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

We have a limited operating history, have incurred significant operating losses since our inception and expectmay never become profitable or, if we achieve profitability, we may not be able to incursustain significant losses for the foreseeable futureit;

We may require additional financing to achieve our goals, finance our operations and meet our financial obligations, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our commercialization activities, product development programs, or other operations;

VonoprazanWe may not haveachieve favorable results in our ongoing clinical trial of vonoprazan in the treatment of EoE or in future clinical trials,trials of vonoprazan or of any other product candidate we may develop, or receive additional regulatory approvals on a timely basis, if at all;

We may not decide to develop vonoprazan for additional indications and formulations beyond the ongoing EoE trial, or even if we proceed with such development, our efforts may not be successful inor, ourif effortssuccessful, tomay expandnot our pipeline by identifying additional indications and formulations for which to investigate vonoprazanresult in theincreased future.revenues. We may expend our limited resources to pursue a particular indication or formulation for vonoprazan and fail to capitalize on product candidates, indications or formulations that may be more profitable or for which there is a greater likelihood of success;

We currently have limited experience as a company in commercializing products. We may lack the necessary expertise, personnel and resources to successfully commercialize VOQUEZNA or any of ourfuture product candidates that have received or may receive regulatory approval, including VOQUEZNAapproval;

We currently engage third-party manufacturers for all of our clinicalcommercial and commercialclinical supplies. The loss of any of these suppliers, or any future single source suppliers, could harm our business;

We rely on the Takeda License to provide us rights to develop and commercialize vonoprazan in the United States, Europe, and Canada. If the license agreement is terminated, we would lose our rights to develop and commercialize vonoprazan which would materially adversely affect our business, results of operations, and prospects;

If the scope of any patent protection or non-patent regulatory exclusivity we obtain is not sufficiently broad, or if we lose or fail to obtain or failure to maintain any of our patent protection or non-patent regulatory exclusivity, our ability to prevent our competitors from commercializing similar or identical product candidatesproducts would be adversely affected which could materially and adversely affect our business, results of operations, and prospects;

The successful commercialization of VOQUEZNA, Voquezna Dual Pak and VOQUEZNA TRIPLE PAK and Voquezna Dual Pak will depend in part on the extent to which governmental authorities andprivate health insurers and governmental authorities establish and maintain coverage, adequate reimbursement levels and favorable pricing policies. Failure to obtain or maintain coverage and adequate reimbursement for our products could limit our ability to market those products successfully and decrease our ability to generate revenue at the levels we expect which could materially and adversely affect our business, results of operations, and prospects;

If we fail to comply with reporting and payment obligations for VOQUEZNA, VOQUEZNA TRIPLEDUAL PAK and VOQUEZNA DUALTRIPLE PAK under the Medicaid Drug Rebate Program or other governmental pricing programs, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects;

We are highly dependent on the services of our key executives and personnel, and if we are not able to retain these members of our management or recruit additional management, clinical and commercial personnel, our business willcould suffer; and The trading price of our securities is likely to be volatile, and purchasers of our securities could incur substantial losses.

Biopharmaceutical commercialization and product development isboth a highly speculative undertaking and involvesinvolve a substantial degree of risk.

We received our first regulatory approvals in 2022, and prior to our commercialization oflaunched VOQUEZNA, VOQUEZNA TRIPLEDUAL PAK and VOQUEZNA DUALTRIPLE PAK in the fourth quarter of 2023,2023. Prior to such launch, we had not conducted sales and marketing activities necessary for successful commercialization of a product or manufactured products on a commercial scale, or arranged for a third party to do so on our behalf or conducted sales and marketing activities necessary for successful commercialization.behalf. Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a longer history of successfully developing and commercializing products. We expect our financial condition and operating results to continue to fluctuate from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. We have transitioned from a company with solely a clinical development focus to a company also undertaking commercial activities. We may encounter unforeseen expenses, difficulties, complications and delays, and may not be successful in suchour acommercialization transition.or development efforts.

We have incurred significant operating losses since inception and anticipate that we will continue to incur substantial operating losses for the foreseeable future and may never achieve or maintain profitability.

Since our inception, we have incurred significant operating losses. Our net loss was $334.3$221.2 million and $201.6$334.3 million for the years ended December 31, 20242025 and 2023,2024, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $1.3$1.5 billion. WeGiven expectour limited history as a commercial-stage company, we face numerous risks associated with our ability to continueachieve tooperating incur expensesprofitability and operatingcash lossesflow forpositivity thebased foreseeableon future.expected It could be several years, if ever, before VOQUEZNA, VOQUEZNA TRIPLE PAKrevenue and VOQUEZNAexpense DUAL PAK or other product candidates, if approved, generate significant revenues to offset these expenseslevels, and operatingthere losses.is Asno acertainty result, we are uncertain when or ifthat we will achieve operating profitability and,or cash flow positivity on the timeline we expect or at all, or that, even if so,we whetherachieve profitability, that we will be able to sustain it. The net losses we incur may fluctuate significantly from quarter to quarter and year to year. We expect to continue to incur lossessignificant expenses for the foreseeable future, and we anticipate these losses will continuefuture as we:

initiate, continue, or complete planned or ongoingconduct clinical trials for VOQUEZNA,new potential indications or formulations of vonoprazan or develop any future product candidates, including related support activities;

pursue regulatory approvals for new indications foror formulations of vonoprazan andor future product candidatescandidates, thatif we conduct and successfully complete clinical trialstrials, seek approvals, and engage in commercialization activities related to such indications, formulations or future product candidates, if approved; and incur additional legal, accounting and other expenses in connection with operating as a public company.

Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, continue our product commercialization and development efforts, diversify our product candidate pipeline or even continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.

We may require substantial additional financing to achieve our goals, finance our operations or meet our financial obligations, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could forcematerially usadversely to delay, limit, reduce or terminateaffect our product development programs, commercialization efforts or other operations.business.

We believe that our existing cash and cash equivalents together with the drawdown of the remaining $100 million under our Loan Agreement, with Hercules Capital, or Hercules, are sufficient to fund operations for at least the next 12 months and along with anticipated product revenues and wethe believe$122.2 million of net proceeds from our January 2026 offering, will be sufficient to enable us to reach cashflowoperating positivity.profitability, Inbeginning particular, we expect that these funds will allow us to financein the ongoingthird launchquarter of VOQUEZNA,2026, VOQUEZNAexcluding TRIPLEstock-based PAK and VOQUEZNA DUAL PAK, and any other clinical activities.compensation. We have based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. Our operating plans and other demands on our cash resources may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to commercialize VOQUEZNA, develop vonoprazan for additional indications or formulations or develop or any future product candidates.

the costs of sales and marketing activities in support of the continued commercial launch of VOQUEZNA, VOQUEZNA TRIPLEDUAL PAK,PAK and VOQUEZNA DUALTRIPLE PAK, or any future product candidatecandidates we may choose to pursue, if successfully developed and approved;

the costs of obtaining, maintaining and enforcing our patents and other intellectual property rightsrights, and the success of our enforcement efforts;

the costs associated with hiring additional personnel and consultants as our business grows particularlyand commercialenhancing personnelour operational systems;

the timing and impact of our obligations under our Loan and Security Agreement with Hercules Capital, Inc., and our Revenue Interest Financing Agreement; and the costs associated with building a portfolio of product candidates through the acquisition or in-license of additional product candidates or technologies, including the terms and timing of establishing and maintaining future collaborations, licenses and other similar arrangements;arrangement and the costs associated with development of any products or technologies that we may in-license or acquire.

Accordingly,We expect that, for the foreseeable future, our revenues will be derived exclusively from sales of products containing vonoprazan in the U.S., particularly arising from the use of VOQUEZNA in its current indications in the treatment of GERD. Until we willcan generate a sufficient amount of product revenue and cash flow from operations to achieve profitability and to fund our future growth opportunities, we may need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.

Until such time, if ever, as we can generate substantial product revenues, weWe expect to continue to finance our cash needs through revenue from product sales and equity offerings, our Loan Agreement with Hercules, our Revenue Interest Financing Agreement, other debt financings, or other capital sources, including potential collaborations, licenses and other similar arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Our Loan Agreement and our Revenue Interest Financing Agreement include, and any future debt financing and preferred equity financing, if available, may involve agreements that include cash covenants and covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures or declaring dividends. For example, our Loan Agreement with Hercules contains minimum cash and performance financial covenants and our Revenue Interest Financing Agreement also contains minimum cash covenants.

TheWe currently rely entirely on the commercial success of our currentVOQUEZNA productsproducts, orwhich any future product candidates will dependdepends upon the degree of market acceptance of such product candidatesproducts by physicians, patients, healthcare payers and others in the medical community.

VOQUEZNA,We currently depend entirely on the success of our approved VOQUEZNA TRIPLE PAK, VOQUEZNA DUAL PAK,products, and any future product candidates, if approved,we may not be commerciallyable successful.to successfully commercialize such products or achieve revenues at the level and timing we expect. The commercial success of our currentapproved products or any future product candidates will depend significantly on the broad adoption and use of such productproducts by physicians and patients for the approved indications. The degree of market acceptance of our current products or any futureproduct products,candidates, if approved, will depend on a number of factors, including:

the indications for which our current product or any future product candidates are approved;

the effectiveness of our or any of our potential futureproduct collaborators’liability sales and marketing strategiesclaims; and unfavorable publicity relating to the product.

If our current productsVOQUEZNA, or any future product candidates,candidate, if approved, does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payers or patients, we may not generate sufficient revenue fromat thatthe productlevels or on the timing we expect which could have a material adverse effect on our business, financial condition, results of operations and may not become or remain profitable.prospects. Our efforts to educate the medical community and third-party payers regarding the benefits of our products may require significant resources and may never be successful.

In May 2021, the FDA granted qualified infectious disease product, or QIDP, designationsdesignation for VOQUEZNA TRIPLE PAK andto VOQUEZNA DUAL PAK and weVOQUEZNA therebyTRIPLE receivedPAK, resulting in an extension of fivethe years offive-year new chemical entity, or NCE, exclusivity basedby onan theadditional vonoprazanfive component in the applicable NDAs. We believe the extended NCE exclusivity should apply to any other approved or future products containing vonoprazan we develop and for which we obtain FDA approval.years. In December 2024, we submitted a citizen petition requesting that the FDA update the Orange Book listingslisting for VOQUEZNA to reflect the same ten-year period of NCE exclusivity forapplicable to VOQUEZNA as reflected on the VOQUEZNA TRIPLEDUAL PAK and VOQUEZNA DUALTRIPLE PAKPAK. In June 2025, the FDA granted the petition and updated the Orange Book listings.listing for VOQUEZNA to reflect the ten-year period of NCE exclusivity for vonoprazan. As a result, all three VOQUEZNA products now have NCE exclusivity extending through May 3, 2032.

We commenced our operations in 2018 and have devoted substantially all of our resources to date to organizing and staffing our company, business planning, raising capital, in-licensing our initial and approved product candidate, vonoprazan, meeting with regulatory authorities, managing our clinical trials of vonoprazan, preparing for commercialization of our initial products containing vonoprazan, commercially launching our approved products,products in the U.S., and providing other selling, general and administrative support for our operations. Our operations to date have been funded primarily through commercial bank debt, our revenue interest financing debt and various equity offerings, including our at-the-market offerings. From our inception through December 31, 2024,2025, we sold 34,737,032 shares of our common stock and 2,608,922 pre-funded warrants, generating net proceeds of approximately $543.3 million, after deducting underwriting discounts, commissions and offering costs. AsIn January 2026, we sold 6,875,000 shares of Decemberour 31,common 2024,stock, weor hadour cashJanuary 2026 Offering, at a price of $16.00 per share and cashpre-funded equivalentswarrants to purchase 1,250,078 shares of $297.3 million. Based on our currentcommon operatingstock plan,at wea believeprice thatof our$15.999 existingper cashpre-funded warrant for total gross proceeds of $130.0 million or $122.2 million of net proceeds after deducting underwriting discounts, commissions and cashoffering equivalents together with the drawdown of the remaining $100 million under our Loan and Security Agreement, as amended, or the Loan Agreement, with Hercules Capital, Inc. or Hercules, together with anticipated product revenues, are sufficient to fund operations for at least the next twelve months and we believe will be sufficient to enable us to reach cashflow positivity.costs.

Since inception, we have incurred significant operating losses. Our net loss was $334.3$221.2 million and $201.6$334.3 million for the years ended December 31, 20242025 and 2023,2024, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $1.3$1.5 billion. WeDespite expectour toplans and expectations, we could continue to incur operating losses for the foreseeable future. ItIf we do not achieve our goals, it could be several years, if ever, before VOQUEZNA,our VOQUEZNAcurrent TRIPLE PAK and VOQUEZNA DUAL PAKproducts or otherpotential future product candidates, if successfully developed and approved, generate significant revenues to offset these operating losses. As a result, we are uncertain when or if we will achieve profitability on our current expected timeline, if at all, and, if so, whether we will be able to sustain it. The net losses we incur may fluctuate significantly from quarter to quarter and year to year.

WeWhile we have generated limited revenue to date, until such time as we can generate significant revenue from sales of our approved products containing vonoprazan, we also expect to finance our cash needs through equity offerings, our Loan Agreement, our Revenue Interest Financing Agreement, additional debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when and if needed on favorable terms or at all, and this risk could be exacerbated by the impact of ongoing conflicts throughout the world and global economic conditions. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

On May 7, 2019, we and Takeda entered into an exclusive license, or the Takeda License, pursuant to which we in-licensed the U.S., European, and Canadian rights to vonoprazan fumarate. During the term of the Takeda License, we and our affiliates are not permitted to commercialize any pharmaceutical product, other than vonoprazan, that treats acid-related disorders, except for certain generic and OTC competing products in specified circumstances. We will beare responsible at our cost for the development, manufacture and commercialization of vonoprazan products. We are required to use commercially reasonable efforts to develop and commercialize the vonoprazan products in our licensed territory.

We paid Takeda upfront consideration consisting of a cash fee of $25 million, 1,084,000 shares of our common stock, a warrant to purchase 7,588,000 shares of our common stock at an exercise price of $0.00004613 per share, or the Takeda Warrant, and issued Takeda a right to receive an additional common stock warrant, or the Takeda Warrant Right, if Takeda’s fully-diluted ownership of the Company represented less than a certain specified percentage of the fully-diluted capitalization, including shares issuable upon conversion of then outstanding convertible promissory notes, calculated immediately prior to the closing of our IPO. The Takeda Warrant Right expired without effect since no fair value had been allocated to it upon completion of our IPO, and no additional warrant was issued. We agreed to make milestone payments to Takeda upon achieving certain tiered aggregate annual net sales of licensed products in the United States, Europe and Canada up to a total maximum milestone amount of $250 million. We also agreed to make tiered royalty payments at percentages averaging in the low double digits on net sales of licensed products, subject to specified offsets and reductions. Royalties will be payable, on a product-by-product and country-by-country basis from the first commercial sale of such product in such country, until the latest of expiration of the licensed patents covering the applicable product, expiration of regulatory exclusivity in such country, or 15 years following first commercial sale in such country. We currently pay royalties to Takeda on sales of VOQUEZNA tablets, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK in the U.S. During the years ended December 31, 2025 and 2024, we recorded $17.5 million and $5.5 million, respectively, of royalty expense under the Takeda License, of which $5.8 million is included within accrued expenses as of December 31, 2025.

Cost of revenue includes the cost of producing and distributing inventories that are related to product sales. This also includes royalties payable to Takeda, pursuant to the Takeda License Agreement (Refer to Note 3 Commitments and Contingencies for further details). In addition, shipping and handling costs for product sales are recorded as incurred. Cost of revenue also includes costs related to excess or obsolete inventory adjustment charges.

Personnel related expenses: salaries, payroll taxes, employee benefits, and employeerestructuring benefitsexpenses in 2025;

Consulting, professional and other costs: external costs related to consulting and professional services and other research costs incurred; and Stock-based compensation expenses: stock-based compensation expense recognized for those individuals involved in research and development efforts.efforts including for any restructuring expenses in 2025.

We plan to invest in our research and development expenses for the foreseeable future as we continue the development of vonoprazan.vonoprazan and potentially in the future also develop additional product candidates. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future clinical trials and nonclinical studies of vonoprazan or any future product candidates due to the inherently unpredictable nature of clinical and preclinical development. Clinical and preclinical development timelines, the probability of successsuccess, actual results and development costs can differ materially from expectations. In addition, we cannot forecast which product candidatescandidates, if any, may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Selling, general and administrative expenses consist of salaries and employee-related costs, including stock-based compensation, for personnel in commercial, executive, finance, accounting, legal, human resources and other administrative functions, restructuring expenses in 2025, legal fees relating to intellectual property and corporate matters, and professional fees for accounting and consulting services. We anticipate that our selling, general and administrative expenses will increase in the future to support our commercialization activities and research and development activities. We also anticipate increased expenses related to audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs associated with operating as a public company.

Beginning on December 14, 2023, interestInterest expense under the Loan Agreement consists of (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 1.35% and provided that the cash interest rate shall be capped at 10.35% and upon Companyus achieving the certain milestones, the cash interest shall be decreased by 0.35%, (ii) payment-in-kind interest at a per annum rate of interest equal to 2.15%, and (iii) amortization of the Loan Agreement debt discount recorded in connection with the fair value of warrants issued to the lenders, the debt issuance costs incurred, and the obligation to make a final payment.

Research and Development Expenses. Research and development expenses were $34.1$32.8 million and $49.9$34.1 million for the years ended December 31, 20242025 and 2023,2024, respectively. The decrease of $15.8$1.3 million consistedconsists of reductions of $5.8 million related to lower stock-based compensation expense, $5.0 million of regulatory and clinical study related expenses due to the wrapping up of our PHALCON-NERD-301 Phase 3 daily dosing study, $4.3$2.6 million of lower CMC costs, clinical and $0.7regulatory costs, and lower project and consulting costs, partially offset by $1.3 million related to lowerhigher consulting,stock-based professionalcompensation andexpense otherdue costs.to restructuring charges.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $290.7$279.7 million and $117.9$290.7 million for the years ended December 31, 20242025 and 2023,2024, respectively. The increasedecrease of $172.8$11.0 million was due to increasesdecreases of $109.4 million in commercial expenses related to the launch of VOQUEZNA product in late 2023, which includes $48.1$19.1 million of externalcommercial project spend and $61.3 million in advertising andrelated promotional expenses in support of ourlaunching commercialVOQUEZNA launchand a decrease of VOQUEZNA products, $55.5$0.2 million in consulting expenses, partially offset by an increase of $8.3 million in personnel-related expenses primarily due to the$7.3 hiringmillion of therestructuring sales force in late 2023 and in early 2024, and an increase of $7.9 million in professional services and other consulting costs.charges.

We have incurred net losses and negative cash flows from operations since our inception and anticipatewhile we willexpect to continue to incur a net lossesloss forin the foreseeablenear future.term, we anticipate achieving operating profitability beginning in the third quarter of 2026, excluding stock-based compensation. As of December 31, 2024,2025, we had cash and cash equivalents of $297.3$130.0 million.million and received $122.2 million of net proceeds from our January 2026 offering.

On September 17, 2021, or the Closing Date, we entered into the Loan Agreement with Hercules (in such capacity, the Agent or Hercules), as administrative agent and collateral agent and as a lender and the other financial institutions that from time to time become parties to the Loan Agreement as lenders (collectively, the Lenders). We’ve entered into several amendments to the Loan Agreement which are described below, most recently in February 2026.

The Loan Agreement providesoriginally provided for term loans in an aggregate principal amount of up to $200 million, or the Term Loan, under multiple tranches. The tranches consistconsisted of (i) a first tranche consisting of term loans in an aggregate principal amount of $100 million, all of which was funded on the Closing Date, or the First Advance, (ii) a second tranche consisting of up to an additional $50 million, (iii) a third and fourth tranches consisting of an additional total $50 million, which became available to us in May 2022.

On December 14, 2023, we entered into a Fourth Amendment to Loan and Security Agreement, or the Fourth Loan Amendment, with the lenders, which, among other things, (i) increasesincreased the aggregate principal amount of the term loans from $200 million to $300 million; (ii) providesprovided for the possibility of accessing the $200 million commitment through five additional tranches referred to as tranches 2 through 6, which are available subject to certain milestones and conditions: (a) Tranche 2: $50 million, $40 million of which was funded on December 14, 2023, available through March 15, 2024, (b) Tranche 3: $25 million available through June 15, 2024, (c) Tranche 4: $25 million available through December 15, 2024, (d) Tranche 5: $50 million available, subject to the achievement of a specified revenue milestone, through June 30, 2025,2025 and which we did not draw down, and (e) Tranche 6: $50 million available, subject to the achievement of a specified revenue milestone, through December 31, 2025 and which we did not draw down; (iii) extendsextended the interest only period and the maturity date from October 2026 to December 2027, (iv) reducesreduced the cash interest rate from 10.75% (floating annual rate equal to the greater of (a) 5.50% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 2.25% to 9.85% (floating rate based on the greater of (a) 9.85% or (b) US WSJ Prime + 1.35%), provided that the cash interest rate shall be capped at 10.35% and upon us achieving the certain milestones, the cash interest shall be decreased by 0.35%, and (v) decreasesdecreased the payment-in-kind interest rate from 3.35% per annum to 2.15% per annum. In connection with the Fourth Loan Amendment, an amendment fee of $250,000 was paid to the Agent and was recorded as a debt discount and being amortized to interest expense using the effective interest method over the remaining term of the Term Loan.

TheAs amended through the Fourth Amendment, the Term Loan willhad maturea onmaturity date of December 1, 2027,2027. orAs of December 31, 2025, the Maturity Date. The Term Loan bearsbore (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 1.35%, or the Interest Rate, and (ii) payment-in-kind interest at a per annum rate of interest equal to 2.15%. We may make payments of interest only through the Maturitymaturity Date.date of the Term Loan. After the interest-only period, the principal balance and related interest will be required to be repaid in full on the Maturitymaturity Date.date.

In addition, under the Fourth Amendment, we arewere obligated to pay a final payment fee of 7.50% of the original principal amount of amounts actually advanced under the Term Loan, or each a Term Loan Advance and together, the Term Loan Advances. In connection with the Fourth Loan Amendment, the final payment fee was amended to be $1 million plus 3.00% of any future tranche drawdowns under the agreement, due upon final maturity. Additionally, the initial final payment fee of $7.5 million for the first termTerm Loan advanceAdvance was amended to become payable on October 1, 2026.2026, Asand has been recorded within other current liabilities as of December 31, 2024,2025. theThe remaining aggregate $11.5$4.0 million of final payment fees includes the first Term Loan Advance of $7.5 million, $2.5 million for the second Term Loan Advance, $0.8 million for the third Term Loan Advance, and $0.7 million for the fourth Term Loan Advance and have been recorded within other long-term liabilities.liabilities as of December 31, 2025.

The Loan Agreement contains customary closing fees, prepayment fees and provisions, events of default, and representations, warranties and covenants, including financial covenants. The financial covenants under the Fourth Loan Amendment includeincluded (i) a minimum cash covenant and (ii) a performance covenant as follows:

Minimum cash balance exceeding (x) outstanding principal amount of term loans, multiplied by (y) (A) 50%, prior to achieving trailing three months net product revenue of greater than $35 million, and (B) 35% thereafter; or c.Trailing three months net product revenue of at least (x) 30% of agreed upon projected net revenues for periods in the calendar year 2024 and 25% for all periods thereafter or (y) $120 million.

In connection with the entry into the Loan Agreement, we issued to Hercules a warrant, or the Warrant, to purchase a number of shares of our common stock equal to 2.5% of the aggregate amount of the Term Loan advances funded, and will issue to Hercules additional warrants when future Term Loan advances are funded. On the Closing Date, we issued a Warrant for 74,782 shares of common stock. The Warrant is exercisable for a period of seven years from the date of issuance at a per-share exercise price equal to $33.43, which was the closing price of our common stock on September 16, 2021. In connection with the entry into the Third Loan Amendment, we amended the form of warrants to be issued upon drawdowns of future tranches such that the exercise price of such warrants shall be equal to the lesser (i) of $11.6783, which was the trailing ten-day VWAP prior to entering into the Third Loan Amendment and (ii) the trailing ten-day VWAP preceding the date on which we drawdown future tranches. In connection with the entry into the Fourth Amendment, we eliminated the warrant agreement for all future tranches. The Warrant issued with the initial tranche was not modified as part of thisthese amendment.amendments. The exercise price and terms of the outstanding Warrant remain unchanged.

On May 3, 2022, we entered into a Revenue Interest Financing Agreement, or the Revenue Interest Financing Agreement, with entities managed or advised by NovaQuest Capital Management, or NQ, Sagard Holdings Manager LP, or Sagard, and Hercules, together with NQ and Sagard, or the Initial Investors, pursuant to which we couldhad the right to receive up to $260 million in funding from the Initial Investors. Under the terms of the Revenue Interest Financing Agreement, we received $100 million at the initial closing and received an additional $160 million upon FDA approval of vonoprazan for treatment of Erosive GERD in the fourth quarter of 2023. Additionally, on October 31, 2022, we entered into a Joinder and Waiver Agreement with the Initial Investors and CO Finance LVS XXXVII LLC, or the Additional Investor, and Hercules in its capacity as administrative agent and collateral agent for itself and the lenders under that certain Loan Agreement, or the Joinder Agreement, in respect of the Revenue Interest Financing Agreement. Under the terms of the Joinder Agreement, we received $15 million in additional funding upon FDA approval of vonoprazan for Erosive GERD, or Approval Additional Funding, in the fourth quarter of 2023 and providesprovided for $25 million in additional funding for achievement of a sales milestone, or Milestone Additional Funding, and, together with the Approval Additional Funding, or the Additional Investor Funding. The Initial Investors waived their right of first offer for any Additional Investor Funding. On December 23, 2024, CO Finance LVS XXXVII LLC agreed to assign and transfer to OC III LVS LX LP all of its rights, title and interest as an Additional Investor and in connection therewith, OC III LVS LX LP executed a Joinder Agreement. The total amount funded by the Initial Investors and any subsequent investors is referred to herein as the Investment Amount. As of December 31, 2024,2025, no additional funding is available under the Revenue Interest Financing Agreement.

Upon the occurrence of an event of default taking place prior to April 1, 2025, between April 1, 2025 and April 1, 2028, andor after April 1, 2028, we are obligated to pay 1.30 times Investment Amount, 1.65 times Investment Amount, and 2.0 times investment amount, respectively, less any amounts we previously paid pursuant to the agreement.

In November 2023, we filed a shelf registration statement on Form S-3 which was declared effective by the SEC on November 17, 2023, which included an at-the-market prospectus pursuant to which we may, from time to time, sell up to an aggregate of $150 million of our common stock through the Sales Agent, or the 2023 ATM Offering. We are not obligated to, and we cannot provide any assurances that we will, make any sales of the shares under the Sales Agreement. The Sales Agreement may be terminated by the Sales Agent or us at any time. For the year ended December 31, 2023, we sold 1,514,219 shares for net proceeds of approximately $14.1 million after deducting $0.4 million of issuance costs. No shares were sold under the Sales Agreement during the yearyears ended December 31, 2025 and 2024. As of December 31, 2024,2025, all of the available $150 million under the 2023 ATM Offering remains available.

We are a commercial-stage biopharmaceutical company focused on commercializing and developing novel treatments for gastrointestinal, or GI, diseases. Our approved products, VOQUEZNA®, VOQUEZNA® DUAL PAK® and VOQUEZNA® TRIPLE PAK®, contain vonoprazan, an oral small molecule potassium-competitive acid blocker, or PCAB. PCABs are a novel class of molecules that block acid secretion in the stomach. VOQUEZNA is the only PCAB currently approved for marketing and sale in the United States.

During the threesix months ended MarchJune 31,30, 2026, we generated increased revenues from sales of our VOQUEZNA products compared to the same period in the prior year, reflecting continued execution of our U.S. commercial strategy. The majority of our revenue was derived from sales of VOQUEZNA. During this period, we also experienced growth in prescription volume and prescriber adoption, with most prescriptions written for GERD indications. As of AprilJuly 17, 2026, approximately 1.351.7 million prescriptions for VOQUEZNA, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK have been filled since launch. We continue to have broad commercial coverage for VOQUEZNA, with access for over 120 million, or over 80%, of U.S. commercial lives. Our commercial efforts are supported by a targeted sales force and continued focus on prescriber engagement and payer access.

In the fourth quarter of 2025, we initiated a Phase 2 clinical trial evaluating vonoprazan in the treatment of adults with eosinophilic esophagitis, or EoE. In June 2026, we announced that we completed enrollment ahead of schedule in the Phase 2 EoE clinical trial study. The study has enrolled 95 patients at 41 U.S. sites. Topline results from the 12-week blinded treatment portion of the trial are expected during the fourth quarter of 2026. While our current focus is on continued U.S. commercialization of VOQUEZNA products for GERD and H. pylori, we are also selectively pursuing life-cycle management opportunities for vonoprazan. We may also explore the potential for vonoprazan in Europe and Canada, as well as opportunities to in-license or acquire additional clinical or commercial-stage product candidates for GI diseases.

We commenced our operations in 2018 and have devoted substantially all of our resources to date to organizing and staffing our company, business planning, raising capital, in-licensing vonoprazan, meeting with regulatory authorities, managing our clinical trials of vonoprazan, preparing for commercialization of our products containing vonoprazan, commercially launching our approved products in the U.S., and providing other selling, general and administrative support for our operations. Our operations to date have been funded primarily through commercial bank debt, our revenue interest financing debt and various equity offerings, including our at-the-market offerings. From inception through MarchJune 31,30, 2026, we sold 41,612,032 shares of common stock and 3,859,000 pre-funded warrants, generating net proceeds of approximately $665.3 million, after deducting underwriting discounts, commissions and offering costs.

As of MarchJune 31,30, 2026, we had cash and cash equivalents of $180.9$182.5 million. Based on our current operating plan, we believe that our existing cash and cash equivalents together with our anticipated product revenues, are sufficient to fund operations for at least the next twelve months and will be sufficient to enable us to reach operating profitability beginning in the third quarter of 2026, excluding stock-based compensation.months. We have based these estimates on assumptions that may prove to be wrong,incorrect, andand, weif couldoperating useresults, commercial performance or expenses differ materially from those contemplated by our current operating plan, our capital resourcesresources, soonertogether thanwith anticipated product revenues, may not be sufficient to fund operations and our cash needs for as long as we currently expect. OurIn operatingsuch plans and other demands on our cash resources may change as a result of many factors currently unknown to us, andevent, we may need to seek additional funds sooner than planned, through public or private equity or debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. AttemptingAdditional financing or other capital may not be available on favorable terms, or at all, and our failure to secureobtain additional financingcapital, mayif divertand ourwhen managementneeded, from our day-to-day activities, which maycould adversely affect our abilityfinancial condition and require us to commercializedelay, VOQUEZNA,limit, develop vonoprazan for additional indicationsreduce or formulationsterminate development or developcommercialization activities or anygrant futurerights to products or product candidates.candidates that we would otherwise prefer to retain.

In May 2025, we implemented a cost reduction and organizational restructuring plan to reduce cash burn and focus resources on commercial execution. In connection with the restructuring, our workforce was reduced by 26 employees, or approximately 6%, including certain leadership changes all designed to right-size the organization. In 2025, total restructuring charges incurred were $9.2 million consisting of one-time termination benefits to affected employees for severance, non-cash stock-based compensation costs, healthcare benefits and outplacement assistance. As of MarchJune 31,30, 2026, approximatelywe $0.2have millionpaid substantially all of the accrued restructuring related accruals remain on the condensed balance sheets.charges.

On May 7, 2019, we and Takeda entered into an exclusive license, or the Takeda License, pursuant to which we in-licensed the U.S., European, and Canadian rights to vonoprazan fumarate. During the term of the Takeda License, we and our affiliates are not permitted to commercialize any pharmaceutical product, other than vonoprazan, that treats acid-related disorders, except for certain generic and OTC competing products in specified circumstances. We are responsible at our cost for theour development, manufacture and commercialization of vonoprazan products. We are required to use commercially reasonable efforts to develop and commercialize the vonoprazan products in our licensed territory.

We paid Takeda upfront consideration consisting of a cash fee of $25 million, 1,084,000 shares of our common stock, a warrant to purchase 7,588,000 shares of our common stock at an exercise price of $0.00004613 per share, or the Takeda Warrant, and issued Takeda a right to receive an additional common stock warrant, or the Takeda Warrant Right, if Takeda’s fully-diluted ownership of the Company represented less than a certain specified percentage of the fully-diluted capitalization, including shares issuable upon conversion of then outstanding convertible promissory notes, calculated immediately prior to the closing of our IPO. The Takeda Warrant Right expired without effect since no fair value had been allocated to it upon completion of our IPO, and no additional warrant was issued. We agreed to make milestone payments to Takeda upon achieving certain tiered aggregate annual net sales of licensed products in the United States, Europe and Canada up to a total maximum milestone amount of $250 million. We also agreed to make tiered royalty payments at percentages averaging in the low double digits on net sales of licensed products, subject to specified offsets and reductions. Royalties are payable, on a product-by-product and country-by-country basis from the first commercial sale of such product in such country, until the latest of expiration of the licensed patents covering the applicable product, expiration of regulatory exclusivity in such country, or 15 years following first commercial sale in such country. We currently pay royalties to Takeda on sales of VOQUEZNA tablets, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK in the U.S. During the three months ended MarchJune 31,30, 2026 and 2025, the Companywe recorded $5.8$7.4 million and $2.9$4.0 million, respectively, of royalty expense under the Takeda License, of which $5.8$7.4 million is included within accrued expenses as of MarchJune 31,30, 2026. During the six months ended June 30, 2026 and 2025, we recorded $13.3 million and $6.8 million, respectively, of royalty expense under the Takeda License.

We began to recognize revenue from product sales, net of rebates, chargebacks, sales returns, discounts, and other adjustments, in November 2023 in conjunction with the commercial launch of VOQUEZNA, VOQUEZNA TRIPLE PAK, and VOQUEZNA DUAL PAK in the United States.

Cost of revenue includes the cost of producing and distributing inventories that are related to product sales. This also includes royalties payable to Takeda, pursuant to the Takeda License Agreement (Refer to Note 3 for further details). In addition, shipping and handling costs for product sales along with fulfillment costs are recorded as incurred. Cost of revenue also includes costs related to excess or obsolete inventory adjustment charges.

The following table summarizes our research and development expenses for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

We plan to invest in our research and development expenses for the foreseeable future as we continue the development of vonoprazan and potentially in the future also develop additional product candidates. We cannot determine with certainty the timing of initiation, thetiming, duration or the completion costs of currentongoing or future clinical trials and nonclinical studies of vonoprazan or any future product candidates due to the inherently unpredictable nature of clinical and preclinical development. Clinical and preclinical development timelines, the probability of success, actual results and development costs can differ materially from expectations. In addition, we cannot forecast which product candidates, if any, may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plansplans, expenses and capital requirements.

Interest expense under the Revenue Interest Financing Agreement (as further described below under Liquidity and Capital Resources) is based on the imputed effective interest rate derived from expected future payments and the carrying value of the obligation. We recalculate the effective interest rate each period based on the current carrying value and the revised estimated future payments. Changes in future payments from previous estimates are included in current and future interest expense.

Beginning on February 25, 2026, interest expense under our Loan and Security Agreement, or the Loan Agreement, with Hercules Capital, Inc., or Hercules, in its capacity as administrative agent and collateral agent and as a lender, consists of (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 3.10%, and (ii) amortization of the Loan Agreement debt discount recorded in connection with the fair value of warrants issued to the lenders, the debt issuance costs incurred, and the obligation to make a final payment.

From December 14, 2023 through February 25, 2026, interest expense under the Loan Agreement consisted of (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 1.35% and provided that the cash interest rate was to be capped at 10.35% and upon us achieving the certain milestones, the cash interest was to decrease by 0.35%, (ii) payment-in-kind interest was at a per annum rate of interest equal to 2.15%, and (iii) amortization of the Loan Agreement debt discount recorded in connection with the fair value of warrants issued to the lenders, the debt issuance costs incurred, and the obligation to make a final payment.

Comparison of the 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 (in thousands):

Revenue. Product revenues were $58.3$74.3 million and $28.5$39.5 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, related to sales of VOQUEZNA, VOQUEZNA TRIPLE PAK, and VOQUEZNA DUAL PAK which were launched in the fourth quarter of 2023. The increase of $29.8$34.8 million was due to continued execution of our commercial strategy.

Cost of Revenue. Cost of revenue werewas $12.0$15.1 million and $3.7$5.0 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase of $8.3$10.1 million was due to the increase in revenues and the corresponding increase in Takeda royaltyroyalties payments,incurred, as well as increased fulfillment costs for the three months ended March 31, 2026.costs.

Research and Development Expenses. Research and development expenses were $7.8 million and $9.2$9.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The decrease of $1.4$1.3 million consists of $1.0$2.5 million related to lower personnel-related expenses and $1.0$0.6 million of lower CMCconsulting costs offset by an increase of $0.6$1.8 million of clinical development and regulatory costs.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $54.0$55.3 million and $94.5$85.3 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The decrease of $40.5$30.0 million was primarily related to a $36.9$23.0 million reduction in advertising and promotional expenses,expenses $2.3and $7.0 million of lower personnel-related expenses, and $1.3 million of lower consulting and professional fees.expenses.

Other (Expense) Income. Other expense of $14.9$28.5 million for the threesix months ended MarchJune 31,30, 2026 consisted of $15.8$30.9 million of interest expense under the Loan Agreement and Revenue Interest Financing Agreement, $0.8 million partial loss on extinguishment of debt recognized under the Loan Agreement, partially offset by $1.7$3.2 million of interest income related to cash held in money market funds. Other expense of $15.5$31.3 million for the threesix months ended MarchJune 31,30, 2025 consisted of $18.1$35.6 million of interest expense under the Loan Agreement and Revenue Interest Financing Agreement, partially offset by $2.6$4.4 million of interest income related to cash held in money market funds.

We have incurred net losses and negative cash flows from operations since our inception and while we expect to continue to incur a net loss in the near term, we anticipateexpect achievingthese operatingnet profitabilitylosses beginningto inbe thelower thirdthan quarterwhat ofwe 2026,have excludingpreviously stock-based compensation.incurred. As of MarchJune 31,30, 2026, we had cash and cash equivalents of $180.9$182.5 million.

On February 25, 2026, or the Fifth Amendment Closing Date, we entered into the Fifth Amendment to the Loan and Security Agreement, or the Fifth Loan Amendment, which, among other things, (i) provided for a new term loan advance of $175 million, or the Term Loan Advance, the proceeds of which, along with cash on our balance sheet, were used to repay in full the existing secured obligations outstanding under the Loan Agreement, including principal, capitalized payment-in-kind interest, cash interest, existing final fee payments, and any applicable prepayment fees, (ii) provided for an additional loan tranche of up to $25 million which shall be available to us in the lenders’ discretion, (iii) extended the maturity date from December 1, 2027 to February 1, 2029, or the Maturity Date, subject to further extension to December 1, 2030 upon the achievement of a specified revenue milestone and subject to a certain pro forma liquidity test, (iv) extended the interest only period from October 2026 to December 2027, thereafter, monthly payment of interest and principal repayments at 2.5% of aggregate original principal balance of the Term Loan Advance through the Maturity Date, with any remaining payments to be repaid in full on the Maturity Date, (v) cash interest rate set at floating rate based on the greater of (a) US WSJ Prime + 3.10% or (b) 9.85%, (vi) eliminated the payment-in-kind interest rate of 2.15% per annum, (vii) amended the prepayment charge, which is a percentage of the principal amount advanced under the Term Loans under the Fifth Loan Amendment, or each a Term Loan Advance and together, the Term Loan Advances, as follows: (a) if the Term Loan Advances are prepaid after the Fifth Amendment Closing Date but prior to the twelfth month anniversary of the Fifth Amendment Closing Date, 2.50%; (b) if the Term Loan Advances are prepaid on or after the twelfth month anniversary of the Fifth Amendment Closing Date but prior to the twenty-fourth month anniversary of the Fifth Amendment Closing Date, 2.00%; (c) if the Term Loan Advances are prepaid on or after the twenty-fourth month anniversary of the Fifth Amendment Closing Date but prior to the thirty-sixth month anniversary of the Fifth Amendment Closing Date, 1.50%; (d) thereafter, 1.00%; provided that (x) any such prepayment charge shall be reduced by 50.0 percent50.0% if such prepayment is a result of a change in control and (y) upon any refinancing by Hercules such prepayment charge shall be waived in full; and (viii) provided for a new final payment fee which is as a percentage of the Term Loan Advance, calculated as follows: (a) if the Term Loan Advances are repaid prior to September 2027, 1.25%; (b) if the Term Loan Advances are repaid after September 1, 2027 but on or prior to February 1, 2029, 2.00%; (c) if the Term Loan Advances are repaid after February 1, 2029 but on or prior to January 1, 2030, 3.00%, and (d) if the Term Loan Advances are repaid after January 1, 2030, 3.50%. As of MarchJune 31,30, 2026, we recorded $3.5 million within other long-term liabilities for the new final payment fee based on the Term Loan Advance being repaid by the Maturity Date.

We accounted for the Fifth Loan Amendment in accordance with ASC 470-50, Modification and Extinguishments, or ASC 470-50, to determine if the transaction was treated as a modification or an extinguishment of debt. We reviewed the debt terms and determined the change would be accounted for prospectively as a partial debt extinguishment in accordance with ASC 470-50. As a result, we expensed a portion of the remaining deferred debt issuance costs and fees of $0.8 million associated with the debt prior to the Fifth Loan Amendment, as a loss on partial debt extinguishment within other expense, net in the condensed statements of operations and comprehensive loss forduring the threefirst monthsquarter endedof March 31,fiscal 2026. Prior to the Fifth Loan Amendment, there were approximately $6.9 million of deferred debt issuance costs remaining to be amortized. The partial extinguishment and modification resulted in a net reduction in deferred issuance fees of $0.5 million with a remaining balance of $6.4 million in debt issuance costs capitalized to be amortized over the three year life of the new debt.

As of MarchJune 31,30, 2026, we were in compliance with all applicable covenants under the Loan Agreement.

In connection with the entry into the initial Loan Agreement, we issued to Hercules a warrant, or the Warrant, to purchase a number of shares of our common stock equal to 2.5% of the aggregate amount of the Term Loan advances. On the Closing Date, the we issued a Warrant for 74,782 shares of common stock. The Warrant will be exercisable until September 17, 2028 (seven years from the date of issuance) at a per-share exercise price equal to $33.43, which was the closing price of our common stock on September 16, 2021. The Warrant issued with the initial tranche was not modified as part of the Fifth Loan Amendment. The exercise price and terms of the outstanding Warrant remain unchanged.

On May 3, 2022, we entered into a Revenue Interest Financing Agreement, or the Revenue Interest Financing Agreement, with entities managed or advised by NovaQuest Capital Management, or NQ, Sagard Holdings Manager LP, or Sagard, and Hercules, together with NQ and Sagard, or the Initial Investors, pursuant to which we had the right to receive up to $260 million in funding from the Initial Investors. Under the terms of the Revenue Interest Financing Agreement, we received $100 million at the initial closing and received an additional $160 million upon FDA approval of vonoprazan for treatment of Erosive GERD in the fourth quarter of 2023. Additionally, on October 31, 2022, we entered into a Joinder and Waiver Agreement with the Initial Investors and CO Finance LVS XXXVII LLC, or the Additional Investor, and Hercules in its capacity as administrative agent and collateral agent for itself and the lenders under that certain Loan Agreement, or the Joinder Agreement, in respect of the Revenue Interest Financing Agreement. Under the terms of the Joinder Agreement, we received $15 million in additional funding upon FDA approval of vonoprazan for Erosive GERD, or Approval Additional Funding, in the fourth quarter of 2023 and provided for $25 million in additional funding for achievement of a sales milestone, or Milestone Additional Funding, and, together with the Approval Additional Funding, or the Additional Investor Funding. The Initial Investors waived their right of first offer for any Additional Investor Funding. On December 23, 2024, CO Finance LVS XXXVII LLC agreed to assign and transfer to OC III LVS LX LP all of its rights, title and interest as an Additional Investor and in connection therewith, OC III LVS LX LP executed a Joinder Agreement. The total amount funded by the Initial Investors and any subsequent investors is referred to herein as the Investment Amount. As of MarchJune 31,30, 2026, no additional funding is available under the Revenue Interest Financing Agreement.

Under the Revenue Interest Financing Agreement, the Initial Investors and the Additional Investors,Investor, are entitled to receive a 10% royalty on net sales of products containing vonoprazan. The royalty rate is subject to a step-down on net sales exceeding certain annual thresholds and upon FDA approval for vonoprazan for an indication relating to the treatment of heartburn associated with Non-Erosive GERD, which occurred on July 17, 2024. The investors’ right to receive royalties on net sales will terminate when the investors have aggregate payments equal to 200% of the Investment Amount. In addition, at any time after April 30, 2024, we have the right to make a cap payment equal to 200% of the Investment Amount less any royalties already paid, at which time the agreement will terminate.

If the investors have not received aggregate payments of at least 100% of the Investment Amount by December 31, 2028, and at least 200% of the Investment Amount by December 31, 2037, each a Minimum Amount, then we will be obligated to make a cash payment to the investors in an amount sufficient to gross the investors up to the applicable Minimum Amount. As of MarchJune 31,30, 2026, the aggregate payments made to investors under the Revenue Interest Financing Agreement equaled $23.1$28.9 million.

Additionally, under the terms of Revenue Interest Financing Agreement, we are subject to a minimum cash covenant of at least (a) beginning on the date that the Hercules Loan Agreement is terminated and each day thereafter until September 30, 2026, $30 million, and (b) beginning on October 1, 2026 and on each day thereafter until September 30, 2029, a certain percentage of the minimum cash reference amount defined as the difference between the Investment Amount and the amount of all royalty payments received by the Investors as of each such date as follows: (i) 50% from October 1, 2026 to September 30, 2027 (ii) 75% from October 1, 2027 to September 30, 2028, and (iii) 100% from October 1, 2028 to September 30, 2029. As of MarchJune 31,30, 2026, we are in compliance with all applicable covenants under the Revenue Interest Financing Agreement.

In November 2023, we filed a shelf registration statement on Form S-3 which was declared effective by the SEC on November 17, 2023, which included an at-the-market prospectus pursuant to which we may, from time to time, sell up to an aggregate of $150 million of our common stock through the Sales Agent, or the 2023 ATM Offering. We are not obligated to, and we cannot provide any assurances that we will, make any sales of the shares under the Sales Agreement. The Sales Agreement may be terminated by the Sales Agent or us at any time. No shares were sold during the three and six months ended MarchJune 31,30, 2026 and 2025. As of MarchJune 31,30, 2026, all of the available $150 million under the 2023 ATM Offering remains available.

Based on our current operating plan, we believe that our existing cash and cash equivalents together with anticipated product revenues, are sufficient to fund operations for at least the next twelve months. However, our forecast of the period of time through which our financial resources may be adequate to support our operations is a forward-looking statement that involves risks and uncertainties and actual results could vary materially. We have based this estimate on assumptions that may prove to be inaccurate, andand, if operating results, commercial performance or expenses differ materially from those contemplated by our current operating plan, we could deplete our capital resources sooner than we expect based on the amount and timing of product sales and operating expenses, among other factors.expect. Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in ongoing and future trials is uncertain.

UntilIf suchour time,operating ifresults, ever,commercial performance or expenses differ materially from those contemplated by our current operating plan, our capital resources, together with anticipated product revenues, may not be sufficient to fund operations and our cash needs for as long as we cancurrently generateexpect. substantialIn productsuch revenues to support our cost structure,event, we expectmay need to also finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programsprograms, products or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when and if needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our products or product candidates even ifthat we would otherwise prefer to develop and market such product candidates ourselves.retain.

Net cash used in operating activities was approximately $15.6$17.6 million and $84.9$147.7 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was due to approximately $17.1$21.8 million spent on ongoing research and development and selling, general and administrative activities and a $1.5$4.2 million net change in operating assets and liabilities. The net change in operating assets and liabilities is related to a $3.3$19.9 million increase in accounts payable and accrued expenses (including interest, operating lease assets and liabilities), a $7.1 million increase in prepaid assets and other current assets, and a $22.8 million decrease in accounts receivable, inventory and other long-term assets. The net cash used in operating activities for the six months ended June 30, 2025 was due to approximately $132.8 million spent on ongoing research and development and selling, general and administrative activities and a $14.9 million net change in operating assets and liabilities. The net change in operating assets and liabilities is related to a $5.5 million decrease in accounts payable and accrued expenses (including interest, operating lease assets and liabilities), a $7.6$6.2 million increasedecrease in inventory, prepaid assets and other current assets, and a $2.8$26.6 million decreaseincrease in accounts receivable and other long-term assets. The net cash used in operating activities for the three months ended March 31, 2025 was due to approximately $76.0 million spent on ongoing research and development and selling, general and administrative activities and a $8.9 million net change in operating assets and liabilities. The net change in operating assets and liabilities primarily is related to a $6.8 million decrease in accounts payable and accrued expenses (including interest, operating lease assets and liabilities), and a $2.1 million net decrease in accounts receivable, inventory, and prepaid assets and other current assets.inventory.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 and 2025, was related to payments for acquiring property and equipment.

Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 related to $173.2 million of net proceeds of the issuance of long-term debt, $122.0 million of net proceeds from issuance of common stock and pre-funded warrants in connection with the underwritten public offering completed in January 2026, $0.6$4.1 million of proceeds from the issuance of common stock from exercise of stock options offset by $229.0 million repayment of long-term debt on our Hercules Loan Agreement and $0.1 million of payments for employee tax obligations related to vesting of PSUs and RSUs. Net cash provided by financing activities for the six months ended June 30, 2025 related to proceeds from issuance of common stock from exercise of stock options.

There were no material changes outside the ordinary course of our business during the threesix months ended MarchJune 31,30, 2026 to the information regarding our contractual obligations that was disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2025 Form 10-K.

For a description of our critical accounting policies, please see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Significant Judgments and Estimates” contained in our 2025 Form 10-K. There have not been any material changes to the critical accounting policies discussed therein during the threesix months ended MarchJune 31,30, 2026.

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter. If we exceed these thresholds, we would not be able to avail ourselves of the scaled disclosure accommodations beginning with the first fiscal year that commences after our determination that we no longer qualify as a smaller reporting company.