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

•We maydo not have sufficient capital to support Phase 3 development of pilavapadin in DPNP and do not have sufficient capital to support Phase 3 development of pilavapadinor in neuropathic pain broadly. If we are unable to establish a strategic collaboration or other arrangement for that purpose, our capital needs will be substantially higher and we may be unable to obtain financing sufficient to fund Phase 3 development of pilavapadin on acceptable terms, or at all, and may be required to forego or reduce the scope of any such Phase 3 development program.

We are developing pilavapadin for neuropathic pain, LX9851 for obesity and cardiometabolic disorders and sotagliflozin for HCM and pilavapadin for neuropathic pain and are conducting research and development of compounds from a number of additional drug programs. We cannot offer any assurances or predict with any certainty that our ongoing research and development efforts, including our IND-enabling studies for LX9851 and SONATA-HCM Phase 3 clinical trial of sotagliflozin in HCM, will be successfully completed, generate positive data or demonstrate competitive clinical or commercial profiles, in any case on our expected timelines. ShouldWe wealso failcannot offer any assurances or predict with any certainty that STENO1, a third party-funded investigator initiated study that may support the resubmission of our NDA for sotagliflozin in type 1 diabetes, will provide viable evidence of the incidence of DKA, with adequate patient exposure and safety data to obtainsupport positivesuch resultsresubmission. fromShould any ongoing research and development efforts,efforts fail to generate positive results, or if any such efforts are not completed on our expected timelines, the likelihood of gaining regulatory approval for the impacted drug program would be reduced, our opportunity to establish a strategic collaboration or other arrangement for the further research, development and commercialization of the impacted drug program would be negatively affected, our business and financial condition could be materially harmed and we may be more heavily dependent on the success of our other drug programs.

Our drug candidates, as well as the activities associated with their research, development and commercialization, are subject to extensive regulation by the FDA and other regulatory agencies in the United States and by comparable authorities in other countries. Failure to obtain regulatory approval for any drug candidate would prevent us from commercializing that drug candidate. The process of obtaining regulatory approvals is expensive, and often takes many years, if approval is obtained at all, and can vary substantially based upon the type, complexity and novelty of the drug candidates involved. Before a new drug application can be filed with the FDA, the drug candidate must undergo extensive clinical trials, which can take many years and may require substantial expenditures. Any clinical trial may fail to produce results satisfactory to the FDA. For example, the FDA could determine that the design of a clinical trial is inadequate to produce reliable results. Furthermore, prior to approving a new drug, the FDA typically requires that the efficacy of the drug be demonstrated in two double-blind, controlled studies. The regulatory process also requires preclinical testing, and data obtained from preclinical and clinical activities are susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. In addition, delays or rejections may be encountered based upon changes in regulatory policy for product approval during the period of product development and regulatory agency review. Changes in regulatory approval policy, regulations or statutes or the process for regulatory review during the development or approval periods of our drug candidates may cause delays in the approval or rejection of an application. Even if the FDA or a comparable authority in another country approves a drug candidate, the approval may impose significant restrictions on the indicated uses, conditions for use, labeling, advertising, promotion, marketing and/or production of such product and may impose ongoing requirements for post-approval studies, including additional research and development and clinical trials. These agencies also may impose various civil or criminal sanctions for failure to comply with regulatory requirements, including withdrawal of product approval.

In order to successfully commercialize any product that we or our collaborators may develop, we or they must establish or maintain an effective commercialization infrastructure supporting such product, including sales force, marketing organization and distribution capabilities. We no longer maintain a significant commercial infrastructure following our restructuring and reduction of commercial operations for INPEFA and would need to largely reestablish sales capabilities in order to effectively commercialize any future products. Factors that may hinder efforts to effectively reestablish, manage and maintain such infrastructure for products that we or our collaborators may develop include:

Changes in government trade policiespolicies, including tariffs, sanctions and trade barriers could disrupt our supply chain or increase the costs of our clinical and commercial supply, negatively impacting our ability to conduct our clinical and commercial operations, price our commercial product competitively and conduct clinical development in a cost effective manner.

As of December 31, 2025 and 2024, we had $125.2 million and $238.0 million in cash, cash equivalentsequivalents, restricted cash and short-term investments. We anticipate that our existing capital resources and revenues will enable us to fund our currently planned operations for at least the next 12 months from the date of this report. However, we caution you that we may generate less cash and revenues or incur expenses more rapidly than we currently anticipate. Our currently planned operations for the next twelve months include the continued research and development of sotagliflozin, pilavapadin, LX9851, sotagliflozin and our other drug candidates and the continued limited commercialization of INPEFA for the treatment of heart failure.

•the timing, progress and results of our and our collaborators’ research and development efforts for sotagliflozin, pilavapadin, LX9851, sotagliflozinLX9851 and our other drug candidates and our ability to obtain necessary regulatory approvals based on clinical trials of those drug candidates;

We maydo not have sufficient capital to support Phase 3 development of pilavapadin in DPNP and do not have sufficient capital to support Phase 3 development of pilavapadinor in neuropathic pain broadly. If we are unable to establish a strategic collaboration or other arrangement for that purpose, our capital needs will be substantially higher and we may be unable to obtain financing sufficient to fund Phase 3 development of pilavapadin on acceptable terms, or at all, and may be required to forego or reduce the scope of any such Phase 3 development program.

Our existing resources may beare insufficient to support Phase 3 development of pilavapadin in DPNP and will be insufficient to support Phase 3 development of pilavapadinor in neuropathic pain broadly. Although we seek to collaborate with another pharmaceutical or biotechnology company or strategic partner under terms which would enable reliance on their resources, in whole or in part, and provide additional funding for such Phase 3 development program, we may be unable to successfully enter into any such collaboration or other arrangement on reasonable terms, or at all. In such event, our capital needs will be substantially higher and we will be reliant on obtaining financing in support of any such Phase 3 development program from alternative sources. We cannot be certain that such financing will be available in amounts or on terms acceptable to us, if at all. If we are unable to secure such financing, we may be required to forego or reduce the scope of any such Phase 3 development program.

We have incurred aggregate net losses since our inception, including an aggregate net loss of approximately $479.5$427.9 million for the three-year period ended December 31, 2024.2025. As of December 31, 2024,2025, we had an accumulated deficit of approximately $2.0 billion. Because of the numerous risks and uncertainties associated with successfully developing and commercializing drug products, we are unable to predict the extent of any future losses or whether or when we will become profitable, if at all. The size of our net losses will depend, in part, on the rate of decline or growth in our revenues and on the amount of our expenses. We expect to continue to incur significant expenses over the next several years including the continued research and development of sotagliflozin, pilavapadin, LX9851, sotagliflozin and our other drug candidates.

We have spent and expect to continue spending significant amounts to fund our continued research and development of sotagliflozin, pilavapadin, LX9851, sotagliflozin and our other drug candidates. As a result, we will need to generate substantial additional revenues to achieve profitability in future periods. Even if we do achieve profitability in future periods, we may not be able to sustain or increase such profitability on a quarterly or annual basis.

Our obligations under the Oxford Term Loans are secured by a first lien security interest in substantially all of our assets. In addition, the Oxford Term Loans require that we comply with certain affirmative and restrictive covenants, including financial covenants relating to net sales of INPEFA and minimum cash balance requirements and additional covenants restricting dispositions, fundamental changes in our business, mergers or acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and subordinated debt, any of which could restrict our business and operations, particularly our ability to respond to changes in our business or to take specified actions to take advantage of certain business opportunities that may be presented to us. Our failure to comply with any of these covenants could result in a default under the Oxford Term Loans, which could permit the lenders to declare all or part of any outstanding borrowings to be immediately due and payable. If we are unable to repay those amounts, the lenders could enforce the security interest granted to them to secure that debt, which would seriously harm our business.

We have derived a substantial majority of our revenues to date from collaborative arrangements with other pharmaceutical and biotechnology companies for the research, development and commercialization of our drug candidates and other research and development collaborations and technology licenses. For example, we have entered into an exclusive license agreementagreements with Viatris for the development and commercialization of sotagliflozin in all markets outside of the United States and Europe.Europe and with Novo Nordisk for the worldwide development, manufacture and commercialization of LX9851. Future revenues from our existing and future collaborations depend upon the achievement of milestones and payment of royalties we earn from any future products developed under those arrangements. If our relationship terminates with any collaborator, our reputation in the business and scientific community may suffer and revenues will be negatively impacted to the extent such losses are not offset by additional collaborations or strategic alliances. If milestones are not achieved or our collaborators are unable to successfully develop and commercialize products from which milestones and royalties are payable, we will not earn the revenues contemplated by those arrangements.

In the past we have experienced and may continue to experience substantial growth in the number of our employees and in the scope of our operations. If we experience it again, it will likely place significant demands on our management, operational and financial resources, and our current and planned personnel, systems, procedures and controls may not be adequate to support our growth. To effectively manage our growth, we must continue to improve existing, and implement new, operational and financial systems, procedures and controls and must expand, train and manage our growing employee base, and there can be no assurance that we will effectively manage our growth without experiencing operating inefficiencies or control deficiencies. We have increased our commercial, medical, clinical, and other personnel, and recruiting and retaining qualified individuals is difficult. If we are unable to manage our growth effectively, or are unsuccessful in recruiting or retaining qualified personnel when advisable, our business, financial condition, results of operations and prospects may be adversely affected.

We are highly dependent upon the principal members of our management, as well as medical and clinical staff, the loss of whose services might adversely impact the achievement of our objectives. Retaining and, where advisable, recruiting qualified personnel will be critical to the advancement of our research and development efforts for pilavapadin,sotagliflozin, LX9851, sotagliflozinpilavapadin and our other drug candidates. Competition is intense for experienced personnel, and we may be unable to retain or recruit such personnel with the expertise or experience necessary to allow us to successfully develop and commercialize our products. Further, all of our employees are employed “at will” and, therefore, may leave our employment at any time.

Invus, L.P. and its affiliates, which we collectively refer to as Invus, currently own approximately 50%48.3% of the outstanding shares of our common stock. An affiliate of Invus, L.P. also owns shares of our Series B Convertible Preferred Stock, which are automatically convertible into shares of our common stock andupon arethe satisfaction of certain conditions. Following such conversion, Invus will own approximately 50.6% of the outstanding shares of our common stock. Invus is thereby able to exert substantial control over the election and removal of our directors and determination of our corporate and management policies, including potential mergers or acquisitions, asset sales, the amendment of our articles of incorporation or bylaws and other significant corporate transactions. This concentration of ownership may delay or deter possible changes in control of our company, which may reduce the value of an investment in our common stock. The interests of Invus and its affiliates may not be aligned with the interests of other holders of our common stock.

•actions taken by regulatory agencies with respect to sotagliflozin, pilavapadin, LX9851, sotagliflozin and our other drug candidates;

If we are unable to meet Nasdaq continued listing requirements,requirements in the future, including minimum trading price, Nasdaq may take action to delist our common stock.

AlthoughOur wecommon arestock monitoringtrades theon closingThe Nasdaq Capital Market, which has qualitative and quantitative listing criteria, including a requirement to maintain a minimum bid price of our$1 commonper stockshare. andIf consideringwe ourare availableunable optionsto inmeet thesuch eventcontinued thatlisting therequirements, closingincluding minimum bid priceprice, ofNasdaq may take action to delist our common stock remains below $1 per share, there can be no assurance that we will be able to regain compliance with the minimum bid price requirement or otherwise maintain compliance with the other Nasdaq listing requirements.stock. A delisting of our common stock would likely negatively impact us and our shareholders by reducing the liquidity and market price of our common stock and potentially reducing the number of investors willing to hold or acquire our common stock.

•We are also developing sotagliflozinsotagliflozin, an orally-delivered small molecule drug candidate, as a treatment for hypertrophic cardiomyopathy, or HCM, and are conducting athe SONATA-HCM pivotal Phase 3 clinical trial of sotagliflozin in that indication.

•We are separately pursuing regulatory approval of ZYNQUISTA™® (sotagliflozin) as a treatment for type 1 diabetes. The FDAU.S. Food and Drug Administration, or FDA, issued a complete response letterletters regarding our New Drug Application, or NDA, for sotagliflozinZYNQUISTA in type 1 diabetes in March 2019 and an additional complete response letter in December 2024 regarding our NDA for sotagliflozin as an adjunct to insulin therapy for glycemic control in adults with type 1 diabetes and CKD.2024. At our request, the FDA has issued a public NOOHNotice of Opportunity for Hearing, or NOOH, on whether there are grounds for denying approval of our NDA and those proceedings are ongoing.

PilavapadinSotagliflozin, originated from our collaborative neuroscience drug discovery efforts with Bristol-Myers Squibb and LX9851, sotagliflozinLX9851 and compounds from a number of additional drug programs originated from our own internal drug discovery efforts.efforts and pilavapadin originated from our collaborative neuroscience drug discovery efforts with Bristol-Myers Squibb. Our efforts were driven by a systematic, target biology-driven approach in which we used gene knockout technologies and an integrated platform of advanced medical technologies to systematically study the physiological and behavioral functions of almost 5,000 genes in mice and assessed the utility of the proteins encoded by the corresponding human genes as potential drug targets. We have identified and validated in living animals, or in vivo, more than 100 targets with promising profiles for drug discovery.

We are presently devoting most of our resources to the continued research and development of sotagliflozin, pilavapadin, LX9851, sotagliflozin and our other drug candidates.

PilavapadinSotagliflozin, originated from our collaborative neuroscience drug discovery efforts with Bristol-Myers Squibb and LX9851, sotagliflozinLX9851 and compounds from a number of additional drug programs originated from our own internal drug discovery efforts. Pilavapadin originated from our collaborative neuroscience drug discovery efforts with Bristol-Myers Squibb. Those efforts were driven by a systematic, target biology-driven approach in which we used gene knockout technologies and an integrated platform of advanced medical technologies to systematically study the physiological and behavioral functions of almost 5,000 genes in mice and assessed the utility of the proteins encoded by the corresponding human genes as potential drug targets. We have identified and validated in living animals, or in vivo, more than 100 targets with promising profiles for drug discovery.

We record significant accrued liabilities related to unbilled expenses for products or services that we have received from service providers, specifically related to ongoing preclinical studies and clinical trials. These costs primarily relate to clinical study management, monitoring, laboratory and analysis costs, drug supplies, toxicology studies and investigator grants. We may have multiple drug candidates in concurrent preclinical studies and clinical trials at clinical sites throughout the world. In order to ensure that we have adequately provided for ongoing preclinical and clinical development costs during the period in which we incur such costs, we maintain accruals to cover these expenses. Substantial portions of our preclinical studies and clinical trials are performed by third party laboratories, medical centers, contract research organizations and other vendors. For preclinical studies, we accrue expenses based upon estimated percentage of work completed and the contract milestones remaining. For clinical studies, expenses are accrued based upon milestonesan andassessment of progress of the clinical studies for services that have been performed, the number of patients enrolled over the duration of the study.study and milestones. We monitor patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to us by the vendors and clinical site visits. Our estimates depend on the timeliness and accuracy of the data provided by our vendors regarding the status of each program and total program spending. We periodically evaluate the estimates to determine if adjustments are necessary or appropriate based on information we receive. Although we use consistent milestones or subject or patient enrollment and other indicators of clinical study progress to drive expense recognition, the assessment of these costs is a subjective process that requires judgment. Upon settlement, these costs may differ materially from the amounts accrued in our consolidated financial statements.

The following discussion and analysis should be read with “Results of Operations” and our financial statements and notes included in our previously filed annual report on Form 10-K for the year ended December 31, 2023.2024.

Revenues for the year ended December 31, 2025 were $49.8 million and primarily consisted of the upfront payment of $45 million received from our license agreement with Novo Nordisk and net product revenues of $4.6 million recognized from sales of INPEFA. Revenues for the year ended December 31, 2024 were approximately $31.1 million and primarily consisted of the upfront payment of $25.0 million received from the Viatris licensing agreement and net product revenues of $6.0 million recognized from sales of INPEFA.

Cost of sales for the years ended December 31, 20242025 and 20232024 were approximately $0.3 million and $0.6 million, respectively, and primarily consist of third-party manufacturing costs and freight associated with sales of INPEFA. Prior to receiving regulatory approval of INPEFA on May 26, 2023, we had completed or begun the manufacturing of certain INPEFA raw materials. These raw materials were either received at “zero-cost” to us in conjunction with a terminated agreement in 2019 or recorded as research and development expense. Based on our expectations for future manufacturing costs, we estimate these amounts totaled approximately $39.0 million. We began capitalizing inventory manufactured subsequent to regulatory approval of INPEFA as the related costs were expected to be recoverable through the commercialization of the product. At December 31, 2024,2025, substantially all of the “zero-cost” INPEFA raw materials remains available to us. However, the time period over which this inventory is consumed will depend on a number of factorsfactors, that may includeincluding the amount of future INPEFA sales, use of this inventory to satisfy the manufacturing and supply agreementagreements we have agreed to enter intoassociated with Viatrisstrategic alliances (for further information, see Note 7) or in clinical development or other research activities, production lead times, and/or the ability to utilize inventory prior to its expiration date. Any future sales of INPEFA will utilize this “zero-cost” inventory and will result in a lower average per unit cost of materials during that period. We estimate our cost of goods sold as a percentage of net product revenue will be less than 10% subsequent to the utilization of all of the remaining “zero-cost” inventory.

Research and development expenses consist primarily of third-party services principallyprimarily including external research costs related to preclinicalour nonclinical and clinical developmentefforts activities,and material costs, salaries and otherrelated personnel-related expenses, facility and equipmentpersonnel costs, stock-based compensation expenseand facility, equipment, and other costs related to our drug discovery and development programs each of which are described below.

•Third-party services – Third-party services relate principally to our clinical trial and related development activities, such as preclinical and clinical studies and contract manufacturing. Overall, third-party services increaseddecreased 64%42% in 20242025 to $33.0 million from $56.7 million,million as compared to the corresponding period in 2024, primarily driven by higherlower clinical external research expense associated with our current drug candidates and higherlower professional consulting fees related to the resubmission of the NDA for ZYNQUISTA.fees.

•Stock-based compensation – Stock-based compensation expense increased 14%9% in 20242025 to $6.3 million from $5.8 million as compared to 2023.the corresponding period in 2024.

•Facilities, equipment, and other – Facilities, equipment, and other costs relate primarily to rent, insurance, travel and training, and software licensing costs. Facilities, equipment, and other costs were $5.3 million and $4.9 million in 2024each of 2025 and 2023, respectively.2024.

•Personnel – Personnel costs increased 28% in 2024 to $68.1 million as compared to the corresponding period in 2023. Salaries (including severance),Salaries, bonuses, employee benefits, payroll taxes, recruiting and relocation costs are included in personnel costs. ThePersonnel increasecosts isdecreased driven79% byin higher2025 to $14.1 million from $68.1 million as compared to the corresponding period in 2024, primarily due to lower employee salaries and benefitbenefits costs,costs includingas severancea result of $11.2decreased millionheadcount incurredfrom our restructuring in late 2024 related to the significant reduction in our commercial field force.2024.

•Professional and consulting fees – Professional and consulting fees increaseddecreased 36%78% in 20242025 to $11.6 million from $52.7 million,million as compared to the corresponding period in 2024, primarily due to higherlower marketing expensescosts in 2024conjunction with our restructuring and professionaldecision feesto incurredsignificantly reduce marketing efforts for ZYNQUISTA prior to receipt of the complete response letterINPEFA in Decemberlate 2024 by the FDA.2024.

•Stock-based compensation – Stock-based compensation expense decreased 17%19% in 20242025 to $6.2 million from $7.7 million as compared to 2023the reflectingcorresponding forfeituresperiod ofin unvested awards2024, due to decreased headcount,headcount primarilyfrom reflecting theour reduction in the field force in late 2024.

•Facilities, equipment, and other – Facilities, equipment, and other costs wererelate primarily to rent, insurance, travel and training, and software licensing costs. Facilities, equipment, and other costs decreased 63% in 2025 to $5.4 million from $14.6 million andas $13.1compared millionto the corresponding period in 2024 and 2023, respectively.2024. The increasedecrease was primarily due to lower travel as a result of our restructuring in conjunctionlate with the commercialization of INPEFA.2024.

Interest Income and Other, NetOther

Interest Income and Other,Other. Net.Interest earned on cash, cash equivalents and short-term investments is included in interest income and other. Interest income and other,other net increaseddecreased to $6.9 million in 2025 from $12.3 million as compared to the corresponding period in 2024 from $7.7 million in 2023 reflecting an increasedecrease in cash and investments.

Net loss was $200.4$50.3 million, or $0.63 net loss$0.14 per share, in 2024,2025, as compared to a net loss of $177.1$200.4 million, or $0.80 net loss$0.63 per share, in 2023.2024.

As of December 31, 2025 and 2024, wetotal hadcash, cash equivalents, short-term investments, and restricted cash were $125.2 million and $238.0 million, respectively. Our December 31, 2025 balance includes $29 million in cash,restricted cash equivalentsas andfurther short-termdescribed investments. As of December 31, 2023, we had $170.0 million in cash, cash equivalents and short-term investments.below. We used cash of $178.8$67.9 million in our operations in 20242025, largelyprimarily reflective of the net loss for the year of $200.4$50.3 million (includingwhich included total non-cash chargesstock compensation expense of $7.4$12.5 million) and changesworking capital changes. Investing activities provided cash of $113.0 million in working2025, capital.primarily Investingdue to net maturities of investments. Financing activities used cash of $15.4 million in 2024, primarily due to net purchases of investments. Financing activities provided cash of $238.3$48.5 million, primarily from the issuance and salerepayment of 2,304,147debt shares of our Series A Convertible Preferred Stock in a private placement in March 2024 at a price of $108.50 per share. The preferred shares were converted into an aggregate of 115,207,350 common shares in May 2024.borrowings.

For a further discussion of our commitments and contingenciescontingencies, please see Note 10 of the Notes to Consolidated Financial Statements.

Outlook. Our future capital requirements will be substantial and will depend on many factors, including the success of our ongoing research and development efforts and the ability to obtain necessary regulatory approvals of the drug candidates which are the subject of such efforts; our success in establishing new collaborations and licenses and our receipt of milestones, royalties and other payments under such arrangements; the amount and timing of our research, development and commercialization expenditures; the resources we devote to commercializing, developing and supporting our products and other factors. Our capital requirements will also be affected by any expenditures we make in connection with license agreements and acquisitions of and investments in complementary technologies and businesses.

We expect to continue to devote substantial capital resources to the research and development of our drug candidates and for other general corporate activities. We believe that our current unrestricted cash and investment balances and cash and revenues we expect to derive from strategic and other collaborations and other sources will be sufficient to fund our currently planned operations for at least the next 12 months from the date of this report. In future periods, if cash on hand or generated by operations is insufficient to satisfy our liquidity requirements, we will need to obtain additional liquidity through future strategic and other collaborations or sell additional equity or debt securities or obtain additional credit arrangements. If we are unable to obtain adequate financing when needed, we may have to delay or reduce the scope of our commercialization efforts or one or more of our clinical trials and other research and development programs. Additional financing may not be available on terms acceptable to us or at all. The sale of additional equity or convertible debt securities may result in additional dilution to our stockholders.

We are exposed to limited market and credit risk on our cash equivalents which have maturities of three months or less at the time of purchase. We had approximately $238.0$125.2 million in cash and cash equivalents andequivalents, short-term investments and restricted cash as of December 31, 2024.2025. We maintain a short-term investment portfolio which consists of U.S. Treasury bills and corporate debt securities that mature three to 12 months from the time of purchase, which we believe are subject to limited market and credit risk. We currently do not hedge interest rate exposure or hold any derivative financial instruments in our investment portfolio.

We are subject to interest rate sensitivity on our outstanding Oxford Term Loans which bear interest at a floating rate equal to the 1-month CME Term SOFR rate. Interest on the Oxford Term Loans is payable in cash monthly and the term loans are fully matured by MarchNovember 2029,2027, unless earlier repaid in accordance with their terms.

•We are developing sotagliflozin, an orally-delivered small molecule drug candidate, as a treatment for hypertrophic cardiomyopathy, or HCM, and arehave conductingcompleted thepatient enrollment in our SONATA-HCM pivotal Phase 3 clinical trial of sotagliflozin in that indication.

Since our inception, we have incurred significant losses and, as of MarchJune 31,30, 2026, we had an accumulated deficit of approximately $2.0$2.1 billion. Our losses have resulted principally from costs incurred in research and development, selling, general and administrative costs associated with our operations, and non-cash stock-based compensation expenses associated with stock options and restricted stock units granted to employees and consultants. Research and development expenses consist primarily of salaries and related personnel costs, external research and material costs related to our nonclinical efforts and clinical trials, and other expenses related to our drug discovery and development programs. Selling, general and administrative expenses consist primarily of salaries and related expenses for executive, sales and marketing, and administrative personnel, professional fees and other corporate expenses, including information technology, facilities costs and general legal activities. We expect to continue to incur significant research and development costs in connection with the continuing research and development of our drug candidates. As a result, we will need to generate significantly higher revenues to achieve profitability.

Revenues were $21.1$0.7 million and $1.3$28.9 million, respectively, for the three months ended MarchJune 31,30, 2026 and 2025 and $21.8 million and $30.1 million, respectively, for the six months ended June 30, 2026 and 2025. Revenues for the threesix months ended MarchJune 31,30, 2026 included $20.0 million in development milestone revenue recognized from the Novo Nordisk licensing agreement. Revenues for the three and six months ended June 30, 2025 included $27.5 million in licensing revenue recognized from the Novo Nordisk licensing agreement. See Note 5, Collaborations and Strategic Alliances, for further information. Total revenues for each of the periods presented also include product revenues from sales of INPEFA.

Cost of sales during the three months ended MarchJune 31,30, 2026 and 2025 were less than $0.1 million for each of the periods and during the six months ended June 30, 2026 and 2025 were $0.1 million and $0.03less than $0.1 million, respectively,respectively. andCost of sales primarily consist of third-party manufacturing costs and freight associated with sales of INPEFA. Prior to receiving regulatory approval of INPEFA in May 2023, we had completed or begun the manufacturing of certain INPEFA raw materials. These raw materials that were either received at “zero-cost” to us in conjunction with a terminated agreement in 2019 or recorded as research and development expense. Based on our expectations for future manufacturing costs, we estimate these amounts totaled approximately $39.0 million. We began capitalizing inventory manufactured subsequent to regulatory approval of INPEFA asto the extent the related costs were expected to be recoverable through thecommercial commercialization of the product. At March 31, 2026, substantially all of the “zero-cost” INPEFA raw materials remains available to us. However, the time period over which this inventory is consumed will depend on a number of factors, including the amount of future INPEFA sales, use of this inventory to satisfy manufacturing and supply agreements associated with strategic alliances (for further information, see our Annual Report on Form 10-K for the year ended December 31, 2025) or in clinical development or other research activities, production lead times, and/or the ability to utilize inventory prior to its expiration date. Any future sales of INPEFA will utilize this “zero-cost” inventory and will result in a lower average per unit cost of materials during that period. We estimate our cost of goods sold as a percentage of net product revenue will be less than 10% subsequent to the utilization of all of the remaining “zero-cost” inventory.sales.

Research and development expenses and dollar and percentage changes as compared to the corresponding periodperiods in the prior year are as follows (dollar amounts are presented in millions):

Research and development expenses consist primarily of third-party services primarily including external research costs related to our nonclinical and clinical efforts and material costs, salaries and related personnel costs, stock-based compensation and facilities, equipment and other costs related to our drug discovery and development programs each of which are described below.

•Third-party services – Third-party services relate principally to our clinical trial and related development activities, such as preclinical and clinical studies and contract manufacturing. Overall, third-party services for the three months ended MarchJune 31,30, 2026 increased 20% to $10.6 million from $8.8 million, reflecting higher HCM study costs, and for the six months ended June 30, 2026 decreased 29%3% to $5.7$16.3 million from $8.0$16.8 millionmillion, reflecting lower LX9211 study costs upon completion of the Phase 2b activities in 2025, as compared to the corresponding periodperiods in 2025 primarily driven by lower clinical and preclinical external research expense associated with our current drug candidates.2025.

•Personnel – Salaries, bonuses, employee benefits, payroll taxes and recruiting costs are included in personnel costs. Personnel costs were $3.8 million for each of the three months ended MarchJune 31,30, 2026 and 2025. and decreased 2%1% to $4.3$8.2 million from $4.4$8.3 million for the six months ended June 30, 2026 as compared to the corresponding period in 2025.

•Stock-based compensation – Stock-based compensation expenses for the three months ended MarchJune 31,30, 2026 decreased 13% to $1.4 million from $1.6 million, and for the six months ended June 30, 2026 decreased 13% to $2.8 million from $3.2 million as compared to the corresponding periodperiods in 2025.

•Facilities, equipment, and other – Facilities, equipment, and other costs relate primarily to rent, insurance, travel and training, and software licensing costs. Facilities, equipment, and other costs for the three months ended MarchJune 31,30, 2026 increased 8%7% to $1.4$1.6 million from $1.3$1.5 million, and for the six months ended June 30, 2026 increased 4% to $2.9 million from $2.8 million as compared to the corresponding periodperiods in 2025.

•Personnel – Salaries, bonuses, employee benefits, payroll taxes, recruiting and relocation costs are included in personnel costs. Personnel costs for the three months ended MarchJune 31,30, 2026 decreased 38%14% to $3.1 million from $5.0$3.6 million, and for the six months ended June 30, 2026 decreased 28% to $6.2 million from $8.6 million as compared to the corresponding periodperiods in 2025, primarily due to decreased headcount.

•Professional and consulting fees – Professional and consulting fees for the three months ended MarchJune 31,30, 2026 increased 27% to $3.3 million from $2.6 million, primarily due to higher consulting fees, and for the six months ended June 30, 2026 decreased 21%3% to $3.1$6.3 million from $3.9$6.5 millionmillion, primarily due to lower marketing costs, as compared to the corresponding periodperiods in 2025, primarily due to lower marketing costs.2025.

•Stock-based compensation – Stock-based compensation expenses for the three months ended MarchJune 31,30, 2026 increased 13%25% to $1.7$2.0 million from $1.5$1.6 million, and for the six months ended June 30, 2026 increased 23% to $3.7 million from $3.0 million as compared to the corresponding periodperiods in 2025.

•Facilities, equipment, and other – Facilities, equipment, and other costs relate primarily to rent, insurance, travel and training, and software licensing costs. Facilities, equipment, and other costs for the three months ended MarchJune 31,30, 2026 increaseddecreased 8%13% to $1.3$1.4 million from $1.2$1.6 million, and for the six months ended June 30, 2026 decreased 1% to $2.8 million from $2.9 million as compared to the corresponding periodperiods in 2025.

Interest and Other Expense. Interest on the outstanding debt principal, amortization/accretion of debt issuance cost and discountdiscount, and otherchanges relatedin itemsthe fair value of warrants are included in interest and other expense. Interest and other expense for the three months ended MarchJune 31,30, 2026 decreasedincreased to $1.6$2.6 million from $1.8$2.3 millionmillion, as compared to the corresponding period in 20252025, reflectingand was $4.2 million for each of the repaymentsix ofmonths $3ended millionJune 30, 2026 and $5 million to Oxford, our lenders, in December 2025 and February 2026, respectively.2025.

Interest Income and Other Income

Interest Income and Other. Interest earned on cash, cash equivalents and short-term investments is included in interest income and other. Interest income and other for the three months ended MarchJune 31,30, 2026 decreased to $1.5$1.7 million from $2.2$1.8 million, and for the six months ended June 30, 2026 decreased to $3.3 million from $4.1 million as compared to the corresponding periodperiods in 2025.

Net (Loss) Income and Net (Loss) Income per Common Share

Net loss was $1.0$31.8 million, or less than $0.01$0.07 per share, in the three months ended MarchJune 31,30, 2026 as compared to a net income of $3.3 million, or $0.01 per diluted share, in the corresponding period in 2025. Net loss was $32.8 million, or $0.08 per share, in the six months ended June 30, 2026 as compared to a net loss of $25.3$22.0 million, or $0.07$0.06 per share, in the corresponding period in 2025.

As of MarchJune 31,30, 2026 and December 31, 2025, total cash, cash equivalents, short-term investments and restricted cash were $199.7$190.6 million and $125.2 million, respectively. These balances include $29 million in restricted cash as further described below. We used cash of $14.7$23.9 million from operations in the threesix months ended MarchJune 31,30, 2026, primarily reflective of the net loss for the period of $1.0$32.8 million (which included total non-cash stock-based compensation expense of $3.1$6.4 million) and working capital changes. Investing activities used cash of $70.3$86.7 million in the threesix months ended MarchJune 31,30, 2026, primarily due to net purchases of investments. Financing activities provided cash of $88.8$88.2 million, primarily due to the common and preferred stock issuance as further described below.

Open Market Sale Agreement. In December 2023, we entered into an Open Market Sale AgreementSM with Jefferies LLC pursuant to which we may offer and sell shares of our common stock having an aggregate sales price of up to $75 million from time to time through Jefferies as sales agent. As of MarchJune 31,30, 2026, the full amount is still available for issuance under the agreement.

Financing Obligations. OnIn May 4, 2026, we entered into a loan and security agreement with Hercules Capital, Inc. and certain of its affiliates that provides up to $100 million in borrowing capacity available in three tranches, each maturing in May 2030. Monthly interest-only payments are due during an initial 18-month period, which may be extended to 24 or 30 months if specified performance milestones are achieved. The interest-only period will be followed by an amortization period extending through the maturity date.

The first $55 million tranche was funded at closing. The second $20 million tranche is available for draw at our option by no later than June 15, 2028, subject to the achievement of specified performance milestones and certain additional timing restrictions. The third $25 million tranche is available for draw at our option, subject to Hercules’s consent, at any time prior to the expiration of the interest-only payment period. The amounts funded under the Hercules term loansloan bear interest at a floating rate equal to the prime rate plus 3.10%, but not less than 9.85%.

We may prepay the Hercules term loansloan in whole or in part at our option at any time. Any prepayment of the Hercules term loansloan is initially subject to prepayment fees equal to 3.0% of the outstanding principal being repaid, subject to a declining scale depending on when prepayment occurs relative to the applicable closing date. A final payment equal to 6.25% of the amount funded under the Hercules term loansloan is due upon prepayment or maturity.

Our obligations under the Hercules term loansloan are secured by a first lien security interest in all of our assets. Financial covenants include (a) a minimum cash covenant beginning on June 1, 2027, which will be extended to January 1, 2028 upon achievement of specified performance milestones and waived at any time we meet specified market capitalization requirements and (b) a minimum revenue covenant relating to net sales of our products beginning only at specified times after we draw the second or third tranche, which will be waived at any time we meet specified minimum cash and/or market capitalization requirements. We were in compliance with our debt covenants as of June 30, 2026.

Concurrent with our execution of the loan and security agreement with Hercules,Hercules in May 2026, we repaid all$54.3 amountsmillion dueto Oxford, including pro-rata final payment exit fees equal to 7% of the amount funded under our previous loan and security agreement withthe Oxford FinanceTerm LLC, under which $100 million had been funded from inception through March 31, 2026.Loans. In April 2025, we repaid $45 million to Oxford, including pro-rata final payment exit fees equal to 7% of the amount funded under the Oxford term loans. In December 2025 and February 2026, we repaid an additional $3 million and $5 million to Oxford, respectively, including a pro-rata portion of the final payment exit fees. In connection with the Oxford repayment we are no longer subject to the $29 million minimum restricted cash requirement.

For a further discussion of ourother commitments and contingencies including our operating lease obligations and legal proceedings see Note 7 of the Notes to Condensed Consolidated Financial Statements.

We are exposed to limited market and credit risk on our cash equivalents which have maturities of three months or less at the time of purchase. We had approximately $199.7$190.6 million in cash and cash equivalents,equivalents and short-term investments and restricted cash as of MarchJune 31,30, 2026. We maintain a short-term investment portfolio which consists of U.S. Treasury bills and corporate debt securities that mature three to 12 months from the time of purchase, which we believe are subject to limited market and credit risk. We currently do not hedge interest rate exposure or hold any derivative financial instruments in our investment portfolio.

As of MarchJune 31,30, 2026, we are subject to interest rate sensitivity on our outstanding OxfordHercules Term LoansLoan which bearbears interest at a floating rate equal to the 1-monthprime CMErate Termplus SOFR3.10%, rate.but not less than 9.85%. For further details see Note 6 of the Notes to Condensed Consolidated Financial Statements.