Pipeline and Programs - Crescent Biopharma is developing CR-001, a PD-1 x VEGF bispecific antibody with the same mechanism of action (MoA) as ivonescimab, with an IND expected in 4Q25[7, 9] - CR-002 and CR-003 are Antibody-Drug Conjugates (ADCs) with topoisomerase inhibitor payloads, targeting undisclosed solid tumor targets, with CR-002's IND expected in mid-2026[7, 9] - CR-001 is designed to reproduce ivonescimab's established pharmacology and has the potential to move to frontline use in the $50 billion+ PD-(L)1 immunotherapy market[9] Market and Clinical Data - The anti-PD-(L)1 global sales reached $50 billion in 2024, with Keytruda leading with approximately $30 billion in revenue across 20+ oncology indications[9, 25, 26] - Ivonescimab demonstrated superiority in Progression-Free Survival (PFS) over pembrolizumab in a Phase 3 Non-Small Cell Lung Cancer (NSCLC) trial, with a PFS Hazard Ratio (HR) of 0.51[27, 28] - Ivonescimab at 9 months showed 56% progression-free survival compared to pembrolizumab's 40%[28] Financial and Corporate - Crescent Biopharma was launched with assets discovered and developed by Paragon Therapeutics, which was founded by Fairmount Funds in 2021[8] - Prior companies founded using Paragon's antibody technology have collectively raised >$2 billion[8] - Current cash is expected to fund operations through 2027, supporting key milestones such as the CR-001 IND in 4Q25 and initial clinical data in 2H26[3, 97]

Core Insights - Crescent Biopharma, Inc. is focused on advancing innovative therapies for cancer patients, with a pipeline that includes a PD-1 x VEGF bispecific antibody and novel antibody-drug conjugates [2] Company Overview - Crescent Biopharma aims to become a leading oncology company by developing transformative therapies for solid tumors, utilizing multiple modalities and established targets [2] Upcoming Events - The company will present at the Cantor Global Healthcare Conference on September 4, 2025, and at the Morgan Stanley Annual Global Healthcare Conference on September 8, 2025 [3]

Core Insights - The article emphasizes the importance of understanding the science behind biotech investments to avoid pitfalls in the industry [1]. Group 1 - The author has a PhD in biochemistry and extensive experience analyzing clinical trials and biotech companies [1]. - The mission is to educate investors on the scientific aspects of biotech businesses to facilitate informed decision-making [1].

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section details the unaudited consolidated financial statements and management's analysis of financial condition and results of operations [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, detailing financial position, performance, equity, and cash flows, with comprehensive notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20(unaudited)%20and%20December%2031%2C%202024) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and equity | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :--------------------------------------- | :------------------------------- | | Total assets | $152,646 | $125,406 | | Cash and cash equivalents | $36,491 | $11,813 | | Total current assets | $91,285 | $64,786 | | Total liabilities | $23,203 | $27,004 | | Total equity | $129,443 | $98,402 | - **Total assets increased by $27.24 million (21.7%)** from December 31, 2024, to June 30, 2025, primarily driven by a significant increase in cash and cash equivalents[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This statement outlines the company's financial performance, including revenues, expenses, and net income | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenues | $26,771 | $25,225 | $48,829 | $52,397 | | Total operating expenses | $24,600 | $22,031 | $44,385 | $41,132 | | Income from operations | $2,171 | $3,194 | $4,444 | $11,265 | | Net income | $1,576 | $4,538 | $5,310 | $14,473 | | Net income attributable to common stockholders | $442 | $3,528 | $3,140 | $11,060 | | Basic EPS | $0.00 | $0.04 | $0.04 | $0.13 | | Diluted EPS | $0.00 | $0.01 | $0.01 | $0.04 | - **Net income attributable to common stockholders decreased significantly by 87%** for the three months ended June 30, 2025, and by **72%** for the six months ended June 30, 2025, compared to the same periods in 2024[10](index=10&type=chunk) [Condensed Consolidated Statements of Convertible Preferred Stock and Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This statement details changes in the company's equity components, including common stock, paid-in capital, and deficit | Equity Component | Balance at Dec 31, 2024 (in thousands) | Balance at June 30, 2025 (in thousands) | | :----------------------- | :------------------------------------- | :------------------------------------ | | Common Stock | $86 | $91 | | Additional Paid-In Capital | $136,185 | $161,437 | | Accumulated Deficit | $(73,453) | $(70,313) | | Total Gyre Stockholders' Equity | $63,319 | $92,026 | | Noncontrolling Interest | $35,083 | $37,417 | | Total Equity | $98,402 | $129,443 | - **Total Gyre stockholders' equity increased by $28.7 million** from December 31, 2024, to June 30, 2025, primarily due to an increase in additional paid-in capital from stock issuances and a reduction in accumulated deficit[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20(unaudited)) This statement summarizes cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by (used in) operating activities | $1,959 | $(2,609) | | Net cash used in investing activities | $(1,075) | $(15,493) | | Net cash provided by financing activities | $23,695 | $814 | | Net increase (decrease) in cash and cash equivalents | $24,678 | $(17,412) | | Cash and cash equivalents at end of the period | $36,491 | $16,097 | - The company generated **$2.0 million in cash from operating activities** in H1 2025, a significant improvement from cash used of **$2.6 million** in H1 2024. Financing activities provided **$23.7 million** in H1 2025, primarily from a public offering[15](index=15&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the consolidated financial statements [1. Nature of Operations and Liquidity](index=8&type=section&id=1.%20Nature%20of%20Operations%20and%20Liquidity) This note describes the company's business activities and assesses its ability to meet short-term obligations - Gyre Therapeutics, Inc. is a commercial-stage biotechnology company focused on small-molecule anti-inflammatory and anti-fibrotic drugs, holding a **65.2% indirect interest** in Beijing Continent Pharmaceuticals Co., Ltd. (Gyre Pharmaceuticals) in the PRC[18](index=18&type=chunk) - As of June 30, 2025, the Company had **$36.5 million in cash and cash equivalents** and an **accumulated deficit of $70.3 million**. Management believes existing cash and cash flows will be sufficient for at least 12 months[19](index=19&type=chunk) [2. Summary of Significant Accounting Policies](index=8&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements - The condensed consolidated financial statements are prepared in accordance with **U.S. GAAP and SEC interim reporting requirements**, with certain footnotes condensed or omitted[20](index=20&type=chunk) - The Company operates in **two distinct reportable segments**: Gyre Pharmaceuticals (PRC operations) and Gyre (U.S. operations)[25](index=25&type=chunk) - The Company adopted **ASU 2023-09 (Improvements to Income Tax Disclosures)** effective January 1, 2025, with no material impact on quarterly financial statements[35](index=35&type=chunk) [3. Fair Value Measurements and Financial Instruments](index=11&type=section&id=3.%20Fair%20Value%20Measurements%20and%20Financial%20Instruments) This note details valuation techniques and inputs for financial instruments measured at fair value | Financial Instrument | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------- | :----------------------------- | :------------------------------- | | Money market funds (Level 1) | $28,645 | $3,300 | | CVR derivative liability (Level 3) | $— | $4,961 | | Warrant liability (Level 3) | $3,201 | $5,668 | - The **CVR derivative liability was fully settled** by June 30, 2025, and the **warrant liability decreased by $2.47 million** during the six months ended June 30, 2025[42](index=42&type=chunk)[46](index=46&type=chunk) [4. Balance Sheet Components](index=15&type=section&id=4.%20Balance%20Sheet%20Components) This note provides disaggregated information for various asset and liability accounts on the balance sheet | Component | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Inventories, net | $8,861 | $6,337 | | Accrued expenses and other current liabilities | $14,924 | $10,615 | | Accounts and note receivables, net | $25,128 | $23,962 | - **Accrued expenses and other current liabilities increased by $4.3 million**, primarily due to higher accrued payroll and welfare, and increased payables to selling expense suppliers[50](index=50&type=chunk) [5. Intangible Assets](index=16&type=section&id=5.%20Intangible%20Assets) This note details the company's intangible assets, including acquisition, amortization, and carrying values | Intangible Asset | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------- | :----------------------------- | :------------------------------- | | Total intangible assets, net | $4,962 | $273 | - The **significant increase in intangible assets** is primarily due to the recognition of **$4.9 million for Etorel technology rights** following NMPA approval and commercial sales commencement in June 2025[55](index=55&type=chunk)[56](index=56&type=chunk) - **Amortization expense for the six months ended June 30, 2025, was $234 thousand**, compared to **$16 thousand** for the same period in 2024[58](index=58&type=chunk) [6. Revenue](index=17&type=section&id=6.%20Revenue) This note provides a breakdown of revenue by product and segment, along with related accounting policies - **ETUARY® sales accounted for 87.8% of total revenue for Q2 2025**, down from 99.3% in Q2 2024, indicating diversification[59](index=59&type=chunk) - New products Contiva and Etorel, launched in March and June 2025 respectively, contributed **5.6% and 6.0% of total revenue for Q2 2025**[59](index=59&type=chunk) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue from sales of pharmaceutical products | $26,771 | $25,225 | $48,829 | $52,397 | [7. Leases](index=17&type=section&id=7.%20Leases) This note describes the company's lease arrangements, including right-of-use assets and lease liabilities - The Company maintains operating leases for office spaces and staff dormitories in Beijing, Zhengzhou, Shanghai, Nanjing, and San Diego, with **lease expirations ranging from 2026 to 2028**[62](index=62&type=chunk)[63](index=63&type=chunk) - As of June 30, 2025, the Company recorded an aggregate **right-of-use asset of $1.5 million** and an aggregate **lease liability of $1.4 million**[65](index=65&type=chunk) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------- | :-------------------------------------------- | :-------------------------------------------- | | Operating lease expense | $400 | $300 | [8. Stockholders' Equity](index=19&type=section&id=8.%20Stockholders%27%20Equity) This note details changes in common stock, additional paid-in capital, and other equity components - **Outstanding common stock increased to 90,822,828 shares** as of June 30, 2025, from 86,307,544 shares at December 31, 2024[8](index=8&type=chunk) - The Company received net proceeds of **$0.5 million from the ATM Program** (54,734 shares) and **$21.3 million from a May 2025 underwritten public offering** (2,555,555 shares)[70](index=70&type=chunk)[74](index=74&type=chunk) - **Restricted capital and statutory reserves of PRC subsidiaries**, not available for distribution, totaled **$64.7 million** as of June 30, 2025[77](index=77&type=chunk) [9. Convertible Preferred Stock](index=20&type=section&id=9.%20Convertible%20Preferred%20Stock) This note describes the terms and conversion of the company's convertible preferred stock - In January 2024, GNI USA converted all **13,151 shares of Convertible Preferred Stock into 8,767,332 shares of common stock**[82](index=82&type=chunk) [10. Stock Based Compensation](index=20&type=section&id=10.%20Stock%20Based%20Compensation) This note outlines the company's stock-based compensation plans and the related expense recognition - The **2023 Omnibus Incentive Plan automatically increased by 4,315,377 shares of common stock** on January 1, 2025[83](index=83&type=chunk) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total stock-based compensation expense | $906 | $16 | $1,413 | $27 | - As of June 30, 2025, **unrecognized stock-based compensation expense was $14.7 million**, expected to be recognized over an estimated weighted-average period of 3.2 years[88](index=88&type=chunk) [11. Net Income per Share ("EPS") Attributable to Common Stockholders](index=22&type=section&id=11.%20Net%20Income%20per%20Share%20(%22EPS%22)%20Attributable%20to%20Common%20Stockholders) This note provides the calculation of basic and diluted earnings per share for common stockholders | 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 | | :----------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.00 | $0.04 | $0.04 | $0.13 | | Diluted EPS | $0.00 | $0.01 | $0.01 | $0.04 | - The **decrease in EPS for both basic and diluted measures** reflects the lower net income attributable to common stockholders in 2025 compared to 2024[90](index=90&type=chunk) [12. Commitments and Contingencies](index=23&type=section&id=12.%20Commitments%20and%20Contingencies) This note discloses the company's contractual obligations, legal proceedings, and other potential future liabilities - The Company has **commitments of $4.0 million for property and equipment purchases** as of June 30, 2025, expected within one year[93](index=93&type=chunk) - The **Etorel IP Rights acquisition includes an initial $4.9 million consideration** and contingent annual payments over eight years based on actual sales[95](index=95&type=chunk) - **Future payments for the Hydronidone program to GNI Group total $12.7 million**, contingent upon NDA submission, NMPA inspection, and NMPA approval[97](index=97&type=chunk) - Gyre Pharmaceuticals has committed to allocate **$22.0 million toward future research and development activities** for various programs[98](index=98&type=chunk) [13. Income Taxes](index=24&type=section&id=13.%20Income%20Taxes) This note details the company's income tax provision, deferred taxes, and net operating loss carryforwards | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Income tax provision | $662 | $1,497 | $1,563 | $4,043 | | Effective tax rate | 29.58% | 24.81% | 22.74% | 21.84% | - The Company has approximately **$193.4 million federal and $13.8 million state net operating loss carryforwards (NOLs)** for U.S. tax purposes[101](index=101&type=chunk) [14. Related Party Transactions](index=24&type=section&id=14.%20Related%20Party%20Transactions) This note describes transactions and balances with entities or individuals considered related parties - **No research and development fees were paid to GNI Group** during the three and six months ended June 30, 2025, compared to **$0.1 million** in the prior year periods[103](index=103&type=chunk) - The Company had **$0.2 million in other receivables from GNI Group** as of June 30, 2025, and December 31, 2024[104](index=104&type=chunk) [15. Employee Benefit Plans](index=25&type=section&id=15.%20Employee%20Benefit%20Plans) This note outlines the company's contributions to employee retirement and welfare benefit plans | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total contributions to PRC employee benefits | $1,300 | $1,200 | $2,600 | $2,400 | - **Contributions to the U.S. defined-contribution savings plan (401(k)) were immaterial** for the three and six months ended June 30, 2025[106](index=106&type=chunk) [16. Segment Information](index=25&type=section&id=16.%20Segment%20Information) This note provides financial data for the company's operating segments, including revenues and operating results - The Company operates in **two reportable segments**: Gyre Pharmaceuticals (mainland China) and Gyre (United States)[107](index=107&type=chunk) - **Gyre Pharmaceuticals generated all consolidated revenues ($26.8 million in Q2 2025, $48.8 million in H1 2025)** from sales of ETUARY®, Etorel, Contiva, and generic drugs[111](index=111&type=chunk) - The Gyre segment (U.S.) has not generated any revenue and reported **operating losses of $2.1 million for Q2 2025 and $3.5 million for H1 2025**[109](index=109&type=chunk)[111](index=111&type=chunk) [17. Subsequent Event](index=28&type=section&id=17.%20Subsequent%20Event) This note discloses significant events that occurred after the balance sheet date but before financial statements were issued - In the third quarter of 2025, BJC increased its capital contribution in Gyre Pharmaceuticals by **$1.28 million**, increasing the Company's indirect interest from **65.2% to 69.7%**[115](index=115&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%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 periods ended June 30, 2025 and 2024 [Overview](index=29&type=section&id=Overview) This section provides a high-level summary of the company's business, strategic focus, and recent operational highlights - Gyre is a commercial-stage biotechnology company focused on developing and commercializing **small-molecule anti-inflammatory and anti-fibrotic drugs**, particularly for organ fibrosis[119](index=119&type=chunk) - The company launched **Etorel (nintedanib) commercially in the PRC in Q2 2025** and initiated commercialization of **Contiva (avatrombopag maleate tablets) in March 2025**, aiming to diversify revenue and offset declines in ETUARY® sales[121](index=121&type=chunk)[124](index=124&type=chunk) - **Hydronidone, the lead development candidate, completed a pivotal Phase 3 trial in the PRC** for CHB-associated liver fibrosis with statistically significant positive results (**P=0.0002 for primary endpoint**)[126](index=126&type=chunk) - Plans include filing a **New Drug Application (NDA) for Hydronidone with the NMPA in Q3 2025** and an **Investigational New Drug (IND) application with the U.S. FDA in Q3 2025** to initiate a Phase 2 trial for MASH-associated fibrosis[127](index=127&type=chunk) [Financial Operations Overview](index=32&type=section&id=Financial%20Operations%20Overview) This section summarizes key financial metrics and trends, including net income, cash position, and accumulated deficit | Metric | Three Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2025 (in millions) | | :----------------------------------- | :--------------------------------------------- | :------------------------------------------- | | Net income | $1.6 | $5.3 | | Net income attributable to common stockholders | $0.4 | $3.1 | - **Cash and cash equivalents increased to $36.5 million** as of June 30, 2025, from **$11.8 million** at December 31, 2024[143](index=143&type=chunk)[144](index=144&type=chunk) - The **accumulated deficit improved to $70.3 million** as of June 30, 2025, from **$73.5 million** at December 31, 2024[143](index=143&type=chunk)[144](index=144&type=chunk) [Components of Results of Operations](index=33&type=section&id=Components%20of%20Results%20of%20Operations) This section explains the primary drivers of revenue, cost of revenues, operating expenses, and other income/expenses - Revenue is primarily generated from sales of **ETUARY®, Contiva, Etorel, and generic drugs** to distributors in the PRC[145](index=145&type=chunk) - **Research and development costs are expensed as incurred** and include expenses for preclinical and clinical development, payroll, laboratory supplies, and contract services[148](index=148&type=chunk)[149](index=149&type=chunk) - Other income includes **interest earned on deposits and government grants**, while other expenses include **losses from equity method investments**[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of financial performance for the current and prior reporting periods [Comparison of the three months ended June 30, 2025 and 2024](index=34&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030%2C%202025%20and%202024) This section compares the company's financial performance for the second quarter of 2025 against the same period in 2024 | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change ($) | Change (%) | | :----------------------------------- | :--------------------- | :--------------------- | :--------- | :--------- | | Revenues | $26,771 | $25,225 | $1,546 | 6% | | Cost of revenues | $1,151 | $770 | $381 | 49% | | Selling and marketing | $15,194 | $14,414 | $780 | 5% | | Research and development | $3,425 | $3,355 | $70 | 2% | | General and administrative | $4,829 | $3,424 | $1,405 | 41% | | Net income attributable to common stockholders | $442 | $3,528 | $(3,086) | (87)% | - **Revenue increase was driven by new product launches (Etorel and Contiva)**, offsetting a decline in ETUARY® sales[161](index=161&type=chunk) - **General and administrative expenses increased significantly** due to higher professional fees and personnel/stock compensation costs[167](index=167&type=chunk) [Comparison of the six months ended June 30, 2025 and 2024](index=36&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section compares the company's financial performance for the first half of 2025 against the same period in 2024 | Metric | H1 2025 (in thousands) | H1 2024 (in thousands) | Change ($) | Change (%) | | :----------------------------------- | :--------------------- | :--------------------- | :--------- | :--------- | | Revenues | $48,829 | $52,397 | $(3,568) | (7)% | | Cost of revenues | $2,045 | $1,749 | $296 | 17% | | Selling and marketing | $26,035 | $26,956 | $(921) | (3)% | | Research and development | $6,520 | $5,537 | $983 | 18% | | General and administrative | $9,784 | $6,822 | $2,962 | 43% | | Net income attributable to common stockholders | $3,140 | $11,060 | $(7,920) | (72)% | - **Revenue decrease was primarily due to a $6.8 million decline in ETUARY® sales**, attributed to the absence of a one-time rural marketing campaign from 2024, weaker economic conditions in China, and increased competition[173](index=173&type=chunk) - **Research and development expenses increased by $1.0 million**, mainly due to higher clinical trial costs, particularly for Hydronidone data analysis[177](index=177&type=chunk) [Recent Accounting Pronouncements](index=38&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses the impact of newly adopted and recently issued accounting standards on financial statements - The Company refers to **Note 2 for information on recently adopted and issued but not yet adopted accounting pronouncements**[182](index=182&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's ability to generate and manage cash, including its cash position and funding sources - As of June 30, 2025, the Company had **$36.5 million in cash and cash equivalents**, **$17.9 million in short-term bank deposits**, and **$21.5 million in long-term certificates of deposit**[183](index=183&type=chunk) | Cash Flow Data | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by (used in) operating activities | $1,959 | $(2,609) | | Net cash provided by financing activities | $23,695 | $814 | - Management believes existing liquidity sources will be sufficient to fund operations for at least the next 12 months, but **additional capital may be needed for the Hydronidone Phase 2 trial in the U.S.**[183](index=183&type=chunk)[184](index=184&type=chunk) [Contractual Obligations and Other Commitments](index=40&type=section&id=Contractual%20Obligations%20and%20Other%20Commitments) This section details the company's future payment obligations and other significant contractual agreements - **Fixed lease payment obligations totaled $1.5 million** as of June 30, 2025, with **$0.5 million payable within the remaining six months of 2025**[195](index=195&type=chunk) - The Company has committed **$34.7 million toward future research and development activities** for various programs[198](index=198&type=chunk) - **Commitments related to property and equipment purchases were $4.0 million** as of June 30, 2025, expected to be incurred within one year[199](index=199&type=chunk) [Critical Accounting Policies and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights accounting policies that require significant management judgment and estimation - There have been **no significant changes to the Company's critical accounting policies and estimates** compared to those disclosed in its Annual Report[201](index=201&type=chunk) [Smaller Reporting Company and Accelerated Filer Status](index=41&type=section&id=Smaller%20Reporting%20Company%20and%20Accelerated%20Filer%20Status) This section clarifies the company's SEC filing status and its implications for reporting requirements - The Company is a **'smaller reporting company'** and transitioned to an **'accelerated filer'** as of December 31, 2024, requiring an attestation report on internal control over financial reporting in its Annual Report[203](index=203&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Gyre Therapeutics, Inc. is not required to provide market risk disclosures under this item - The Company is a **smaller reporting company** and is not required to provide information under this item[204](index=204&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated disclosure controls and procedures as effective as of June 30, 2025, with no material changes in internal control - The Company's **disclosure controls and procedures were evaluated and concluded to be effective** as of June 30, 2025[206](index=206&type=chunk) - There were **no material changes in internal control over financial reporting** during the quarter ended June 30, 2025[207](index=207&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, commitments, and other relevant disclosures [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not currently a party to any material legal proceedings, though ordinary course claims may arise - The Company is **not currently a party to any material legal proceedings**[208](index=208&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The Company refers to risk factors in its Annual Report on Form 10-K, noting no material changes to these factors - There have been **no material changes from the risk factors disclosed** in Part I, Item 1A, 'Risk Factors' in the Company's Annual Report[209](index=209&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company reports no unregistered sales of equity securities or use of proceeds for the period - None[210](index=210&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reports no defaults upon senior securities for the period - None[211](index=211&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Not applicable[212](index=212&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) The Chief Operating Officer entered a Rule 10b5-1 trading arrangement on June 16, 2025, to sell up to 700,000 shares - **Weiguo Ye, the Chief Operating Officer, entered into a Rule 10b5-1 trading arrangement** on June 16, 2025, to sell up to 700,000 shares of common stock[213](index=213&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or furnished as part of the Quarterly Report on Form 10-Q, including agreements and certifications - The exhibit list includes **Asset Purchase Agreements, Business Combination Agreements, Certificates of Incorporation/Designation, Warrants, and certifications** from the Interim CEO and CFO[216](index=216&type=chunk)[217](index=217&type=chunk) [Signatures](index=47&type=section&id=Signatures) The report is duly signed by the Executive Chairman, Interim CEO, and CFO on August 11, 2025 - The report was signed by **Ping Zhang, Executive Chairman and Interim Chief Executive Officer, and Ruoyu Chen, Chief Financial Officer**, on August 11, 2025[225](index=225&type=chunk)

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) [Leadership Transition](index=1&type=section&id=Leadership%20Transition) Gyre Therapeutics appointed Ping Zhang as interim CEO, with Dr. Han Ying transitioning to Senior VP of Science for R&D - Ping Zhang (Executive Chairman) was appointed interim CEO, responsible for daily operations and global strategic expansion[1](index=1&type=chunk)[3](index=3&type=chunk) - Dr. Han Ying resigned as CEO, transitioning to Senior Vice President of Science, responsible for research and discovery activities to support the company's fibrosis pipeline[1](index=1&type=chunk)[3](index=3&type=chunk) [Q2 2025 & Year-to-Date Highlights](index=1&type=section&id=Q2%202025%20%26%20YTD%20Highlights) Q2 and H1 2025 highlights include net income growth, reaffirmed guidance, positive Hydronidone Phase III results, and successful new product launches Financial Highlights | Metric | Q2 2025 | H1 2025 | | :--- | :--- | :--- | | Net Income | $1.6 million | $5.3 million | | Revenue | $26.8 million | $48.8 million | | GAAP Basic EPS | $0.00 | $0.04 | - Reaffirmed **full-year 2025 revenue guidance of $118-$128 million**[1](index=1&type=chunk) - Hydronidone (F351) showed statistically significant fibrosis reversal after 52 weeks of treatment in a Phase III clinical trial for CHB-related liver fibrosis[4](index=4&type=chunk) - Etorel (nintedanib ethanesulfonate soft capsules) successfully launched in China for SSc-ILD and PF-ILD[4](index=4&type=chunk) - First subject dosed in Phase I clinical trial of F230 for PAH[4](index=4&type=chunk) [CEO Outlook & Strategic Priorities](index=2&type=section&id=CEO%20Outlook%20%26%20Strategic%20Priorities) Interim CEO Ping Zhang outlined strategic priorities for commercial expansion, fibrosis pipeline advancement, and Hydronidone's NDA submission - Plan to initiate a Phase II trial for Hydronidone in MASH-related liver fibrosis in the US in **H2 2025**[5](index=5&type=chunk) - Expect to initiate a Phase II/III trial for pirfenidone in tumor-related lung complications in **H2 2025**[5](index=5&type=chunk) - Plan to submit a New Drug Application (NDA) for Hydronidone to the NMPA in **Q3 2025**[5](index=5&type=chunk) [Business Highlights & Upcoming Milestones](index=2&type=section&id=Business%20Highlights%20%26%20Upcoming%20Milestones) [Commercial Portfolio Expansion](index=2&type=section&id=Commercial%20Portfolio%20Expansion) Q2 2025 commercial portfolio expanded with successful Etorel and Contiva launches, offsetting a slight ETUARY® sales decline Product Sales | Product | Q2 2025 Sales (million USD) | Q2 2024 Sales (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | ETUARY® (pirfenidone) | $23.5 | $25.1 | ↓ $1.6 | | Etorel (nintedanib ethanesulfonate) | $1.6 | N/A | New Launch | | Contiva (avatrombopag maleate) | $1.5 | N/A | New Launch | - Etorel launched in China in **June 2025** for SSc-ILD and PF-ILD[6](index=6&type=chunk) - Contiva began commercialization in China in **March 2025** for thrombocytopenia in adults with chronic liver disease and immune thrombocytopenia[7](index=7&type=chunk) [Pipeline Development Updates](index=2&type=section&id=Pipeline%20Development%20Updates) The company's pipeline advanced with positive Hydronidone Phase III results, planned US MASH trials, and new clinical stages for ETUARY® and F230 [Hydronidone](index=2&type=section&id=Hydronidone) - In **May 2025**, Hydronidone achieved positive results in a pivotal Phase III clinical trial for chronic hepatitis B (CHB)-related liver fibrosis, showing statistically significant fibrosis reversal after 52 weeks[8](index=8&type=chunk) - Hydronidone also met key secondary endpoints at 52 weeks, demonstrating inflammation improvement without fibrosis progression[8](index=8&type=chunk) - Plan to submit a New Drug Application (NDA) to the NMPA in **Q3 2025**[8](index=8&type=chunk) - Internal review is ongoing to determine if a new IND is required for the US Phase II trial in MASH-related liver fibrosis, expected to start in **H2 2025**[9](index=9&type=chunk) [ETUARY® (Pirfenidone)](index=3&type=section&id=ETUARY%C2%AE%20(Pirfenidone)) - Plan to initiate an adaptive Phase II/III trial for pirfenidone in radiation-induced lung injury (RILI) in China in **H2 2025**[10](index=10&type=chunk) [F573](index=3&type=section&id=F573) - F573, a caspase inhibitor for acute/acute-on-chronic liver failure (ALF/ACLF), is expected to complete its Phase II clinical trial by **end of 2026**[11](index=11&type=chunk) [F230](index=3&type=section&id=F230) - In **June 2025**, the first subject was successfully dosed in China for the Phase I clinical trial of F230, a novel endothelin A receptor agonist, for pulmonary arterial hypertension (PAH)[12](index=12&type=chunk) [F528](index=3&type=section&id=F528) - F528, a novel anti-inflammatory agent, is undergoing preclinical studies for COPD, with an IND application planned for **2026**[13](index=13&type=chunk) [Corporate Updates](index=3&type=section&id=Corporate%20Updates) [Corporate Updates](index=3&type=section&id=Corporate%20Updates) Gyre Therapeutics completed leadership transition, appointed interim CEO, raised $23 million, and increased Gyre Pharmaceuticals ownership - In **August 2025**, Ping Zhang was appointed interim CEO, and Dr. Han Ying transitioned to a scientific leadership role[14](index=14&type=chunk) - In **May 2025**, completed an underwritten public offering, raising approximately **$23 million** in gross proceeds[14](index=14&type=chunk) - In **Q3 2025**, the company's indirect ownership in Gyre Pharmaceuticals increased from **65.2% to 69.7%**[14](index=14&type=chunk) [Financial Results](index=4&type=section&id=Financial%20Results) [Cash Position](index=4&type=section&id=Cash%20Position) As of June 30, 2025, cash and equivalents totaled $75.9 million, primarily from $21.3 million net proceeds of a May public offering Cash and Equivalents | Asset Category | Amount (million USD) | | :--- | :--- | | Cash and Cash Equivalents | $36.5 | | Short-Term Bank Deposits | $17.9 | | Long-Term Time Deposits | $21.5 | | **Total** | **$75.9** | - The increase in cash and cash equivalents primarily includes approximately **$21.3 million** in net proceeds from an underwritten public offering in **May 2025**[15](index=15&type=chunk) [Financial Results for the Three Months Ended June 30, 2025](index=4&type=section&id=Financial%20Results%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025) Q2 2025 revenue grew from new product launches, but increased operating expenses led to a decline in operating and net income Condensed Consolidated Statements of Operations (Q2) | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | YOY Change (million USD) | YOY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $26.8 | $25.2 | ↑ $1.6 | ↑ 6.3% | | Cost of Revenue | $1.2 | $0.8 | ↑ $0.4 | ↑ 50.0% | | Selling and Marketing Expenses | $15.2 | $14.4 | ↑ $0.8 | ↑ 5.6% | | Research and Development Expenses | $3.4 | $3.3 | ↑ $0.1 | ↑ 3.0% | | General and Administrative Expenses | $4.8 | $3.4 | ↑ $1.4 | ↑ 41.2% | | Operating Income | $2.2 | $3.2 | ↓ $1.0 | ↓ 31.3% | | Net Income | $1.6 | $4.5 | ↓ $2.9 | ↓ 64.4% | | Non-GAAP Adjusted Net Income | $2.9 | $3.1 | ↓ $0.2 | ↓ 6.5% | - Revenue growth was primarily driven by Etorel launch (**$1.6 million**) and Contiva sales (**$1.5 million**), partially offset by a decrease in ETUARY® sales (**$1.5 million**)[16](index=16&type=chunk) - The decline in operating income was primarily due to a **$2.6 million** increase in total operating expenses, partially offset by a **$1.6 million** increase in revenue[16](index=16&type=chunk) [Financial Results for the Six Months Ended June 30, 2025](index=5&type=section&id=Financial%20Results%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025) H1 2025 revenue declined due to lower ETUARY® sales and increased operating expenses, leading to a significant drop in operating and net income Condensed Consolidated Statements of Operations (H1) | Metric | H1 2025 (million USD) | H1 2024 (million USD) | YOY Change (million USD) | YOY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $48.8 | $52.4 | ↓ $3.6 | ↓ 6.9% | | Cost of Revenue | $2.0 | $1.7 | ↑ $0.3 | ↑ 17.6% | | Selling and Marketing Expenses | $26.0 | $26.9 | ↓ $0.9 | ↓ 3.3% | | Research and Development Expenses | $6.5 | $5.5 | ↑ $1.0 | ↑ 18.2% | | General and Administrative Expenses | $9.8 | $6.8 | ↑ $3.0 | ↑ 44.1% | | Operating Income | $4.4 | $11.3 | ↓ $6.9 | ↓ 61.1% | | Net Income | $5.3 | $14.5 | ↓ $9.2 | ↓ 63.4% | | Non-GAAP Adjusted Net Income | $5.8 | $11.3 | ↓ $5.5 | ↓ 48.7% | - Revenue decline was primarily due to a **$6.8 million** decrease in ETUARY® sales, partially offset by new product sales growth from Contiva (**$1.8 million**) and Etorel (**$1.6 million**)[17](index=17&type=chunk) - The decrease in ETUARY® sales was mainly attributed to the non-recurrence of a one-time rural marketing campaign in H1 2024, a weak economic environment in China, and increased competition in the IPF treatment market[17](index=17&type=chunk) - The decline in operating income was primarily due to a **$3.6 million** decrease in revenue and a **$3.3 million** increase in total operating expenses[23](index=23&type=chunk) [Full Year 2025 Financial Guidance](index=6&type=section&id=Full%20Year%202025%20Financial%20Guidance) The company reaffirmed its full-year 2025 revenue guidance of $118-$128 million, projecting growth driven by new product commercialization and ETUARY® sales 2025 Financial Outlook | Metric | FY 2025 Guidance | | :--- | :--- | | Total Revenue | $118 - $128 million | | YOY Growth | 11.3% - 20.8% | | Driving Factors | Commercialization of Etorel and Contiva, and ETUARY® sales | - Revenue guidance assumes constant exchange rates and no significant economic disruptions or recession[21](index=21&type=chunk) [Use of Non-GAAP Financial Measures](index=6&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) Gyre Therapeutics uses non-GAAP adjusted net income, excluding specific items, to provide a clearer assessment of core operating performance - Adjusted net income excludes changes in fair value of warrant liabilities, share-based compensation expenses, and income tax provision[22](index=22&type=chunk) - Management believes adjusted net income provides investors with additional useful information for evaluating the company's performance and valuation[22](index=22&type=chunk) [About the Company](index=7&type=section&id=About%20the%20Company) [About Gyre Pharmaceuticals](index=7&type=section&id=About%20Gyre%20Pharmaceuticals) Gyre Pharmaceuticals focuses on organ fibrosis drug R&D, manufacturing, and commercialization, with flagship ETUARY® and a diverse pipeline - ETUARY® (pirfenidone capsules) was China's first approved IPF treatment in **2011**, with **$105 million** in net sales in **2024**[24](index=24&type=chunk) - Hydronidone showed statistically significant fibrosis reversal in a Phase III clinical trial for CHB-related liver fibrosis and is expected to have its NDA submitted in **Q3 2025**[24](index=24&type=chunk) - Gyre Therapeutics acquired a **65.2%** indirect majority stake in Gyre Pharmaceuticals in **October 2023**, increasing to **69.7%** in **Q3 2025**[24](index=24&type=chunk) [About Gyre Therapeutics](index=7&type=section&id=About%20Gyre%20Therapeutics) Gyre Therapeutics, based in San Diego, focuses on Hydronidone development for US MASH, and advances ETUARY® and other pipeline programs in China - Gyre Therapeutics, headquartered in San Diego, USA, primarily focuses on the development and commercialization of Hydronidone for liver fibrosis (including MASH) in the US[25](index=25&type=chunk) - Through indirect control of Gyre Pharmaceuticals, the company advances ETUARY®'s therapeutic indication expansion and development programs such as F573, F528, and F230 in China[25](index=25&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements, subject to risks and uncertainties, where actual results may differ materially from expectations - Forward-looking statements cover expectations regarding R&D efforts, clinical trial timelines, regulatory filings and approvals, product sales, and financial condition[26](index=26&type=chunk) - Actual results may differ materially due to risks and uncertainties such as the ability to execute clinical development strategies, timing of regulatory approvals, competition, economic conditions, and sufficiency of capital resources[26](index=26&type=chunk) [Financial Statements](index=9&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations detail Q2 and H1 2025 revenue, expenses, and net income, reflecting profitability and cost structure Condensed Consolidated Statements of Operations | Metric (thousand USD) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 26,771 | 25,225 | 48,829 | 52,397 | | Total Operating Expenses | 24,600 | 22,031 | 44,385 | 41,132 | | Operating Income | 2,171 | 3,194 | 4,444 | 11,265 | | Net Income | 1,576 | 4,538 | 5,310 | 14,473 | | Net Income Attributable to Common Stockholders | 442 | 3,528 | 3,140 | 11,060 | | Basic Earnings Per Share | 0.00 | 0.04 | 0.04 | 0.13 | | Diluted Earnings Per Share | 0.00 | 0.01 | 0.01 | 0.04 | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets present assets, liabilities, and equity as of June 30, 2025, and December 31, 2024, showing asset growth and capital structure Condensed Consolidated Balance Sheets | Metric (thousand USD) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | 36,491 | 11,813 | | Short-Term Bank Deposits | 17,874 | 14,858 | | Total Current Assets | 91,285 | 64,786 | | Total Assets | 152,646 | 125,406 | | **Liabilities and Stockholders' Equity** | | | | Total Current Liabilities | 16,920 | 19,516 | | Total Liabilities | 23,203 | 27,004 | | Equity Attributable to Gyre Stockholders | 92,026 | 63,319 | | Non-Controlling Interests | 37,417 | 35,083 | | Total Equity | 129,443 | 98,402 | | Total Liabilities and Stockholders' Equity | 152,646 | 125,406 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This reconciliation table details the calculation from GAAP to non-GAAP adjusted net income, excluding specific items for clearer core operating performance GAAP to Non-GAAP Reconciliation | Metric (thousand USD) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | 1,576 | 4,538 | 5,310 | 14,473 | | Loss (gain) from change in fair value of warrant liabilities | (212) | (2,913) | (2,467) | (7,201) | | Share-based compensation expenses | 906 | 16 | 1,413 | 27 | | Income tax provision | 662 | 1,497 | 1,563 | 4,043 | | **Non-GAAP Adjusted Net Income** | **2,932** | **3,138** | **5,819** | **11,342** |

Core Viewpoint - Crescent Biopharma, Inc. has completed a merger with GlycoMimetics and secured $200 million in private financing to advance its pipeline of next-generation therapeutics for solid tumors, with a focus on its lead program, CR-001, a PD-1 x VEGF bispecific antibody, expected to submit an IND application by the end of 2025 [1][2][6]. Corporate Developments - The company appointed a new leadership team with extensive experience in oncology drug development and biotechnology, including Joshua Brumm as CEO and Jonathan McNeill, M.D., as President and COO [6]. - Crescent began trading on the Nasdaq under the ticker symbol "CBIO" on June 16, 2025, following the merger [6]. Pipeline Progress - CR-001 is designed to replicate the pharmacology of ivonescimab, which showed superior efficacy compared to pembrolizumab in a Phase 3 trial for non-small cell lung cancer [4][13]. - The company is on track to submit an IND application for CR-001 in Q4 2025, with proof-of-concept clinical data expected in the second half of 2026 [4][2]. - Two additional antibody-drug conjugates (ADCs), CR-002 and CR-003, are being developed, with an IND application for CR-002 expected in mid-2026 [5]. Financial Performance - As of June 30, 2025, Crescent reported cash reserves of $152.6 million, sufficient to fund operations through 2027 [7][12]. - R&D expenses for Q2 2025 were $12.1 million, while general and administrative expenses were $8.9 million, leading to a net loss of $21.8 million for the quarter [7][11]. - The total operating expenses for the first half of 2025 amounted to $35.3 million, with a net loss of $36.9 million [11].

Core Insights - Crescent Biopharma has appointed Dr. Jan Pinkas as chief scientific officer, bringing over two decades of experience in oncology drug development [1][2] - The company is advancing its portfolio of next-generation therapeutics for solid tumors, with plans to initiate a global Phase 1 trial for CR-001 in early 2026 and an IND submission for CR-002 in mid-2026 [2][5] Company Overview - Crescent Biopharma aims to build a leading oncology company focused on developing innovative therapies for cancer patients, including a PD-1 x VEGF bispecific antibody and novel antibody-drug conjugates [5] - The company’s pipeline is designed to leverage advancements in cooperative PD-1 x VEGF therapies and next-generation ADCs, targeting both monotherapy and combination treatment opportunities [2][5] Leadership Background - Dr. Pinkas previously served as chief scientific officer at Pyxis Oncology, where he established preclinical research for ADC programs [3] - His experience includes significant roles at Magenta Therapeutics and ImmunoGen, where he contributed to the development of approved therapies such as ELAHERE and SARCLISA [3][4]

Core Insights - Crescent Biopharma, Inc. has completed its merger with GlycoMimetics, Inc. and will trade under the ticker symbol "CBIO" on Nasdaq starting June 16, 2025 [1][2] - The company has raised $200 million in a private financing round, which will support operations through 2027 and facilitate multiple pipeline milestones [1][3] - Crescent is advancing its lead program, CR-001, a PD-1 x VEGF bispecific antibody, with an IND application expected in Q4 2025 and proof-of-concept clinical data anticipated in H2 2026 [3][4] Company Overview - Crescent Biopharma aims to become a leading oncology company by developing innovative therapies for cancer patients, including its lead program and novel antibody-drug conjugates (ADCs) [4] - The company plans to leverage multiple modalities and established targets to advance transformative therapies for solid tumors [4] Pipeline Development - CR-001 is designed to replicate the pharmacology of ivonescimab, which has shown superior efficacy compared to pembrolizumab in a Phase 3 trial for non-small cell lung cancer [3][7] - The company is also developing two novel ADCs, CR-002 and CR-003, with CR-002 expected to enter clinical trials in mid-2026 [3]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents Gyre Therapeutics' unaudited condensed consolidated financial statements for Q1 2025, covering Balance Sheets, Operations, Equity, Cash Flows, and notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$129.8 million** from **$125.4 million**, driven by cash, while liabilities decreased and equity grew to **$104.3 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $15,045 | $11,813 | | Total current assets | $68,448 | $64,786 | | Total assets | $129,790 | $125,406 | | **Liabilities & Equity** | | | | Total current liabilities | $18,991 | $19,516 | | Total liabilities | $25,488 | $27,004 | | Total stockholders' equity | $104,302 | $98,402 | | Total liabilities and stockholders' equity | $129,790 | $125,406 | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Q1 2025 revenues decreased to **$22.1 million** and net income to **$3.7 million**, with basic EPS at **$0.03** Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $22,058 | $27,172 | | Income from operations | $2,273 | $8,071 | | Net income | $3,734 | $9,935 | | Net income attributable to common stockholders | $2,698 | $7,532 | | Basic EPS | $0.03 | $0.09 | | Diluted EPS | $0.00 | $0.03 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was **$0.1 million** in Q1 2025, a significant change from **$2.9 million** provided in Q1 2024, with cash ending at **$15.0 million** Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(129) | $2,884 | | Net cash provided by (used in) investing activities | $1,967 | $(7,220) | | Net cash provided by financing activities | $1,344 | $658 | | Net increase (decrease) in cash and cash equivalents | $3,232 | $(3,724) | | Cash and cash equivalents at end of period | $15,045 | $29,785 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover accounting policies, business operations, liquidity, fair value, revenue concentration, intangible assets, R&D commitments, and segment reporting - The company is a commercial-stage biotechnology firm focusing on anti-inflammatory and anti-fibrotic drugs, holding a **65.2%** indirect interest in its PRC-based subsidiary, Gyre Pharmaceuticals[16](index=16&type=chunk)[17](index=17&type=chunk) - Management believes existing cash, cash flows from operations, and capital market access are sufficient to fund operations for at least **12 months** from the financial statement issuance date[18](index=18&type=chunk) - For Q1 2025, three customers (Sinopharm, Resources Pharmaceutical, Shanghai Pharmaceuticals) accounted for **50.3%**, **15.5%**, and **12.4%** of total revenue, respectively[30](index=30&type=chunk) - In March 2025, the company acquired technology rights for Nintedanib for approximately **$4.9 million**, which is recorded as an intangible asset[56](index=56&type=chunk) - The company has future commitments including **$12.7 million** for the F351 program and an additional **$20.0 million** for other R&D activities[96](index=96&type=chunk) - The company operates in two reportable segments: Gyre Pharmaceuticals (operations in China) and Gyre (operations in the U.S.). Gyre Pharmaceuticals generated all of the company's **$22.1 million** in revenue for Q1 2025[105](index=105&type=chunk)[109](index=109&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial condition and operations, including commercialization, pipeline, financial results, liquidity, and funding [Overview](index=27&type=section&id=Overview) Gyre, a commercial-stage biotech, focuses on anti-fibrotic drugs, expanding its portfolio and advancing F351 in Phase 3 and Phase 2 trials - The company is planning to initiate commercialization of Nintedanib in the PRC in Q2 2025 to offset declines in ETUARY sales and drive revenue growth[116](index=116&type=chunk) - Topline results for the Phase 3 trial of F351 in CHB-associated liver fibrosis are expected in Q2 2025[120](index=120&type=chunk) - A Phase 2 trial of F351 for MASH-associated liver fibrosis is expected to begin in the U.S. in 2025, pending IND approval[121](index=121&type=chunk) - The company initiated commercialization of avatrombopag maleate tablets in the PRC in March 2025 for treating thrombocytopenia[123](index=123&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Q1 2025 revenues decreased **19%** to **$22.1 million**, with R&D and G&A expenses rising, resulting in a **72%** drop in operating income Comparison of Operations for the three months ended March 31 (in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $22,058 | $27,172 | $(5,114) | (19)% | | Gross profit | $21,164 | $26,193 | $(5,029) | (19)% | | Research and development | $3,095 | $2,182 | $913 | 42% | | General and administrative | $4,955 | $3,398 | $1,557 | 46% | | Income from operations | $2,273 | $8,071 | $(5,798) | (72)% | | Net income | $3,734 | $9,935 | $(6,201) | (62)% | - The **19%** decrease in revenue was anticipated, attributed to a one-time marketing campaign in early 2024 that was not repeated, weaker economic conditions in China, and increased competition[151](index=151&type=chunk) - R&D expenses increased by **$0.9 million** (**42%**), mainly due to a **$1.3 million** increase in clinical research expenses for F351 data analysis[155](index=155&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds **$15.0 million** in cash and believes current resources are sufficient for 12 months, with future funding dependent on clinical trials and M&A - The company believes its existing cash of **$15.0 million**, plus other deposits and operational cash flow, will be sufficient to fund operations for at least the next **12 months**[161](index=161&type=chunk) Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(129) | $2,884 | | Net cash provided by (used in) investing activities | $1,967 | $(7,220) | | Net cash provided by financing activities | $1,344 | $658 | - As of March 31, 2025, the company has committed **$32.7 million** for future R&D activities and **$4.8 million** for property and equipment purchases[175](index=175&type=chunk)[176](index=176&type=chunk) - PRC regulations restrict the transfer of **$64.3 million** in capital and statutory reserves from the Chinese subsidiary, but this is not expected to materially impact the company's ability to meet cash obligations[171](index=171&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide market risk disclosures - As a smaller reporting company, Gyre Therapeutics is not required to provide quantitative and qualitative disclosures about market risk[181](index=181&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, with no material changes in internal control over financial reporting - Based on an evaluation as of March 31, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[183](index=183&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[184](index=184&type=chunk) [PART II. OTHER INFORMATION](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - As of the report date, the company is not involved in any material legal proceedings[186](index=186&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K - The company states there have been no material changes from the risk factors disclosed in its Annual Report[187](index=187&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - None reported[188](index=188&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No director or executive officer adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025 - No director or executive officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[191](index=191&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) Lists exhibits filed as part of the Quarterly Report on Form 10-Q, including CEO and CFO certifications - The report includes a list of all exhibits filed, such as agreements and officer certifications pursuant to the Sarbanes-Oxley Act[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)

[Business Highlights and Upcoming Milestones](index=1&type=section&id=Business%20Highlights%20and%20Upcoming%20Milestones) Gyre Therapeutics advanced commercial and clinical strategies in Q1 2025, launching avatrombopag, preparing nintedanib, and progressing pipeline milestones - ETUARY® (pirfenidone) sales were **$21.7 million** in Q1 2025, remaining the market leader for idiopathic pulmonary fibrosis (IPF) in the PRC despite a year-over-year decline[4](index=4&type=chunk) - Commercialization of avatrombopag in China began in March 2025, targeting liver disease specialists, with nintedanib on track for a May 2025 launch to expand IPF treatment options[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) - China's NMPA granted IND approval for a new pirfenidone indication to treat radiation-induced lung injury (RILI), marking the company's entry into oncology supportive care, with an adaptive Phase 2/3 trial planned for the second half of 2025[3](index=3&type=chunk)[5](index=5&type=chunk)[8](index=8&type=chunk) - Database lock was achieved for the pivotal Phase 3 trial of Hydronidone in Chronic Hepatitis B (CHB)-associated liver fibrosis, with topline results expected in Q2 2025[5](index=5&type=chunk) Pipeline Development Status | Candidate | Indication | Stage / Next Milestone | | :--- | :--- | :--- | | **F573** | Acute/Acute on-Chronic Liver Failure (ALF/ACLF) | Phase 2 trial completion expected by end of 2026 | | **F230** | Pulmonary Arterial Hypertension (PAH) | Phase 1 trial expected to begin in Q2 2025 | | **F528** | Chronic Obstructive Pulmonary Disease (COPD) | IND application planned for 2026 | - Ping Zhang was appointed as Executive Chairman of the Board of Directors in March 2025[12](index=12&type=chunk) [Financial Results](index=2&type=section&id=Financial%20Results) Gyre's Q1 2025 financial results showed decreased revenues and net income due to strategic marketing shifts, with the company reaffirming its full-year revenue guidance Q1 2025 Key Financial Metrics | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Revenues | $22.1 million | $27.2 million | | Income from Operations | $2.3 million | $8.1 million | | Net Income | $3.7 million | $9.9 million | | GAAP Basic EPS | $0.03 | $0.09 | | Non-GAAP Adjusted Net Income | $2.9 million | $8.2 million | - The **$5.1 million** year-over-year revenue decrease was primarily due to a **$5.2 million** decline in ETUARY® sales, resulting from a deliberate reallocation of marketing resources to support new product launches[14](index=14&type=chunk) - The company reaffirmed its full-year 2025 revenue guidance of **$118 to $128 million**, anticipating growth driven by the launch of Nintedanib and expansion of avatrombopag[1](index=1&type=chunk)[14](index=14&type=chunk) - As of March 31, 2025, the company held **$51.3 million** in cash, cash equivalents, and short/long-term deposits, deemed sufficient to fund operations for the next 12 months[5](index=5&type=chunk)[13](index=13&type=chunk) Q1 2025 Operating Expense Changes (YoY) | Expense Category | Q1 2025 (in millions) | Q1 2024 (in millions) | Change Driver | | :--- | :--- | :--- | :--- | | Cost of Revenues | $0.9M | $1.0M | Decreased in line with sales decline | | Selling & Marketing | $10.8M | $12.5M | Decreased due to lower commission costs from reduced sales | | Research & Development | $3.1M | $2.2M | Increased due to higher clinical research expenses for F351 | | General & Administrative | $5.0M | $3.4M | Increased due to higher personnel/stock costs and annual meeting expenses | [Financial Statements](index=7&type=section&id=Financial%20Statements) The unaudited condensed consolidated financial statements detail Gyre's Q1 2025 performance, showing revenue and net income declines, balance sheet changes, and GAAP to Non-GAAP reconciliation [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, Gyre reported revenues of **$22.1 million** and net income attributable to common stockholders of **$2.7 million**, both decreasing year-over-year Statement of Operations Summary (in thousands) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $22,058 | $27,172 | | Total operating expenses | $19,785 | $19,101 | | Income from operations | $2,273 | $8,071 | | Net income | $3,734 | $9,935 | | Net income attributable to common stockholders | $2,698 | $7,532 | | Basic EPS | $0.03 | $0.09 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, Gyre's balance sheet showed total assets of **$129.8 million**, total liabilities of **$25.5 million**, and total stockholders' equity of **$104.3 million**, with increased cash and cash equivalents Balance Sheet Summary (in thousands) | Line Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $15,045 | $11,813 | | Total current assets | $68,448 | $64,786 | | Total assets | $129,790 | $125,406 | | Total current liabilities | $18,991 | $19,516 | | Total liabilities | $25,488 | $27,004 | | Total stockholders' equity | $104,302 | $98,402 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) The company reconciled Q1 2025 GAAP net income of **$3.7 million** to a non-GAAP adjusted net income of **$2.9 million**, primarily by excluding a **$2.3 million** gain from warrant liability and adding **$0.5 million** in stock-based compensation GAAP to Non-GAAP Reconciliation (in thousands) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income (GAAP) | $3,734 | $9,935 | | Adjustments: | | | | Gain from change in fair value of warrant liability | $(2,255) | $(4,288) | | Stock-based compensation | $507 | $11 | | Provision for income taxes | $901 | $2,546 | | **Non-GAAP adjusted net income** | **$2,887** | **$8,204** | [Company and Product Overview](index=4&type=section&id=Company%20and%20Product%20Overview) Gyre Therapeutics is a biopharmaceutical company focused on organ fibrosis, developing F351 for MASH-associated fibrosis in the U.S. and commercializing ETUARY® (pirfenidone) in the PRC while advancing a diverse pipeline - F351 (Hydronidone), a structural analogue of pirfenidone, inhibits key pathways in liver fibrosis and is being evaluated in a Phase 3 trial for CHB-associated liver fibrosis in the PRC, with topline data expected in Q2 2025[18](index=18&type=chunk)[20](index=20&type=chunk) - Gyre Pharmaceuticals' flagship product, ETUARY® (pirfenidone), was the first approved IPF treatment in the PRC and generated **$105.8 million** in net sales in 2024[20](index=20&type=chunk) - Gyre Therapeutics' primary focus in the U.S. is the development and commercialization of F351 for MASH-associated fibrosis[21](index=21&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section contains a standard "safe harbor" provision, cautioning that forward-looking statements regarding clinical trials, regulatory approvals, commercial launches, and financial performance are subject to significant risks and uncertainties - The press release contains forward-looking statements concerning R&D efforts, clinical trial timing, commercial launches, and financial position, which are subject to substantial risks and uncertainties[23](index=23&type=chunk) - Actual results could differ materially from expectations due to various risks, including the ability to execute clinical strategies, unpredictable trial outcomes, regulatory hurdles, competition, and economic conditions[23](index=23&type=chunk)