Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K (the “Annual Report”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section titled “Risk Factors,” our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
Vor Bio is a clinical-stage biopharmaceutical company focused on developing a novel therapy in the treatment of autoimmune diseases. In June 2025, we in-licensed telitacicept from RemeGen Co., Ltd. (“RemeGen”). Pursuant to our license agreement with RemeGen, we were granted an exclusive license to develop and commercialize telitacicept outside of the Greater China region, which includes mainland China, Hong Kong, Macau and Taiwan. RemeGen retains development and commercialization rights in Greater China. Telitacicept is approved in China for the treatment of generalized myasthenia gravis (“gMG”), systemic lupus erythematosus (“SLE”) and rheumatoid arthritis (“RA”), and has two Biologics License Applications (“BLAs”) filed and pending in China for the treatment of Sjögren’s disease (“SjD”) and IgA nephropathy (“IgAN”).
Telitacicept is currently being evaluated in a global Phase 3 clinical trial, for which we have assumed responsibility from RemeGen in connection with the license agreement, for the treatment of gMG. The trial is currently recruiting patients in North America, Europe, Latin America, and Asia to support potential approval in the United States, Europe, Japan and other countries. In July 2024, the clinical trial enrolled a patient in the United States, the first in the global clinical trial. Topline data from the trial is anticipated in the first half of 2027.
Telitacicept was evaluated by RemeGen in a Phase 3 clinical trial in patients with gMG in China. Most recently, the 48-week data from Part B of the Phase 3 trial were presented at the American Association of Neuromuscular & Electrodiagnostic Medicine (“AANEM”) Annual Meeting in October 2025.
We have recently initiated a global Phase 3 clinical trial evaluating telitacicept for the treatment of SjD, with first patient dosing in March 2026. The trial anticipates recruiting approximately 250 adults with SjD in the United States, Europe, South America, and Asia. The trial is a randomized, double-blind, placebo-controlled trial.
Telitacicept was evaluated by RemeGen in a Phase 3 clinical trial in patients with active SjD in China. Most recently, the 48-week data including Stage A and B from the Phase 3 trial were presented at the American College of Rheumatology (“ACR”) Annual Meeting in October 2025.
We have incurred significant operating losses since inception, including net losses of $696.0 million for the year ended December 31, 2025 and $116.9 million for the year ended December 31, 2024. As of December 31, 2025, we had an accumulated deficit of $1,153.0 million.
As of December 31, 2025, we had cash, cash equivalents and marketable securities of $455.2 million. Based on our current operating plan, we expect that our cash, cash equivalents and marketable securities, together with the expected proceeds from our 2026 Private Placement, will enable us to fund our operating expenses and capital expenditure requirements into early 2029.
Restructuring Plan
On May 5, 2025, our board of directors approved the wind down of our then-existing clinical and manufacturing operations focused on previous product candidates (the “Restructuring Plan”). We publicly announced this plan on May 8, 2025. In conjunction with the Restructuring Plan, we announced a reduction of our workforce by 154 full-time employees, or approximately 99% of our then-current employee base.
During the year ended December 31, 2025, we incurred restructuring costs related to the Restructuring Plan of $29.7 million comprised of severance payments, stock-based compensation modifications, loss on disposal of long-lived assets and accelerated depreciation and amortization on long-lived assets and right-of-use assets.
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Financial Operations Overview
Revenue
We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all. If our development efforts for our product candidates are successful and result in marketing approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from such agreements.
Expenses
Research and Development Expenses
Research and development expenses consist primarily of external and internal expenses incurred in connection with our research and development activities, including our drug discovery efforts and the development of our product candidates. External expenses include:
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research and development expenses incurred under agreements with clinical research organizations (“CROs”) and other scientific development services;
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costs of consultants, including their fees and related travel expenses;
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costs related to compliance with quality and regulatory requirements;
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costs of laboratory supplies and acquiring and developing preclinical and clinical trial materials, including expenses associated with our clinical manufacturing organizations (“CMOs”); and
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payments made and consideration issued under third party licensing agreements.
Internal expenses include:
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personnel-related expenses, including salaries, bonuses, benefits and stock-based compensation expenses, for employees involved in research and development activities;
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facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, insurance, and other internal operating costs; and
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research and development related restructuring costs incurred with the Restructuring Plan, including severance payments, stock-based compensation modifications, loss on disposal of long-lived assets and accelerated depreciation and amortization on long-lived assets and right-of-use assets.
We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our consolidated financial statements as prepaid expenses or accrued research and development expenses. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized, even when there is no alternative future use for the research and development. The capitalized amounts are expensed as the related goods are delivered or the services are performed.
A significant portion of our research and development costs have been external costs, which we track by program.
Research and development activities are central to our business model. We expect that our research and development expenses will increase significantly for the foreseeable future as we continue to identify and develop product candidates, particularly as our product candidates move into later stages of clinical development.
The successful development of our product candidates in the future is highly uncertain. Therefore, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development and commercialization of any of our product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of our product candidates, if approved. This is due to the numerous risks and uncertainties associated with developing product candidates, many of which are outside of our control, including the uncertainty of:
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the timing and progress of clinical development activities;
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the number and scope of clinical programs we decide to pursue;
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our ability to maintain our current research and development programs and to establish new ones;
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establishing an appropriate safety profile with IND-enabling studies;
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the number of sites and patients included in the clinical trials;
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the countries in which the clinical trials are conducted;
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per patient trial costs;
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successful patient enrollment in, and the initiation of, clinical trials, as well as drop out or discontinuation rates;
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the successful completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority;
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the number of trials required for regulatory approval;
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the timing, receipt and terms of any regulatory approvals from applicable regulatory authorities;
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our ability to establish new licensing or collaboration arrangements;
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the performance of our current and future collaborators, if any;
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establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;
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significant and changing government regulation and regulatory guidance;
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the impact of any business interruptions to our operations or to those of the third parties with whom we work;
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obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;
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launching commercial sales of our product candidates, if approved, whether alone or in collaboration with others; and
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maintaining a continued acceptable safety profile of the product candidates following approval.
Any changes in the outcome of any of these variables could mean a significant change in the costs and timing associated with the development of our product candidates.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related costs, including salaries, bonuses, benefits and stock-based compensation expenses for employees involved in our executive, finance, corporate, business development and administrative functions, as well as expenses for outside professional services, including legal, audit, accounting and tax-related services and other consulting fees, facility-related expenses, which include depreciation costs and other allocated expenses for rent and maintenance of facilities, insurance costs, recruiting costs, travel expenses and other general administrative expenses. General and administrative costs also consist of restructuring costs incurred under the Restructuring Plan, including severance payments, stock-based compensation modifications, and accelerated depreciation and amortization on long-lived assets and right-of-use assets.
We expect that our general and administrative expenses will increase as our business expands and we hire additional personnel to support our continued development of our clinical programs. We also anticipate continued increased expenses associated with being a public company, including costs for legal, audit, accounting, investor and public relations, regulatory and tax-related services related to compliance with the rules and regulations of the SEC, Nasdaq listing standards and director and officer insurance premiums.
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Other Income(Expense)
Interest Income
Interest income consists of interest income earned on our cash, cash equivalents and marketable securities held in financial institutions.
Other Income
Other income represents the proceeds received from the sale of certain intellectual property related to our previous product candidates trem-cel, VCAR33 and VADC45.
Change in Fair Value of Warrant Liabilities
Change in fair value of warrant liabilities represents the change in the fair value of liability-classified warrants due to changes in their intrinsic value resulting from changes in the quoted price of our common stock underlying the warrants.
Results of Operations
Comparison of Years Ended December 31, 2025 and 2024
The following table summarizes our results of operations for the years ended December 31, 2025 and 2024 (in thousands):
Year EndedDecember 31,
Operating expenses:
Other income:
Change in fair value of warrant liabilities (334,358 ) — (334,358 )
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Research and Development Expenses
The following table summarizes our research and development expenses incurred for the years ended December 31, 2025 and 2024 (in thousands):
Year EndedDecember 31,
External research expenses:
Internal research expenses:
Manufacturing, facilities, and other research expenses 22,355 14,558 7,797
Research and development expenses were $321.5 million for the year ended December 31, 2025, compared to $93.3 million for the year ended December 31, 2024. The increase of $228.2 million was primarily attributable to the $222.6 million of expense incurred in 2025 for the purchase of the telitacicept license (included as a component of other research and development), a $25.0 million increase due to new spend for Telitacicept-gMG, an increase in manufacturing, facilities, and other expenses of $7.8 million primarily due to lease impairments taken in 2025 in connection with the Restructuring Plan, and a $3.3 million increase due to new spend for Telitaciept- SjD. These increases were offset in part by a $11.9 million decrease in personnel-related costs due to the Restructuring Plan, and decreases of $9.5 million in Trem-cel spend and $2.9 million in VCAR33 spend due to the discontinuation of those programs in the first half of 2025. In addition, the increase in Other research and development attributed to the telitacicept license was partially offset by a decrease of $7.1 million in non-license spend, attributable primarily to decreases in lab supplies and consumables, consulting fees, and software expenses, due to our decrease in related activities as part of the Restructuring Plan.
General and Administrative Expenses
General and administrative expenses were $50.1 million for the year ended December 31, 2025, compared to $27.9 million for the year ended December 31, 2024. The increase of $22.2 million was primarily attributable to an increase of $11.8 million in stock-based compensation, an increase of $4.9 million in legal and professional fees, an increase of $3.9 million in personnel costs, and an increase of $1.6 million in facilities, equipment, and other costs. The increase in stock-based compensation was primarily driven by grants to new hires, including grants to the new executives hired during the year, as well as an appreciation in our stock price and incremental expense recognized from award modifications which took place during the year. The increase in personnel costs was driven by the severance costs incurred in connection with the Restructuring Plan, partially offset by a reduction in headcount compared to the prior year. The increase in legal and professional fees was driven primarily by increased consulting costs incurred in the current year compared to prior year due to our transition after the implementation of the Restructuring Plan. The increase in these fees was also attributable to an increase in legal fees driven by the increase in transactions which occurred during the year, as well as accounting fees relating to incremental reviews of significant transactions. The increase in facilities and other costs was primarily driven by an increase in rent expense allocated to general and administrative expense as a result of the shift in headcount brought on by the Restructuring Plan, and an increase in software related expenses in the current year.
Other Income (Expense), net
Other income (expense), net decreased by $328.6 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease was primarily due to the $334.4 million loss on the change in fair value of warrant liabilities, partially offset by a $1.6 million increase in interest income due to an increase in cash, cash equivalents and marketable securities and $4.1 million of income recognized from the sale of intellectual property in 2025.
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Liquidity and Capital Resources
Sources of Liquidity
Since our inception, we have not recognized any revenue and have incurred operating losses and negative cash flows from our operations. We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all. We have funded our operations primarily through the sale of equity securities and have received aggregate net proceeds from these transactions of approximately $1,019.1 million as of December 31, 2025.
In order to fund our future operations, including our ongoing and planned clinical trials, we filed a universal shelf registration statement, which was declared effective on March 31, 2025, to provide for aggregate offerings of up to $350.0 million of common stock, preferred stock, debt securities, warrants or any combination thereof. As of December 31, 2025, $164.2 million remained available under the shelf registration statement, including $48.9 million reserved for at-the market offerings discussed below.
At-the-Market Sales Agreements
In December 2022, we entered into a Sales Agreement with Stifel, Nicolaus & Company, Incorporated (“Stifel”) as the agent (the “Stifel ATM Facility”). Pursuant to the Stifel ATM Facility, we may offer and sell shares of common stock with an aggregate value of up to $125.0 million. We pay Stifel a commission of up to 3.0% of the gross proceeds of any common stock sold through Stifel. We sold 1,910,861 and 12,454 shares of common stock under the Stifel ATM Facility during the years ended December 31, 2025 and 2024, respectively at a weighted average price per share of $37.06 and $32.09, respectively, for aggregate net proceeds of $70.1 million and $0.3 million, respectively, after deducting commissions. As of December 31, 2025, $48.9 million remained available to be sold under the Stifel ATM Facility.
2024 Private Placement
On December 27, 2024, we entered into a purchase agreement with certain institutional investors pursuant to which we issued and sold in a private placement an aggregate of (i) 2,793,562 shares of common stock and (ii) warrants to purchase up to 3,491,953 shares of common stock at the closing of the private placement on December 30, 2024 (the "December 2024 Private Placement"). Net proceeds from the private placement were $52.7 million, after deducting placement fees and issuance costs payable by us. If exercised for cash, the warrants would result in additional gross proceeds to us of up to approximately $58.5 million.
June 2025 Private Placement
On June 25, 2025, we entered into a purchase agreement with certain institutional investors, pursuant to which we issued and sold in a private placement pre-funded warrants to purchase up to an aggregate of 34,999,999 shares of common stock (the “2025 PIPE Warrants”) at the closing on June 27, 2025 (the "June 2025 Private Placement"). Net proceeds from the private placement were $174.4 million, after deducting issuance costs payable by us.
November 2025 Public Offering
On November 10, 2025, we entered into an underwriting agreement relating to the issuance and sale in a public offering of 11,500,000 shares of common stock, including 1,500,00 shares purchased by the underwriters under a 30-day option to purchase additional shares (the “November 2025 Offering”) at a public offering price of $10.00 per share. The net proceeds from the November 2025 Offering were $107.7 million after deducting the underwriting discounts and commissions and offering expenses.
December 2025 Private Placement
On December 15, 2025, we entered into a purchase agreement with certain investors pursuant to which we issued and sold an aggregate of 13,876,032 shares of common stock, at a price per share of $10.81, for net proceeds of $149.9 million after deducting issuance costs payable by us (the "December 2025 Private Placement").
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March 2026 Private Placement
On March 26, 2026, we entered into a purchase agreement with certain institutional investors pursuant to which we agreed to issue and sell an aggregate of 5,338,078 shares of common stock, at a price per share of $14.05, for gross proceeds of $75.0 million before deducting issuance costs payable by us. The closing of the private placement is expected to occur on March 30, 2026, subject to satisfaction of customary closing conditions.
Cash Requirements
As of December 31, 2025, we had cash, cash equivalents and marketable securities of $455.2 million. We will need to raise additional capital to fund our planned future operations.
We expect that our existing cash, cash equivalents and marketable securities at December 31, 2025, together with the expected proceeds from our 2026 Private Placement, will enable us to fund our operating expenses and capital expenditure requirements into early 2029. We have based this estimate on assumptions that may prove to be wrong and we could exhaust our capital resources sooner than we expect.
We expect our expenses to increase substantially if, and as, we:
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continue clinical development of our product candidate and any future product candidates, including in particular the expenses associated with our clinical trials;
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incur third party manufacturing costs to support our clinical trials of our product candidate and any future product candidates and, if approved, their commercialization;
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seek to identify and develop additional product candidates;
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seek regulatory and marketing approvals for our product candidate and any future product candidates;
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establish a sales, marketing and distribution infrastructure to commercialize any approved product candidates;
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adapt our regulatory compliance efforts to incorporate requirements to applicable marketed products;
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acquire or in-license products, product candidates, or technologies;
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maintain, expand, enforce, defend and protect our intellectual property;
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hire additional clinical, quality control, manufacturing and other scientific personnel;
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add operational, financial and management information systems and personnel;
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expand our office facility or establish dedicated laboratory and manufacturing facilities; and
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experience any delays or encounter any issues with any of the above.
In addition, we expect to continue to incur additional costs associated with operating as a public company, including significant legal, audit, accounting, investor and public relations, regulatory, tax-related, director and officer insurance premiums, investor relations and other expenses. Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval for any product candidates or generate revenue from the sale of any product candidate for which we may obtain marketing approval. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for at least several years, if ever.
As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the public or private sale of our equity, government or private party grants, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions. To the extent that we raise additional capital through the sale of our equity or convertible debt
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securities, including through the use of the Stifel ATM Facility, the ownership interest of our shareholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to obtain additional funding, we could be forced to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or any commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations. If we raise funds through strategic collaborations or other similar arrangements with third parties, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs or product candidates or may have to grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. Our ability to raise additional funds may be adversely impacted by worsening global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from worsening geopolitical tensions and adverse macroeconomic conditions or otherwise. Because of the numerous risks and uncertainties associated with product development, we cannot predict the timing or amount of increased expenses, and there is no assurance that we will ever be profitable or generate positive cash flow from operating activities.
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources.
Cash Flows
The following table provides information regarding our cash flows for the periods presented (in thousands):
Year Ended December 31,
Net cash used in operating activities $ (142,713 ) $ (99,660 )
Net cash (used in) provided by investing activities (48,802 ) 96,857
Net cash provided by financing activities 503,807 53,392
Operating Activities
Net cash used in operating activities was $142.7 million for the year ended December 31, 2025, primarily reflecting a net loss of $696.0 million, offset primarily by non-cash charges of $543.1 million. The non-cash charges primarily consisted of the fair value of warrants issued in connection with entering into the Telitacicept License Agreement of $177.4 million, a $334.4 million loss due to the change in fair value of warrant liabilities, stock-based compensation expense of $18.9 million, non-cash lease expense of $5.6 million, a $3.3 million loss on the sale of equipment, and depreciation expense of $2.9 million, offset by non-cash interest accretion of $0.1 million. Changes in working capital balances increased by a net of $10.2 million during the year, driven primarily by an increase in accrued expenses and accounts payable due to increases in accrued clinical and manufacturing expenses, partially offset by a decrease in accrued expenses for personnel costs. The net cash used was also impacted by the $45.0 million payment made to Remegen for the telitacicept license.
Net cash used in operating activities was $99.7 million for the year ended December 31, 2024, primarily reflecting a net loss of $116.9 million, offset primarily by non-cash charges of $17.2 million. The non-cash charges primarily consisted of stock-based compensation expense of $9.8 million, non-cash lease expense of $5.0 million and depreciation expense of $3.5 million, offset by non-cash interest accretion of $1.1 million.
Investing Activities
Net cash used in investing activities was $48.8 million for the year ended December 31, 2025, which consisted of purchases of $53.7 million of marketable securities and $0.9 million of property and equipment, partially offset by proceeds of $5.0 million from the maturity of marketable securities and $0.8 million from the sale of equipment.
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Net cash provided by investing activities was $96.9 million for the year ended December 31, 2024, which consisted of purchases of $9.9 million of marketable securities and $0.2 million of property and equipment offset by proceeds of $107.0 million from the maturity of marketable securities.
Financing Activities
Net cash provided by financing activities was $503.8 million for the year ended December 31, 2025, which consisted of $175.0 million of proceeds from the June 2025 Private Placement, $150.0 million of proceeds from the December 2025 Private Placement, $108.1 million of proceeds received from the November 2025 Offering, $70.1 million of proceeds from the sale of common stock under the Stifel ATM Facility, and proceeds of $2.2 million from the exercise of stock options and purchases of common stock under our ESPP. These amounts were offset by the payment of $1.3 million of issuance costs related to the private placements and underwritten offering and $0.3 million of taxes paid related to net share settlement of equity awards.
Net cash provided by financing activities was $53.4 million for the year ended December 31, 2024, which consisted of proceeds of $55.6 million from the proceeds of the December 2024 Private Placement, $0.3 million from the sale of common stock under the Stifel ATM Facility and proceeds of $0.2 million from the exercise of stock options and purchases of common stock under our ESPP, offset by the payment of $2.3 million of issuance costs related to the private placement and $0.3 million of taxes paid related to net share settlement of equity awards.
Contractual Obligations and Other Commitments
Contractual obligations relate to future minimum lease payments for our existing non-cancellable lease relating to corporate office space, with a term expiring in August 2031. Future minimum annual rental payments required under this operating lease agreement as of December 31, 2025 are described in more detail in Note 9 to our audited consolidated financial statements included elsewhere in this Annual Report.
Other commitments include license and collaboration agreements we have entered into with certain parties. Such arrangements require ongoing payments, including payments upon the achievement of certain development, regulatory and commercial milestones, receipt of sublicense income, as well as royalties on commercial sales. Refer to Note 10 to our audited consolidated financial statements included elsewhere in this Annual Report.
We also have agreements with certain vendors for various services, including services related to clinical operations and support, which we are not contractually able to terminate for convenience and avoid any and all future obligations to the vendors. Under such agreements, we are contractually obligated to make certain payments to vendors to reimburse them for their unrecoverable outlays incurred prior to cancellation. The exact amounts of such obligations are dependent on the timing of termination and the exact terms of the relevant agreement and cannot be reasonably estimated. We do not include these payments in this summary as they are not fixed and estimable.
Critical Accounting Estimates
Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements. Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are 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. We evaluate our estimates and
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assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. During the year ending December 31, 2025, there were no material changes to these assumptions.
While our significant accounting policies are described in more detail in Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting policy is the most critical in the preparation of our consolidated financial statements.
Accrued Research and Development Expenses
As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses as of each balance sheet date. This process involves reviewing open contracts and purchase orders, communicating with our applicable personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of the estimates with the service providers and make adjustments if necessary.
Recent Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report.
Emerging Growth Company and Smaller Reporting Company Status
Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
In addition, as an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
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being permitted to present only two years of audited consolidated financial statements in addition to any required unaudited interim consolidated financial statements, with correspondingly reduced disclosure in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
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an exception from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended;
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reduced disclosure about our executive compensation arrangements in our periodic reports, proxy statements and registration statements;
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exemptions from the requirements of holding non-binding advisory votes on executive compensation or golden parachute arrangements; and
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an exemption from compliance with the requirements of the Public Company Accounting Oversight Board regarding the communication of critical audit matters in the auditor’s report on consolidated financial statements.
We may take advantage of these provisions until the last day of the fiscal year ending after the fifth anniversary of our initial public offering or such earlier time that we no longer qualify as an emerging growth company. We will cease to qualify as an emerging growth company on the date that is the earliest of: (i) December 31, 2026; (ii) the last day of the fiscal year in which we have more than $1.235 billion in total annual gross revenues; (iii) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June
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30th and we have been a public company for at least 12 months and have filed one annual report on Form 10-K; or (iv) the date on which we have issued more than $1.0 billion of non-convertible debt over the prior three-year period. We may choose to take advantage of some but not all of these reduced reporting burdens. We have taken advantage of certain reduced reporting requirements in this this Annual Report. Accordingly, the information contained herein may be different than you might obtain from other public companies in which you hold equity interests.
We are also a “smaller reporting company.” If we are a smaller reporting company at the time that 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 consolidated financial statements in our Annual Report and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company, as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, for this reporting period and are not required to provide the information required under this item.
Item 8. Financial Statements and Supplementary Data.
The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K. An index of those financial statements is found in Item 15, Exhibits and Financial Statement Schedules, of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in “Internal Control-Integrated Framework (2013 framework)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that, as of December 31, 2025 our internal control over financial reporting was effective.
Attestation Report of the Registered Public Accounting Firm
This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm on internal control over financial reporting due to an exemption established by the JOBS Act for “emerging growth companies.”
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
95
Item 9B. Other Information.
During the three months ended December 31, 2025, no director or officer, as defined in Rule 16a-1(f) under the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this Item 10 will be set forth under the captions “Executive Officers”, “Proposal No. 1 – Election of Directors,” “Corporate Governance,” and "Delinquent Section 16(a) Reports", if applicable, in our Definitive Proxy Statement with respect to our 2026 Annual Meeting of Stockholders to be filed with the SEC and is incorporated herein by reference.
Item 11. Executive Compensation.
The information required by this Item 11 will be set forth under the captions “Executive Compensation” and “Director Compensation” in our Definitive Proxy Statement with respect to our 2026 Annual Meeting of Stockholders to be filed with the SEC and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this Item 12 will be set forth under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information at December 31, 2025” in our Definitive Proxy Statement with respect to our 2026 Annual Meeting of Stockholders to be filed with the SEC and is incorporated by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this Item 13 will be set forth under the captions “Certain Relationships and Related Party Transactions” and “Corporate Governance” in our Definitive Proxy Statement with respect to our 2026 Annual Meeting of Stockholders to be filed with the SEC and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services.
The information required by this Item 14 will be set forth under the caption “Independent Registered Public Accountants’ Fees” in our Definitive Proxy Statement with respect to our 2026 Annual Meeting of Stockholders to be filed with the SEC and is incorporated herein by reference.
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PART IV
Item 15. Exhibits, Financial Statement Schedules.
(1)
For a list of the financial statements included herein, see Index to the Consolidated Financial Statements on page F-1 of this Annual Report on Form 10-K, incorporated into this Item by reference.
(2)
Schedules have been omitted since they are either not required or not applicable or the information is otherwise included herein.
(3)
Exhibits
Incorporated by Reference
98
Notices and Restricted Stock Agreement
10.15+ Non-Employee Director Compensation Policy X
99
Rongpu Investment Partnership (Limited Partnership)
23.1 Consent of Ernst & Young LLP X
100
101.INS Inline XBRL Instance Document X
101.SCH Inline XBRL Taxonomy Extension Schema Document X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X
+ Indicates management contract or compensatory plan.
† Portions of the exhibit have been omitted as the Registrant has determined that: (i) the omitted information is not material; and (ii) the omitted information is the type that the Registrant treats as private or confidential.
^ Schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant will furnish a supplemental copy of any omitted schedule or similar attachment to the SEC upon request.
* This certification is being furnished and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and are not to be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
VOR BIOPHARMA INC.
Date: March 30, 2026 By: /s/ Jean-Paul Kress
Jean-Paul Kress, M.D.
President, Chief Executive Officer and Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Name Title Date
Jean-Paul Kress, M.D.
Sandesh Mahatme
/s/ Daniella Beckman Lead Independent Director March 30, 2026
Daniella Beckman
/s/ Alexander Cumbo Director March 30, 2026
Alexander Cumbo
/s/ Erez Kalir Director March 30, 2026
Erez Kalir
/s/ Michel Detheux Director March 30, 2026
Michel Detheux, Ph.D.
/s/ Wouter Joustra Director March 30, 2026
Wouter Joustra
/s/ Fouad Namouni Director March 30, 2026
Fouad Namouni, M.D.
/s/ Andrew Levin Director March 30, 2026
Andrew Levin, M.D., Ph.D.
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VOR BIOPHARMA INC.
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) F-1
Consolidated Balance Sheets F-2
Consolidated Statements of Operations and Comprehensive Loss F-3
Consolidated Statements of Stockholders’ Equity (Deficit) F-4
Consolidated Statements of Cash Flows F-5
Notes to Consolidated Financial Statements F-7
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Vor Biopharma Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Vor Biopharma Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2020.
Boston, Massachusetts
March 30, 2026
F-1
VOR BIOPHARMA INC.
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
(in thousands, except share and per share amounts) 2025 2024
Assets
Current assets:
Restricted cash equivalents 168 2,413
Property and equipment, net 533 6,581
Operating lease right-of-use assets 2,936 35,007
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Operating lease liabilities 280 4,215
Non-current liabilities:
Operating lease liabilities—non-current 2,720 27,615
Stockholders’ equity (deficit):
Accumulated other comprehensive income 41 22
Total liabilities and stockholders’ equity (deficit) $ 464,126 $ 142,891
The accompanying notes are an integral part of these consolidated financial statements
F-2
VOR BIOPHARMA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Year EndedDecember 31,
(in thousands, except share and per share amounts) 2025 2024
Operating expenses:
Other income (expense), net:
Change in fair value of warrant liabilities (334,358 ) —
Net loss per share, basic and diluted $ (70.50 ) $ (34.03 )
Other comprehensive income:
Unrealized gain on available for sale marketable securities 19 99
Total other comprehensive income 19 99
The accompanying notes are an integral part of these consolidated financial statements
F-3
VOR BIOPHARMA INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
Issuance of common stock from at-the-market sales agreement 12,454 — 302 — — 302
Stock-based compensation expense — — 9,847 — — 9,847
Other comprehensive income, net of tax — — — 99 — 99
Stock-based compensation expense — — 18,912 — — 18,912
Other comprehensive income, net of tax — — — 19 — 19
The accompanying notes are an integral part of these consolidated financial statements
F-4
Vor Biopharma Inc.
CONSOLIDATED StatementS of Cash Flows
Year Ended December 31,
Cash flows from operating activities
Adjustments to reconcile net loss to net cash used in operations:
Transaction costs for issuance of pre-funded warrants 643 —
Change in fair value of warrant liabilities 334,358 —
Interest amortization on marketable securities (67 ) (1,149 )
Loss (gain) on sale of property and equipment 3,303 (18 )
Changes in operating assets and liabilities:
Operating lease liabilities (2,406 ) (3,830 )
Prepaid expenses and other current assets 1,684 (835 )
Accounts payable and accrued liabilities 10,930 2,241
Net cash used in operating activities (142,713 ) (99,660 )
Cash flow from investing activities
Purchases of marketable securities (53,660 ) (9,914 )
Proceeds from maturities of marketable securities 5,000 107,000
Purchases of property and equipment (941 ) (229 )
Proceeds from sales of property and equipment 799 —
Net cash (used in) provided by investing activities (48,802 ) 96,857
Cash flow from financing activities
Proceeds from the issuance of common stock from private placement 149,999 55,550
Net cash provided by financing activities 503,807 53,392
Supplemental disclosure of non-cash activities
Right-of-use assets obtained in exchange for lease obligations $ 3,079 $ —
Unrealized gain on available-for-sale securities $ 19 $ 99
A reconciliation of the cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the statements of cash flows is as follows:
For the Year Ended December 31,
Restricted cash equivalents 168 2,413
F-5
The accompanying notes are an integral part of these consolidated financial statements
F-6
VOR BIOPHARMA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of the Business
Vor Biopharma Inc. (the “Company”) is a clinical-stage company advancing telitacicept, a novel, dual-target recombinant fusion protein that inhibits both BLyS (BAFF) and APRIL—two key cytokines involved in B cell survival and autoantibody production. This dual-target mechanism reduces autoreactive B cells and autoantibody production, key drivers of autoimmune pathology. The Company is headquartered in Boston, Massachusetts. The Company was incorporated on December 30, 2015.
Risks and Uncertainties
The Company is subject to a number of risks common to development stage companies in the biotechnology industry, including, but not limited to, risks of failure of clinical trials, dependence on key personnel, protection of proprietary technology, reliance on third party organizations, uncertainty of obtaining regulatory approval for any product candidate that it may develop, development by competitors of technological innovations, compliance with government regulations, adverse macroeconomic conditions, and the need to obtain additional financing.
Liquidity and Capital Resources
As of December 31, 2025, the Company had $455.2 million of cash, cash equivalents and marketable securities and an accumulated deficit of $1,153.0 million. The Company expects that its existing cash, cash equivalents and marketable securities will be sufficient to allow the Company to fund its current planned operations through at least a period of one year after the date the financial statements are issued. The Company anticipates that it will continue to incur significant operating losses for the next several years as it continues to develop its product candidate. As a result, the Company’s continued operations are dependent on its ability to raise additional funding. If the Company is unable to obtain additional funding on a timely basis, it may be forced to significantly curtail, delay, or discontinue one or more of its planned research or development programs or be unable to expand its operations.
2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) or an Accounting Standards Update (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation.
September 2025 Reverse Stock Split
On August 25, 2025, the Company’s stockholders approved a proposal to authorize the Company’s board of directors to amend the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split. The Board approved the reverse stock split on August 27, 2025 and, on September 18, 2025, the Company effected a 1-for-20 reverse stock split of its common stock. The par value and the number of authorized shares of common stock were not adjusted as a result of the reverse stock split. All share and per share amounts for all periods presented in these consolidated financial statements and the notes thereto have been adjusted retroactively, where applicable, to reflect the effect of this reverse stock split.
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amount of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies in developing the estimates and assumptions that are used in the preparation of the consolidated financial statements. Management must apply significant judgment in this process. Management’s estimation
F-7
process often may yield a range of potentially reasonable estimates and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: accrued expenses and stock-based compensation expense.
Segments
Operating segments are defined as components of an enterprise for which separate and discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company has one operating segment. The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on an aggregate basis for the purpose of allocating resources. Refer to Note 15 for more information.
Cash and Cash Equivalents
The Company considers highly-liquid investments purchased with an original maturity date of ninety days or less from the date of purchase to be cash equivalents. Cash and cash equivalents include cash held in banks and amounts held in money market funds. Cash equivalents are stated at cost, which approximates market value.
Marketable Securities
Investments in marketable debt securities are classified as available-for-sale. Marketable securities with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such securities represent an investment of cash that is available for current operations.
Available-for-sale marketable securities are reported at fair value at each balance sheet date. Amortization and accretion of premiums and discounts are recorded in interest income. Realized gains and losses are included as a component of other income (expense), net in the consolidated statements of operations.
The Company evaluates its marketable securities with unrealized losses for impairment. When assessing marketable securities for unrealized declines in value, the Company considers whether the decline in value is related to a credit loss or non-credit loss. For credit losses, the Company reduces the marketable security to fair value through an allowance for credit losses recorded to the balance sheet and corresponding charge to the statement of operations. The allowance for credit losses and corresponding impairment charge is adjusted each period for changes in fair value. For non-credit losses, the Company reduces the marketable security to fair value through a charge to the statement of operations and comprehensive loss, reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity (deficit). No credit losses were recorded during the periods presented.
Restricted Cash Equivalents
The Company had $0.2 million and $2.4 million of restricted cash equivalents in the form of a letter of credit related to a lease at December 31, 2025 and 2024, respectively.
Comprehensive Income (Loss)
Comprehensive loss includes net loss, as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders.
Concentrations of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash equivalents and marketable securities. The Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.
The Company’s marketable securities may consist of money market funds and marketable debt securities, including corporate bonds and U.S. Treasury securities. The Company’s investment policy limits instruments to investment grade securities with high credit quality issuers with the objective to preserve capital and to maintain liquidity until the funds can be used in business operations.
F-8
Fair Value Measurements
Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
•
Level 1—Quoted prices in active markets for identical assets or liabilities.
•
Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
•
Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.
To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
Property and Equipment, Net
Property and equipment, net is recorded at cost less accumulated depreciation. Depreciation expense is recorded using the straight-line method over the estimated useful life of the related asset, which are as follows:
Estimated Useful Life
Computer equipment 3 years
Manufacturing equipment 5 years
Furniture and equipment 5 years
Laboratory equipment 5 years
Leasehold improvements Shorter of remaining lease term or useful life
Purchased assets that are not yet in service are recorded to construction-in-process and no depreciation expense is recorded. Once they are placed in service, they are reclassified to the appropriate asset class. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in the Company’s consolidated statements of operation and comprehensive loss. Expenditures for maintenance and repairs are expensed as incurred.
Impairment of Long-Lived Assets
Long-lived assets consist of property, equipment and right-of-use assets. The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets may warrant revision or that the carrying value of these assets may not be recoverable. If circumstances require that a long-lived asset or asset group be tested for impairment, the Company first compares the estimated undiscounted future cash flows expected to result from the use or disposition of that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss would be recognized to the extent the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market prices and third-party independent appraisals, as considered necessary. The Company did not recognize any impairment loss in the year ended December 31, 2025.
Leases
At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease. Leases with a term greater than one year are recognized on the consolidated balance sheet as a right-of-use (“ROU”)
F-9
asset and current and non-current lease liabilities, as applicable. The Company has made an accounting policy election, known as the short-term lease recognition exemption, which allows the Company to not recognize ROU assets and lease liabilities that arise from short-term leases (12 months or less). The Company has applied this election to all classes of underlying assets. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew or options to cancel a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew or will not cancel, respectively. The Company monitors its material leases on a quarterly basis.
Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of future lease payments over the expected remaining lease term. Lease cost for operating leases is recognized on a straight-line basis over the lease term as an operating expense. Certain adjustments to the ROU asset may be required for items such as lease prepayments or incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.
The Company has elected to account for lease and non-lease components together.
Research and Development
Research and development expenses include costs directly attributable to the conduct of the Company’s research and development programs.
Expenditures relating to research and development are expensed in the period incurred. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. The cost of materials for a research and development activity that have an alternative future use is capitalized when the materials are acquired and recognized as expense as consumed. The costs of materials that were acquired for a particular research and development activity and have no alternative future use are expensed in the period acquired.
Costs incurred in obtaining licenses are recognized as research and development expense as incurred if the license has no alternative use.
Accrued Research and Development Expenses
The Company has entered into various research and development related contracts, including contracts with third-party contract research organizations and contract manufacturing organizations. These agreements are cancelable, and related costs are recognized as research and development expenses as incurred. The Company records accrued liabilities for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes the progress of the studies, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be required to determine the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. To date, the Company’s historical accrual estimates have not been materially different from the actual costs.
Warrants
The Company accounts for warrants to purchase its common stock as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC Topic 480, Distinguishing Liabilities from Equity ("ASC 480")and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether warrants are freestanding financial instruments pursuant to ASC 480, meet the liability classification requirements pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent period end date while the warrants are outstanding.
Warrants classified as equity are recorded at fair value as of the date of issuance on the Company’s consolidated balance sheets and no further adjustments to their initial valuation will be subsequently made as long as they remain equity-classified. Warrants classified as liabilities are recorded on the Company’s consolidated balance sheets at their fair value on the date of issuance and are revalued at each subsequent balance sheet date until such
F-10
instruments are exercised or expired, or meet the criteria to become equity-classified, with any changes in the fair value between reporting periods recorded as a component of other income (expense), net on the consolidated statement of operations and comprehensive loss.
As of December 31, 2025, the Company has both equity-classified and liability-classified warrants outstanding.
Stock-Based Compensation Expense
The Company accounts for stock-based compensation under the provisions of ASC 718-10, Compensation—Stock Compensation (“ASC 718-10”), which requires all stock-based payments to employees, non-employees and directors, including grants of stock options and restricted stock units, to be recognized in the consolidated statements of operations and comprehensive loss based on their fair values on the date of grant over the requisite service period, which is generally the vesting period of the respective award. Forfeitures are accounted for as they occur. Generally, the Company issues awards with only service-based vesting conditions and records the expense for these awards using the ratable method. The Company classifies stock-based compensation expense in the same manner in which the award recipient’s payroll or service provider’s costs are classified. Stock-based payments that contain performance conditions are recognized when such conditions are probable of being achieved.
The fair value of each restricted common stock award and each restricted stock unit award is estimated on the date of grant based on the fair value of the Company’s common stock on that same date.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model which requires inputs based on certain subjective assumptions, including the following:
•
Expected Term—The expected term represents the period that the stock-based awards are expected to be outstanding. The Company uses the simplified method to determine the expected term, which is based on the average of the time-to-vesting and the contractual life of the options.
•
Expected Volatility—Because the Company does not have sufficient trading history for its common stock as of December 31, 2025, the expected volatility was estimated based on the average volatility for comparable publicly traded biotechnology companies over a period equal to the expected term of the stock option grants. The comparable companies were chosen based on the similar size, stage in life cycle or area of specialty. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.
•
Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the awards.
•
Dividend Yield—The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero.
Income Taxes
The Company accounts for income taxes using the asset and liability approach. Deferred tax assets and liabilities represent future tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities and for loss carryforwards using enacted tax rates expected to be in effect in the years in which the differences reverse. A valuation allowance is established to reduce deferred tax assets to the amounts expected to be realized. The Company also recognizes a tax benefit from uncertain tax positions only if it is “more likely than not” that the position is sustainable based on its technical merits. The Company accounts for interest or penalties related to uncertain tax positions as part of its provision for income taxes. To date, the Company has not incurred interest and penalties related to uncertain tax positions. Should such costs be incurred, they would be classified as a component of provision for income taxes.
Net Loss Per Share
Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the reporting period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common shares and potentially dilutive securities outstanding during the periods. For purposes of the diluted net loss per share calculation, warrants, restricted stock units and stock options considered to be potentially dilutive securities were excluded from the
F-11
calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all reporting periods presented.
Restructuring Costs
Employee severance costs are recorded based on whether the termination benefits are provided under an on-going benefit arrangement or under a one-time benefit arrangement. The Company accounts for on-going termination benefit arrangements, such as those arising from employment agreements, applicable regulations or past practices, in accordance with ASC 712, Compensation-Nonretirement Postemployment Benefits. Under ASC 712, liabilities for post-employment benefits are recorded at the time the obligations are probable of being incurred and can be reasonably estimated. The Company accounts for one-time employment benefit arrangements in accordance with ASC 420, Exit or Disposal Cost Obligations. One-time termination benefits are expensed at the date the entity notifies the employee, unless the employee must provide future service over a period extending past the minimum notification period, in which case the benefits are expensed ratably over the future service period. Other associated costs are recognized in the period in which the liability is incurred. Refer to Note 16 for additional information on the severance expense that the Company recognized for employees terminated in connection with the Restructuring Plan (as defined below).
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected to take advantage of the extended transition period for complying with certain new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires more detailed income tax disclosures, requiring entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. This update is effective beginning with the Company’s 2026 fiscal year annual reporting period. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). ASU 2024-03 improves disclosures surrounding a public business entity’s expenses by requiring more detailed information about the types of expenses included within commonly presented income statement captions. The update is effective beginning with the Company's 2027 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) ("ASU 2025-11"). ASU 2025-11 provides clarity about current interim reporting requirements to help entities determine whether disclosures not specified in Topic 270 should be provided in interim reporting periods. The update is effective beginning with the Company's 2028 fiscal year annual reporting period, with early adoption permitted. The Company does not expect the update to have a material impact on the consolidated financial statements.
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3. Marketable Securities
The amortized cost and estimated fair value of marketable securities, by contractual maturity are as follows:
Maturing in one year or less
Maturing after one year through five years
Maturing in one year or less
Maturing after one year through five years
The Company did not have any individual securities in an unrealized loss position as of December 31, 2025 or 2024. The Company did not record any impairments to marketable securities or reserves for credit losses related to its marketable debt securities during the years ended December 31, 2025 and December 31, 2024.
4. Fair Value Measurements
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:
(in thousands) Level 1 Level 2 Level 3 Total
Cash equivalents
Marketable securities
Restricted cash equivalents
Liabilities
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(in thousands) Level 1 Level 2 Level 3 Total
Cash equivalents
Marketable securities
Total marketable securities — 9,977 — 9,977
Restricted cash equivalents
The fair value of the Company’s cash equivalents and restricted cash equivalents is based on quoted market prices in active markets with no valuation adjustment. The fair values of marketable securities and warrant liabilities are determined based on observable market inputs. During the years ended December 31, 2025 and 2024, there were no transfers between levels.
Prepaid expenses, accounts payable and accrued expenses are stated at their respective historical carrying values which approximate fair value due to their short-term nature.
5. Property and Equipment, Net
Property and equipment, net consisted of the following:
December 31, December 31,
Laboratory equipment $ — $ 9,625
Manufacturing equipment — 7,082
Computer equipment — 446
Furniture, fixtures and other 558 606
Construction in progress — 36
Less: Accumulated depreciation (25 ) (11,214 )
Property and equipment, net $ 533 $ 6,581
Depreciation expense for the years ended December 31, 2025 and 2024 was $2.9 million and $3.5 million, respectively. In connection with the Restructuring Plan (as defined below in Note 16, Restructuring), during the year ended December 31, 2025, the Company recognized a $3.3 million loss on disposal of certain long-lived assets including equipment and leasehold improvements which was recognized as research and development expense in the consolidated statements of operations and comprehensive loss.
6. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
December 31, December 31,
Employee-related expenses $ 3,066 $ 5,852
Research and development expenses 241 872
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7. Stockholders' Equity
Common Stock
As of December 31, 2025 and 2024, the Company’s authorized capital stock included 800,000,000 and 400,000,000shares of its $0.0001 par value common stock, respectively, and 10,000,000 shares of its $0.0001 par value preferred stock.
Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders provided, however, that, except as otherwise required by law, holders of common stock shall not be entitled to vote on any amendment to the Company’s certificate of incorporation, as amended (the “Certificate of Incorporation”), that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Certificate of Incorporation or pursuant to the Delaware General Corporation Law. Common stockholders are entitled to receive dividends, as may be declared by the Company’s board of directors, if any, subject to the preferential dividend rights of the preferred stock. No dividends have been declared or paid as of and for either of the years ended December 31, 2025 and 2024.
At-the-Market Sales
During the years ended December 31, 2025 and 2024, the Company sold 1,910,861 and 12,454 shares of common stock, respectively, in at-the-market offerings at a weighted average price per share of $37.06 and $32.09, respectively, for aggregate net proceeds of $70.1 million and $0.3 million, respectively, after deducting commissions.
2024 Private Placement
On December 27, 2024, the Company entered into a purchase agreement with certain institutional investors pursuant to which the Company issued and sold in a private placement an aggregate of (i) 2,793,562 shares of the Company's common stock and (ii) warrants to purchase up to 3,491,953 shares of the Company's common stock (the "2024 Warrants") at the closing of the private placement on December 30, 2024. Net proceeds from the private placement were $52.7 million, after deducting placement fees and issuance costs payable by the Company.
The 2024 Warrants have an exercise price of $16.76 per share and are immediately exercisable, subject to certain limitations on exercise set forth in the 2024 Warrants. The 2024 Warrants will terminate on December 30, 2031.
The Company determined that the 2024 Warrants are freestanding instruments that do not meet the definition of a liability or derivative. The 2024 Warrants are indexed to the Company’s common stock and meet all other conditions for equity classification and have continued to meet such conditions for all periods presented. Accordingly, the 2024 Warrants are classified as equity and accounted for as a component of additional paid-in capital. The Company also determined that the 2024 Warrants should be included in the determination of diluted net loss per share if their impact is dilutive. However, they are not included within diluted net loss per share for the years ended December 31, 2025 or 2024 as their effect would be antidilutive.
As of December 31, 2025, none of the 2024 Warrants have been exercised.
June 2025 Private Placement
On June 25, 2025, the Company entered into a purchase agreement with certain institutional investors (collectively, the “2025 Purchasers”), pursuant to which the Company issued and sold to the 2025 Purchasers in a private placement pre-funded warrants to purchase up to an aggregate of 34,999,999 shares of the Company's common stock (the “2025 PIPE Warrants”) at the closing on June 27, 2025. Net proceeds from the private placement were $174.4 million, after deducting issuance costs payable by the Company. In addition to the 2025 PIPE Warrants, on June 25, 2025 the Company issued a warrant to purchase up to 16,000,000 shares of the Company’s common stock as partial consideration for the Telitacicept License Agreement (as defined below) to a subsidiary of RemeGen Co., Ltd. ("Remegen") (the “RemeGen Warrant”). Refer to Note 10 for additional
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information on the license arrangement. The 2025 PIPE Warrants and RemeGen Warrant are collectively referred to as the 2025 Warrants.
The 2025 Warrants have an exercise price of $0.002 per share and became exercisable upon stockholder approval of the issuance of the underlying shares and an amendment to the Certificate of Incorporation to increase the number of authorized shares, subject to certain limitations on exercise set forth in the 2025 Warrants. The 2025 Warrants do not expire.
Upon issuance, the 2025 Warrants were liability-classified as they are not considered indexed to the Company’s common stock. The 2025 Warrants are measured at fair value each period with changes in fair value presented within the consolidated statements of operations and comprehensive loss. The valuation of the 2025 Warrants is classified within Level 2 of the fair value hierarchy due to the use of observable market inputs, primarily the quoted price of the Company’s common stock underlying the warrants. The initial carrying value of the 2025 PIPE Warrants and the RemeGen Warrant at issuance was $175.0 million and $177.4 million, respectively. Issuance costs related to the 2025 PIPE Warrants were expensed as incurred.
The Company determined the 2025 Warrants should be included in the determination of diluted net loss per share if their impact is dilutive. However, they are not included within diluted net loss per share for the year ended December 31, 2025 as the effect would be antidilutive. Because the 2025 Warrants are liability-classified, they are excluded from basic net loss per share until exercised.
During the year ended December 31, 2025, 5,079,640 of the 2025 Warrants were exercised for an immaterial amount of net proceeds, with certain of the exercises completed on a cashless basis. The remaining 45,920,359 outstanding 2025 Warrants had a fair value of $600.5 million as of December 31, 2025.
November 2025 Public Offering
On November 10, 2025, the Company entered into an underwriting agreement relating to the issuance and sale in a public offering of 11,500,000 shares of the Company’s common stock, including 1,500,00 shares purchased by the underwriters under a 30-day option to purchase additional shares (the “November 2025 Offering”) at a public offering price of $10.00 per share. The net proceeds to the Company from the November 2025 Offering were $107.7 million after deducting the underwriting discounts and commissions and offering expenses.
December 2025 Private Placement
On December 15, 2025, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company, in a private placement, issued and sold an aggregate of 13,876,032 shares of common stock, at a price per share of $10.81, for net proceeds of $149.9million after deducting offering expenses (the “December 2025 Private Placement”).
8. Stock-Based Compensation
Stock Incentive Plans
In December 2015, the Company’s board of directors adopted and approved the 2015 Stock Incentive Plan (as amended to date, the “2015 Plan”). The 2015 Plan provided for the granting of incentive stock options, non-statutory stock options, restricted stock awards and other stock-based awards to eligible employees, officers, directors, consultants and advisors as determined by the Company’s board of directors.
In February 2021, the Company’s board of directors adopted and stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan became effective on February 5, 2021, following which no further grants were or will be made under the 2015 Plan. In March 2024, the Company’s board of directors adopted an amendment and restatement of the 2021 Plan, which the Company’s stockholders approved in May 2024. The 2021 Plan provides for the grant of stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to the Company's employees, consultants and directors.
The number of shares of the Company's common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year through January 1, 2035, by 4.0% of the total number of shares of
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as common stock outstanding on December 31 of the preceding calendar year. Any grants that expire or are canceled, terminated, forfeited, fail to vest, or are withheld to satisfy a tax withholding obligation are allowed to be reissued under 2021 Plan. As of December 31, 2025, the Company had 433,804 shares of its common stock available for future issuance under the 2021 Plan.
In August 2023, the Company’s board of directors adopted the Company’s 2023 Inducement Plan (the “2023 Inducement Plan”) pursuant to which the Company reserved 3,500,000 shares of common stock for issuance under the 2023 Inducement Plan. The 2023 Inducement Plan provides for the grant of non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance awards and other forms of stock-based compensation to eligible individuals. In accordance with Nasdaq Marketplace Rule 5635(c)(4), awards under the 2023 Inducement Plan may only be made to individuals not previously employees or directors of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company. Awards granted under the 2023 Inducement Plan must be approved by either a majority of the Company’s independent directors or the compensation committee of the Company’s board of directors. In June 2025, the Company’s board of directors approved an amendment to the 2023 Inducement Plan to reserve an additional 7,511,334 shares of common stock for issuance under the 2023 Inducement Plan. As of December 31, 2025, the Company had 2,539,361 shares of its common stock available for future issuance under the 2023 Inducement Plan.
February 2025 Option Repricing
On February 3, 2025, the Company's board of directors approved a stock option repricing (the “February 2025 Option Repricing”) whereby the exercise price of certain outstanding options to purchase shares of the Company’s common stock was reduced to $26.80 per share. The repricing applied to options to purchase shares of the Company’s common stock held by continuing employees as of February 3, 2025 that had an exercise price per share greater than $26.80; provided that holders of repriced options must remain in continuous service with the Company through February 3, 2026 or, if earlier, a change in control of the Company or 30 days prior to the applicable repriced option’s original expiration date. If any such repriced option is exercised prior to such time, the exercise price per share will be the original exercise price per share, and not the repriced exercise price. The total number of shares underlying all repriced options was 337,809. The repriced options previously had exercise prices ranging from $27.20 to $899.20 per share. Management determined that the February 2025 Option Repricing represents a modification of share-based awards and calculated incremental compensation cost of $1.9 million resulting from the modification. However, as the conditions of the modified terms were not expected to be met, the Company has not recognized any incremental compensation cost associated with the February 2025 Option Repricing.
December 2025 Equity Award Cancellation and Replacement
On December 5, 2025, the Company executed a cancellation of the Chief Financial Officer's award of 694,137 restricted stock units ("RSUs"), which was granted on July 9, 2025, and concurrently replaced it with a grant of 1,388,274 options on the date of cancellation. The cancellation and concurrent replacement grant was treated as an award modification. The incremental compensation cost resulting from this modification was $2.4 million, of which $0.1 million was recognized in the year ended December 31, 2025.
December 2025 Option Repricing
On December 5, 2025, the Company's board of directors approved a stock option repricing (the “ December 2025 Option Repricing”) whereby the exercise price of certain outstanding options to purchase shares of the Company’s common stock was reduced to $8.18 per share. The repricing applied to options to purchase shares of the Company’s common stock held by continuing employees as of December 5, 2025 that had an exercise price per share greater than $8.18; provided that holders of repriced options must remain in continuous service with the Company through December 5, 2027 or, if earlier, a change in control of the Company or 30 days prior to the applicable repriced option’s original expiration date. If any such repriced option is exercised prior to such time, the exercise price per share will be the original exercise price per share, and not the repriced exercise price. The total number of shares underlying all repriced options was 6,582,767. The repriced options previously had exercise prices ranging from $17.80 to $47.60 per share. Management determined that the December 2025 Option Repricing represents a modification of share-based awards and calculated incremental compensation cost of $7.0 million resulting from the modification. The Company recognized $0.1 of this incremental expense in the year ended December 31, 2025; the remaining incremental expense will be fully recognized by 2029.
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Stock Options
The Company’s stock options generally vest over 48 months with 25% vesting after one year followed by ratable monthly vesting over three years and have a contractual term of 10 years. The weighted-average assumptions used principally in determining the fair value of options granted are presented in the table below. The below assumptions reflect those used to determine the original grant date fair value for options granted, and do not reflect the impact of the modifications described above.
Year Ended December 31,
Expected term (in years) 6.0 6.0
Expected volatility 98.9 % 88.9 %
Risk-free interest rate 3.9 % 4.1 %
Dividend yield — —
The following table summarizes the Company’s stock option activity for the year ended December 31, 2025:
*Weighted-average exercise price for shares outstanding at the end of the period reflect the exercise price resulting from the February and December 2025 Option Repricings. Each of the other weighted-average exercise prices included above reflect the original grant date exercise price for such grants. None of the options exercisable at year-end were subject to the repricings.
The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the common stock as of the respective date. The intrinsic value for options outstanding at the end of the period reflects the impact of the December 2025 Option Repricing.
The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2025 and 2024 was $15.09 and $29.60 per share, respectively. The weighted-average grant date fair value for options granted in 2025 reflects the original grant date fair value and does not reflect the impact of any repricing. The weighted-average fair value of the repriced options was $5.54 immediately prior to the repricing, and $6.60 immediately after the effect of the repricing. As of December 31, 2025, total unrecognized compensation expense related to stock options was $113.4 million which is expected to be recognized over a weighted-average period of 3.5 years. There were 61,189 stock options exercised during the year ended December 31, 2025.
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Restricted Stock Units
As of December 31, 2025, there were 186,325 restricted stock units outstanding under the 2021 Plan and the 2023 Inducement Plan. The following table summarizes the Company's unvested restricted stock unit activity for the year ended December 31, 2025:
Shares Weighted-Average Grant Date Fair Value
As of December 31, 2025, total unrecognized compensation expense related to the unvested restricted stock units was $5.9 million, which is expected to be recognized over a weighted average period of 3.6 years.
2021 Employee Stock Purchase Plan
In February 2021, the Company’s board of directors adopted and stockholders approved the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP became effective on February 5, 2021. The number of shares of common stock reserved for issuance under the ESPP will automatically increase on January 1 of each year through January 1, 2031, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, and (ii) 90,000 shares. If purchase rights granted under the ESPP terminate without having been exercised, the shares of common stock not purchased under such purchase rights will again become available for issuance under the ESPP. As of December 31, 2025, the Company had 115,932 shares of its common stock available for future issuance under the ESPP.
The ESPP permits eligible employees to purchase common stock through accumulated payroll deductions at a purchase price equal to 85% of the lesser of the market value of the common stock at the beginning of the 6-month offering period or on the purchase date. During the years ended December 31, 2025 and 2024, the Company issued 33,477 and 11,392 shares, respectively, with a weighted average purchase price per share of $2.91 and $19.60, respectively, which resulted in an immaterial amount of compensation expense.
Stock-Based Compensation
Stock-based compensation expense was allocated as follows:
Year Ended December 31,
Total stock-based compensation expense $ 18,912 $ 9,847
9. Leases
Cambridgepark Lease
In December 2019, the Company entered into a lease agreement for office and laboratory space (the “Cambridgepark Lease”) in Cambridge, Massachusetts with PPF Off 100 Cambridge Park Drive, LLC (the “Landlord”). During 2021 and 2022, the Company entered into various lease amendments with the Landlord to obtain additional leased space (the “Lease Amendments”).
In connection with the Restructuring Plan, the Company entered into an early termination agreement with the Landlord on June 20, 2025, pursuant to which the parties agreed to terminate the lease, effective August 4, 2025. Per the terms of such agreement, the Company paid a non-refundable termination fee in the amount of $8.5 million to the Landlord. The early termination was treated as a lease modification for accounting purposes. As a result of the modification, the Company remeasured the lease liability and recognized a corresponding adjustment to the right-of-use asset as of the date of the modification. Additionally, as of June 30, 2025, the space was determined to be
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abandoned, thus the Company accelerated amortization of the right-of-use asset and de-recognized any remaining balances.
In conjunction with the Cambridgepark Lease, the Company was required to execute an irrevocable standby letter of credit of $2.4 million for the benefit of the Landlord. The funds were released to the Company during the quarter ended September 30, 2025.
Boylston Lease
In August 2025, the Company entered into a lease agreement for office space (“Boylston Lease”) with 500 Boylston & 222 Berkeley Owner (DC) LLC (the “Boylston Landlord”). The commencement date of the lease was September 1, 2025, and the Boylston Lease will expire on August 31, 2031, unless terminated earlier in accordance with the lease agreement. The Company has the option to extend the term for one additional five-year period.
Payments due associated with the Boylston Lease include both fixed and variable payments. Total fixed lease payments under the lease agreement are $3.8 million. Variable payments relate to the Company’s share of the Boylston Landlord’s operating costs associated with the underlying assets and are recognized when the event on which those payments are assessed occurs. The Boylston Lease does not contain a residual value guarantee.
In conjunction with the Boylston Lease, the Company was required to execute an irrevocable standby letter of credit of $0.2 million for the benefit of the Boylston Landlord. As of September 30, 2025, the funds securing the letter of credit were presented as restricted cash equivalents on the consolidated balance sheets.
The elements of lease expense were as follows: