ABSI 10-K & 10-Q changes, risk factors and insider trading

Our current business has a limitedshort operating history, whichhistory may make it difficult for you to evaluate the success of our business to date and predictto assess our future performance.viability.

Our revenue to date has been generated primarily from drug creation activities conducted through these partnered programs. In addition, a substantial portion of our expenses have been and will continue to be fixed, and we expect our expenses to increase as we advance our internally developed programs into and through clinical development. Accordingly, if we do not generate revenue as and when anticipated, our losses may be greater than expected and our operating results will suffer.

We have incurred significant losses since our inception. For the years ended December 31, 2024 and 2023, we incurred net losses of $103.1 million and $110.6 million, respectively. As of December 31, 2024, we had an accumulated deficit of $509.6 million. We expect that our operating expenses will continue to increase as we grow our business and advance our internally developed programs. Since our inception, we have financed our operations primarily from private placements of our equity securities, convertible promissory notes, the sale of common stock in our initial public offering (IPO), subsequent follow-on offering,offerings, the incurrence of other indebtedness and other financing activities, and to a lesser extent, revenue derived from our drug creation activities leveraging our Integrated Drug Creation platform. We have devoted substantially all of our resources to the development of our Integrated Drug Creation platform and commercialization of resulting drug creation capabilities, and the research and development of our internally developed programs. We will need to generate significant additional revenue to achieve and sustain profitability, and even if we achieve profitability, we cannot be sure that we will remain profitable for any substantial period of time. We may never be able to generate sufficient revenue to achieve or sustain profitability and our recent and historical financial and operating results should not be considered indicative of our future performance.

We will need to raise additional capital to fund our operationsoperations, pre-clinical and clinical development of our internally developed programs, and to improve our Integrated Drug Creation platform. If we are unable to raise additional capital on terms acceptable to us or at all, we may not be able to continue to develop our internally developed programs and/or compete successfully,successfully with our Integrated Drug Creation platform, which would harm our business, operations, and financial condition.

As of December 31, 2024,2025, we had $112.4$144.3 million in cash, cash equivalents and shortmarketable term investments.securities. We expect our current cash, cash equivalents and shortmarketable term investmentssecurities and anticipated cash flows from operations will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months. If our available resources and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements, including because of higher expenses than we anticipate related to internally developed programs or our investments in our Integrated Drug Creation platform or any other technology, lower demand from existing and potential partners for our Integrated Drug Creation platform, or the realization of other risks described in this "Risk Factors” section, we will be required to raise additional capital through issuances of equity or convertible debt securities, entrance into a credit facility or another form of third party funding, or seek other sources of financing. Such additional financing may not be available on terms acceptable to us or at all.

•acquire, license or invest in additional technologies or complementary businesses or assets; and

For the year ended December 31, 2024, substantially2025, all of our revenue was generated by technology development fees through performing drug creation activities for our partnered programs. To date, such fees have generally been payable upon both the inception of, and the demonstration of technical achievement of program milestones, under drug creation agreements with our partners. Our business model depends, in part, on the successful completion of the drug creation phase under these arrangements and on our subsequent entry into long-term license arrangements with our partners that entitle us to development, regulatory and commercial milestones and/or royalties with respect to product candidates generated through our Integrated Drug Creation platform, as well as product candidates discovered and/or manufactured in cell lines developed by us. We are still in the very early stages of implementing our drug creation model and, to date, no partner has entered into a license for clinical or commercial use of any intellectual property rights related to product candidates discovered thereunder or cell lines developed by us. If we are unable to maintain these partnerships (including if such partnerships are terminated prior to or upon completion of the drug creation phase) or we are otherwise unable to enter into commercial license agreements for our partnered programs, we will not receive any downstream payments, which may have a material and adverse effect on our business prospects. Additionally, any such license agreements that we may enter into may not be on terms that are favorable to us and may not result in meaningful revenues to us, or at all, or such license agreements may be terminated.

Technology development fees areFees generated by drug creation activities that we perform for our partners, the timing and nature of which are dictated by the timing of program commencement, which depends on various permissions, information and supplies provided by our partners and/or third party vendors as well as the pace of program progression and receipt of ongoing input from our partners. Our eligibility to receive milestone payments from our partnerships is generally subject to the negotiation of future arrangements, as described above. As a result, we currently do not generate significant recurring revenue and, until we are able to establish significant recurring revenue, if at all, we will be prone to regular and significant fluctuations in our revenue dependent on the timing of our entry into partnership agreements, our partners advancing such programs, and our partners achieving development milestones or commercial sales with respect to product candidates discovered and/or manufactured in cell lines developed by us.

Biologic drug development is inherently uncertain, and it is possible that our technology may not succeed in discovering appropriate moleculesproduct or producing cell lines.candidates. Even if we do succeed, it is possible that none of the product candidates created using our Integrated Drug Creation platform, if any, that are further developed by our partners will achieve development or regulatory milestones, including marketing approval, or become viable commercial technologies, on a timely basis or at all, which would harm our ability to generate revenue.

We use our Integrated Drug Creation platform both to advance our internally developed programs and to create product candidates for partners that are engaged in biologic drug discovery and development. In addition, we may enter into partnerships for the further development and commercialization of our internally developed programs during later stages of clinical development. While we currently receive payments for performing drug creation activities and successfully completing technical program deliverables and milestones for our partners with respect to our partnered programs, we anticipate that the vast majority of the economic value of the agreements that we enter into with our partners will be in the downstream payments that would be payable if certain milestones are met by our partners with respect to product candidates generated utilizing our Integrated Drug Creation platform and royalties on net sales if such product candidates are approved for marketing and successfully commercialized. As a result, our future growth is dependent on our ability to successfully advance our internally developed programs through to clinical development and eventual marketing approval and commercialization, and the ability of our partners to successfully develop and commercialize therapies based on product candidates generated using our Integrated Drug Creation platform. Risks relating to clinical development, including risks related to manufacturing and clinical supply, regulatory clearance, authorization or approval and commercialization apply to us both directly with respect to our internally developed programs and indirectly through the activities of our partners with respect to their programs that are generated pursuant to a drug creation agreement. Even if our Integrated Drug Creation platform is capable of identifying high quality product candidates, there can be no assurance that we or our partners will successfully develop, secure marketing approvals for and commercialize any product candidates discovered and developed under a partnered program. As a result, we may not realize the intended benefits of our internal research and development efforts or our partnerships.

We are also subject to industry-wide FDA and other regulatory risk. For example, the number of BLAs approved by the FDA varies significantly over time and if changes in applicable laws, regulations, or policy or other eventsevents, such as staffing changes or shortages at the FDA, lead to an extended reduction in the number of BLAs approved by the FDA or otherwise reduce the number of biologics in development, our industry would contract and our business would be materially harmed.

Preclinical and clinical development is uncertain. Our or our partners' preclinical and clinical product candidates may experience delays or may never advance to and/or through clinical trials, which would adversely affect our or our partners’ ability to obtain regulatory approvals or commercialize these product candidates on a timely basis or at all, which would have an adverse effect on our business.

We have limited experience as a company in conducting clinical trials, and to date we have not initiated any clinical trials for any product candidates. We cannot guarantee that any clinical trials will be initiated or conducted as planned or completed on schedule, if at all. We also cannot be sure that submission of an IND (or foreign equivalent) will result in the FDA or other regulatory authority, as applicable, allowing clinical trials to begin in a timely manner, if at all. Moreover, even if these trials begin, issues may arise that could cause us or a regulatory authority to suspend or terminate such clinical trials. A failure of one or more clinical trials can occur at any stage of testing, and our current and future clinical trials may not be successful. If our preclinical product candidates experience delays or never advance to clinical trials, it would have an adverse effect on our business.

In order to obtain FDA approval to market a new biological product, we or our partners must demonstrate proof of safety, purity and potency or efficacy in humans. To meet these requirements we or our partners will have to conduct adequate and well-controlled clinical trials. Before we or our partners can commence clinical trials for a product candidate, we or our partners must complete extensive preclinical testing and studies that support our planned INDs in the United States. All of our internally developed programs are in early clinical or preclinical development. We cannot be certain of the timely completion or outcome of our or our partners' preclinical testing and studies and cannot predict if the FDA will accept our or our partners' proposed clinical programs or if the outcome of our or our partners' preclinical testing and studies will ultimately support the further development of our product candidates. As a result, we cannot be sure that we or our partners will be able to submit INDs or similar applications for our product candidates on the timelines we expect, if at all, and we cannot be sure that submission of INDs or similar applications will result in the FDA or other regulatory authorities allowing clinical trials to begin. Further, changes and cuts in FDA staffing have been reported as resulting in delays in the FDA’s responsiveness or in its ability to review IND submissions, or applications, issue regulations or guidance, or implement or enforce regulatory requirements in a timely fashion.

•delays in reaching a consensus with regulatory agencies on study design; and

•the number of patients,participants, or amount of data, required to complete clinical trials may be larger than anticipated, patientparticipant enrollment in these clinical trials may be slower than anticipated or patients may drop out of clinical trials at a higher rate than anticipated;

From time to time, we may publish interim, “top-line,” or preliminary data from our clinical studies based on a preliminary analysis of then-available data. Preliminary or interim data from clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as patientparticipant enrollment continues, the duration of treatment increases and more patient data become available. For example, we may encounter unacceptable side effects for our product candidates as patient dosing progresses in our clinical trials and additional data become available. Our preliminary or interim results and related conclusions also are subject to change following a more comprehensive review of the data related to the particular study or trial. Preliminary or “top-line” data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Material adverse changes between preliminary, “top-line,” or interim data and final data could significantly harm our business prospects, financial condition and results of operations.

Even if our planned clinical trials are successful, we will need to conduct additional clinical trials, which may include registrational trials, trials in additional patient populations or under different treatment conditions, and trials using different manufacturing protocols, processes, materials or facilities or under different manufacturing conditions, before we are able to seek approvals for our product candidates from the FDA and regulatory authorities outside the United States to market and sell these product candidates. In addition, changes in regulatory policiespolicies, priorities or theinterpretations administrationby asregulatory a result of the 2024 U.S. presidential electionauthorities may result in delays in the regulatory review and approval processprocesses andor causecreate uncertainty regarding approval pathways. If we fail to meet theregulatory requirements necessary to support continued clinical development, if our clinical development activities for any of our product candidates are delayed or suspended, or if we failare unable to obtain or maintain regulatory approvals with an acceptable scope, our business, prospects, financial condition and results of operations willcould be harmed.adversely affected.

In addition, clinical trial sites may need to delay or pause patientparticipant enrollment or treatment in clinical trials as a result of public health crises, supply chain shortages or a variety of factors beyond our control. The extent and duration of such delays and disruptions, and the overall impact on the timing and conduct of our or our partners’ clinical trials, are uncertain. If we or our partners have difficulties enrolling a sufficient number of patients to conduct clinical trials as planned, we or our partners may need to delay or terminate ongoing or planned clinical trials, which would have an adverse effect on our business, prospects, financial condition, results of operations, and the market price of our common stock.

Total revenueRevenue was $2.8 million for the year ended December 31, 2025 compared to $4.5 million for the year ended December 31, 2024, compared to $5.7 million for the year ended December 31, 2023, a decrease of $1.2 million2024 due to the number of ongoing partnered programs and respective timing of project-based milestones achieved. We incurred a net loss of $115.2 million for the year ended December 31, 2025 compared to a net loss of $103.1 million for the year ended December 31, 2024,2024. comparedResearch toand adevelopment netexpenses lossincreased ofby $110.6$17.6 millionmillion, or 27%, for the year ended December 31, 2023. Research and development expenses increased by $15.8 million, or 33%, for the year ended December 31, 20242025 compared to the year ended December 31, 2023. The net loss for the year ended December 31, 2023 included a non-cash goodwill impairment charge in the amount of $21.3 million recorded during the quarter ended June 30, 2023.2024.

As of December 31, 2024,2025, we had an accumulated deficit of $509.6$624.8 million and cash and cash equivalents and short-termmarketable investmentssecurities totaling $112.4$144.3 million.

•develop ourABS-201 and other internally developed programs across diverse indications, including the advancement of these product candidates through preclinical and clinical development;

•continue to engage in discovery, research and development efforts and scale our activities tothrough meetour existing and potential demand from both new and existing partnerspartnerships;

•attract, retain and motivate highly qualified personnel.personnel to join Absci in our mission.

Our revenue currently consists primarily of fees earned from our partners in conjunction with drug creation agreements utilizing our Integrated Drug Creation platform, which are presented as partner program revenue in our results of operations. These fees are earned and paid at various points throughout the terms of these agreements including upfront, upon the achievement of specified project-based milestones, and throughout the program. Future revenue may also be earned from our partners’ achievements of certain clinical, regulatory, and commercial milestones and through royalties as a percentage of net product sales.

We expect that our revenue will fluctuate from period to period due to, for example, the timing of executing additional partnerships, the contractual structure of future partnerships, the measurement of progress towards completion of each program, the uncertainty of the timing of milestone achievements and dependence on our partners’ program-related decisions. We expect revenue to increase over time as we grant licenses to our partners for the clinical and commercial use of product candidates, and as the partnered product candidates advance into and through clinical development and commercialization.

Research and development expenses include the personnel-related costs (comprised of salaries, benefits and share-based compensation), contract research services, contract manufacturing, consulting fees, laboratory supplies and facilities, and certain technology costs. These expenses are exclusive of depreciation and amortization. Research and development activities consist of continued development of our Integrated Drug Creation platform, internally developed programs, and partnered programs. We derive improvements to our Integrated Drug Creation platform from each type of activity. Research and development efforts apply to our Integrated Drug Creation platform broadly, as well as and across programs.

We expect research and development expenses to increase in absolute dollars over the long term as we develop and advance our internally developed programs,programs through pre-clinical and clinical activities, enter into additional partnerships, and continue to invest in technology enhancements.

Selling, general, and administrative expenses include personnel-related costs (comprised of salaries, benefits and share-based compensation) for executive, business development, legal, finance, human resources, information technology and other administrative functions. Business development expenses include costs associated with attending conferences and other promotion efforts of our Integrated Drug Creation platform. General and administrative expenses include certain professional service expensesexpenses, such as,as external legal, accounting, and other consultants, as well as insurance, certain technology costscosts, and allocated facility costs. These expenses are exclusive of depreciation and amortization.

We expect depreciation expense to fluctuate in future periods in line with continued growth and compute demands in absolute dollars as we purchase additional equipment.

In addition to the development of our internally developed programs, we began entering into drug creation collaborations for drug creation programs and co-development partnerships with third parties in 2018. We are still early in the adoption phase of our drug creation collaboration business model, and, as of MayAugust 7,11, 2026, no partner has entered into a license for clinical or commercial use of any intellectual property rights related to a product candidate or cell lines.

We have incurred significant losses since our inception. For the threesix months ended MarchJune 31,30, 2026 and 2025, we incurred net losses of $29.6$62.8 million and $26.3$56.9 million, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $654.4$687.6 million. We expect that our operating expenses will continue to increase as we grow our business and advance our internally developed programs.

We will need to raise additional capital to fund our operations, pre-clinicalpreclinical and clinical development of our internally developed programs, and to improveexpand the capabilities of our Integrated Drug Creation platform. If we are unable to raise additional capital on terms acceptable to us or at all, we may not be able to continue to develop our internally developed programs and/or compete successfully with our Integrated Drug Creation platform, which would harm our business, operations, and financial condition.

As of MarchJune 31,30, 2026, we had $125.7$201.1 million in cash, cash equivalents and marketable securities. We expect our current cash, cash equivalents and marketable securities and anticipated cash flows from operations will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months. If our available resources and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements, including because of higher expenses than we anticipate related to internally developed programs or our investments in our Integrated Drug Creation platform or any other technology, lower demand from existing and potential partners for our Integrated Drug Creation platform, or the realization of other risks described in this "Risk Factors” section, we will be required to raise additional capital through issuances of equity or convertible debt securities, entrance into a credit facility or another form of third party funding, or seek other sources of financing. Such additional financing may not be available on terms acceptable to us or at all.

For the threesix months ended MarchJune 31,30, 2026, all of our revenue was generated by performing drug creation activities for our partnered programs. To date, such fees have generally been payable upon both the inception of, and the demonstration of technical achievement of program milestones, under drug creation agreements with our partners. Our business model depends, in part, on the successful completion of the drug creation phase under these arrangements and on our subsequent entry into long-term license arrangements with our partners that entitle us to development, regulatory and commercial milestones and/or royalties with respect to product candidates generated through our Integrated Drug Creation platform, as well as product candidates discovered and/or manufactured in cell lines developed by us. We are still in the very early stages of implementing our drug creation model and, to date, no partner has entered into a license for clinical or commercial use of any intellectual property rights related to product candidates discovered thereunder or cell lines developed by us. If we are unable to maintain these partnerships (including if such partnerships are terminated prior to or upon completion of the drug creation phase) or we are otherwise unable to enter into commercial license agreements for our partnered programs, we will not receive any downstream payments, which may have a material and adverse effect on our business prospects. Additionally, any such license agreements that we may enter into may not be on terms that are favorable to us and may not result in meaningful revenues to us, or at all, or such license agreements may be terminated.

FeesRevenue generated by drug creation activities that we perform forfrom our partners,partnered theprograms timingdepend and nature of which are dictated byon the timing of programeach program's commencement, which dependsis on various permissions, information and supplies providedcontrolled by our partnerspartners. Program progression and/or thirdrelated partyrevenues vendorsare asalso welldependent ason the pace of program progressiondevelopment and receiptthe timing of ongoingpartner inputfeedback fromand our partners.input. Our eligibility to receive milestone payments from our partnerships is generally subject to the negotiation of future arrangements, as described above. As a result, we currently do not generate significant recurring revenue and, until we are able to establish significant recurring revenue, if at all, we will be prone to regular and significant fluctuations in our revenue dependent on the timing of our entry into partnership agreements, our partners advancing such programs, and our partners achieving development milestones or commercial sales with respect to product candidates discovered and/or manufactured in cell lines developed by us.

Biologic drug development is inherently uncertain, and it is possible that our technology may not succeed in discovering appropriate product candidates. Even if we do succeed, it is possible that none of the product candidates created using our Integrated Drug Creation platform will achieve development or regulatory milestones, including marketing approval, or become viable commercial technologies,products, on a timely basis or at all, which would harm our ability to generate revenue.

Positive results from early preclinical studies or preliminary results from clinical trialsdata of our product candidates aremay not necessarily predictivepredict oflater-stage the results of later preclinical studiesresults, and any futureinterim clinical trialsdata ofmay ourchange productas candidates.additional data become available. If we cannot replicate the positive results from our earlier preclinical studies of our product candidates in our later preclinical studies, clinical trials and future clinical trials, we may be unable to successfully develop, obtain regulatory approval for and commercialize our product candidates.

We may from time to time disclose results from preclinical testing or preliminary data or interim results from clinical trials of our product candidates. Positive results from early preclinical studies, exploratory analyses or preliminary results from clinical trials of our product candidates may not be predictive of the results of later preclinical studies or future clinical trials. In addition, results in one indication may not be predictive of results to be expected for the same or a similar product candidate in another indication. Many companies in the biopharmaceutical industry have experienced significant setbacks in later-stage clinical trials after achieving positive results in early-stage development, and we cannot be certain that we will not face similar setbacks. The results of preclinical studies and early-stage clinical trials may not be replicated in later preclinical studies or in larger or more advanced clinical trials conducted under different protocols or conditions.

Preclinical studies are conducted in laboratory models and animals and may not accurately predict the safety, tolerability, pharmacokinetics, pharmacodynamicspharmacodynamics, potency or efficacy of a product candidate in humans. Similarly, early clinical trials are typically conducted in small patient populations and over relatively short durations, and therefore may not be indicative of results obtained in larger or longer-term trials. Differences in trial design, eligibility criteria, patient populations, endpoints, dosing regimens, statistical analyses, manufacturing processes or other factors may also lead to results in later trials that differ materially from earlier findings.

In addition, preliminarypreliminary, “top-line”, or interim data from our clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as additional patient data become available and are subject to further verification and analysis. PreliminaryFor example, we may encounter unacceptable side effects for our product candidates as patient dosing progresses in our clinical trials and additional data become available. Our preliminary, “top-line”, and interim results and related conclusions also remain subject to audit and verification procedures and are subject to change following a more comprehensive review of the data related to the particular study or trial. Preliminary, “top-line”, or interim results that we report from time to time may not reflect the final results of the trial, and final results may differ materially from the preliminary data we previously reported. As a result, preliminary, “top-line”, and interim data should be viewed with caution until the final data are available. We may also report results based on exploratory endpoints, biomarker data or other early indicators of activity that may not ultimately translate into clinically meaningful outcomes or regulatory approval. Regulatory authorities may also interpret the data differently than we do and may require additional studies before approving any of our product candidates.

In addition,addition to the risks associated with interpreting preclinical and clinical data, our discovery efforts rely in part on proprietary technologies, computational approaches and AI-enabled platforms to identify and design potential product candidates. While we believe these technologies may help accelerate aspects of the drug discovery process, the application of AI and computational methods to drug discovery is still evolving and has not yet consistently resulted in the successful development and regulatory approval of new therapeutic products. Product candidates identified or optimized using these technologies may not demonstrate the expected safety, tolerability, pharmacokinetic properties or therapeutic activity in preclinical studies or clinical trials. Even if our platform generates promising product candidates, we may not be able to successfully advance those candidates through clinical development, obtain regulatory approval or achieve commercial success. As a result, our platform technologies may not result in the discovery or development of commercially viable product candidates, which could materially adversely affect our business, financial condition, results of operations and prospects.

We are veryin early in our development of product candidatescandidates, including our Phase 1/2a clinical trial of ABS-201. With respect to ABS-201 clinical development, we have dosed planned SAD cohorts and continue to dose MAD cohorts in our clinical trials of ABS-201. Prior to these clinical trials, we have focused our efforts to date on platform development, discovery, research, preclinical and early clinical development. We have only recently dosed the first participants in our Phase 1 clinical trials of ABS-101 and ABS-201, and all of ourOur other ongoing programs are stillremain in the research or preclinical stage of development. Thus, we have limited experience as a company in conducting clinical trials.

In order to obtain FDA approval to market a new biological product, we or our partners must demonstrate proof of safety, purity and potency or efficacy in humans. To meet these requirementsrequirements, we or our partners will have to conduct adequate and well-controlled clinical trials. Before we or our partners can commence clinical trials for a product candidate, we or our partners must complete extensive preclinical testing and studies that support our planned INDs in the United States. All of our internally developed programs are in early clinical or preclinical development. We cannot be certain of the timely completion or outcome of our or our partners' preclinical testing and studies and cannot predict if the FDA will accept our or our partners' proposed clinical programs or if the outcome of our or our partners' preclinical testing and studies will ultimately support the further development of our product candidates. As a result, we cannot be sure that we or our partners will be able to submit INDs or similar applications for our product candidates on the timelines we expect, if at all, and we cannot be sure that submission of INDs or similar applications will result in the FDA or other regulatory authorities allowing clinical trials to begin. Further, changes and cuts in FDA staffing have been reported as resulting in delays in the FDA’s responsiveness or in its ability to review IND submissions, or applications, issue regulations or guidance, or implement or enforce regulatory requirements in a timely fashion.

Clinical trials conducted in Australia may involve additional operational and logistical challenges, including coordinating activities across international sites, managing clinical trial supply chains, and complying with foreign regulatory requirements. In addition, geopolitical events, public health emergencies, travel restrictions, or other factors could disrupt trial operations, participant enrollment or monitoring activities. Any such delays or disruptions could increase the cost of our clinical trials and delay the development of our product candidates.

•ABS-201 in AGAPHL: Existing FDA-approved treatments for AGAPHL include oral minoxidil, oral finasteride, oral dutasteride, and topical minoxidil, which are currently established as standard of care despite their limitations. We are aware of several drug candidates that are in clinical development for AGAPHL including Hope Medicine’s HMI-115, Veradermics’ VDPHL01, Pelage Pharmaceuticals’ PP405, and Cosmo Pharmaceuticals’ Clascoterone.

Disruptions to the operations of the FDA, the SEC or other government agencies, including due to funding shortages, leadership changes, government shutdowns, policy changes or staffing reductions, could delay regulatory reviews, approvals or other governmental actions on which our business depends, which could adversely affect our business.

The ability of the FDA or comparable foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain leadership and key personnel and accept the payment of user fees, and statutory, regulatory and policy changes that may otherwise affect the FDA’s ability to perform routine functions. In addition, government funding of the SEC and other government agencies or comparable foreign regulatory authorities on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

•any delay in filing or clearance of an IND (or foreign equivalent) or BLA (or foreign equivalent) for our product candidates and any adverse development or perceived adverse development with respect to the FDA’s review of that IND or BLA;

As of MarchJune 31,30, 2026 the aggregate number of shares of our common stock that may be issued pursuant to our 2021 Plan, 2021 ESPP, and 2023 Inducement Plan are 7,681,1938,805,878 shares, 4,511,265 shares, and 1,074,200798,000 shares, respectively. The number of shares of common stock that may be issued pursuant to the 2021 Plan does not include outstanding equity awards. The number of shares of common stock reserved for issuance under the 2021 Plan and 2021 ESPP are automatically increased on each January 1 by 5% and 1%, respectively, of the total number of shares of common stock outstanding on December 31 of the preceding calendar year or a lesser number of shares determined by our board of directors. Unless our board of directors elects not to increase the number of shares available for future issuance each year, our stockholders will experience additional dilution, which could cause our share price to fall.

As of AprilJuly 30,31, 2026, our executive officers, directors, and 5% stockholders beneficially owned over 41%29% of our common stock. Therefore, these stockholders have the ability to influence us through this ownership position. These stockholders may be able to determine all matters requiring stockholder approval. For example, these stockholders may be able to control elections of directors, amendments of our organizational documents or approval of any merger, sale of assets or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders.

Sales of a substantial number of shares of our common stock in the public market, including any time following the expiration of legal restrictions on resale or the perception in the market that the holders of a large number of shares of our common stock intend to sell shares, could reduce the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities. In August 2025, we filed a registration statement on Form S-3 with respect to potential future sales of our securities, which was declared effective in August 2025. This registration statement covers (i) an aggregate of $100.0 million in shares of common stock that we may issue and sell pursuant to the Sales Agreement, of which we have sold 4,590,101 shares of common stock for $16.0 million in gross proceeds and $84.0 million is available for future sale as of June 30, 2026, and (ii) an additional $300.0 million in common stock, preferred stock, debt securities, warrants or units, of which we have issued and sold 13,495,277 shares of common stock for net proceeds of approximately $93.6 million. We have also filed registration statements on Form S-8 to register our common stock issuable pursuant to our equity incentive plans. Shares registered under the registration statements on Form S-8 will be available for sale in the public market subject to vesting arrangements and exercise of options. Additionally, certain holders of our common stock are entitled to rights with respect to registration of such shares under the Securities Act pursuant to a registration rights agreement between such holders and us. If such holders, by exercising their registration rights, sell a large number of shares, they could adversely affect the market price for our common stock.

Our results of operations could be adversely affected by general conditions in the global economy and financial markets. A severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our technologies and our ability to raise additional capital when needed on favorable terms, if at all. Recently, the rate of inflation has increased throughout the U.S. economy. Inflation may adversely affect us by increasing the costs associated with performing research and development on internal research initiatives and partnered programs. We may experience significant increases in the prices of labor, consumables, and other costs of doing business. In an inflationary environment, such cost increases may outpace our expectations, causing us to use cash faster than forecasted. A weak or declining economy may also strain our partners, possibly resulting in supply disruption, or cause delays in their payments to us. In addition,particular, the U.S. hasin recentlyJuly 2026 imposed blanketbaseline tariffs ofgenerally atranging leastfrom 10% to 12.5% on virtuallya allsubstantial portion of imports to the U.S. and significantly higher tariffs applicable to imports from many countries, which have resulted in other countries imposing additional tariffs on imports from theThe U.S. In addition, the current U.S. presidential administration has publishedalso specialimposed higher tariffs on certain imported pharmaceutical products, which the administration has scheduled to take effect in mid-2026 and could lead to corresponding punitive actions by the countries with which the U.S. trades.products. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past, such as in the case of the closure and subsequent placement into receivership with the Federal Deposit Insurance Corporation (FDIC) of Silicon Valley Bank in March 2023, and may in the future lead to market-wide liquidity problems. In those cases, borrowers under credit agreements, letters of credit and certain other financial instruments with any financial institution that is placed into receivership by the FDIC may be unable to access undrawn amounts thereunder. If any of our customers, suppliers or other parties with whom we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected. Additionally, there is no guarantee that the U.S. Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion. Although we assess our banking and other business relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial institutions with which we have credit agreements or arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry or the supervision thereof.

In the ordinary course of our business, we generate and store confidential and sensitive data, including research data, intellectual property and proprietary business information owned or controlled by ourselves or our employees, partners and other third parties upon which we rely. We manage and maintain our applications and data utilizing a combination of on-site systems and cloud-based data centers. We utilize external security and infrastructure vendors to manage parts of our data centers. These applications and data encompass a wide variety of business-critical information, including research and development information, commercial information and business and financial information. We face a number of risks relative to protecting this critical information, including loss of access risk, inappropriate use or disclosure, accidental exposure, unauthorized access, inappropriate modification, wrongful conduct by employees or vendors, remediation costs, lost revenues, damages to our competitiveness, stock price and long-term stockholder value, and the risk of our being unable to adequately monitor and audit and modify our controls over our critical information. This risk extends to the third party vendors, subcontractors and partners we use to manage this sensitive data or otherwise process it on our behalf. Further, to the extent our employees may work remotely, additional risks may arise depending on the networking and security put into place by the employees and where they choose to work, including at home, while in transit or in other public locations. The secure processing, storage, maintenance and transmission of this critical information are vital to our operations and business strategy, and we devote significant resources to protecting such information.

Our lead product candidate, ABS-201, is an anti-prolactin receptor (PRLR) antibody engineered with an extended half-life to support a patient-friendly dosing interval. We believe PRLR is an underexplored target with the potential to provide durable, disease-modifying effects. If successfully developed, ABS-201 could establish a new treatment category in indications where current options remain inadequate. ABS-201 is being developed for two indications, androgenetic alopecia (AGA) or pattern hair loss (PHL) and endometriosis, each with large affected populations and significant unmet need.

ABS-201 for the Treatment of AGAPHL

ABS-201 is being evaluated in the HEADLINE™ Phase 1/2a clinical trial (NCT07317544) for AGA,PHL, a condition affecting approximately 80 million people in the United States. Our own patient and clinician surveys, as well as those of other parties, show broad dissatisfaction with current standard of care, which is limited by variable efficacy, poor compliance, and a lack of durable approaches. No approved therapy provides durable hair regrowth. This trial is designed to evaluate the safety, tolerability and preliminary efficacy of ABS-201 in healthy volunteers with and without AGA.PHL. The trial is a randomized, double-blind, placebo-controlled study expected to enroll up to 227 male and female healthy volunteers at multiple sites in Australia.

AsIn of May 7,June 2026, we haveannounced dosedpositive interim Phase 1 data from the HEADLINE trial, which included interim blinded data indicating that the study drug appears well tolerated, with favorable safety data across all four planned healthy volunteerblinded single ascending dose (SAD) cohortscohorts. withAdditionally, the estimated half-life of at least 65 days supports potential for ABS-201's targeted dosing interval of two or three injections over a favorablesix-month safety profile to date, and we have initiated dosing of the first multiple ascending dose (MAD) cohort of AGA participants. We currently expect to initiate two additional MAD cohorts in the second quarter of 2026, each planned to enroll approximately 49 healthy volunteers with AGA.period. Interim proof-of-concept data, including data on exploratory efficacy endpoints, are expected in the second half of 2026 and full proof-of-concept data in early 2027.

Published literature suggests that PRL and PRLR may play a role in the development of endometrial lesions and associated pain in patients with endometriosis. As such, inhibition of PRLR signaling may influence pathways associated with lesion development and pain perception. As a result, ABS-201 may have the potential to affect both lesion growth and pain-related pathways. We intend to evaluate, and if possible, rely on the data generated from the HEADLINE trial, together with other available information, as part of our assessment of potential next steps for the ABS-201 program. We believe that thisthe studyHEADLINE willtrial could provide supporting first-in-human safety, tolerability, and PK data tothat supportmay ainform the planned Phase 2 clinical trial evaluating ABS-201 in patients with endometriosis. Based on these and other considerations, we anticipate initiating a Phase 2 clinical trial evaluating ABS-201 in endometriosis in the fourth quarter of 2026, subject to review of available data, regulatory considerations and other factors, with potential proof-of-concept data in the second half of 2027.

We are advancing early-stage oncology and immunology and inflammation programs. We continue to use our platform to develop additional early-stage programs addressing challenging targets in various indications with areas of significant unmet medical need. We plan to provide more information about these additional programs selectively and to seek partnerships or out-licenses for select programs as they advance.

Revenue was $0.2$0.3 million and $0.5 million for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to $1.2$0.6 million and $1.8 million for the three and six months ended MarchJune 31,30, 2025.2025, respectively. The decrease in revenue is due to a combination of the numbertiming of achieving project-based milestones and the mix of ongoing partneredprogram programsactivity andunder respectiveour timingdrug ofcreation project-based milestones achieved.agreements. We incurred a net loss of $29.6$33.2 million and $62.8 million for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to a net loss of $26.3$30.6 million and $56.9 million for the three and six months ended MarchJune 31,30, 2025.2025, respectively. Research and development expenses increased by $2.9$5.1 million, or 18%,14%, for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025.

As of MarchJune 31,30, 2026, we had an accumulated deficit of $654.4$687.6 million and cash equivalents and marketable securities totaling $125.7$201.1 million.

In January 2025, we entered into a strategic collaboration with Advanced Micro Devices, Inc. (AMD) with a goal to optimize the performance of AMD InstinctTM accelerators and ROCmTM software to support our AI drug creation, including our de novo antibody design models. Additionally, AMD invested $20.0 million through the purchase of 5,714,285 shares of our common stock in a private investment in public equity (PIPE) at a premium over the market price.

We expect research and development expenses to continue to increase in absolute dollars over the long term as we developadvance the HEADLINE trial, prepare for and conduct the planned Phase 2 trial of ABS-201 in endometriosis, advance our other internally developed programs through pre-clinical and clinical activities, enter into additional partnerships,programs, and continue to invest in technologyour enhancements.Integrated Drug Creation platform.

As we expand our clinical development and regulatory operations andoperations, require furtheradditional administrative support, and also prepare for athe potential future commercial launch of a product candidate, we expect personnel-related costs may increase in absolute dollars andwhile we expect to continuecontinuing to actively manage other general and administrative expenses.

We have a comprehensive intellectual property portfolio directed towards the many aspects of our Integrated Drug Creation platform, including those related to our internally developed programs, product candidatescandidates, proprietary cell lines and protein expression technologies, proprietary screening assays, antibody discovery methods, and generative AI models. We regularly file patent applications to protect innovations arising from our research and development. We also hold trademarks and trademark applications in the United States and foreign jurisdictions. Costs to secure and defend our intellectual property are expensed as incurred and are classified as selling, general and administrative expenses.

Interest expense, net,expense consists primarily of interest related to borrowings under our term debt and financed laboratory equipment.

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

Partner program revenue decreased by $1.0$0.3 million, or 82%,46% for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 and decreased by $1.2 million, or 70%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, driven by a combination of the timing of achieving project-based milestones and the mix of ongoing program activity under our drug creation agreements. During the three months ended March 31, 2026, two partners represented 100% of total partner program revenue. During the three months ended March 31, 2025, two partners represented approximately 95% of total partner program revenue.

The following tables summarize our operating expenses for the three and six months ended MarchJune 31,30, 2026 and 2025 (In thousands, except for percentages):

Research and development expenses increased by $2.9$2.2 million, or 18%,11%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to ana net increase of $1.6$1.5 million in direct costs associated with external preclinical and clinical developmentdevelopment, ofprimarily driven by an increase from ABS-201, an increase of $2.1$0.8 million of other drug creation and platform costs, and a $0.2$0.5 million increase in other lab costs. This increase was offset by a decrease of $0.9$0.6 million of personnel costs and stock-based compensation.

Selling, general, and administrative expenses decreasedincreased by $0.4$0.6 million, or 4%,7%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The decreaseincrease was primarily attributable to aan decreaseincrease of $0.3$0.4 million in personnel and stock-based compensation costs.

Depreciation and amortization expense decreased by $0.3 million, or 11%,10%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 and decreased by $0.6 million, or 11%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to disposals of lab equipment.

Other income, net, was $1.3$2.3 million for the threesix months ended MarchJune 31,30, 2026, compared to $1.5$2.5 million for the threesix months ended MarchJune 31,30, 2025, representing a decrease of $0.2 million, or 12%,8%, primarily attributable to realized and unrealized gains and losses on foreign currency transactions and a decrease in investment income from cash, cash equivalents and marketable securities.

As of MarchJune 31,30, 2026, we had $125.7$201.1 million of cash, cash equivalents and marketable securities.

We have incurred net operating losses since inception. As of MarchJune 31,30, 2026, our accumulated deficit was $654.4$687.6 million. To date, we have funded operations through issuances and sales of equity securities and debt, in addition to revenue generated from our drug creation agreements. We believe that our cash, cash equivalents and marketable securities will be sufficient to meet our operating expenses, working capital and capital expenditure needs over at least the next 12 months following the date of this filing.

In August 2025, we entered into a Sales Agreement with TD Securities (USA) LLC, as Sales Agent (the “Sales Agreement”), with respect to an “at the market offering” program under which we may offer and sell, from time to time, shares of our common stock having an aggregate offering price of up to $100.0 million through the Sales Agent. We have agreed to pay the Sales Agent a commission of up to 3.0% of the gross proceeds of any shares sold under the Sales Agreement. Upon execution, the Sales Agreement terminated and superseded the prior sales agreement entered into in June 2023 in its entirety. During the threesix months ended MarchJune 31,30, 2026, we issued 2,871,2183,662,246 shares and received $8.0$12.5 million in net proceeds from the sale of securitiescommon stock pursuant to the Sales Agreement.

OnIn JulyJune 28, 2025,2026, we sold an aggregate of 16,670,00013,495,277 shares of our common stock pursuant to an underwriting agreement with Morgan Stanley & Co.Jefferies LLC, J.P. Morgan Securities LLC, Jefferies LLC and TD Securities (USUSA) LLCLLC, and Guggenheim Securities LLC, at a public offering price of $3.00$7.41 per share, before underwriting discounts and commissions.share. We received total net proceeds from the offering of $46.7approximately $93.6 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

In the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities was $26.3$53.9 million and consisted primarily of a net loss of $29.6$62.8 million adjusted for non-cash items, including depreciation and amortization expense of $2.7$5.4 million, stock-based compensation expense of $4.4$9.6 million, and a net increase in operating assets and liabilities in the amount of $3.1$4.9 million.

In the threesix months ended MarchJune 31,30, 2025, net cash used in operating activities was $21.8$38.7 million and consisted primarily of a net loss of $26.3$56.9 million adjusted for non-cash items, including depreciation and amortization expense of $3.1$6.1 million, stock-based compensation expense of $4.9$9.7 million, and a net increasedecrease in operating assets and liabilities in the amount of $2.8$4.0 million.

In the threesix months ended MarchJune 31,30, 2025,2026, net cash provided by (used in) investing activities was $15.0$31.4 million primarily from maturities of marketable securities of $54.0 million, partially offset by purchases of marketable securities of $40.1 million, partially offset by maturities of marketable securities of $25.0$22.6 million.

In the threesix months ended MarchJune 31,30, 2026, net cash provided by financing activities was $7.6$110.3 million. The net cash provided resulted primarily from aggregate proceeds of $8.0$93.6 million from the issuance of stock in our June public offering, $12.5 million from the issuance of common stock pursuant to the Sales Agreement, and proceeds of $0.1$4.9 million from the issuance of common stock through employee equity plans.

In the threesix months ended MarchJune 31,30, 2025, net cash provided by financing activities was $42.8$41.8 million. The net cash provided resulted primarily from aggregate proceeds of $41.7 million from the issuance of common stock pursuant to the PIPE with AMD and pursuant to the Prior Sales Agreement, and proceeds of $1.9$2.0 million from the issuance of common stock through employee equity plans, partially offset by principal payments of $0.8$1.9 million made for financed equipment.

There were no material changes in our critical accounting policies and estimates during the threesix months ended MarchJune 31,30, 2026.

In addition, we are also a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act and have elected to take advantage of certain of the scaled back disclosure requirements available to smaller reporting companiescompanies, suchincluding asproviding avoiding the extensivereduced narrative disclosure required of other reporting companies,disclosure, particularly in the description of executive compensation. We will remain a smaller reporting company until (a) the last day of the fiscal year in which we have total annual gross revenue of less than $100 million and the market value of our common stock held by non-affiliates exceeds $700.0 million as of the prior June 30th, or (b) the last day of the fiscal year in which we have total annual gross revenue exceeding $100 million and the market value of our common stock held by non-affiliates exceeds $250.0 million. In August 2025, the SEC released a Compliance and Disclosure Interpretation clarifying the filer status transition for registrants that lose their smaller reporting company status based on the revenue tests. Due to this interpretation, we will remain a non-accelerated filer for filings due in the fiscal year immediately following the loss of smaller reporting company status, allowing us to retain the exception from the auditor attestation requirement on internal control over financial reporting. However, the interpretation specifies that we will lose eligibility for all other smaller reporting company accommodations beginning with the Form 10-Q for the first fiscal quarter of the year after losing smaller reporting company status.

In addition, the loss of emerging growth company status will not impact our “non-accelerated filer” status, which also provides an exemption from the auditor attestation requirement with respect to internal control over financial reporting.