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

We are a clinical-stage biotechnology company with a limited operating history. We were formed in April 2021 and have devoted substantially all of our resources since that time to research and development activities for our product candidates, including OD-001 and OD-002, and our other development programs, recruiting management and technical staff, raising capital, producing materials for preclinical studies and clinical trials, developing and establishing our intellectual property portfolio, developing our research and development tools and technologies, entering into collaboration agreements, acquiring companies or assets to further our development programs and building infrastructure to support such activities. Our most advanced product candidate, OD-001, is in an ongoing phase 2a monotherapy trial withand otherwe trials plannedexpect to commenceinitiate a phase 2b monotherapy and a phase 2a combination trial in the second half of 2026, and all of our other product candidates remain in preclinical or non-clinical development.

We have incurred net losses since our inception through MarchJune 31,30, 2026. Net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital. For the threesix months ended MarchJune 31,30, 2026 and 2025, we reported a net loss of $38.3$91.1 million and $38.4$79.7 million, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $606.4$659.2 million. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue research and development efforts for our product candidates, advance our product candidates through preclinical studies and clinical trials and seek regulatory approvals for our product candidates.

As of MarchJune 31,30, 2026, we had $175.7$433.1 million in cash, cash equivalents and marketable securities. We expect that the net proceeds from our IPO and the concurrent private placement, together with our existing cash, cash equivalents and short-term marketable securities will be sufficient to fund our operations into the second half of 2028. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. Additionally, because the design and outcome of our planned and anticipated preclinical studies and clinical trials are highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of any product candidate.

As of MarchJune 31,30, 2026, we had 100 full-time employees. As our development and commercialization plans and strategies progress, and as we transition into operating as a public company, we expect to expand our employee base for managerial, operational, financial and other resources. In addition, as our product candidates enter and advance through preclinical studies and clinical trials, we will need to expand our development and regulatory capabilities and contract with other organizations to provide manufacturing and other capabilities for us. In the future, we expect to have to manage additional relationships with collaborators or partners, suppliers and other organizations. Our ability to manage our operations and future growth will require us to continue to improve our operational, financial and management controls, reporting systems and procedures. Our inability to successfully manage our growth and expand our operations could adversely affect our business, financial condition, results of operations and prospects.

We have entered into, and may in the future enter into, collaborations, acquisitions and in-licensing arrangements that contemplate contingent or deferred payments. In the event we are deemed to have achieved certain milestones in connection with such contingent or deferred payments, we may be required to pay such amounts in full or in part. For example, if certain contingencies are satisfied, we may be required to make a payment of up to $30.0 million to the former shareholders of Rahko Limited, or Rahko, a company we acquired in 2021. Additionally, upon the achievement of certain development, commercial, regulatory and sales milestones for each of our NLRP1 and MDA5 programs, we may be required to pay up to $30.0 million in contingent payments once for each such program to the former members of IFM Discovery, LLC, or IFM, a company we acquired in 2022. See the section of this Quarterly Report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commitments” for additional information regarding our deferred consideration obligations. Contingent or deferred payments may have an adverse impact on our business, financial condition, results of operations and prospects.

Our two most advanced product candidates are currently in a phase 2a clinicalmonotherapy trial and IND-enabling studies, respectively. We have never successfully completed any large-scale or pivotal clinical trials with our product candidates, and we may be unable to do so for any product candidates we develop.

All of our product candidates are either in preclinical development or, in the case of OD-001, in a phase 2a clinicalmonotherapy trial. The risk that our product candidates fail to successfully proceed through clinical development is high. We expect it will be many years before we commercialize any product candidate, if ever. The product candidates we are developing are novel and unproven, which makes it difficult to accurately predict the challenges we may face with respect to our product candidates as they proceed through development. It is also impossible to predict whether our clinical trials will proceed through registrational trials and when or if any of our product candidates will receive regulatory approval. To obtain the requisite regulatory approvals to commercialize any product candidates, we must demonstrate through extensive preclinical studies and lengthy, complex and expensive clinical trials that our product candidates are safe and effective in humans. Clinical testing can take many years to complete, and its outcome is inherently uncertain. Commencing any future clinical trials is subject to finalizing the trial design and submitting an application to the FDA or a comparable foreign regulatory authority. Even after we make our submission, the FDA or comparable foreign regulatory authority could disagree that we have satisfied their requirements to commence our clinical trials or disagree with our trial design, which may require us to complete additional studies or trials, amend our protocols or impose stricter conditions on the commencement of clinical trials.

For example, as of the date of this Quarterly Report, we have enrolled patients in our phase 2a signal seeking trial for OD-001 at multiple sites, including sites in Ukraine. We are also considering, subject to the receipt of necessary approvals from the applicable regulatory authorities, enrolling patients at sites in the Middle East for future clinical trials. To the extent military conflicts, political unrest, unstable economic conditions or other events adversely impact our ability to enroll patients or complete enrollments in process or adversely impacts the ability of our suppliers to produce and distribute the supplies we need for our OD-001 phase 2a clinicalmonotherapy trial or in future clinical trials, we may be required to enroll patients at other sites which could increase the cost or delay the timing for completing such trial.

Our current RIPK2 phase 2a clinicalmonotherapy trial utilizes an “open-label” trial design and we may utilize this for future clinical trials for this or future product candidates. An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo. Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical trials are aware when they are receiving treatment. Open-label clinical trials may be subject to a “patient bias” where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment. In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.

For example, our phase 1 healthy participant trial for OD-001 was conducted in Australia and, as of the date of this Quarterly Report,and we have enrolled patients in our phase 2a signal seeking monotherapy trial for OD-001 at multiple sites in Australia, Canada, Jordan, Moldova, New Zealand, Poland and Ukraine. We are also considering, subject to the receipt of necessary approvals from the applicable regulatory authorities, enrolling patients at sites in the Middle East and other jurisdictions globally for future clinical trials. To the extent military conflicts, political unrest, unstable economic conditions or other events adversely impact our ability to enroll patients or complete enrollments in process or adversely impact the ability of our suppliers to produce and distribute the supplies we need for our OD-001 phase 2a clinical trial or future clinical trials, we may be required to enroll patients at other sites which could increase the cost or delay the timing for completing such trial.

While vedolizumab is approved by regulatory authorities in major markets, including the FDA and EMA, it has not received marketing approval in some countries where we intend to conduct our clinical trials. If we are unable to use the standard of care agents in our planned phase 2a combination trial for OD-001 in countries where the standard of care agents have not been approved or in ourany ongoingother phase 2a signal seekingclinical trial for OD-001, whichthat includes a vedolizumabstandard of care agent for a maintenance and induction periodperiod, we may be required to enroll additional patients at existing sites or identify new trial sites, resulting in potential delays in the trial and additional expenses. As a result, our clinical development activities could be delayed or otherwise adversely affected, which could adversely affect our business, financial condition, results of operations and prospects.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year, which began in 2013 and will remain in effect until 2032 unless additional Congressional action is taken. Further, on July 4, 2025, the One Big Beautiful Bill Act, or the OBBBA,OBBBA was signed into law, which narrowed access to ACA marketplace exchange enrollment and declined to extend the ACA enhanced advanced premium tax credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. The OBBBA also is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired ACA subsidies.

If our quarterly or annual operating results fall below the expectations of investors or securities analysts or any forecasts or guidance we may provide to the market, the price of our common stock could decline substantially. Such a stock price decline could occur even when we have met any previously publicly stated guidance we may provide. We believe that quarterly or annual comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future performance.

The 15,500,00016,100,000 shares of our common stock sold in our IPO (unless they were purchased by one of our affiliates), including the shares sold pursuant to the partial exercise of the underwriters' option, are freely tradable, without restriction, in the public market.

In addition, the 4,631,713 shares of our common stock that are subject to outstanding options under theour 2021 Plan asand of2026 December 31, 2025Plan became eligible for sale in the public market after our IPO, to the extent permitted by the provisions of various vesting schedules, the lock-up and market standoff agreements (and the exceptions thereto) and Rule 144 and Rule 701 under the Securities Act. If these additional shares of our common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

In addition, in the future, we may issue additional shares of common stock, or other equity or debt securities convertible into or exercisable for common stock, in connection with a financing, acquisition, employee arrangement, or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and could cause the price of our common stock to decline.

Our most advanced programs include OD-001, an oral small-molecule scaffolding inhibitor of receptor-interacting protein kinase 2, or RIPK2, and OD-002, an oral small-molecule inhibitor of solute carrier family 15 member 4, or SLC15A4. OD-001 has achieved proof-of-concept in a phase 2a trial for the treatment of ulcerative colitis, or UC, one of the two main types of inflammatory bowel disease, or IBD, and OD-002 is currently in IND-enabling studies. These programs have the potential to yield treatments for inflammatory and autoimmune diseases that have large, addressable patient populations globally and a lack of effective treatments, including inflammatory bowel disease, or IBD, systemic lupus erythematosus, or SLE, and other disorders characterized either by the chronic overactivation of the type I interferon pathway, referred to as interferonopathies, or by pathogenic autoreactive B cells. In addition to our most advanced programs, we have a portfolio of wholly owned preclinical programs that include, but are not limited to, a regulatory T cells-specific tumor necrosis factor receptor 2 agonist, a bispecific antagonist of thymic stromal lymphopoietin and interleukin-33, and an interleukin-1 receptor-associated kinase 4 scaffolding inhibitor. We also have an interferon regulatory factor 5, or IRF5, inhibitor in preclinical development which we are collaborating on with Terray Therapeutics, Inc., or Terray.

We have incurred significant operating losses and negative cash flows since our inception. Our net loss was $38.3$91.1 million and $38.4$79.7 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $606.4$659.2 million and cash, cash equivalents, and marketable securities of $175.7$433.1 million. Since our inception, we have financed our operations primarily through the sale of shares of our convertible preferred stock, the proceeds from research collaborations and license agreements, and through the sale of our common stock as part of our IPO and concurrent private placement completed in May 2026.

Based on our current operating plan, we estimate that our existing cash, cash equivalents and marketable securities as of MarchJune 31, 2026, together with the net proceeds received from our IPO and concurrent private placement completed in May30, 2026 will be sufficient to fund our operating expenses and capital expenditures into the second half of 2028. We have based this estimate and our forecast of cash resources and planned operations on our current assumptions, which may prove to be wrong, and we may exhaust our available capital resources sooner than we expect. Additional funds will be necessary to maintain our current operations and to continue our research and development activities.

We did not have any revenue for the three and six months ended MarchJune 31,30, 2026. For the three and six months ended MarchJune 31,30, 2025 our revenue consisted of collaboration revenue earned under the Material Transfer and Evaluation Agreement, dated December 20, 2022, or the Pfizer MTA, with Pfizer Inc., or Pfizer, which expired by its terms in 2025, and revenue earned under the Strategic Collaboration, Option and License Agreement, dated March 29, 2024, or the J&J Agreement, with Janssen Pharmaceutica NV, a Johnson & Johnson company, or J&J. For additional information about our revenue recognition policy related to our collaboration agreements, refer to Note 4 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

Income tax provision consists of U.S. state and foreign taxes in jurisdictions in which we conduct business. Since our inception, we have not recorded any income tax benefits for the net losses we have incurred or for our earned research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that not all of our net operating loss carryforwards and tax credits will be realized. As of MarchJune 31,30, 2026, we have recorded a full valuation allowance against our net deferred tax assets.

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

Collaboration revenue decreased by $1.9$1.0 million, from $1.9$1.0 million for the three months ended MarchJune 31,30, 2025 compared to zero for the three months ended MarchJune 31,30, 2026. The decrease is related to the Company fulfilling all of its current obligations under the J&J Agreement and the expiration of the Pfizer MTA during the year ended December 31, 2025.

Research and development expenses decreasedincreased by $6.5$6.0 million, from $38.8$30.2 million for three months ended June 30, 2025 to $36.2 million for the three months ended MarchJune 31, 2025 to $32.3 million for the three months ended March 31,30, 2026. This decreaseincrease was primarily attributable to:

a $3.0$6.2 million increase in external expenses associated with preclinical and clinical studies, primarily due to an increase in CRO expenses and chemistry, manufacturing, and controls activities primarily associated with our ongoing OD-001 phase 2a trial.monotherapy trial;

General and administrative expenses decreased by $0.6$2.7 million, from $8.0$13.2 million during the three months ended MarchJune 31,30, 2025 to $7.4$10.5 million for the three months ended MarchJune 31,30, 2026. This decrease was primarily attributable to:

a $0.5$1.2 million decreaseincrease in payroll and personnel-related expenses, primarily attributabledue to aincreased lowerstock-based headcountcompensation duringfrom awards granted upon the three months ended March 31, 2026 as compared to March 31, 2025IPO; and a $0.1 million decreaseincrease in facility-relatedother costsgeneral relatedand administrative expenses due to decreasedadditional rentalcorporate andinsurance facility costs.expenses.

ChangesThe change in the fair value of contingent consideration decreasedresulted by $5.8 million toin expense of $0.1$8.7 million for the three months ended MarchJune 31,30, 20262026, compared to income of $5.6$0.6 million for the three months ended MarchJune 31,30, 2025. The decreasechange was driven by changesupdates into the assumptions management used in estimating the fair value of futurethe paymentsRahko thatcontingent weconsideration may be obligated to make to IFM and Rahko, period over period, includingfollowing the discount rate, timingcompletion of milestoneour eventsIPO andin probabilityMay of achieving the milestones.2026.

Interest income increased by $0.6$1.9 million from $1.2$0.9 million for the three months ended MarchJune 31,30, 2025 to $1.7$2.8 million for the three months ended MarchJune 31,30, 2026. The increase is primarily attributed to additional cash invested in investmentsmarketable securities and interest-bearing accounts during the threefirst monthshalf endedof March 31, 2026 as compared to the three months ended March 31, 2025,2026, given the proceeds received from theour Series D convertible preferred stock financing completed in the second half of 2025.IPO.

Interest expense did not significantly fluctuate during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025, and is attributable to interest on our finance leases for certain lab equipment.

Other income (expense), net decreased by $0.2$0.1 million from expense of $0.3$0.2 million during the three months ended MarchJune 31,30, 2025 compared to expense of $0.1 million during the three months ended MarchJune 31,30, 2026. The decrease primarily relates to fluctuations in unrealized foreign currency gains and losses.

IncomeResearch taxand provisiondevelopment expenses decreased by $77$0.5 thousandmillion, from expense$69.0 of $140 thousandmillion for the threesix months ended MarchJune 31,30, 2025 to expense$68.5 of $63 thousandmillion for the threesix months ended MarchJune 31,30, 2026,2026. This decrease was primarily relatedattributable to income taxes in foreign jurisdictions.:

Since our inception, we have primarily funded our operations through the sale of shares of our convertible preferred stock, the proceeds from research collaborations and license agreements and through the sale of our common stock in our IPO and concurrent private placement completed in May 2026. We have not generated any revenue from product sales and have incurred significant annual operating losses and negative cash flows from our operations. We expect to incur significant expenses and operating losses in the foreseeable future as we advance the development of our product candidates. As of MarchJune 31,30, 2026, we had $175.7$433.1 million in cash, cash equivalents and marketable securities and an accumulated deficit of $606.4$659.2 million.

As of MarchJune 31,30, 2026, we had cash and cash equivalents, and marketable securities of $175.7$433.1 million. Based upon our current operating plans, we believe that the net proceeds from our IPO and concurrent private placement completed in May 2026, together with our cash, cash equivalents and investments as of MarchJune 31,30, 2026, will be sufficient to fund our operations into the second half of 2028. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

ThreeSix months ended MarchJune 31,30, 2026 and 2025

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was $41.0$72.2 million, primarily consisting of our net loss of $38.3$91.1 million and net changes in operating assets and liabilities of $7.2$2.7 million, which were partially offset by adjustments to reconcile net loss to net cash used in operating activities of $4.5$21.6 million.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025 was $38.6$72.9 million, primarily consisting of our net loss of $38.4$79.7 million and net changes in operating assets and liabilities of $5.3$2.8 million, which were partially offset by adjustments to reconcile net loss to net cash used in operating activities of $5.1$9.7 million.

Net cash providedused byin investing activities for the threesix months ended MarchJune 31,30, 2026 was $34.8$176.6 million, primarily consisting of $246.5 million of purchases of marketable securities, partially offset by $69.9 million of maturities of marketable securities of $35.0 million, and offset by purchases of property and equipment of $0.1 million.securities.

Net cash provided by investing activities for the threesix months ended MarchJune 31,30, 2025 was $34.1$57.4 million, primarily consisting of maturities of marketable securities of $35.0 million and proceeds from sale of property and equipment of $0.1 million, and offset by purchases of property and equipment of $0.9$58.3 million.

Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 was $0.7$289.3 million, primarily consisting of proceeds from our IPO and concurrent private placement, including the underwriters’ partial exercise of stocktheir options.option to purchase additional shares.

Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2025 was $0.2$118.9 million, primarily consisting of proceeds from the exerciseissuance of stockSeries options.D convertible preferred stock.

In September 2024, we entered into a collaboration and license agreement, or the Terray Agreement, with Terray Therapeutics, Inc., or Terray, to discover, develop and commercialize or out-license products directed to IRF5. We and Terray have agreed to share all collaboration losses (generated in accordance with and subject to applicable budgets) and collaboration profits (including any payments received in connection with an out-licensing transaction) equally, beginning from the effective date of the Terray Agreement until the earlier of the date either party elects to opt-out, or the date the agreement expires or is terminated. The activities performed under the Terray Agreement are governed by a joint steering committee, made up of two employees designated by each party. No upfront payments were made upon the execution of the Terray Agreement and there have not been any payments made or received from the profit and loss share arrangement under the Terray Agreement as of MarchJune 31,30, 2026.

In September 2021, we entered into an operating lease agreement for our corporate headquarters located in Boston, Massachusetts, expiring in September 2029. We are also party to several operating leases for office and lab space, as well as finance leases for certain lab equipment. As of MarchJune 31,30, 2026, our non-cancellable lease obligations were $31.4$29.6 million and $0.7$0.6 million under our operating and finance leases, respectively, of which $7.5 million and $0.2 million related to operating and finance leases, respectively, are due within the next 12 months. Refer to Note 9 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for more information on our leases.

We enter into contracts in the normal course of business with CROs for clinical trials, with CMOs for clinical manufacturing supplies and with other vendors for preclinical studies, supplies and other products and services for operating purposes. These agreements generally provide for termination at the request of either party with 30 to 90 days’ prior written notice and, therefore, we believe that our non-cancellable obligations under these agreements are not material. We do not currently expect any of these agreements to be terminated and did not have any non-cancellable obligations under these agreements as of MarchJune 31,30, 2026.

On May 6, 2022, we acquired all of the membership interests in IFM, or the IFM Acquisition. The total purchase consideration was $3.1 million, which consisted of the following: (i) 81,240 shares of our non-voting common stock at closing, with the estimated fair value of $0.2 million, (ii) cash consideration of $0.9 million at closing, (iii) a deferred payment of $0.9 million, which was paid in June 2022 and (iv) contingent consideration in cash of up to $30.0 million, payable once for each of our NLR family pyrin domain containing 1 and melanoma differentiation-associated protein 5 programs upon the first achievement of certain development, commercial, regulatory and sales milestones related to each such program, the estimated fair value of which was determined to be $1.1 million on the acquisition date. As of MarchJune 31,30, 2026, no milestones had been achieved or were deemed probable to occur.