[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions readers about forward-looking statements, which involve inherent risks and uncertainties that may cause actual results to differ materially - The report contains **forward-looking statements** regarding future operations, financial position, business strategy, product candidates, clinical trials, R&D costs, and regulatory approvals[9](index=9&type=chunk)[10](index=10&type=chunk) - These statements are subject to known and unknown **risks**, **uncertainties**, and other important factors that may cause actual results to differ materially[9](index=9&type=chunk)[11](index=11&type=chunk) - The company does not plan to publicly update or revise any **forward-looking statements** unless required by applicable law[11](index=11&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed financial statements for AN2 Therapeutics, Inc., including the balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with their accompanying notes. These statements provide a snapshot of the company's financial position and performance for the periods ended June 30, 2025, and December 31, 2024 (balance sheet), and for the three and six months ended June 30, 2025 and 2024 (operations, equity, cash flows) [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific points in time | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | | **Assets** | | | | Cash and cash equivalents | $18,220 | $21,351 | | Short-term investments | $44,696 | $62,267 | | Prepaid expenses and other current assets | $4,608 | $2,644 | | Total current assets | $67,524 | $86,262 | | Long-term investments | $8,301 | $5,021 | | Other assets, long-term | $0 | $804 | | **Total assets** | **$75,825** | **$92,087** | | **Liabilities** | | | | Accounts payable | $2,113 | $3,317 | | Accrued compensation | $1,199 | $1,676 | | Accrued liabilities | $2,954 | $4,454 | | Other current liabilities | $717 | $791 | | **Total liabilities** | **$6,983** | **$10,238** | | **Stockholders' Equity** | | | | Additional paid-in capital | $291,704 | $287,594 | | Accumulated other comprehensive gain | $25 | $31 | | Accumulated deficit | $(222,887) | $(205,776) | | **Total stockholders' equity** | **$68,842** | **$81,849** | | **Total liabilities and stockholders' equity** | **$75,825** | **$92,087** | [Condensed Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section presents the company's revenues, expenses, and net loss over specific reporting periods, along with comprehensive loss | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Research and development | $3,200 | $12,149 | -$8,949 | | General and administrative | $4,016 | $3,731 | +$285 | | Total operating expenses | $7,216 | $15,880 | -$8,664 | | Loss from operations | $(7,216) | $(15,880) | +$8,664 | | Interest income | $754 | $1,445 | -$691 | | Net loss attributable to common stockholders | $(6,462) | $(14,435) | +$7,973 | | Net loss per share, basic and diluted | $(0.21) | $(0.48) | +$0.27 | | Comprehensive loss | $(6,485) | $(14,515) | +$8,030 | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Research and development | $10,890 | $26,804 | -$15,914 | | General and administrative | $7,863 | $7,372 | +$491 | | Total operating expenses | $18,753 | $34,176 | -$15,423 | | Loss from operations | $(18,753) | $(34,176) | +$15,423 | | Interest income | $1,642 | $3,123 | -$1,481 | | Other income | $0 | $1 | -$1 | | Net loss attributable to common stockholders | $(17,111) | $(31,052) | +$13,941 | | Net loss per share, basic and diluted | $(0.57) | $(1.04) | +$0.47 | | Comprehensive loss | $(17,117) | $(31,354) | +$14,237 | [Condensed Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit, over time | Metric | Balances at Dec 31, 2024 (in thousands) | Balances at June 30, 2025 (in thousands) | | :-------------------------------------- | :-------------------------------------- | :------------------------------------- | | Common Stock Shares | 29,919,634 | 27,376,461 | | Additional Paid-In Capital | $287,594 | $291,704 | | Accumulated Other Comprehensive Gain (Loss) | $31 | $25 | | Accumulated Deficit | $(205,776) | $(222,887) | | Total Stockholders' Equity | $81,849 | $68,842 | | Metric | Balances at Dec 31, 2023 (in thousands) | Balances at June 30, 2024 (in thousands) | | :-------------------------------------- | :-------------------------------------- | :------------------------------------- | | Common Stock Shares | 29,741,445 | 29,829,040 | | Additional Paid-In Capital | $278,881 | $283,888 | | Accumulated Other Comprehensive Gain (Loss) | $275 | $(27) | | Accumulated Deficit | $(154,455) | $(185,507) | | Total Stockholders' Equity | $124,701 | $98,354 | [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities for the specified periods | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :---------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Net cash used in operating activities | $(18,223) | $(31,977) | +$13,754 | | Net cash provided by investing activities | $15,027 | $42,750 | -$27,723 | | Net cash provided by financing activities | $65 | $349 | -$284 | | Net (decrease) increase in cash and cash equivalents | $(3,131) | $11,122 | -$14,253 | | Cash and cash equivalents at end of period | $18,220 | $26,769 | -$8,549 | [Notes to Unaudited Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) This section provides detailed notes to the unaudited condensed financial statements, offering explanations and additional information on the company's organization, significant accounting policies, fair value measurements, funding arrangements, collaboration agreements, balance sheet components, commitments, equity, stock-based compensation, net loss per share, related party transactions, and segment reporting [Note 1. Organization and Description of the Business](index=10&type=section&id=Note%201.%20Organization%20and%20Description%20of%20the%20Business) This note describes AN2 Therapeutics as a biopharmaceutical company focused on developing novel small molecule therapeutics from its boron chemistry platform - AN2 Therapeutics is a biopharmaceutical company developing novel small molecule therapeutics from its boron chemistry platform[28](index=28&type=chunk) - The company's pipeline includes compounds for Chagas disease, melioidosis, non-tuberculous mycobacterial (NTM) lung disease, oncology, and infectious diseases[28](index=28&type=chunk) - The company has primarily devoted resources to **research and development**, business planning, hiring, and capital raising since launching operations in November 2019[29](index=29&type=chunk) [Note 2. Basis of Presentation and Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the basis for financial statement preparation, significant accounting policies, and the company's going concern assessment - The company's unaudited interim condensed financial statements are prepared in accordance with U.S. GAAP and reflect normal recurring adjustments[33](index=33&type=chunk) - The company has incurred **significant losses** and **negative net cash flows** from operations, with an **accumulated deficit of $222.9 million** as of June 30, 2025[34](index=34&type=chunk) - Management believes existing **cash, cash equivalents, and investments ($71.2 million** as of June 30, 2025) will fund operations for at least **12 months** from the issuance date of these statements[35](index=35&type=chunk) - All **research and development costs**, including third-party work, are expensed as incurred[39](index=39&type=chunk) - The company operates and manages its business as **one reportable and operating segment**[37](index=37&type=chunk) - The company adopted ASU 2020-06 on June 17, 2025, using the modified retrospective method in connection with accounting for pre-funded warrant exchange, with no impact on financial statements or net loss per share[61](index=61&type=chunk) [Note 3. Fair Value Measurements](index=17&type=section&id=Note%203.%20Fair%20Value%20Measurements) This note details the fair value hierarchy applied to the company's financial assets and liabilities, primarily cash, cash equivalents, and investments - The company records certain financial assets and liabilities at **fair value**, primarily **cash, cash equivalents, and investments**[66](index=66&type=chunk) | Asset Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------- | :----------------------------- | :------------------------------- | | Cash equivalents | $5,755 | $10,127 | | Short-term investments | $44,696 | $62,267 | | Long-term investments | $8,301 | $5,021 | | **Total Investments** | **$58,752** | **$77,415** | - Money market funds and some U.S. Treasury securities are classified as Level 1, while commercial paper, corporate debt, U.S. government agency securities, and other U.S. Treasury securities are Level 2[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) [Note 4. Funding Arrangements](index=19&type=section&id=Note%204.%20Funding%20Arrangements) This note describes the company's external funding sources, including government contracts and grants, and their impact on recognized income - The NIAID contract **funding was reduced by $9.0 million** to a cumulative total of **$9.3 million** due to a U.S. government cost efficiency initiative in June 2025[75](index=75&type=chunk) | Funding Source | Three Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------- | :-------------------------------------------- | :------------------------------------------ | :-------------------------------------------- | :------------------------------------------ | | NIAID Contract | $3,200 | $3,200 | $0 | $0 | | UGARF Grant | $0 | $0 | $0 | $100 | | BMGF Grants | $500 | $900 | $500 | $900 | | **Total Income Recognized** | **$3,700** | **$4,100** | **$500** | **$1,000** | - The company is engaged with federal agencies to fund a Phase 2 proof-of-concept clinical trial for acute melioidosis following the completion of pivotal work under the NIAID contract[53](index=53&type=chunk) [Note 5. Collaboration, License and Other Agreements](index=21&type=section&id=Note%205.%20Collaboration,%20License%20and%20Other%20Agreements) This note outlines key agreements, including exclusive licenses and development rights, and their potential milestone and royalty payments - The Anacor License grants exclusive worldwide rights for certain compounds, with potential aggregate maximum payments of **$2.0 million** for development milestones and **$125.0 million** for commercial/sales milestones, plus tiered sales royalties[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - The Brii Biosciences Agreement grants exclusive development and commercialization rights in China, Hong Kong, Taiwan, and Macau, with potential aggregate milestones of **$15.0 million** for development/regulatory and **$150.0 million** for commercial, plus tiered sales-based royalties[87](index=87&type=chunk) - No development, regulatory, commercial, sales milestones, or royalty payments were recognized during the three and six months ended June 30, 2025 and 2024[86](index=86&type=chunk) [Note 6. Balance Sheet Components](index=22&type=section&id=Note%206.%20Balance%20Sheet%20Components) This note provides a detailed breakdown of specific accrued liabilities and other components within the balance sheet | Accrued Liability | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change | | :---------------------------------- | :----------------------------- | :------------------------------- | :----- | | Accrued research and development-related expenses | $1,513 | $1,974 | -$461 | | Accrued clinical trial-related expenses | $733 | $2,377 | -$1,644 | | Accrued professional services expenses | $666 | $52 | +$614 | | Other | $42 | $51 | -$9 | | **Total accrued liabilities** | **$2,954** | **$4,454** | **-$1,500** | [Note 7. Commitments and Contingencies](index=22&type=section&id=Note%207.%20Commitments%20and%20Contingencies) This note discloses the company's legal proceedings, contractual commitments, and global access obligations for public health programs - The company was **not subject to any material legal proceedings** as of June 30, 2025, and December 31, 2024[89](index=89&type=chunk) - The Adjuvant Global Health Agreement commits the company to support the creation of innovative and affordable drugs for public health programs in Low and Lower-Middle-Income Countries, specifically for melioidosis and tuberculosis[91](index=91&type=chunk)[92](index=92&type=chunk) - These global access commitments remain in effect until Adjuvant ceases to be a shareholder or **ten years** following epetraborole approval for melioidosis[92](index=92&type=chunk) [Note 8. Equity](index=23&type=section&id=Note%208.%20Equity) This note details the company's authorized and outstanding equity, including common stock, preferred stock, and recent pre-funded warrant exchanges - The company's certificate of incorporation authorizes up to **500,000,000 shares** of common stock and **10,000,000 shares** of preferred stock, with no preferred shares outstanding[94](index=94&type=chunk)[99](index=99&type=chunk) - In June 2025, the company entered into exchange agreements with existing stockholders to exchange **2,952,000 shares** of common stock for pre-funded warrants[101](index=101&type=chunk) - The exchange was accounted for as an equity-for-equity exchange with no cash consideration and no gain or loss recognized, meeting equity classification criteria under ASC 815-40[103](index=103&type=chunk)[104](index=104&type=chunk) - As of June 30, 2025, **2,952,000 shares** under warrants remained outstanding for EPS computation and were unexercised[105](index=105&type=chunk) | Shares Reserved for Future Issuance | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | Stock options, issued and outstanding | 5,890,920 | 4,890,843 | | Pre-funded warrants | 2,952,000 | — | | Unvested restricted stock units | 927,468 | 516,511 | | ESPP, authorized for future issuance | 820,130 | 563,731 | | Stock options, authorized for future issuance | 431,562 | 859,841 | | **Total** | **11,022,080** | **6,830,926** | [Note 9. Equity Incentive Plan and Stock-Based Compensation](index=25&type=section&id=Note%209.%20Equity%20Incentive%20Plan%20and%20Stock-Based%20Compensation) This note describes the company's equity incentive plan, stock-based compensation expenses, and unrecognized compensation costs - The 2022 Equity Incentive Plan allows for various equity awards, with **431,562 shares** of common stock remaining available for future issuance as of June 30, 2025[106](index=106&type=chunk)[109](index=109&type=chunk) | Expense Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Research and development expenses | $1,005 | $1,170 | -$165 | | General and administrative expenses | $993 | $1,101 | -$108 | | **Total Stock-Based Compensation** | **$1,998** | **$2,271** | **-$273 (-12%)** | | Expense Category | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Research and development expenses | $1,870 | $2,368 | -$498 | | General and administrative expenses | $2,175 | $2,288 | -$113 | | **Total Stock-Based Compensation** | **$4,045** | **$4,656** | **-$611 (-13%)** | - Unrecognized **stock-based compensation expense was $6.5 million** for unvested stock options (weighted-average period of **2.2 years**) and **$1.2 million** for unvested RSUs (weighted-average period of **2.8 years**) as of June 30, 2025[113](index=113&type=chunk)[115](index=115&type=chunk) [Note 10. Net Loss Per Share](index=28&type=section&id=Note%2010.%20Net%20Loss%20Per%20Share) This note explains the calculation of basic and diluted net loss per share, noting that potentially dilutive securities are anti-dilutive due to the company's loss position | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------------------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net loss attributable to common stockholders (in thousands) | $(6,462) | $(14,435) | $(17,111) | $(31,052) | | Weighted-average common shares outstanding, basic and diluted | 30,172,328 | 29,824,725 | 30,113,321 | 29,794,001 | | Net loss per share, basic and diluted | $(0.21) | $(0.48) | $(0.57) | $(1.04) | - Basic and diluted **net loss per share** are the same for all periods due to the company being in a **loss position**, making potentially dilutive securities anti-dilutive[59](index=59&type=chunk)[120](index=120&type=chunk) [Note 11. Related Party Transactions](index=28&type=section&id=Note%2011.%20Related%20Party%20Transactions) This note discloses any material transactions with related parties during the reporting periods - No additional **material related party transactions** occurred during the six months ended June 30, 2025, other than those disclosed in Note 8[121](index=121&type=chunk) - No **material related party transactions** occurred during the six months ended June 30, 2024[121](index=121&type=chunk) [Note 12. Segment Reporting](index=29&type=section&id=Note%2012.%20Segment%20Reporting) This note clarifies that the company operates and manages its business as a single reportable and operating segment, detailing R&D expense categories - The company operates and manages its business as **one reportable and operating segment**[122](index=122&type=chunk) | R&D Expense Category | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :---------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Other external research and development | $3,846 | $4,161 | -$315 | | Consulting and outside services | $954 | $2,856 | -$1,902 | | Clinical trials expenses | $895 | $10,442 | -$9,547 | | **Total external R&D expenses** | **$5,695** | **$17,459** | **-$11,764** | | Personnel-related expenses | $5,195 | $9,345 | -$4,150 | | **Total research and development expenses** | **$10,890** | **$26,804** | **-$15,914** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three and six months ended June 30, 2025 and 2024. It covers the company's business overview, key operating expenses, detailed financial comparisons, liquidity, capital resources, and critical accounting policies. The discussion highlights significant reductions in net loss and R&D expenses, ongoing product development, and the company's financial runway [Overview](index=30&type=section&id=Overview) This section provides a high-level summary of AN2 Therapeutics' business, pipeline developments, recent workforce reduction, and key financial metrics - AN2 Therapeutics is a biopharmaceutical company focused on discovering and developing novel small molecule therapeutics from its boron chemistry platform, with a pipeline for Chagas disease, melioidosis, NTM lung disease, oncology, and infectious diseases[127](index=127&type=chunk) - Initiated Phase 1 start-up activities for AN2-502998 for chronic Chagas disease in May 2025, with dosing of the first Single Ascending Dose cohort completed in August 2025. Anticipates Phase 1 completion in H2 2025 and Phase 2 initiation in 2026[128](index=128&type=chunk) - Completed enrollment in a **200-patient observational trial** for acute melioidosis in October 2024, with key insights announced in June 2025 reinforcing high mortality despite standard of care. Discussions are underway with the U.S. government to fund Phase 2 development[130](index=130&type=chunk) - Announced a **reduction of approximately 50%** of its workforce in August 2024, incurring **$2.2 million** in severance and other charges, to extend operating capital following the discontinuation of the EBO-301 study[132](index=132&type=chunk) | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :------- | :------------------------------------------- | :------------------------------------------- | | Net Loss | $(17.1) | $(31.1) | | Accumulated Deficit (as of June 30, 2025) | $(222.9) | N/A | | Cash, Cash Equivalents, and Investments (as of June 30, 2025) | $71.2 | N/A | [Components of Our Operating Results](index=32&type=section&id=Components%20of%20Our%20Operating%20Results) This section explains the primary drivers of the company's operating expenses and income, including research and development, general and administrative, and interest income - **Research and development expenses**, including third-party fees and personnel costs, are expensed as incurred and are expected to **increase substantially** as product candidates advance through clinical trials[140](index=140&type=chunk)[141](index=141&type=chunk) - **General and administrative expenses**, primarily payroll and professional services, are expected to **increase** due to legal, accounting, regulatory, and investor relations costs associated with operating as a public company[142](index=142&type=chunk) - **Interest income** is derived from **cash, cash equivalents, and investments**, while other income relates to foreign currency fluctuations[143](index=143&type=chunk)[144](index=144&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This section discusses the company's financial performance by comparing key metrics across different reporting periods [Comparison of the Three Months Ended June 30, 2025 and 2024](index=33&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) This section analyzes the financial performance for the three-month periods, highlighting changes in operating expenses, interest income, and net loss | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | % Change (YoY) | | :-------------------------- | :--------------------- | :--------------------- | :----------- | :------------- | | Research and development | $3,200 | $12,149 | $(8,949) | (74%) | | General and administrative | $4,016 | $3,731 | $285 | 8% | | Total operating expenses | $7,216 | $15,880 | $(8,664) | (55%) | | Loss from operations | $(7,216) | $(15,880) | $8,664 | (55%) | | Interest income | $754 | $1,445 | $(691) | (48%) | | Net loss | $(6,462) | $(14,435) | $7,973 | (55%) | - The **$8.9 million decrease in R&D expenses** was primarily due to a **$4.3 million decrease** in clinical trial expenses (EBO-301 termination), a **$1.8 million decrease** in CMC expenses, and a **$1.8 million decrease** in personnel-related expenses (restructuring activities), partially offset by a **$0.7 million increase** in preclinical and research study expenses[146](index=146&type=chunk) - Reimbursement of operating expenses from **funding arrangements increased from $0.5 million** in Q2 2024 to **$3.7 million** in Q2 2025[146](index=146&type=chunk) - **Interest income decreased by $0.6 million** due to lower **cash, cash equivalents, and investment balances** and lower interest rates[149](index=149&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=35&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) This section analyzes the financial performance for the six-month periods, highlighting changes in operating expenses, interest income, and net loss | Metric | H1 2025 (in thousands) | H1 2024 (in thousands) | Change (YoY) | % Change (YoY) | | :-------------------------- | :--------------------- | :--------------------- | :----------- | :------------- | | Research and development | $10,890 | $26,804 | $(15,914) | (59%) | | General and administrative | $7,863 | $7,372 | $491 | 7% | | Total operating expenses | $18,753 | $34,176 | $(15,423) | (45%) | | Loss from operations | $(18,753) | $(34,176) | $15,423 | (45%) | | Interest income | $1,642 | $3,123 | $(1,481) | (47%) | | Net loss | $(17,111) | $(31,052) | $13,941 | (45%) | - The **$15.9 million decrease in R&D expenses** was primarily due to a **$9.6 million decrease** in clinical trials expenses (EBO-301 termination) and a **$4.2 million decrease** in personnel-related expenses (restructuring activities), partially offset by a **$2.0 million increase** in preclinical and research study expenses[151](index=151&type=chunk) - Reimbursement of operating expenses from **funding arrangements increased from $1.0 million** in H1 2024 to **$4.1 million** in H1 2025[151](index=151&type=chunk) - **Interest income decreased by $1.5 million** due to lower **cash, cash equivalents, and investment balances** and lower interest rates[154](index=154&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its short-term and long-term financial obligations and its sources of funding [Sources of Liquidity](index=36&type=section&id=Sources%20of%20Liquidity) This section details the company's historical funding sources and current cash position, assessing its ability to fund operations for the foreseeable future - The company has incurred **net losses** since inception, with **$17.1 million** for H1 2025 and an **accumulated deficit of $222.9 million** as of June 30, 2025[155](index=155&type=chunk) - As of June 30, 2025, **cash, cash equivalents, and investments totaled $71.2 million**, believed to be sufficient to fund operations for at least **12 months**[155](index=155&type=chunk) - Operations have been primarily funded through an Underwritten Offering (**$65.5 million** net), ATM Offering (**$19.1 million** net), IPO (**$70.4 million** net), and private placements of redeemable convertible preferred stock (**$91.6 million**)[156](index=156&type=chunk) [Future Funding Requirements](index=36&type=section&id=Future%20Funding%20Requirements) This section outlines the company's anticipated capital needs, expected negative cash flows, and strategies for securing future financing - The company does not have any products approved for sale and does not expect meaningful revenue until regulatory approval and commercialization of product candidates[157](index=157&type=chunk) - **Negative cash flows** are expected to **increase significantly** as product candidates advance through clinical development, regulatory approval, and commercialization[157](index=157&type=chunk) - Future **cash needs** are expected to be financed through public or private equity offerings or debt financings, with no assurance of availability on reasonable terms[159](index=159&type=chunk) - Future capital requirements depend on factors such as the scope, timing, and costs of preclinical/clinical development, regulatory approvals, manufacturing, commercialization activities, and intellectual property maintenance[160](index=160&type=chunk)[161](index=161&type=chunk) [Summary Statements of Cash Flows](index=38&type=section&id=Summary%20Statements%20of%20Cash%20Flows) This section provides a summary of cash flow changes across operating, investing, and financing activities, explaining key drivers of these movements | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :---------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Net cash used in operating activities | $(18,223) | $(31,977) | +$13,754 | | Net cash provided by investing activities | $15,027 | $42,750 | -$27,723 | | Net cash provided by financing activities | $65 | $349 | -$284 | | Net (decrease) increase in cash and cash equivalents | $(3,131) | $11,122 | -$14,253 | - **Net cash used in operating activities decreased by $13.754 million** YoY, primarily due to a **lower net loss** and a smaller **decrease** in net operating assets and liabilities, partially offset by lower non-cash charges[166](index=166&type=chunk)[167](index=167&type=chunk) - **Net cash provided by investing activities decreased by $27.723 million** YoY, mainly due to lower proceeds from maturities of investments and higher purchases of investments[168](index=168&type=chunk)[169](index=169&type=chunk) - **Net cash provided by financing activities decreased by $0.284 million** YoY, primarily due to lower proceeds from the exercise of stock options and ESPP[170](index=170&type=chunk)[171](index=171&type=chunk) [Contractual Obligations and Commitments](index=39&type=section&id=Contractual%20Obligations%20and%20Commitments) This section describes the company's significant contractual obligations, including license agreements and third-party service contracts - The company has an exclusive worldwide license agreement with Anacor, involving potential development milestones up to **$2.0 million**, commercial/sales milestones up to **$125.0 million**, and tiered sales royalties[172](index=172&type=chunk) - The company enters into contracts with third-party organizations for preclinical/nonclinical studies, clinical trials, manufacturing, and other services, which generally allow for termination after notice, making non-cancelable obligations immaterial[173](index=173&type=chunk) [Recent Accounting Pronouncements](index=39&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to detailed disclosures on recently adopted accounting standards and their impact on the financial statements - Refers to "Note 2—Basis of Presentation and Summary of Significant Accounting Policies" for details on recently adopted accounting pronouncements[174](index=174&type=chunk) [Critical Accounting Policies, Significant Judgements, and Use of Estimates](index=40&type=section&id=Critical%20Accounting%20Policies,%20Significant%20Judgements,%20and%20Use%20of%20Estimates) This section highlights the key accounting policies and estimates that require significant management judgment in preparing the financial statements - The preparation of financial statements requires judgments, assumptions, and estimates, particularly for research and development accruals and stock-based compensation[175](index=175&type=chunk) - There have been no **material changes** to critical accounting policies and estimates through June 30, 2025, from those discussed in the Annual Report on Form 10-K for 2024[175](index=175&type=chunk) [JOBS Act Accounting Election](index=40&type=section&id=JOBS%20Act%20Accounting%20Election) This section explains the company's status as an emerging growth company and its election to use extended transition periods for new accounting standards - As an "**emerging growth company**" (EGC), the company has elected to use the extended transition period for complying with new or revised accounting standards, allowing it to delay adoption until such standards apply to private companies[176](index=176&type=chunk) - The company intends to rely on other JOBS Act exemptions, including not complying with auditor attestation requirements of Section 404(b) of Sarbanes-Oxley[177](index=177&type=chunk) - The company will remain an EGC until the earliest of: annual revenues > **$1.235 billion**, qualifying as a "large accelerated filer," issuing > **$1.0 billion** in non-convertible debt over **three years**, or the fiscal year ending after the fifth anniversary of its IPO (March 2027)[178](index=178&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section assesses the company's exposure to market risks, primarily interest rate sensitivity and foreign currency fluctuations, and their potential financial impact - As of June 30, 2025, the company had **$71.2 million** in **cash, cash equivalents, and investments**, primarily in money market funds and marketable securities (investment grade, short/long-term fixed income, and government securities)[180](index=180&type=chunk) - A hypothetical **10% relative change** in interest rates would not have a **material impact** on the financial statements for the periods presented[182](index=182&type=chunk) - The company was **not exposed to material foreign currency risk** during the quarter ended June 30, 2025, and believes inflation has not had a **material effect** on its unaudited interim condensed financial statements[183](index=183&type=chunk)[184](index=184&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and procedures, addressing identified material weaknesses in internal control over financial reporting - As of June 30, 2025, the company's disclosure controls and procedures were **not effective** due to **material weaknesses in internal control over financial reporting**[187](index=187&type=chunk) - Identified **material weaknesses** include: (i) lack of sufficient resources with appropriate accounting knowledge and experience, leading to insufficient segregation of duties; (ii) **ineffective controls** over the period-end financial reporting process; and (iii) **ineffective IT general controls** for relevant information systems[190](index=190&type=chunk)[191](index=191&type=chunk) - Despite the **material weaknesses**, management determined that the condensed financial statements were prepared in accordance with U.S. GAAP[188](index=188&type=chunk) - No changes in **internal control over financial reporting materially affected**, or are reasonably likely to materially affect, **internal control over financial reporting** during the three months ended June 30, 2025[192](index=192&type=chunk) [PART II. OTHER INFORMATION](index=44&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides additional information beyond the financial statements, covering legal proceedings, risk factors, equity sales, and other disclosures [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms that the company was not subject to any material legal proceedings during the reported periods - The company was **not subject to any material legal proceedings** as of June 30, 2025, and December 31, 2024[89](index=89&type=chunk)[196](index=196&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section details the significant risks associated with investing in the company, encompassing financial, operational, regulatory, and market-related uncertainties [Risk Factors Summary](index=44&type=section&id=Risk%20Factors%20Summary) This section provides a concise overview of the primary risks associated with investing in the company's common stock, including financial and operational challenges - Investing in the company's common stock involves a **high degree of risk** due to numerous uncertainties[197](index=197&type=chunk)[198](index=198&type=chunk) - Limited operating history and **no approved products**, leading to **significant losses** and **uncertain profitability** - **Uncertainty** of expected benefits from business restructuring and workforce reduction - **Requirement for substantial additional funding**, with potential delays or cessation of development if capital is unavailable - **Risk of failure** to obtain regulatory approval or successfully commercialize product candidates - **Reliance on third parties** for preclinical studies and clinical trials - **Substantial competition** in the biopharmaceutical industry - **Material weaknesses in internal control over financial reporting** - Dependence on licenses from third parties for technology and product candidates - Challenges in obtaining and maintaining intellectual property protection - **Volatility** in the trading price of common stock [Risks Related to Our Financial Position and Capital Needs](index=46&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Needs) This section outlines risks stemming from the company's limited operating history, ongoing losses, substantial funding requirements, and potential capital raising challenges - The company is a clinical-stage biopharmaceutical company with a limited operating history, **no approved products**, and has incurred **significant losses** since inception, with an **accumulated deficit of $222.9 million** as of June 30, 2025[199](index=199&type=chunk)[202](index=202&type=chunk) - The company expects to incur **significant expenses and operating losses** for several years as it advances product candidates, seeks regulatory approval, and prepares for commercialization[203](index=203&type=chunk)[206](index=206&type=chunk) - **Substantial additional funding** is required for ongoing operations and planned activities, and **failure to raise capital** could force delays or cessation of product development programs[215](index=215&type=chunk)[216](index=216&type=chunk) - Raising additional capital may **dilute stockholders**, **restrict operations**, or require **relinquishing rights** to technologies or product candidates[217](index=217&type=chunk)[219](index=219&type=chunk) - The company has a **contractual commitment** under the Global Health Agreement with Adjuvant to develop affordable drugs for melioidosis and tuberculosis in at-risk countries, relying on **non-dilutive funding** which may not be consistently available[220](index=220&type=chunk)[221](index=221&type=chunk) [Risks Related to the Development of Our Product Candidates](index=50&type=section&id=Risks%20Related%20to%20the%20Development%20of%20Our%20Product%20Candidates) This section details risks associated with the lengthy, expensive, and uncertain process of drug development, including clinical trial failures and regulatory delays - **Failure to obtain regulatory approval** and successfully commercialize product candidates, or **significant delays**, could prevent profitability. Drug development is **long, expensive, and uncertain**, with **high failure rates** in clinical trials[222](index=222&type=chunk)[223](index=223&type=chunk)[229](index=229&type=chunk) - Clinical trials may **fail to demonstrate safety and/or efficacy**, leading to additional costs, delays, or inability to complete development. **Undesirable side effects** could delay or prevent regulatory approval or limit commercial potential[231](index=231&type=chunk)[236](index=236&type=chunk) - **Delays or difficulties in patient enrollment** for clinical trials, especially for rare diseases like Chagas, could delay or prevent clinical development and regulatory approvals[246](index=246&type=chunk)[247](index=247&type=chunk)[250](index=250&type=chunk) - **Interim or preliminary clinical trial data may change** upon comprehensive review, and adverse differences between preliminary and final data could significantly harm business prospects[252](index=252&type=chunk)[253](index=253&type=chunk) - Data from clinical trials conducted outside the United States may **not be accepted by the FDA**, potentially requiring additional costly and time-consuming trials[255](index=255&type=chunk) [Risks Related to Our Dependence on Third Parties](index=60&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) This section highlights risks arising from the company's reliance on third-party organizations for preclinical studies, clinical trials, and manufacturing activities - The company **relies heavily on third parties** (CROs, CMOs, consultants) to conduct preclinical studies and clinical trials, reducing control over these activities but not relieving the company of its responsibilities[256](index=256&type=chunk)[257](index=257&type=chunk) - **Failure of third parties to meet deadlines**, adhere to protocols, or comply with regulatory requirements (e.g., GCPs) could delay or terminate clinical trials and regulatory approvals[258](index=258&type=chunk) - **Reliance on single-sourced third parties** for manufacturing product candidates increases the **risk of insufficient quantities or unacceptable costs**, potentially delaying or impairing development and commercialization efforts[261](index=261&type=chunk)[262](index=262&type=chunk) - Third-party manufacturing facilities must comply with **cGMP requirements** and be approved by regulatory authorities; **non-compliance** could lead to sanctions and supply disruptions[264](index=264&type=chunk)[265](index=265&type=chunk) [Risks Related to the Commercialization of Our Product Candidates](index=63&type=section&id=Risks%20Related%20to%20the%20Commercialization%20of%20Our%20Product%20Candidates) This section addresses risks concerning market acceptance, intense competition, lack of commercial infrastructure, reimbursement challenges, and product liability - Even if regulatory approval is obtained, product candidates may **fail to achieve market acceptance** by physicians, patients, and third-party payors, impacting commercial success[270](index=270&type=chunk)[271](index=271&type=chunk) - The company faces **substantial competition** from major pharmaceutical and biotechnology companies with greater resources and expertise, potentially leading to competitors commercializing products more successfully or earlier[273](index=273&type=chunk)[274](index=274&type=chunk) - The company **lacks a sales and marketing infrastructure** and limited experience in commercialization, requiring substantial resources or third-party agreements, which may not be successful or favorable[276](index=276&type=chunk)[278](index=278&type=chunk) - Coverage and **adequate reimbursement** from third-party payors may not be available for product candidates, making profitable sales difficult and impacting demand or pricing[279](index=279&type=chunk)[281](index=281&type=chunk) - **Product liability lawsuits** could result in substantial liabilities, reputational harm, and limit commercialization, with insurance coverage potentially inadequate[282](index=282&type=chunk)[283](index=283&type=chunk) - Marketing product candidates internationally involves **risks** such as differing regulatory requirements, economic instability, foreign currency fluctuations, and challenges in enforcing intellectual property rights[284](index=284&type=chunk)[285](index=285&type=chunk) [Risks Related to Our Business, Industry and Managing Our Growth](index=68&type=section&id=Risks%20Related%20to%20Our%20Business,%20Industry%20and%20Managing%20Our%20Growth) This section covers risks related to personnel retention, macroeconomic uncertainties, internal control weaknesses, and challenges in managing operational growth - The company operates with a small team and its future success depends on **retaining key executives** and **attracting/retaining qualified personnel**, with **intense competition** for talent in the biopharmaceutical industry[287](index=287&type=chunk)[288](index=288&type=chunk) - **Macroeconomic uncertainties**, including inflation, higher interest rates, and supply chain disruptions, may **adversely impact** the business and financial condition[290](index=290&type=chunk) - **Material weaknesses in internal control over financial reporting persist**, potentially inhibiting accurate financial reporting and leading to investor **loss of confidence** or regulatory sanctions[291](index=291&type=chunk)[293](index=293&type=chunk) - Future **growth in operations** (R&D, regulatory, sales/marketing) may be **difficult to manage** due to limited financial resources and management experience, potentially disrupting operations[294](index=294&type=chunk) - Future acquisitions or strategic collaborations could increase capital requirements, **dilute stockholders**, incur debt, or assume contingent liabilities, and divert management attention[295](index=295&type=chunk) [Risks Related to Our Intellectual Property](index=71&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section discusses risks concerning the company's ability to obtain, maintain, and enforce intellectual property protection, including patent and trade secret challenges - **Inability to obtain and maintain broad patent and intellectual property protection** for technology and product candidates could allow competitors to commercialize similar drugs, impairing the company's competitive advantage[297](index=297&type=chunk)[300](index=300&type=chunk) - Rights to develop and commercialize product candidates are largely subject to third-party licenses (e.g., Anacor), and **failure to comply with obligations** could lead to **loss of these critical rights**[301](index=301&type=chunk)[303](index=303&type=chunk) - The company may become involved in **expensive, time-consuming, and potentially unsuccessful lawsuits** to protect or enforce its intellectual property, diverting management attention and resources[309](index=309&type=chunk)[310](index=310&type=chunk) - Third parties may **allege infringement of their intellectual property rights**, potentially forcing the company to cease development/commercialization, obtain costly licenses, or pay substantial damages[311](index=311&type=chunk)[313](index=313&type=chunk) - Claims by third parties that the company or its employees misappropriated intellectual property or claiming ownership of the company's IP could lead to litigation, **loss of rights**, or personnel[314](index=314&type=chunk)[316](index=316&type=chunk) - **Trademarks may be infringed or challenged**, leading to rebranding costs, **loss of brand recognition**, and competitive disadvantage[317](index=317&type=chunk)[318](index=318&type=chunk) - **Failure to protect the confidentiality of proprietary information**, know-how, and trade secrets could **adversely affect** product candidate value and competitive position[320](index=320&type=chunk)[321](index=321&type=chunk) - **Inability to obtain patent term extension and data exclusivity** for product candidates could allow competitors to enter the market sooner, harming the business[323](index=323&type=chunk) - **Non-compliance with procedural requirements** for patent maintenance or challenges in foreign jurisdictions (e.g., Russia, EU Patent Package) could reduce or eliminate patent protection globally[324](index=324&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk)[330](index=330&type=chunk) [Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters](index=81&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20of%20Our%20Product%20Candidates%20and%20Other%20Legal%20Compliance%20Matters) This section details risks associated with obtaining and maintaining regulatory approvals, compliance with healthcare laws, and potential impacts of policy changes - **Failure or delays in obtaining required regulatory approvals** (e.g., FDA NDA) will prevent commercialization and **materially impair revenue generation**, as the process is lengthy, expensive, and uncertain[331](index=331&type=chunk)[335](index=335&type=chunk) - **Disruptions at regulatory agencies** (FDA, foreign authorities) due to funding shortages, staffing limitations, or global health concerns could delay product development, review, and approval[337](index=337&type=chunk)[338](index=338&type=chunk) - **Inability to obtain or maintain orphan drug designations** could prevent access to associated benefits, including market exclusivity, and may not effectively protect against competition[340](index=340&type=chunk)[341](index=341&type=chunk)[343](index=343&type=chunk)[344](index=344&type=chunk) - **Failure to utilize accelerated approval pathways** or delays in such processes could increase development costs and harm competitive position[346](index=346&type=chunk)[348](index=348&type=chunk) - **Failure to obtain regulatory approval in foreign jurisdictions** would prevent marketing in those territories, and U.S. approval does not guarantee foreign approval[350](index=350&type=chunk) - Even with regulatory approval, **ongoing regulation** of manufacturing, labeling, promotion, and adverse event reporting requires substantial resources, and **non-compliance** can lead to sanctions, product recalls, or withdrawal[351](index=351&type=chunk)[352](index=352&type=chunk) - **Strict enforcement against off-label promotion** by regulatory agencies could lead to **significant liability**, fines, and restrictions on promotional activities[355](index=355&type=chunk)[356](index=356&type=chunk) - **Misconduct by employees, contractors, or partners**, including **non-compliance** with regulatory standards or healthcare fraud and abuse laws, could result in **significant penalties**, reputational harm, and operational disruptions[357](index=357&type=chunk) - **Failure to comply with reporting and payment obligations** under U.S. governmental pricing programs (e.g., Medicaid Drug Rebate Program, Medicare Part D) could lead to civil monetary penalties and other liabilities[358](index=358&type=chunk) - Relationships with healthcare professionals and third-party payors are subject to anti-kickback, fraud and abuse, and transparency laws, with potential for **significant penalties for non-compliance**[360](index=360&type=chunk)[361](index=361&type=chunk) - **Changes in healthcare policies, laws, and regulations** (e.g., ACA, IRA, OBBBA) could impact the ability to obtain approval or commercialize product candidates, and affect drug pricing and reimbursement[362](index=362&type=chunk)[363](index=363&type=chunk)[364](index=364&type=chunk)[367](index=367&type=chunk) - **Non-compliance with privacy and data security laws** (e.g., HIPAA) could result in **significant fines, penalties**, enforcement actions, litigation, and reputational harm[368](index=368&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk) - **Compliance with U.S. and foreign export/import controls, sanctions, embargoes, anti-corruption, and anti-money laundering laws is critical**, with violations potentially leading to **substantial fines, penalties, and criminal liability**[371](index=371&type=chunk)[372](index=372&type=chunk)[374](index=374&type=chunk) [Risks Related to Ownership of Our Common Stock](index=93&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) This section outlines risks pertinent to common stock ownership, including ownership concentration, stock price volatility, anti-takeover provisions, and dividend policies - **Concentration of common stock ownership** among executive officers, directors, and principal stockholders may prevent new investors from influencing significant corporate decisions and matters requiring stockholder approval[375](index=375&type=chunk) - A **sale of a substantial number of common stock shares**, or the perception of such sales, could cause the stock price to decline[376](index=376&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk) - Provisions in corporate charter documents, Delaware law, and the adoption of a rights plan could make an acquisition of the company more difficult and may prevent attempts by stockholders to replace current management[381](index=381&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk) - The amended and restated certificate of incorporation designates the Court of Chancery of Delaware and federal district courts as **exclusive forums for disputes**, potentially limiting stockholders' ability to choose a favorable judicial forum[385](index=385&type=chunk)[386](index=386&type=chunk)[387](index=387&type=chunk) - Management has **broad discretion in using cash**, which may not align with investor preferences or increase investment value[388](index=388&type=chunk) - The company does **not anticipate paying cash dividends** in the foreseeable future, requiring stockholders to rely on capital appreciation for returns[390](index=390&type=chunk) - The ability to **use net operating loss (NOL) carryforwards** and other tax attributes may be limited due to "ownership changes" under U.S. tax law (Sections 382 and 383 of the Code)[391](index=391&type=chunk) [General Risk Factors](index=96&type=section&id=General%20Risk%20Factors) This section covers broad risks such as stock price volatility, public company costs, cybersecurity threats, and the implications of being an emerging growth company - The trading price of the common stock has been and may continue to be **volatile** due to various factors, including clinical trial results, regulatory developments, competition, and general economic conditions[392](index=392&type=chunk)[396](index=396&type=chunk) - **Lack of or unfavorable equity research analyst coverage** could lead to a decline in stock price and trading volume[395](index=395&type=chunk) - Operating as a public company incurs **significantly increased costs** and requires substantial management time for compliance initiatives (e.g., Sarbanes-Oxley Act, Nasdaq listing requirements)[397](index=397&type=chunk)[399](index=399&type=chunk) - **Significant disruptions of IT systems or cybersecurity incidents** could result in substantial financial, legal, regulatory, business, and reputational harm[401](index=401&type=chunk)[402](index=402&type=chunk)[404](index=404&type=chunk) - As an "**emerging growth company**," the company benefits from reduced disclosure and governance requirements, which may make its common stock less attractive to some investors[405](index=405&type=chunk)[406](index=406&type=chunk) - **Failure to adhere to Nasdaq listing requirements** could result in delisting, **adversely affecting stock price** and liquidity[407](index=407&type=chunk) - **Changes to U.S. and non-U.S. tax laws** (e.g., Tax Act, CARES Act, IRA, OBBBA) could **materially adversely affect** the company's financial position and increase compliance costs[408](index=408&type=chunk)[409](index=409&type=chunk) - **Indemnity provisions** in agreements expose the company to **substantial liability** for intellectual property infringement, data protection, and other losses[410](index=410&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=103&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on specific unregistered equity sales, including a pre-funded warrant exchange, and confirms no material change in IPO proceeds usage - On June 30, 2025, the company exchanged **152,000 shares** of common stock for a pre-funded warrant to acquire an equivalent number of shares, with an exercise price of **$0.00001 per share**[412](index=412&type=chunk)[413](index=413&type=chunk) - The pre-funded warrant was issued without registration, relying on the exemption from registration contained in Section 3(a)(9) of the Securities Act of 1933[414](index=414&type=chunk) - There has been **no material change** in the use of proceeds from the IPO as described in the final prospectus dated March 24, 2022[415](index=415&type=chunk) - The company made **no issuer purchases of equity securities** during the period[416](index=416&type=chunk) [Item 3. Defaults Upon Senior Securities](index=103&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there are no defaults upon senior securities - This item is not applicable, indicating **no defaults upon senior securities**[417](index=417&type=chunk) [Item 4. Mine Safety Disclosures](index=103&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section confirms that there are no mine safety disclosures - This item is not applicable, indicating **no mine safety disclosures**[418](index=418&type=chunk) [Item 5. Other Information](index=103&type=section&id=Item%205.%20Other%20Information) This section discloses Rule 10b5-1 trading arrangements adopted by certain entities associated with a company director - MGC Venture Partners 2018, LP adopted a Rule 10b5-1 trading arrangement on April 17, 2025, for the sale of up to **582,288 shares** of common stock until August 15, 2026[419](index=419&type=chunk) - MGC Venture Partners QP 2018, LP adopted a Rule 10b5-1 trading arrangement on April 17, 2025, for the sale of up to **652,573 shares** of common stock until August 15, 2026[420](index=420&type=chunk) - No other directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[421](index=421&type=chunk) [Item 6. Exhibits](index=105&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate documents and certifications - The section lists exhibits filed with the Form 10-Q, including corporate documents (Amended and Restated Certificate of Incorporation, Bylaws), the Rights Agreement, Form of Pre-Funded Warrant, and certifications (31.1, 31.2, 32.1, 32.2)[423](index=423&type=chunk)[424](index=424&type=chunk) - Inline XBRL documents are included for the cover page, condensed financial statements, and notes[424](index=424&type=chunk)[425](index=425&type=chunk) [Signatures](index=107&type=section&id=Signatures) This section formally certifies the report by the Chief Executive Officer and Chief Financial Officer - The report is signed by Eric Easom, Chief Executive Officer and Director, and Lucy O. Day, Chief Financial Officer, on August 12, 2025[430](index=430&type=chunk)[431](index=431&type=chunk)

Financial Performance - For the three months ended March 31, 2025, the net loss was $10.6 million, a decrease of 36% compared to a net loss of $16.6 million for the same period in 2024[137] - Net losses for the three months ended March 31, 2025, were $10.6 million, compared to $16.6 million for the same period in 2024, representing a 36% improvement[142] - Net cash used in operating activities was $10.6 million for the three months ended March 31, 2025, compared to $17.6 million for the same period in 2024, indicating a reduction of 40%[153][154] - Interest income decreased to $0.9 million for the three months ended March 31, 2025, down from $1.7 million in the same period of 2024, a decline of approximately 47%[141] Research and Development - Research and development expenses decreased by 48% to $7.7 million for the three months ended March 31, 2025, down from $14.7 million in 2024[138] - The company completed enrollment in a 200-patient observational trial for epetraborole in October 2024, with topline data expected in the second quarter of 2025[123] - The Phase 1 study for AN2-502998 is expected to be completed in the second half of 2025, with the compound showing curative activity in preclinical studies[121] - The company anticipates advancing its first oncology compound(s) into development later this year, with potential clinical proof of concept within the current cash runway[122] Financial Position - As of March 31, 2025, the company had cash, cash equivalents, and investments totaling $78.5 million, expected to fund operations for at least twelve months[128] - The company has an accumulated deficit of $216.4 million as of March 31, 2025[127] - As of March 31, 2025, the company had cash, cash equivalents, and investments primarily in investment-grade securities totaling $78.5 million, with exposure to interest rate risk[166] Operating Costs and Future Outlook - General and administrative expenses increased by 6% to $3.8 million for the three months ended March 31, 2025, compared to $3.6 million in 2024[140] - The company expects to incur substantial additional losses in future periods and does not anticipate generating meaningful revenue until regulatory approval and commercialization of product candidates occur[144] - Future funding requirements are expected to be significant, with the company relying on public or private equity offerings or debt financings to meet cash needs[146] - The company plans to continue using third-party service providers for preclinical and clinical development, which will increase operating costs if regulatory approval is obtained[130] Inflation Impact - Inflation has increased labor and operating costs, including clinical trial, non-clinical study, and manufacturing costs[170] - The company believes inflation has not had a material effect on its unaudited interim condensed financial statements[170] Contractual Obligations - The company has contractual obligations including a $2.0 million upfront payment to Anacor and potential milestone payments totaling up to $127 million[158] Cash Flow from Activities - Cash provided by investing activities was $9.2 million for the three months ended March 31, 2025, down from $26.3 million in the same period of 2024[155] - The company generated approximately $65.5 million from an Underwritten Offering in August 2023 and $19.1 million from an ATM Offering in June 2023[143]

Summary of AN2 Therapeutics (ANTX) Conference Call Company Overview - **Company**: AN2 Therapeutics (ANTX) - **Focus**: Development of novel therapeutics for infectious diseases and oncology Key Points Novel Drug Development - AN2 Therapeutics is developing two novel compounds targeting previously unaddressed areas in human medicine: one antibacterial and one antiparasitic [1] - The company is leveraging boron chemistry to expedite drug development, which has favorable pharmacokinetic properties and operates in a less crowded intellectual property space [1][2] Chagas Disease Treatment - The oral candidate AN2502998 is in phase one trials, targeting Chagas disease, which affects approximately seven million people globally, with significant cardiac complications in about 30% of patients [6][8] - The drug is expected to provide a cure for chronic Chagas disease, with a potential market opportunity estimated at over one billion dollars [15] - The company plans to implement a "test and treat" strategy to increase awareness and diagnosis of Chagas disease in the U.S. [17] Regulatory Path and Clinical Trials - AN2 Therapeutics anticipates a streamlined regulatory path due to the high unmet need for Chagas disease treatment, planning a Phase II and pivotal Phase III trial [19][21] - The company has a contract with the NIH for $18 million to support a phase two proof of concept study for melioidosis, a serious infectious disease with high mortality rates [25][26] Oncology Programs - AN2 is entering the oncology space with two targets utilizing boron chemistry, focusing on ENPP1, which is involved in cancer metastasis, and PI3 kinase alpha, which has significant competition [40][41] - The company believes it can develop best-in-class compounds with unique binding properties and a strong intellectual property position [46][48] Market Potential and Competitive Landscape - The market for abscessus, a type of NTM infection, is estimated to be a multibillion-dollar opportunity, with a significant patient population in the U.S. and Japan [34] - AN2 aims to differentiate its oncology drugs through unique chemistry and a strong IP position, avoiding crowded spaces with overlapping structures [47][48] Financial Position - The company has sufficient cash reserves to fund operations and development through 2028, allowing for multiple avenues of growth despite recent setbacks in NTM drug development [48] Additional Insights - The company emphasizes the importance of addressing neglected tropical diseases and the potential for significant patient impact alongside commercial opportunities [9][29] - AN2 is committed to advancing its drug candidates quickly, with plans for rapid clinical trials and a focus on patient outcomes [14][20][37]

Financial Performance - The company reported a net loss of $51.3 million for the year ended December 31, 2024, compared to a net loss of $64.7 million for 2023, resulting in an accumulated deficit of $205.8 million[134]. - The company expects to incur significant expenses and operating losses over the next several years as it continues its research and development efforts[134]. - The company anticipates substantial additional funding will be required to meet its financial needs and pursue business objectives[149]. - As of December 31, 2024, the company had federal net operating loss carryforwards of approximately $81.3 million and state net operating loss carryforwards of approximately $166.3 million[322]. - The company does not expect to pay any cash dividends on its common stock in the foreseeable future, relying instead on capital appreciation for returns[321]. - The company is incurring significantly increased costs due to compliance with U.S. public company regulations, which may affect financial performance[327]. - The company has broad discretion in the use of its cash, which could lead to financial losses if not applied effectively[319]. - The company’s ability to utilize net operating loss carryforwards may be limited by ownership changes, affecting future tax liabilities[322]. Research and Development - The Phase 2 part of the EBO-301 study demonstrated a PRO-based clinical response rate of 39.5% for epetraborole + optimized background regimen (OBR) compared to 25.0% for placebo + OBR, with a treatment difference of 13.9%[133]. - The company plans to transition from a research and development focus to supporting commercial activities, which may pose challenges[142]. - The company may defer or discontinue development of epetraborole based on further FDA feedback or data review[164]. - The success of product candidates depends on timely completion of clinical trials and obtaining regulatory approvals[157]. - There is a high failure rate for product candidates in clinical trials, with significant setbacks possible even after promising results in earlier stages[162]. - The company is developing product candidates to treat bacterial infections, but the potential for bacteria to develop resistance could impact revenue potential[169]. - Patient enrollment in clinical trials is critical, and challenges in recruiting eligible patients could lead to significant delays and increased development costs[180]. - The company may face difficulties in enrolling patients for trials targeting rare diseases, which could hinder clinical development[181]. - The company is focusing on discovering and commercializing a portfolio of product candidates targeting diseases with high unmet needs, utilizing a targeted-design drug discovery platform[176]. Regulatory and Compliance Risks - The company may face delays in obtaining regulatory approvals, which would materially impair its ability to generate revenue[135]. - Regulatory authorities may impose additional requirements or restrictions on approved product candidates, affecting market acceptance and commercialization[174]. - The lengthy and unpredictable nature of the regulatory approval process may significantly harm the company's business and growth prospects[266]. - The FDA must approve any proprietary names for product candidates, and objections could require significant resources to resolve[250]. - The company must comply with extensive FDA requirements, including cGMP and GCP, to avoid sanctions and ensure product safety[281]. - The company is exposed to risks related to employee misconduct and non-compliance with regulatory standards, which could lead to significant penalties[287]. - The company may seek accelerated approval for certain product candidates, but there is no assurance that such applications will be accepted or lead to timely approvals[276]. - Disruptions at regulatory agencies, such as the FDA, due to funding shortages or global health concerns, could negatively impact the company's ability to obtain timely approvals[269]. Market and Competitive Landscape - The company faces substantial competition from major pharmaceutical and biotechnology companies, which may result in competitors obtaining regulatory approvals more rapidly[205]. - The company lacks a sales and marketing infrastructure, which is essential for the successful commercialization of its product candidates[209]. - Market acceptance of the company's product candidates will depend on factors such as safety, efficacy, and reimbursement availability[203]. - The company faces risks related to the inability to establish its own sales, marketing, and distribution capabilities, which could lead to lower revenues and profitability compared to self-distribution[211]. - The company may face challenges in international marketing due to differing regulatory requirements and potential economic instability in foreign markets[218]. Intellectual Property and Legal Risks - The company relies on licenses for critical intellectual property, including a key agreement with Anacor for epetraborole[234]. - Compliance with license agreements is essential; failure to do so could result in loss of rights to important technologies[236]. - The patent application process is expensive and time-consuming, with uncertain outcomes regarding the issuance and enforceability of patents[230]. - The patent position is highly uncertain, with potential changes in laws affecting the value and enforceability of patents[233]. - The company may face expensive and time-consuming lawsuits to protect its intellectual property rights, which could divert management's attention and resources[241]. - There is a risk that third parties may infringe on the company's patents, potentially leading to costly litigation and adverse effects on stock price[242]. - The company may face claims from third parties asserting ownership of its intellectual property, which could lead to litigation and distract management[246]. Workforce and Management - A workforce reduction was implemented in August 2024, resulting in recognized severance and other charges of $2.2 million[146]. - The company has reduced its workforce by approximately 50% as part of a restructuring effort, which may affect its ability to manage future growth effectively[226]. - The company is highly dependent on key executives and may face challenges in retaining them, which could impede its business strategy[219]. - The company may encounter difficulties in recruiting and retaining qualified personnel, impacting its research, development, and commercialization objectives[220]. Economic and Market Conditions - The company faces macroeconomic uncertainties that could adversely affect its business, including inflation rates and volatility in financial markets[221]. - The Inflation Reduction Act of 2022 (IRA) is expected to significantly impact the pharmaceutical industry, including provisions for price negotiations on certain high-expenditure drugs starting in fiscal year 2023[293]. - State-level legislation is increasingly controlling pharmaceutical pricing, potentially imposing price limits on certain drugs[294]. - Government downsizing initiatives may negatively impact the FDA's ability to review and approve new drug applications, leading to delays[295].

Financial Performance - Cash, cash equivalents, and investments totaled $88.6 million as of December 31, 2024, expected to fund operations through 2027[1] - Net loss for the full year 2024 was $51.3 million, compared to a net loss of $64.7 million in 2023, representing a 20.5% improvement[9] - Interest income for the full year 2024 was $5.5 million, an increase from $4.9 million in 2023[9] - General and Administrative (G&A) expenses for the full year 2024 were $14.1 million, slightly down from $14.8 million in 2023[9] - Research and Development (R&D) expenses for the full year 2024 were $40.5 million, a decrease of 26.2% from $54.9 million in 2023[9] - Restructuring charges for the full year 2024 amounted to $2.2 million due to severance payments and other employee termination expenses[9] Clinical Development - The company plans to announce topline Phase 3 results for epetraborole in the second quarter of 2025[4] - A Phase 1 clinical study for AN2-502998, targeting Chagas disease, is expected to start in mid-2025[1] - Enrollment in a 200-patient observational trial for melioidosis was completed in October 2024, with a Phase 2 study planned for the second half of 2025[6] - The company aims to advance its first oncology candidate from its boron chemistry platform into development in the second half of 2025[1]

Financial Performance - For the three months ended September 30, 2024, total operating expenses were $14.0 million, a decrease of 23% from $18.2 million in the same period of 2023[134]. - The net loss for the three months ended September 30, 2024, was $12.7 million, a 24% improvement compared to a net loss of $16.7 million for the same period in 2023[134]. - As of September 30, 2024, the accumulated deficit was $198.3 million, with net losses of $43.8 million and $47.8 million for the nine months ended September 30, 2024, and 2023, respectively[123]. - Net loss for the nine months ended September 30, 2024, was $43.8 million, a reduction of $4.0 million (8%) compared to a net loss of $47.8 million in 2023[146]. - Other income, net for the nine months ended September 30, 2024, was $4.4 million, an increase of $1.4 million (47%) compared to $3.0 million in 2023[145]. Research and Development - Research and development expenses decreased to $8.3 million for the three months ended September 30, 2024, down 43% from $14.4 million in the prior year, primarily due to reduced clinical trial costs and personnel-related expenses[135]. - Research and development expenses for the nine months ended September 30, 2024, were $35.1 million, a decrease of $4.9 million (12%) compared to $40.0 million for the same period in 2023[141]. - The company plans to initiate a Phase 1 trial in Chagas disease and a Phase 2 proof-of-concept trial in melioidosis in 2025, along with advancing earlier-stage programs in oncology and infectious diseases[119]. - The Phase 2 part of the EBO-301 study for epetraborole showed a PRO-based clinical response rate of 39.5% compared to 25.0% for placebo, indicating potential clinical proof of concept[117]. - The company intends to request an End-of-Phase-2 meeting with the FDA in the first half of 2025 to discuss re-initiating a pivotal Phase 3 trial for treatment-refractory MAC lung disease[118]. Operating Expenses - Total operating expenses for the nine months ended September 30, 2024, were $48.2 million, down by $2.6 million (5%) from $50.8 million in the prior year[140]. - General and administrative expenses for the three months ended September 30, 2024, were $3.5 million, down from $3.8 million in the same period of 2023[137]. - A workforce reduction of approximately 50% was announced, resulting in severance and other charges of $2.2 million for the three and nine months ended September 30, 2024[121]. - Restructuring charges for the three months ended September 30, 2024, were $2.2 million, with no charges reported in the same period of 2023[138]. Cash and Investments - Cash, cash equivalents, and investments totaled $93.4 million as of September 30, 2024, expected to fund operations for at least the next twelve months[124]. - The company had cash, cash equivalents, and investments totaling $93.4 million as of September 30, 2024, primarily in money market funds and investment-grade securities[172]. - Net cash used in operating activities was $44.0 million for the nine months ended September 30, 2024, compared to $36.2 million for the same period in 2023, reflecting a net loss primarily due to drug development expenses[156][158]. - Net cash provided by investing activities was $61.5 million for the nine months ended September 30, 2024, primarily from $83.8 million in proceeds from the maturity of investments, while it was a net cash outflow of $43.7 million in 2023[159][160]. - Net cash provided by financing activities was $0.4 million for the nine months ended September 30, 2024, a significant decrease from $85.3 million in 2023, which included proceeds from stock offerings[161][162]. Future Outlook - The company expects to incur substantial additional losses in future periods as it continues its research and development efforts[148]. - Future funding requirements are anticipated to be significant, with the company not expecting to generate meaningful revenue until regulatory approval and commercialization of its product candidates[148]. - The company aims to preserve capital while maximizing income from investments, with a focus on maintaining a portfolio in accordance with its investment policy[173]. Risk Factors - The company does not believe that inflation, interest rate changes, or exchange rate fluctuations had a significant impact on its results of operations for the periods presented[174][176]. - The company was not exposed to material foreign currency risk during the quarter ended September 30, 2024[175].

Clinical Trial Results - Epetraborole-treated patients showed a statistically significant improvement in the QOL-B respiratory domain with a least squares mean change of 7.20 compared to 0.30 for the placebo group, resulting in a mean difference of 6.90 (p-value: 0.0365) from baseline to month 6[4] - The MACrO2 post-hoc analysis indicated a mean change of -12.91 for the epetraborole group versus -7.10 for the placebo group, with a mean difference of -5.81 (p-value: 0.0433) from baseline to month 6[6] - The company completed enrollment in a 200-patient observational trial for epetraborole in acute melioidosis in October 2024, with plans for a Phase 2 proof of concept study in the second half of 2025[12] - The company anticipates releasing top-line Phase 3 data from 97 patients in mid-2025, pending discussions with the FDA[10] - The company plans to initiate Phase 1 clinical development for AN2-502998 targeting chronic Chagas disease in mid-2025[11] Financial Performance - Research and Development (R&D) expenses for Q3 2024 were $8.3 million, a decrease from $14.4 million in Q3 2023, attributed to reduced clinical trial costs and other operational efficiencies[15] - General and Administrative (G&A) expenses for Q3 2024 were $3.5 million, down from $3.8 million in the same period last year, reflecting a decrease in professional services[15] - The net loss for Q3 2024 was $12.7 million, an improvement from a net loss of $16.7 million in Q3 2023[15] Cash and Investments - The company had cash, cash equivalents, and investments totaling $93.4 million as of September 30, 2024, which is expected to fund operations through 2027[16] - Cash and cash equivalents increased significantly from $15,647,000 to $33,504,000, showing a growth of about 113.5%[20] - Short-term investments decreased from $91,648,000 to $59,922,000, a reduction of approximately 34.5%[20] Assets and Liabilities - Total assets decreased from $138,744,000 in December 31, 2023 to $97,689,000 as of September 30, 2024, representing a decline of approximately 29.6%[20] - Total liabilities reduced from $14,043,000 to $10,017,000, indicating a decrease of around 28.5%[20] - Stockholders' equity declined from $124,701,000 to $87,672,000, reflecting a decrease of about 29.7%[20] - Accounts payable decreased from $2,676,000 to $1,711,000, a decline of approximately 36.1%[20] - Other current liabilities reduced from $11,367,000 to $8,306,000, showing a decrease of about 27.0%[20] - Long-term investments were eliminated, dropping from $27,194,000 to $0[20] - Other long-term assets decreased from $1,043,000 to $0, indicating a complete reduction[20] Operational Efficiency - The company achieved a 50% reduction in expenditures through strategic realignment of operations[16]

Company Overview - AN2 Therapeutics (ANTX) is a clinical-stage company focused on developing small molecule therapeutics using its boron chemistry platform to address infectious diseases and cancer [1] - The lead candidate, epetraborole, is being evaluated for nontuberculous mycobacteria (NTM) lung disease and acute melioidosis in early-stage studies [1] Recent Developments - Shares of AN2 Therapeutics fell 66.3% in the past month after the company discontinued a mid to late-stage study on epetraborole for treatment-refractory mycobacterium avium complex (MAC) lung disease due to unsatisfactory efficacy results [1] - Year-to-date, ANTX shares have plummeted 95.2%, contrasting with a 1.7% decline in the industry [1] Study Results - The phase II portion of the EBO-301 study showed a higher patient-reported outcome (PRO) clinical response rate of 39.5% in the epetraborole arm compared to 25% in the placebo arm [2] - However, the study did not demonstrate a statistically significant superior sputum culture conversion at month six, a key secondary endpoint [2] Strategic Actions - Following the setback, the company plans to evaluate EBO-301 study results for future development of epetraborole for NTM lung disease in other patient populations [4] - AN2 Therapeutics will undergo strategic restructuring, including a workforce reduction of approximately 50% by the end of 2024, with anticipated charges of $2-$3 million [4] Future Plans - The company is preparing to initiate a phase I clinical study of its second product candidate, AN2-502998, aimed at curing chronic Chagas disease [5] - Additionally, a mid-stage study of epetraborole for the melioidosis indication is also planned [5]

Financial Performance - For the six months ended June 30, 2024, the net loss was $31.1 million, consistent with the net loss of $31.1 million for the same period in 2023, resulting in an accumulated deficit of $185.5 million as of June 30, 2024[118]. - The company reported net losses of $31.1 million for both the six months ended June 30, 2024, and 2023, with an accumulated deficit of $185.5 million as of June 30, 2024[141]. Operating Expenses - Total operating expenses for the three months ended June 30, 2024, were $15.9 million, a decrease of 4% from $16.6 million in the same period of 2023[128]. - Total operating expenses for the six months ended June 30, 2024, were $34.2 million, an increase of 5% from $32.6 million in the same period of 2023[135]. - General and administrative expenses increased by 22% to $3.7 million for the three months ended June 30, 2024, compared to $3.0 million in the same period of 2023[132]. - General and administrative expenses were $7.4 million for the six months ended June 30, 2024, compared to $7.1 million in 2023, marking a 4% increase[139]. - Research and development expenses decreased by 10% to $12.1 million for the three months ended June 30, 2024, compared to $13.5 million for the same period in 2023[129]. - Research and development expenses increased to $26.8 million for the six months ended June 30, 2024, up from $25.5 million in the same period of 2023, representing a 5% increase[136]. - Clinical trial expenses rose by $3.3 million to $10.4 million, a 46% increase compared to $7.1 million in 2023[138]. - Personnel-related expenses increased by $1.3 million to $9.3 million, reflecting a 17% rise from $8.0 million in 2023[138]. Income and Cash Flow - Other income, net increased by 81% to $1.4 million for the three months ended June 30, 2024, compared to $0.8 million for the same period in 2023, driven by higher interest rates and cash balances[133]. - Other income, net increased to $3.1 million for the six months ended June 30, 2024, up from $1.5 million in 2023, a 107% increase[140]. - Cash used in operating activities was $32.0 million for the six months ended June 30, 2024, compared to $24.4 million in 2023[152][153]. - Net cash provided by investing activities was $42.8 million for the six months ended June 30, 2024, compared to $18.8 million in 2023[154]. - The company generated approximately $65.5 million from an Underwritten Offering in August 2023, after deducting commissions and offering expenses[142]. Funding and Future Outlook - The company has raised a total of $182.4 million through various funding rounds since its inception, including $70.0 million from an underwritten offering in August 2023[118]. - Future funding requirements are expected to be substantial, as the company does not have any products approved for sale and anticipates continued operating losses[143][144]. - As of June 30, 2024, the company had cash, cash equivalents, and investments totaling $104.5 million, expected to fund operations for at least the next twelve months[120]. - The company had cash, cash equivalents, and investments totaling $104.5 million as of June 30, 2024, primarily in money market funds and marketable securities[162]. Regulatory and Compliance - The company intends to rely on exemptions provided by the JOBS Act, including not complying with auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act[161]. - The company will remain an emerging growth company (EGC) until total annual revenues exceed $1.235 billion or it qualifies as a large accelerated filer with at least $700 million in equity securities held by non-affiliates[161]. Economic Factors - A hypothetical 10% relative change in interest rates would not have had a material impact on the company's financial statements[163]. - The company was not exposed to material foreign currency risk during the quarter ended June 30, 2024[164]. - Inflation has generally increased the company's labor and operating costs, but it has not had a material effect on the unaudited interim condensed financial statements[165].

Financial Performance - Cash, cash equivalents, and investments totaled $104.5 million as of June 30, 2024, expected to fund operations through 2027[1] - Net loss for Q2 2024 was $14.4 million, an improvement from a net loss of $15.8 million in Q2 2023[7] - Other income for Q2 2024 was $1.4 million, up from $0.8 million in Q2 2023, attributed to increased interest income[6] - Total operating expenses for Q2 2024 were $15.9 million, slightly down from $16.6 million in Q2 2023[11] Research and Development - Research and Development (R&D) expenses for Q2 2024 were $12.1 million, a decrease of 10.3% from $13.5 million in Q2 2023[5] - The company plans to advance two development programs into clinical trials in 2025, including AN2-502998 for chronic Chagas disease and epetraborole for melioidosis[2] - The Phase 2 part of the EBO-301 study was terminated, although it met its primary objective regarding a novel patient-reported outcome tool[3] - The company published new data on epetraborole's efficacy against M. abscessus, indicating its potential as an important therapy for lung disease[4] Administrative Expenses - General and Administrative (G&A) expenses increased to $3.7 million in Q2 2024 from $3.1 million in Q2 2023, reflecting higher personnel-related expenses[5] Product Pipeline - The company has a pipeline of boron-based compounds targeting high unmet needs in infectious disease and oncology[2]