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

•We are aan preclinical-stageearly clinical-stage biotechnology company and have incurred significant losses since our inception, and we expect to incur losses for the foreseeable future. We have no products approved for commercial sale, have never generated revenue from product sales, and may never achieve or maintain profitability.

•We will require additional funding in order to complete development of our product candidate(s),candidates including SL-325, and commercialize our products, if approved. Additional funding may not be available on acceptable terms, or at all. If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs and anycurrent and future clinical trials, our efforts to access manufacturing capacity, and any commercialization efforts.

•OurWe limitedhave operatingnot historycompleted any late-stage clinical trials and have no products approved for commercial sale, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

•We are substantially dependent on the success of our lead product candidate, SL-325, and our anticipatedcurrent and any future clinical trials of such product candidate may not be successful.

•Our product candidate(s)candidates are in preclinical and clinical stages of development and may fail in development or suffer delays. We depend on the successful initiation and completion of clinical trials for our product candidates to advance our product development plans.

•Our clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of our product candidate(s)candidates or any future product candidates, which would prevent or delay or limit both the scope of regulatory approval and our ability to successfully commercialize.

•Preclinical and clinical development is a lengthy and expensive process that is subject to delays and uncertain outcomes, and results of earlier studies and trials may not be predictive of future clinical trial results. If preclinical studies and clinical trials of our product candidate(s)candidates are prolonged or delayed, we may be unable to obtain required regulatory approvals, and, therefore, be unable to complete the development of and commercialize our product candidate(s)candidates on a timely basis or at all.

•Our product candidate(s)candidates may have serious adverse, undesirable, or unacceptable side effects or other properties that may delay or prevent marketing approval.

•The development and commercialization of biopharmaceutical products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our product candidate(s)candidates on a timely basis, if at all, our business will be substantially harmed. We operate in highly-competitive and rapidly-changing industries, which may result in others discovering, developing, or commercializing competing products before or more successfully than we do.

•We rely on third parties to supply raw materials and to manufacture our product candidate(s).candidates. The manufacture of our product candidate(s)candidates is complex and our third-party manufacturers may encounter difficulties in production, which could delay or entirely halt their ability to supply our product candidate(s)candidates for clinical trials or, if approved, for commercial sale.

•Our success depends upon our ability to obtain and maintain patents and other intellectual property rights to protect our technology, including SL-325, methods used to manufacture our product candidate(s),candidates, formulations thereof, and the methods for treating patients using those product candidate(s).candidates.

We are aan preclinical-stageearly clinical-stage biotechnology company and have incurred significant losses since our inception, and we expect to incur losses for the foreseeable future. We have no products approved for commercial sale, have never generated revenue from product sales, and may never achieve or maintain profitability.

We are a preclinical-stageclinical-stage biotechnology company and will need to raise substantial additional capital to continue to fund our operations in the future. We have based our estimates on assumptions that may prove to be wrong, and could exhaust our available financial resources sooner than we currently anticipate.

Biotechnology product development is a highly speculative undertaking and involves a substantial degree of risk. We have incurred significant operating losses since inception. For the years ended December 31, 20242025 and 2023,2024, we reported a net loss of $75.4$48.8 million and $87.3$75.4 million, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $381.7$430.5 million. We expect to continue to incur significant operating losses for the foreseeable future, including as our product candidate(s)candidates entercontinue through preclinical and clinical trials.development. We expect to invest significant funds into the research and development of our current programs to determine the potential to advance product candidate(s)candidates to regulatory approval. To become and remain profitable, we must succeed in developing and eventually commercializing products that generate significant revenue. We may never succeed in these activities and, even if we do, we may never generate revenue that is sufficient to achieve profitability.

•continue the preclinical development and initiate the clinical development of our lead product candidate, SL-325, and any other potential product candidatesSL-325;

•continue the manufacturing of our product candidate(s)candidates or increase volumes manufactured by third parties;

•initiate additional preclinical and nonclinical studies or clinical trials for our product candidate(s)candidates;

•seek regulatory and marketing approvals for our product candidate(s)candidates;

•experience any delays or encounter issues with the development and potential regulatory approval of our clinical and product candidate(s)candidates such as safety issues, manufacturing delays, clinical trial accrual delays, longer follow-up for planned studies or trials, additional major studies or trials, or supportive trials necessary to support marketing approval.

We will require additional funding in order to complete development of our product candidate(s),candidates, including SL-325, and commercialize our products, if approved. Additional funding may not be available on acceptable terms, or at all. If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs and other operations.

Based on our current business plans, we estimate that our existing cash and cash equivalents and investmentsshort-term investments, assuming the full exercise of our outstanding common stock warrants, will enable us to fund our operating expensesoperations into 2027.2029. We have based this estimate on assumptions that may prove to be wrong, including that the outstanding common stock warrants will be exercised in full, and we could use our capital resources sooner than we currently expect, requiring us to seek additional funds sooner than planned through public or private equity or debt financings or other sources, such as strategic collaborations. 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 materially and adversely affect the development of our product candidates. Our ability to raise additional funds will depend on financial, economic, and market conditions and other factors, over which we may have no or limited control. Additional funds may not be available when we need them, on terms that are acceptable to us or at all.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations, or require us to relinquish rights to our technologies or product candidate(s).candidates.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our research programs or product candidate(s)candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements with third parties when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to third parties to develop and market product candidate(s)candidates that we would otherwise prefer to develop and market ourselves.

Our success depends upon the continued contributions of our key management, scientific, and technical personnel, many of whom have been instrumental for us and have substantial experience with our product candidate(s)candidates and related technologies. Although we have employment agreements with certain of our key employees, including our Chief Executive Officer, these employment agreements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice.

In the future, as we progress SL-325SL-325, and any other current or future product candidates through clinical development, we expect to experience periods of growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, clinical operations, business development, manufacturing, regulatory affairs, quality assurance, human resources, legal, accounting and finance, and, ultimately, sales and marketing. The competition for qualified personnel in the biotechnology and pharmaceutical industries is intense, and our future success depends upon our ability to attract, retain, and motivate highly skilled scientific, technical, and managerial employees. If our recruitment and retention efforts are unsuccessful, when needed, in the future, it may be difficult for us to implement our business strategy, which could have a material adverse effect on our business.

OurWe limitedhave operatingnot historycompleted any late-stage clinical trials and have no products approved for commercial sale, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

We are substantially dependent on the success of our lead product candidate, SL-325, and our anticipatedcurrent and any future clinical trials of such product candidate(s) may not be successful.

Our lead product candidate, SL-325, is in preclinicala development,Phase 1 clinical trial, and if that product candidate is not successful, our business could be materially impacted. While we have other preclinical programs, such as SL-425, there is no guarantee that these programs will advance into clinical development. Our future success is substantially dependent on our ability to develop and timely obtain marketing approval for, and then successfully commercialize, SL-325. We are investing the majority of our efforts and financial resources into the research and development of SL-325, SL-425, and other DR3 antagonists, includingbased bispecific antibodies targeting DR3 together with another biologically relevant target.

Our product candidates, including our lead product candidate, SL-325, are in the early stages of development and will require substantial preclinical and clinical development and testing, manufacturing process development, improvement and validation, and regulatory approval prior to commercialization and before we generate any revenues from product sales. The success of our product candidate(s)candidates will depend on a variety of factors. We do not have complete control over many of these factors, including certain aspects of clinical development and the regulatory submission process, potential threats to our intellectual property rights and the manufacturing, marketing, distribution and sales efforts of any future collaborator.

OurSL-325 is in early stages of clinical development and our other product candidate(s)candidates are in preclinical stages of developmentdevelopment, and any of our product candidates may fail in development or suffer delays. We depend on the successful initiation and completion of clinical trials for our product candidate(s)candidates to advance our product development plans.

We have no products on the market, and our product candidate(s)candidates are in early clinical and preclinical stages of development and have not been tested in humans.development. As a result, we expect it will be years before we can obtain regulatory approval for and commercialize any product candidate, if ever. We must initiate and complete clinical trials that demonstrate the safety and efficacy of our product candidates in humans, and we do not yet know if our lead product candidate, SL‑325, will be safe or effective in humans. Clinical testing is expensive, difficult to design and implement, and can take years to complete and is uncertain as to outcome. A failure of one or more of our clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval for their products.

Preclinical and clinical development is a lengthy and expensive process that is subject to delays and uncertain outcomes, and results of earlier preclinical studies and clinical trials may not be predictive of future clinical trial results. If preclinical studies and clinical trials of our product candidate(s)candidates are prolonged or delayed, we may be unable to obtain required regulatory approvals, and, therefore, be unable to complete the development of and commercialize our product candidate(s)candidates on a timely basis or at all.

It is impossible to predict when or if any of our product candidate(s)candidates will prove safe and effective in humans or will receive regulatory approval. Before obtaining marketing approval from regulatory authorities for the sale of any drug candidate, we must complete preclinical studies and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidate(s)candidates in humans. Our clinical trials may not be conducted as planned or completed on schedule, if at all, and a failure can occur at any time or stage of the preclinical study or clinical trial process. Additionally, there is no guarantee that our future IND filing(s), or amendments to our existing INDs, will be accepted by the FDA, or comparable foreign regulatory authorities, or that these filings(s) will be accepted within our expected timelines. The outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. The design of a clinical trial can determine whether its results will support approval of a product candidate, and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their compounds and product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their product candidates. In addition, the results of our preclinical animal studies, including our non-human primate studies, may not be predictive of the results of outcomes in subsequent clinical trials on human subjects. Product candidates in clinical trials may fail to show the desired pharmacological properties or safety and efficacy traits despite having progressed through preclinical studies.

We could also encounter delays if a clinical trial is suspended or terminated by us, by the independent institutional review boards of the institutions in which such clinical trials are being conducted, by the Data Safety Monitoring Board, if any, for such clinical trial, or by the FDA or other regulatory authorities. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical trial protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from the product candidates, changes in governmental regulations or administrative actions, or lack of adequate funding to continue the clinical trial. If we are required to conduct additional clinical trials or other testing of our product candidate(s)candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidate(s),candidates, if the results of these trials are not positive or are only moderately positive, or if there are safety concerns, our business and results of operations may be materially and adversely affected, and we may incur significant additional costs.

Clinical trials that we conduct may not demonstrate the efficacy and safety that is necessary to obtain regulatory approval to market our product candidate(s).candidates. If the results of our future clinical trials are inconclusive with respect to the efficacy of our product candidate(s),candidates, if we do not meet the clinical endpoints with statistical and clinically meaningful significance, or if there are safety concerns associated with our product candidate(s),candidates, we may be delayed in obtaining marketing approval, if at all. For example, with respect to a legacy product candidate, SL-172154, we previously discontinued development when promising complete remission rates from interim data did not translate into improved overall survival in subsequent topline data. Additionally, any safety concerns observed in any one of our future clinical trials could limit the prospects for regulatory approval of that product candidate or other product candidates in any indications. Even if our clinical trials are successfully completed, clinical data are often susceptible to varying interpretations and analyses, and we cannot guarantee that the FDA or comparable foreign regulatory authorities will interpret the results as we do, and more trials could be required before we are able to submit our product candidate(s)candidates for approval. Moreover, results that are acceptable to support approval in one jurisdiction may be deemed inadequate to support regulatory approval in other jurisdictions. Even if regulatory approval is secured for a product candidate, the terms of such approval may limit the scope and use of the specific product candidate in a manner that does not meet our expectations, which limitations may reduce its commercial potential.

We face competition from entities that have developed or may develop programs for the diseases addressed by product candidate(s)candidates developed by us.

The development and commercialization of drugs is highly competitive. Product candidate(s)candidates developed by us, if approved, will face significant competition and our failure to effectively compete may prevent us from achieving significant market penetration. We compete with a variety of biopharmaceutical companies as well as academic institutions, governmental agencies, and public and private research institutions, among others. Many of the companies with which we are currently competing or will compete against in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, clinical trials, regulatory approvals, and marketing than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industry may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites, recruiting participants for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our product candidate(s).candidates.

Our competitors have developed, are developing or will develop programs and processes competitive with our programs and processes. Competitive therapeutic treatments include those that have already been approved and accepted by the medical community and any new treatments. Our success will depend partially on our ability to develop and commercialize products that have a competitive safety, efficacy, dosing and/or presentation profile.profiles. Our commercial opportunity and success will be reduced or eliminated if competing products are safer, more effective, have a more attractive dosing profile or presentation or are less expensive than the products we develop, or if our competitors develop competing products or if biosimilars enter the market more quickly than we do and are able to gain market acceptance.

We are developing programs which may compete with one another. For example, we are developing SL-325 and may choose to develop SL-425SL-425, and/or a potential DR3-based bispecific antibody, for the same indication: inflammatory bowel disease, and may in the future develop our programs for other inflammatory and immune-mediated diseases. Developing multiple programs for a single indication may negatively impact our business if the programs compete with each other. For example, if multiple programs are conducting clinical trials at the same time, they could compete for the enrollment of patients. In addition, if multiple programs are approved for the same indication, they may compete for market share, which could limit our future revenue.

Our product candidates may have serious adverse, undesirable, or unacceptable side effects or other properties that may delay or prevent marketing approval and our ability to market and derive revenue from our product candidate(s)candidates could be compromised.

Undesirable side effects that may be caused by our product candidate(s)candidates could cause us or regulatory authorities to interrupt, delay, or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities. Our product candidate(s),candidates, including our lead product candidate, SL-325, have not beencompleted testedany clinical trials in humans, and we do not yet know if it will have serious, undesirable, or unacceptable side effects. Results of our preclinical studies or clinical trials could reveal a high and unacceptable severity and/or prevalence of side effects. In such an event, our clinical trials could be suspended or terminated and the FDA or comparable foreign authorities could order us to cease further development or deny approval of our product candidate(s)candidates for any or all targeted indications. The drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the clinical trial or result in potential product liability claims. Any of these occurrences may significantly harm our business, financial condition and results of operations.

Further, clinical trials by their nature utilize a sample of the potential patient population. With a limited number of patients and limited duration of exposure, rare and severe side effects of our product candidate(s)candidates may only be uncovered with a significantly larger number of patients exposed to the product candidate.

We have not yet initiatedcompleted any clinical trials for our product candidate(s),candidates, including our lead product candidate, SL-325. Successful and timely completion of our planned clinical trials will require that we initiate our clinical trial sites in a timely manner and enroll a sufficient number of subjects or patients. Trials may be subject to delays for a variety of reasons, including as a result of delays to clinical trial site start up and initiation, patient enrollment taking longer than anticipated, fewer than expected patients who meet enrollment eligibility criteria, patient withdrawal, or AEs. Our clinical trials may compete with other clinical trials that are in the same therapeutic areas as our product candidate(s)candidates and/or that seek to enroll the same specific patient populations as our clinical trials, which reduces the number and types of patients available to us. We may also compete with head-to-head clinical trials, in which patients may prefer to participate, which may further reduce the number of patients available to us.

Delays in the completion of any clinical trial of our product candidate(s)candidates will increase our costs, slow down our product candidate development and approval process, and delay or potentially jeopardize our ability to commence product sales and generate revenue. In addition, some of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidate(s).candidates.

Because we have limited financial resources, we focus our research and development efforts on certain selected product candidate(s),candidates, including SL-325. As a result, we may forgo or delay pursuit of opportunities with other product candidates that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable product candidates. In addition, if we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing, or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

The development and commercialization of biopharmaceutical products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our product candidate(s)candidates on a timely basis, if at all, our business will be substantially harmed.

The clinical development, manufacturing, labeling, packaging, storage, recordkeeping, advertising, promotion, export, import, marketing, distribution, adverse event reporting (including the submission of safety and other post-marketing information and reports), and other possible activities relating to our product candidate(s)candidates are subject to extensive regulation by the FDA and by comparable regulatory authorities outside the United States. Obtaining approval of a BLA can be a lengthy, expensive, and uncertain process, and as a company we have no experience with the preparation of a BLA submission or any other application for marketing approval. This lengthy approval process may result in our failing to obtain regulatory approval to market any of our product candidates, which would significantly harm our business, results of operations, and prospects. See “Business-Government Regulation-BLA Submission and Review”.

If we or a regulatory authority discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facilities where the product is manufactured, a regulatory authority may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing, restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials, restrictions on the manufacturing process, warning or untitled letters, civil and criminal penalties, injunctions, product seizures, detentions or import bans, voluntary or mandatory publicity requirements and imposition of restrictions on operations, including costly new manufacturing requirements. The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidate(s)candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity.

We believe that our product candidate(s),candidates, if approved as biologics under a BLA, should qualify for the 12-year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider our product candidate(s)candidates to be reference products for competing products, potentially creating the opportunity for competition sooner than anticipated. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. Moreover, the extent to which a biosimilar, once approved, will be substituted for any reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

In order to receive approval of our products by the FDA and comparable foreign regulatory authorities, we must show that we and our CMOCDMO partners are able to characterize, control and manufacture our drug products safely and in accordance with regulatory requirements. This includes manufacturing the active ingredient, developing an acceptable formulation, manufacturing the drug product, performing tests to adequately characterize the formulated product, documenting a repeatable manufacturing process, and demonstrating that our drug products meet stability requirements. Meeting these chemistry, manufacturing and control requirements is a complex task that requires specialized expertise. While we have transferred a cGMP manufacturing process for SL-325 to a third-party CMO, we have not yet completed a cGMP manufacturing campaign with the third-party CMO. If we are not able to meet the chemistry, manufacturing and control requirements, we may not be successful in getting our products, including SL-325, approved.

The ability of the FDA to review and approve regulatory submissions can be affected by a variety of factors, including disruptions caused by government shutdowns, changes in leadership and/or policy at the FDA and/or the department of health and human services, reduced staffing in the federal government, and public health crises. There have been mass layoffs of federal employees since the start of the current presidential administration in January 2025, the impact of which is unclear at this time. Such disruptions could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business. In addition, the current presidential administration has led and is expected to continue to lead to changes in the leadership of various U.S. federal regulatory agencies and changes to U.S. federal government policy that have led to, in some cases, legal challenges and uncertainty around the funding, functioning and policy priorities of U.S. federal regulatory agencies.

We are unable to predict the extent to which the current presidential administration may impose or seek to impose leadership or policy changes at the U.S. federal regulatory agencies responsible for regulating our business or changes to rules and policies impacting our operations. Government proposals to reduce or eliminate budgetary deficits may include reduced allocations to the FDA and other related government agencies. These budgetary pressures may reduce the FDA’s ability to perform its responsibilities. If a significant reduction in the FDA’s workforce occurs, the FDA’s budget is significantly reduced or a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions or take other actions critical to the development of our most advanced product candidate, SL-325, or other product candidates, which could have a material adverse effect on our business.

Heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare therapies, which could result in reduced demand for our product candidate(s)candidates or additional pricing pressures. In August 2022, President Biden signed into law2022 the IRA,IRA was enacted, which, among other provisions, included several measures intended to lower the cost of prescription drugs and enact related healthcare reforms. Since enactment of the IRA, the Centers for Medicare & Medicaid Services and other federal agencies have issued, and continue to issue, regulations and guidance to implement key provisions of the IRA, including provisions relating to Medicare drug price negotiation, inflation-based rebates, redesign of the Medicare Part D benefit and limits on patient out-of-pocket costs. Certain of these provisions are being implemented on a phased basis and are subject to ongoing rulemaking, interpretation and, in some cases, legal challenges. We cannot be sure whether additional legislation or rulemaking related to the IRA or other healthcare reforms will be issued or enacted, the manner in which the IRA will ultimately be implemented or interpreted, or what impact, if any, such changesdevelopments willmay have on the pricing, reimbursement, commercial viability or profitability of any of our drug candidates, if approved for commercial use, in the future.

Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors, patient organizations, and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations. These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell, and distribute our product candidate(s),candidates, if approved. See “Business-Government Regulation-Other Healthcare Laws and Compliance Requirements” for a more detailed description of the laws that may affect our ability to operate.

We rely on third parties to supply raw materials and to manufacture our product candidate(s).candidates. The manufacture of our product candidate(s)candidates is complex and our third-party manufacturers may encounter difficulties in production, which could delay or entirely halt their ability to supply our product candidate(s)candidates for clinical trials or, if approved, for commercial sale.

The process of manufacturing our current and future product candidates is complex and highly regulated. We do not currently own or operate any cGMP manufacturing facilities, and we do not currently have any in-house cGMP manufacturing capabilities. Consequently, we expect to rely on third-party contract manufacturers to produce sufficient quantities of our current and future product candidates for preclinical testing and clinical trials, in compliance with applicable regulatory and quality standards. While we have transferred a cGMP manufacturing process for our lead product candidate, SL-325, to a third-party contract manufacturer, we have not yet completed a cGMP manufacturing campaign with the third-party CMO, and thereThere can be no assurance that a manufacturer will be able to successfully produce satisfactory product on a timely basis. With legacy programs in the past, the manufacture of our product candidates by third-party manufacturers was, in the normal course of business, negatively impacted by equipment failure, improper installation or operation of equipment, vendor or operator error, inconsistency in yields, variability in product characteristics, and difficulties in scaling the production process. If we are unable to successfully and timely produce sufficient supply of our current and future product candidates, our planned clinical trials may be delayed and materially and adversely harm our business.

As part of our process development efforts, we also may make changes to our manufacturing processes at various points during development for various reasons, such as controlling costs, achieving scale, decreasing processing time, increasing manufacturing success rate, or other reasons. We have invested in an in-house process development pilot plant to reduce our reliance on third parties for our process development efforts, however we cannot guarantee that these efforts will result in useful changes to our manufacturing processes. Any changes to our manufacturing processes carry the risk that they will not achieve their intended objectives, and any of these changes could cause our product candidate(s)candidates to perform differently and affect the results of our ongoing clinical trials or future clinical trials. In some circumstances, changes in the manufacturing process may require us to perform ex vivo comparability studies and to collect additional data from patients prior to undertaking more advanced clinical trials.

In addition, the FDA and other regulatory authorities require that our product candidate(s)candidates be manufactured according to cGMPs and similar foreign standards relating to methods, facilities, and controls used in the manufacturing, processing, packing, storage, and distribution of the product, which are intended to ensure that biological products are safe and that they consistently meet applicable requirements and specifications. We are dependent on third parties for all of these activities, and we have limited ability to prevent or control the risk that such activities will not be in compliance with cGMP. In addition, the storage and distribution of our product candidate(s)candidates for use in clinical trials is subject to extensive regulation by the FDA and other regulatory authorities. Any failure by our third-party manufacturers to comply with cGMP or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of product candidate(s)candidates in a timely manner, could lead to a delay in our clinical trials and development efforts, or a delay in or failure to obtain regulatory approval of any of our product candidate(s).candidates.

We rely, and expect to continue to rely, on third parties to conduct preclinical studies, nonclinical studies, and clinical trials. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements, or meet expected deadlines, we may not be able to obtain regulatory authorizations or approvals required to develop or commercialize our product candidate(s)candidates and our business could be materially and adversely affected.

You should read the following discussion and analysis of our financial condition and results of operations together with our audited financial statements and related notes appearing in this Annual Report on Form 10-K. This discussion and other parts of this Annual Report on Form 10-K contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report entitled “Risk Factors.” You should carefully read the “Cautionary Note About Forward-Looking Statements” and “Risk Factors” sections of this Annual Report on Form 10-K to gain an understanding of the important factors that could cause actual results to differ materially from the results described below.

We are a clinical-stage biotechnology company specializing inpioneering the development of potential treatments for inflammatory and immune-mediated diseases. We are developing a potentially first-in-class antibodymonoclonal and bispecific Death Receptor 3 (“DR3”) blocking antibodies for the treatment of inflammatorypatients bowel disease ("IBD") and otherwith inflammatory and immune-mediated diseases. Our expertise in protein engineering and the development of novel tumor necrosis factor ("“TNF"”) receptor therapeutics come together in our lead program, SL-325, whicha wepotentially believefirst-in-class couldDR3 beblocking antibody designed to achieve a first-in-classmore deathcomplete receptorblockade 3of ("the clinically validated DR3")/TL1A antagonistpathway antibody.than TL1A blocking antibodies.

SL-325 is a high-affinity DR3 blocking monoclonal antibody. DR3 is the sole known receptor for tumor necrosis factor like ligand 1A (“TL1A”). In our head-to-head preclinical studies, SL-325 blocked TL1A binding to DR3 better than sequence equivalents of leading TL1A blocking antibodies. We believe that the underlying biological differences in the expression of DR3 and TL1A, and the design characteristics of SL-325, may allow SL-325 to achieve best-in-class clinical remission rates in patients with IBD due to a more complete and durable blockade of the clinically validated DR3/TL1A pathway. Additionally, we expect that SL-325 has the potential to demonstrate a superior immunogenicity profile in comparison to TL1A blocking antibodies. By targeting DR3 instead of TL1A, we expect to avoid the formation of immune complexes, which we believe are the primary source of immunogenicity for all TL1A blocking antibodies, and lead to high rates of anti-drug antibody (“ADA”) formation toward TL1A targeting antibodies. ADA to TL1A targeting antibodies has been shown to reduce efficacy in IBD patients. We are currently conducting a single ascending dose (“SAD”) and multiple ascending dose (“MAD”) Phase 1 clinical trial evaluating SL-325 in healthy volunteers. We expect this Phase 1 clinical trial to be completed in the second quarter of 2026. We expect to initiate a randomized, placebo-controlled Phase 2 clinical trial evaluating SL-325 in patients with Crohn’s Disease (“CD”) in the third quarter of 2026.

TL1A is the sole known signaling ligand for DR3, and TL1A does not signal through any other receptors. Thus, we believe that the clinical safety profile of TL1A blocking antibodies generated to date in clinical trials conducted by other parties derisks the clinical safety profile for DR3 blockade. The lack of toxicity of SL-325 in our recently completed non-human primate (“NHP”) acute toxicology study also suggests a potentially favorable clinical safety profile. We engineered SL-325 to lack any Fc gamma receptor binding function, and SL-325 has not shown any evidence in our preclinical studies to date of antibody dependent cellular cytotoxicity or cellular phagocytosis, which further supports a potentially derisked safety profile. We have demonstrated that SL-325 binds an epitope on DR3 that does not trigger receptor-mediated endocytosis, and the binding of SL-325 to DR3 was shown to be highly durable in our preclinical assays.assays and in our NHP studies. Because DR3 is expressed on circulating, peripheral blood lymphocytes, we are able to directly measure DR3 receptor occupancy (“RO”), and our preclinicalnonclinical studies suggest that blockade mayis lastdurable for at least onetwo monthmonths as a result of the properties of SL-325 and the stable expression of DR3. TheIn our preclinical studies, including our acute NHP toxicology study, the RO and pharmacokinetic (“PK”) profile of SL-325 suggestssuggest extended dosing intervals, which weare intend tobeing further characterizecharacterized in our upcomingongoing Phase 1 clinical trial. Finally, the human protein decoy receptor 3 (“DcR3”) neutralizes soluble TL1A, Fas Ligand and LIGHT, which all induce a proinflammatory immune response. DcR3 serves as a sink for these proteins, tempering the proinflammatory immune signaling. Thus, it is desirable to block DR3, but not DcR3, to preserve the natural anti-inflammatory role of DcR3. SL-325 binds to DR3 but not to DcR3.

We are planning initial clinical development of SL-325 forin patients with IBD, including UC and CD. The clinical success of several TL1A blocking antibodies to date suggests that SL-325 may have monotherapy disease modifying activity early in clinical development. As described above, we believe that targeting DR3 may be more efficacious than targeting TL1A in patients with IBD. We expect to filecomplete anenrollment Investigationalin Newthe Drugongoing ("IND")Phase application1 clinical trial for SL-325 in healthy volunteers in the second quarter of 2026, and initiate our Phase 2 clinical trial in patients with CD in the third quarter of 2025, and we expect to complete enrollment in the full Phase 1 clinical trial in the second quarter of 2026.

FutureWe clinicalalso trialsplan mayto explore the efficacy ofevaluate SL-325 in other inflammatory and immune-mediated diseases where the DR3/TL1A axis is implicated.

For the years ended December 31, 20242025 and 2023,2024, our net loss was $75.4$48.8 million and $87.3$75.4 million, respectively. We have not been profitable since inception, and as of December 31, 2024,2025, we had an accumulated deficit of $381.7$430.5 million and $73.0$78.1 million in cash and cash equivalents and short-term investments. We expect to continue to incur significant expenses and operating losses in the near term in connection with our ongoing activities, as we:

•continue to advance the preclinical development and initiate Phase 1 clinical development of our lead product candidate, SL-325;

•initiate nonclinical studies and clinical trials for additional product candidates that we may identify in the future, including potential DR3 based bispecific antibodies targeting DR3 antagonisttogether antibodywith productanother candidatesbiologically relevant target;

The global macroeconomic environment is uncertain, and could be negatively affected by, among other things, inflation, slower growth or recession, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, instability or volatility in the global capital and credit markets, supply chain weaknesses, financial institution instability, changes to fiscal and monetary policy or government budget dynamics and instability in the geopolitical environment. Such challenges have caused, and may continue to cause, recession fears, high interest rates, foreign exchange volatility, and inflationary pressures. At this time, we are unable to quantify the potential effects of this economic instability on our future operations.

We have no products approved for commercial sale, and we have not generated any revenue from commercial product sales. Our total revenue to date has been generated from our collaboration and research agreements with various third parties. Revenue recognized in 2024 was a result of collaboration agreements with Ono Pharmaceutical Co., Ltd ("Ono") and ImmunoGen, Inc. (“ImmunoGen”).

In February 2024, we entered into a collaboration and license agreement with Ono (the "Ono Agreement") pursuant to which we and Ono collaborated in the research and preclinical development of certain compounds selected by Ono from our pipeline of bifunctional fusion proteins directed toward a pair of prespecified targets for potential treatment of autoimmune and inflammatory diseases. UnderWe have completed all obligations under the agreement and have accordingly recognized $5.4 million in revenue pursuant to terms of the Ono Agreement including the $2.0 million paid for the option to enter into an exclusive license with us. On September 30, 2024, we and Ono mutually agreed to terminate the Ono Agreement and the related option pursuant to the terms of the Ono Agreement, we were primarily responsible for carrying out research activities in accordance with a mutually agreed upon research plan. Pursuant to the Ono Agreement, we granted Ono an exclusive option (the “Option”) to obtain an exclusive, sublicensable license to further research, develop, manufacture and commercialize products containing these specified bifunctional fusion proteins in any therapeutic area worldwide.agreement.

As of December 31, 2024, we completed our obligations under the collaboration agreement with ImmunoGen (the “ImmunoGen Agreement”),ImmunoGen, and have recognized all revenue pursuant to the terms of that agreement.

1 Expenses for SL-325 that were incurred prior to itits beingnomination nominated aas product candidate are included in “other pipeline compounds” in the table above.

We expect that our general and administrative expense may decrease in the future due to workforce reductions that occurred as a result of our discontinuing the clinical development of SL-172154. If any of our current or future product candidatescandidates, advancesincluding SL-325, continues to advance through clinical developmentdevelopment, or obtains regulatory approval, we expect that we would incur increased expenses associated with building out the appropriate general and administrative support for our increased research and development activities, or building out a sales and marketing team.

Other income consists of interest earned on our cash, cash equivalents and short-term investments, which consists of amounts held in a money market fund and government obligations as well as investment fees and realized gain or losses on short-term investments (if any).

Since our inception, we have not recorded any income tax benefits for the net operating losses ("NOLs") we have incurred or for our research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our NOLs and tax credits will not be realized. Our NOLscapital loss and tax credit carryforwards as of December 31, 2024 began to expire in 2024.2025.. We have recorded a full valuation allowance against our deferred tax assets at each balance sheet date.

Research and development expensesexpense decreased by $7.1$31.9 million, or 9.6%,47.5%, to $35.3 million for the year ended December 31, 2025 from $67.2 million for the year ended December 31, 2024 from $74.3 million for the year ended December 31, 2023.2024. The decrease in research and development expense was primarily due to a decrease inof $31.5 million as a result of the cGMP manufacturediscontinuation of clinicalthe trialSL-172154 materialprogram and other manufacturing related chargesworkforce of $4.3 million, a decrease in materials consumed in our lab of $2.4 millionreductions and a decrease of $2.3$6.6 million associated with our reduction in headcount,other pipeline compounds cost, partially offset by an increase of $2.1$6.2 million in preclinicalSL-325 costsexpenses associatedprimarily withas oura result of moving SL-325 into clinical development of SL-325 and other potential pipeline product candidates in 2024.2025.

General and administrative expenses decreased by $0.2$1.8 million, or 1.2%,9.7%, to $17.2 million for the year ended December 31, 2025 from $19.1 million for the year ended December 31, 20242024. fromThe $19.3decrease is primarily the result of a $1.2 million fordecrease thein year ended December 31, 2023compensation and remainedrelated relativelybenefit flatexpenses betweenas periods.a result of workforce reductions in 2024 as well as a decrease of $0.6 million in legal fees.

Since our inception, our primary sources of liquidity have been generated by sales of our common stock, pre-funded warrants, common stock warrants, convertible preferred stock, and convertible notes, and through collaboration agreements. As of December 31, 2024,2025, we had an accumulated deficit of $381.7$430.5 million and $73.0$78.1 million of cash and cash equivalents and short-term investments.

In JulyJanuary 2022,2026, we entered into a sales agreement (the “Sales Agreement”), with SVBLeerink SecuritiesPartners LLC (the “Sales Agent”), pursuant to which we may offer and sell up to $75.0 million of shares of our common stock from time to time through anour at the market offering facility (the “ATM Facility”).Facility. The Sales Agent is generally entitled to compensation at a commission equal to up to 3.0% of the aggregate gross sales price per share sold under the Sales Agreement. AsWe sold 5,000,000 shares of Decembercommon 31,stock 2024at there$4.28 wereper noshare salesfor pursuantgross toproceeds theof ATM$21.4 Facility.million in January 2026.

Our primary uses of cash andcash, cash equivalents and short-term investments are to fund our operations, which consist primarily of research and development expenditures related to our programs, product development costs, research expenses, administrative support, capital expenditures related to bringing in-house certain process development and manufacturing capabilities, and working capital requirements. We anticipate that we will continue to incurincurring additional net losses and negative cash flows from operations in the near future until such time, if ever, that we can generate significant sales of our product candidates currently in development. Our future funding requirements will depend on many factors, including:

•the costs of process development and scale up of a commercially ready manufacturing ourprocess productto candidatessupport for preclinical studies andregistrational clinical trials, and in preparation for marketing approval and commercializationtrials;

•the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rightsrights, and defending other intellectual property-related claims;

We believe that our cash andcash, cash equivalents and short-term investments as of December 31, 20242025 areand the potential future proceeds assuming the full exercise of all outstanding common stock warrants will be sufficient to fund projected operations into 2027.2029.

During the year ended December 31, 2023,2024, net cash used in operating activities was $81.2$60.5 million and primarily reflected by our net loss of $87.3$75.4 million, partially offset by noncash charges of $11.9 million and a $4.1 million net change in our operating assets and liabilities, and was offset by noncash chargesliabilities of $10.2$3.0 million related to stock-based compensation expense, depreciation expense, amortization of investments, non-cash operating lease expense and impairment losses.million.

During the year ended December 31, 2024,2025, net cash used in investing activities was $8.5$7.9 million,million due primarily to purchases of government securities, net of maturities.sales and maturities of investments.

During the year ended December 31, 2023,2024, net cash providedused byin investing activities was $110.9$8.5 million,million due primarily to a $111.3 million increasepurchases of cashgovernment duesecurities, tonet of sales and maturities of investments, net of purchases, offset by $0.4 million in purchases of equipment.investments.

During the year ended December 31, 2023,2025, net cash provided by financing activities was $48.6$44.6 million anddue was fromto the sale of common stockstock, pre-funded warrants and pre-fundedcommon stock warrants, the exercise of stock options and common stock warrants and purchases pursuant to our employee stock purchase plan.

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, the accrual for research and development expenses, and the valuation of stock-based awards. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We have and may continue to enter into license and collaboration agreements with other companies. Arrangements with collaboratorsother companies may include licenses to intellectual property, research and development services, manufacturing services for clinical and commercial supply, and participation on joint steering and patent committees. We evaluate the promised goods or services in the contract to determine which promises, or group of promises, represent performance obligations. In contemplation of whether a promised good or service meets the criteria required of a performance obligation, we consider the stage of development of the underlying intellectual property, the capabilities and expertise of the customer relative to the underlying intellectual property, and whether the promised goods or services are integral to or dependent on other promises in the contract. When accounting for an arrangement that contains multiple performance obligations, we develop judgmental assumptions, which may include market conditions, reimbursement rates for personnel costs, development timelines, and probabilities of regulatory success to determine the stand-alone selling price for each performance obligation identified in the contract.

We then allocate the transaction price to each performance obligation based on the relative standalone selling price and recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied. For performance obligations that consist of licenses and other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

We measure compensation expense for all share-based awards based on the estimated fair value of the share-based awards on the grant date. We use the Black-Scholes option pricing model to value our stock option awards. The fair values of restricted stock units (“RSUs”) are based on the fair value of the Company’s common stock on the date of the grant. We recognize compensation expense on a straight-line basis over the requisite service period, which is generally the vesting period of the award. We also grant stock options that vest upon achievement of certain market-based conditions. We use the Monte Carlo pricing model to estimate the fair value of options that have market-based conditions.

The Black-Scholes and Monte Carlo option-pricing modelsmodel requirerequires the use of subjective assumptions that include the expected stock price volatility and, for options granted prior to our IPO, the fair value of the underlying common stock on the date of grant. See Note 10 to our audited financial statements included elsewhere in this Annual Report on Form 10-K for information concerning certain of the specific assumptions we used in applying the Black-Scholes and Monte Carlo option pricing modelsmodel to determine the estimated fair value of our stock options granted during the year ended December 31, 2024.2025.

WeThe areCompany was previously an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended ("JOBS Act.Act"). Under theThe JOBS Act,Act provides that an emerging growth company can take advantage of thean extended transition period for complying with new or revised accounting standardsstandards. andThus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from complying with new or revised accounting standards and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We are also a “smaller reporting company” as defined under the Exchange Act. We will continue to be a smaller reporting company so long as (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million. IfAs long as we areremain a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Our business is subject to various risks, uncertainties and other factors, including those described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes from the risk factors disclosed in Item 1A of our Annual Report on Form 10-K.10-K for the year ended December 31, 2025.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes appearing in this Quarterly Report on Form 10-Q, as well as the audited financial statements, notes and 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. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties, suchincluding asbut not limited to, statements of our plans, objectives, expectations and intentions. Our actual results or outcomes, and the timing of our results or outcomes, could differ materially from those discussed in these forward-looking statements. FactorsRisks, uncertainties and other factors that could cause or contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section of this Quarterly Report on Form 10-Q.10-Q, in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2025 and in our other filings with the SEC. You should carefully read the “Cautionary Note About Forward-Looking Statements” of this Quarterly Report on Form 10-Q and the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2025 to gain an understanding of the important factors that could cause actual results or outcomes, and the timing of results or outcomes, to differ materially from the results or outcomes described below.

SL-325 is a high-affinity DR3 blocking monoclonal antibody. DR3 is the sole known receptor for tumor necrosis factor like ligand 1A ("TL1A"). In our head-to-head preclinical studies, SL-325 blocked TL1A binding to DR3 better than sequence equivalents of leading TL1A blocking antibodies. We believe that the underlying biological differences in the expression of DR3 and TL1A, and the design characteristics of SL-325, may allow SL-325 to achieve best-in-classbest-in-mechanism clinical remission rates in patients with inflammatory bowel disease ("IBD") due to a more complete and durable blockade of the clinically validated DR3/TL1A pathway.pathway, Additionally, we expect that SL-325 has the potential to demonstrateand a superiorpotentially best-in-mechanism immunogenicity profile in comparison to TL1A blocking antibodies. By targeting DR3 instead of TL1A, we expect to avoid the formation of immune complexes, which we believe are the primary source of immunogenicity for all TL1A blocking antibodies, and lead to high rates of anti-drug antibody (“ADA”) formation toward TL1A targeting antibodies. ADA to TL1A targeting antibodies has been shown to reduce efficacy in IBD patients. We are currently conducting a single ascending dose (“SAD”) and multiple ascending dose (“MAD”) Phase 1 clinical trial evaluating SL-325 in healthy volunteers. We expect this Phase 1 clinical trial to be completed in the second quarter of 2026. We expect to initiate a randomized, placebo-controlled Phase 2 clinical trial evaluating SL-325 in patients with Crohn’s Disease (“CD”) in the third quarter of 2026.profile.

In addition to SL-325 and SL-425 (a half-life extended version of SL-325), we are developing bispecific antibodies which co-target DR3 and other clinically validated targets in immune mediated and inflammatory diseases. Inhibition of the TL1A/DR3 axis may be mechanistically distinct from the IL-23/IL-23R, IL-17/IL-17R, TSLP/TSLP-R or α4β7/MADCAM-1 axes (as examples). Thus, dual inhibition of the TL1A/DR3 axis with coformulated or bispecific antibodies may provide additive clinical benefit in a variety of immune mediated and inflammatory diseases. As seen with TL1A directed monoclonal antibodies, two third-party TL1A-directed bispecific antibodies, AMG966 and RO7837195, have also demonstrated nearly 100% ADA formation following a single dose in Phase 1 clinical trials. The mechanism of ADA formation was reported to be secondary to large immune complex formation for AMG966, which we believe iscould also be true for RO7837195. Both of these antibodies utilized monovalent, ‘1x1’, bispecific antibody formats, similar to other TL1A directed bispecific antibodies which are continuing in clinical development, including XmAb412 and CLD-423. The emerging clinical data from TL1A-directed bispecific antibodies is similar to the prior failure of TNFα-directed bispecific antibodies, which we believe is because both TNFα and TL1A are soluble trimeric proteins found in the blood, and cause immunogenicity secondary to large immune complex formation. We expect that our DR3-directed bispecific antibodies to be less immunogenic than TL1A-directed bispecifics. DR3 may thus provide a differentiated target in a bispecific antibody format, potentially providing advantages over TL1A-directed bispecific antibodies. Additionally, development of bispecific antibodies may enable more efficient clinical development than is expected for multi-antibody coformulations, and may avoid some of the challenges associated with potential immunogenicity in certain coformulations, as described above.coformulations.

For the threesix months ended MarchJune 31,30, 2026 and 2025, our net loss was $14.8$29.9 million and $13.7$26.2 million, respectively. We have not been profitable since inception, and as of MarchJune 31,30, 2026, we had an accumulated deficit of $445.3$460.4 million and $90.4$208.3 million in cash and cash equivalents.equivalents and short-term investments. We expect to continue to incur significant expenses and operating losses in the near term in connection with our ongoing activities, as we:

•continueinitiate and advance through Phase 12 clinical development offor our lead product candidate, SL-325SL-325, in Crohn's disease;

•initiate nonclinical studies and clinical trials for SL-846, including our planned Phase 1 clinical trial, and any additional product candidates that we may identify in the future, including other potential DR3 based bispecific antibodies targeting DR3 together with another biologically relevant target;

The global macroeconomic environment is uncertain, and could be negatively affected by, among other things, inflation, slower growth or recession, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, instability or volatility in the global capital and credit markets, supply chain weaknesses, financial institution instability, changes to fiscal and monetary policy or government budget dynamicsdynamics, military conflicts, and instability in the geopolitical environment. Such challenges have caused, and may continue to cause, recession fears, high interest rates, foreign exchange volatility, and inflationary pressures. At this time, we are unable to quantify the potential effects of this economic instability on our future operations.

•expenses incurred to conduct our clinical trials, including expenses associated with clinical trials of SL-325SL-325, future planned clinical trials of SL-846, and any potential product candidates we may advance in the future;

1 Expenses for SL-325 and SL-846 that were incurred prior to it being nominatednomination as a product candidate are included in "“other pipeline compounds” in the table above..

Research and development activities are central to our business model. We are focused on the preclinical and clinical development of SL-325 and SL-846 and other DR3 targeted assets, including SL-425, and conducting additional research on other potential product candidates. Product candidates in earlier stages of development generally have lower development costs than those in later stages of development. In the third quarter of 2026, we anticipate initiating a Phase 2 clinical trial for SL-325, and continuing to advance SL-846 into Phase 1 clinical development in 2027. Additionally, we may initiate Phase 2 clinical trial(s) for SL-325.SL-325 in indications outside of IBD. Accordingly, we expect an increase in research and development and expenseexpenses year-over-year, as we incur incremental clinical trial expenses and additional costs associated with commensurate increases in our workforce to support these efforts.

Other income consists of interest earned on our cash, cash equivalents and short-term investments, which consists of amounts held in a money market fund and government obligations as well as investment fees and realized gaingains or losses on short-term investments (if any).

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

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

Research and Development ExpensesExpense

Research and development expenses increased by $1.0$3.0 million, or 10.4%,34.8%, to $10.9$11.7 million for the three months ended MarchJune 31,30, 2026 from $9.9$8.7 million for the three months ended MarchJune 31,30, 2025. The increase in research and development expenses was primarily duea toresult of an increase of $0.6$3.2 million in SL-325clinical and non-clinical expenses primarily as a result of movingfor SL-325 intoand clinicalSL-846 development in 2025,and an increase of $0.4 million in personnelcompensation and related costsbenefit ofexpenses $0.7due millionto additional headcount to support a Phase 2 study in SL-325, partially offset by a decrease of $0.3$0.9 million inas othera pipelineresult compoundsof cost.the discontinuation of SL-172154.

General and administrative expenses remainedwere relatively unchangedflat for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025.

Other income increased by $0.1$0.4 million, or 13.2%,74.7%, to $0.8$1.0 million for the three months ended MarchJune 31,30, 2026 from $0.7$0.6 million for the three months ended MarchJune 31,30, 20252025. primarilyThe increase was a result of increased overall balances in investments and funds held in our money market accounts as a result of an increase in our averagerecent investment balance.financings.

Since our inception, our primary sources of liquidity have been generated by sales of our common stock, pre-funded warrants, common stock warrants, convertible preferred stock, and convertible notes, and through collaboration agreements. As of MarchJune 31,30, 2026, we had an accumulated deficit of $445.3$460.4 million and $90.4$208.3 million of cash and cash equivalents.equivalents and short-term investments.

In August 2025, we issued and sold 15,225,158 shares of common stock, pre-funded warrants to purchase up to 37,410,188 shares of common stock, and accompanying common stock warrants to purchase up to 52,635,346 shares of common stock for gross proceeds of $45.7 million. InDuring the six months ended June 30, 2026, 5,019,71948,665,670 common stock warrants have beenwere exercised for gross proceeds of $5.4$52.8 millionmillion. andSubsequently, in July 2026, we may receivereceived an additional $51.5$4.2 million in gross proceeds ifwhen the remaining 3,841,622 common stock warrants arewere exercised.exercised in July 2026.

In January 2026, we entered into a sales agreement (the “Sales Agreement”) with Leerink Partners LLC (the “Sales Agent”), pursuant to which we may offer and sell up to $75.0 million of shares of our common stock from time to time through our ATM Facility. The Sales Agent is generally entitled to compensation at a commission equal to up to 3.0% of the aggregate gross sales price per share sold under the Sales Agreement. For the threesix months ended MarchJune 31,30, 2026, we sold 5,000,000 shares of common stock at $4.28 per share for gross proceeds of $21.4 million.

We believe that our cash andcash, cash equivalents and short-term investments as of MarchJune 31,30, 2026, and assuming the full exercise of the outstanding common stock warrants,2026 are sufficient to fund projected operations into 2029.

During the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities was $13.4$23.6 million and primarily reflected our net loss of $14.8$29.9 million and a $2.0 million decrease in our operating assets and liabilitiesmillion, partially offset by net non-cashnoncash operating charges of $3.4$6.2 million for stock-based compensation, depreciation expense, accretion of investmentsinvestments, and non-cash operating lease expense.expense and $0.3 million in net changes to our operating assets and liabilities. We expect to continue to use cash in our operating activities as we conduct our clinical trials and nonclinical studies, incur costs of manufacturing clinical trial and nonclinical study materialsmaterials, and continue process development activities to optimize our manufacturing processes.

During the threesix months ended MarchJune 31,30, 2025, net cash used in operating activities was $12.0$22.5 million and primarily reflected our net loss of $13.7$26.2 million and a $1.1$2.0 million decreasenet change in our operating assets and liabilitiesliabilities, partially offset by non-cash operatingnoncash charges of $2.8$5.7 million forin stock-based compensation, depreciation expense, accretion of investmentsinvestments, and non-cash operating lease expense.