DTIL 10-K & 10-Q changes, risk factors and insider trading
Precision Biosciences Inc. · Nasdaq · Biological Products, (No Diagnostic Substances) · CIK 1357874 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We have obtained a rare pediatric disease designation for PBGENE-DMD, however, there is no guarantee that FDA approval of PBGENE-DMD will result in issuance of a priority review voucher”
New heading “A Fast Track Designation from the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive regulatory approval.”
Removed heading “Our business and operations may suffer in the event of information technology system failures, cyber-attacks or deficiencies in our security, which could materially affect our results.”
Largest changes
“We and certain of our service providers are from time to time, subject to cyberattacks and security incidents. While we do not believe that we have experienced any material impact to our business strategy, results of operations, or financial condition resulting from a system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our or our critical third parties’ operations, it could result in delays and/or material disruptions of our research and development programs, our operations and ultimately, our financial results. …”see in full comparison
We and certain of our service providers are from time to time subject to cyberattacks and security incidents. While we do not believe that we have experienced anysee in full comparisonsignificantmaterial impact to our business strategy, results of operations, or financial condition resulting from a system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our or our critical third parties’ operations, it could result inadelays and/or materialdisruptiondisruptions of our research and developmentprogramsprograms, our operations and ourbusinessfinancialoperations, whether due to a loss, corruption or unauthorized disclosure of our trade secrets, personal information or other proprietary or sensitive information or other similar disruptions.results. For example, the loss ofclinicaltrial data fromcompletedcompleted, ongoing orongoing clinicalplanned trials could result in delays in our development and regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of or damage to data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability due to delays in the development of our product candidates and/or due to reputational harm, litigation, regulatory investigations and enforcement, fines and penalties, or increased costs of compliance and system remediation. Any losses, costs or liabilities may not be covered by, or may exceed the coverage limits of, any or all applicable insurance policies.
“Even though we may have contractual protections with third parties who process or handle sensitive information, any breach could compromise our or their networks and the information stored there could be accessed, publicly disclosed, lost or stolen. …”see in full comparison
“Our information technology systems and those of our third-party service providers, strategic partners and other contractors or consultants are vulnerable to attack, damage and interruption from computer viruses and malware (e.g. …”see in full comparison
“The current Presidential administration is pursuing a two-fold strategy to reduce drug costs in the U.S. While it is unclear whether and how such policies will be implemented, the proposed policies are likely to have a negative impact on the pharmaceutical industry and on our ability to receive adequate revenues for any products we commercialize and any additional product candidates we develop, if approved. …”see in full comparison
“A Fast Track Designation from the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive regulatory approval.”see in full comparison
Full comparison: every changed paragraph (283)
We do not expect to be profitable in the foreseeable future. Since inception, we have incurred significant operating losses. If our product candidates are not successfully developed and approved, we may never generate any revenue from product sales. Our net incomeloss was $7.2$(45.7) million for the year ended December 31, 2024.2025. As of December 31, 2024,2025, we had an accumulated deficit of $482.5$528.2 million. In addition, we have not commercialized any products and have never generated any revenue from product sales. Substantially all of our losses have resulted from expenses incurred in connection with our research and development activities, including our preclinical development activities, and from general and administrative costs associated with our operations. We have financed our operations primarily through proceeds from upfront and milestone payments from collaboration and licensing agreements, our IPO, private placements of our common stock, convertible preferred stock and convertible debt financings, underwritten and at-the-market (“ATM”) offerings of common stock and warrants, and borrowings on credit facilities. The amount of our future net losses will depend, in part, on the amount and growth rate of our expenses and our ability to generate revenues.
•continue our current research and development programs, including conducting laboratory and preclinical studies for product candidates;
•initiate potential clinical trials for product candidates;
•seek to identify, assess, acquire or develop additional research programs or product candidates;
•maintain, expand and protect our intellectual property portfolio;
•seek marketing approvals for any product candidates that may successfully complete development;
•establish a sales, marketing and distribution infrastructure to commercialize any products that may obtain marketing approval;
•change or add additional manufacturers or suppliers of biological materials or product candidates;
•further develop our genome editing technology;
•acquire or in-license other technologies;
•seek to attract new and retain existing personnel;
•expand our facilities; and
expand our facilities; and •incur increased costs as a result of operating as a public company.
We believe that, as of the date of this Annual Report on Form 10-K, existing cash and cash equivalents, inclusive of the expected operationalazer-cel receipts,milestone includingproceeds, upfrontcontinued fiscal and potentialoperating near-term consideration to be received from our licensees, operational efficiencies gained from divestment of our historical CAR T operations,discipline, and availability of our ATM facility will be sufficient to fund our operating expenses and capital expenditure requirements intothrough the second half of 2026.2028. We expect our cash runway to be sufficient to achievefund first-in-humanPBGENE-HBV Phaseand 1 clinicalPBGENE-DMD data formilestones twothrough of our wholly-owned programs.2028. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. Our operating plans and other demands on our cash resources may change as a result of many factors, including the outcomes of preclinical studies and clinical trials, our ability to obtain regulatory approval, investor interest in and the likelihood of commercial success of particular product candidates and programs, and other factors unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations and licensing arrangements, or abandon one or more product candidates or programs in the event that sufficient funding is not available.
•the timing, scope, progress, costs, results and analysis of results of research activities, preclinical studies and potential clinical trials for any of our product candidates;
•the costs of future activities, including product manufacturing, sales, marketing and distribution activities for any product candidates that receive regulatory approval;
•the success of our existing or future collaborative and other out-licensing relationships;
•the extent to which we exercise any development or commercialization rights under collaborative relationships;
•our ability to establish and maintain additional collaborative or other out-licensing relationships on favorable terms, or at all;
•the extent to which we expand our operations and the timing of such expansion, including with respect to facilities, employees and product development platforms;
•the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending intellectual property-related claims;
•the extent to which we acquire or in-license other technologies or product candidates;
•the extent to which we acquire or invest in other businesses;
•the costs of continuing to operate as a public company; and
the costs of continuing to operate as a public company; and •the amount of revenues, if any, received from commercial sales of any products that we develop alone or with collaborators that receive regulatory approval.
Even if we believe we have sufficient funds for our current or future operating plans, we may continue to seek additional capital if market conditions are favorable or in light of specific strategic considerations. Adequate additional financing may not be available to us on acceptable terms, or at all.
Even if we believe we have sufficient funds for our current or future operating plans, we may continue to seek additional capital if market conditions are favorable or in light of specific strategic considerations. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, SEC regulations limit the amount that companies with a public float of less than $75 million may raise during any 12-month period pursuant to a shelf registration statement on Form S-3. As of the filing of this Annual Report on Form 10-K, we are subject to General Instruction I.B.6 to Form S-3 (the “Baby Shelf Rule”). Under the Baby Shelf Rule, the amount of funds we can raise through primary public offerings of securities in any 12-month period using our registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of our common stock held by non-affiliates. Therefore, we will be limited in the amount of proceeds we are able to raise by selling shares of our common stock using our Form S-3, including through our ATM facility, until our public float exceeds $75 million. Furthermore, if we are required to file a new registration statement on another form, we may incur additional costs and be subject to delays due to review by the SEC staff.
In July 2024, we entered into an amended and restated loan and security agreement (the “2024 Loan and Security Agreement”) with Banc of California (formerly known as Pacific Western Bank) pursuant to which Banc of California provided us with a term loan with a principal amount of $22.5 million (the “2024 Term Loan”). Pursuant to the terms of the 2024 Loan and Security Agreement, we granted Banc of California a security interest in a cash security account at Banc of California (the “Cash Security Account”).
•change our name, location, executive office or executive management, business, fiscal year, or control;
•complete mergers with or into other entities;
•incur indebtedness; and
incur indebtedness; and •maintain less than $22.5 million of unencumbered cash in the Cash Security Account.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity and/or debt financings and collaborations, licensing agreements or other strategic arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, including in underwritten and ATM offerings, stockholders’ ownership interest will be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect common stockholders’ rights. For example, on March 19,in 2025, 921,2434.4 million shares were sold through the ATM facility. Additionally, in March 2024, we entered into an underwriting agreement relating to the offering, issuance and sale of an aggregate of 2,500,000 shares of our common stock and warrants to purchase up to an aggregate of 2,500,000 shares of our common stock at a combined offering price of $16.00 per shareshare. On November 10, 2025, we also entered into an underwriting agreement relating to the issuance and sale of 10,815,000 shares of our common stock and accompanying one-half warrants to purchase up to 5,407,500 shares of our common stock at a combined price of $6.14 per share. Further, in lieu of common stock to certain investors, we issued pre-funded warrants to purchase up to 1,400,000 shares of our common stock and accompanying one-half warrants to purchase up to 700,000 shares of our common stock at a combined price of $6.139995 per share. Both of which resulted in dilution to our existing stockholders. Moreover, there is a provision in each warrant under which we may be required to purchase the warrants from the holders by paying cash in an amount equal to the Black-Scholes value of the remaining unexercised portion of the warrants in certain specified situations involving a “fundamental transaction” (as defined in the warrants), which generally includes a merger with another person or entity, the sale, transfer or other disposition of all or substantially all of our assets, another person or entity becoming the beneficial owner of 50% of the outstanding shares of our common stock, any reclassification, reorganization or recapitalization of our common stock, any compulsory share exchange pursuant to which our common stock is effectively converted into or exchanged for other securities, cash or property, any plan or proposal for our voluntary or involuntary dissolution, liquidation or the winding up of our affairs, or if other conditions are met. It may be uncertain whether a particular transaction or series of transactions will trigger the cash-settlement provision or if the provision is triggered, what the actual payment due to a warrant holder would be in such circumstance, but any such payment could be material to us and could materially and adversely affect our financial condition. Furthermore, we may find it more difficult to raise additional equity capital needed for our business or to pursue strategic alternatives or other corporate transactions while the warrants are outstanding.
Research programs to identify new product candidates and product development platforms require substantial technical, financial and human resources. We are continually evaluating our business strategy and may modify this strategy in light of developments in our business and other factors. We may focus our efforts and resources on potential programs, product candidates or product development platforms that ultimately prove to be unsuccessful. Any time, effort and financial resources we expend on identifying and researching new product candidates and product development platforms may divert our attention from, and adversely affect our ability to continue, development and commercialization of existing research programs, product candidates and product development platforms. Clinical trials of any of our product candidates may never commence despite the expenditure of significant resources in pursuit of their development, and our spending on current and future research and development programs, product candidates and product development platforms may not yield any commercially viable products. As a result of having limited financial and managerial resources, we may forego or delay pursuit of opportunities that later prove to have greater commercial potential. For example, as part of the ongoing strategic prioritization exercise, in 2023 we announced that while we will continue to pursue gene knock-out opportunistically, the proof-of-concept data continues to lead toward prioritizing programs involving complex edits and gene insertion. As such, we made the decision to cease pursuit of PBGENE-PCSK9 for familial hypercholesterolemia with iECURE as our partner in December 2022. We also made the choice to look for a partner in the kidney disease arena for further development of PBGENE-PH1 and will no longer develop the program on our own. There is no guarantee that this ongoing prioritization review will ultimately lead to any viable commercial products, profitable market opportunities or other value-enhancing activities. Our resource allocation decisions may cause us to fail to timely capitalize on viable commercial products or profitable market opportunities. Additionally, if we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other strategic arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
To date, we have focused our efforts on optimizing our proprietary genome editing technology and exploring its potential applications. ARCUS is a novel genome editing technology using sequence-specific DNA-cutting enzymes, or nucleases, that is designed to perform modifications in the DNA of living cells and organisms. Other companies have previously undertaken research and development of genome editing technologies using zinc finger nucleases, transcription activator-like effector nucleases (“TALENs”) and clustered regularly interspaced short palindromic repeats associated protein-0 nuclease (“CRISPR/Cas9,Cas9”), although none has obtained marketing approval for an in vivo gene editing product candidate developed using such technologies. Other genome editing technologies in development or commercially available, or other existing or future technologies, may lead to treatments or products that may be considered better suited for use in human therapeutics, which could reduce or eliminate our commercial opportunity.
The success of our business depends primarily upon our ability to identify, develop and commercialize products using our genome editing technology. AllOur of ournamed in vivo productdevelopment candidatesprograms, PBGENE-HBV and product development programs wePBGENE-DMD, are currentlyearly pursuingstage areclinical still in the discovery or preclinical stages.programs. We may be unsuccessful in advancing thosethese product candidatesprograms into later stage clinical development or in identifying anyand developing additional product candidates. Our ability to identify and develop product candidates is subject to the numerous risks associated with preclinical and early stage biotechnology development activities, including that:
•the use of ARCUS may be ineffective in identifying additional product candidates;
•we may not be able to assemble sufficient resources to acquire or discover additional product candidates;
•we may not be able to enter into collaborative arrangements to facilitate development of product candidates, the terms of our collaborative arrangements may change, or our collaborative arrangements may be terminated;
•competitors may develop alternatives that render our product candidates obsolete or less attractive;
•our product candidates may be covered by third parties’ patents or other exclusive rights;
•the regulatory pathway for a product candidate may be too complex, expensive or otherwise difficult to navigate successfully; or
the regulatory pathway for a product candidate may be too complex, expensive or otherwise difficult to navigate successfully; or •our product candidates may be shown to not be effective, have harmful side effects or otherwise pose risks not outweighed by such product candidate’s benefits or have other characteristics that may make the products impractical to manufacture, unlikely to receive any required marketing approval, unlikely to generate sufficient market demand or otherwise not achieve profitable commercialization.
Our current development programs and future product candidates may never be approved. Failure to successfully identify and develop new product candidates and obtain regulatory approvals for our products would have a material adverse effect on our business and financial condition and could cause us to cease operations.
The developmental and commercial success of our current development programs of future product candidates, or any that we develop alone or with collaborators in the future, will depend in part on public acceptance of the use of genome editing technology for the prevention or treatment of human diseases. Adverse public perception of applying genome editing technology for these purposes may negatively impact our ability to raise capital or enter into strategic agreements for the development of product candidates.
There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications for which we have research programs. Some of these competitive products and therapies are based on scientific approaches that are similar to our approach, and others are based on entirely different approaches. We principally compete with others developing and utilizing genome editing technology in the human health sector. Several companies have obtained FDA approval for autologous immunotherapies, and a number of companies are pursuing allogeneic immunotherapies. We expect that our operations focused on developing products for in vivo gene editing will face substantial competition from others focusing on gene therapy treatments, especially those that may focus on conditions that our product candidates target. Moreover, any human therapeutics products that we develop alone or with collaborators will compete with existing standards of care for the diseases and conditions that our product candidates target and other types of treatments, such as small molecule, antibody or protein therapies.
•obtaining, on a country-by-country basis, the applicable marketing authorization from the competent regulatory authority;
•the burden of complying with complex and changing regulatory, tax, accounting, labor and other legal requirements in each jurisdiction that we or our collaborators pursue;
•reduced protection for intellectual property rights;
•differing medical practices and customs affecting acceptance in the marketplace;
•import or export licensing requirements;
•governmental controls, trade restrictions or changes in tariffs;
•economic weakness, including inflation, political instability in particular foreign economies and markets, or civil unrest or war, such as the current conflict between Russia and Ukraine;
•production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;
•longer accounts receivable collection times;
•longer lead times for shipping;
•language barriers;
•foreign currency exchange rate fluctuations;
•foreign reimbursement, pricing and insurance regimes; and the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
•the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
Management's Discussion & Analysis (MD&A)
New heading “Wholly-Owned Portfolio”
New heading “Partnered In Vivo Gene Editing Program”
New heading “Non-Core Ex Vivo Programs”
New heading “Impairment Charges”
New heading “Impairment Charges”
Removed heading “Business Updates”
Removed heading “Corporate Updates”
Removed heading “Reverse Stock Split”
Removed heading “Prevail Therapeutics, Inc.”
Removed heading “Loss from Discontinued Operations”
Removed heading “Loss from Discontinued Operations”
Largest changes
“Unless earlier terminated, the Novartis Agreement will remain in effect on a licensed product-by-licensed product and country-by-country basis until the expiration of a defined royalty term for each licensed product and country. Novartis has the right to terminate the Novartis Agreement without cause by providing advance notice to us. Either party may terminate the Novartis Agreement for material breach by the other party and a failure to cure such breach within the time period specified in the Novartis Agreement. …”see in full comparison
“Pursuant to the terms of the Novartis Agreement, we will develop an ARCUS nuclease and conduct in vitro characterization for the licensed products, with Novartis then assuming responsibility for all subsequent development, manufacturing and commercialization activities. Novartis will receive an exclusive license for, and be required to use commercially reasonable efforts to conduct all subsequent research, development, manufacture and commercialization activities with respect to the licensed products. …”see in full comparison
“The ELIMINATE-B trial is actively enrolling patients in Moldova, Hong Kong, and New Zealand and we expect to initiate Phase 1 clinical activities in the U.S. following Investigational New Drug (“IND”) approval in March 2025. We also anticipate receiving approval to dose patients in the U.K. as part of the Phase 1 study. The ELIMINATE-B trial is designed to investigate PBGENE-HBV at multiple ascending dose levels with three dose administrations per dose level in patients with chronic hepatitis B who are HBeAg-negative. …”see in full comparison
“In January 2024 we entered into a license agreement with TG Cell Therapy, Inc. (“TG Subsidiary”) and its parent company TG Therapeutics, Inc. (“TG Parent” and, together with TG Subsidiary, “TG Therapeutics”) for non-oncological applications of azercabtagene zapreleucel (“azer-cel”) (the “TG License Agreement”). In connection with the TG License Agreement, we received upfront, and are also entitled to receive potential near-term, economics valued in the aggregate at $17.5 million. …”see in full comparison
Full comparison: every changed paragraph (126)
The following discussion and analysis of our financial condition andcondition, results of operationsoperations, and cash flows should be read in conjunction with our Financial Statements and the related notes to those statements included elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many important factors, including those set forth in Part I. Item 1A. “Risk Factors” of this Annual Report on Form 10-K, our actual results could differ materially from the results described in, or implied by, these forward-looking statements. As used in this Annual Report on Form 10-K, unless the context otherwise requires, references to “we,” “us,” “our,” the “Company” and “Precision” refer to Precision BioSciences, Inc.
A discussion regarding our financial condition andcondition, results of operations, and cash flows, including liquidity and capital resources, for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 is presented below.
Wholly-Owned Portfolio
PBGENE-HBV is our wholly owned in vivo gene editing program under investigation in a global first-in-human clinical trial, ELIMINATE-B, which is designed to be a potentially curative treatment for chronic Hepatitis B infection. In patients with chronic hepatitis B, cccDNA acts as the template to make new infectious viral particles. PBGENE-HBV is the only clinical stage program that targets the elimination of cccDNA, the sole source of viral replication, leading to sustained loss of HBV DNA and other downstream viral markers.
On November 10, 2025, we reported late-breaking Phase 1 data at AASLD The Liver Meeting® 2025 from the first three ELIMINATE-B cohorts, including nine patients across 22 total doses, demonstrating safety and tolerability across repeat administrations (at doses of 0.2 mg/kg, 0.4 mg/kg, and 0.8 mg/kg at eight week intervals) with no dose-limiting toxicities reported, and evidence of cumulative, dose-dependent antiviral activity and HBsAg declines. The presentation featured substantial viral marker reductions and paired biopsy data providing first evidence consistent with direct viral DNA gene editing.
As part of the ongoing assessment of the safety and efficacy profile of PBGENE-HBV after repeat doses in Part 1 dose finding, we have administered additional doses in Cohort 3 and in parallel commenced pre-planned additional cohorts to investigate a shorter dosing interval. Cohort 4 is investigating dosing at 0.4 mg/kg every 4 weeks and Cohort 5 is investigating dosing at 0.65 mg/kg every 4 weeks to evaluate the potential for an optimized therapeutic index. In addition, to mitigate acute infusion reactions common to LNP delivered therapies, such as transient hypotension and transient elevated liver enzymes, we continue to investigate prophylactic measures per protocol. These measures include intravenous fluids, steroids, antihistamines and infusion duration across dose levels and administrations. The goal during Part 1 of the study is to select the dose and schedule that achieves the desired therapeutic index to move to the expansion phase of the ELIMINATE-B trial.
PBGENE-HBV is the first in vivo gene editing approach to prospectively employ repeat administrations of LNP. To date, 13 participants have completed more than 30 administrations of PBGENE-HBV across five cohorts. Looking ahead, we expect additional clinical biomarker and biopsy data in the first half of 2026 and expect to have completed dosing in Cohorts 3, 4, and 5. This will inform selection of an optimal dosing regimen intended to support discontinuation of nucleos(t)ide analog treatment and progression into the Part 2 expansion phase of ELIMINATE-B. We expect to share further clinical data from the PBGENE-HBV programs at hepatitis-focused medical conferences throughout 2026.
PBGENE-DMD is our wholly-owned development program for the treatment of DMD. PBGENE-DMD is designed to potentially improve function for approximately 60% of patients afflicted with DMD by employing two complementary ARCUS nucleases delivered in a single AAV to excise exons 45-55 of the dystrophin gene. The aim of this approach is to restore a near-full length functional dystrophin protein within the body that more closely resembles normal dystrophin as opposed to synthetic, truncated microdystrophin approaches with minimal functional benefit.
In October 2025, we presented a late-breaking poster presentation at the 30th Annual International Congress of the World Muscle Society meeting, highlighting durable improvements in muscle function over time through increased dystrophin expression and dystrophin-positive cells for PBGENE-DMD. The data from a DMD mouse model demonstrated that dystrophin protein was detected in all muscles evaluated following the administration of PBGENE-DMD at doses up to 1x1014 vg/kg, with increased expression observed at 9 months versus prior timepoints in the quadriceps, gastrocnemius, heart, and diaphragm, resulting in substantial and sustained functional muscle improvement. An increase in dystrophin-positive muscle cells were observed in all muscles. The maximum force output was significantly improved over untreated DMD mice at 3-, 6- and 9-months post-treatment, highlighting expected durability of PBGENE-DMD outcomes. New preclinical study data supporting the potential long-term efficacy of PBGENE-DMD was presented in a poster session at the Muscular Dystrophy Association Clinical & Scientific Conference 2026 in March 2026.
In February 2026, we announced that we had received IND clearance from the FDA to advance PBGENE-DMD. IND clearance enables us to initiate IRB activities and clinical trial site activation for the FUNCTION-DMD Phase 1/2 clinical trial for PBGENE-DMD. The FUNCTION-DMD trial will include ambulatory DMD patients at highly specialized U.S clinical trial sites. Initial data from multiple patients is expected by year-end 2026, including safety and early efficacy assessment based on near full-length dystrophin protein expression from muscle biopsies.
PBGENE-3243 is a potential treatment for m.3243 associated mitochondrial disease that is designed to specifically target and eliminate mutant m.3243G mitochondrial DNA, thereby eliminating the root cause of the disease. We have paused development of PBGENE-3243 to prioritize our two lead programs, PBGENE-HBV and PBGENE-DMD.
Partnered In Vivo Gene Editing Program
In partnership with iECURE, an ARCUS-mediated gene insertion approach is being evaluated as a potentially curative treatment for neonatal onset OTC deficiency in the ongoing OTC-HOPE study. Recently, iECURE reached alignment with the FDA on the primary and key secondary efficacy endpoints, comparators and study size for the ongoing OTC-HOPE study which could support a Biologics License Application. In addition, ECUR-506 was granted FDA RMAT designation for neonatal onset OTC deficiency. The OTC-HOPE study is ongoing in the U.K., the U.S., Australia, and Spain. In January 2025, iECURE reported clinical results demonstrating complete clinical response in the first participant at the lowest dose level (1.3x1013 GC/kg) of ECUR-506, as defined by the study protocol. iECURE expects to release additional patient data from the ongoing OTC-HOPE trial in the first half of 2026.
Non-Core Ex Vivo Programs
Imugene continues development of azer-cel in diffuse large B-cell lymphoma and has received written guidance from the FDA regarding the registrational pathway for azer-cel. The guidance provided clear alignment with the FDA across key elements required to support advancement into a pivotal study, including dosing regimen, patient population, endpoints, and manufacturing readiness. On October 31, 2025, we received an $8.0 million milestone payment from Imugene, comprised of $3.0 million in cash and $5.0 million in Imugene stock.
Separately, azer-cel is being evaluated by TG Therapeutics (Nasdaq: TGTX) in a Phase 1 trial in progressive multiple sclerosis. In March 2026, we announced the achievement of a clinical milestone under its license agreement with TG Therapeutics. As a result, we have earned a cash payment of $7.5 million in proceeds, inclusive of $5.25 million cash and $2.25 million for the purchase of 201,504 shares of our common stock by TG Therapeutics at $11.17 per share. Anticipated 2026 events include presentation of preliminary Phase 1 azer-cel data in progressive multiple sclerosis in the second half of 2026 and commencement of additional exploratory studies in autoimmune diseases outside of multiple sclerosis.
Business Updates
Since mid-2023, we have solely focused on leveraging our proprietary ARCUS genome editing platform to advance in vivo gene editing programs that go beyond gene knockouts in the liver and carry out more sophisticated edits such as gene insertions, gene excision, and gene elimination, unlocking a broader potential for ARCUS in vivo gene editing in human therapeutics.
In January 2024 we entered into a license agreement with TG Cell Therapy, Inc. (“TG Subsidiary”) and its parent company TG Therapeutics, Inc. (“TG Parent” and, together with TG Subsidiary, “TG Therapeutics”) for non-oncological applications of azercabtagene zapreleucel (“azer-cel”) (the “TG License Agreement”). In connection with the TG License Agreement, we received upfront, and are also entitled to receive potential near-term, economics valued in the aggregate at $17.5 million. We are also entitled to receive additional payments upon the achievement of additional specified milestones of up to $288.6 million. If a licensed product under the TG License Agreement is approved and sold, TG Therapeutics is also required to pay us tiered royalties ranging from high-single-digit to low-double-digit percentages on net sales of the licensed product. In August 2024, we announced TG Therapeutics received U.S. Food and Drug Administration (“FDA”) clearance for its investigational new drug (“IND”) application to investigate azer-cel in human clinical trials for the treatment of progressive forms of multiple sclerosis. TG Therapeutics initiated its Phase 1 clinical trial in 2024 and is actively enrolling patients to continue advancing the program through 2025.
In February 2024, we announced that we had granted Caribou Biosciences, Inc. (“Caribou”), a leading CRISPR genome-editing cell therapy company, a non-exclusive, worldwide license, with the right to sublicense, to one of our foundational cell therapy patent families for use with CRISPR-based therapies in the field of human therapeutics. Under the terms of the agreement, we received an upfront payment and, upon commercialization by Caribou, will receive royalties on net sales of licensed products. In addition, for each occurrence of certain strategic transactions involving Caribou, we are entitled to receive a specific tiered milestone payment.
In April 2024, we received written notice from Prevail Therapeutics, Inc. (“Prevail”), a wholly-owned subsidiary of Eli Lilly and Company, of its termination of the amended and restated development and license agreement between the Company and Prevail (the “Prevail Agreement”). Prevail’s notice informed us that Prevail was exercising its right pursuant to Section 15.3.2 of the Prevail Agreement to terminate the Prevail Agreement in its entirety without cause upon 90 days’ prior written notice to us. We subsequently exercised our rights to the return of the three programs. We are continuing to evaluate these returned programs to determine the appropriate next steps with each of them, including a novel gene excision approach for treatment of Duchenne Muscular Dystrophy (“DMD”), a liver target for gene insertion, and a gene editing program targeting neurons to address a disease of the central nervous system.
In July 2024, we entered into an amended and restated loan and security agreement (the “2024 Loan and Security Agreement”) with Banc of California (formerly known as Pacific Western Bank) pursuant to which Banc of California provided us with a term loan with a principal amount of $22.5 million (the “2024 Term Loan”). The proceeds from the 2024 Term Loan were used to repay the $22.5 million outstanding principal balance under our revolving line of credit with Banc of California (the “Revolving Line”), and pursuant to the terms of the 2024 Loan and Security Agreement, the Revolving Line was terminated.
Corporate Updates
The ELIMINATE-B trial is actively enrolling patients in Moldova, Hong Kong, and New Zealand and we expect to initiate Phase 1 clinical activities in the U.S. following Investigational New Drug (“IND”) approval in March 2025. We also anticipate receiving approval to dose patients in the U.K. as part of the Phase 1 study. The ELIMINATE-B trial is designed to investigate PBGENE-HBV at multiple ascending dose levels with three dose administrations per dose level in patients with chronic hepatitis B who are HBeAg-negative. PBGENE-HBV is our lead wholly owned in vivo gene editing program designed eliminate cccDNA, the key source of replicating hepatitis B virus (“HBV”), and inactivating integrated HBV DNA in hepatocytes. We dosed the first patient in December 2024 and have completed dosing the low-dose cohort (N= 3 patients) with the first dose administration of PBGENE-HBV. In the first cohort, all three patients dosed with the first dose administration of PBGENE-HBV have completed the initial safety evaluation period. PBGENE-HBV was well tolerated and none of the patients experienced a Grade ≥2 treatment-related adverse event or serious adverse event. In addition to safety, the ELIMINATE-B protocol is designed to assess the efficacy for three dose administrations at each dose level, with the goal to maximize cumulative viral editing to achieve undetectable levels of hepatitis B surface antigen (“HBsAg”). PBGENE-HBV demonstrated a substantial reduction in HBsAg in two of the three participants following the first administration at the lowest dose.
HBV causes inflammation and damage to the liver, leading to chronic infection and increased risk of death from liver cancer or cirrhosis. There is no cure for chronic hepatitis B and current treatments rarely result in functional cure, primarily due to persistence of viral DNA in the liver. In patients with chronic HBV, genetic material of the virus is converted within infected liver cells into cccDNA that acts as a template to make HBV copies. HBV also inserts its DNA into the human genome of infected liver cells. Both cccDNA and integrated HBV DNA produce the viral protein, HBsAg, which is secreted in the blood. Presence of HBsAg is associated with poorer outcomes and suppression of HBsAg is necessary for functional cure of chronic hepatitis B.
We believe specificity is of particular importance for developing a safe gene editing approach to eliminating HBV, as a lack of nuclease specificity can lead to unfavorable off-target results including increased integrations of HBV genomes into the human genome, as well as translocations between integrations. Preclinical data from the PBGENE-HBV program was presented in March 2025 at the Global Hepatitis Summit, in November 2024 at the American Association for the Study of Liver Diseases, and in June 2024 at a poster presentation and panel discussion at the European Association for the Study of the Liver Congress. The data presented supported the advancement of PBGENE-HBV into clinical development and highlighted the ability of ARCUS to make efficient, durable, and targeted edits to potentially eliminate cccDNA and inactivate integrated HBV DNA. The data also demonstrated a lack of detectable off-target editing for PBGENE-HBV at therapeutically relevant doses, including no editing-associated translocations in HBV infected primary human hepatocytes. PBGENE-HBV was well tolerated in non-human primates (“NHP”) across multiple dose administrations.
The PBGENE-3243 program, previously known as PBGENE-PMM, is our wholly-owned, first of its kind potential treatment for m.3243 associated mitochondrial disease. The program’s updated nomenclature more accurately describes its intended target patient population – those who have the m.3243 mutation and muscle-related symptoms. Mitochondrial diseases are the most common hereditary metabolic disorder, affecting 1 in 4,300 people. In particular, the m.3243 associated mitochondrial disease that our program intends to address affects about 20,000 people in the United States alone. The highly specific mitochondria-targeted ARCUS nucleases are designed to shift heteroplasmy by editing and eliminating mutant mitochondrial DNA while allowing normal (wild-type) mitochondrial DNA to repopulate in the mitochondria, thus improving cellular function. Preclinical data from the PBGENE-3243 program presented in June 2024 at the United Mitochondrial Disease Foundation’s Mitochondrial Medicine 2024 Conference and in March 2024 at a poster presentation at the Mitochondrial Medicine – Therapeutic Development Annual Conference demonstrated ARCUS’ ability to efficiently eliminate mutant mitochondrial DNA without nuclear off-target editing. We anticipate submitting an IND and/or CTA application in 2025 with respect to PBGENE-3243.
In October 2024, we presented a poster at the European Society of Gene & Cell Therapy 31st Annual Congress. The poster highlighted preclinical data demonstrating the ability of ARCUS to achieve high-efficiency gene insertion, gene replacement, and base correction via homology-directed repair (“HDR”). In the preclinical work presented, we showed that targeted gene insertion can be achieved using ARCUS in greater than 85% of T-cells and 39% of non-dividing primary human hepatocytes. These high rates of gene insertion were accomplished primarily through HDR, which the research demonstrated was dependent on homology arms in the repair template and on the characteristic ARCUS 3’ overhang cut in the direction of DNA replication.
We, along with our collaboration partners, intend to continue to evaluate the ARCUS platform with regards to safety, on-target editing, gene insertion, complex gene edits, and compatibility with viral and non-viral delivery.
In partnership with iECURE, Inc. (“iECURE”), an ARCUS-mediated gene insertion approach is being pursued as a potential treatment option for neonatal onset ornithine transcarbamylase (“OTC”) deficiency. iECURE has received regulatory approvals in the United States, the United Kingdom, Spain, and Australia for initiation of the OTC-HOPE study, a first-in-human Phase 1/2 trial evaluating ECUR-506 as a potential treatment for OTC deficiency, and has begun recruiting patients. In May 2024, iECURE announced that it had received Fast Track designation from the Food and Drug Administration (“FDA”) for ECUR-506. In January 2025, IECURE reported clinical efficacy and safety data in the first patient dosed with ECUR-506 in the Phase 1/2 OTC-HOPE study. iECURE expects to finish enrollment in 2025 and provide complete data for the program in the first half of 2026.
In June 2022, we announced we entered into an exclusive in vivo gene editing research and development collaboration and license agreement (the “Novartis Agreement”) with Novartis Pharma AG (“Novartis”). In connection with this partnership, we are developing a custom ARCUS nuclease that will be designed to insert, in vivo, a therapeutic transgene at a “safe harbor” location in the genome as a potential one-time transformative treatment option for diseases including certain hemoglobinopathies such as sickle cell disease and beta thalassemia. Under the terms of the Novartis Agreement, we will develop an ARCUS nuclease and conduct in vitro characterization, with Novartis then assuming responsibility for all subsequent research, development, manufacturing and commercialization activities.
Reverse Stock Split
On January 18, 2024, our stockholders approved a proposal to amend our amended and restated certificate of incorporation to effect a reverse stock split of our common stock at a ratio of not less than 1-for-10 and not more than 1-for-30, with such ratio and the implementation and timing of such reverse stock split to be determined by our board of directors in its sole discretion. On February 6, 2024, our board of directors approved a 1-for-30 reverse stock split of our issued and outstanding common stock, and on February 13, 2024, we filed with the Secretary of State of the State of Delaware a certificate of amendment to our amended and restated certificate of incorporation in order to effect the reverse stock split. Trading of our common stock on The Nasdaq Capital Market commenced on a split-adjusted basis on February 14, 2024. As a result of the reverse stock split, every 30 shares of our common stock issued or outstanding were automatically reclassified into and became one new share of common stock, and the number of our issued and outstanding shares of common stock was reduced to 4,191,053 and 4,164,038, respectively. All references to numbers of shares of common stock and per-share information in this Annual Report on Form 10-K have been adjusted retroactively, as appropriate, to reflect the reverse stock split.
InOn MarchNovember 2024,10, 2025, we entered into an underwriting agreement relating to the issuance and sale of an aggregate of 2,500,00010,815,000 shares of our common stock and accompanying one-half warrants to purchase 2,500,000up to 5,407,500 shares of our common stock at a combined offeringprice of $6.14 per share. Further, in lieu of common stock to certain investors, we issued pre-funded warrants to purchase up to 1,400,000 shares of our common stock and accompanying one-half warrants to purchase up to 700,000 shares of our common stock at a combined price of $16.00$6.139995 per share. Each whole warrant has a five-year term and an exercise price of $7.25 per share of $20.00, is immediately exercisable and will expire on March 5, 2029.share. The offering was made pursuant to a registration statement on Form S-3.
On January 7, 2024, we entered into a license agreement (the “TG License Agreement”) with TG Cell Therapy, Inc. (“TG Subsidiary”) and its parent company TG Therapeutics, Inc. (“TG Parent” and, together with TG Subsidiary, “TG Therapeutics”), pursuant to which we granted TG Subsidiary certain exclusive and non-exclusive license rights to develop, manufacture, and commercialize azer-cel for autoimmune diseases and other indications outside of cancer pursuant to the terms of the TG License Agreement.
Under the TG License Agreement, we are entitled to receivereceived an upfront cash payment of $10.0 million (the “Upfront Payment”), and are entitled to receive an additional cash payment of $7.5 million in the event thatas TG Therapeutics achievesachieved a certain clinical milestone that is expected to be achieved in the near-term (the “Initial Milestone Payment”),. andWe are entitled to additional payments upon the achievement of additional specified milestones of up to $288.6 million (the “Additional Milestone Payments”). As described below, up to $10.0 million of the cash payments received and potentially payable us are payable in exchange for the issuance (the “Company Stock Issuances”) to TG Subsidiary of shares of our common stock.
The Upfront Payment of $10.0 million iswas comprised of (i) a $5.25 million cash payment that was paid to us on February 5, 2024, (ii) a $2.25 million cash payment that was paid to us on February 5, 2024 in exchange for 97,360 shares of our common stock, based on a price per share equal to a 100% premium to the VWAP of our common stock for the 30 trading days prior to the date of the TG License Agreement, and (iii) a deferred cash payment of $2.5 million that was paid to us on January 6, 2025 in exchange for 220,712 shares of our common stock, based on a price per share equal to the greater of (A) 100% premium to the VWAP of our common stock for the 30 trading days prior to the date of payment or (B) a minimum price of $11.1660 determined in accordance with Nasdaq Listing Rule 5635(d) (the “Minimum Price”).Price.
The Initial Milestone Payment of $7.5 million, if payable,million will consist of (i) a $5.25 million cash milestone payment and (ii) a $2.25 million cash payment payable in exchange for such number of201,504 shares of our common stock determined based on a price per share equal to the greater of (A) 100% premium to the VWAP of our common stock for the 30 trading days prior to the achievement of such milestone or (B) the Minimum Price.
In consideration for the Acquired Assets, Imugene US assumed certain liabilities, paid us $8$8.0 million in cash, and issued us convertible notes pursuant to the terms and conditions set forth in a convertible note subscription deed (collectively, the “Imugene Convertible Note”) in an aggregate principal amount of $13$13.0 million. The Imugene Convertible Note was a non-interest bearing and had a maturity date of the first anniversary of the Closing Date (the “Maturity Date”). On the Maturity Date, the Imugene Convertible Note was redeemed through the payment of $9.75 million in cash, and the remaining amount of the note was converted into ordinary shares of Imugene Limited. The ordinary shares of Imugene Limited were determined using a conversion price based on the 10-day10 days volume weighted average price of Imugene Limited’s ordinary shares prior to the date of conversion.
In addition, under the License Agreement, we are eligible to receive milestone payments of up to an aggregate of $206$206.0 million for azer-cel, inclusive of aan $8.0 million milestone payment offrom $8Imugene which we received in October 2025, including $3.0 million in cash and equity$5.0 upon successful completion of the Phase 1b dosingmillion in theImugene CAR T relapsed LBCL patient population.stock. For azer-cel, we are eligible to receive double-digit royalties on net sales. For up to three additional research programs to be developed by Imugene, we are eligible for up to $145$145.0 million in milestone payments and, if licensed products are approved and sold, tiered royalties ranging from the mid-single digit to low-double digit percentages on net sales of such licensed products. In addition, we are eligible to receive mid-single digit percentage-based fees for certain change of control transactions involving Imugene and for partnering transactions involving a licensed product. Imugene’s obligation to pay royalties to us expires on a country-by-country and licensed product-by-licensed product basis, upon the latest to occur of certain events related to expiration of patents, regulatory exclusivity or a period of 10 years following the first commercial sale of the respective licensed product.
We concluded the Imugene License Agreement represents functional intellectual property in accordance with ASC 606 given we do not expect to provide any additional services to Imugene outside of the right to use the licensed intellectual property. As of December 31, 20242025 management has constrained all remaining variable consideration related to milestone payments in the Imugene License Agreement given the level of uncertainty associated with achievement of the milestone payments. Accordingly,As noa result of the milestone payment received in October 2025, $8.0 million of revenue was recognized under the Imugene License Agreement during the year ended December 31, 2025. There was no revenue recognized under the Imugene License Agreement during the year ended December 31, 2024.
On June 14, 2022, we entered into the Novartis Agreement, which became effective on June 15, 2022 (the “Novartis Effective Date”), to collaborate to discover and develop in vivo gene editing products incorporating our custom ARCUS nucleases for the purpose of seeking to research and develop potential treatments for certain diseases (collectively referred to as licensed products). Any initial licensed products under the Novartis Agreement will be developed for the potential treatment of certain hemoglobinopathies,diseases, including sickle cell disease and beta thalassemia.
In July 2022, we received a $50.0 million upfront cash payment under the Novartis Agreement. Additionally, on the Novartis Effective Date, Novartis made an equity investment in our common stock pursuant to a stock purchase agreement.
Pursuant to the terms of the Novartis Agreement, we will develop an ARCUS nuclease and conduct in vitro characterization for the licensed products, with Novartis then assuming responsibility for all subsequent development, manufacturing and commercialization activities. Novartis will receive an exclusive license for, and be required to use commercially reasonable efforts to conduct all subsequent research, development, manufacture and commercialization activities with respect to the licensed products. We will initially develop a single, custom ARCUS nuclease for a defined “safe harbor” target site for insertion of specified therapeutic payloads in the patient’s genome (the “Initial Nuclease”) for Novartis to further develop as a potential in vivo treatment option for certain hemoglobinopathies, including sickle cell disease and beta thalassemia. Pursuant to the terms of the Novartis Agreement, Novartis may elect, subject to payment of a fee to us, to replace licensed products based on the Initial Nuclease with licensed products based on a second custom ARCUS nuclease we design for gene editing of a specified human gene target associated with hemoglobinopathies (the “Replacement Nuclease”). Additionally, Novartis has the option, upon payment of a fee to us for each exercise of the option, to include licensed products utilizing the Initial Nuclease for insertion of up to three additional specified therapeutic payloads at the “safe harbor” target site, each intended to treat a particular genetic disease. The exercise period for such option ends on the earlier of (a) the fourth anniversary of the Novartis Effective Date and (b) the replacement of the Initial Nuclease with the Replacement Nuclease as described above.
In July 2022, we received a $50.0 million upfront cash payment under the Novartis Agreement. Additionally, on the Novartis Effective Date, Novartis made an equity investment in our common stock pursuant to a stock purchase agreement (the “Novartis Stock Purchase Agreement”) pursuant to which, on the Novartis Effective Date, we issued and sold to Novartis 413,581 shares of our common stock (the “Novartis Shares”) in a private placement transaction for an aggregate purchase price of $25.0 million, or approximately $60.30 per share. The price per share of our common stock under the Novartis Stock Purchase Agreement represented a 20% premium over the volume-weighted-average-price of our common stock over the 10 trading days preceding the execution date of the Novartis Stock Purchase Agreement.
We will also be eligible to receive milestone payments of up to an aggregate of approximately $1.4 billion as well as certain research funding. If licensed products resulting from the collaboration are approved and sold, we will also be entitled to receive tiered royalties ranging from the mid-single digit to low-double digit percentages on net sales of licensed products, subject to customary potential reductions. Novartis’s obligation to pay royalties to us expires on a country-by-country and licensed product-by-licensed product basis, upon the latest to occur of certain events related to expiration of patents, regulatory exclusivity or a period of 10 years following the first commercial sale of the licensed product.
Unless earlier terminated, the Novartis Agreement will remain in effect on a licensed product-by-licensed product and country-by-country basis until the expiration of a defined royalty term for each licensed product and country. Novartis has the right to terminate the Novartis Agreement without cause by providing advance notice to us. Either party may terminate the Novartis Agreement for material breach by the other party and a failure to cure such breach within the time period specified in the Novartis Agreement. We may also terminate the Novartis Agreement in the event that Novartis brings a challenge to our patents.
During the years ended December 31, 2024 and 2023 we recognized revenue under the Novartis Agreement of $6.4 million and $22.7 million, respectively. Deferred revenue related to the Novartis Agreement amounted to $26.3 million and $32.4 million as of December 31, 2024 and December 31, 2023, respectively, of which $3.0 million and $7.4 million, respectively, was included in current liabilities within the balance sheets.
Prevail Therapeutics, Inc.
On November 19, 2020, we entered into a development and license agreement with Eli Lilly and Company (“Lilly”) to collaborate to discover and develop in vivo gene editing products incorporating ARCUS nucleases to utilize ARCUS for the research and development of potential in vivo therapies for genetic disorders, which was subsequently assigned to Prevail Therapeutics Inc., a wholly-owned subsidiary of Lilly (“Prevail”), effective November 1, 2022 (the “Original Prevail Agreement”).
On June 30, 2023, we entered into an amended and restated development and license agreement (the “Prevail Agreement”) with Prevail. The Prevail Agreement amended and restated the Original Prevail Agreement. Pursuant to the terms of the Prevail Agreement, we and Prevail continued to collaborate on developing our ARCUS nucleases for the research and development of potential in vivo therapies for genetic disorders, including Duchenne muscular dystrophy, a liver-directed target, and a central nervous system directed target. Pursuant to the Prevail Agreement, manufacturing initial clinical trial material for the first licensed product, which was previously our responsibility to conduct at Prevail’s expense, instead became Prevail’s responsibility at Prevail’s expense.
On AprilOctober 11,31, 2024,2025, we received written notice from PrevailNovartis of its termination of the PrevailNovartis Agreement. Prevail’sThe notice informed us that PrevailNovartis was exercising its right pursuant to Section 15.3.2 of the Prevail Agreement to terminate the PrevailNovartis Agreement in its entirety without cause upon 90 days’ prior written notice to us. We subsequently exercised our rights to the return of the three programs. The termination was effective on JulyJanuary 10,30, 2024.2026. Although we and Novartis have concluded work in the area of hemoglobinopathies, we and Novartis are continuing our research collaboration in other areas of undisclosed therapeutic focus.
During the years ended December 31, 20242025 and 2023,2024, we recognized revenue under the PrevailNovartis Agreement of $52.7$26.3 million and $26.06.4 million, respectively. TheDuring Companythe hasyear noended December 31, 2025, the deferred revenue underbalance related to the PrevailNovartis Agreement was reduced to 0.0 million. The deferred revenue balance related to the Novartis agreement as of December 31, 2024, due to the termination. Deferred revenue related to the Prevail Agreement2024 was $52.7$26.3 million as of December 31, 2023,million, of which $4.7$3.0 million was included in current liabilities within the balance sheet.sheets.
In August 2021, we entered into a development and license agreement with iECURE (the “iECURE DLA”) under which iECURE was to advance our PBGENE-PCSK9 candidate through preclinical activities as well as a Phase 1 clinical trial in order to gain access to a license to use our PCSK9-directed ARCUS nuclease to insert genes into the PCSK9 locus to develop treatments for four pre-specified rare genetic diseases, including OTC deficiency (the “PCSK9 License”). Simultaneously with the entry into the iECURE DLA, we and iECURE entered into an equity issuance agreement (the “iECURE Equity Agreement”), pursuant to which iECURE issued us common stock in iECURE as additional consideration for the PCSK9 license. Additionally, we are eligible to receive milestone and mid-single digit to low double digit royalty payments on sales of iECURE products developed with ARCUS.
We adjust the carrying value of the iECURE equity to fair value each reporting period with any changes in fair value recorded to other income (expense). There was no change in the fair value of the IECURE equity during the year ended December 31, 2024. During the year ended December 31, 2023,2025, we recorded a $0.6$2.5 million increasedecrease in the carrying value of our iECURE equity to adjust to fair value. There was no change in the fair value of the iECURE equity during the year ended December 31, 2024.
Revenue
•salaries, benefits and other related costs, including share-based compensation expense, for personnel engaged in research and development functions;
•expenses incurred under agreements with third parties, including third parties that conduct preclinical research and development activities on our behalf;
•costs of manufacturing drug products for use in our preclinical studies, including the costs of contract manufacturing organizations (“CMOs”);
•costs of outside consultants;
What changed in the latest 10-Q
Risk Factors
Largest changes
We do not expect to be profitable in the foreseeable future. Since inception, we have incurred significant operating losses. If our product candidates are not successfully developed and approved, we may never generate any revenue from product sales. Our net loss wassee in full comparison$18.4$51.1 million for thethreesix months endedMarchJune31,30, 2026. As ofMarchJune31,30, 2026, we had an accumulated deficit of$546.6$579.3 million. In addition, we have not commercialized any products and have never generated any revenue from product sales. Substantially all of our losses have resulted from expenses incurred in connection with our research and development activities, including our preclinical development activities, and from general and administrative costs associated with our operations. We have financed our operations primarily through proceeds from upfront and milestone payments from collaboration and licensing agreements, our IPO, private placements of our common stock, convertible preferred stock and convertible debt financings, underwritten and ATM offerings of common stock and warrants, and borrowings on credit facilities. The amount of our future net losses will depend, in part, on the amount and growth rate of our expenses and our ability to generate revenues.
As ofsee in full comparisonMarchJune31,30, 2026, we had cash, cash equivalents and restricted cash of$125.8$112.4 million. While we are not aware of any downgrades, material losses or other significant deterioration in the fair value of our cash equivalents sinceMarchJune31,30, 2026, deterioration of the global credit and financial markets could negatively impact our current portfolio of cash equivalents or our ability to meet our financing objectives. In addition, we may have bank deposits at financial institutions in excess of FDIC insured limits, and we currently maintain and are required to maintain such deposits at the Banc of California pursuant to the 2024 Loan and Security Agreement. Market conditions can impact the viability of these institutions and, in the event of failure of the financial institution where we maintain our cash and cash equivalents, if the treatment of our cash sweep accounts were called into question in a bank receivership or if there is continued turmoil in the banking industry generally, we may not be able to access uninsured funds in a timely manner or at all, which would adversely impact our business, financial condition and results of operations. Furthermore, our stock price may decline due in part to the volatility of the stock market and any general economic downturn.
Full comparison: every changed paragraph (5)
We do not expect to be profitable in the foreseeable future. Since inception, we have incurred significant operating losses. If our product candidates are not successfully developed and approved, we may never generate any revenue from product sales. Our net loss was $18.4$51.1 million for the threesix months ended MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, we had an accumulated deficit of $546.6$579.3 million. In addition, we have not commercialized any products and have never generated any revenue from product sales. Substantially all of our losses have resulted from expenses incurred in connection with our research and development activities, including our preclinical development activities, and from general and administrative costs associated with our operations. We have financed our operations primarily through proceeds from upfront and milestone payments from collaboration and licensing agreements, our IPO, private placements of our common stock, convertible preferred stock and convertible debt financings, underwritten and ATM offerings of common stock and warrants, and borrowings on credit facilities. The amount of our future net losses will depend, in part, on the amount and growth rate of our expenses and our ability to generate revenues.
Research programs to identify new product candidates and product development platforms require substantial technical, financial and human resources. We are continually evaluating our business strategy and may modify this strategy in light of developments in our business and other factors. We may focus our efforts and resources on potential programs, product candidates or product development platforms that ultimately prove to be unsuccessful. Any time, effort and financial resources we expend on identifying and researching new product candidates and product development platforms may divert our attention from, and adversely affect our ability to continue, development and commercialization of existing research programs, product candidates and product development platforms. Clinical trials of any of our product candidates may never commence despite the expenditure of significant resources in pursuit of their development, and our spending on current and future research and development programs, product candidates and product development platforms may not yield any commercially viable products. As a result of having limited financial and managerial resources, we may forego or delay pursuit of opportunities that later prove to have greater commercial potential. For example, as part of the ongoinga strategic prioritization exercise,exercise in 20232023, we announced that while we will continue to pursue gene knock-out opportunistically, the proof-of-concept data continues to lead toward prioritizing programs involving complex edits and gene insertion. There is no guarantee that this ongoing prioritization review will ultimately lead to any viable commercial products, profitable market opportunities or other value-enhancing activities. Our resource allocation decisions may cause us to fail to timely capitalize on viable commercial products or profitable market opportunities. Additionally, if we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other strategic arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
On April 28, 2025, the UK adopted an amendment to the UK clinical trials regulations intended to support a more streamlined and flexible regulation of clinical trials and remove unnecessary administrative burdens on trial sponsors, while protecting the interests of trial participants. It also intends to bring the UK regulatory framework for clinical trials, which is still based on the now-repealed EU Clinical Trials Directive, into closer alignment with the CTR. The amendment will becomebecame applicable on April 28, 2026 following a one-year transition period.
As of MarchJune 31,30, 2026, we had 6667 full-time employees. Our future financial performance, ability to develop and commercialize product candidates alone or with collaborators and ability to compete effectively will depend in part on our ability to effectively manage the then applicable needs of our business. We may have difficulty identifying, hiring and integrating new personnel. Many of the biotechnology companies that we compete against for qualified personnel and consultants have greater financial and other resources (including the ability to offer greater cash and equity incentive compensation), different risk profiles and a longer history than we do. If we are unable to continue to attract and retain high-quality personnel and consultants, the rate and success at which we can identify and develop product candidates, enter into collaborative arrangements and otherwise operate our business will be limited.
As of MarchJune 31,30, 2026, we had cash, cash equivalents and restricted cash of $125.8$112.4 million. While we are not aware of any downgrades, material losses or other significant deterioration in the fair value of our cash equivalents since MarchJune 31,30, 2026, deterioration of the global credit and financial markets could negatively impact our current portfolio of cash equivalents or our ability to meet our financing objectives. In addition, we may have bank deposits at financial institutions in excess of FDIC insured limits, and we currently maintain and are required to maintain such deposits at the Banc of California pursuant to the 2024 Loan and Security Agreement. Market conditions can impact the viability of these institutions and, in the event of failure of the financial institution where we maintain our cash and cash equivalents, if the treatment of our cash sweep accounts were called into question in a bank receivership or if there is continued turmoil in the banking industry generally, we may not be able to access uninsured funds in a timely manner or at all, which would adversely impact our business, financial condition and results of operations. Furthermore, our stock price may decline due in part to the volatility of the stock market and any general economic downturn.
Management's Discussion & Analysis (MD&A)
New heading “Comparison of the Six Months Ended June 30, 2026 and June 30, 2025”
New heading “Research and Development Expenses”
New heading “General and Administrative Expenses”
New heading “Gain from Equity Method Investment”
New heading “Loss on Changes in Other Fair Value Adjustments”
New heading “Loss on Change in Fair Value of Warrant Liability”
New heading “Interest Expense”
New heading “Interest Income”
New heading “Gain (Loss) on Disposal of Assets”
Largest changes
“Comparison of the Six Months Ended June 30, 2026 and June 30, 2025”see in full comparison
Full comparison: every changed paragraph (69)
PBGENE-HBV is our wholly owned in vivo gene editing program under investigation in a global first-in-human clinical trial, ELIMINATE-B, which is designed to be a potentially curative treatment for chronic hepatitis B infection. In patients with chronic hepatitis B, cccDNA acts as the template to make new infectious viral particles. PBGENE-HBV is the only clinical stage program that targets theand elimination ofeliminates covalently closed circular DNA (“cccDNA”), the sole source of viral replication, leading to sustained loss of pre-genomic RNA (“pgRNA”), the precursor for hepatitis B virus (“HBV”) DNA and other downstream viral markers.DNA. PBGENE-HBV is the first and only in vivo gene editingelimination approach to prospectively employ repeat administrations of lipid nanoparticle (“LNP”). in chronic hepatitis B with the goal of complete viral cure.
On May 27, 2026, we presented new and late-breaking clinical data from the ongoing ELIMINATE-B study at the European Association for the Study of the Liver (“EASL”) Congress 2026 in Barcelona, Spain. The data cut on May 4, 2026 was based on 38 doses administered across 16 patients in five cohorts.
Liver biopsy data demonstrated a 1-log (10-fold) reduction in cccDNA-derived transcripts in one patient after only two administrations of PBGENE-HBV at 0.4 mg/kg, with less than 1% of cccDNA remaining post-treatment. Further biopsy analysis of a second patient, who received three doses at the same dose level and schedule, demonstrated that repeat administrations of PBGENE-HBV cumulatively increase the anti-cccDNA effect in the liver. Together, the biopsy data delivered proof that a gene editor can directly target and eliminate cccDNA in chronic hepatitis B patients.
Following treatment with PBGENE-HBV, pgRNA became durably undetectable in 100% of patients who had detectable pgRNA prior to treatment. Importantly, the loss of pgRNA was ongoing for up to six months as of the data cut-off. This sustained loss of pgRNA demonstrates the durability of PBGENE-HBV's elimination mechanism designed to directly target and eradicate cccDNA.
Substantial S-antigen declines were observed in 100% of patients treated, and durability was demonstrated in patients across all dose levels being investigated ranging from 0.2mg/kg to 0.8mg/kg. Additionally, the first patient dosed in the ELIMINATE-B trial continued to demonstrate substantial reductions more than one year after dosing.
No dose-limiting toxicities have been observed in 16 patients across five cohorts. The etiology of LNP-related hypotension observed during dose escalation was identified and ameliorated through straightforward mitigation measures such as a longer infusion time and a short course of steroids at the time of infusion.
Since the data update, we have opened new trial sites and continue enrolling additional patients, expanding cohorts 4 (0.4 mg/kg) and 5 (0.65 mg/kg), while collecting additional biopsies and blood biomarker data to further assess viral elimination. The current and future datasets are expected to inform selection of the optimal dosing schedule for Part 2 expansion. We continue our work with global investigators for next phase study design and expect to provide additional updates on the ELIMINATE-B trial progress by the end of 2026.
As part of the ongoing assessment of the safety and efficacy profile of PBGENE-HBV after repeat doses in Part 1 dose finding, we have treated 16 patients with 38 administrations of PBGENE-HBV across five cohorts evaluating the impact of escalating dose levels as well as 8-week and 4-week dosing intervals. The goal during Part 1 of the study is to select the dose and schedule that achieves the desired therapeutic index to move to the expansion phase of the ELIMINATE-B trial.
Looking ahead, we expect to share further clinical data from the PBGENE-HBV program at hepatitis-focused medical conferences throughout 2026, starting with the European Association for the Study of the Liver (“EASL”).
In April 2026, we announced that a late-breaking poster for PBGENE-HBV was accepted for presentation at the EASL Congress 2026. The poster titled, “First evidence of elimination and inactivation of cccDNA in liver biopsies collected from patients with chronic hepatitis B treated with PBGENE-HBV” will be presented by investigator, Man-Fung Yuen, Chair and Professor of Gastroenterology and Hepatology at The University of Hong Kong.
Also in April 2026, we announced that we received Clinical Trial Application (“CTA”) approval to expand ELIMINATE-B into France and Romania, broadening the study’s footprint in Europe. Site initiation activities are underway and initial patient screening in those countries is expected in the second quarter of 2026.
PBGENE-DMD is our wholly-owned development programcandidate for the treatment of Duchenne muscular dystrophy, or DMD. PBGENE-DMD is designed to potentiallydurably improve function for approximately 60% of patients afflicted with DMDDMD. byBy employing two complementary ARCUS nucleases delivered in a single adeno-associated virus (“AAV”), toPBGENE-DMD exciseexcises exons 45-55 of the dystrophin gene.gene, Therestoring aimexpression of this approach is to restore a near-fullnear length functionalfull-length dystrophin protein within the body that more closely resembles normal dystrophin as opposed to synthetic, truncated microdystrophin approaches with minimal functional benefit.protein.
We presented new preclinical data at the American Society of Gene & Cell Therapy (“ASGCT”) 2026 Annual Meeting in Boston, Massachusetts. The new data showed that treatment with PBGENE-DMD in early-juvenile mice resulted in significantly higher efficacy across key skeletal and respiratory muscles than treatment in late-juvenile mice over a comparable timeframe. This new data further supports evaluating PBGENE-DMD in younger DMD patient populations, including the 2- to 3-year-old patients, who are a key demographic of the ongoing Phase 1/2 FUNCTION-DMD trial evaluating PBGENE-DMD in boys ages 2 to 7.
We continue to advance the Phase 1/2 FUNCTION-DMD clinical trial, with two clinical trial sites now active: Arkansas Children's Hospital and Washington University School of Medicine, both recognized centers of excellence for DMD care.
The study is actively recruiting patients with initial safety data expected for year-end 2026.
Following investigational new drug (“IND”) clearance from the U.S. Food and Drug Administration (“FDA”) in early 2026, we advanced Institutional Review Board (“IRB”) activities and clinical trial site activation for the FUNCTION-DMD Phase 1/2 clinical trial for PBGENE-DMD. In April 2026, we activated Arkansas Children’s Hospital as the first clinical trial site and are actively enrolling patients.
In March 2026, PBGENE-DMD received FDA Fast Track designation; we hosted a DMD investor event, and we presented preclinical PBGENE-DMD data highlighting durable dystrophin expression and functional benefit at the Muscular Dystrophy Association Clinical & Scientific Conference 2026.
PBGENE-3243 is a potential treatment for m.3243 associated mitochondrial disease that is designed to specifically target and eliminate mutant m.3243G mitochondrial DNA, thereby eliminating the root cause of the disease. We have paused development of PBGENE-3243 to prioritize our two lead programs, PBGENE-HBV and PBGENE-DMD.
In partnership with iECURE, ECUR-506 is an ARCUS-mediated in vivo targeted gene insertion program currently in a first-in-human trial, OTC-HOPE, evaluating ECUR-506 as a potential treatment for neonatal onsetneonatal-onset ornithine transcarbamylase (“OTC”) deficiency. iECURE previously announced alignment with the U.S. Food and Drug Administration (“FDA”) on key study elements that could support a potential Biologics License Application (“BLA”). The OTC-HOPE study is ongoing in the U.K., the U.S., Australia, and Spain.
iECURE expects to presentpresented clinical data from the ongoing OTC-HOPE clinical trial at the American Society of Gene & Cell Therapy (“ASGCT”) Annual Meeting in May 2026.2026, The oral presentation at ASGCT will includeincluding preliminary data from study participants in the first three dose cohorts (n=7) of the ongoing OTC-HOPE study, includingand ademonstrated decreasedthat rate71% of participants experienced no hyperammonemic crises following ECUR-506 administration. In addition, iECURE plans to presentpresented a poster at the Society for Inherited Metabolic Disorders (“SIMD”) Annual Meeting in May 2026 featuring one-year post-treatment data from the first infant dosed in the study who achieved a complete clinical response as defined by study protocol, including sustained discontinuation of standard-of-care therapies.protocol.
Imugene continues development of azer-cel in diffuse large B-cell lymphoma and has received written guidance from the FDA regarding the registrational pathway for azer-cel. The guidance provided clear alignment with the FDA across key elements required to support advancement into a pivotal study, including dosing regimen, patient population, endpoints, and manufacturing readiness. Azer-cel hasdata been selected for oral presentationpresented at the 2026 American Society of Clinical Oncology Annual Meeting being held in May 2026.2026 demonstrated that among 24 patients evaluable for response following their first disease assessment at Day 28, response rates ranging from 50%-100% were observed across all six cancer subtypes.
Separately, azer-cel is being evaluated by TG Therapeutics (Nasdaq: TGTX) in a Phase 1 trial in progressive multiple sclerosis. InWe March 2026, wepreviously announced the achievement of a clinical milestone under itsour license agreement with TG Therapeutics. As a result, we have earned a cash payment of $7.5 million in proceeds, inclusive of $5.25 million cash and $2.25 million for the purchase of 201,504 shares of our common stock by TG Therapeutics at $11.17 per share. Anticipated 2026 events include presentation of preliminary Phase 1 azer-cel data in progressive multiple sclerosis in the second half of 2026 and commencement of additional exploratory studies in autoimmune diseases outside of multiple sclerosis.
Changes in fair value on our equity method investment represents changes in the investment value of our equity method investee, Elo Life Systems, Inc. (“Elo”). As of March 31,In 2026, Elo is no longer classified as an equity method investment. Any subsequent changes to the investment’s fair value will be recorded through the other fair value adjustments line item.
Comparison of the Three Months Ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025
The following table summarizes our results of operations for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, together with the changes in those items:
RevenueNo revenue was recognized for the three months ended MarchJune 31,30, 2026 was $10.8 million, compared to less than $0.1 million for the three months ended MarchJune 31,30, 2025. TheRevenue increasefrom inthe revenueprior period was thegenerated result of revenue recognized underfrom the TGNovartis License Agreement and a legacy ARCUS agriculture gene editing agreement during the three months ended March 31, 2026.Agreement.
Research and development expenses for the three months ended MarchJune 31,30, 2026 were $13.1$12.4 million, compared to $13.6$12.8 million for the three months ended MarchJune 31,30, 2025. The decrease of $0.5$0.4 million was primarily due to a $2.3$1.1 million decrease in platform development and early-stage research expenses, partially offset by a $1.8$0.7 million increase in our direct expenses in PBGENE-DMDPBGENE-HBV and PBGENE-HBV.PBGENE-DMD as the clinical programs continue to advance globally.
The decrease in platform development and early-stage research expenses of $2.3$1.1 million was primarily the result of paused development of the PBGENE-3243 program as well as a reduction in employee-related costs, partially offset by an increasedecrease in licensing fees and other research and development costs.costs as well as reduced lab supply expenses and facility-related costs as a result of reduced headcount. Direct expenses in PBGENE-DMDPBGENE-HBV increased by $1.6$0.7 millionmillion, asdriven weby initiatedtranslational IRBassay activitiesdevelopment expenses and clinicalan trialincrease site activation for the FUNCTION-DMD Phase 1/2in clinical trial.material manufacturing.
General and administrative expenses were $6.8 million for the three months ended MarchJune 31,30, 2026, compared to $8.6$9.1 million for the three months ended MarchJune 31,30, 2025. The decrease of approximately $1.8$2.3 million was primarily due to a $1.6result millionof decreaseoperational indiscipline and lower employee-related costs.
For the three months ended MarchJune 31,30, 2025, the $1.3$0.7 million non-cash gain from equity investment was the result of a $2.3 million gain recorded from our proportionate share of Elo’s proceeds from a Series A-2 financing in such period, partially offset by our proportionate share of Elo’s loss. AsIn ofthe Marchthree 31,months ended June 30, 2026, Elo iswas no longernot classified as an equity method investment. There were no changes to the investment value for the three months ended MarchJune 31,30, 2026 and any subsequent changes in the investment’s fair value will be recorded through other fair value adjustments.
(Loss) Gain on Changes in Other Fair Value Adjustments
LossThe loss on changes in other fair value adjustments wasof $3.0$0.2 million for the three months ended MarchJune 31,30, 2026, which2026 is attributable to the non-cash decrease in fair value on the ordinary shares held for Imugene Limited. GainThe loss on changes in other fair value adjustments wasof less than $0.1$2.5 million for the three months ended MarchJune 31,30, 2025, which2025 was primarily attributable to the increasenon-cash decrease in fair value onof the ordinaryiECURE shares held for Imugene Limited.investment.
The non-cash loss from change in fair value of the warrant liability was $7.1$13.9 million for the three months ended MarchJune 31,30, 2026 compared to a non-cash lossgain of $0.8 million for the three months ended MarchJune 31,30, 2025,2025 which represents the mark-to-market fair value adjustment to the outstanding warrants issued in connection with the March 2024 Public Offering and November 2025 Public Offering.
Interest expense was $0.3 million for the three months ended MarchJune 31,30, 2026 compared to $0.4 million for the three months ended MarchJune 31,30, 2025 primarily driven by declining interest rates on the 2024 Term Loan over the comparison period.
Interest income was $1.0$0.9 million during the three months ended MarchJune 31,30, 2026 compared to $1.3$1.1 million during the three months ended MarchJune 31,30, 2025. The decrease of approximately $0.3$0.2 million was primarily driven by the Elo note receivable interest accrued for in the prior year as well as declining interest rates which was partially offset by a higher cash balance for the current period.
Gain on disposal of assets was less than $0.1 million during the three months ended MarchJune 31,30, 2026 compared to the loss on disposal of assets of less than $0.1 million during the three months ended MarchJune 31,30, 2025.
Comparison of the Six Months Ended June 30, 2026 and June 30, 2025
The following table summarizes our results of operations for the six months ended June 30, 2026 and June 30, 2025, together with the changes in those items:
Revenue
Revenue for the six months ended June 30, 2026 was $10.8 million compared to less than $0.1 million for the six months ended June 30, 2025. Revenue from the prior period was generated from the Novartis Agreement. The increase in revenue was the result of revenue recognized under the TG License Agreement and a legacy ARCUS agriculture gene editing agreement during the six months ended June 30, 2026.
Research and Development Expenses
Research and development expenses for the six months ended June 30, 2026 were $25.5 million, compared to $26.4 million for the six months ended June 30, 2025. The decrease of $0.9 million was primarily due to a $3.4 million decrease in platform development and early-stage research expenses, partially offset by a $2.5 million increase in our direct expenses in PBGENE-HBV and PBGENE-DMD as the clinical programs continue to advance globally.
The decrease in platform development and early-stage research expenses of $3.4 million was primarily the result of paused development of the PBGENE-3243 program as well as a reduction in employee-related costs. Direct expenses in PBGENE-DMD increased by $1.7 million as we initiated Institutional Review Board (“IRB”) activities and clinical trial site activation for the FUNCTION-DMD Phase 1/2 clinical trial, and direct expenses in PBGENE-HBV increased by $0.9 million due to translational assay development expenses and an increase in clinical material manufacturing.
General and Administrative Expenses
General and administrative expenses were $13.6 million for the six months ended June 30, 2026, compared to 17.7 million for the six months ended June 30, 2025. The decrease of approximately $4.1 million was primarily a result of operational discipline and lower employee-related costs.
Gain from Equity Method Investment
For the six months ended June 30, 2025, the $0.7 million non-cash gain from equity investment was the result of a $2.3 million gain recorded from our proportionate share of Elo’s proceeds from a Series A-2 financing in such period, partially offset by our proportionate share of Elo’s loss over the period. In the six months ended June 30, 2026, Elo was not classified as an equity method investment. There were no changes to the investment value for the six months ended June 30, 2026 and any subsequent changes in the investment’s fair value will be recorded through other fair value adjustments.
Loss on Changes in Other Fair Value Adjustments
The non-cash loss on changes in other fair value adjustments was $3.2 million for the six months ended June 30, 2026, which is attributable to the decrease in fair value on the ordinary shares held for Imugene Limited. The non-cash loss on changes in other fair value adjustments was $2.4 million for the six months ended June 30, 2025, which was primarily attributable to the decrease in fair value of the iECURE investment in the prior period.
Loss on Change in Fair Value of Warrant Liability
The non-cash loss from change in fair value of the warrant liability was $21.0 million for the six months ended June 30, 2026 compared to a non-cash loss of $0.1 million for the six months ended June 30, 2025, which represents the mark-to-market fair value adjustment to the outstanding warrants issued in connection with the March 2024 Public Offering and November 2025 Public Offering.
Interest Expense
Interest expense was $0.6 million for the six months ended June 30, 2026 compared to $0.7 million for the six months ended June 30, 2025 primarily driven by declining interest rates on the 2024 Term Loan over the comparison period.
Interest Income
Interest income was $1.9 million during the six months ended June 30, 2026 compared to $2.4 million during the six months ended June 30, 2025. The decrease of approximately $0.5 million was primarily driven by the Elo note receivable interest accrued for in the prior year as well as declining interest rates which was partially offset by a higher cash balance for the current period.
Gain (Loss) on Disposal of Assets
Gain on disposal of assets was less than $0.1 million during the six months ended June 30, 2026 compared to the loss on disposal of assets of less than $0.1 million during the six months ended June 30, 2025.
We have incurred significant operating losses since our inception and have not generated any revenue from the sale of products. Our ability to generate any product revenue or product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our product candidates or the product candidates of our collaborators or other licensees for which we may receive milestone payments or royalties. As of MarchJune 31,30, 2026, we had an accumulated deficit of $546.6$579.3 million.
As of MarchJune 31,30, 2026, we had cash$112.4 andmillion of cash, cash equivalents of $99.4 millionequivalents, and $26.5 million in restricted cash under the 2024 Term Loan and compensatory arrangements with certain of our officers, respectively. Refer to Note 4, Commitments and Contingencies, in the accompanying notes to the financial statements for more information on these compensatory arrangements. Pursuant to our July 31, 2024 amended and restated loan and security agreement with Banc of California (the “2024 Loan and Security Agreement”), we are not entitled to borrow any additional amounts under the 2024 Term Loan and are required to maintain an aggregate balance in a cash security account with Banc of California (the “Cash Security Account”) at least equal to the outstanding principal amount of the 2024 Term Loan then outstanding.
Our cash, cash equivalents, and restricted cash totaled $125.8$112.4 million and $99.8$84.8 million as of MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively.
DTIL insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 3 Form 4 filings (3 insiders, 2 trade dates, 4,744 shares, about $29.5K) and open-market sales in 0 filings. Net open-market shares: 4,744 (purchases minus sales); net value about $29.5K.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.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-28 | Frankel Stanley |
Open-market purchase | 1,000 | $6.00 | $6.0K |
| 2026-09-25 | Brown Melinda |
Open-market purchase | 1,135 | $6.27 | $7.1K |
| 2026-09-25 | Germano Geno J |
Open-market purchase | 2,609 | $6.28 | $16.4K |
| 2026-05-20 | Buehler Kevin |
Option exercise | 21,000 | — | — |
| 2026-05-20 | Frankel Stanley |
Option exercise | 21,000 | — | — |
| 2026-05-20 | Brown Melinda |
Option exercise | 21,000 | — | — |
| 2026-05-20 | Pire Shari Lisa |
Option exercise | 21,000 | — | — |
| 2026-05-20 | Germano Geno J |
Option exercise | 21,000 | — | — |
Well-known investors holding DTIL (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 237,863 | $1.9M | 0.0% | Reduced 23% |
| Renaissance Technologies | 2026-06-30 | 68,577 | $539.0K | 0.0% | Reduced 69% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 68,552 | $538.8K | 0.0% | Reduced 41% |
| Millennium Management (Israel Englander) | 2026-06-30 | 27,684 | $152.3K | — | Sold out |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 14,104 | $110.9K | 0.0% | Reduced 60% |