress from the VS-7375 TARGET-D clinical development program. Data presented in June continued to support a differentiated profile of VS-7375, demonstrating encouraging anti-tumor activity across multiple KRAS G12D-driven tumor types, including metastatic PDAC, metastatic CRC and advanced NSCLC, with evidence of dose-dependent activity, favorable pharmacokinetics (“PK”) supporting target exposure, and a favorable and manageable safety and tolerability profile. The updated PK data continued to show the 900 mg QD dose achieves target plasma levels of VS-7375 and provides clear separation from the 600 mg QD dose.
• At the R&D event, we announced our and Erasca, Inc.’s (“Erasca”) intent to enter into an agreement to evaluate VS-7375 with Erasca’s potential best-in-class oral pan-RAS molecular glue ERAS-0015, across KRAS G12D mutant solid tumor models. In July, the companies executed an agreement enabling the planned preclinical evaluation. Subject to the outcome of the preclinical evaluation and the execution of a definitive agreement, the Companies intend to explore a future clinical trial collaboration to evaluate the combination in patients with advanced solid tumors.
• Also, in June 2026 we announced that the FDA granted Fast Track Designation to VS-7375 for the treatment of adult patients with KRAS G12D-mutated unresectable locally advanced or metastatic NSCLC who have received platinum-based chemotherapy and an anti-PD-(L)1 antibody either concurrently or sequentially.
• We have dosed the first patients in three Phase 2 registration-directed trials, including:

1. TARGET-D 201 to evaluate VS-7375 at 900 mg QD both as monotherapy and in combination with cetuximab in patients with second-line PDAC. The study is also evaluating VS-7375 and cetuximab in the first-line PDAC setting.

2. TARGET-D 202 to evaluate VS-7375 at 900 mg QD in patients with advanced NSCLC who have received one-to-two prior lines of therapy. The study is also evaluating VS-7375 in NSCLC patients with asymptomatic untreated brain metastasis.

3. TARGET-D 203 to evaluate VS-7375 at 900 mg QD in 2L+ CRC as both monotherapy and in combination with epidermal growth factor receptor inhibitors, including cetuximab or panitumumab, and chemotherapy in patients with metastatic CRC.

Expected key milestones:

• We expect to report updating VS-7375 clinical data in October 2026.
• We expect to complete enrollment across all three TARGET-D phase 2 trials by end of 2026
• We expect to meet with the FDA before the end of 2026 to review Phase 3 pivotal trial designs in first-line (“1L”) metastatic PDAC, 1L metastatic CRC, and 1L advanced NSCLC
• We expect to enroll the first patient in each of the Phase 3 pivotal trials in the first half of 2027.

GENFLEET THERAPEUTICS (SHANGHAI), Inc

We shared updates from GenFleet Therapeutics, our partner developing VS-7375, known as GFH375, in China.

• In April 2026, GenFleet announced that GFH375 was granted Breakthrough Therapy Designation in China for patients with KRAS G12D-mutated metastatic pancreatic cancer who have received at least one prior systemic therapy.

FINANCIAL OPERATIONS OVERVIEW

As of June 30, 2026, we had an accumulated deficit of $1,236.3 million. Our net loss was $34.7 million, $71.3 million, $25.9 million, $78.0 million for the three and six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had cash, cash equivalents, and investments of $136.4 million. In accordance with applicable accounting standards, we are required to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within twelve months after the date of the issuance of these condensed consolidated financial statements.

In our Annual Report on Form 10-K for the year ended December 31, 2025, filed on March 4, 2026, we disclosed that our existing cash resources, including proceeds from exercise of warrants in January 2026, along with revenue we expected to generate from sales of AVMAPKI FAKZYNJA CO-PACK, was expected to be sufficient to fund our planned operations through twelve months from the date of issuance of those consolidated financial statements. Subsequent to the filing of our Annual Report on Form 10-K for the year ended December 31, 2025, we initiated TARGET-D 201, TARGET-D 202, and TARGET-D 203, resulting in a significant increase in projected research and development expenses. Consequently, the significant increase in costs we now expect to incur raises substantial doubt about our ability to continue as a going concern within the twelve months after the date of the issuance of these condensed consolidated financial statements.

We expect to finance our operations with our existing cash, cash equivalents and investments, through potential future milestones and royalties received pursuant to the Secura APA, through the Note Purchase Agreement, through future product revenues or through other strategic financing opportunities that could include, but are not limited to collaboration agreements, offerings of our equity, or the incurrence of debt. However, given the risks associated with these potential strategic or financing opportunities, they are not deemed probable for purposes of the going concern assessment. If we fail to obtain additional capital or generate sufficient revenue from our commercialization activities in the future, we may be unable to complete our planned preclinical studies and clinical trials and obtain approval of certain investigational product candidates from the FDA or foreign regulatory authorities. Therefore, there is substantial doubt about our ability to continue as a going concern.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of certain assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements, and the amounts of revenues and expenses during the reported periods.

We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as “critical” because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates—which also would have been reasonable—could have been used, which would have resulted in different financial results.

The critical accounting policies we identified in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2025, related to revenue recognition, accrued and prepaid research and development expenses, stock-based compensation and fair value of Notes.

RESULTS OF OPERATIONS

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

(dollar amounts in thousands)

“N/M” - Percentage change is not meaningful (N/M) where the prior period amount is zero or not comparable

Product revenue, net.

We began commercial sales of AVMAPKI FAKZYNJA CO-PACK within the United States in May 2025, following receipt of FDA marketing approval on May 8, 2025. For the three months ended June 30, 2026 (the “2026 Quarter”) we recorded approximately $25.1 million of net product revenue. For the three months ended June 30, 2025 (the “2025 Quarter”) we recorded approximately $2.1 million of net product revenue.

Sale of COPIKTRA license and related assets

Sale of COPIKTRA license and related assets revenue for the 2026 Quarter was $15.0 million compared to $0.0 million for the 2025 Quarter. Sale of COPIKTRA license and related assets revenue for the 2026 Quarter consisted of one sales milestone of $15.0 million due to Secura achieving cumulative worldwide net sales of COPIKTRA exceeding $200.0 million since the closing of the Secura APA during the 2026 Quarter. The $15.0 million milestone payment was received by us in July 2026.

Cost of sales – product.

Cost of sales – product for the 2026 Quarter was $3.8 million compared to $0.3 million for the 2025 Quarter. Cost of sales – product for the 2026 Quarter and 2025 Quarter consisted of costs associated with the manufacturing of AVMAPKI FAKZYNJA CO-PACK, royalties owed on such sales, and certain period costs including inventory write downs. The Company began capitalizing inventory upon receiving FDA approval for AVMAPKI FAKZYNJA CO-PACK on May 8, 2025. Prior to the FDA approval of AVMAPKI FAKZYNJA CO-PACK, expenses associated with the manufacturing of AVMAPKI FAKZYNJA CO-PACK were recorded as research and development expense. Certain costs of AVMAPKI FAKZYNJA CO-PACK units recognized as revenue during the 2026 Quarter and 2025 Quarter, or approximately $0.2 million and less than $0.1 million, respectively, were expensed prior to obtaining regulatory approval, therefore, are not included in cost of sales – product during this period. We expect cost of sales - product to increase in relation to product revenues as we deplete these inventories.

Cost of sales – intangible amortization.

Cost of sales – intangible amortization for the 2026 Quarter and 2025 Quarter of approximately $0.3 million and $0.1 million, respectively, was related to finite-lived intangible assets related to AVMAPKI FAKZYNJA CO-PACK which we recognized and began amortizing during the second quarter of 2025.

Research and development expense.

Research and development expense for the 2026 Quarter was $41.3 million, compared to $24.8 million for the 2025 Quarter. The $16.6 million increase was primarily driven by a $7.4 million increase in investigator fees, a $5.5 million increase in contract research organization (“CRO”) costs, a $2.1 million increase in drug substance and drug product manufacturing costs, and a $1.6 million increase in personnel costs, including non-cash stock-based compensation.

Research and development expenses consist of costs associated with our research activities, including the development of our product candidates. Research and development expenses include product/ product candidate and/or project-specific costs, as well as unallocated costs. We record expenses related to external research and development services, such as CROs, clinical sites, pass-through fees such as investigator fees, manufacturing organizations and consultants, by project and/or product candidate. We use our employee and infrastructure resources in a cross-functional manner across multiple research and development projects. Our project costing methodology does not allocate personnel, infrastructure and other indirect costs to specific clinical programs or projects.

Product/ product candidate/ project specific costs include:

• direct third-party costs, which include expenses incurred under agreements with CROs, the cost of consultants who assist with the development of our product candidates on a program-specific basis, clinical

site costs, and any other third-party expenses directly attributable to the development of the product candidates;

• direct costs related to avutometinib or defactinib that are not specific to a clinical trial such as the costs relating to contract manufacturing operations including manufacturing costs in connection with producing avutometinib and defactinib are included within “Avutometinib and defactinib manufacturing and non-clinical trial specific” as the cost to manufacture avutometinib and defactinib is not allocated to specific clinical trials;
• direct costs related to VS-7375 that are not specific to a clinical trial such as the costs relating to contract manufacturing operations including manufacturing costs in connection with producing VS-7375 are included within “VS-7375 manufacturing and non-clinical trial specific” as the cost to manufacture VS-7375 is not allocated to specific clinical trials; and
• license fees.

Unallocated costs include:

• research and development employee-related expenses, including salaries, benefits, travel, and stock-based compensation expense;
• cost of consultants, including our scientific advisory board, who assist with our research and development but are not allocated to a specific program; and
• facilities, depreciation, and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, and laboratory supplies.

The table below summarizes our direct research and development expenses for our product/ product candidates/ projects and our unallocated research and development costs for the 2026 Quarter and the 2025 Quarter.

(dollar amounts in thousands)

The $14.4 million increase in VS-7375 clinical trial expenses was primarily attributable to higher CRO costs and investigator fees resulting from increased enrollment in the TARGET-D 101 trial, as well as study start-up and initiation activities for three Phase 2 TARGET-D trials. The $1.2 million increase in personnel costs, excluding stock-based compensation, was primarily attributable to increased headcount. The $1.1 million increase in VS-7375 manufacturing and non-clinical trial specific costs, was primarily attributable to increases in drug manufacturing and drug supply costs in support of the growing TARGET-D program.

Selling, general and administrative expense

Selling, general and administrative expense for the 2026 Quarter was $27.4 million compared to $20.7 million for the 2025 Quarter. The $6.7 million increase was primarily driven by a $4.3 million increase in commercial operations expenses, a $2.6 million increase in personnel costs, including non-cash based stock-based compensation expense, a $1.2 million increase in other general and administrative expenses. These increases were partially offset by a $1.4 million decrease in consulting and professional fees.

Other expense

Other expense for the 2026 Quarter and 2025 Quarter was $0.1 million. Other expense for the 2026 Quarter and 2025 Quarter consisted of transaction losses due to changes in foreign currency exchange rates.

Interest income

Interest income for the 2026 Quarter was $1.1 million, compared to $0.8 million for the 2025 Quarter. The $0.3 million increase was primarily driven by higher balances of cash equivalents during the 2026 Quarter compared to the 2025 Quarter.

Interest expense

Interest expense for the 2026 Quarter was $0.4 million compared to $0.2 million for the 2025 Quarter. The $0.2 million increase from the 2025 Quarter to the 2026 Quarter was primarily driven by interest expense incurred as part of the vendor financing arrangement.

Change in fair value of warrant liability

There was no change in fair value of the warrant liability for the 2026 Quarter compared to $20.3 million income for the 2025 Quarter. There was no change in the fair value of the warrant liability for the 2026 Quarter as all the outstanding Warrants were either exercised or expired as of January 25, 2026. The $20.3 million income for the 2025 Quarter consisted of the mark-to-market adjustment for the liability classified Warrants issued as part of the July 2024 Offering. The liability classified warrants decreased in value from December 31, 2024 as a result of the exercise of 2,787,499 Warrants during the quarter and a decrease in warrant valuation due to a lower stock price.

Change in fair value of Notes

The change in fair value of Notes was $1.8 million for the 2026 Quarter compared to $3.0 million for the 2025 Quarter. We elected the fair value option for the Notes and therefore changes in fair value, including interest, other than changes that are directly attributable to instrument specific credit risk are recorded as change in fair value of Notes in the condensed statements of operations and comprehensive loss. The change in fair value of Notes for the 2026 Quarter of $1.8 million was primarily driven by interest on the Notes. The change in fair value of Notes for the 2025 Quarter of $3.0 million was primarily driven by interest on the Notes and a reduction in risk free rate during the 2025 Quarter resulting in higher valuation of the Notes.

Income tax expense.

Income tax expense for the 2026 Quarter was $0.8 million compared to no income tax expense in the 2025 Quarter. The income tax expense within the 2026 Quarter was primarily a result of interest being owed under IRC section 453A related to the $15.0 million milestone payment from Secura because it was an installment sale.

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

(dollar amounts in thousands)

“N/M” - Percentage change is not meaningful (N/M) where the prior period amount is zero or not comparable.

Product Revenue, Net.

We began commercial sales of AVMAPKI FAKZYNJA CO-PACK within the United States in May 2025, following receipt of FDA marketing approval on May 8, 2025. For the six months ended June 30, 2026 (the “2026 Period”) we recorded approximately $43.7 million of net product revenue. For the six months ended June 30, 2025 (the “2025 Period”) we recorded approximately $2.1 million of net product revenue.

Sale of COPIKTRA license and related assets

Sale of COPIKTRA license and related assets revenue for the 2026 Period was $15.0 million compared to $0.0 million for 2025 Period. Sale of COPIKTRA license and related assets revenue for the 2026 Period consisted of one sales milestone of $15.0 million due to Secura achieving cumulative worldwide net sales of COPIKTRA exceeding $200.0 million since the closing of the Secura APA during the 2026 Period. The $15.0 million milestone payment was received by us in July 2026.

Cost of sales – product.

Cost of sales – product for the 2026 Period was $6.5 million compared to $0.3 million for the 2025 Period. Cost of sales – product for the 2026 Period and 2025 Period consisted of costs associated with the manufacturing of AVMAPKI FAKZYNJA CO-PACK, royalties owed on such sales, and certain period costs including inventory write downs. The Company began capitalizing inventory upon receiving FDA approval for AVMAPKI FAKZYNJA CO-PACK on May 8, 2025. Prior to the FDA approval of AVMAPKI FAKZYNJA CO-PACK, expenses associated with the manufacturing of AVMAPKI FAKZYNJA CO-PACK were recorded as research and development expense. Certain costs of AVMAPKI FAKZYNJA CO-PACK units recognized as revenue during the 2026 Period and 2025 Period, or approximately $0.3 million and less than $0.1 million, respectively, were expensed prior to obtaining regulatory approval, therefore, are not included in cost of sales – product during this period. We expect cost of sales - product to increase in relation to product revenues as we deplete these inventories.

Cost of sales – intangible amortization.

Cost of sales – intangible amortization for the 2026 Period and 2025 Period of approximately $0.6 million and $0.1 million, respectively, was related to finite-lived intangible assets related to AVMAPKI FAKZYNJA CO-PACK which we recognized and began amortizing during the second quarter of 2025.

Research and development expense.

Research and development expense for the 2026 Period was $79.6 million, compared to $53.9 million for the 2025 Period. The $25.6 million increase was primarily driven by a $12.1 million increase in investigator fees, an $8.2 million increase in CRO costs, a $5.8 million increase in drug substance and drug product manufacturing costs, a $3.4 million increase in personnel costs, including non-cash based stock-based compensation, a $3.0 million increase in clinical supply costs and a $0.4 million increase in investigator sponsored trial expenses. These increases were partially offset by a $6.0 million decrease in license fees, reflecting an Option exercise fee payment made during the 2025 Period pursuant to the GenFleet Agreement, and a $1.3 million decrease in consulting expenses.

The table below summarizes our direct research and development expenses for our product/ product candidates/ projects and our unallocated research and development costs for the 2026 Period and the 2025 Period.

(dollar amounts in thousands)

The $23.0 million increase in VS-7375 clinical trial expenses was primarily attributable to higher CRO costs and investigator fees resulting from increased enrollment in the TARGET-D 101 trial, as well as study start-up and initiation activities for three Phase 2 TARGET-D studies. The $0.3 million decrease in VS-7375 manufacturing and non-clinical trial specific costs was driven by $6.0 million Option exercise fee incurred to license VS-7375 in the 2025 Period pursuant to the GenFleet Agreement, partially offset by increased VS-7375 drug substance and drug product costs in the 2026 Period. The $2.9 million increase in personnel costs, excluding stock-based compensation, was primarily attributable to increased headcount.

Selling, general and administrative expense

Selling, general and administrative expense for the 2026 Period was $49.7 million compared to $35.7 million for the 2025 Period. The $14.0 million increase was primarily driven by a $7.4 million increase in personnel costs, including non-cash based stock-based compensation expense, a $6.5 million increase in commercial operations expenses, a $2.0 million increase in other general and administrative expenses. These increases were partially offset by a $1.1 million decrease in consulting and professional fees and a $0.8 million decrease in financing fees related to the Note Purchase Agreement incurred in the 2025 Period.

Other expense

Other expense for the 2026 Period and 2025 Period was $0.1 million in both periods. Other expense for the 2026 Period and 2025 Period consisted of transaction losses due to changes in foreign currency exchange rates.

Interest income

Interest income for the 2026 Period was $2.4 million, compared to $1.8 million for the 2025 Period. The $0.6 million increase was primarily driven by higher balances of cash equivalents and investments during the 2026 Period compared to the 2025 Period.

Interest expense

Interest expense for the 2026 Period was $0.7 million compared to $0.4 million for the 2025 Period. The $0.3 million increase from the 2025 Period was primarily driven by interest expense incurred as part of the vendor financing arrangement.

Loss on debt extinguishment.

There was no loss on debt extinguishment in the 2026 Period. The loss on debt extinguishment for the 2025 Period of $1.8 million represents the loss recognized on early extinguishment of our Loan Agreement. On January 13, 2025, we repaid in full all principal, accrued and unpaid interest, fees, and expenses under the Loan Agreement in an aggregate amount of $42.7 million (the “Payoff Amount”). The Payoff Amount, excluding accrued interest, exceeded the carrying amount of the Term Loans on January 13, 2025 by $1.8 million which was recorded as a loss on debt extinguishment.

Change in fair value of warrant liability

The change in fair value of the warrant liability was $9.3 million income for the 2026 Period compared to $17.9 million income for the 2025 Period. The $9.3 million income for the 2026 Period and $17.9 million income for the 2025 Period consisted of the mark-to-market adjustment for the liability classified Warrants issued as part of the July 2024 Offering. The liability classified warrants decreased in value from December 31, 2025 to when 8,391,666 Warrants were exercised in January 2026 primarily driven by a reduction in our stock price and the expiration of 37,500 Warrants, resulting in $9.3 million income during the 2026 Period. The $17.9 million income for the 2025 Period consisted of the mark-to-market adjustment for the warrants issued as part of the July 2024 Offering which decreased primarily due to the decrease in our stock price from December 31, 2024 to when warrants were exercised during the 2025 Period and at the end of the 2025 Period.

Change in fair value of Notes

The change in fair value of Notes was $3.7 million for the 2026 Period compared to $7.4 million during the 2025 Period. We elected the fair value option for the Notes and therefore changes in fair value, including interest, other than changes that are directly attributable to instrument specific credit risk are recorded as change in fair value of Notes in the condensed statements of operations and comprehensive loss. The change in fair value of Notes for the 2026 Period of $3.7 million was primarily driven by interest and Revenue Participation Payments on the Notes. The change in fair value of Notes for the 2025 Period of $7.4 million was primarily driven by interest on the Notes and a reduction in risk free rate during the 2025 Period resulting in higher valuation of the Notes.

Income tax expense.

Income tax expense for the 2026 Period was $0.8 million compared to no income tax expense in the 2025 Period. The income tax expense within the 2026 Period was primarily a result of interest being owed under IRC section 453A related to the $15.0 million milestone payment from Secura because it was an installment sale.

LIQUIDITY AND CAPITAL RESOURCES

Sources of liquidity

We have financed our operations to date primarily through public and private offerings of our common stock, pre-funded warrants, and warrants, offerings of convertible notes, sales of common stock under our at-the-market equity offering program, our Note Purchase Agreement, former loan agreements, the upfront payments and milestone payments under our license and collaboration agreements with Sanofi, CSPC, and Yakult, the upfront payment and milestone payments received under the Secura APA, and sales of Series B Convertible Preferred Stock. Additionally, we have financed a portion of our operations through product revenue, including from AVMAPKI FAKZYNJA CO-PACK, beginning with our U.S. commercial launch in May 2025, and from COPIKTRA, from its U.S. commercial launch in September 2018 through our sale of the COPIKTRA license in September 2020. We expect to finance a portion of our business through future potential milestones and royalties received pursuant to the Secura APA.

As of June 30, 2026, we had $136.4 million in cash, cash equivalents, and investments. We primarily invest our cash, cash equivalents and investments in U.S. Government money market funds, government bonds, corporate bonds and commercial paper of publicly traded companies.

Risks and uncertainties include those identified under Item 1A. Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 4, 2026, and under “Risk Factors” in this Quarterly Report on Form 10-Q.

Cash flows

The following table sets forth the primary sources and uses of cash for the 2026 Period and the 2025 Period (in thousands):

Operating activities

The use of cash in both periods resulted primarily from our net losses adjusted for non-cash charges and changes in the components of working capital. Our cash outflow from net losses adjusted for non-cash charges and adjustments was $74.6 million for the 2026 Period and $84.2 million for the 2025 Period. Non-cash charges and adjustments for the 2026 Period were primarily related to the change in fair value of common stock warrant liability and stock-based compensation expense. Non-cash charges and adjustments for the 2025 Period were primarily related to the change in fair value of warrant liability, non-cash changes in fair value of the Notes, loss on debt extinguishment and stock-based compensation expense.

Our cash outflow from operating activities due to changes in operating assets and liabilities was $21.4 million for the 2026 Period. Our cash inflow from operating activities due to changes in operating assets and liabilities was $12.9 million for the 2025 Period. Cash outflow due to changes in operating assets and liabilities for the 2026 Period was primarily driven by an increase of $20.1 million in accounts receivable, an increase of $6.5 million in prepaid expenses, other current assets and other assets, and an increase of $0.6 million in inventory, partially offset by an increase of $5.7 million in accounts payable, accrued expenses and other liabilities. Cash inflow due to changes in operating assets and liabilities for the 2025 Period was primarily driven by an increase of $6.6 million in accrued expenses and other liabilities, an increase of $6.3 million in accrued expenses, long-term, and an increase of $4.0 million in accounts payable, offset by an increase of $2.1 million in accounts receivable, an increase of $1.2 million in inventory, and an increase of $0.8 million in prepaid expenses, other current assets and other assets. The increases in both periods in prepaid expenses, other current assets, and other assets is exclusive of cash received from PanCAN and used on the RAMP 205 study. Cash used in operating activities was $96.0 million and $71.3 million for the 2026 Period and the 2025 Period, respectively.

Investing activities

The cash provided by investing activities was $0.2 million for the 2026 Period, compared with no investing activities for the 2025 Period. Investing activities during the 2026 Period consisted of $16.3 million of maturities of investments, partially offset by $16.0 million of purchases of investments.

Financing activities

The cash provided by financing activities for the 2026 Period represents $29.4 million of proceeds from the exercise of Warrants, $0.7 million of proceeds received from insurance premium financing, and $0.1 million of proceeds received from the exercise of stock options and our employee stock purchase plan, partially offset by $2.5 million of repayments under the vendor financing arrangement and $0.5 million of payments for insurance premium financing. The cash provided by financing activities for the 2025 Period represents $100.1 million of net proceeds received from the issuance of common stock and pre-funded warrants, $75.0 million of proceeds received pursuant to the Note Purchase Agreement, $13.8 million of proceeds from the exercise of Warrants, $1.2 million of proceeds received from insurance premium financing, and less than $0.1 million of proceeds received related to our employee stock purchase plan, partially offset by the $42.6 million repayment of our Loan Agreement, and $0.7 million of payments for insurance premium financing. Refer to Note 10. Debt to our unaudited condensed consolidated financial statements included in this quarterly report for additional details on the Note Purchase Agreement and Loan Agreement; Note 15. Capital Stock to our unaudited condensed consolidated financial statements included in this quarterly report for additional details on the 2025 Private Placement, the Stock Purchase Agreement and the Warrants; Note 12. Notes Payable to our unaudited condensed consolidated financial statements included in this quarterly report for additional details on the finance agreement with AFCO Premium Credit LLC related to insurance premium financing and the monthly payments of principal and interest related thereto; Note 13. Vendor Financing Arrangement to our unaudited condensed consolidated financial statements included in this quarterly report for additional details on the vendor finance agreement with IQVIA related to the master service agreement.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

The disclosure of our contractual obligations and commitments was reported in our Annual Report on Form 10-K for the year ended December 31, 2025. Except as previously disclosed in the Company’s subsequent filings with the SEC, including this Quarterly Report on Form 10-Q, there have not been any material changes from the contractual obligations and commitments previously disclosed in such report.

We are exposed to market risk related to changes in interest rates. We had cash, cash equivalents and investments of $136.4 million as of June 30, 2026, consisting of cash and U.S. Government money market funds. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because most of our investments are interest bearing. Our available for sale securities are subject to interest rate risk and will fall in value if market interest rates increase. Due to the short-term duration of most of our investment portfolio and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our portfolio.

We contract with CROs and contract manufacturers globally which may be denominated in foreign currencies. We may be subject to fluctuations in foreign currency rates in connection with these agreements. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. As of June 30, 2026, an immaterial amount of our total liabilities was denominated in currencies other than the functional currency.

As of June 30, 2026, we have borrowed $75.0 million under the Note Purchase Agreement. The Notes under the Note Purchase Agreement bear interest at a floating rate equal to the sum of (i) the greater of the Term SOFR (as defined in the Note Purchase Agreement) and 4.29%, and (ii) 3.71%, which is subject to an overall floor and cap. Changes in interest rates can cause interest charges to fluctuate under the Note Purchase Agreement. A 10% increase in current interest rates would have resulted in an immaterial increase in the amount of cash interest expense for the three and six months ended June 30, 2026 due to the overall interest rate floor and cap.

Evaluation of disclosure controls and procedures

Our management, with the participation of our President and Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial and accounting officer), evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934 (Exchange Act), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2026, our President and Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting during the three and six months ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

You should carefully review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth under Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the SEC on March 4, 2026.

• We will require additional financing to execute our operating plan, and there is substantial doubt about our ability to continue as a going concern.

As required under Accounting Standards Update 2014-15, Presentation of Financial Statements-Going Concern (ASC 205-40), we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year after the date the condensed consolidated financial statements are issued. We have incurred historical losses from operations and anticipate that operating losses may continue for the foreseeable future as we continue to incur operating costs to execute our strategic plan, including costs related to the commercialization of AVMAPKI FAKZYNJA CO-PACK and the research and development of our product candidates. Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern within one year after the issuance date of our condensed consolidated financial statements.

To address these conditions, we expect to finance our operations with our existing cash, cash equivalents and investments and through one or more potential sources of additional liquidity, including sufficient future net product revenues, potential future milestones and royalties received pursuant to the Secura APA, funding pursuant to our Note Purchase Agreement or other strategic financing opportunities that could include, but are not limited to, collaboration agreements, offerings of our equity or the incurrence of debt. However, given the risks associated with these potential strategic or financing opportunities, they are not deemed probable for purposes of the going concern assessment and do not alleviate the substantial doubt about our ability to continue as a going concern. There can be no assurance that we will be able to generate sufficient net product revenues or obtain additional capital on favorable terms or at all.

If we are unable to raise capital when needed, we may be forced to delay, reduce or eliminate our commercial efforts for AVMAPKI FAKZYNJA CO-PACK or our other research and development activities for our product candidates, or ultimately not be able to continue as a going concern.