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

All of our product candidates are in discovery, preclinical or early clinical development. Clinical trials are difficult to design and implement, and they involve a lengthy and expensive process with uncertain outcomes. We may experience delays in completing, or ultimately be unable to complete, the development and commercialization of TX45TX45, TX2100 or any future product candidates.

We currently rely on and expect to rely on in the future on the use of manufacturing suites in third-party facilities or on third parties to manufacture TX45TX45, TX2100 and any other product candidates, and we may rely on third parties to produce and process our products, if approved.

We are a biotechnology company with a limited operating history. Since our inception in 2019, we have invested most of our resources in organizing and staffing our company, developing our technology and product candidates, building our intellectual property portfolio, conducting business planning, raising capital and providing general and administrative support for these operations. We also completed the Merger in June 2024 and have been operating under this structure for only a short time. Consequently, we have no meaningful operations upon which to evaluate our business, and predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing drug products. We continue to incur significant research and clinical development and other expenses related to our ongoing operations. As a result, we are not profitable and have incurred losses in each period since our inception. For the years ended December 31, 20242025 and 2023,2024, we reported a net loss of $58.0$74.2 million and $42.8$58.0 million, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $148.6$222.7 million. We expect to continue to incur significant losses for the foreseeable future, and expect these losses to increase as we continue our research and development of, and seek regulatory approvals for, our lead product candidate,candidates, TX45,TX45 and TX2100, along with any future product candidates we may develop.

continue the research and development of our clinical- and preclinical-stage product candidates and discovery-stage programs, including the continued development of our lead product candidatecandidates TX45 and TX2100;

To date, we have financed our operations primarily through the sale and issuance of common stock, convertible preferred stock, convertible promissory notes and the issuance of SAFEs. We expect our expenses to increase in connection with our ongoing activities, particularly as we continue our Phase 1b and Phase 2 clinical trials of TX45, including the Phase 2 PH-ILD clinical trial, pursue manufacturing and clinical activities for our HHT product candidate, TX2100, and initiate health authority and/or IND enabling safety studies and continue to research, develop and initiate clinical trials of any other future product candidates. In addition, if we successfully complete development through Phase 3 and obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our product development programs or any future commercialization efforts.

Future capital requirements for TX45TX45, TX2100 or our preclinical programs will depend on many factors, including:

the need for additional or expanded pre-clinicalpreclinical studies and clinical trials beyond those that we plan to conduct with respect to our current and future 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. Market volatility resulting from geopolitical and economic instability, including the conflicts between Russia and Ukraine and in the Middle EastEast, current international trade and regulatory environment uncertainty or other factors could also adversely impact our ability to access capital as and when needed. If adequate funds are not available on commercially acceptable terms when needed, we may be forced to delay, reduce or terminate the development or commercialization of all or part of our research programs or product candidates or we may be unable to take advantage of future business opportunities.

We are very early in our development efforts. If we are unable to advance TX45TX45, TX2100 or any of our other product candidates through clinical development, obtain regulatory approval and ultimately commercialize TX45TX45, TX2100 or any of our other product candidates, or experience significant delays in doing so, our business will be materially harmed.

We have no products approved for sale and our lead product candidate,candidates, TX45,TX45 and TX2100, will require clinical development, regulatory review and approval in each jurisdiction in which we intend to market it, access to sufficient commercial manufacturing capacity, and significant sales and marketing efforts before we can generate any revenue from product sales.

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates in humans. We are early in our product candidate development efforts, as TX45 is still in a Phase 1b2 clinical trialtrials and recentlyTX2100 initiatedhas just entered a Phase 21a clinical trial.

Our ability to generate product revenues, which we do not expect will occur in the foreseeable future, if ever, will depend heavily on the successful development and eventual commercialization of TX45, TX2100, and any future product candidates we develop, which may never occur. TX45TX45, TX2100 and any future product candidates we develop will require additional preclinical and clinical development, management of clinical, preclinical and manufacturing activities, marketing approval in the United States and other jurisdictions for specific indications for use, demonstrating effectiveness to pricing and reimbursement authorities, obtaining sufficient manufacturing supply for both clinical development and commercial production, building of a commercial organization and substantial investment and significant marketing efforts before we generate any revenues from product sales. The success of our current and future product candidates will depend on several factors, including the following:

All of our product candidates are in discovery, preclinical or Phase 1 and Phase 2 clinical trials. Clinical trials are difficult to design and implement, and they involve a lengthy and expensive process with uncertain outcomes. We may experience delays in completing, or ultimately be unable to complete, the development and commercialization of TX45TX45, TX2100 or any future product candidates.

To date, we have completed onlythe one clinical trial (Phase 1a trial in normal healthy volunteervolunteers withand TX45)Phase required for the approval of any of our product candidates. Enrollment in Part A of our TX45 Phase1b trial1b in patients with Group 2 PHPulmonary Hypertension associated with HFrEF and HFpEF isfor complete and we are currently conducting a Part B trial in Group 2 PH patients with HFrEF.TX45. We are enrolling a TX45 Phase 2 clinical trial in Group 2 PH patients with HFpEF, and we may experience delays in our ongoing clinical trials or preclinical studies. Additionally, we do not know whether planned clinical trials will begin on time, need to be redesigned, enroll patients on time, have sufficient drug supply for our product candidates on a timely basis or be completed on schedule, if at all. Furthermore, our product candidate TX2100 ishas stilljust inentered preclinicalPhase studies and the full results of such studies are not yet known.1a. A failure of one or more clinical trials can occur at any stage of testing, and our ongoing and future clinical trials may not be successful. We also may experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize TX45TX45, TX2100 or any future product candidates, including:

delays in or failure to obtain institutional review board (“IRB”) approval at each site or positive ethics committee opinions;

In addition, we could also encounter delays if a clinical trial is suspended or terminated by us, the IRBs or ethics committees of the institutions in which such trials are being conducted, or the FDA or comparable foreign regulatory authorities, or recommended for suspension or termination by the Data Safety Monitoring Board for such trial. A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or comparable foreign regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product or treatment, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. Many 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 candidates. Further, the FDA or comparable foreign regulatory authorities may disagree with our clinical trial design and our interpretation of data from clinical trials, or may change the requirements for approval even after they have reviewed and commented on the design for our clinical trials.

To obtain the requisite regulatory approvals to market and sell any of our product candidates, including TX45TX45, TX2100 and any other future product candidates, we must demonstrate through extensive preclinical studies and clinical trials that our biologic products, including TX45,TX45 and TX2100, are safe and effective for use in each targeted indication. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. For example, during clinical development our product candidates may fail to meet the expected shelf-life due to unforeseen stability or other technical issues at suppliers, which would prevent or delay or limit the scope of clinical development, regulatory approval, and commercialization. Failure can occur at any time during the clinical development process. Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization. We may be unable to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful, and a clinical trial can fail at any stage of testing. Further, the process of obtaining regulatory approval is expensive, often takes many years following the commencement of clinical trials and can vary substantially based upon the type, complexity and novelty of the product candidates involved, as well as the target indications, patient population and regulatory agency. Prior to obtaining approval to commercialize TX45TX45, TX2100 and any future product candidates in the United States or abroad, we, our collaborators or our potential future collaborators must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses.

Even if the trials are successfully completed, clinical data are often susceptible to varying interpretations and analyses or may not provide a sufficient risk-benefit ratio, and we cannot guarantee that the FDA or comparable foreign regulatory authorities will interpret the results as we do or find a risk-benefit ratio for a proposed indication acceptable, and more trials could be required before we submit our product candidates for approval. We cannot guarantee that the FDA or comparable foreign regulatory authorities will view our product candidates as having efficacy even if positive results are observed in clinical trials. Moreover, results acceptable to support approval in one jurisdiction may be deemed inadequate by another regulatory authority to support regulatory approval in that other jurisdiction. To the extent that the results of the trials are not satisfactory to the FDA or comparable foreign regulatory authorities for support of a marketing application, approval of TX45TX45, TX2100 and any future product candidates may be significantly delayed, or we may be required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates. 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, which may also limit our commercial potential.

The results of nonclinical, preclinical and early-stage clinical trials may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. Furthermore, there can be no assurance that any of our clinical trials will ultimately be successful or support further clinical development of any of our product candidates. There is a high failure rate for product candidates proceeding through clinical trials. Many companies in the biotechnology and pharmaceutical industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development and we cannot be certain that we will not face similar setbacks. These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway, or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA approval or comparable foreign regulatory approval. Any such setbacks in our clinical development could have a material adverse effect on our business, financial condition and results of operations.

Undesirable side effects that may be caused by our product 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 comparable foreign regulatory authorities. While our lead product candidate,candidate TX45,TX45 has been generally well tolerated in its preclinical studies, the Phase 1a healthy volunteer trial and our Phase 1b studytrial in patients with Group 2 PH to date, the results from future preclinical studies and clinical trials, including any of our other product candidates, may identify safety concerns or other undesirable properties of our product candidates.

The results of our ongoing Phase 1b2 clinical trials of TX45 and/or our ongoing Phase 1a trial of TX45, the recently initiated Phase 2 clinical trial of TX45,TX2100 and future clinical trials of these and other product candidates may show that our product candidates cause undesirable or unacceptable side effects or even death. In such an event, our trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product 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 trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and results of operations significantly.

regulatory authorities may withdrawwithdraw, vary or suspend approvals of such product and require us to take such approved product off the market;

regulatory authorities may require a medication guide outlining the risks of such side effects for distribution to patients, or that we implement a risk evaluation and mitigation strategy (“REMS”) plan to ensure that the benefits of the product outweigh its risks or a comparable foreign plan;

location of trial sites in MoldovaEastern and GeorgiaEurope for the Phase 1b2 trialTX45 andtrials, Phaseincluding IIactive sites in the Ukraine, with itstheir proximity to the conflict between Russia and the Ukraine;

delays in obtaining, or the inability to obtain, required approvals from institutional review boards (“IRBs”) and positive ethics committeescommittee opinions or other governing entities at clinical trial sites selected for participation in our clinical trials;

Before we can commence clinical trials for any product candidate, we must complete extensive preclinical studies that support any future Investigational New Drug (“IND”) applications in the United States, or similar applications in other jurisdictions. In July 2024, we received clearance from the FDA for our IND application for our TX45 program. In January 2026, we received clearance from Australia to commence the Phase 1a study with TX2100. Conducting preclinical testing is a lengthy, time-consuming and expensive process and delays associated with product candidates for which we are directly conducting preclinical testing and studies may cause us to incur additional operating expenses. While we are currently conducting a Phase 1b1a clinical trial for TX2100 and the recently initiated Phase 2 clinical trials for TX45, including some trials which may be outside of the United States, we cannot be certain of the timely completion or outcome of our preclinical testing and studies for our other product candidatescandidates, and cannot predict if the FDA will accept our proposed clinical programs or if the outcome of our preclinical testing and foreign clinical trials will ultimately support the further development of our other product candidates. As a result, we cannot be sure that we will be able to submit INDs or similar applications for our preclinical programsprograms, such as TX2100, on the timelines we expect, if at all, and we cannot be sure that submission of INDs or similar applications will result in the FDA or comparable foreign regulatory authorities allowing clinical trials to begin.

We are presently conducting clinical development in the United States, Eastern Europe, the European Union, Australia, and New Zealand and will likely choose to conduct additional international clinical trials in the future. The acceptance of study data by the FDA or any comparable foreign regulatory authority from clinical trials conducted outside of their respective jurisdictions may be subject to certain conditions or may not be accepted at all. In cases where data from foreign clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the United States population and United States medical practice, (ii) the trials are performed by clinical investigators of recognized competence and pursuant to compliance with current GCP requirements and (iii) the FDA is able to validate the data through an on-site inspection or other appropriate mean. Additionally, the FDA’s clinical trial requirements, including the adequacy of the patient population studied and statistical powering, must be met. Similar requirements and considerations apply abroad. In addition, such foreign trials are subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA or any applicable foreign regulatory authority will accept data from trials conducted outside of its applicable jurisdiction. If the FDA or any applicable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan, and which may result in our product candidates not receiving approval for commercialization in the applicable jurisdiction.

The FDA may impose consent decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program. Similar risks apply abroad as foreign regulatory authorities have comparable authority. Other potential consequences include, among other things:

refusal by the FDA or comparable foreign regulatory authorities to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals;

The FDA and foreign regulatory authorities strictly regulates marketing, labeling, advertising, and promotion of products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses and a company that is found to have improperly promoted off-label uses may be subject to significant liability including, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products. The federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined companies from engaging in off-label promotion. The FDA and other regulatory agencies have also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA approved labeling. Comparable rules apply in foreign countries. In the EU, the advertising and promotion of medicinal products are subject to both EU and EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices. Applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics (SmPC), which may require approval by the competent national authorities in connection with a marketing authorization. The SmPC is the document that provides information to physicians and other healthcare professionals concerning the safe and effective use of the product. Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EU.

The holder of a BLA or a foreign marketing authorization must submit new or supplemental applications and obtain approval for certain changes to the approved product, product labeling, or manufacturing process. We could also be asked to conduct post-marketing clinical trials to verify the safety and efficacy of our products in general or in specific patient subsets. If original marketing approval was obtained via the accelerated approval pathway, we could be required to conduct a successful post-marketing clinical trial to confirm clinical benefit for our products. An unsuccessful post-marketing study or failure to complete such a study could result in the withdrawal of marketing approval.

The policies of the FDA and of comparable foreign regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability. For instance, the regulatory landscape related to clinical trials in the EU evolved. The EU Clinical Trials Regulation ("CTR"), which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. The CTR introduces, among other changes, a centralized application system, coordinated review procedures, expanded reporting and increased transparency obligations. The CTR foresaw a three-year transition period that ended on January 30, 2025. Since this date, all new or ongoing trials are subject to the provisions of the CTR. Compliance with the CTR requirements by us and our third-party service providers, such as CROs, may impact our development plans.

We are currently developing TX45 initially for the treatment of Group 2 Pulmonary Hypertension (“PH”) in HFpEF, and for the treatment of PH-ILD, which we anticipate will be regulated as a biological product. Once Phase 1 is complete we anticipate developing TX2100 for HHT which we anticipate will be regulated as a biological product. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity, and potency of the other company’s product. The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation, and meaning are subject to uncertainty.

Due to our limited resources and access to capital, we must, and have in the past decided to, prioritize development of certain product candidates over other potential product candidates. These decisions may prove to have been wrong and may adversely affect our ability to develop our own programs, our attractiveness as a commercial partner and may ultimately have an impact on our commercial success.

Because we have limited resources and access to capital to fund our operations, we must decide which product candidates to pursue and the amount of resources to allocate to each. Our decisions concerning the allocation of research, collaboration, management and financial resources toward particular proprietary molecules in our library,portfolio, product candidates or therapeutic areas may not lead to the development of viable commercial products and may divert resources away from better opportunities. Similarly, our decisions to delay, terminate or collaborate with third parties in respect of certain product development programs may also prove not to be optimal and could cause us to miss valuable opportunities. If we make incorrect determinations regarding the market potential of our product candidates or misread trends in the biotechnology industry, in particular for our lead product candidate,candidates TX45,TX45 TX2100, our business, financial condition and results of operations could be materially adversely affected.

Even if we obtain orphan drug exclusivity for any of our product candidates, that exclusivity may not effectively protect the product candidate from competition because different therapies can be approved for the same condition and the same therapies can be approved for different conditions but used off-label. Even after an orphan drug is approved, the FDA can subsequently approve the same drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care. In addition, a designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. Moreover, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. While we may seek orphan drug designation for applicable indications for our current and any future product candidates, we may never receive such designations. Even if we do receive such designations, there is no guarantee that we will enjoy the benefits of those designations.

If we are successful in obtaining marketing approval from applicable regulatory authorities for TX45TX45, TX2100 or any other product candidate, our ability to generate revenues from any such products will depend on our success in:

We compete in the segments of the biotechnology, pharmaceutical and other related industries that develop and market therapies for the treatment of Group 2 PHPH, withGroup HFpEF3 PH-ILD, and Hereditary Hemorrhagic Telangiectasia (“HHT”) disorders. Although there are no other companies who have commercialized therapies for theGroup same2 therapeuticPH areasor that our product candidates target,HHT, there are many other companies, including large biotechnology and pharmaceutical companies, that are developing therapies for the samethese therapeutic areas. For example, AstraZenecaMerck and Tenax Therapeutics for the treatment of Group 2 PH and Diagonal Therapeutics, Atavistik, Terremoto, Vaderis Therapeutics and VaderisAlnylam TherapeuticsPharmaceuticals for the treatment of HHT. For PH-ILD, United Therapeutics and Liquidia have commercialized therapies, while Insmed, Gossamar, Pulmovant, Halo Biosciences and Foresee Pharmaceuticals are developing therapies for PH-ILD. In addition, in January 2025, Eli Lilly terminated its Phase 2 trial of volenrelaxin, and in February 2026 AstraZenca announced its Phase 2 clinical trial with AZD3427 for Group 2 PH was discontinued due to efficacy, which has affected investor perception of relaxin product candidates in general.

Healthcare reform may negatively impact our ability to profitably sell TX45TX45, TX2100 and any potential future product candidates, if approved.

Third-party payors, whether domestic or foreign, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system that could prevent or delay marketing approval of TX45TX45, TX2100 or any potential future product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product for which we obtain marketing approval.

Many countries implement health technology assessment (“HTA”), procedures that use formal economic metrics such as cost-effectiveness to determine prices, coverage and reimbursement of new therapies. These assessments are increasingly implemented in established and emerging markets. The outcome of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States. The extent to which pricing and reimbursement decisions are influenced by the HTA of the specific medicinal product currently varies between EU Member States. In the EU, Regulation (EU) 2021/2282 on Health Technology Assessment, whichentered willinto become effectiveapplication on January 12, 2025, willthrough allowa phrased implementation. The Regulation intended to increase cooperation among EU Member States in assessing clinical aspects of health technologies, including new medicinal products. The Regulation establishes a framework for joint clinical assessments, joint scientific consultations, and the early identification of emerging health technologies. The Regulation permits EU member states to use common HTA tools, methodologies and procedures and requires them to conductrely on EU‑level joint clinical assessmentsassessment andreports jointfor scientificthe consultationsclinical wherebycomponents of their national HTA authorities may provide advice to health technology developers.evaluations. Each EU member state will, however, remain exclusively competent for assessing thenon‑clinical relativeaspects, effectivenesssuch ofas healtheconomic, technologiesethical, and social considerations, and for making pricing and reimbursement decisions. Given that the extent to which pricing and reimbursement decisions are influenced by the HTA process currently varies between EU member states, it is possible that our products may be subject to favorable pricing and reimbursement status only in certain EU countries. If we are unable to maintain favorable pricing and reimbursement status in EU member states that represent significant markets, including following periodic review, our anticipated revenue from and growth prospects for our products in the EU could be negatively affected. Moreover, in order to obtain reimbursement for our products in some EU member states, we may be required to compile additional data comparing the cost-effectiveness of our products to other available therapies. Efforts to generate additional data for the HTA process will involve additional expenses which may substantially increase the cost of commercializing and marketing our products in certain EU member states.

Disruptions at the FDA and other agencies (including layoffs) may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, many staff members from the FDA and other agencies have recently been laid off. If a prolonged government shutdown or disruption occurs,continues or occurs in the future, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, future government shutdowns and/or disruptions could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operation.

the federal Sunshine Act, as amended, and its implementing regulations, requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the HHS information related to “payments or other transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members; and analogous state and foreign laws and regulations, such as state and foreign anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and local laws requiring the registration of pharmaceutical sales representatives; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or pricing; federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and state and foreign laws that govern the privacy and security and other processing of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Our business could be materially and adversely affected in the future by political unrest in China, as well as the effects of disease outbreaks, epidemics and pandemics.China.

In addition, because our key manufacturer and supplier for TX45 is located in China, weWe are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies, laws, rules and regulations of the United States or Chinese governments, as well as political unrest or unstable economic conditions in China, because our key manufacturer and supplier for TX45 is located in China. For example, trade tensions between the United States and China have been escalating in recent years. The U.S. government has indicated its intent to adopt a new approach to trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements. For example, onin February 1,April 2025, Presidentthe DonaldU.S. Trumpgovernment signed executive orders imposingannounced a 25%new universal baseline tariff of 10%, plus additional country-specific tariffs for select trading partners, on certainall importsU.S. fromimports. MexicoThe ultimate impact of any tariffs will depend on various factors, including how long such tariffs remain in place, the ultimate levels and Canada,application of such tariffs and athe 10%extent tariff on certain imports from China,to which wereother tocountries takeimpose effectretaliatory ontariffs. FebruaryIn 4, 2025. A 30-day pause was granted to Canada and Mexico. However,addition, these newly proposed and imposed tariffs have resulted in threatened and actual retaliatory tariffs against U.S. goods. Our components may in the future be subject to these tariffs, which could increase our manufacturing costs and could make our products, if successfully developed and approved, less competitive than those of our competitors whose inputs are not subject to these tariffs. We may otherwise experience supply disruptions or delays, and although we carefully manage our inventory and lead-times, our supplier may not continue to provide us with battery components in our required quantities, to our required specifications and quality levels or at attractive prices. In addition, certain Chinese biotechnology companies and CDMOs may become subject to trade restrictions, sanctions, other regulatory requirements, or proposed legislation by the U.S. government, which could restrict or even prohibit our ability to work with such entities, thereby potentially disrupting the supply of material to us. For example, theon HouseDecember of18, Representatives2025, ofPresident Trump signed the priorNational CongressDefense (theAuthorization 118thCongress)Act passedfor Fiscal Year 2026 into law, which includes the BIOSECURE Act, which proposed targeting U.S. government contracts, grants, and loans for entities that use biotechnology equipment or services from certain named Chinese biotechnology companies, and potentially additional Chinese biotechnology companies designated in the future.Act. The language of the proposed BIOSECURE Act would,prohibits among other things, prohibitthe U.S. federal agenciesGovernment from entering intoprocuring or renewing any contract with any entity that usesobtaining biotechnology equipment or services produced or provided by a “biotechnology company of concern.concern” The(“BCC”), versionentering ofinto, theextending, billor passedrenewing bygovernment thecontracts priorwith Housean ofentity Representativesthat includeddirectly aor grandfatheringindirectly provision allowinguses biotechnology equipment andor services providedfrom a BCC in performance of a federal contract, and issuing grants or loans to entities to purchase, obtain, or use biotechnology equipment or services produced or provided by nameda BCC. Companies designated as a BCC include those that are identified on the U.S. Department of Defense’s annual List of Chinese Military Companies, also known as the 1260H List. In addition, the U.S. Government has the ability to designate entities as BCCs through a separate designation process. There is a “safe harbor” provision providing that the restrictions do not apply to equipment or services that were formerly but are no longer provided by a BCC, as well as a “grandfathering” provision providing that the prohibitions do not apply for a five-year period to biotechnology companiesequipment ofor concernservices produced or provided under a contract or agreement entered into before the applicable effective date until January 1, 2032. The BIOSECURE Act did not become law in the 118th Congress.date. It is unclear whether the currentgrandfathering Congressprovision (thewould 119thapply Congress)to willentities introducedesignated as BCCs due to their inclusion on the BIOSECURE1260H ActList. orThe similarguidance legislationto inbe thisissued congressional session and, if so, howby the scope, prohibitions, or designated biotechnology companiesOffice of concernManagement mayand differBudget fromregarding the versionimplementation of the BIOSECURE Act passedmay byprovide thefurther Houseclarity inon thethis priorpoint. 118thThe Congress.BIOSECURE IfAct, theseand billsany become law, orother similar laws arethat may be passed, they could severely restrict the ability of companies to work with certain Chinese biotechnology companies of concern without losing the ability to contract with, or otherwise receive funding from, the U.S. government. Such disruption could have adverse effects on the development of our product candidates and our business operations.

Unless otherwise indicated or the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section to the Company, “we,” “us,” and “our” refer to the business and operations of Tectonic Operating Company, Inc. (previously Tectonic Therapeutic, Inc., referred to as “Legacy Tectonic”) and its consolidated subsidiariessubsibdiaries prior to the Merger, and the business and operations of Tectonic Therapeutic, Inc. (previously AVROBIO, Inc., referred to as “AVROBIO”) and its consolidated subsidiaries following the Merger.

We are a clinical-stage biotechnology company focused on the discovery and development of therapeutic proteins and antibodies that modulate the activity of GPCRs. The discovery of biologics that can modulate GPCRs has historically been quite challenging. We have developed a proprietary technology platform called GEODe™, with the aim of addressing these challenges to enable the discovery and development of GPCR-targeted biologic medicines that can modify the course of disease. We focus on areas of significant unmet medical need, often where therapeutic options are poor or nonexistent, as these are areas where new medicines have the potential to improve patient quality of life or extend duration of life.

Our lead asset, TX45, is an Fc-relaxin fusion molecule that activates the RXFP1 receptor, the GPCR target of the hormone, relaxin. In September 2024, we announced favorable results from a Phase 1a clinical trial evaluating safety, tolerability and pharmacokinetic (“PK”) and pharmacodynamic (“PD”) properties for TX45. In this clinical trial, TX45 was well-tolerated with no drug-related severe adverse events, no observed immunogenicity and demonstrated a favorable PK/PD relationship. Renal plasma flow was measured in each patient at several time points as a pharmacodynamicPD marker. This data was used to develop an exposure-response model which enabled the selection of doses for the APEX Phase 2 clinical trial.

Research and development expenses consist of costs incurred forin connection with our research activities, including our discovery efforts and the preclinical and clinical development of our programsprograms, product candidates, and platform. These expenses include:

employee-related expenses, including salaries andsalaries, bonuses, related benefits and stock-based compensation expense,compensation, for employees engaged in research and development functions;

costs related to manufacturing materialmaterials for our preclinical studies and clinical trials, including fees paid to contract development and manufacturing organizations (“CDMOs”);

facilities, depreciationdepreciation, and other expenses related to research and development activities, which include direct or allocated expenses for rentrent, utilities, and facility maintenance of facilities, and utilities;

We expense all research and development costs in the periods in which they areas incurred. Costs for certain development activities are recognized based on our evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and third-party service providers. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense when the goods have been delivered or the services have been performed, or when it is no longer expected that the goods will be delivered or the services rendered. Upfront payments under license agreements are expensed upon receipt of the license, and annual maintenance fees under license agreements are expensed in the period in which they are incurred. Milestone payments under license or collaboration agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable.

Costs that are deployed across multiple internal programs, including programs aimed at the discovery and development of potential therapies for fibrotic disease, and ouror platform technologyactivities and are not directly attributable to any single program are not allocated to any single program and,recorded as such,platform aredevelopment notand separatelyunallocated classified.research Theseand costsdevelopment expenses, which include multi-program employee-related costs, cross-program payments made under third-party licensing agreements, costs ofpayments, laboratory supplies and facilitiesrelated expenses, contract research, manufacturing and consulting services, facility-related and other expenses, including rent, depreciationdepreciation, and other indirect costs, the costs of our discovery efforts and projects, and other expenses.efforts.

Research and development activities are central to our businessbusiness. model. Product candidates in later stages ofLater-stage clinical developmentprograms generally haveincur higher development costs than thoseearly-stage in earlier stages of clinical development, primarilyprograms due to the increased size and duration of later-stage clinical trials. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of our product candidates due to the inherently unpredictable nature of preclinical and clinical development. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations ascontinue to evaluate which product candidates to pursue and howthe muchallocation of funding to direct to each product candidatebased on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials,results, regulatory developmentsdevelopments, and our ongoing assessments as to each product candidate’s commercial potential. We willexpect needour toresearch raise substantial additional capital in the future. Our clinicaland development costs are expectedexpenses to increase significantly as we commenceadvance our product candidates through clinical development and initiate additional clinical trials. Our future expenses may vary significantly each period based on factors such as:

per patient trial costs, including based on the number of doses that patients receivedreceive;

General and administrative expenses consist primarily of employee-related costs, including salaries andsalaries, bonuses, related benefits and stock-based compensation expense,compensation, for our personnel in executive, legal,finance accounting,and humaninformation resourcestechnology, and other administrative functions. General and administrative expenses also include legal fees relating to patents and corporate matters, professional fees paidfor forlegal, accounting, auditing,and consulting and tax services, insurance,insurance travelcosts, expenses, officefacilities and information technology costsexpenses, investor relations and facilitiespublic andcompany utilities,compliance depreciationcosts, and other expensesgeneral relatedcorporate tooverhead. As a clinical-stage company, our general and administrative activities.expenses are driven in part by the costs required to support our research and development activities and to operate as a public company.

Other Income (Expense), Net

TotalInterest research and development expensesincome increased $4.4by $7.0 million for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024 Theprimarily due to an increase in researchcash and developmentcash expenseequivalents wasas primarily thea result of increasedthe CROMerger and CDMOPrivate costs related to the discovery and development of TX2100.Placement.

Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and clinical development of our research programs and product candidates. We expect that our research and development and general and administrative costs will increase in connection with conducting additional preclinical studies and clinical trials for our current and future research programs and product candidates, contracting with CROs and CDMOs to support preclinical studies and clinical trials, expanding our intellectual property portfolio, and providing general and administrative support for our operations. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources.

We do not currently have any approved products and have never generated any revenue from product sales. We have funded our operations with proceeds from the sale of convertible preferred stock, the issuance of convertible promissory notes, the Merger, and sale of common stock. In February 2025, we sold shares of our common stock under a securities purchase agreement in exchange for gross proceeds of $185 million. As of December 31, 2024,2025, we had $141.2$253.8 million in cash and cash equivalents and an accumulated deficit of $148.6$222.7 million. Based on our current business plans, management believes that our cash, cash equivalents and marketable securities on hand at December 31, 20242025 are sufficient to meet our operating requirements for at least the next 12 months from the issuance of the consolidated financial statements included in this Annual Report on Form 10-K. WeHowever, haveour estimates are based this estimate on assumptions that may prove to be wrong,incorrect, and we could exhaust our capital resources sooner than weexpected. expect.We may require additional funding to support our research programs, clinical development, and general operations. There can be no assurance that additional financing, whether through public or private equity, debt, collaborations, or licensing arrangements, will be available on acceptable terms, or at all.

During the year ended December 31, 2023,Net cash used in operating activities was $40.7$60.1 million.million for the year ended December 31, 2025. Cash used in operating activitiesoperations was primarily used to fund our operations toin developmentdeveloping our product candidates, resulting in a net loss of $42.8 million and changes in our operating assets and liabilities of $0.6$74.2 million, partially offset by non-cash charges of $2.7$14.1 millionmillion. related to the change in the fair value of the SAFE liabilities, stock-based compensation expense, depreciation and amortization expense and lease expense. The increaseChanges in operating assets and liabilitiesliabilities, relatesincluding to accrued expenses,the timing of vendor payments,payments and timinglease repayments, had a minimal net effect of lease$0.1 repayments.million on cash used in operating activities.

Investing in the Company'sCompany’s common stock involves a high degree of risk. Careful consideration should be given to the following risk factors, in addition to the other information set forth in this Quarterly Report and in other documents that were filed and will be filed with the SEC, in evaluating the Company and its business. Additional risks and uncertainties not presently known to or that are currently seen as immaterial may also harm Company'sthe Company’s business. If any of these risks occur, business, growth prospects, operating results and financial condition could be materially and adversely affected, the trading price of the Company'sCompany’s common stock could decline, and investors could lose part or all of their investment.

We are a biotechnology company with a limited operating history. Since our inception in 2019, we have invested most of our resources in organizing and staffing our company, developing our technology and product candidates, building our intellectual property portfolio, conducting business planning, raising capital and providing general and administrative support for these operations. Consequently, we have no meaningful operations upon which to evaluate our business, and predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing drug products. We continue to incur significant research and clinical development and other expenses related to our ongoing operations. As a result, we are not profitable and have incurred losses in each period since our inception. For the three months ended MarchJune 31,30, 2026 and 2025, we reported a net loss of $25.2$22.3 million and $15.9$20.0 million, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $248.0$270.3 million. We expect to continue to incur significant losses for the foreseeable future, and expect these losses to increase as we continue our research and development of, and seek regulatory approvals for, our lead product candidates, TX45 and TX2100, along with any future product candidates we may develop.

As of MarchJune 31,30, 2026, we had $236.9$227.1 million in cash and cash equivalents. Although we believe that our available cash and cash equivalents will be sufficient to fund our planned operations for at least 12 months following the date of our condensed consolidated financial statements included in this Quarterly Report, this belief is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates in humans. We are early in our product candidate development efforts, as TX45 is still in Phase 2 clinical trials and TX2100 hasis justcurrently enteredin a Phase 1a clinical trial.

To date, we have completed the Phase 1a trial in normal healthy volunteers and Phase 1b in patients with Group 2 Pulmonary Hypertension associated with HFrEF and HFpEF for TX45. We may experience delays in our ongoing clinical trials or preclinical studies. Additionally, we do not know whether planned clinical trials will begin on time, need to be redesigned, enroll patients on time, have sufficient drug supply for our product candidates on a timely basis or be completed on schedule, if at all. Furthermore, our product candidate TX2100 hasis justcurrently enteredin a Phase 1a.1a trial. A failure of one or more clinical trials can occur at any stage of testing, and our ongoing and future clinical trials may not be successful. We also may experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize TX45, TX2100 or any future product candidates, including:

We compete in the segments of the biotechnology, pharmaceutical and other related industries that develop and market therapies for the treatment of Group 2 PH, Group 3 PH-ILD, and Hereditary Hemorrhagic Telangiectasia (“HHT”) disorders. Although there are no other companies who have commercialized therapies for Group 2 PH or HHT, there are many other companies, including large biotechnology and pharmaceutical companies, that are developing therapies for these therapeutic areas. For example, Merck and Tenax Therapeutics for the treatment of Group 2 PH and Diagonal Therapeutics, Atavistik, Terremoto, Vaderis Therapeutics and Alnylam Pharmaceuticals for the treatment of HHT. For PH-ILD, United Therapeutics and Liquidia have commercialized therapies, while Insmed, Gossamar, Pulmovant, Halo Biosciences and Foresee Pharmaceuticals are developing therapies for PH-ILD. In addition, in January 2025, Eli Lilly terminated its Phase 2 trial of volenrelaxin, and in February 2026 AstraZencaAstraZeneca announced its Phase 2 clinical trial with AZD3427 for Group 2 PH was discontinued due to efficacy,lack of efficacy. AstraZeneca is also developing AZD5462, an oral RXFP1 agonist targeting the same relaxin pathway, which hascompleted a Phase 2b trial in patients with chronic heart failure in February 2026, with results not yet reported, which may have affected investor perception of relaxin product candidates in general.

The current administration is pursuing policies to reduce regulations and expenditures across government agencies including at the U.S. Department of Health and Human Services (“HHS”), the FDA, the Centers for Medicare & Medicaid Services (“CMS”) and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. For example, the current administration has announced agreements with several pharmaceutical companies that require the drug manufacturers to offer, through a direct-to-consumer platform,platform (TrumpRx), U.S. patients and Medicaid programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues. Other recent actions, for example, include (1) directing agencies to reduce agency workforce and cut programs; (2) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing Most-Favored-Nation pricing for pharmaceutical products; (3) imposing tariffs on certain imported certain pharmaceutical products; and (4) as part of the Make America Healthy Again Commission’s Strategy Report released in September 2025, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising. Additionally, the current administration recently called on Congress to enact "“The Great Healthcare Plan,"Plan”, to codify and expand Most-Favored Nation pricing, lower government subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on pharmacy benefit manager payment methodologies, among other things. These actions and policies may significantly reduce U.S. drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks. In June 2024, in Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court greatly reduced judicial deference to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our operations. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program.

The regulations that govern marketing approvals, pricing and reimbursement for new drug products vary widely from country to country. Current and future legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. In many regions, including the EU, Japan and Canada, the pricing of prescription drugs is controlled by the government and some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after regulatory approval for the product is granted. Regulatory agencies in those countries could determine that the pricing for our products should be based on prices of other commercially available drugs for the same disease, rather than allowing us to market our products at a premium as new drugs. As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay or limit commercial launch of the product, possibly for lengthy time periods, which could negatively impact the revenue we generate from the sale of the product in that particular country. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates obtainsobtain marketing approval.

Our commercial success also depends on coverage and adequate reimbursement of our product candidates by third-party payors, including government payors, private health insurers, health maintenance organizations and other organizations, which may be difficult or time-consuming to obtain, may be limited in scope and may not be obtained in all jurisdictions in which we may seek to market our products. In the United States and markets in other countries, governments and private insurers closely examine medical products to determine whether they should be covered by reimbursement and, if so, the level of reimbursement that will apply. In the United States, the principal decisions about reimbursement for new medicines are typically made by the CMS an agency within the HHS. CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree. Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular drugs. For example, the U.S. Department of Health and Human Services, or HHS,HHS imposes rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on an annual basis. HHS has also been empowered to negotiate the price of certain single-source biologics that have been on the market for at least eleven (11) years covered under Medicare as part of the Medicare Drug Price Negotiation Program. Each year up to twenty (20) products will be selected by HHS for the Medicare Drug Price Negotiation Program. Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for drug products. We cannot be sure that coverage and reimbursement will be available for any product that we or our partners commercialize and, if reimbursement is available, what the level of reimbursement will be. Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we or our partners obtain regulatory approval. If coverage and reimbursement are not available or reimbursement is available only to limited levels, we and our partners may not be able to successfully commercialize any product candidate for which marketing approval is obtained.

There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or comparable foreign health authorities. Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers our costs, including costs of research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may only be temporary. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price and best price. Penalties may apply in some cases when such metrics are not submitted accurately and timely. Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs. Our inability to promptly obtain coverage and profitable reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, ability to raise capital needed to commercialize products and overall financial condition.

In addition, courts outside the United States are sometimes less willing to protect proprietary information. If we choose to go to court to stop a third party from using any of our proprietary information, we may incur substantial costs. These lawsuits may consume our time and other resources even if we are successful. Although we take steps to protect our proprietary information ,information, including through contractual means with our employees and consultants, third parties may independently develop substantially equivalent proprietary information or otherwise gain access to, or disclose, our technology.

In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveal competitively sensitive details about the company and could be used to undermine our competitive advantage or market position. Additionally, sensitive information of ours could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of generative AI technologies.

Privacy and data security laws in the United States at the federal, state and local level are increasingly complex and changing rapidly. For example, at the federal level, HIPAA, as amended by HITECH, imposes specific requirements relating to the privacy, security and transmission of individually identifiable health information. Additionally, at the state level, the privacy and data protection landscape is changing rapidly. Many states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data. As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services if we become subject to these laws. For example, the California Consumer Rights Act (“CCPA”), as amended by the California Privacy Rights Act of 2020 (“CPRA”) applies to personal information data of consumers, business representatives, and employees who are California residents and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain rights concerning their personal data. The CCPA provides fines for noncompliance and a limited private right of action in connection with certain data breaches. While the CCPA and other state privacy laws contain an exemption for certain personal information processed in connection with clinical trials, , these developments further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties with whom we work. Similar laws have been passed or are being considered in several other states, as well as at the federal and local levels. The evolving patchwork of differing state and federal privacy and data security laws increases the cost and complexity of operating our business and increases our exposure to liability, including from third party litigation and regulatory investigations, enforcement, fines, and penalties.

Based on the number of shares outstanding as of MarchJune 31,30, 2026, our executive officers, directors and principal stockholders, in the aggregate, beneficially own approximately 40% of our outstanding shares of common stock. As a result, if these stockholders were to choose to act together, they would be able to control or significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these stockholders, if they choose to act together, would control or significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of our company on terms that other stockholders may desire.

Our amended and restated bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claim for (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of breach of or based on a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders; (3) any action asserting a claim against us or any of our current or former directors, officers, employees or stockholders arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws; or (4) any action asserting a claim governed by the internal affairs doctrine, or the Delaware Forum Provision. The Delaware Forum Provision will not apply to any causes of action arising under the Securities Act or the Exchange Act. Our amended and restated bylaws further provide that, unless AVROBIOwe consentsconsent in writing to an alternative forum, the United States District Court for the District of Massachusetts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, or the Federal Forum Provision, as our principal executive offices are located in Watertown, Massachusetts. In addition, our amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the foregoing Delaware Forum Provision and the Federal Forum Provision; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the U.S. federal securities laws and the rules and regulations thereunder.

The ongoing APEX Phase 2 clinical trial is a global, 24-week, placebo-controlled trial designed to evaluate the safety and efficacy of TX45 administered subcutaneously (“SC”) in subjects with Pulmonary Hypertension (“PH”) in Heart Failure with Preserved Ejection Fraction (“HFpEF”), known as PH-HFpEF, enriched for combined pre- and post-capillary pulmonary hypertension (“CpcPH”). We dosed our first subject in the APEX Phase 2 clinical trial in October 2024. Subjects are beingwere randomized to 300 mg SC (2 ml injection) once monthly of TX45, 300 mg SC once every other week of TX45, or placebo. Change from baseline in pulmonary vascular resistance (“PVR”) in the PVR>3 population is the primary endpoint of the trial. The trial is designed to enrich for patients with a PVR>3 aiming for 70% of patients enrolled. In JanuaryJuly 2026, the Independent Data Monitoring Committee (“IDMC”) met to review unblinded safety and efficacy data from the TX45 APEX Phase 2 clinical trial.trial, including approximately 80% of the expected patient exposure. The dataIDMC included safety data (adverse experiences, vital signs, plasma volume and labs) as well as efficacy data (right heart catheterization and six-minute walk distance). Based on this reviewrecommended the IDMCcontinuation concluded thatof the trial could continuestudy without anymodification. modifications.In June 2026, we completed enrollment in the APEX Phase 2 clinical trial, having enrolled 191 patients across 14 countries, with approximately 72% of enrolled patients in the enriched population of CpcPH patients with a PVR>3 WU at baseline. We expect topline results from the APEX clinical trial late in the fourth quarter of 2026 or early in the first quarter of 2027.

Our second lead product candidate, TX2100, is being evaluated for the treatment of Hereditary Hemorrhagic Telangiectasia (“HHT”), the second most common genetic bleeding disorder with no approved therapy. TX2100 is a VHH-Fc fusion antagonist antibody that binds to APJ (also known as the apelin receptor; APLNR), a GPCR that mediates signaling by the pro-angiogenic peptide hormone apelin. A rodent surrogate of TX2100 demonstrated reductions in arteriovenous malformation (“AVM”) formation, bleeding, and anemia across the neonatal anti-BMP9/10 immunoblocked model and the more severe, adult inducible ALK1 knockout mouse model of HHT, supporting disease-modifying activity through APJ antagonism. TX2100 was further evaluated in non-human primates in IND-enabling GLP toxicology studies, including a 13-week repeat-dose study. In these studies, TX2100 was well tolerated at doses up to 100 mg/kg/week, with no treatment-related or target-related toxicities identified and no effects observed on cardiovascular, respiratory, neurological, renal, metabolic, or hematologic parameters. A formulation supporting subcutaneous dosing has been established, and drug substance and drug product manufacturing under Good Manufacturing Practice (“GMP”) have been completed to support initiation of a Phase 1a clinical trial. In February 2026, we randomized the first subject in the Phase 1a healthy volunteer clinical trial for TX2100. As of AprilJune 2026, foursix single dose cohorts of healthy volunteers have been dosed. We expect to report topline results from the ongoing Phase 1a trial of TX2100 in healthy volunteers by the end of the third quarter of 2026. Assuming acceptable PK in the Phase 1a trial, a Phase 1b clinical trial to explore the safety and efficacy (hematological support, anemia,hemoglobin, and epistaxis) of TX2100 in patients with hematologic-support dependent HHT and a Phase 2 clinical trial in patients with moderate to severe HHT are planned in early 2027.

Costs that are deployed across multiple programs or platform activities and not directly attributable to any single program are recorded as platform development and unallocated research and development expenses, which include multi-program employee-related costs, cross-program licensing payments, laboratory supplies and related expenses, contract research, manufacturing and consulting services, facility-related and other expenses, including depreciation, and discovery efforts.

Research and development activities are central to our business. Later-stage clinical programs generally incur higher costs than early-stage programs due to the increased size and duration of trials. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of our product candidates due to the inherently unpredictable nature of preclinical and clinical development. ClinicalPreclinical and preclinicalclinical development timelines, the probability of success and development costs can differ materially from expectations. We will continue to evaluate which product candidates to pursue and the allocation of funding based on preclinical and clinical results, regulatory developments, and commercial potential. We expect our research and development expenses to increase significantly as we advance our product candidates through clinical development and initiate additional and later stage clinical trials. Our future expenses may vary significantly each period based on factors such as:

per patient clinical trial costs, based on the number of doses that patients receive;

the abilitymaterials utilized to manufacture our product candidates;

Comparison of the three months ended MarchJune 31,30, 2026 and 2025

The following tables summarize our results of operations for the three months ended MarchJune 31,30, 2026 and 2025 (in thousands, except percentages):

Research and development expenses increased by $7.8$0.9 million for the three months ended MarchJune 31,30, 20262026, compared to the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to $6.4$1.4 million in expenses forhigher CRO and CDMO costs related to theour ongoing Phase 2 clinical trials of TX45,TX45 and a $1.4$1.6 million increase in platform development and unallocated expenses, principally driven by higher employee-related expenses. The increase in employee-related expenses was driven byreflected higher non-cash stock-based compensation expense, reflectingdriven by incremental equity awards granted to employees, including new hires and ongoing annual grants.employee Ingrants, addition,and wehigher expandedpayroll and related costs associated with the continued expansion of our research and development team toin support of our programs,pipeline resultingprograms. These increases were partially offset by a $2.1 million decrease in higher payroll andcosts related costs.to our TX2100 program, primarily due to CDMO costs incurred in the prior-year period for the production of drug substance.

General and administrative expenses increased by $1.2$1.0 million for the three months ended MarchJune 31,30, 20262026, compared to the three months ended MarchJune 31,30, 2025, primarily dueattributable to higher employee-related expenses. The increase in employee-related expenses was driven by higher non-cash stock-based compensation expense, reflecting incremental equity awards granted to employees, including new hires and ongoing annual grants.

Interest income decreased by $0.3$1.4 million for the three months ended MarchJune 31,30, 20262026, compared to the three months ended MarchJune 31,30, 20252025, primarily due to lower cash and cash equivalents.

We do not currently have any approved products and have never generated any revenue from product sales. We have funded our operations primarily through the sale and issuance of common stock, convertible equity instruments, and proceeds from prior corporate transactions. We currently have an effective shelf registration statement on Form S-3 filed with the SEC, which we may use to offer from time to time any combination of common stock, preferred stock, debt securities, and warrants up to an aggregate amount of $400 million. Of this amount, we have the ability to sell up to $100 million of additional shares of our common stock to the public through an at the market offering program (“ATM”). During the threesix months ended MarchJune 31,30, 2026, wethe Company sold approximately 43,000432,306 shares of its common stock under the ATM at an average price per share of $30.89 for gross proceeds of $1.4$13.4 million.million Afterand net proceeds of $13.1 million after deducting commissions and offering expenses,expenses of $0.3 million. During the three months ended June 30, 2026, the Company sold 389,806 shares of its common stock under the ATM at an average price per share of $30.75 for gross proceeds of $12.0 million and net proceeds wereof $1.3$11.7 million.million Thisafter representsdeducting thecommissions firstand utilizationoffering expenses of the$0.3 ATM.million.

As of MarchJune 31,30, 2026, we had $236.9$227.1 million in cash and cash equivalents and an accumulated deficit of $248.0$270.3 million. Based on our current business plans, management believes that our cash, cash equivalents and marketable securities on hand at MarchJune 31,30, 2026 are sufficient to meet our operating requirements for at least the next 12 months from the issuance of the consolidated financial statements included in this Quarterly Report. However, our estimates are based on assumptions that may prove to be incorrect, and we could exhaust our capital resources sooner than expected. We may require additional funding to support our research programs, clinical development, and general corporate operations. There can be no assurance that additional financing, whether through public or private equity, debt, collaborations, or licensing arrangements, will be available on acceptable terms, or at all.

The following table shows a summary of our cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025:

Net cash used in operating activities was $18.4$39.9 million for the threesix months ended MarchJune 31,30, 2026. Cash used in operations was primarily used to fund development of our product candidates, resulting in a net loss of $25.2$47.5 million, partially offset by non-cash charges of $4.0$8.8 million. Changes in operating assets and liabilities, including the timing of vendor payments and lease repayments, had an effect of $2.8$1.1 million on cash used in operating activities.

Net cash used in operating activities was $13.1$27.8 million for the threesix months ended MarchJune 31,30, 2025. Cash used in operating activities was primarily used to fund our operations to develop our product candidates, resulting in a net loss of $15.9$35.9 million partially offset by non-cash charges of $3.0$6.5 million and changes in operating assets and liabilities related to the timing of the vendor payments of $1.6 million.

Net cash used in or provided by investing activities during the threesix months ended MarchJune 31,30, 2026 and 2025 was nominal and related to the purchase and sale of property and equipment.

Net cash provided by financing activities was $0.8$12.5 million for the threesix months ended MarchJune 31,30, 2026, primarily due to net proceeds of $1.3$13.1 million received from shares sold under the ATM offset by payments for employee taxes related to the net share settlement of equity awards, whereby a portion of vested shares was withheld to satisfy employees’ tax withholding obligations of $0.4$0.5 million.

Net cash provided by financing activities was $178.1$174.0 million for the threesix months ended MarchJune 31,30, 2025, primarily due to net proceeds of $177.3$173.1 million from the sale of shares in a private offering and $1.0$1.2 million in proceeds from the exercise of stock options.

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, continue or initiate clinical trials of, and seek marketing approval for, our product candidates including our lead product candidates TX45 and TX2100. In addition, if we obtain marketing approval for TX45, TX2100 or any of our other product candidates, we expect to incur significant commercialization expenses related to program sales, marketing, manufacturing and distribution to the extent that such sales, marketing and distribution are not the responsibility of potential collaborators. Furthermore, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

the costs of operating as a publicly traded company and supporting our anticipated organizational growth;

Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of product candidates that we do not expect to be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

We have lease obligations for certain laboratory equipment and office and laboratory space and laboratory equipment under non-cancelable operating and finance leases. The leases expire at various times through 2029. Minimum lease payments under these agreements are $1.7$1.3 million infor the remainder of 2026, $1.9 million in 2027, $2.0 million in 2028, and $0.2 million in 2029. These amounts reflect enforceable obligations under non-cancelable contracts and do not include commitments that can be terminated without significant penalty.