COYA 10-K & 10-Q changes, risk factors and insider trading
Coya Therapeutics, Inc. · Nasdaq · Pharmaceutical Preparations · CIK 1835022 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Disruptions at the FDA and other government agencies caused by shutdowns or funding shortages could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.”
Largest changes
“In addition, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. On September 9, 2021, the Biden Administration published a wide-ranging list of policy proposals, most of which would need to be carried out by Congress, to reduce drug prices and drug payment. …”see in full comparison
Global events, including political instability, natural disasters, events of terrorism andsee in full comparisonwars, including the war between Ukraine and Russia, and the corresponding tensions created from such conflict between Russia, the United States and countries in Europe as well as other countries such as China; and the conflict between Hamas and Israelwars may negatively impact our business.
“Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA. The Supreme Court upheld the ACA in the main challenge to the constitutionality of the law in 2012. Specifically, the Supreme Court held that the individual mandate and corresponding penalty was constitutional because it would be considered a tax by the federal government. The Supreme Court also upheld federal subsidies for purchasers of insurance through federally facilitated exchanges in a decision released in June 2015. …”see in full comparison
“Disruptions at the FDA and other government agencies caused by shutdowns or funding shortages could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.”see in full comparison
The global credit and financial markets are currently, and have from time to time experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict,see in full comparisonincluding the ongoing conflict between Russia and Ukraine and Hamas and Israel,terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, financial institutions, manufacturers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and on budget.
“As of December 31, 2025, our cash and cash equivalents were $46.8 million. We expect our existing cash and cash equivalents, together with the $11.1 million in gross proceeds from the January 2026 Offering (defined below), to enable us to fund our operating expenses and capital expenditure requirements into the second half of 2027. This estimate is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. …”see in full comparison
Full comparison: every changed paragraph (23)
Global events, including political instability, natural disasters, events of terrorism and wars, including the war between Ukraine and Russia, and the corresponding tensions created from such conflict between Russia, the United States and countries in Europe as well as other countries such as China; and the conflict between Hamas and Israelwars may negatively impact our business.
As of December 31, 2025, our cash and cash equivalents were $46.8 million. We expect our existing cash and cash equivalents, together with the $11.1 million in gross proceeds from the January 2026 Offering (defined below), to enable us to fund our operating expenses and capital expenditure requirements into the second half of 2027. This estimate is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more than currently expected because of circumstances beyond our control. Because the length of time and activities associated with successful development of our product candidates is highly uncertain, we are unable to estimate the actual funds we will require for development and any marketing and commercialization activities.
We believe that our existing cash, together with interest thereon, will be sufficient to fund our operations into 2026. We intend to use our existing cash to, among other uses, advance our pipeline product candidates through preclinical and clinical development. Developing pharmaceutical products and conducting preclinical studies and clinical trials is expensive. We will need to raise significant additional capital to do so. Market volatility resulting from of the ongoing conflicts between Russia and Ukraine, and Hamas and Israel,conflicts, the effect of tariffs and/or any resulting trade wars, generally rising prices, increasing interest rates, or other factors could adversely impact our ability to access capital as and when needed. We have no commitments for any additional financing, and will likely be required to raise such financing through the sale of additional equity securities or debt, which, in the case of equity securities, may occur at prices lower than the price of our common stock and warrants. These financings could result in substantial dilution to the holders of our common stock and warrants or require contractual or other restrictions on our operations or on alternatives that may be available to us. If we issue debt, we may need to dedicate a substantial portion of our operating cash flow to paying principal and interest on such debt and we may need to comply with operating restrictions, such as limitations on incurring additional debt, which could impair our ability to acquire, sell or license intellectual property rights which could impede our ability to conduct our business. Furthermore, the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common stock to decline. If we raise additional funds through licensing or collaboration arrangements with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us.
The global credit and financial markets are currently, and have from time to time experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the ongoing conflict between Russia and Ukraine and Hamas and Israel, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, financial institutions, manufacturers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and on budget.
our ability to recruit and enroll sufficient patients for our clinical trials in a timely manner or at all;
The results of preclinical studies may not be predictive of the results of clinical trials, and the results of any early-stage clinical trials we commence may not be predictive of the results of the later-stage clinical trials. For example, preclinical models do not adequately represent the clinical setting, and thus cannot predict clinical activity nor all potential risks, and may not provide adequate guidance as to appropriate dose or administration regimen of a given therapy. In addition, initial success in clinical trials may not be indicative of results obtained when such trials are completed. Interim data from clinical trials that we may conduct are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary 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 announced. Negative differences between preliminary or interim data and final data could materially adversely affect the prospects of any product candidate that is impacted by such data updates.
Preliminary 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 announced. Negative differences between preliminary or interim data and final data could materially adversely affect the prospects of any product candidate that is impacted by such data updates.
delays or difficulties resulting from the COVID-19 pandemic;
Disruptions at the FDA and other government agencies caused by shutdowns or funding shortages could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could negatively impact our business.
Disruptions at the FDA and other agencies may slow the time necessary for new products to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the United States government has shut down several times – including the most recent shutdown, which began October 1, 2025 and ended November 12, 2025 and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
In the United States and other jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes to the healthcare system that could affect our future results of operations. In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. ForThese example, in March 2010,include the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) was enacted,, which substantially changed the way healthcare is financed by both governmental and private insurers. Among the provisions of the ACA, those of greatest importance to the pharmaceutical and biotechnology industries include the following:
an annual, non-deductible fee payable by any entity that manufactures or imports certain branded prescription drugs and biologic agents (other than those designated as orphan drugs), which is apportioned among these entities according to their market share in certain government healthcare programs;
a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;
new requirements to report certain financial arrangements with physicians and teaching hospitals, including reporting “transfers of value” made or distributed to prescribers and other healthcare providers and reporting investment interests held by physicians and their immediate family members;
an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;
a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs and biologics that are inhaled, infused, instilled, implanted, or injected;
extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
expansion of eligibility criteria for Medicaid programs thereby potentially increasing a manufacturer’s Medicaid rebate liability;
a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;
establishment of a Center for Medicare Innovation at the Centers for Medicare & Medicaid Services, or CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending; and expansion of the entities eligible for discounts under the Public Health Service program; and a licensure framework for follow on biologic products.
Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA. The Supreme Court upheld the ACA in the main challenge to the constitutionality of the law in 2012. Specifically, the Supreme Court held that the individual mandate and corresponding penalty was constitutional because it would be considered a tax by the federal government. The Supreme Court also upheld federal subsidies for purchasers of insurance through federally facilitated exchanges in a decision released in June 2015. This includes enactment of the TCJA (as defined below), which, among other things, removes penalties for not complying with the ACA’s individual mandate to carry health insurance. It is uncertain the extent to which any such changes may impact our business or financial condition.
In addition, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. On September 9, 2021, the Biden Administration published a wide-ranging list of policy proposals, most of which would need to be carried out by Congress, to reduce drug prices and drug payment. The United States Department of Health and Human Services (“HHS”) plan includes, among other reform measures, proposals to lower prescription drug prices, including by allowing Medicare to negotiate prices and disincentivizing price increases, and to support market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase price transparency. These initiatives recently culminated in the enactment of the Inflation Reduction Act (the “IRA”) in August 2022, which will, among other things, allow the HHS to negotiate the selling price of certain drugs and biologics that the Centers for Medicare & Medicaid Services (“CMS”) reimburses under Medicare Part B and Part D, although only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year. The negotiated prices, which will first become effective in 2026, will be capped at a statutory ceiling price beginning in October 2023, penalize drug manufacturers that increase prices of Medicare Part B and Part D drugs at a rate greater than the rate of inflation. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties. The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. These provisions will take effect progressively starting in 2023, although they may be subject to legal challenges.
IndividualIn addition, individual states in the United States have also become increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. This could reduce the ultimate demand for our product candidates or put pressure on our product pricing.
Management's Discussion & Analysis (MD&A)
Removed heading “Stock-Based Compensation”
Largest changes
To date, we have not recognized any revenue from product sales, and we do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts for our product candidates are successful and result in regulatory approval, or license agreements with third parties, we may generate revenue in the future from product sales. However, there can be no assurance as to when we will generate such revenue, if at all. Collaboration revenue represents revenue from the DRL Development Agreement, as amended in June 2024, pursuant to which we granted Dr. Reddy's Laboratories Ltd., or DRL, and its affiliate, Dr. Reddy’s Laboratories SA, or collectively Dr. Reddy’s, an exclusive, royalty-bearing right and license to commercialize COYA 302, solely for use in patients with ALS in the United States, Canada, the European Union and the United Kingdom, or collectively, the New Territories. Collaboration revenue includes two performance obligations, R&D Services and the License (both defined below). We allocate the transaction price to both performance obligations based on their estimated stand-alone selling price at contract inception. R&D Services revenue is recognized over time, using the inputs approach, by applying actual COYA 302 - ALS expenses against budgeted COYA 302 - ALS expenses. License revenue is recognized at a point in time upon delivery of the license or upon a cumulative catch-up adjustment in the event of a contract modification or achievement of milestones.see in full comparison
“In August of 2025, the FDA accepted our IND application for a randomized, double-blind placebo-controlled Phase 2, study of COYA 302 in ALS patients, or the ALS IND Milestone, resulting in the receipt of a $4.2 million milestone payment from Dr. Reddy’s (defined below) as required under the terms of the Development and License Agreement, or the DRL Development Agreement. In December of 2025, we received a $4.2 million milestone payment under the DRL Development Agreement. …”see in full comparison
“We are currently conducting the ALSTARS Trial, a Phase 2, randomized, multi-center, double-blind, placebo-controlled study to evaluate the efficacy and safety of COYA 302 for the treatment of ALS (ClinicalTrials.gov Identifier: NCT 07161999). COYA 302 is an investigational product not yet approved by the U.S. Food and Drug Administration, or the FDA, or any other regulatory agency.”see in full comparison
“We estimate the fair value of stock options using the Black-Scholes option-pricing model, which requires assumptions, including the fair value of our common stock prior to the IPO, volatility, the expected term of our stock options, the risk-free interest rate for a period that approximates the expected term of our stock options, and our expected dividend yield. …”see in full comparison
“R&D Services revenue is calculated quarterly using the inputs approach, by applying actual COYA 302 expenses against budgeted COYA 302 expenses as the two inputs. In addition, License revenue is recognized at a point in time upon delivery of a license or upon a cumulative catch-up in the event of a contract modification. Collaboration revenue was $3.6 million and $6.0 million for the years ended December 31, 2024 and 2023, respectively, related to License and R&D Services revenue.”see in full comparison
Full comparison: every changed paragraph (40)
We are a clinical-stage biotechnology company focused on developing proprietary new therapies to enhance the function of regulatory T cells (“Tregs”). Tregs are a subpopulation of T-lymphocytes consisting of CD4+CD25high hFOXP3+ cells that suppress inflammatory responses. Tregs were first discovered in 1995 by Dr. Shimon SakaguchiSakaguchi. andOn sinceOctober their6, discovery2025, Dr. Sakaguchi, along with two others, was awarded the Nobel Prize in Physiology or Medicine. Since Tregs were discovered, multiple lines of research have contributed to elucidate Treg biology and its role in health and disease. Tregs and their transcription factors have been shown to be essential to maintaining cellular homeostasis by regulating autoimmune and inflammatory responses and maintaining self-tolerance in mammals. Dysfunctional Tregs underlie numerous disease states, and this cellular dysfunction is driven by the chronic inflammatory environment and high levels of oxidative stress commonly observed in certain diseases. Further, the degree of Treg dysfunction is correlated with the severity and progression of serious and life-threatening conditions. These and other recent advances in the understanding of Treg biology, have made this subset of T-lymphocytes an important potential therapeutic target, which we believe may provide new treatments for serious diseases.
We are currently conducting the ALSTARS Trial, a Phase 2, randomized, multi-center, double-blind, placebo-controlled study to evaluate the efficacy and safety of COYA 302 for the treatment of ALS (ClinicalTrials.gov Identifier: NCT 07161999). COYA 302 is an investigational product not yet approved by the U.S. Food and Drug Administration, or the FDA, or any other regulatory agency.
In August of 2025, the FDA accepted our IND application for a randomized, double-blind placebo-controlled Phase 2, study of COYA 302 in ALS patients, or the ALS IND Milestone, resulting in the receipt of a $4.2 million milestone payment from Dr. Reddy’s (defined below) as required under the terms of the Development and License Agreement, or the DRL Development Agreement. In December of 2025, we received a $4.2 million milestone payment under the DRL Development Agreement. The milestone payment was triggered by dosing of the first patient in our ALSTARS trial evaluating COYA 302 for the treatment of ALS, or the Dosing Milestone, which was announced on December 9, 2025.
In October of 2025, we entered into an Underwriting Agreement with Lucid Capital Markets, LLC, or the Underwriter, relating to an underwritten public offering, or the October 2025 Offering, of 4,181,818 shares of our common stock, including 545,454 shares pursuant to the full exercise of an option to purchase additional shares granted to the Underwriter. The October 2025 Offering closed on October 27, 2025 and each share was offered and sold to the public at an offering price of $5.50 per share. Gross proceeds from the October 2025 Offering, including the proceeds from the exercise by the Underwriter of its option to purchase additional Shares, was approximately $23.0 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by us. In addition, we issued our strategic advisor warrants to purchase 100,000 shares of common stock with an exercise price of $5.50 and an expiration date of October 2030.
In January of 2026, we entered into a Securities Purchase Agreement with certain accredited investors for the issuance and sale in a private placement of 2,522,727 shares of our common stock, or the January 2026 Offering. The January 2026 Offering closed on January 30, 2026 and each share was offered and sold to the public at an offering price of $4.40 per share. Gross proceeds from the private placement were approximately $11.1 million, before deducting underwriting discounts and commissions and estimated expenses payable by us.
On October 21, 2024, we entered into a Securities Purchase Agreement with certain accredited investors, majority of which were existing institutional stockholders of ours, for the issuance and sale in a private placement of 1,379,314 shares of our common stock, or the October 2024 Private Placement. The offering resulted in net proceeds of $9.1 million, at a price of $7.25 per share of common stock, after deducting placement agent commissions and other offering expenses. We paid a cash fee equal to 7% of the gross proceeds from the sale of securities in the offering and we issued our strategic advisor in the October 2024 Private Placement warrants to purchase an aggregate of 150,000 shares of common stock with an exercise price of $7.00 per share and an expiration date of November 2029.
On May 17, 2024, we entered into a Securities Purchase Agreement with the Alzheimer's Drug Discovery Foundation, or the ADDF, for the issuance and sale in a private placement of 603,136 shares of our common stock at a purchase price of $8.29 per share for net proceeds of $4.9 million, or the May 2024 Private Placement. In connection with the May 2024 Private Placement, we entered into an Agreement to Accept Conditions for Biotechnology Funding agreement, with ADDF pursuant to which the proceeds received in connection with the May 2024 Private Placement will be used for a Phase 2 study of COYA 302 in FTD.
On December 5, 2023, we entered into a securities purchase agreement with certain accredited investors for the issuance and sale in a private placement of 4,370,382 shares of our common stock at a price of $6.06 per share of common stock (the "2023 Private Placement"). The offering resulted in net proceeds of $24.0 million after deducting placement agent commissions and other offering expenses. In connection with the 2023 Private Placement and as a form of payment for services provided by a co-placement agent and financial advisor, we issued warrants to purchase up to 319,004 shares of common stock at an exercise price of $7.58 per share. Such warrants have a term of four years from issuance, and are fully exercisable.
To date, we have not recognized any revenue from product sales, and we do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts for our product candidates are successful and result in regulatory approval, or license agreements with third parties, we may generate revenue in the future from product sales. However, there can be no assurance as to when we will generate such revenue, if at all. Collaboration revenue represents revenue from the DRL Development Agreement, as amended in June 2024, pursuant to which we granted Dr. Reddy's Laboratories Ltd., or DRL, and its affiliate, Dr. Reddy’s Laboratories SA, or collectively Dr. Reddy’s, an exclusive, royalty-bearing right and license to commercialize COYA 302, solely for use in patients with ALS in the United States, Canada, the European Union and the United Kingdom, or collectively, the New Territories. Collaboration revenue includes two performance obligations, R&D Services and the License (both defined below). We allocate the transaction price to both performance obligations based on their estimated stand-alone selling price at contract inception. R&D Services revenue is recognized over time, using the inputs approach, by applying actual COYA 302 - ALS expenses against budgeted COYA 302 - ALS expenses. License revenue is recognized at a point in time upon delivery of the license or upon a cumulative catch-up adjustment in the event of a contract modification or achievement of milestones.
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to increase significantly over the next several years as we increase personnel costs, including stock-based compensation, conduct our clinical trials, including later-stage clinical trials, for current and future product candidates and prepare regulatory filings for our product candidates. In addition, we expect spending in 2024 to increase over 2023 spending levels and will be focused primarily on advancing COYA 301 and COYA 302. As described in the notes to financial statements contained elsewhere in this Annual Report on Form 10-K, under the terms of our license we may be required to make payments to Methodist if certain milestones are achieved. This could result in significant charges to research and development in the period such milestones become probable of being achieved.achieved
Other Income, NetIncome
Other income, netincome consists primarily of interest earned on our excess cash.
Collaboration revenues were $7.9 million for the year ended December 31, 2025, compared to $3.6 million for the year ended December 31, 2024. The increase was primarily due to a $3.6 million increase in License revenue and a $0.7 million increase in R&D services revenue. Licenses revenue totaled $6.7 million for year ended December 31, 2025, arising from milestone payments received upon achievement of the ALS IND Milestone and Dosing Milestone
R&D Services revenue is calculated quarterly using the inputs approach, by applying actual COYA 302 expenses against budgeted COYA 302 expenses as the two inputs. In addition, License revenue is recognized at a point in time upon delivery of a license or upon a cumulative catch-up in the event of a contract modification. Collaboration revenue was $3.6 million and $6.0 million for the years ended December 31, 2024 and 2023, respectively, related to License and R&D Services revenue.
Research and development expenses increased by $6.4$4.9 million from $5.5 million for the year ended December 31, 2023 to $11.9 million for the year ended December 31, 2024.2024 to $16.7 million for the year ended December 31, 2025. The increase was due to a $5.0$4.9 million increase in our preclinicalclinical expenses,expenses due to our clinical advancement of COYA 302 in ALS, a $1.1$1.4 million increase in internal research and development expenses, and a $0.3$0.4 million increase in costssponsored attributableresearch, partially offset by a $1.8 million decrease in our preclinical expenses. For our clinical product candidate (COYA 302), we track our external research and development expenses on a candidate-by-candidate basis. Coincident with FDA's approval of our IND of COYA 302 in patients with ALS, in the third quarter of 2025, we characterized expenses related to COYA 302 for ALS as clinical product candidate expenses. Prior to the third quarter of 2025, all expenses associated with COYA 302 for ALS were included among the preclinical product candidate expenses captioned as COYA 300 Series. For our sponsoredpreclinical product candidates, we track our external research agreementand withdevelopment Houstonexpenses Methodistby Hospital.Series. External research and development expenses include fees paid to CROs and CMOs and fees paid to regulatory, clinical trial and manufacturing professional service firms largely in connection with preclinical activities necessary to prepare COYA 302 for its initial IND filing and launch of a Phase 2 clinical trial. OnceOn December 23, 2025, we received FDA approval of our IND of COYA 302 in patients with FTD, or the FTD IND Milestone, together with the ALS IND Milestone, the IND Milestones. While we began to track our external research and development expenses for COYA 302 hasfor beenFTD approved,upon weFDA intendapproval, tosuch expandcosts were de minimis for the tableperiod below,from creatingDecember a23, new2025 classthrough calledDecember "Clinical31, product2025. candidates," whereinTherefore, we will disclosecharacterize theexpenses related to COYA 302 for FTD as clinical product candidate expenses forin COYA 302.2026.
In-process research and development was $2.3 million for the year ended December 31, 2025 compared to $0 the year ended December 31, 2024 as result of milestone payments pursuant to our license agreements which were due upon the achievement of the IND Milestones and the Dosing Milestone which were met in 2025.
Under the terms of our exclusive License and Supply Agreement, or DRL Agreement, with DRL, we paid a licenses fee of $0.5 million, which was expensed as in-process research and development expense during the year ended December 31, 2023. In-process research and development expenses were immaterial for the year ended December 31, 2024.
General and administrative expenses increased by $1.1$2.5 million from $7.8$8.9 million for year ended December 31, 20232024 to $8.9$11.4 million for the year ended December 31, 2024.2025. The increase was primarily due to a $1.2$1.6 million increase in payroll and employee related benefits, a $0.3$0.6 million increase in franchiseprofessional taxes and licenseservice fees and $0.2a $0.3 million increase in our investor and public relations costs, partially offset by a $0.2 million decrease in insurance fees and a $0.4 million decrease in professional service fees.costs.
Other Income, NetIncome
Other income,income net increaseddecreased by $1.0$0.3 million from the year ended December 31, 20232024 compared to the year ended December 31, 2024.2025. The increasedecrease was due to a reduction in interest and dividend income earned on cash balances.
Income Tax Benefit (Expense) Benefit
We recorded state tax expense for the year ended December 31, 2025 and $0.7 million of income tax benefit for the year ended December 31, 2024, which offset the $0.7 million of income tax expense recorded for the year ended December 31, 2023.2024.
Since our inception, we have incurred operating losses and incurred negative cash flows from our operations through 2024.2025. We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all. Since our inception through December 31, 20242025 we have funded our operations through the public and private sale of our equity securities, and payments from DRLDr. Reddy's in accordance with the DRL Development Agreement. As of December 31, 20242025, we had $38.3$46.8 million in cash and cash equivalents and had an accumulated deficit of $40.7$62.0 million. We expect our existing cash and cash equivalentsequivalents, together with the $11.1 million in gross proceeds from the January 2026 Offering, to enable us to fund our operating expenses and capital expenditure requirements for at least one year afterinto the financialsecond statementshalf areof issued.2027. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect. Our total future capital requirements will depend on many factors and is subject to the risks and uncertainties set forth in the section titled “Risk Factors.”
During the year ended December 31, 2025, we used $10.7 million of cash in operating activities. Cash used in operating activities reflected our net loss of $21.2 million, partially offset by a $3.9 million change in operating assets and noncash charges of $6.6 million, which primarily consisted of stock-based compensation and acquired in-process research and development.
During the year ended December 31, 2023, we used $11.2 million of cash in operating activities. Cash used in operating activities reflected our net loss of $8.0 million and a $4.6 million change in our operating assets and liabilities, partially offset by noncash charges of $1.4 million, which primarily consisted of $0.9 million in stock-based compensation and other charges of $0.5 million in acquired in-process research and development costs. The primary use of cash was to fund our operations related to the development of our product candidates.
During the year ended December 31, 2023,2025, we usedpurchased $0.5$1.2 million of cash for the purchase of in-process research and development.development assets. During the year ended December 31, 2024, cash used related to investing activities was immaterial.
During the year ended December 31, 2024,2025, financing activities provided $16.0$20.4 million of cash, which consisted of $14.0$20.3 million in net proceeds from the issuance of common stock and $2.1 million in proceeds from the exercise of warrants, partially offset by $0.1 million in payments of offering costs related to the 2023 private placement.stock.
During the year ended December 31, 2023,2024, financing activities provided $38.4$16.0 million of cash, which consisted of $24.1$14.0 million in net proceeds from the 2023 Private Placement, net of offering costs, $14.3 million in proceeds from issuance of common stock in the IPO, net of offering costs, and $0.1$2.1 million in proceeds from the exercise of stockwarrants, options.partially offset by $0.1 million in payments of offering costs related to the 2023 private placement.
In December 2023, we entered into the DRL Development Agreement,Agreement with Dr. Reddy's, pursuant to which, among other things, we granted to Dr. Reddy's an exclusive, royalty-bearing right and license to commercialize COYA 302 solely for use in patients with ALS in the United States, Canada, the European Union and the United Kingdom, or collectively, the New Territories. We previously granted DRL an exclusive license to obtain regulatory approval and commercialize COYA 302 for ALS and certain other indications in all other countries (other than the New Territories, Japan, Mexico, and in each country in South America), pursuant to the License and Supply Agreement entered between with DRL, or the DRL Agreement, effective as of April 1, 2023. COYA 302 is comprised of two components, COYA 301 and DRL_AB. In accordance with the DRL Agreement, we in-licensed DRL_AB for the development and commercialization of COYA 302. Further, under the DRL Development Agreement, Dr. Reddy’s is responsible for the development of DRL_AB. We will have the responsibility for the clinical development of COYA 302 and for seeking regulatory approval in the United States for COYA 302 in ALS.
Pursuant to the DRL Development Agreement, we received an up-front, nonrefundable payment of $7.5 million in January 2024. Additionally, we are entitled to receivereceived (i) an additional $4.2 million upon FDA acceptance of an IND application for COYA 302 for the treatment of ALS in August 2025 and (ii) an additional $4.2 million payment upon the dosing of the first patient in the first phase 2 clinical trial for COYA 302 for the treatment of ALS in the United States.States in December 2025. The DRL Development Agreement also calls for up to an aggregate of $40.0 million in development milestones and up to an aggregate of $677.3 million in sales milestones, related to the New Territories, should all such development and sales milestones be achieved. We will also be owed royalties by Dr. Reddy's on Net Sales (as defined in the DRL Development Agreement) of COYA 302 in the low to mid-teens (prior to paying royalties due pursuant to previously disclosed license agreements related to COYA 302). In June 2024, we entered into the First Amendment to the DRL Development Agreement, or the First Amendment, with DRL and Dr. Reddy's, pursuant to which, among other things, Dr. Reddy's paid us a one-time payment of $3.9 million and, in return, Dr. Reddy's will have no obligation to pay the first $6.0 million in royalty payments that would have otherwise been payable to us under the DRL Development Agreement. Pursuant to the First Amendment, as discussed above, the first $6.0 million of royalty payments will not be owed to us.
Stock-Based Compensation
We measure compensation expense for all stock-based awards based on the estimated fair value of the stock-based awards on the grant date. We use the Black-Scholes option pricing model to value our stock option awards. We recognize compensation expense on a straight-line basis over the requisite service period, which is generally the vesting period of the award. We have not issued awards for which vesting is subject to a market or performance conditions.
We estimate the fair value of stock options using the Black-Scholes option-pricing model, which requires assumptions, including the fair value of our common stock prior to the IPO, volatility, the expected term of our stock options, the risk-free interest rate for a period that approximates the expected term of our stock options, and our expected dividend yield. Certain assumptions used in our Black-Scholes option-pricing model represent management’s best estimates and involve a number of variables, uncertainties and assumptions and the application of management’s judgment, as they are inherently subjective. If any assumptions change, our stock-based compensation expense could be materially different in the future.
These subjective assumptions are estimated as follows:
Fair value of common stock— Historically, for all periods prior to our IPO, the fair value of the shares of common stock underlying our share-based awards was estimated on each grant date by our board of directors. To determine the fair value of our common stock underlying option grants, our board of directors considered, among other things, valuations of our common stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or the Practice Aid. Since becoming a public company in 2022, we have used our stock price to determine fair value of our common stock.
Expected volatility—As a privately held company we did not have any trading history for our common stock; accordingly the expected volatility was estimated based on the average volatility for comparable publicly traded biotechnology companies over a period equal to the expected term of the stock option grants. The comparable companies were chosen based on their similar size, stage in the life cycle or area of specialty. As a public company will continue to use the average volatility for comparable publicly traded biotechnology companies until we have ample trading history of our own stock commensurate with the estimated expected term of our options.
The Methodist License Agreement provides that in the event we sublicense products and services covered by the Methodist License Agreement, then royalties owed to Houston Methodist would be computed as a percentage of payments received by us from the sublicensee. In addition, the termination provisions provide that Houston Methodist may only terminate the Methodist License Agreement, among other things, in the event that after five years we are not “Actively Attempting to Develop or Commercialize,” as such term is defined in the Methodist License Agreement. During the year ended December 31, 2025, we incurred an aggregate of $0.1 million in milestones to Methodist in connection with the the Dosing Milestone and FTD IND Milestone, none of which were paid as of December 31, 2025.
In May 2023, we executed a Sponsored Research Agreement, or SRA, with Houston Methodist Research Institute, or HMRI, in which we agreed to fund approximately $0.5 millionresearch through May 2024. We have subsequently amended the SRA to increase agreed funding and, at times, extend the term. TheOur latestSRA amendmentwith wasHMRI expired on December 31, 2025. On January 1, 2026, we entered into another SRA with HMRI in Octoberwhich 2024we agreed to increasefund research through the earlier of completion of the research or 12 months. The total funding fromcommitment $1.0is million to $1.2$0.6 million.
In addition, we may also owe tiered payments to ARS based on our achievement of certain developmental milestones. Under the ARS License Agreement, we will pay an aggregate of $13.3 million in developmental milestone payments for the first Combination Product (as defined in the ARS License Agreement) in a new indication. We will then pay an aggregate of $11.6 million in developmental milestone payments for each Combination Product in each subsequent new indication. Further, for the first Mono Product (as defined in the ARS License Agreement), we will pay an aggregate of $11.8 million in developmental milestone payments. We will then pay an aggregate of $5.9 million in developmental milestone payments for each Mono Product in each subsequent new indication, and we will owe an aggregate of $5.9 million if all developmental milestones are achieved for each new indication. We will also owe royalties on net sales of licensed products ranging from low to mid-single digit percentages. In the event we sublicense our rights under the ARS License Agreement, we will owe royalties on sublicense income within the range of 10% to 20%. To date, the $0.1 million option fee and the mid-six-figure up-front fee (upon exercise of the ARS Option) are the only payments made to ARS under the ARS License Agreement. During the year ended December 31, 2025, we incurred an aggregate of $1.1 million in milestones to ARS in connection with the IND Milestones and the Dosing Milestone, of which $0.4 million was paid during the year ended December 31, 2025.
In March 2023, we entered into the DRL Agreement with DRL. The DRL Agreement became effective on April 1, 2023. Pursuant to the terms of the DRL Agreement, we will in-license DRL_AB to be used in the development and commercialization of COYA 302 in the U.S., Canada, Mexico, South America, the European Union, the United Kingdom, and Japan. In consideration for the license, we paid a one-time, non-refundable upfront fee of $0.4 million. We will pay to DRL up to an aggregate of approximately $2.9 million of pre-approval regulatory milestone payments for the first indication in the Field (as defined in the DRL Agreement) and an additional approximately $20.0 million if all other development, regulatory approval and sales milestones are incurred under the DRL Agreement. We will also pay to DRL a low-six figure milestone payment per additional indication. Further, pursuant to the DRL Agreement, we will pay to DRL single-digit royalties on Net Sales (as defined in the DRL Agreement). During the year ended December 31, 2025, we incurred an aggregate of $1.0 million in milestones to DRL in connection with the IND Milestones and the Dosing Milestone, of which $0.8 million was paid during the year ended December 31, 2025.
What changed in the latest 10-Q
Risk Factors
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission, or SEC, on March 16, 2026, or our Quarterly Report on Form 10-Q for the period ended March 31, 2026 filed with the SEC on May 12, 2026. Any of these factors could result in a significant or material adverse effect on our result of operations or financial conditions. Additional risk factors not presently known to us may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Removed heading “If our license agreement with The Methodist Hospital is terminated, we could lose our rights to key components enabling our Treg Modalities.”
Removed heading “Duration of patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time, and the expiration of our patents may subject us to increased competition.”
Removed heading “We can provide no assurance that we will be able to file or receive additional patent protection for our product candidates.”
Largest changes
“Duration of patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time, and the expiration of our patents may subject us to increased competition.”see in full comparison
“The term of the Methodist License Agreement extends until expiration of the last of the patent rights licensed to us by the Licensor, which is currently expected to occur in approximately 2046. …”see in full comparison
“If our license agreement with The Methodist Hospital is terminated, we could lose our rights to key components enabling our Treg Modalities.”see in full comparison
“We can provide no assurance that we will be able to file or receive additional patent protection for our product candidates.”see in full comparison
“Given the amount of time required for the development, testing and regulatory review of product candidates, patents protecting such candidates might expire before or shortly after such product candidates are commercialized. We expect to seek extensions of patent terms in the United States and, if available, in other countries where we have or will obtain patent rights. …”see in full comparison
“Our patent estate derived from our relationship with Dr Reddy’s Laboratories includes two pending U.S. non-provisional patent applications, one issued U.S. patent, 15 pending foreign patent applications and five issued foreign patents. The issued U.S. …”see in full comparison
Full comparison: every changed paragraph (14)
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission, or SEC, on March 16, 2026, exceptor asour follows.Quarterly Report on Form 10-Q for the period ended March 31, 2026 filed with the SEC on May 12, 2026. Any of these factors could result in a significant or material adverse effect on our result of operations or financial conditions. Additional risk factors not presently known to us may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
If our license agreement with The Methodist Hospital is terminated, we could lose our rights to key components enabling our Treg Modalities.
Key components of the technology utilized in our Treg Modalities have been in-licensed pursuant to an Amended and Restated Patent and Know How License Agreement, (the “Methodist License Agreement”), between us and The Methodist Hospital located in Houston, Texas (the “Methodist”). Pursuant to the Methodist License Agreement, Methodist granted to us an exclusive, worldwide, royalty-bearing, sublicensable license under specified patents and patent applications related to Treg technology in the field of therapeutics. Pursuant to the Methodist License Agreement, we are also required to pay Methodist, on a licensed product-by-licensed product and country-by-country basis, royalties (subject to customary reductions) ranging from 1% to 10% of annual worldwide net sales of such licensed product. The applicable royalty percentage increases as Licensed Products are used to treat from only one to more than three indications and if a given licensed product utilizes only Treg cell therapy or is a combination of both Treg cell therapy and exosomes. Therefore, the lowest tier is paid when there is only a single indication being addressed with a single product. There is only one low double-digit tier with such tier bearing only on combination products where there are three or more indications being served. We are also required to pay a low single digit percentage for certain licensed services. We are required to pay mid-teens royalties on sublicense revenue.
The term of the Methodist License Agreement extends until expiration of the last of the patent rights licensed to us by the Licensor, which is currently expected to occur in approximately 2046. The Licensor may terminate the Methodist License Agreement or convert it into a non-exclusive license upon the occurrence or non-occurrence of certain events subject to the terms and conditions therein, such as (i) not “Actively Attempting to Develop or Commercialize” (as defined in the Methodist License Agreement) for a continuous period of 6 months anytime beginning October 2, 2025, (ii) breach of obligation to make timely payments or reports by us, (iii) an uncured material breach by us, (iv) the cessation of our business or our insolvency, liquidation or receivership. If the Licensor terminates or narrows the Methodist License Agreement, we could lose the use of intellectual property rights that may be material or necessary to the development or production of our product candidates, which could impede or prevent our successful commercialization of such product candidates and materially adversely affect our business, financial condition, results of operations and growth prospects.
Furthermore, our Methodist License Agreement with the Licensor is field-specific and has been granted to us in the field of therapeutics. This Methodist License Agreement permits Licensor to practice the licensed rights, and to allow non-profit academic third parties to practice the licensed rights for certain academic purposes. As such, certain patents in a patent family that is licensed to us by the Licensor have been licensed to at least one other third party. Although these patents should not be overlapping with our licensed patents, there is a risk that inadvertent overlap may occur, and thus resources may have to be expended to resolve any such overlap and to prevent other licensees from practicing under our licensed patents rights. If any of the foregoing were to occur, it could delay our development and commercialization of our product candidates, which in turn could materially adversely affect our business, financial condition, results of operations and growth prospects.
Duration of patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time, and the expiration of our patents may subject us to increased competition.
As of the date of this Quarterly Report on Form 10-Q, our patent estate derived from our relationship with The Houston Methodist Hospital included one pending U.S. provisional patent application, seven pending U.S. non-provisional patent applications, 43 pending foreign patent applications, and three pending Patent Cooperation Treaty (“PCT”) applications, each co-owned with or in-licensed from The Houston Methodist Hospital. To date, no patents have been issued. If any patents issue from or claim priority to these patent applications, the patents are expected to expire in 2040, 2042 and 2044-2046 without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees. These patent applications are directed to our Treg and exosome compositions and methods of use, methods of Treg and exosome manufacture, and methods of in vivo Treg expansion via combination therapies, among other things. We have filed intellectual property claims on the contents of the exosomes, namely the micro RNAs that are reproducibly represented from batch to batch. Many of these micro RNAs confer anti-inflammatory functionality as a mechanism of action and may explain the exosomes immunomodulatory function. The exosome field is an emerging and new area at present and understanding the functional aspects of the exosomes is an important but evolving regulatory aspect. We have filed intellectual property claims for compositions of matter that teach the reproducible micro RNA contents. All of our Houston Methodist Hospital patent applications have composition and method claims, with the exception of a biomarker patent application, which has only method claims.
In addition, our patent estate derived from our relationship with ARScience Biotherapeutics, Inc. (described below) includes three pending U.S. non-provisional patent applications one issued U.S. patent, nine pending foreign patent applications and two issued foreign patents. The issued U.S. patent is expected to expire in 2042, the issued foreign patents are expected to expire in 2039, and if any other patents issue from or claim priority to one or more of these patents or patent applications, the patents are expected to expire between 2039 and 2041, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The ARScience Biotherapeutics, Inc. patents and patent applications have composition, method, and/or utility claims.
Our patent estate derived from our relationship with Dr Reddy’s Laboratories includes two pending U.S. non-provisional patent applications, one issued U.S. patent, 15 pending foreign patent applications and five issued foreign patents. The issued U.S. patent is expected to expire in 2042, the issued foreign patents are expected to expire in 2039, and if any other patents issue from or claim priority to one or more of these patents or patent applications, the patents are expected to expire in 2039, 2041 and 2042, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The Dr. Reddy’s patents andpatent applications have composition and method claims.
Our patent estate derived from our relationship with the University of Nebraska includes two non-provisional U.S. patent applications, and one foreign patent application. If any patents issue from or claim priority to these patent applications, the patents are expected to expire in 2043 and 2044, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The University of Nebraska patent applications have composition and/or use claims.
Finally, our patent estate derived from our relationship with Carnegie Mellon includes two U.S. non-provisional patent applications. If any patents issue from or claim priority to these patent applications, the patents are expected to expire in 2040 and 2044, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The Carnegie Mellon patent applications have composition and method claims.
We can provide no assurance that we will be able to file or receive additional patent protection for our product candidates.
Patent expiration dates may be shortened or lengthened by a number of factors, including terminal disclaimers, patent term adjustments, supplemental protection certificates and patent term extensions. Patent term extensions and supplemental protection certificates, and the like, may be impacted by the regulatory process and may not significantly lengthen patent term. Our patent protection could also be reduced or eliminated for noncompliance with various procedural, document submission, fee payment and other requirements imposed by government patent agencies. In addition, if we fail to apply for applicable patent term extensions or adjustments, we will have a more limited time during which we can enforce our granted patent rights.
Given the amount of time required for the development, testing and regulatory review of product candidates, patents protecting such candidates might expire before or shortly after such product candidates are commercialized. We expect to seek extensions of patent terms in the United States and, if available, in other countries where we have or will obtain patent rights. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits a patent term extension of up to five years beyond the normal expiration of the patent; provided that the patent is not enforceable for more than 14 years from the date of drug approval, which is limited to the approved indication (or any additional indications approved during the period of extension). Furthermore, only one patent per approved product can be extended and only those claims directed to the approved product, a method for using it or a method for manufacturing it may be extended. However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request. If we are responsible for patent prosecution and maintenance of patent rights in-licensed to us, we could be exposed to liability to the applicable patent owner. If we or our licensors fail to maintain the patents and patent applications covering our product candidates and technologies, we may not be able to prevent a competitor from marketing products that are the same as or similar to our product candidates. Further, others commercializing products similar or identical to ours, and our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case, which could increase competition for our product candidates and materially adversely affect our business, financial condition, results of operations and growth prospects.
Management's Discussion & Analysis (MD&A)
New heading “Comparison of the six months ended June 30, 2026 and 2025”
New heading “Collaboration Revenue”
New heading “Research and Development Expenses”
New heading “General and Administrative Expenses”
New heading “Sources of Liquidity”
Removed heading “Intellectual Property and Protection”
Largest changes
Full comparison: every changed paragraph (45)
You should read the following discussion and analysis of our financial condition and operating results together with our financial statements and the related notes appearing at the endbeginning of this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth in the section of the Quarterly Report on Form 10-Q captioned “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements.
the accuracy of our estimates regarding expenses, future revenues, capital requirements, our need for additional financing and our anticipated cash burn rate;
our ability to raise additional capital, which may be adversely impacted by potential worsening of global economic conditions, potential future global pandemics or health crises, and the recent disruptions to, and volatility in,in the credit and financial markets in the United States;
The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipateanticipated in our forward-looking statements.
We are currently conducting the ALSTARS Trial, a Phase 2, randomized, multi-center, double-blind, placebo-controlled study to evaluate the efficacy and safety of COYA 302 for the treatment of ALS (ClinicalTrials.gov Identifier: NCT 07161999). COYA 302 is an investigational product not yet approved by the U.S. Food and Drug Administration, or the FDA, or any other regulatory agency. On May 11, 2026, the FDA granted Fast Track Designation to COYA 302 for the treatment of ALS.
Our operations have consisted of developing our clinical and preclinical product candidates and we have devoted substantially all of our resources to developing product and technology rights, conducting research and development (which includes preclinical and non-clinical studies of our product candidates), organizing and staffing our company, ongoing business operations and raising capital.
Our operations have consisted of developing our clinical and preclinical product candidates and we have devoted substantially all of our resources to developing product and technology rights, conducting research and development (which includes preclinical and non-clinical studies of our product candidates), organizing and staffing our company, ongoing business operations and raising capital. We have funded our operations primarily through the private and public sale of our securities. Our net losses were $7.2$6.6 million and $7.3$6.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Our net losses were $13.8 million and $13.4 million for the six months ended June 30, 2026 and 2025, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $69.2$75.8 million. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures and general and administrative expenditures. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or future product candidates.
Intellectual Property and Protection
As of May 1, 2026, our patent estate derived from our relationship with The Houston Methodist Hospital includes one U.S. provisional patent application, seven U.S. non-provisional patent applications, 43 foreign patent applications, and three pending Patent Cooperation Treaty (“PCT”) applications, each co-owned with or in-licensed from The Houston Methodist Hospital. These patent applications are directed to our Treg and exosome compositions and methods of use, methods of Treg and exosome manufacture, and methods of in vivo Treg expansion via combination therapies, among other things. If any patents issue from or claim priority to these patent applications, the patents are expected to expire in 2040, 2042 and 2044-2046 without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity or other governmental fees. All of our pending Houston Methodist Hospital patent applications have composition and method claims, with the exception of a biomarker patent application, which has only method claims.
In addition, our patent estate derived from our relationship with ARScience Biotherapeutics, Inc. (described below) includes three pending U.S. non-provisional patent applications, one issued U.S. patent, nine pending foreign patent applications and two issued foreign patents. The issued U.S. patent is expected to expire in 2042, the issued foreign patents are expected to expire in 2039, and any other patents that may issue from or claim priority to one or more of these patents or patent applications, if granted, are expected to expire between 2039 and 2041, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The ARScience Biotherapeutics, Inc. patents have composition, method, and/or utility claims.
In addition, our patent estate derived from our relationship with Dr Reddy’s Laboratories includes two pending U.S. non-provisional patent applications, one issued U.S. patent, 15 pending foreign patent applications and five issued foreign patents. The issued U.S. patent is expected to expire in 2042, the issued foreign patents are expected to expire in 2039, and any other patents that may issue from or claim priority to one or more of these patents or patent applications, if granted, are expected to expire in 2039, 2041, or 2042, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The Dr. Reddy’s patents and patent applications have composition, method and/or utility claims.
In addition, our patent estate derived from our relationship with the University of Nebraska includes two pending non-provisional U.S. patent applications and one pending foreign patent application. If any patents issue from or claim priority to these patent applications, the patents are expected to expire in 2043 and 2044, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The University of Nebraska patent applications have composition and/or method claims.
Finally, our patent estate derived from our relationship with Carnegie Mellon includes two pending U.S. non-provisional patent applications. If any patents issue from or claim priority to these patent applications, the patents would be expected to expire in 2040 and 2044, without giving effect to any potential patent term extensions or patent term adjustments and assuming payment of all appropriate maintenance, renewal, annuity, or other governmental fees. The Carnegie Mellon patent applications have composition and/or method claims.
Financings
In January of 2026, we entered into a Securities Purchase Agreement with certain accredited investors for the issuance and sale in a private placement of 2,522,727 shares of our common stock, or the January 2026 Offering. The January 2026 Offering closed on January 30, 2026 and each share was offered and sold at an offering price of $4.40 per share. Gross proceeds from the private placement were approximately $11.1 million, before deducting offering costs payable by us.
Comparison of the three months ended MarchJune 31,30, 2026 and 2025
Collaboration revenue was $0.3$0.2 million for the three months ended MarchJune 31,30, 2026 and 2025 related to R&D Services revenue.
Research and development expenses increased by $1.3 million from $3.7 million for the three months ended June 30, 2025 to $5.0 million for the three months ended June 30, 2026. The increase was primarily due to a $1.1 million increase in preclinical and clinical product candidate costs, reflecting primarily the advancement of the COYA 302 ALS Phase 2 clinical trial. The increase was further driven by a $0.4 million increase in internal research and development expenses, partially offset by a $0.2 million decrease in sponsored research expense.
Research and development expenses decreased by $1.1 million from $5.2 million for the three months ended March 31, 2025 to $4.1 million for the three months ended March 31, 2026. The decrease was primarily due to a $1.2 million decrease in external preclinical and clinical product candidates, reflecting the timing of preclinical activities undertaken in early 2025 to support our IND applications for COYA 302 in ALS. The decrease was further driven by a $0.1 million decrease in sponsored research expense, partially offset by a $0.2 million increase in internal research and development expenses. For our clinical product candidate (COYA 302), we track our external research and development expenses on a candidate-by-candidate basis. Coincident with FDA's approval of our IND of COYA 302 in patients with ALS and FTD, we characterized expenses related to COYA 302 for ALS and FTD as clinical product candidate expenses. Prior to IND approval, all expenses associated with COYA 302 for ALS and FTD were included among the preclinical product candidate expenses captioned as COYA 300 Series. For our preclinical product candidates, we track our external research and development expenses by Series. External research and development expenses include fees paid to CROs and CMOs and fees paid to regulatory, clinical trial and manufacturing professional service firms largely in connection with preclinical activities necessary to prepare COYA 302 for its initial IND filing and launch of a Phase 2 clinical trial.
We do not further classify or evaluate our internal research and development expenses by product candidate or by Series as these expenses primarily relate to compensation, materials and supplies, and other costs which are deployed across multiple therapeutic modalities, multiple product candidates, and multiple therapeutic areas under development.
General and administrative expenses increaseddecreased by $1.1$0.6 million from $2.7$2.9 million for the three months ended MarchJune 31,30, 2025 compared to $3.8$2.3 million for the three months ended MarchJune 31,30, 2026. The increasedecrease was primarily due to ana $1.1$0.4 million increasedecrease in professional services and a $0.2 million decrease in employee compensation, whichincluding includedlower astock-based non-cash charge of $1.0 million related to the modification of stock options held by the our former Executive Chairman in connection with his resignation.compensation.
Other income increased by $0.1 million from the$0.3 threemillion months ended March 31, 2025 compared tofor the three months ended MarchJune 31,30, 2025 compared to $0.4 million for the three months ended June 30, 2026. The increase was primarily due to an increase in interest income earned on cash balances.
Comparison of the six months ended June 30, 2026 and 2025
Collaboration Revenue
Collaboration revenue was $0.5 million and $0.4 million for both the six months ended June 30, 2026 and 2025, respectively, related to R&D Services revenue.
Research and Development Expenses
Research and development expenses increased by $0.2 million from $8.9 million for the six months ended June 30, 2025 to $9.1 million for the six months ended June 30, 2026. The increase was primarily due to a $0.7 million increase in internal research and development expenses, partially offset by a $0.3 million decrease in sponsored research expense and a $0.2 million decrease in preclinical and clinical product candidate costs.
Research and development expenses disaggregated and classified by preclinical, and external and internal expenses are summarized in the table below:
General and Administrative Expenses
General and administrative expenses increased by $0.4 million from $5.6 million for the six months ended June 30, 2025 compared to $6.0 million for the six months ended June 30, 2026. The increase was primarily due to a $0.8 million increase in employee compensation, which included a non-cash charge of $1.0 million related to the modification of stock options held by our former Executive Chairman in connection with his resignation, partially offset by a $0.4 million decrease in professional services.
Other Income
Other income increased by $0.1 million from $0.7 million for the six months ended June 30, 2025 compared to $0.8 million for the six months ended June 30, 2026. The increase was primarily due to an increase in interest income earned on cash balances.
Since our inception, we have incurred operating losses from our operations through MarchJune 31,30, 2026. We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all. Since our inception through MarchJune 31,30, 2026, we have funded our operations through the public and private sale of our equity securities, and payments from Dr. Reddy's in accordance with the DRL Development Agreement. As of MarchJune 31,30, 2026, we had $50.7$43.2 million in cash and cash equivalents and had an accumulated deficit of $69.2$75.8 million. We expect our existing cash and cash equivalents to enable us to fund our operating expenses and capital expenditure requirements into the second half of 2027. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect. Our total future capital requirements will depend on many factors and is subject to the risks and uncertainties set forth in the section titled “Risk Factors.”
Sources of Liquidity
On May 12, 2026, we entered into a Sales Agreement with Leerink Partners LLC (the “Agent” or “Leerink Partners”), as the sales agent, pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $30.0 million in “at-the-market” offerings (the “ATM Offering Program”) through Leerink Partners. Sales of the shares of common stock will be made at prevailing market prices at the time of sale, or as otherwise agreed with Leerink Partners. We will pay Leerink Partners LLC a commission rate of up to 3.0% of the aggregate gross proceeds from the sale of any shares of common stock pursuant to the Sales Agreement. No shares of common stock had been sold under the ATM Offering Program during the six months ended June 30, 2026 and $30.0 million remained available for sale.
During the threesix months ended MarchJune 31,30, 2026, we used $6.2$13.6 million of cash in operating activities. Cash used in operating activities reflected our net loss of $7.2$13.8 million, a $1.2$2.9 million change in operating assets and liabilities, partially offset by noncash charges of $2.2$3.2 million primarily related to stock-based compensation..compensation.
During the threesix months ended MarchJune 31,30, 2025, we used $2.8$8.6 million of cash in operating activities. Cash used in operating activities reflected our net loss of $7.3$13.4 million, partially offset by a $3.4$2.7 million change in operating assets and liabilities and noncash charges of $1.1$2.1 million primarily related to stock-based compensation.
During the threesix months ended MarchJune 31,30, 2026, we paid $0.9 million in in-process research and development assets, which we incurred in 2025.assets.
We had no investing activities during the threesix months ended MarchJune 31,30, 2025.
During the threesix months ended MarchJune 31,30, 2026, financing activities provided $11.0 million of cash from the net proceeds from the issuance of common stock in the January Offering.Offering, partially offset by $0.1 million in payments of finance costs related to the ATM Offering Program.
During the threesix months ended MarchJune 31,30, 2025, financing activities were immaterial.
The Methodist License Agreement provides that in the event we sublicense products and services covered by the Methodist License Agreement, then royalties owed to Houston Methodist would be computed as a percentage of payments received by us from the sublicensee. In addition, the termination provisions provide that Houston Methodist may only terminate the Methodist License Agreement, among other things, in the event that after five years we are not “Actively Attempting to Develop or Commercialize,” as such term is defined in the Methodist License Agreement.
In May 2023, we entered into an SRA with HMRI in which the Company agreed to fund approximately $0.5 million through May 2024. Along with HMRI, we have subsequently amended the SRA multiple times to increase agreed funding and, at times, extend the term. In January 2026, we entered into another SRA with HMRI in which we agreed to fund research through the earlier of completion of the research or 12 months. The maximum funding commitment is $0.6 million. During the three months ended MarchJune 31,30, 2026 and 2025, we incurred $0.1 million and $0.2$0.3 million, respectively, in research and development expenses related to the SRA. During the six months ended June 30, 2026 and 2025, we incurred $0.2 million and $0.5 million, respectively, in research and development expenses related to the SRA.
We may owe tiered payments to ARS based on its achievement of certain developmental milestones. Under the ARS License Agreement, the Company will pay an aggregate of $13.3 million in developmental milestone payments for the first Combination Product (as defined in the ARS License Agreement) in a new indication. We will then pay an aggregate of $11.6 million in developmental milestone payments for each Combination Product in each subsequent new indication. Further, for the first Mono Product (as defined In the ARS License Agreement) we will pay an aggregate of $11.8 million in developmental milestone payments. We will then pay an aggregate of $5.9 million in developmental milestone payments for each Mono Product in each subsequent new indication, and an aggregate of $5.9 million if all developmental milestones are achieved for each new indication. We will also owe royalties on net sales of licensed products ranging from low to mid-single digit percentages. In the event we sublicensessublicense itsthe rights under the ARS License Agreement, we will owe royalties on sublicense income within the range of 10% to 20%.
In 2023, we entered into an exclusive DRL Agreement with DRL which allowed us to in-license DRL’s abatacept biosimilar for use in the development of COYA 302. COYA 302 is a dual biologic intended to suppress neuroinflammation via multiple immunomodulatory pathways, for the treatment of neurodegenerative conditions. The DRL Agreement also provides for the license of COYA 301 to DRL to permit the commercialization by DRL of COYA 302 in territories not otherwise granted to Coya. In consideration for the license we have paid a non-refundable upfront fee of $0.4 million. We will pay to DRL up to an aggregate of approximately $2.9 million of pre-approval regulatory milestone payments for the first indication in the Field (as defined in the DRL Agreement), and an additional approximately $20.0 million if all other development, regulatory approval and sales milestones are incurred under the DRL Agreement. We will also pay to DRL a low-six figure milestone payment per additional indication. Further, pursuant to the DRL Agreement, we will pay to DRL single-digit royalties on Net Sales (as defined in the DRL Agreement). As of MarchJune 31,30, 2026, we owed DRL $0.3 million in milestone payments in connection with the FDA's approval of our IND of COYA 302 in patients with FTD.
COYA insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding COYA (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| DME Capital Management (Greenlight Capital, David Einhorn) | 2026-06-30 | 2,335,540 | $13.7M | 0.35% | No change |
| Renaissance Technologies | 2026-06-30 | 192,986 | $1.1M | 0.0% | Added 86% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 37,681 | $148.5K | — | Sold out |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 13,105 | $76.7K | 0.0% | Reduced 22% |