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

expand our operational, financial and management systems and hire and retain additional personnel, such as clinical, manufacturing, quality control, regulatory and finance personnel; and; experience any delays or encounter issues with any of the above.

successfully complete development activities, including the remaining non-clinical studies and planned clinical trials for our product candidates;

As of December 31, 2024,2025, our existing cash, cash equivalents and marketable securities were $183.5$136.9 million,million. whichTogether with the $107.6 million in net proceeds from our recently completed February 2026 public offering, we anticipateexpect this will fund our operations into the second quarter of 2026.2027.

We expect to continue to spend substantial and increasing amounts to conduct clinical trials of nomlabofusp and further research and development activities for nomlabofusp, and for any additional product candidates that we may develop, in-license or acquire in the future. In addition, raising funds in the current economic environment may present substantial challenges, for example, any sustained disruption in the capital markets from adverse macroeconomic conditions, such as the disruption and uncertainty caused by inflationary pressures, rising interest rates, banking instability, monetary policy changes, changes in trade policies, (including tariffs (includingor tariffsother trade protection measures that have been or may in the future be imposed by the U.S. or other countries), economic slowdowns or recessions, could negatively impact our ability to raise capital and we cannot predict the extent or duration of such macroeconomic disruptions. Additionally our expenses will increase as we expand, through development, in-license or acquisition, our pipeline of product candidates. If we obtain marketing approval for any of our product candidates, we will likely incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of a future collaborator. Accordingly, we will need to obtain additional funding in connection with our continuing operations. Our current cash, cash equivalents and marketable securities augmented by the $107.6 million of net proceeds from our February 2026 public offering of our common stock may not be sufficient to completely fund all of the efforts that we plan to undertake or to fund the completion of the development and commercialization of nomlabofusp. Accordingly, we may be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources. The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates.

If additional capital is needed to complete the development and commercialization of nomlabofusp, there can be no assurance that we will be able to raise sufficient additional capital on acceptable terms or at all. If such additional financing is not available on satisfactory terms, or is not available in sufficient amounts, or we do not have sufficient authorized shares, we may be required to delay, limit, or eliminate the development of business opportunities and our ability to achieve our business objectives, our competitiveness, and our business, financial condition, and results of operations will be materially adversely affected. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results, financial condition and prospects. In addition, geopolitical tension including, for example, the broader impact of the current conflict between the United States, the ongoing conflictconflicts between Russia and Ukraine and the currentcontinuing conflict in Israelthe andMiddle GazaEast (including any further escalation or expansion), and the impact of a future pandemic, epidemic or outbreak of an infectious disease or liquidity constraints, failures and instability in U.S. and international financial banking systems on the global financial markets may reduce our ability to access capital, which could negatively affect our liquidity.

As of December 31, 20242025 we had NOL carryforwards that expire for U.S. federal income tax purposes of $ $198.2$349.9 million, a portion of which begin to expire in 2026. Our NOLs could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of restrictions under U.S. tax law. NOLs generated in taxable years beginning before January 1, 2018 are permitted to be carried forward for 20 taxable years under applicable U.S. federal income tax law. Under current U.S. federal income tax law, NOLs arising in tax years beginning after December 31, 2020 may not be carried back. Moreover, NOLs generated in taxable years beginning after December 31, 2017 may be carried forward indefinitely. As of December 31, 2024,2025, the Company had federal net operating loss carryforwards that were generated after December 31, 2017 of $159.5$343.9 million that do not expire,expire; howeverhowever, these carryforwards are limited to 80% of the taxable income in any one tax period.

In general, under Section 382 of the Internal Revenue Code (the "“Code"”) if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as capitalized research and development costs and research tax credits) to offset its post-change income may be limited. We believe that as a result of our merger with Zafgen, our ability to utilize NOLs acquired in the transaction and our other NOLs is expected to be severely limited by Section 382 of the Code. Additionally, our Julyequity 2021,transactions Septemberexecuted 2022between 2021 and 2026 through February 202428, equity transactions2026 could also limit our ability to utilize NOLs in the future. We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership. As a result, if we earn net taxable income, our ability to use our pre-change NOLs to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed and would adversely affect our business, financial condition and results of operations.

We currently have no drug products for sale and our business is currently wholly dependent on our successful clinical development, regulatory approval and commercialization of nomlabofusp, our lead product candidate and our only product candidate in clinical development, for which we have completed four clinical studies in patients with FA: (i) two Phase 1 clinical studies andin adults with FA, (ii) a four-week, placebo-controlled Phase 2 dose exploration study.study in adults with FA and (iii) a PK run-in study in adolescents (12-17 years old) with FA. We have an ongoing Phase 2 OLEOL trial in patients with FAadults and an ongoing PK run-in study in adolescent patientsadolescents with FA.

In addition to the regulatory and manufacturing hurdles faced by our product candidate, the administration of a protein such as nomlabofusp may cause an immune response, resulting in the creationdevelopment of antibodies directed against the protein. These anti-drug antibodies can have no effecteffect, may cause allergic reactions or canmay neutralize the effectiveness of the proteinprotein, or may require that higherdifferent doses be used to obtain a therapeutic effect. Neutralizing antibodies may be detected at a later date or upon longer exposure periods and there can be no assurance that neutralizing antibodies will not be detected in the future.

Additionally, while nomlabofusp was selected by the FDA for participation in its Support for clinical Trials Advancing Rare disease Therapeutics (START) Pilot Program,Program and while nomlabofusp was awarded Breakthrough Therapy designation, it is unknown whether participation in theeither programor both of these programs will accelerate the development of nomlabofusp and whether the FDA will continue investing its resources in thisthe START program. If our efforts to develop and commercialize nomlabofusp for the treatment of FA are unsuccessful, or we experience significant delays in doing so, our business could also be substantially harmed. The success of nomlabofusp will depend on several factors, including the following:

maintaining our IND with the FDA in order to continue to conduct clinical trials in the United States and similarly maintaining clinical trial applications to conduct clinical trials in other countries;

successfully submitting a BLA foras acceleratedwell approvalas foreign marketing authorization applications;

Clinical development is expensive and can take many years to complete, and its outcome is inherently uncertain. We cannot guarantee that any non-clinical studies, toxicology studies or clinical trials will be conducted as planned or completed on schedule, if at all, and failure can occur at any time during the non-clinical study, toxicology study or clinical trial process. Despite promising non-clinical, toxicology or clinical results, any product candidate can unexpectedly fail at any stage of non-clinical, toxicologytoxicology, or clinical development. The historical failure rate for product candidates in our industry is high, especially for products in early stages of development.

Moreover, current and future non-clinical and clinical data may be susceptible to varying interpretations and analyses. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies. Furthermore, we cannot provide assurance that we will be able to successfully progress any future non-clinical programs from candidate identification to Phase 1 clinical development. As is typical in candidate development, we have a program of toxicology studies in animals for nomlabofusp and cannot provide assurance that the findings from such non-clinical studies or any ongoing or future clinical trials will not adversely affect the clinical development of nomlabofusp.product candidate. For the foregoing reasons, we cannot be certain that our non-clinical studies and clinical trials will be successful. If non-clinical studies or clinical trials for nomlabofusp or any future product candidates or indications fail to demonstrate safety or efficacy to the satisfaction of the FDA or the equivalent regulatory authorities in other countries, the FDA or equivalent regulatory authority will not approve our product candidates in those and other indications, which could have a material adverse effect on our business, financial condition results of operations and prospects.

For our lead product candidate nomlabofusp, we have completed four clinical studies in patients with FA: (i) two Phase 1 clinical trialsstudies in patientsadults, with(ii) FA and our four-week, placebo-controlleda Phase 2 dose exploration study. We have an ongoing Phase 2 OLE trialstudy in patients with FAadults and an(iii) ongoinga PK run-in study in adolescentadolescents patients(12-17 withyears FA.old). Our clinical trials may be delayed or terminated as a result of safety issues in non-clinical or clinical trials, ambiguous or negative interim results or events outside of our control. If future clinical trials of nomlabofusp fail or further delays occur in the United States and or other countries, we may not be able to develop and commercialize nomlabofusp and could fail to realize the potential advantages of doing so, and it could materially adversely affect our business, financial condition and results of operations.

In addition, disruptions caused by future pandemic, epidemic or outbreak of an infectious disease, may increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing clinical trials. Further, FA is a rare disease and as a result, there are a limited number of patients in close proximity to clinical trial sites and clinical trial patientsparticipants may need to travel from other countries to the clinical trial sites in order to participate. In addition, given the limited number of FA patients, the approval of a competing therapy for the treatment of FA may make patients less likely to enroll in our clinical trials or less likely to be eligible for our clinical trials. Any inability to successfully initiate or complete clinical trials could result in additional costs to us or impair our ability to generate revenue from product sales. In addition, if we make manufacturing or formulation changes to our product candidates, we may be required to or we may elect to conduct additional studies to bridge our modified product candidates to earlier versions. Clinical trial delays could also shorten any periods during which our products have patent protection and may allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may seriously harm our business.

Research programs to identify new product candidates require substantial technical, financial and human resources.resources, which we may not have access to. We may focus our efforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful. If any of these events occur, we may be forced to abandon our development efforts for a program or programs, which would have a material adverse effect on our business, financial conditioncondition, and results of operations.

We have little experience in later stage clinical development, and conducting global trials as well as related regulatory requirements or the commercialization of products. As a result, we have not yet demonstrated our ability to independently and repeatedly conduct clinical development after Phase 1,2, successfully conduct an international multi-center clinical trial, conduct a pivotal clinical trial, obtain regulatory approval, manufacture drug product on a commercial scale or arrange for a third party to do so on our behalf, and commercialize therapeutic products. We will need to develop such abilities if we are to execute on our business strategy to develop and independently commercialize product candidates for orphan and niche indications. To execute on our business plan for the development of independent programs, we will need to successfully:

We have advanced only one product candidate into clinical development, nomlabofusp. Our business currently depends primarily on nomlabofusp’s successful clinical development, regulatory approval and commercialization. We submitted our IND and it was accepted, permitting the conduct of clinical trials. We have completed four clinical studies in patients with FA: (i) two Phase 1 andclinical ourstudies four-week,in placebo-controlledadults, (ii) a Phase 2 dose exploration study.study in adults and (iii) a Phase 1 PK run-in study in adolescents (12-17 years old). We have an ongoing Phase 2 OL trial in adults and adolescents.

Published clinical data or case reports from third parties or early clinical trial data of nomlabofusp or any future product candidates may not be predictive of the results of later-stage clinical trials. Interpretation of results from early, usually smaller, studies that suggest a clinically meaningful response in some patients, requires caution. Results from later stages of clinical trials enrolling more patients, or different patient populations, such as pediatric patients, may fail to show the desired safety or efficacy results or otherwise fail to be consistent with the results of earlier trials of the same product candidate. Later clinical trial results may not replicate earlier clinical trials for a variety of reasons, including differences in trial design, different trial endpoints (or lack of trial endpoints in exploratory studies), different patient population, number of patients, patient selection criteria, trial duration, drug dosage and formulation and lack of statistical power. These uncertainties are enhanced where the diseases under study lack established clinical endpoints, validated measures of efficacy, as is often the case with orphan diseases for which no drugs have been developed previously and where the product candidates target novel mechanisms. For example, to our knowledge, nomlabofusp is thea onlynovel protein replacement therapy being developed for the treatment of FAplatform and therefore non-clinical studies may not be adequate to predict efficacy in a clinical trial due to our novel protein replacement therapy platform.trial.

Further, nomlabofusp or any future product candidates may not be approved even if they achieve their primary endpoint in clinical trials. The FDA, EMA or other foreign regulatory authorities may disagree with our trial design and our interpretation of data from non-clinical studies and clinical trials. In addition, FDA, EMA or other foreign regulatory authorities may disagree with the extent of population exposure to assess clinical safety. Any of these regulatory authorities may change its requirements for the approval of a product candidate even after reviewing and providing comments or advice on a protocol for a pivotal clinical trial that, if successful, would potentially form the basis for an application for approval by the FDA, EMA or another regulatory authority. Furthermore, any of these regulatory authorities may also approve nomlabofusp or any future product candidates for a narrower indication than we may request or may grant approval contingent on the performance of costly post-marketing clinical trials. The FDA and other comparable foreign authorities have substantial discretion in the approval process and determining when or whether regulatory approval will be granted for any product candidate that we develop and may decide that our data are insufficient for approval or require additional non-clinical, clinical, or other data. The U.S. Supreme Court’s July 2024 decision to overturn prior established case law giving deference to regulatory agencies’ interpretations of ambiguous statutory language has introduced uncertainty regarding the extent to which FDA’s regulations, policies and decisions may become subject to increasing legal challenges, delays, and/or changes.

We may experience difficulties identifying and enrolling patients in our clinical trials given the number of ongoing trials being conducted and the limited number of patients who have the disease for which nomlabofusp is being studied or for any other product candidate we may study in the future. Difficulty in enrolling patients could delay or prevent clinical trials of nomlabofusp or any future product candidate. There are also competing FA therapeutics, other competing studies and potentially other FA therapeutics that could be approved that may also limit the availability of prospective participants in nomlabofusp clinical trials.

The conditions for which we are planning to evaluate nomlabofusp and any product candidates we may evaluate in the future, are rare genetic diseases. Accordingly, there are limited patient pools from which to draw for clinical trials.trials Arrangingand multiple developers competing for access to conduct their research in those same limited patient pools with the same experienced investigators or research sites. Accordingly, arranging for investigative sites and recruiting patients for clinical trials in this disease may be very difficult. TheCurrent recentand FDAfuture approvalapprovals of a productproducts for the treatment of FA may impact our ability to enroll patients in our clinical trials as patients using other FA treatments may be excluded from participation in our nomlabofusp studies or may be less likely to participate in our nomlabofusp clinical trials due to the availability of another FA therapy. If other companies are studying their investigational products in Friedreich’s ataxiaFA and/or if other companies have their products approved for the treatment of FA, it may be more difficult to identify available study sites and investigators to enroll eligible patients into our clinical trials. Competing priorities at sites and participation of subjects in other studies may limit our ability to execute clinical trials in a timely fashion, if at all.

Regulatory authorities in the United States, the United Kingdom and the European Union have not issued definitive guidance as to how to measure and achieve efficacy in treatments for FA. As a result, the design and conduct of clinical trials of nomlabofusp may take longer, be more costly or be less effective as part of the novelty of development in FA. The FDA may not accept that the supportive PD and clinical information, and safety data from the OLEOL study, along with additional non-clinical pharmacology data we ultimately submit in our BLA, adequately supports the use of FXN levels as a novel surrogate endpoint. Even if the FDA supports the use of FXN levels as a novel surrogate endpoint, the FDA may not agree with the adequacy of the design of clinical trials intended to assess this novel surrogate endpoint.

Any adverse events or undesirable side effects caused by, or other unexpected properties of, nomlabofusp in non-clinical or clinical studies could cause us, any future collaborators, an IRB or ethics committee or regulatory authorities to interrupt, delay or halt clinical trials of our product candidate and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities. It is possible that as we progress nomlabofusp through clinical trials and toxicology studies, or as the use of nomlabofusp becomes more widespread if it receives regulatory approval, illnesses, injuries, discomforts and other adverse events that were not observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, may be reported by patients. For example, recently our Safety Monitoring Team deemed anaphylaxis asis an adverse drug reaction likely associated with nomlabofusp. To reduce the risk of allergic reactions, including anaphylaxis, we amendedhave implemented risk mitigation measures in the OLEOL study protocol and the Phase 3 confirmatory study protocol, including modifying the starting dose regimen and supplying epinephrine autoinjectors. Such side effects could cause regulatory authorities to administerimpose premedicationadditional requirements for thedrug firstapproval monthlabeling ofand dosing.marketing. If such side effects become known or their incidence increases later in development or after approval, other such findings may harm our business, financial condition and prospects significantly. Further, if a serious safety issue is identified in connection with the use of nomlabofusp commercially or in third-party clinical trials elsewhere, such issues may adversely affect the development potential of nomlabofusp elsewhere or result in regulatory authorities restricting our ability to develop or commercialize nomlabofusp, if approved.

regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contraindication or a precaution, or additional labeling restrictions or REMS requirements based on patient population;

Interim, “top-line,” and preliminary dataresults from our clinical trials that we announce or publish from time to time may change as more patient data become available or as additional analyses are conducted, and as the data are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publish interim, preliminary or “top-line” dataresults from our clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or “top-line” data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Material adverse changes between interim, preliminary or “top-line” data and final data could significantly harm our business, financial condition, results of operations and prospects.

The FDA's Fast track designationDesignation byand theits FDABreakthrough Therapy Designation or any future expedited program designations may not lead to a faster development, regulatory review or approval process and it does not increase the likelihood that any of our product candidates will receive marketing approval.

We have received fastFast trackTrack therapyDesignation designationand Breakthrough Therapy Designation for nomlabofusp for the treatment of FA. We may, in the future, apply for other expedited program designations from the FDA (such as breakthrough therapy) for nomlabofusp or future product candidates. Designation for these programs is within the discretion of the FDA. Accordingly, even if we believe nomlabofusp or a future product candidate meets the criteria for designation, the FDA may disagree. The receipt of a designation may not result in a faster development process, review or approval compared to products considered for approval without these expedited program designations and, in any event, does not assure ultimate approval by the FDA. In addition, even though nomlabofusp has obtained fastFast trackTrack designation,Designation and Breakthrough Therapy Designation, the FDA may later decide that it no longer meets the criteria for designation and revoke it. Approval of other therapies for the treatment Friedreich’sof ataxiaFA could negatively impact our continued fastFast trackTrack therapyDesignation designationor Breakthrough Therapy Designation for nomlabofusp for the treatment of FA. In addition, if we apply to the FDA for other designations for nomlabofusp or future product candidates, the FDA might not grant such designations. If we have or apply for any similar programs in foreign countries for nomlabofusp or future product candidates, those designations also might not be granted by the regulatory authorities of those countries.countries, and also could be revoked if circumstances change. Any of the above could adversely affect our business, financial condition and results of operations.

We intend to pursue an accelerated approval from FDA for nomlabofusp for the treatment of FA using FXN concentrations as a surrogate endpoint, supportive pharmacodynamic and clinical information and safety data from the OLEOL study, along with non-clinical pharmacology information needed to support our surrogate biomarker approach. Under the FDA’s accelerated approval program, the FDA may approve a drug or biologic for a serious or life-threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. The FDA stated in written correspondence associated with a meeting through the START pilot program that they are open to considering the use of FXN concentration as an RLSE and the acceptability of FXN’s use as an RLSE would ultimately be a matter of review of the data. There can be no assurance that data we intend to generate will be successful in establishing that increases in FXN concentrations are reasonably likely to predict clinical benefit or that increases in FXN concentrations due to treatment with nomlabofusp meet the legal standards to support approval of a marketing application. In addition, non-clinical pharmacology and clinical studies may not provide adequate information or may fail to support the predictive value of increases in FXN and, therefore, its ability to serve as a surrogate endpoint, or may fail to support that increases in FXN are the result of treatment with nomlabofusp. Even if these evidentiary requirements are met, we may not be able to accrue adequate exposures to assess clinical safety or expedite the scale up of manufacturing or meet other CMC requirements in a timeframe commensurate with the expedited assessment of clinical efficacy.

We have also received orphan designation for nomlabofusp in the European Union. In the European Union, the European Commission may grant orphan designationdesignation, infollowing respectan ofopinion from the EMA's Committee for Orphan Medicinal Products (COMP), for products that are intended for the diagnosis, prevention or treatment of a life threateninglife-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the European Union. Additionally,Alternatively, designation ismay be granted for products intended for the diagnosis, prevention or treatment of a life threatening,life-threatening, seriously debilitating or serious and chronic condition and when,where, without incentives, it is unlikely that sales of the drug in the European Union would be sufficient to justify the necessary investment in developing the drug. In each case, orphan designation is only available if there is no other satisfactory method approvedauthorized for marketing in the European Union offor diagnosing, preventing,preventing or treating the condition, or if such a method exists, the proposed orphan product will be of significant benefit to patients over the existing options. In the European Union, orphan drug designation also entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market exclusivity following the grant of marketing authorization. This period may be reduced to six years if it is determined at the end of the fifth year that the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently profitable sosuch that maintenance of market exclusivity is no longer justified. Loss of orphan drug designation for nomlabofusp or the failure to obtain such designation in other countries or for any future product candidates could adversely affect our business, financial condition and results of operation.operations.

The sponsor of an application for a rare pediatric disease drug product may be eligible for a voucher that can be used or sold to obtain a priority review for a subsequent application submitted under section 505(b)(1) of the FDCA or section 351 of the PHS Act. The rare pediatric disease priority review voucher program beganwas toreauthorized sunsetby on December 20, 2024, due to failure to pass a continuing resolution package that included its reauthorization.Congress. Under thecurrent amended statutory sunset provisions,law, after December 20, 2024, the FDA may award a priority review voucher for an approved rare pediatric disease product application only if the sponsor has rare pediatric disease designation for the drug and if that designation was granted by December 20, 2024. After September 30, 2026,2029, the FDA may not award any rare pediatric disease priority review vouchers.vouchers although the FDA's authority to do so could be extended by Congress mayin votethe to reauthorize this program, but its future remains unknown at this time.future. We received rare pediatric disease designation from the FDA for nomlabofusp in 2019. We may, in the future, apply for rare pediatric disease designation from the FDA for future product candidates that may qualify for designation if Congress reauthorizes the program.designation. Vouchers for rare pediatric disease drugs are awarded for qualifying applications if properly requested when the drug receives approval.

Although nomlabofusp has received rare pediatric disease designation, nomlabofusp may not receive a priority review voucher for a number of reasons: nomlabofusp may not receive approval; nomlabofusp may receive approval in adults, but not pediatric patients; nomlabofusp may not meet the eligibility requirements for a priority voucher at the time we seek approval for nomlabofusp; or we may not meet the current deadline for receiving a priority review voucher (September 30, 20262029), in which case we would not be able to obtain a voucher unless Congress further reauthorizes the program.program in the future. Finally, a rare pediatric disease designation does not necessarily lead to faster development or regulatory review of the product or increase the likelihood that it will receive marketing approval. If the program is reauthorized and we apply for designation for future product candidates as drugs for rare pediatric diseases, the FDA may not find that those candidates meet the criteria for designation and may not grant the designation. The failure to maintain rare pediatric disease designation for nomlabofusp or if FDA approval does not occur prior to September 30, 20262029 could result in the inability to receive a priority review voucher which could adversely affect our business, financial condition and results of operations.

The PRIME scheme is open to medicines under development and for which the applicant intends to apply for an MA through the centralized procedure. Eligible products must target conditions for which wherethere is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the European Union or, if there is, the new medicine will bring a major therapeutic advantage in comparison to existing therapies) and they must demonstrate the potential to address the unmet medical need by introducing new methods orof therapy or improving existing ones. Applicants will typically be at the exploratory clinical trial phase of development and will have preliminary clinical evidence in patients to demonstrate the promising activity of the medicine and its potential to addressaddress, to a significant extentextent, an unmet medical need. In exceptional cases, applicants from the academic sector or SMEs may submit an eligibility request at an earlier stage of development if compelling non-clinical data in a relevant model provide early evidence of promising activity to establish proof of principle, and first in manfirst-in-human studies indicate adequate exposure for the desired pharmacotherapeutic effects and tolerability.

appoints a rapporteur from the CHMP or from the CAT to provide continuous support and to build up knowledge of the medicine in advance of the filing of an MMAMAA;

Medicines that are selected for the PRIME scheme are also expected to benefit from EMA’s accelerated assessment procedure at the time of application for marketing authorization. Where, during the course of development, a medicine no longer meets the eligibility criteria, or if a medicine granted early access to the PRIME scheme cannot later demonstrate proof of concept, support under the PRIME scheme may be withdrawn. Approval of other therapies for the treatment Friedreich’sof ataxia,FA, including the approval of omaveloxolone could negatively impact our continued access to this and similar programs. Loss of PRIME designation for nomlabofusp or the failure to obtain such designation for any future product candidates could adversely affect our business, financial condition and results of operation.operations.

Changes in funding or disruptions at the FDA, the SEC, patent offices in the FDA,United States and abroad and other government agencies caused by funding shortages or comparableglobal regulatoryhealth authoritiesconcerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new or modified products and services from being developed, approved or commercialized in a timely manner or at all, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

If a prolonged government shutdown occurs, such as the one that occurred in October 2025, including as a result of reaching the debt ceiling, if the FDA or SEC experiences significant decreases in funding or personnel it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business and our timelines. Further, government shutdowns could impact our ability to access the public markets and obtain additional capital in the future.

Before obtaining regulatory approvals for the commercial sale of any product candidate, we must demonstrate through non-clinical testing and clinical trials that the product candidate is safe and effective for use in each target indication. This process can take many years. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval of or may result in the decision not to approve our product candidates. We have not obtained regulatory approval for nomlabofusp, and it is possible that this product candidate or any product candidates we may seek to develop in the future will never obtain regulatory approval. If marketing approval is obtained, it will likely include post-marketing studies, and other post-marketing requirements, and could include surveillance such as REMS which will require the expenditure of substantial resources beyond the proceeds we currently have on hand.

Nomlabofusp requires substantial further clinical development before we can submit a BLA to the FDA. Development and/or regulatory programs for nomlabofusp in any countries other than the United States (such as a MAA to the EMA) are onlyin earlier stages than in verythe preliminaryUnited stagesStates and may require substantial further development in those countries prior to regulatory submissions seeking regulatory approval for marketing.

The commercial potential for our approved products, if any, could be affected by changes in healthcare spending and policy in the United States and abroad. We operate in a highly regulated industry. New laws, regulations or judicial decisions or new interpretations of existing laws, regulations or decisions, related to healthcare availability, the method of delivery or payment for healthcare products and services could adversely affect our business, operations and financial condition. The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system that may affect our ability to profitably sell our product and product candidates, if approved. The United States government, state legislatures and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. The pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. Previously, in March 2010, the ACA was enacted, which was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. Healthcare reform initiatives recently culminated in the enactment of the IRA, which, among other things, allow allows HHS to directly negotiate the ceiling price of a statutorily specified number of drugs and biologic each year that CMS reimburses under Medicare Part B and Part D, requires the payment of rebates on Medicare Part B and Part D drugs whose prices have increased at a rate faster than the rate of inflation, and redesign the Medicare Part D cost sharing structure, including revising manufacturer financial liability for covered products. For more information, see the section of this report titled “Business – Healthcare Laws and Regulations – Healthcare Reform.” Moreover, the Creating and Restoring Equal Access to Equivalent Samples Act ("“CREATES"” Act), was enacted in 2019 requiring sponsors of approved new drug applications and biologics license applications to provide sufficient quantities of product samples on commercially reasonable, market-based terms to entities developing generic drugs and biosimilar biological products. The law establishes a private right of action allowing developers to sue application holders that refuse to sell them product samples needed to support their applications. If we are required to provide product samples or allocate additional resources to respond to such requests or any legal challenges under this law, our business could be adversely impacted.

We expect that additional federal, state and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures. The effect of these healthcare reform initiatives on our business and the pharmaceutical industry in general is not yet known, but could be substantial and materially adverse to our ability to successfully commercialize our product candidates at profitable price points.

In some foreign countries, particularly in Canada and European countries, the pricing of prescription pharmaceuticals is subject to strict governmental control. In these countries, pricing negotiations with governmental authorities can take six6 to 12 months or longer after the receipt of regulatory approval and product launch. To obtain favorable reimbursement for the indications sought or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of product candidates that we elect to sell on our own with other available therapies. If reimbursement for product candidates that we elect to sell on our own is unavailable in any country in which we seek reimbursement, if it is limited in scope or amount, if it is conditioned upon our completion of additional clinical trials, or if pricing is set at unsatisfactory levels, our business, financial conditions and results of operations could be materially adversely affected.

The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products, such as nomlabofusp or any potential product candidates, if approved. If we receive marketing approval for nomlabofusp, or any potential product candidates, physicians may prescribe our product candidates to their patients in a manner that is inconsistent with the approved label. If we are found to have promoted such off-label uses, we may become subject to significant liability. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion and required that they enter into corporate integrity agreements with the Office of Inspector General of the Department of Health and Human Services. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. Further, FDA’s Office of Prescription Drug Promotion (OPDP) actively scrutinizes promotional communications, including digital and social media; any materials that are false, misleading or promote unapproved uses can lead to enforcement actions and could necessitate corrective communications. In the current administration, the FDA has increased its enforcement scrutiny over prescription drug advertising, particularly direct-to-consumer product promotion and advertising. If the FDA finds any of our promotional communications or advertising to be violative, we may receive an untitled or warning letter, requests for corrective advertising, or fines, amongst other enforcement tools available to the FDA. If we cannot successfully manage the promotion of nomlabofusp or any potential product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business, financial condition and results of operations.

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. For example, omaveloxolone, was approved for the treatment of FA in adults and adolescents aged 16 and older by the FDA and the European Commission in February 2023 and February 2024, respectively. We expect nomlabofusp, if approved, will compete with omaveloxolone and other new, future approved products and may need to demonstrate compelling advantages in efficacy, convenience, tolerability and safety to be commercially successful. Other competitive factors, including biosimilar and gene therapy competition, could force us to lower prices or could result in reduced sales. Many of our current or potential competitors, either alone or with strategic partners, have significantly greater financial resources and expertise in research and development, manufacturing, non-clinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do. New products developed by others could emerge as competitors to nomlabofusp or any other potential product candidates, resulting in nomlabofusp or other product candidates being obsolete before we are able to recover expenses incurred in connection with their development or realize revenues from any commercialized product. The pricing of our current product candidate, if and when approved for marketing, will depend, in part, on the pricing strategies adopted by our competitors. If these or other companies enact pricing strategies that impact the price we can charge for our product candidate, if approved, we may reduce our prices and our revenue and results of operations could be affected. Any new product could also affect our ability to recruit and retain clinical trial patients, to obtain and maintain designations or eligibility for expedited regulatory pathways, and to commercialize current and future product candidates. Given that we are still in a relatively earlyour phase of development for nomlabofusp, the recent approval and commercialization of omaveloxolone and the approval of any future competing technologies could provide competitors with a significant competitive advantage and may create an additional barrier to market acceptance of nomlabofusp. If we are not able to compete effectively against our current and future competitors, our business will not grow and our financial condition and results of operations will be adversely affected.

In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws). For example, HIPAA, as amended by HITECH, imposes specific requirements relating to the privacy, security, and transmission of individually identifiable health information. Additionally, in the past few years, numerous U.S. states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data. As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services. Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (CPRA) (collectively, CCPA) requires businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights. The CCPA provides for fines of up to $7,500 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages. Although some U.S. comprehensive privacy laws exempt some data processed in the context of clinical trials, these laws may increase compliance costs and potential liability with respect to other personal data we may maintain about California residents. Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more jurisdictions to pass similar laws in the future.

Outside the United States, an increasing number of laws, regulations, and industry standards may govern data privacy and security. For example, the European Union’s General Data Protection Regulation (EU GDPR), United Kingdom’s GDPR (UK GDPR) (collectively, the GDPR), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or LGPD) (Law No. 13,709/2018), and China’s Personal Information Protection Law (PIPL) impose strict requirements for processing personal data. For example, the GDPR includesimposes numerous obligations on companies, including requirements relating to processing health and other sensitive data, where required obtaining consent of the individuals to whom the personal data relates, having legal bases and/or conditions for processing, requiring disclosures to individuals regarding data processing activities, requiring that safeguards are implemented to protect the security and confidentiality of personal data, responding on individuals’ requests to exercise their rights, limiting retention periods for personal data, creating mandatory data breach notification requirements in certain circumstances, and requiring that certain measures (including contractual requirements) are put in place when engaging third-party processorsprocessors, appointing data protection officers, conducting data protection impact assessments, ensuring certain accountability measures are in place and record keeping. Companies that fail to comply with the GDPR may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR / 17.5 million pounds sterling under the UK GDPR or 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.

We are a clinical-stage biotechnology company focused on developing treatments for patients suffering from complex rare diseases using our novel cell penetrating peptide ("“CPP"”) technology platform. Our lead product candidate, nomlabofusp (nomlabofusp is the International Nonproprietary Name and the United States Adopted Name for CTI-1601),nomlabofusp, is a subcutaneously administered, recombinant fusion protein intended to deliver tissue frataxin ("“FXN"”), an essential protein, to the mitochondria of patients with Friedreich's ataxia (“FA”). FA is a rare, progressive, and fatal disease in which patients are unable to produce sufficient FXN due to a genetic abnormality. Currently, there are no treatment options that address the core deficit of FA, low levels of FXN. Nomlabofusp represents the first potential therapy designed to systemically increase FXN levels in patients with FA.

We believe that our CPP platform, which enables a therapeutic molecule to cross a cell membrane in order to reach intracellular targets, also has the potential to enable the treatment of other rare and orphan diseases. We intend to use our proprietary platform to target additional orphan indications characterized by deficiencies in or alterations of intracellular content or activity.

OnThe May 30, 2024, we announced that the FDA'sFDA’s Center for Drug Evaluation and Research ("CDER") had selected nomlabofusp as one of a few drug development programs for participation in the Support for Clinical Trials Advancing Rare Disease Therapeutics ("“START"”) Pilot Program. The objective of the program is to accelerate the development of drugs for rare diseases that lead to significant disability or death by facilitating frequent advice and regular communication with the FDA staff to expedite the review process of biologics and drugs.

In January 2025, we initiated dosing of adolescents (12-17 years old) in a PK run-in study for pediatric patients with FA. Study participants in the PK run-in study arewere randomized 2:1 to receive either nomlabofusp at a weight-base dose expected to match the PK of adults receiving the 50 mg dose, or placebo, daily for seven days. FollowingWe assessmentcompleted ofdosing safetyin 14 adolescents in March 2025. The PK and PKexposure data,data were similar to adults and the participants will bebecame eligible to screenenroll forin the OLEOL study. The dataPK results from thisthe adolescent cohort isalso expectedsupported the predictive value of our exposure modeling and will facilitate direct enrollment of children (2-11 years old) into the OL study which would eliminate any pause in study drug administration between the PK study and the OL study. Therefore, it was not necessary to beperform presenteda duringcohort for children in the nomlabofuspPK programstudy updateand inwe Septemberterminated 2025.the study. We are now planning to initiate enrollment of children directly into the ongoing OL study.

In March 2025, we announced that the FDA stated inas writtenpart correspondence associated with a meeting throughof the START pilotPilot programProgram, that theyit areis open to considering the use of FXN concentration as a reasonably likely surrogate endpoint (“RLSE”) and the acceptability of FXN’sFXN useconcentration as an RLSE wouldto ultimatelysupport accelerated approval will be a matter of review of the data in a future marketing application. The FDA recommended focusing on assessments of skin FXN concentrations rather than buccal FXN concentrations due to more consistent sampling and less variability. The FDA acknowledged that data we recently submitted appearappeared to support a relationship between increased FXN concentrations in skin cells and relevant tissues such as the heart, dorsal root ganglion and skeletal muscle. The FDA also acknowledged that the nonclinical studies we submitted were performed at relevant human doses. The FDA also suggested that we consider exploring the relationship between increases in FXN in skin and changes in pharmacodynamic (“PD”) markers such as lipid profiles and/or clinical measures to provide additional support for the use of FXN as an RLSE. We plan to continue discussions with FDA regarding the adequacy of the safety data set for a BLA submission seeking accelerated approval targeted for year-end 2025.

We have funded our operations to date primarily with proceeds from sales of common stock, proceeds from the sale of prefunded warrants for the purchase of common stock, the acquisition in 2020 of cash, cash equivalents, marketable securitiessecurities, and restricted cash upon the merger with Zafgen, Inc. ("“Zafgen"”) and, prior to the 2020 merger with Zafgen, capital contributions from Chondrial Holdings, LLC.

In May 2024, we entered into a Sales Agreement (the "“ATM Agreement"”) with Guggenheim Securities, LLC in connection with the establishment of an “at-the-market” offering program providing for the sale of up to an aggregate of $100 million of shares of our common stock from time to time. To date, we have made no sales under the ATM agreement.

Our condensed, consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles ("“GAAP"”). The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, costs and expenses, and related disclosures. We believe that the estimates and assumptions involved in the accounting policies described below may have the greatest potential impact on our consolidated financial statements and, therefore, consider these to be our critical accounting policies. We evaluate these estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.

Costs for certain research and development activities, such as manufacturing, non-clinical studiesstudies, and clinical trials are generally recognized based on the evaluation of the progress of completion of specific tasks using information and data provided by our vendors and collaborators, and accordingly, are considered an area of significant judgment and management’s review of manufacturing, non-clinicalnon-clinical, and clinical expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnelpersonnel, and outside vendors to identify services that have been performed on our behalf and estimating the level of service performed and the associated costs incurred for the services when we have not yet been invoiced or otherwise notified of the actual costs. We work with vendors and suppliers to ensure that our estimates of our research and development expenses are reasonable. We expect to increase our investment in research and development in order to advance nomlabofusp through additional clinical trials. As a result, we expect that our research and development expenses will continue to increase in the foreseeable future as we pursue clinical development including manufacturing activities of nomlabofusp and/or any other product candidates we develop.

We measure all stock-based awards granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the use of highly subjective assumptions which determine the fair value of stock-based awards. The assumptions used in our option-pricing model represent management’s best estimates. These estimates are complex, involve a number of variables, uncertaintiesuncertainties, and assumptions and the application of management’s judgment, and thus are inherently subjective. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.

Prior to May 28, 2020, we were a private company and lacked company-specific historical and implied volatility information for our common stock. Prior to January 1, 2023, the Companywe estimated itsour expected common stock price volatility solely based on the historical volatility of publicly traded peer companies with comparable characteristics including enterprise value, risk profilesprofiles, and position within the industry. Beginning on January 1, 2023, the Companywe began blending itsour historical data starting in June 2020 (following itsour merger with Zafgen in 2020) with its historical peer group. We regularly evaluate our peer group to assess changes in circumstances where identified companies may no longer be similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation. We expect to continue to do so until we have full historical data regarding the volatility of our own traded stock price.

To date, we have not generated any revenue from product sales,sales and do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts result in clinical success and regulatory approval or collaboration agreements with third parties for our product candidates, we may generate revenue from those product candidates or collaborations.

A change in the outcome of one or more of these variables with respect to the development of a product candidate could significantly change the costs, timingtiming, and viability associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct additional non-clinical or clinical trials beyond those that we currently anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.

General and administrative expenses consist primarily of personnel costs, consisting of salaries, related benefits and stock-based compensation, costs related to our executive, finance, commercial, information technology, and costs related to other administrative functions. General and administrative expenses also include insurance expenses and professional fees for auditing, commercial readiness costs, tax, and legal services, including legal expenses to pursue patent protection for our intellectual property.property and related costs. We expect that our general and administrative expenses will increase in the foreseeable future as we hire additional employees to implement, improveimprove, and scale our operational, financial, commercial and management systems.

General and administrative expenses for the twelve months ended December 31, 20242025 increased $3.5$0.7 million compared to the twelve months ended December 31, 2023.2024. TheThis increase in general and administrative expenses was primarily drivenattributable byto an increase of $1.5$1.2 million in personnel expense driven by increased headcount and an increase of $0.9 million in professional consulting fees primarily related to consulting costs related to commercial activityongoing and otherincreasing publicpre-commercial companyactivities, relatedpartially expenses,offset anby increasea of $1.4 milliondecrease in personnel expense due to increased headcount, an increase of $0.4 million of other expense related to computer software, information technology services and recruiting and an increase of $0.2 million innon-cash stock compensation costs associated with 2024 grants to existing and new employee grants.expense.

Other income, net was $10.3$6.8 million of income in the twelve months ended December 31, 20242025 compared to $4.8$10.3 million in the twelve months ended December 31, 2023.2024. The increasedecrease was primarily relatesdriven by lower interest and accretion income due to lower interest income on a higher investment baseyields and higherlower investmentaverage yieldsinvestable oncash, thatcash baseequivalents, duringand themarketable currentsecurities period.balances.

Since our inception, we have not generated any revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from our operations. We have devoted substantially all of our resources to developing nomlabofusp, developing third-party manufacturing capabilities, building our intellectual property portfolio, developing third-party manufacturing capabilities, business planning, capital raising, and providing general and administrative support for such operations.

During the year ended December 31, 2024,2025, net operating activities used $70.8$113.2 million of cash, resulting from our net loss of $80.6$165.7 million, adjusted for noncash expenses of $3.7$5.4 million, and changes in our operating assets and liabilities provided cash of $6.2$47.1 million. Our net loss was attributed to operating expenses of $90.9$172.5 million, offset by other income (net) of $10.3$6.8 million. The change in operating assets and liabilities was primarily due to an increase in accounts payable, an increase in accrued expenses related to nomlabofusp manufacturing and offset by an increase in prepaid assets, all sources of cash associated with increasing expenditures and development activity.

During the year ended December 31, 2023,2024, operating activities used $33.5$70.8 million of cash, resulting from our net loss of $36.9$80.6 million, adjusted for noncash expenses of $6.0$3.7 million, and changes in our operating assets and liabilities resulting in a use of cash of $2.5$6.2 million. Our net loss was attributed to operating expenses of $41.8$90.9 million, offset by other income (net) of $4.8$10.3 million. The change in operating assets and liabilities was a net source of cash primarily due to a decreaseincreases in accounts payable and accrued expenses andpartially anoffset increaseby a decrease in prepaid assets.

During the year ended December 31, 2023,2025, investing activities providedwere $33.4a source of $100.3 million of net cash, resulting from $134.8$184.0 million of maturities and sales of marketable securities, which was offset by purchases of $101.2$83.6 million in marketable securities.

You should carefully consider the risk factors described in our 2025 Annual Report under the caption “Item 1A. Risk Factors.” .” Except as set forth below, there have been no material changes in our risk factors disclosed in our 2025 Annual Report. The risks described in our 2025 Annual Report are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or future results.

Additionally, inIn February 2026, as a result of a START pilot program meeting with the FDA, we announced continued alignment with the FDA to consider the use of skin FXN as a novel surrogate endpoint reasonably likely to predict clinical benefit to support a planned Biologics License Application (“BLA”) submission seeking accelerated approval and that the use of FXN as a novel surrogate endpoint to support accelerated approval. There was also agreement on the type of analyses required to support the exposure response relationships for the nomlabofusp program. The FDA also stated that the adequacy of the safety database will be a matter of review at the time of BLA submission.

For our global confirmatory Phase 3 study, we are planning sites in the U.S., E.U., U.K., Canada and Australia. We have obtained feedback from both the FDA and the EMA on the study protocol. We plan to initiate dosing of the first patient in mid-2026.the third quarter of 2026.

We measure all stock-basedstock awardsoptions granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the use of highly subjective assumptions which determine the fair value of stock-based awards. The assumptions used in our option-pricing model represent management’s best estimates. These estimates are complex, involve a number of variables, uncertainties, and assumptions and the application of management’s judgment, and thus are inherently subjective. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.

In January 2025, our Board of Directors (“Board”) approved the issuance of an aggregate of 200,000 performance-based restricted stock units (“RSUs”) to certain of our executive officers (the “January 2025 PSU Awards”). The Board established specified performance criteria and a corresponding performance period over which such performance criteria must be achieved, the satisfaction of which are conditions to earning the January 2025 PSU Awards, and vesting of the underlying RSUs. As of MarchJune 31,30, 2026, the underlying performance criteria of the January 2025 PSU Awards were determined to be not probable of achievement for accounting purposes and no stock-based compensation expense was recognized for the three months ended MarchJune 31,30, 2026.

Comparison of three months ended MarchJune 31,30, 2026 and 2025

The following table summarizes our results of operations for the three months ended MarchJune 31,30, 2026 and 2025:

Research and development expenses for the three months ended MarchJune 31,30, 2026 decreasedincreased $1.5$4.6 million compared to the three months ended MarchJune 31,30, 2025. The decreaseincrease in research and development expenses was primarily driven by a decrease of $3.1$2.3 million increase in nomlabofuspprocess performance qualification, and other drug manufacturing relatedactivities costsat our third-party manufacturers and a decrease of $0.5$2.0 million in clinical trial costs primarily related to the completion of the Company’s adolescent run-in study in the first half of 2025, partially offset by an increase of $1.6 million in professional and consulting fees predominantlyassociated relatedwith toour BLAongoing and planned clinical trials, data analysis costs, FDA inspection readiness expenditures, as well as Biologics License Application preparation and inspection readiness, and an increase of $0.2 million in personnel expenses due to increased headcount.costs.

General and administrative expenses for the three months ended MarchJune 31,30, 2026 increased $1.5$1.9 million compared to the three months ended MarchJune 31,30, 2025. The increase in general and administrative expenses was primarily duerelated to the acceleration of commercial activities as we prepare for the planned mid-2027 launch of nomlabofusp, if approved. This included an increase of $1.1$0.7 million inof professionalincreased feescompensation costs associated with additional commercial and related to commercial consulting services performed andheadcount, an increase of $0.3$0.5 million of personnelmarket costsdevelopment associatedactivities withand increasedcommercial headcount.readiness efforts as well as an increase of $0.5 million in legal fees supporting commercialization and development efforts.

Other income (expense), net was $1.5$3.1 million income in the threesix months ended MarchJune 31,30, 2026 compared to $1.9$3.5 million income in the threesix months ended MarchJune 31,30, 2025. The decrease was primarily driven by lower interest and accretion income due to lower interest yields and lower average investable cash, cash equivalents, and marketable securities balances.

During the threesix months ended MarchJune 31,30, 2025,2026, operating activities used $26.5$88.6 million of cash, resulting from our net loss of $29.3$62.4 million, adjusted for noncash expenses of $1.1$3.7 million and changes in our operating assets and liabilities resulting in a sourceuse of cash of $1.6$30.0 million. Our net loss was primarily attributed to research and development activities related to our nomlabofusp program and our general and administrative expenses as described above. Noncash expenses areprimarily primarilyrelate to stock-based compensation expenses. The change in operating assets and liabilities was primarily due to a decreasedecreases in prepaid expenses and accrued expenses, partially offset by aan decreaseincrease in accrued expense and accounts payable.

During the threesix months ended MarchJune 31,30, 2025,2026, investing activities providedused $14.4$11.9 millionmillion. This use of cash resulted from the maturitiespurchases of $67.0$63.3 million of marketable securities, partially offset by the purchasematurities of $52.5$51.5 million inof marketable securities.

During the threesix months ended MarchJune 31,30, 2026, financing activities provided $108.1$107.7 million of cash flows from an offering of common stock.

During the threesix months ended MarchJune 31,30, 2025, there were no financing activities.

Losses have resulted principally from costs incurred in connection with research and development activities, and general and administrative costs associated with the development of nomlabofusp and our operations. We expect to incur significant expenses and operating losses for the foreseeable future as we expect to continue to incur expenses in connection with our ongoing activities, if and as we: