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

We rely on third parties to conduct our preclinical studies and our clinical trials, and those third parties may not perform satisfactorily.

A few stockholders, including one of our former directors, control the voting rights with respect to a large number of shares of our common stock and could exercise their voting power in a manner that adversely affects us or our stockholders.

We expect our net operating losses to increase substantially as our product candidates advance into clinical development. However, the amount of our future losses is uncertain. Our ability to achieve or sustain profitability, if ever, will depend on, among other things, successfully developing product candidates, continuing development for our lead product candidates, successful development and testing of SZN-413 through our partnership withby Boehringer Ingelheim International GmbH, or BI,Boehringer Ingelheim, obtaining regulatory approvals to market and commercialize product candidates, manufacturing any approved products on commercially reasonable terms, entering into potential future alliances, establishing a sales and marketing organization or suitable third-party alternatives for any approved product and raising sufficient funds to finance business activities. If we, or our current and potential future collaborators, are unable to commercialize one or more of our product candidates, or if sales revenue from any product candidate that receives approval is insufficient, we will not achieve or sustain profitability, which could have a material and adverse effect on our business, financial condition, results of operations and prospects.

the timing and progress of preclinical and clinical development of SZN-413, SZN-8141, SZN-8143, SZN-113current and other potential future product candidates;

the extent to which prices for supplies and materials increase due to inflationary pressurespressures, tariffs and labor market constraints;

product-related side effects experienced by participants in our clinical trials (such as the asymptomatic transaminase elevations discussed above) or by individuals using drugs or therapeutic antibodies similar to ours, including immunogenicity;

We may ultimately discover that our product candidates do not possess certain properties that we believe are beneficial for therapeutic effectiveness and safety. For example, although our lead product candidates exhibited encouraging results in animal studies, they may not demonstrate the same properties in humans and may interact with human physiology in unforeseen, ineffective or harmful ways, as shown by the observations of asymptomatic transaminase elevations discussed above.elevations. As a result, we may never succeed in developing a marketable product based on any of our current or future product candidates. If our product candidates prove to be ineffective, unsafe or commercially unviable, our entire pipeline could have little, if any, value, which could require us to change our focus and approach to antibody-based discovery and development and materially and adversely affect our business, financial condition, results of operations and prospects.

A key element of our strategy is to use and expand our Wnt therapeutics platform to discover and develop a portfolio of Wnt product candidates that can facilitate the repair and/or regeneration of damaged tissue for patients suffering from a variety of severe diseases. Although our research and development efforts to date have resulted in the discovery and development of SZN-413, SZN-8141, SZN-8143, SZN-113current and other potential product candidates, our current product candidates may not be safe or effective therapeutics and we may not be able to develop any successful product candidates. Our platform is evolving and may not reach a state at which building a pipeline of product candidates is possible. Even if we are successful in building our pipeline of product candidates, the potential product candidates that we identify may not be suitable for clinical development or generate acceptable clinical data, including as a result of being shown to have unacceptable toxicity or other characteristics that indicate that they are unlikely to be products that will receive marketing approval from the FDA or other regulatory authorities or achieve market acceptance.

From time to time, we consider strategic transactions, such as collaborations, acquisitions of companies, asset purchases, joint ventures and out- or in-licensing of product candidates or technologies. For example, in October 2022, we executed a strategic partnership with BIBoehringer Ingelheim for the research and development of SZN-413 for the treatment of retinal diseases. We will continue to evaluate and, if strategically attractive, seek to enter into collaborations, including with biotechnology or biopharmaceutical companies or hospitals. The competition for collaborators is intense, and the negotiation process is time-consuming and complex. If we are not able to enter into strategic transactions, we may not have access to required liquidity or expertise to further develop our potential future product candidates or our Wnt therapeutics platform. Any such collaboration, or other strategic transaction, may require us to incur non-recurring or other charges, increase its near- and long-term expenditures and pose significant integration or implementation challenges or disrupt our management or business.

From time to time, we expect that we will make public statements regarding the expected timing of certain milestones and key events, such as the commencement and completion of preclinical and IND-enabling studies in our internal drug discovery programs as well as the commencement and completion of our ongoing and planned clinical trials. The actual timing of these events can vary dramatically due to a number of factors such as delays or failures in our or any future collaborators’ drug discovery and development programs, the amount of time, effort and resources committed by us and any future collaborators, and the numerous uncertainties inherent in the development of drugs. As a result, there can be no assurance that we or any current or future collaborators’ programs will advance or be completed in the time frames we or they announce or expect. If we or any collaborators fail to achieve one or more of these milestones or other key events as planned, including the milestones in our agreement with BI,Boehringer Ingelheim, our business could be materially adversely affected and the price of common stock could decline.

Human clinical trials are expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. Because our current and potential future product candidates are based on new technologies and discovery approaches, we expect that they will require extensive research and development and have substantial manufacturing and processing costs. In addition, because of the limited number of drugproduct candidates that target the Wnt pathway, the FDA or other regulatory authorities may require us to perform additional testing before commencing or resuming clinical trials and be hesitant to allow us to enroll patients impacted with its targeted disease indications in Phase 1 trials. If we are unable to enroll patients impacted by the targeted disease indications in our current and planned Phase 1 trials, we may continue to be delayed or would be delayed in obtaining potential proof-of-concept data in humans, which could extend our development timelines. In addition, costs to treat patients and to treat potential side effects that may result from our product candidates may be significant. Accordingly, our clinical trial costs are likely to be high and could have a material and adverse effect on our business, financial condition, results of operations and prospects.

If the market opportunities for our current and potential future product candidates, including SZN-413, SZN-8141, SZN-8143 and SZN-113,candidates are smaller than we believe they are, our future product revenues may be adversely affected and our business may suffer.

Our understanding of the number of people who suffer from certain types of retinal vascular associated diseases that our lead product candidates may be able to treat are based on estimates. These estimates may prove to be incorrect, and new studies may reduce the estimated incidence or prevalence of these diseases. The number of patients in the United States or elsewhere may turn out to be lower than expected, may not be otherwise amenable to treatment with our current or potential future product candidates or patients may become increasingly difficult to identify and access, all of which would adversely affect our business prospects and financial condition. In particular, the treatable population for our candidates may further be reduced if its estimates of addressable populations are erroneous or sub-populations of patients do not derive benefit from SZN-413, SZN-8141, SZN-8143 or SZN-113.SZN-8143.

The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on intellectual property. We face potential competition from many different sources, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities and other academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for the research, development, manufacturing, and commercialization of therapies aimed at treating ophthalmic, autoimmune, inflammatory, metabolic, and other diseases, including indications that we are pursuing or may pursue in the future. Any product candidates that we successfully develop and commercialize will compete with current therapies and new therapies that may become available in the future.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” (as defined under Section 382 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. We have determined that we likely had an ownership change in September 20202020, April 2024 and AprilNovember 2024.2025. As a result of the annual limitations caused by the ownership changes, it was estimated that approximately $2.6$3.9 million of federal tax credit, $8.8$9.0 million of federal NOL and $76.5$76.2 million of California NOL will expire unutilized for income tax purposes, and such amounts are excluded from the carryforward balances of December 31, 2024.2025. We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, and some of which are outside our control. Furthermore, our ability to utilize NOLs of companies that we may acquire in the future may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities, including for state tax purposes. For these reasons, we may not be able to utilize a material portion of the NOLs reflected on our balance sheet, even if we attain profitability, which may result in increased future tax liability to us and could adversely affect our operating results and financial condition.

Our success largely depends on the continued service of key executive management, advisors and other specialized personnel, including Craig Parker, our President and Chief Executive Officer,Officer and Charles Williams, our Chief Financial Officer and Chief Operating Officer. Our senior management may terminate their employment with us at any time. We do not maintain “key person” insurance for any of our employees. The loss of one or more members of the executive team, management team or other key employees or advisors could delay research and development programs and have a material and adverse effect on our business, financial condition, results of operations and prospects.

natural disasters, political and economic instability, wars, terrorism, political unrest, outbreak of disease, boycotts, trade warswars, tariffs and other significant events;

We may selectively seek additional third-party collaborators for the development and commercialization of our product candidates. Our ability to generate revenue from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements. Collaborations involving our product candidates, including our collaboration with BI,Boehringer Ingelheim, pose many risks to us, including that:

Even if patents do successfully issue from our owned or in-licensed patent application, and even if such patents cover our current or any future technologies or product candidates, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed, invalidated, or held unenforceable. Any successful challenge to these patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successful commercialization of any current or future technologies or product candidates that it may develop. Likewise, if patent applications we own or have in-licensed with respect to our development programs and current or future technologies or product candidates fail to issue, if their breadth or strength is threatened, or if they fail to provide meaningful exclusivity, other companies could be dissuaded from collaborating with us to develop current or future technologies or product candidates. Lack of valid and enforceable patent protection could threaten our ability to commercialize current or future products and could prevent us from maintaining exclusivity with respect to the invention or feature claimed in the patent applications. Any failure to obtain or any loss of patent protection could have a material adverse impact on our business and ability to achieve profitability. We may be unable to prevent competitors from entering the market with a product that is similar or identical to SZN-413, SZN-8141, SZN-8143, SZN-113SZN-8143 or any future product candidates.

The filing of a patent application or the issuance of a patent is not conclusive as to its ownership, inventorship, scope, patentability, validity or enforceability. Issued patents and patent applications may be challenged in the courts and in the patent office in the United States and abroad. For example, our patent applications or patent applications filed by our licensors, or any patents that grant therefrom, may be challenged through third-party submissions, opposition or derivation proceedings.proceedings, which can be complex, time-consuming and costly. By further example, any issued patents that may result from our owned or in-licensed patent applications may be challenged through reexamination, inter partes review or post-grant review proceedings before the USPTO, or in declaratory judgment actions or counterclaims. AnFor adverse determinationexample, in anyFebruary such2026, submission,Merck proceedingfiled a post-grant review petition with the U.S. Patent Trial and Appeal Board challenging our U.S. Patent No. 12,297,278 (the ‘278 patent) claiming certain multispecific, tetravalent Wnt surrogate molecules. We are evaluating Merck’s petition and will respond in accordance with the schedule set by the USPTO. The ‘278 patent is in one of our 21 patent families that we solely own or litigationexclusively couldlicense preventas theof issuanceDecember of,31, reduce2025 therelated scope of, invalidate or render unenforceableto our ownedSWAP orplatform. in-licensed patent rights; result in the loss of exclusivity; limit our ability to stop others from using or commercializing similar or identical platforms and product candidates; allow third parties to compete directly with us without payment to us; or result in our inability to manufacture or commercializeOur product candidates withoutdo infringingnot third-partysolely rely on the ‘278 patent rights.in In addition, if the breadth or strength of protection provided by any patents that might result from our owned or in-licensed patent applications is threatened, it could dissuade companies from collaborating with usrespect to license,intellectual developproperty or commercialize current or future platforms or product candidates. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.protection.

Extensions of patent term may be available, but there is no guarantee that we would have patents eligible for extension, or that we would succeed in obtaining any particular extension— and no guarantee any such extension would confer patent term for a sufficient period of time to exclude others from commercializing product candidates similar or identical to us. In the United States, depending upon the timing, duration and specifics of FDA marketing approval of product candidates, the Drug Price Competition and Patent Term Restoration Act of 1984 permits a patent term extension of up to five years beyond the normal expiration of the patent, which is limited to the approved product or approved indication. In the United States, patent term extension cannot extend the remaining term of a patent beyond 14 years from the date of product approval; only one patent may be extended; and extension is available for only those claims covering the approved drug, a method for using it, or a method for manufacturing it. The applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to its patents, or may grant more limited extensions than we request. An extension may not be granted or may be limited where there is, for example, a failure to exercise due diligence during the testing phase or regulatory review process, failure to apply within applicable deadlines, failure to apply before expiration of relevant patents, or some other failure to satisfy applicable requirements. If this occurs, our competitors may be able to launch their products earlier by taking advantage of our investment in development and clinical trials along with our clinical and preclinical data. This could have a material adverse effect on our business and ability to achieve profitability.

Furthermore, we expect to rely on CROs, collaborators such as BIBoehringer Ingelheim and clinical trial sites to ensure the proper and timely conduct of our clinical trials and, while we expect to enter into agreements governing their committed activities, we may have limited influence over their actual performance.

We may be unable to obtain U.S. or foreign regulatory approval and, as a result, be unable to commercialize SZN-413, SZN-8141, SZN-8143, SZN-113current or potential future product candidates.

SZN-413, SZN-8141, SZN-8143, SZN-113Current and any potential future product candidates are subject to extensive governmental regulations relating to, among other things, research, testing, development, manufacturing, safety, efficacy, approval, recordkeeping, reporting, labeling, storage, packaging, advertising and promotion, pricing, marketing and distribution of therapeutic biologics. Rigorous preclinical testing and clinical trials and an extensive regulatory approval process are required to be successfully completed in the U.S. and in many foreign jurisdictions before a new drug or therapeutic biologic can be marketed. Satisfaction of these and other regulatory requirements is costly, time-consuming, uncertain and subject to unanticipated delays. It is possible that none of the product candidates we may develop will obtain the regulatory approvals necessary for us or our potential future collaborators to begin selling them.

We have limited experience in conducting and managing the clinical trials necessary to obtain regulatory approvals, including approval by the FDA and other regulatory authorities. The time required to obtain FDA and other approvals is unpredictable but typically takes many years following the commencement of clinical trials, depending upon the type, complexity and novelty of the product candidate. The standards that the FDA and its foreign counterparts use when regulating us require judgment and can change, which makes it difficult to predict with certainty how they will be applied. Any analysis we perform of data from preclinical and clinical activities is subject to confirmation and interpretation by regulatory authorities, which could delay, limit or prevent regulatory approval. We may also encounter unexpected delays or increased costs due to new government regulations, for example, from future legislation or administrative action, or from changes in regulatory policy during the period of product development, clinical trials and FDA regulatory review in the United States and other jurisdictions. It is impossible to predict whether legislative changes will be enacted, or whether FDA or foreign regulations, guidance or interpretations will be changed, or what the impact of such changes, if any, may be. In addition, the ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels for critical departments, payment of user fees and reauthorization of user fee programs, ability to hire and retain key personnel involved in the review of sponsor applications, as well as statutory, regulatory and policy changes. In addition, funding of other government agencies that support research and development activities relevant to FDA review, such as research to understand new technologies or establish new standards, is subject to the political process, which is inherently fluid and unpredictable.

We currently expect to use our existing cash to fund the development of our lead product candidates through the continuation of first in human trials and to fund our other ongoing research and discovery programs, as well as for working capital and other general corporate purposes. We may also use a portion of our cash to in-license, acquire or invest in complementary businesses, technologies, products or assets. However, other than our CLA with BI,Boehringer Ingelheim, we have no current commitments or obligations to do so. Therefore, our management will have flexibility in allocating our cash. Accordingly, you will be relying on the judgment of our management with regard to the allocation of our cash, and you will not have the opportunity, as part of your investment decision, to assess whether the cash is being allocated appropriately. It is possible that the cash will be invested in a way that does not yield a favorable, or any, return for our company.

Significant additional capital will be needed in the future to continue our planned operations, including further development of our Wnt therapeutics platform, preparing IND or equivalent filings, conducting preclinical studies and clinical trials, commercialization efforts, expanded research and development activities and costs associated with operating a public company. To raise capital, we may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our common stock. In April 2024 and March 2025, we issued and sold shares of common stock, pre-funded warrants and warrants to purchase common stock in private placements. Please see Notes 9,8, 10, 119 and 1710 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for further information regarding the private placements and the terms of the warrants. In addition, outstanding options and warrants may be exercised and restricted stock units may vest resulting in the issuance of additional shares of common stock, which will result in further dilution to our stockholders.

As of December 31, 2024, and after taking into account our March 2025 private placement,2025, entities affiliated with The Column Group (of which a member of our board of directors, Tim Kutzkey, Ph.D., is a Managing Partner) beneficially owned approximately 21.7%22.5% of our common stock and can significantly influence any matter requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combinations.

We qualify as an emerging growth company as well as a smaller reporting company within the meaning of the SecuritiesExchange Act, and ifsince we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

Additionally, weWe qualify as a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter. ToWe theexpect extent weto take advantage of such reduced disclosure obligations,obligations itwhich may also make comparison of our financial statements with other public companies difficult or impossible.

WeOur aremission discovering and developing biologic drug candidatesis to selectivelytransform modulatethe treatment of serious ophthalmic disease by fully exploiting the Wnt pathway, a critical mediator of tissue repair, in a broad range of organs and tissues, for human diseases.pathway. Building upon the seminal work of our founders and scientific advisors who discovered the Wnt gene and key regulators of the Wnt pathway, we have made breakthrough discoveries that we believe will overcome previous limitations in harnessing the potential of Wnt biology.biology in a tissue-selective manner. These breakthroughs enable us to rapidly and flexibly design tissue-targeted therapeutics that modulate Wnt signaling.signaling Asand aform resultthe foundation of our discoveries,ophthalmology weportfolio and research programs, which are pioneeringdesigned theto selectiverestore activationtissue of Wnt signaling, designingstructure and engineeringfunction Wntin pathwayserious mimetics,eye anddiseases advancingwith tissue-selectivehigh Wntunmet candidates.medical need.

Our lead product candidates are multi-specific, antibody-based therapeutics that mimic the roles of naturally occurring Wnt proteins, which are involved in activation and enhancement of the Wnt pathway, respectively. Givenpathway. Wnt signaling is essential in tissue maintenance and regeneration throughout the body,body. weOur havecurrent development efforts are focused on ophthalmology, where the potential to target a wide varietybiology of severe diseases, including certain diseases that afflict the intestine,Wnt liver,pathway retina,is cornea,clinically lung, kidney, cochlea, skin, pancreasvalidated and centrallocalized nervousdelivery system.enables Incontrolled eachtherapeutic ofmodulation. these areas, weWe believe our approach has the potential to change the treatment paradigm for theophthalmic disease and substantially impact patient outcomes.

Our strategy is to exploit the full potential of Wnt signaling by identifying disease states responsive to Wnt modulation, designdesigning tissue-selective therapeutics, evaluating mechanisms complementary to Wnt signaling, and advanceadvancing candidates into clinical development in targeted ophthalmic indications with high unmet need. Our unique approach and platform technologies have led to the discovery and advancement of two leadmultiple product candidates. We believe that ophthalmology indications are particularly well-suited for Wnt modulating therapeutics due to the combination of strong genetic and biologic validation and the need for approaches to restore tissue structure and function.

The chart below represents a summary of our product candidatespipeline:

Please see “Part I, Item I – Business” for a further discussion of our product candidates and clinical development programs.candidates.

In October 2022, we executed a Collaboration and Licensing Agreement, or the CLA, with Boehringer Ingelheim International GmbH, or BI,Boehringer Ingelheim, to research, develop and commercialize Frizzled 4, or Fzd4, bi-specific antibodies designed using our SWAP technology, including SZN-413. WeBoehringer Ingelheim and BIus conducted partnership research focused on SZN-413 during a 1.5-year period. WeUnder grantedthe BICLA, Boehringer Ingelheim has an exclusive, royalty-bearing, worldwide, sublicensable license, under our applicable patents and know-how, to develop, manufacture and commercialize, for all uses, one lead and two back-up Fzd4 bi-specific antibodies selected by BI.Boehringer Ingelheim. After anthe initial period of joint research, BIBoehringer shallIngelheim beis responsible for all further research, preclinical and clinical development, manufacturing, regulatory approvals, and commercialization of licensed products at its expense. For five years after the effective date of the CLA, we are prohibited from preclinically and clinically developing or commercializing Fzd4 bi-specific antibodies that have certain properties for any diseases of the eye, and BIBoehringer Ingelheim is prohibited from clinically developing or commercializing licensed products for any purpose other than diseases of the eye. In March 2026, Boehringer Ingelheim achieved a research milestone, reflecting a positive outcome of the IND-enabling GLP toxicology study. The achievement of the research milestone entitles us to receive a $5.0 million non-refundable and non-creditable payment from Boehringer Ingelheim.

In October 2024, we entered into a strategic research collaboration with a privately-held company, TCGFB, Inc., or TCGFB, to discover antibody therapeutics targeting transforming growth factor beta, or TGF-β, for the potential treatment of patients with idiopathic pulmonary fibrosis, or TCGFB Collaboration. Under the terms of the agreement, we provide antibody discovery services for a period of up to two years. TCGFB will own all TGF-β product related intellectual property. In exchange for our research services, TCGFB agreed to pay us a fixed monthly fee up to $6.0 million in the aggregate, plus any third-party costs, and issued us a warrant exercisable for up to 3.4 million shares of TCGFB common stock at an exercise price of $0.0001 per share based on certain vesting conditions. TCGFB was founded and is controlled by entities affiliated with The Column Group. The agreement constitutes a related party transaction because entities affiliated with The Column Group hold more than 5% of our common stock and Dr. Kutzkey, a member of our board of directors, serves as Managing Partner of The Column Group. The Research Collaboration Agreement was terminated effective November 13, 2025.

Please see “Part I, Item I – Business – Intellectual Property - Collaboration and LicensingLicense Arrangements” for a further discussion of our collaboration and licensinglicense arrangements.

We had not generated any revenue prior to the execution of the CLA in October 2022. Under the terms of the CLA, BIBoehringer Ingelheim paid us a non-refundable upfront payment of $12.5 million less applicable withholding tax and agreed to pay success-based milestone payments up to $587.0 million and mid-single digit to low-double digit royalties on net sales of the licensed products should any reach commercialization. In September 2024, a milestone was achieved asupon BIdecision decidedby Boehringer Ingelheim to move forward with the development of SZN-413, and we received a $10.0 million non-refundable and non-creditable payment from BIBoehringer Ingelheim pursuant to the terms of the CLA. The milestone payment of $10.0 million was recognized as collaboration and license revenue for the year ended December 31, 2024.

Research service revenue – related party relates to the amounts recognized for the research service performed in 2024 in connection with TCGFB Collaboration. The research collaboration was terminated in November 2025.

We classify operating expenses into threetwo main categories: (i) research and development expenses,expenses and (ii) general and administrative expenses and (iii) restructuring expenses.

costs of laboratory supplies and acquiring, developing and manufacturing drugproduct candidate materials; and license and sublicense costs under our license agreements made for intellectual property used in research and development activities.

launching commercial sales of our drugproduct candidates, if approved, whether alone or in collaboration with others;

the effect of products that may compete with our product candidates or other market developments; and maintaining a continued acceptable safety profile of the drugproduct candidates following approval.

Any changes in the outcome of any of these variables could mean a significant change in the costs and timing associated with the development of our drugproduct candidates.

RestructuringOther Income and Expenses

Loss on Issuance of Common Stock, Pre-Funded Warrants and Warrants in the 2024 PIPE

Loss on issuance of common stock, pre-funded warrants and warrants represents the excess of the initial fair value of common stock, pre-funded warrants and warrants over the aggregate gross proceeds in the private placement consummated in April 2024.2024, or the 2024 PIPE.

The increasedecrease of $10.0 million in collaboration and license revenue for 2024,2025, compared to 20232024 is due to the recognition of a milestone achieved under the CLA with BIBoehringer Ingelheim in September 2024.

The increase of $0.7$2.8 million in research service revenue – related party for 2024,2025, compared to 2023,2024, is attributable to the research service performed in 2024 in accordance with TCGFB Collaboration. The TCGFB Collaboration was terminated effective in November 2025.

The decreaseincrease of $0.7$1.1 million, or 5%,8%, in general and administrative expenses for 2024,2025, compared to 2023,2024, is primarily attributable to reductionsan increase in employee-related expenses as a result of the workforce reductions in 2023, as well as lower consulting and professional feesservice as a result of the restructuring plans we implemented in 2023.fees.

The decreaseincrease of $0.6$1.3 million, or 28%,78%, in interest income for 2024,2025, compared to 2023,2024, is due to aan decreaseincrease in cash and cash equivalents.

Loss on Issuance of Common Stock, Pre-Funded Warrants and Warrants in the 2024 PIPE

The increase of $20.4 million in lossLoss on issuance of common stock, pre-funded warrants and warrants in the 2024 PIPE for 2024,2024 comparedis toa 2023,result asof the fair value of warrants issued wasbeing greater than the proceeds received in athe private2024 placement closed in April 2024.PIPE.

Since inception, we have only generated revenue andfrom income under the CLA with BIlicensing and TCGFBresearch Collaboration.collaborations. We incurred significant net operating losses and negative cash flows from operations. Historically, we have financed our operations primarily through the sales of our equity securities and the paymentpayments received under our collaboration and license agreement.agreements. We anticipate that we will continue to incur net operating losses for the foreseeable future because of additional costs and expenses related to our research and development activities, including increased expenses from pipeline advancement and advancement of our product candidates into and through clinical developments and associated regulatory submissions, as well as increased general and administrative expenses asrelated weto scaleaudit, ourlegal, organizationregulatory, asand atax-related publicservices company.associated with maintaining compliance with the rules and regulations of the SEC and Nasdaq.

The filing of a patent application or the issuance of a patent is not conclusive as to its ownership, inventorship, scope, patentability, validity or enforceability. Issued patents and patent applications may be challenged in the courts and in the patent office in the United States and abroad. For example, our patent applications or patent applications filed by our licensors, or any patents that grant therefrom, may be challenged through third-party submissions, opposition or derivation proceedings, which can be complex, time-consuming and costly. By further example, any issued patents that may result from our owned or in-licensed patent applications may be challenged through reexamination, inter partes review or post-grant review proceedings before the USPTO, or in declaratory judgment actions or counterclaims. For example, in February 2026, Merck filed a post-grant review petition with the U.S. Patent Trial and Appeal Board challenging our U.S. Patent No. 12,297,278 (the ‘278 patent) claiming certain multispecific,multispecific tetravalent Wnt surrogate molecules. WeIn areJuly evaluating2026, Merck’s post-grant review petition andwas will respond in accordance with the schedule setdenied by the USPTO.U.S. ThePatent ‘278Trial patentand isAppeal in one of our 22 patent families that we solely own or exclusively license as of March 31, 2026 related to our SWAP platform. Our product candidates do not solely rely on the ‘278 patent in respect to intellectual property protection.Board.

In addition, in August 2025, we entered into a sales agreement with TD Securities (USA) LLC, or TD Cowen, to issue and sell up to $50.0 million of shares of common stock, or the 2025 ATM, and to date we have sold 2,150,937 shares of common stock for net proceeds of $35.9 million under the 2025 ATM. In March 2026, we terminated the 2025 ATM and entered into a new sales agreement with TD Cowen to issue and sell up to $50.0 million of shares of common stock.stock, or the 2026 ATM. To date we have not sold any shares of common stock under the 2026 ATM.

As of MarchJune 31,30, 2026, entities affiliated with The Column Group (of which a member of our board of directors, Tim Kutzkey, Ph.D., is a Managing Partner) beneficially owned approximately 29.3%28.7% of our common stock and can significantly influence any matter requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combinations.

We are developing SZN-8141 for the treatment of diabetic macular edema, or DME, and neovascular age-related macular degeneration, or wet AMD. SZN-8141 combines Frizzled 4, or Fzd4, agonism and vascular endothelial growth factor, or VEGF, antagonism and has the potential to provide benefits over treatment with single mechanism agents against these targets. The current standard of care for diabetic retinopathy (including DME), retinal vein occlusion and wet AMD is intravitreal administration of anti-VEGF therapies, including monotherapies and dual-pathway agents targeting VEGF and angiopoietin-2, or Ang-2. In addition, MK-3000, a Fzd4 monotherapy, has demonstrated proof of concept in DME in a clinical trials.trial. We believe SZN-8141 has the potential to treat multiple retinopathy indications and be differentiated from existing therapies. Data generated in preclinical models of retinopathy demonstrated that SZN-8141 stimulated Wnt signaling and induced normal retinal vessel regrowth while suppressing pathological vessel growth. We anticipate submitting an IND for SZN-8141 inby the second halfend of the third quarter of 2026 and initiating a Phase 1b/2a study in patients with DME called DUET by year-end 2026.

We are developing SZN-8143 for the treatment of DME, wet AMD, and uveitic macular edema, or UME. SZN-8143 combines Fzd4 agonism, VEGF antagonism, and interleukin-6, or IL-6, antagonism and may have benefits over single mechanism agents against these targets. The current standard of care for diabetic retinopathy (including DME), retinal vein occlusion and wet AMD is intravitreal administration of anti-VEGF therapies, including monotherapies and dual-pathway agents targeting VEGF and Ang-2. In addition, MK-3000, a Fzd4 monotherapy, has demonstrated proof of concept in DME in a clinical trials.trial. We believe SZN-8143 has the potential to treat multiple retinopathy indications and be differentiated from existing therapies. Data generated in preclinical models of retinopathy demonstrated that SZN-8143 stimulated Wnt signaling and induced normal retinal vessel regrowth while suppressing pathological vessel growth.

In October 2022, we executed a Collaboration and License Agreement, or CLA, with Boehringer Ingelheim International GmbH, or Boehringer Ingelheim, to research, develop and commercialize Fzd4 bi-specific antibodies designed using our SWAP technology, including SZN-413. In September 2024, Boehringer Ingelheim decided to move forward with the development of SZN-413, which triggered a $10.0 million milestone payment to us. In March 2026, Boehringer Ingelheim achieved a research milestone, reflecting a positive outcome of the IND-enabling GLP toxicology study.study, which triggered a $5.0 million milestone payment to us. In June 2026, Boehringer Ingelheim achieved a development milestone following the initiation of a Phase 1 study, which triggered a $5.0 million milestone payment to us. We received the researcheach milestone payment of $5.0 million from Boehringer Ingelheim in April 2026.2026 and July 2026, respectively.

Since our inception in 2015, we have devoted substantially all of our efforts and financial resources to organizing and staffing our company, business planning, raising capital, developing and optimizing our Wnt therapeutics platform, identifying potential product candidates, undertaking research and development activities, engaging in strategic transactions, establishing and enhancing our intellectual property portfolio, and providing general and administrative support for these operations. We have incurred operating losses since inception. During the three months ended MarchJune 31,30, 20262026, we had net income of $50.2 million, including noncash gains of $59.6 million on changes in fair value of tranche liability and 2025,warrant liabilities during the period. During the six months ended June 30, 2026, we incurred a net loss of $127.5$77.3 million. During the three and six months ended June 30, 2025, we had net income of $39.7 million and a$12.8 netmillion, lossrespectively, including noncash gains of $27.0$47.6 million and $104.6 million, respectively.respectively, on changes in fair value of tranche liability and warrant liabilities during the period. As of MarchJune 31,30, 2026, we had an accumulated deficit of $654.8$604.6 million and cash and cash equivalents of $106.9$102.0 million.

During the three and six months ended MarchJune 31,30, 2026, there were no material changes to our critical accounting policies or in the methodology used for estimates from those described under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025.

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

The increase of $5.0 million in collaboration and license revenue for three months ended MarchJune 31,30, 2026, compared to three months ended MarchJune 31,30, 2025 is due to the recognition of a milestone achieved by Boehringer Ingelheim under the CLA in MarchJune 2026. See Note 5 to the unaudited condensed consolidated financial statements for information regarding the June 2026 development milestone and related contractual disagreement with Boehringer Ingelheim.

The decrease of $1.0 million in research service revenue – related party for three months ended MarchJune 31,30, 2026, compared to three months ended MarchJune 31,30, 2025, is attributable to the termination of the Research Collaboration Agreement with TCGFB, Inc., effective in November 2025.

The increase of $2.8$2.4 million, or 42%,40%, in research and development expenses for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, is primarily due to a $2.4$1.7 million increase in manufacturing costs, lab expenses and consulting fees for SZN-8141 and a $1.2$1.0 million increase in employee-related expenses,expenses primarily related to stock-based compensation, offset by a $0.9$0.3 million decrease in clinical expenses as a result of the discontinuation of clinical development of SZN-043.

The increase of $2.2$2.9 million, or 54%,74%, in general and administrative expenses for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025 is primarily attributable to a $1.1$1.5 million increase in employee-related expenses primarily related to stock-based compensation and a $1.0$1.3 million increase in professional service fees.fees primarily related to the defense of our intellectual property portfolio.

The increasedecrease of $0.6$87,000, millionor 8%, in interest income for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025 is due to ana increasedecrease in cashmarket andinterest cashrates equivalents.on our money market funds.

The loss on amendment and cancellation of warrants for the threesix months ended MarchJune 31,30, 2025 was due to the non-cashnoncash change in the fair value of warrant liabilities resulting from the amendment of Series A and Series B common stock warrants and cancellation of Series C and Series D common stock warrants in connection with a private placement which was executed in March 2025, or the 2025 PIPE.

Loss on execution of the 2025 PIPE for the threesix months ended MarchJune 31,30, 2025 reflects the loss recognized upon the initial execution of the 2025 PIPE as the committed proceeds from the 2025 PIPE were less than the fair value of the tranche liability recognized at contract execution date. See Note 8 to the unaudited condensed consolidated financial statements for further information regarding the 2025 PIPE.

The increase of $93.2$85.5 million in loss on change in fair value of tranche liability for the threesix months ended MarchJune 31,30, 2026, compared to threesix months ended MarchJune 31,30, 2025 was attributable to the non-cashnoncash change in fair value of tranche liability duringrelated to the period,2025 whichPIPE. The noncash loss was primarily driven by the increase in our stock price.price during the period.

The gain on settlement of tranche liability for the threesix months ended MarchJune 31,30, 2025 represents the proceeds from the sale of securities in the 2025 PIPE being greater than the net value of securities issued. The net value of securities issued constitutes the fair value of the securities issued, offset by the associated tranche liability remeasured at fair value on settlement date. See Note 8 to the unaudited condensed consolidated financial statements for further information regarding the 2025 PIPE.

The increase of $79.1$74.9 million in other expense, net for the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025, is primarily attributable to a $81.7$77.5 million non-cashnoncash change in fair value of warrant liabilities during the period, offset by $2.7$2.8 million financing transaction costs for the 2025 PIPE.

Since inception, we have only generated revenue from licensing and research collaborations. We incurred significant operating losses and negative cash flows from operations. Historically, we have financed our operations primarily through the sales of our equity securities and the payments received under our collaboration and license agreements. We anticipate that we will continue to incur net operating losses for the foreseeable future because of additional costs and expenses related to our research and development activities, including increased expenses from pipeline advancement and advancement of our product candidates into and through clinical developments and associated regulatory submissions, as well as increased general and administrative expenses related to audit, legal, regulatory, and tax-related services associated with maintaining compliance with the rules and regulations of the SEC and Nasdaq.

In August 2025, we entered into a sales agreement with TD Securities (USA) LLC, or TD Cowen, to issue and sell up to $50.0 million of shares of common stock, or the 2025 ATM. The compensation payable to TD Cowen was up to 3.0% of the gross sales price of any shares sold pursuant to the sales agreement. During the threefirst monthsquarter ended March 31,of 2026, we sold 1.4 million shares of common stock under the 2025 ATM for net proceeds of $26.9 million, after deducting sales agent commissions. In March 2026, we terminated the 2025 ATM and entered into a new sales agreement with TD Cowen to issue and sell up to $50.0 million of shares of common stock, or the 2026 ATM. The compensation payable to TD Cowen is up to 3.0% of the gross sales price of any shares sold pursuant to this new sales agreement. As of MarchJune 31,30, 2026, we had not sold any shares of common stock under the 2026 ATM.

The second tranche of the 2025 PIPE is contingent upon the public announcement of the receipt of clearance from the FDA on or prior to October 31, 2026 of our Investigation New Drug Application for SZN-8141, or the Second Closing Milestone. If we terminate our SZN-8141 program prior to October 31, 2026, then we will provide written notice to each purchaser, referred to as the Termination Notice, and each purchaser will have the right, but not the obligation, for 30 calendar days following the receipt of such notice, upon written notice to us, to purchase the additional shares of common stock, pre-funded warrants, and Series E common stock warrants subscribed for by such purchaser in the second closing. In addition, at any time prior to October 31, 2026 or the date of the Termination Notice (if earlier), in lieu of the requirement to purchase units in the second closing, each purchaser has the right, but not the obligation, upon five trading days’ prior written notice to us to purchase all (but not a portion) of the units subscribed for by such purchaser in the second closing, which we refer to as an Optional Closing. If a purchaser fails to purchase in full its subscribed for units after the achievement of the Second Closing Milestone in the second closing, or previously at the first closing or an Optional Closing, then the Series E common stock warrants issued to such purchaser shall automatically be cancelled and cease to be exercisable. In December 2025, in an optional closing we issued and sold 301,716 shares of common stock and Series E common stock warrants to purchase up to 150,858 shares of common stock for aggregate net proceeds of $3.3 million, after deducting placement agent fees and other expenses. Assuming achievement of the Second Closing Milestone, we will issue (i) 5,741,605 shares of common stock, (ii) pre-funded warrants to purchase up to 2,456,500 shares of common stock, and (iii) Series E common stock warrants to purchase up to 4,099,052 shares of common stock for aggregate gross proceeds of approximately $95.1 million in the second tranche. Please see Note 8 to the unaudited condensed consolidated financial statements for further information regarding the 2025 PIPE. During the three and six months ended MarchJune 31,30, 2026, 77,500 shares and 111,500 shares, respectively, of Series E common stock warrants to purchase 34,000 shares of common stock were exercised for the gross proceeds of $0.4$0.9 million.million and $1.3 million, respectively.

As of MarchJune 31,30, 2026, we had cash and cash equivalents of $106.9$102.0 million and accumulated deficit of $654.8$604.6 million. We believe, based on our current operating plan, that our existing cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months from the filing date of this Quarterly Report. In addition, if the FDA clears the IND application for SZN-8141 on or prior to October 31, 2026, the second closing of the 2025 PIPE will occur and we will receive an additional $95.1 million in gross proceeds which is expected to fund multiple ophthalmology programs through initial Phase 1 safety, tolerability and efficacy studies. We expect that in the long-term we will need to raise additional capital through public or private equity offerings, debt financings or other capital sources, including government grants, potential collaborations with other companies or other strategic transactions until we are able to generate revenue on our own. Our ability to continue as a going concern in the long-term is dependent upon our ability to successfully secure sources of financing and ultimately achieve profitable operations. There can be no assurance that sufficient funds will be available to us at all or on attractive terms when needed from these sources. If we are unable to obtain additional funding from these or other sources when needed, we may be necessary to significantly reduce expenses through reductions in staff and delaying, scaling back operations, or stopping certain research and development programs.

Cash used in operating activities of $12.5$19.9 million for the threesix months ended MarchJune 31,30, 2026 was primarily due to the use of funds in our operations, and the resulting net loss of $127.5$77.3 million and a net change of $5.6$7.0 million in our net operating assets and liabilities, offset by $120.6$64.4 million in non-cashnoncash charges. Cash used in operating activities of $9.3$15.4 million for the threesix months ended MarchJune 31,30, 2025 was primarily due to the use of funds in our operations, and the resulting a net lossincome of $27.0$12.8 millionmillion, andoffset by a net change of $1.4$0.8 million in our net operating assets and liabilities,liabilities offsetand by $19.1$27.4 million in non-cashnoncash charges.

Cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 and 2025 was related to the purchases of lab equipment.

Cash provided by financing activities of $30.3$32.8 million for the threesix months ended MarchJune 31,30, 2026 consisted primarily of $26.9 million proceeds from the issuance and sale of common stock under the 2025 ATMATM, and $3.3$5.5 million proceeds from issuance of common stock upon exercises of warrants.warrants and $0.4 million proceeds from issuance of common stock under our equity plans. Cash provided by financing activities of $76.4$71.3 million for the threesix months ended MarchJune 31,30, 2025 consisted primarily of the proceeds from the issuance and sale of common stock, pre-funded warrants and warrants in the 2025 PIPE.

Our contractual obligations as of MarchJune 31,30, 2026 have not materially changed since December 31, 2025. Please see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025 for information regarding our contractual obligations and commitments.

The current presidential administration has issued multiple executive orders directing the United States to impose new tariffs on imports from multiple nations. Our contract manufacturing organization is located in the United Kingdom and Switzerland for the manufacture and supply of our drug substance and drug projects. We are currently evaluating the potential impact of tariffs on our business. For a further discussion of the potential impact of tariffs on our business please see Part II, Section 1A. Risk Factors – “International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospectsprospects.”.