Summary of Connect Biopharma Holdings FY Conference Call Company Overview - Connect Biopharma is a China-based biotech company that has transitioned to a U.S.-centric model, focusing on monoclonal antibody discovery and development, particularly rademikibart, a second-generation Dupixent targeting IL-4 receptor alpha [2][3] Clinical Development Focus - Rademikibart is being developed for acute exacerbations of asthma, differentiating from traditional chronic-only strategies [4] - The drug shows a rapid onset of effect, with over 70% of FEV1 benefit achieved within 24 hours, which is significantly faster than existing biologics [6][7] - There is a substantial unmet need for improved treatments for acute exacerbations, with millions of patients affected annually [5] Competitive Landscape - Current biologics for asthma do not have indications for acute exacerbations, presenting a unique market opportunity for rademikibart [8] - Rademikibart has a differentiated safety profile, showing no increase in eosinophils, unlike Dupixent, which can lead to serious adverse events [9][10] Commercial Strategy - The acute indication is seen as a gateway to chronic use, with market research indicating a strong preference among clinicians to continue using rademikibart if patients respond well acutely [12][13] - The company plans to leverage the acute indication to penetrate the crowded chronic asthma market, where ongoing treatment is required [13] Clinical Trials and Regulatory Strategy - Two phase 2 studies are currently underway, with top-line results expected in the first half of 2026 [15] - The primary endpoint for these studies is treatment failure, defined as patients returning for medical care within four weeks, with an expected failure rate of about 45% based on similar studies [17][18] - The company aims to use data from these trials to support regulatory discussions for an acute indication with the FDA [18] Financial Position - Connect Biopharma reported $72 million in cash at the end of Q2 2025, which, along with expected milestones from its partnership in China, is projected to sustain operations into 2027 [21] Key Takeaways - Rademikibart's rapid onset of action and unique safety profile position it favorably against existing treatments - The acute indication strategy is critical for market entry and potential chronic use - Strong financial backing and a clear regulatory pathway support the company's development plans [12][21]

Core Viewpoint - Connect Biopharma Holdings Limited is advancing its clinical-stage product candidate, rademikibart, which targets inflammatory diseases, particularly asthma, and will present new trial data at the European Respiratory Society Congress 2025 [1][3]. Group 1: Company Overview - Connect Biopharma is a clinical-stage biopharmaceutical company headquartered in San Diego, California, focused on transforming care for asthma and chronic obstructive pulmonary disease (COPD) [3]. - The company is conducting global clinical studies of rademikibart, which is designed to target interleukin-4 receptor alpha (IL-4Rα) [2][3]. - Connect Biopharma has an exclusive license and collaboration agreement for rademikibart with Simcere in China [3]. Group 2: Product Information - Rademikibart is a fully human monoclonal antibody that blocks the functions of IL-4 and IL-13, aiming to treat Th2 related inflammatory diseases such as atopic dermatitis and asthma [2]. - The product is currently under clinical investigation and has not yet received marketing approval from regulatory agencies [8]. Group 3: Upcoming Presentations - Connect Biopharma will present two posters at the ERS Congress 2025, detailing the impact of eosinophils and regional differences on the response to rademikibart in moderate-to-severe asthma [1]. - The presentations are scheduled for September 29, 2025, during the session on biologics for asthma and allergic rhinitis [1].

Summary of Connect Biopharma Holdings (CNTB) Conference Call Company Overview - Connect Biopharma Holdings is a biotech company that transitioned from a Chinese-based organization to a US-centric one, with a focus on monoclonal antibody technology and the development of its lead product, Radimigabart [5][4]. Product Development - Radimigabart is positioned as a second-generation DUPIXENT, targeting IL-4 receptor alpha, with initial focus on atopic dermatitis and asthma, now shifted to respiratory diseases like asthma and COPD [6][10]. - The drug has shown rapid onset of effect in previous studies, particularly in treating acute exacerbations of asthma and COPD [7][13]. - Radimigabart is expected to have a longer half-life and a differentiated safety profile compared to DUPIXENT, which has adverse effects like increased eosinophils [8][10]. Market Opportunity - Approximately 4 million patients annually experience acute exacerbations of asthma and COPD, with no new drug approvals for this condition in over 30 years [15][16]. - Current standard treatments include prednisone and bronchodilators, indicating a significant unmet need for effective acute treatment options [16]. Clinical Trials - Two parallel Phase II trials are underway, targeting patients with acute exacerbations of asthma and COPD, with the goal of reducing treatment failures by at least 50% [19][20]. - The studies are designed to evaluate the efficacy of Radimigabart in improving airway function and reducing the incidence of subsequent exacerbations [27][20]. Financial Position - As of the end of Q2, the company reported approximately $72 million, sufficient to complete current trials [49]. - The company anticipates key catalysts in the upcoming year, including data from a Phase I IV study and the Phase II trials [49]. Future Plans - The company plans to develop Radimigabart for both acute and chronic settings, responding to clinician interest in maintaining patients on the same drug post-acute treatment [39][40]. - The anticipated costs for Phase III studies are estimated to be around $12 million for acute studies and $5-7 million for chronic studies [42][43]. Key Takeaways - Connect Biopharma is strategically shifting its focus to the US market and developing Radimigabart as a novel treatment for acute respiratory conditions. - The company is addressing a significant market gap with its innovative approach to treating acute exacerbations, which has not seen new drug development in decades. - Financially, the company is positioned to support its ongoing clinical trials and is optimistic about upcoming data releases that could drive investor interest [49].

Core Viewpoint - Connect Biopharma has transitioned to a direct listing of its ordinary shares on Nasdaq, marking a strategic shift towards becoming a U.S.-centric company focused on treating inflammatory diseases [1][2][3]. Company Overview - Connect Biopharma is a clinical-stage biopharmaceutical company headquartered in San Diego, California, dedicated to transforming care for asthma and COPD [5]. - The company is advancing rademikibart, a next-generation monoclonal antibody targeting IL-4Rα, which is currently undergoing global clinical studies for treating acute exacerbations of asthma and COPD [5]. Recent Developments - The ADR program and Deposit Agreement were terminated on September 2, 2025, with ADRs being mandatorily cancelled and exchanged for ordinary shares at a one-for-one ratio [2]. - Ordinary shares began trading directly on Nasdaq under the existing symbol "CNTB" [2]. Future Focus - The company aims to execute its Phase 2 Seabreeze STAT studies for rademikibart, which is expected to enhance institutional access with U.S. investors and build long-term shareholder value [3].

Core Insights - Connect Biopharma Holdings Limited is a clinical-stage biopharmaceutical company focused on treating inflammatory diseases, particularly asthma and COPD [3] - The company is advancing rademikibart, a next-generation antibody targeting IL-4Rα, currently undergoing global clinical studies [3] - Connect Biopharma has an exclusive collaboration with Simcere for rademikibart in China [3] Upcoming Conferences - Company management will participate in the Cantor Global Healthcare Conference on September 3rd, 2025, at 3:20 p.m. ET [1] - The H.C. Wainwright 27th Annual Global Investment Conference is scheduled for September 8th, 2025, at 9:30 a.m. ET [2] - Live webcasts of both events will be available on the company's investor website, with archived replays accessible for approximately 90 days [2]

Core Viewpoint - Conade Biopharma (CNTB) experienced a 5.06% increase in stock price, reaching $1.818 per share, with a total market capitalization of $101 million as of August 22 [1] Financial Performance - As of June 30, 2025, Conade Biopharma reported total revenue of $48,000, representing a 99.8% year-over-year decrease [1] - The company recorded a net loss attributable to shareholders of $23.171 million, which is a 476.52% year-over-year decline [1] Company Overview - Conade Biopharma Holdings Limited is a biopharmaceutical company with clinical-stage products and a global presence, focusing on developing innovative therapies through its proprietary T-cell function modulation platform to improve the quality of life for patients with inflammatory immune diseases [1]

Core Viewpoint - Conformative Biopharma (CNTB) has experienced a significant decline in revenue and net profit, indicating potential challenges in its financial performance and market position [1] Financial Performance - As of June 30, 2025, Conformative Biopharma reported total revenue of $48,000, representing a year-over-year decrease of 99.8% [1] - The company recorded a net loss attributable to shareholders of $23.171 million, which is a staggering year-over-year decline of 476.52% [1] Market Activity - On August 22, CNTB opened with a 2.31% increase, trading at $1.77 per share, with a total trading volume of $352.0 [1] - The company's total market capitalization stands at approximately $98.6273 million [1] Company Overview - Conformative Biopharma is a biopharmaceutical company in the clinical stage, focusing on developing innovative therapies through its proprietary T-cell functional modulation platform to improve the quality of life for patients with inflammatory immune diseases [1]

Core Viewpoint - Conformant Biopharma (CNTB) has experienced a significant decline in revenue and net profit, indicating potential challenges in its financial performance and operational efficiency [1] Financial Performance - As of June 30, 2025, Conformant Biopharma reported total revenue of $48,000, a year-over-year decrease of 99.8% [1] - The company recorded a net profit attributable to shareholders of -$23.17 million, reflecting a year-over-year decline of 476.52% [1] - Basic earnings per share were reported at -$0.42 [1] Stock Performance - On August 21, CNTB's stock price increased by 3.22%, reaching $1.724 per share [1] - The trading volume on that day was $23,700, with a total market capitalization of $96.053 million [1] Company Overview - Conformant Biopharma is a biopharmaceutical company with clinical-stage products and a global presence [1] - The company develops innovative therapies through its proprietary T-cell function modulation platform, aimed at improving the quality of life for patients with inflammatory immune diseases [1]

Core Points - Connect Biopharma Holdings Limited collaborates with the Jovante Woods Foundation to enhance asthma education and awareness, particularly focusing on acute asthma attacks [1][3] - The partnership aims to expand educational programming across the U.S. and includes a video package sharing Jovante Woods' story to highlight the dangers of acute asthma [3][4] - The initiative is driven by the need for improved treatments for acute asthma exacerbations, with Connect Biopharma advancing its Phase 2 Seabreeze STAT studies [4][8] Company Overview - Connect Biopharma is a clinical-stage biopharmaceutical company focused on transforming care for asthma and COPD, headquartered in San Diego, California [8] - The company is developing rademikibart, a monoclonal antibody targeting IL-4Rα, aimed at treating acute exacerbations of asthma and COPD [7][8] - Connect Biopharma has an exclusive collaboration agreement for rademikibart with Simcere in China [8] Foundation Activities - The Jovante Woods Foundation, established by Ickey and Chandra Woods, aims to raise awareness about asthma and educate families on treatment management [2] - The Foundation has organized educational events and fundraisers in various states, including Ohio, California, and Nevada [2] - The collaboration with Connect Biopharma will enhance the Foundation's reach and frequency of educational programming [5]

```markdown Report Information [Form 10-Q Filing Details](index=1&type=section&id=Form%2010-Q%20Filing%20Details) This section provides the basic filing information for the Form 10-Q, including the reporting period, registrant details, and classification under SEC rules Registrant Information | Detail | Value | | :--- | :--- | | **Form Type** | Quarterly Report (10-Q) | | **Period Ended** | June 30, 2025 | | **Registrant Name** | Connect Biopharma Holdings Limited | | **Jurisdiction** | Cayman Islands | | **Principal Office** | San Diego, California 92130 | | **Commission File Number** | 001-40212 | | **Trading Symbol** | CNTB | | **Exchange** | The Nasdaq Global Market | | **Filer Status** | Non-accelerated filer, Smaller reporting company, Emerging growth company | - As of July 31, 2025, there were **55,721,657 ordinary shares outstanding**[4](index=4&type=chunk) [Explanatory Note](index=4&type=section&id=EXPLANATORY%20NOTE) Connect Biopharma Holdings Limited, a Cayman Islands company, qualifies as a 'foreign private issuer' but has voluntarily elected to file reports on U.S. domestic issuer forms (10-K, 10-Q, 8-K). The Company intends to maintain its foreign private issuer status, retaining exemptions from U.S. federal proxy rules, Regulation FD, and Section 16 reporting requirements for officers, directors, and principal shareholders - **Company is a 'foreign private issuer'** but voluntarily files on U.S. domestic issuer forms (10-K, 10-Q, 8-K)[9](index=9&type=chunk) - **Maintains foreign private issuer status**, exempt from U.S. federal proxy rules, Regulation FD, and Section 16 reporting[10](index=10&type=chunk) PART I. FINANCIAL INFORMATION [ITEM 1. Condensed Consolidated Financial Statements](index=5&type=section&id=ITEM%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive income (loss), statements of shareholders' equity, and statements of cash flows, along with their accompanying notes, for the periods ended June 30, 2025 and December 31, 2024 (for balance sheet) or June 30, 2024 (for income/cash flow statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change (2025 vs 2024) | | :--- | :--- | :--- | :--- | | **ASSETS** | | | | | Cash and cash equivalents | $40,632 | $78,232 | -$37,600 | | Short-term investments | $31,136 | $15,476 | +$15,660 | | Total current assets | $77,756 | $96,961 | -$19,205 | | Total assets | $82,725 | $101,284 | -$18,559 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | | Accounts payable | $2,294 | $342 | +$1,952 | | Accrued liabilities | $7,933 | $7,802 | +$131 | | Total current liabilities | $10,741 | $8,462 | +$2,279 | | Total liabilities | $11,383 | $9,118 | +$2,265 | | Total shareholders' equity | $71,342 | $92,166 | -$20,824 | | Total liabilities and shareholders' equity | $82,725 | $101,284 | -$18,559 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Condensed Consolidated Statements of Operations (in thousands, except per share) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | License and collaboration revenue | $48 | $24,116 | $48 | $24,116 | | Research and development expense | $8,773 | $5,348 | $15,406 | $14,011 | | General and administrative expense | $4,699 | $5,122 | $9,513 | $9,092 | | Total operating expenses | $13,472 | $10,470 | $24,919 | $23,103 | | (Loss) income from operations | $(13,424) | $13,646 | $(24,871) | $1,013 | | Net (loss) income | $(12,899) | $14,847 | $(23,171) | $6,154 | | Basic net (loss) income per ordinary share | $(0.23) | $0.27 | $(0.42) | $0.11 | | Diluted net (loss) income per ordinary share | $(0.23) | $0.27 | $(0.42) | $0.11 | [Condensed Consolidated Statements of Shareholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' Equity Changes (in thousands) | Item | Balance, Dec 31, 2024 | Balance, June 30, 2025 | Change | | :--- | :--- | :--- | :--- | | Additional Paid-In Capital | $439,357 | $441,413 | +$2,056 | | Accumulated Other Comprehensive Loss | $(1,666) | $(1,375) | +$291 | | Accumulated Deficit | $(345,355) | $(368,526) | -$23,171 | | Total Shareholders' Equity | $92,166 | $71,342 | -$20,824 | - **Net loss for the six months ended June 30, 2025, was $23,171 thousand**, contributing to the increase in accumulated deficit[19](index=19&type=chunk) - **Share-based compensation expense for the six months ended June 30, 2025, was $1,893 thousand**, increasing additional paid-in capital[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | Change (2025 vs 2024) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(22,550) | $(8,286) | $(14,264) | | Net cash (used in) provided by investing activities | $(15,512) | $12,460 | $(27,972) | | Net cash provided by financing activities | $163 | $121 | +$42 | | Net (decrease) increase in cash and cash equivalents | $(37,600) | $4,176 | $(41,776) | | Cash and cash equivalents at end of year | $40,632 | $109,839 | $(69,207) | - The increase in net cash used in operating activities was primarily due to an **increase in net loss of $29.3 million**, partially offset by **net changes in operating assets and liabilities of $16.9 million**[114](index=114&type=chunk) - The decrease in cash provided by investing activities was primarily due to **net purchases of short-term investments of $15.1 million** in 2025, compared to **net maturities of $12.8 million** in 2024[115](index=115&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization and Business](index=13&type=section&id=1.%20Organization%20and%20Business) - Connect Biopharma is a clinical-stage biopharmaceutical company focused on asthma and COPD, advancing rademikibart, an anti-IL-4Rα antibody[25](index=25&type=chunk) - The Company plans to **terminate its ADR program** around **September 2, 2025**, and list its Ordinary Shares directly on Nasdaq under the existing symbol **'CNTB'**[26](index=26&type=chunk) - As of June 30, 2025, cash, cash equivalents, and short-term investments **totaled $71.8 million**, believed to be **sufficient for at least one year** of anticipated cash requirements[27](index=27&type=chunk) [2. Basis of Presentation and Significant Accounting Policies](index=13&type=section&id=2.%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) - The Company voluntarily elected to become a domestic filer starting with its 2024 Annual Report on Form 10-K, while maintaining its Foreign Private Issuer status[28](index=28&type=chunk) - Financial statements are prepared in accordance with **U.S. GAAP** for interim financial information and **SEC rules**, with all necessary adjustments included[28](index=28&type=chunk) - **Significant accounting policies** involving judgment and estimates include revenue recognition, investments, accrued R&D expenses, income taxes, and share-based compensation[31](index=31&type=chunk) - **Effective January 1, 2025**, the Company adopted ASU 2023-09 (Income Taxes) prospectively, with **no material impact** on current disclosures[43](index=43&type=chunk)[44](index=44&type=chunk) - FASB issued ASU 2024-03 (Expense Disaggregation Disclosures), effective for annual periods beginning after December 15, 2026, which the Company is currently **evaluating**[45](index=45&type=chunk) [3. Fair Value Measurements](index=16&type=section&id=3.%20Fair%20Value%20Measurements) Fair Value Measurements of Financial Assets (in thousands) | Asset Type | Balance at June 30, 2025 | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Money market funds | $9,564 | $9,564 | $— | $— | | U.S. treasury bills | $9,928 | $9,928 | $— | $— | | U.S. government agency obligations | $8,917 | $— | $8,917 | $— | | U.S. corporate debt securities | $3,382 | $— | $3,382 | $— | | U.S. commercial paper | $6,930 | $— | $6,930 | $— | | Foreign commercial paper | $1,979 | $— | $1,979 | $— | | **Total** | **$40,700** | **$19,492** | **$21,208** | **$—** | - The Company measures cash, cash equivalents, and short-term investments at fair value on a recurring basis, with **no investments classified as Level 3**[46](index=46&type=chunk)[48](index=48&type=chunk) [4. Balance Sheet Details](index=17&type=section&id=4.%20Balance%20Sheet%20Details) Available-for-Sale Investments (June 30, 2025, in thousands) | Investment Type | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | | :--- | :--- | :--- | :--- | :--- | | U.S. treasury bills | $9,930 | $— | $(2) | $9,928 | | U.S. government agency obligations | $8,918 | $— | $(1) | $8,917 | | U.S. corporate debt securities | $3,382 | $— | $— | $3,382 | | U.S. commercial paper | $6,932 | $— | $(2) | $6,930 | | Foreign commercial paper | $1,980 | $— | $(1) | $1,979 | | **Total** | **$31,142** | **$—** | **$(6)** | **$31,136** | - For the three and six months ended June 30, 2025, the Company recorded **$6,000 and $7,000**, respectively, in **net unrealized losses** on available-for-sale investments, compared to net unrealized gains in 2024[52](index=52&type=chunk) Prepaid Expenses and Other Current Assets (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepaid expenses | $5,567 | $2,149 | | Interest receivables | $193 | $262 | | Other assets | $228 | $53 | | **Total** | **$5,988** | **$2,464** | Accrued Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accrued clinical, manufacturing and professional expense | $5,574 | $4,211 | | Accrued compensation and benefits | $1,656 | $3,342 | | Other accrued expenses | $703 | $249 | | **Total** | **$7,933** | **$7,802** | [5. License and Collaboration Agreement](index=18&type=section&id=5.%20License%20and%20Collaboration%20Agreement) - Connect HK and Connect SZ entered an exclusive license and collaboration agreement with Simcere Pharmaceutical Co., Ltd. on November 21, 2023, for rademikibart in Greater China[56](index=56&type=chunk)[57](index=57&type=chunk) - Simcere paid a non-refundable **upfront fee of approximately $21 million** and made **$5 million in milestone payments** in 2024. Remaining eligible milestone payments **total up to $110 million** as of June 30, 2025, after an **$8 million time-based milestone lapsed**[58](index=58&type=chunk) - The Company **recognized $48,000 in revenue** for cost reimbursements for clinical materials for the three and six months ended June 30, 2025, a **significant decrease from $24.1 million** in 2024 which included the upfront license fee and development milestones[62](index=62&type=chunk)[105](index=105&type=chunk) [6. Commitments and Contingencies](index=20&type=section&id=6.%20Commitments%20and%20Contingencies) - The Company was **not a party to any material litigation** and **did not have contingency reserves established for any liabilities** as of June 30, 2025, or December 31, 2024[71](index=71&type=chunk) [7. Leases](index=20&type=section&id=7.%20Leases) - In February 2025, the Company relocated its corporate headquarters in San Diego, California, recognizing an **initial ROU lease asset and liability of $0.9 million** for the new space **expiring January 31, 2028**[72](index=72&type=chunk) - As of June 30, 2025, the **weighted average remaining lease term was 2.4 years** (vs. **1.0 year** at Dec 31, 2024), and the **weighted average discount rate was 8.0%** (vs. **4.8%** at Dec 31, 2024)[74](index=74&type=chunk) Annual Future Minimum Lease Payments (as of June 30, 2025, in thousands) | Year | Amount | | :--- | :--- | | 2025 (remainder) | $211 | | 2026 | $371 | | 2027 | $354 | | 2028 | $30 | | **Total future minimum lease payments** | **$966** | | Less: amount representing interest | $(96) | | **Total lease liabilities** | **$870** | [8. Reorganization](index=21&type=section&id=8.%20Reorganization) - During Q2 and Q3 2024, the Company implemented executive leadership changes, **resulting in $3.2 million in total expenses** (**$2.0 million cash severance**, **$1.2 million non-cash share-based compensation**)[77](index=77&type=chunk) - Of the total expense, **$1.4 million was recognized** during the three and six months ended June 30, 2024 (**$0.7 million G&A**, **$0.7 million R&D**)[77](index=77&type=chunk) [9. Shareholders' Equity](index=21&type=section&id=9.%20Shareholders'%20Equity) - PRC subsidiaries have **not made profit appropriations** to the statutory surplus reserve fund due to accumulated losses[78](index=78&type=chunk) - **Restricted net assets of PRC subsidiaries were $28.1 million** as of June 30, 2025, and **$29.6 million** as of December 31, 2024[79](index=79&type=chunk) [10. Equity Incentive Plans](index=21&type=section&id=10.%20Equity%20Incentive%20Plans) Stock Option Activity (Six Months Ended June 30, 2025) | Activity | Number of Options | Weighted-Average Exercise Price | | :--- | :--- | :--- | | Outstanding at Dec 31, 2024 | 14,263,242 | $2.93 | | Granted | 1,104,000 | $0.78 | | Exercised | (26,500) | $0.76 | | Cancelled | (1,442,640) | $8.05 | | **Outstanding at June 30, 2025** | **13,898,102** | **$2.23** | Share-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $253 | $954 | $584 | $1,561 | | General and administrative | $698 | $1,035 | $1,309 | $1,744 | | **Total** | **$951** | **$1,989** | **$1,893** | **$3,305** | - As of June 30, 2025, **$9.0 million of unrecognized compensation cost** related to non-vested, share-based payment awards is expected to be recognized over a **weighted-average period of 3.0 years**[81](index=81&type=chunk) - **Effective January 1, 2025**, the Company switched to the **Black-Scholes option pricing model** and the **simplified method for expected term estimation** for stock options, aligning with peers and limited exercise history[82](index=82&type=chunk) [11. Income Taxes](index=22&type=section&id=11.%20Income%20Taxes) Income Tax Expense and Effective Tax Rate | Period | Income Tax Expense (in thousands) | Effective Tax Rate | | :--- | :--- | :--- | | Three Months Ended June 30, 2025 | $55 | (0.4)% | | Three Months Ended June 30, 2024 | $30 | 0.2% | | Six Months Ended June 30, 2025 | $109 | (0.5)% | | Six Months Ended June 30, 2024 | $60 | 1.0% | - The **effective tax rate** in both periods was primarily driven by the **full valuation allowance** maintained against the Company's deferred tax assets due to accumulated net losses[86](index=86&type=chunk)[88](index=88&type=chunk) - **Unrecognized tax benefits were $1.4 million** as of June 30, 2025, none of which would affect the effective tax rate if recognized[89](index=89&type=chunk) - The One Big Beautiful Bill Act (OBBBA) signed on July 4, 2025, is **not expected to have a material impact** on the Company's effective tax rate or consolidated financial statements[90](index=90&type=chunk) [12. Segment Reporting](index=23&type=section&id=12.%20Segment%20Reporting) - The Company operates in **one operating segment**: treatment of respiratory diseases, with the CEO acting as the **Chief Operating Decision-Maker (CODM)**[91](index=91&type=chunk) Segment Net Loss (Income) (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | License and collaboration revenue | $48 | $24,116 | $48 | $24,116 | | Research and development expense | $(8,773) | $(5,348) | $(15,406) | $(14,011) | | General and administrative expense | $(4,699) | $(5,122) | $(9,513) | $(9,092) | | Other income, net | $580 | $1,231 | $1,809 | $5,201 | | Income tax expense | $(55) | $(30) | $(109) | $(60) | | **Segment net loss (income)** | **$(12,899)** | **$14,847** | **$(23,171)** | **$6,154** | - **Long-lived tangible assets and ROU lease assets** were primarily located in the PRC (**$3.9 million**) and the U.S. (**$0.9 million**) as of June 30, 2025[92](index=92&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&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, results of operations, and significant developments for the three and six months ended June 30, 2025, compared to the same periods in 2024. It includes forward-looking statements and discussions on liquidity, capital resources, and critical accounting estimates [Overview](index=24&type=section&id=Overview) - Connect Biopharma is a clinical-stage biopharmaceutical company focused on transforming care for asthma and COPD, advancing rademikibart, a next-generation anti-IL-4Rα antibody[95](index=95&type=chunk) [Significant Developments](index=24&type=section&id=Significant%20Developments) - Presented clinical and preclinical data for rademikibart at major conferences (ATS 2025, EAACI 2025), showing **significant improvement in airway function and reduction in acute exacerbations** for inflammation-mediated chronic asthma[97](index=97&type=chunk) - Preclinical data suggests rademikibart's **differentiated structural and molecular dynamics**, potentially offering **enhanced IL-4Rα inhibition** compared to dupilumab[97](index=97&type=chunk) - Collaborator Simcere submitted a **New Drug Application** for rademikibart in China for adult and adolescent AD, with Connect eligible for **up to $110 million** in remaining milestone payments and tiered royalties on net sales[98](index=98&type=chunk) - Company announced plans to **terminate its ADR program** and list ordinary shares directly on Nasdaq around **September 2, 2025**, under the existing symbol **'CNTB'**[99](index=99&type=chunk) - **Expanded Board of Directors to seven** and appointed James A. Schoeneck, an experienced biotech leader, as a new director in July 2025[100](index=100&type=chunk) [Critical Accounting Estimates](index=25&type=section&id=Critical%20Accounting%20Estimates) - **Preparation of financial statements requires estimates and judgments** in areas such as revenue recognition, investments, accrued R&D expenses, income taxes, and share-based compensation[101](index=101&type=chunk) - **Actual results may differ materially from estimates** under different assumptions or conditions[101](index=101&type=chunk) [Recent Accounting Pronouncements](index=25&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to Note 2 of the condensed consolidated financial statements for details on recent accounting pronouncements[103](index=103&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Key Financial Performance Indicators (in thousands, except per share) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | License and collaboration revenue | $48 | $24,116 | $48 | $24,116 | | Research and development expense | $8,773 | $5,348 | $15,406 | $14,011 | | General and administrative expense | $4,699 | $5,122 | $9,513 | $9,092 | | Other income, net | $580 | $1,231 | $1,809 | $5,201 | | Net (loss) income | $(12,899) | $14,847 | $(23,171) | $6,154 | | Basic net (loss) income per ordinary share | $(0.23) | $0.27 | $(0.42) | $0.11 | [License and Collaboration Revenues](index=25&type=section&id=License%20and%20Collaboration%20Revenues) - Revenue for Q2 and H1 2025 was **$48,000 in revenue** from cost reimbursements for clinical materials, a **significant decrease from $24.1 million** in Q2 and H1 2024, which included an upfront license fee and development milestones from the Simcere agreement[105](index=105&type=chunk) [Research and Development Expense](index=26&type=section&id=Research%20and%20Development%20Expense) Research and Development Expense Breakdown (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Rademikibart-related costs | $5,753 | $1,412 | $9,409 | $7,096 | | Other development related costs | $8 | $181 | $81 | $444 | | Personnel costs and other expenses | $2,759 | $2,801 | $5,332 | $4,910 | | Share-based compensation expense | $253 | $954 | $584 | $1,561 | | **Total** | **$8,773** | **$5,348** | **$15,406** | **$14,011** | - **R&D expense increased to $8.8 million** (Q2 2025) and **$15.4 million** (H1 2025) primarily due to increased costs for rademikibart development, including the initiation of two Phase 2 clinical trials for asthma and COPD exacerbations[107](index=107&type=chunk) [General and Administrative Expense](index=26&type=section&id=General%20and%20Administrative%20Expense) - **G&A expense decreased to $4.7 million** for Q2 2025 (from **$5.1 million** in Q2 2024) mainly due to lower non-cash, share-based compensation expense[108](index=108&type=chunk) - **G&A expense increased to $9.5 million** for H1 2025 (from **$9.1 million** in H1 2024) due to higher professional fees for U.S.-centric efforts and increased personnel costs, partially offset by lower share-based compensation[109](index=109&type=chunk) [Other Income, Net](index=26&type=section&id=Other%20Income,%20Net) - **Other income, net, decreased to $0.6 million** (Q2 2025) and **$1.8 million** (H1 2025) from **$1.2 million and $5.2 million**, respectively, in 2024, primarily due to reduced government subsidies and interest income[110](index=110&type=chunk) [Reorganization](index=26&type=section&id=Reorganization) - Refer to Note 8 for details on the executive officer reorganization plan[111](index=111&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, cash, cash equivalents, and short-term investments **totaled $71.8 million**, projected to be **sufficient for at least one year**[112](index=112&type=chunk) Net (Loss) Income and Cash Flow from Operations (in thousands, except per share) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (2025 vs 2024) | | :--- | :--- | :--- | :--- | | Net (loss) income | $(23,171) | $6,154 | $(29,325) | | Net cash used in operating activities | $(22,550) | $(8,286) | $(14,264) | | Net cash (used in) provided by investing activities | $(15,512) | $12,460 | $(27,972) | | Net cash provided by financing activities | $163 | $121 | +$42 | - Historically, operations have been financed through **equity offerings** (including a **$219.9 million IPO** in March 2021) and collaborative arrangements[117](index=117&type=chunk) - **Future capital requirements are uncertain** and depend on R&D progress, regulatory outcomes, manufacturing costs, intellectual property, and market conditions[122](index=122&type=chunk) - The Company expects to finance future cash needs through **equity, debt, collaborations, or other strategic transactions**, acknowledging potential dilution or unfavorable terms[123](index=123&type=chunk) - **Global economic slowdown, high inflation, and recession risks may adversely affect business, operating costs, and ability to obtain financing**[124](index=124&type=chunk) [Material Cash Requirements](index=28&type=section&id=Material%20Cash%20Requirements) - **Operating lease obligations total $1.0 million** as of June 30, 2025, with **$0.2 million** due in the remainder of 2025 and **$0.8 million** due within the next two to three years, including a new San Diego headquarters lease expiring January 31, 2028[118](index=118&type=chunk)[119](index=119&type=chunk) - **Short-term purchase obligations consist of non-cancellable commitments** with third-party manufacturers, to be funded by current financial resources[120](index=120&type=chunk) - **Future costs for clinical trials, contract research organizations, and contract manufacturing organizations are variable and cannot be estimated with certainty**, but will be funded by current financial resources[121](index=121&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for smaller reporting companies, and therefore, no quantitative and qualitative disclosures about market risk are provided - **Not required for smaller reporting companies**[125](index=125&type=chunk) [ITEM 4. Controls and Procedures](index=29&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the principal executive and financial officers, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they were effective at a reasonable assurance level. No material changes to internal control over financial reporting were identified during the quarter - Disclosure controls and procedures were evaluated and deemed **effective at the reasonable assurance level** as of June 30, 2025[128](index=128&type=chunk) - **No material changes to internal control over financial reporting occurred during the latest fiscal quarter**[129](index=129&type=chunk) PART II. OTHER INFORMATION [ITEM 1. Legal Proceedings](index=30&type=section&id=ITEM%201.%20Legal%20Proceedings) The Company is not currently involved in any material legal proceedings and is unaware of any pending or threatened legal actions that could adversely affect its business, operating results, or financial condition - **Not currently a party to any material legal proceedings**[131](index=131&type=chunk) - **No pending or threatened legal proceedings are believed to have an adverse effect on business, operating results, or financial condition**[131](index=131&type=chunk) [ITEM 1A. Risk Factors](index=30&type=section&id=ITEM%201A.%20Risk%20Factors) The Company operates in a dynamic environment with inherent risks. No material changes to the risk factors previously described in the 2024 Annual Report and Q1 2025 Form 10-Q were identified for this reporting period - **No material changes to the risk factors described in the 2024 Annual Report and Q1 2025 Form 10-Q were identified**[132](index=132&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period - **Not applicable**[133](index=133&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=30&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the reporting period - **Not applicable**[134](index=134&type=chunk) [ITEM 4. Mine Safety Disclosures](index=30&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period - **Not applicable**[135](index=135&type=chunk) [ITEM 5. Other Information](index=30&type=section&id=ITEM%205.%20Other%20Information) This item is not applicable for the reporting period - **Not applicable**[136](index=136&type=chunk) [ITEM 6. Exhibits](index=31&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications, XBRL documents, and other relevant agreements Key Exhibits Filed | Exhibit No. | Description | Filed/Furnished | | :--- | :--- | :--- | | 10.1† | Non-Employee Director Compensation Program | Filed | | 31.1 | Certification of Principal Executive Officer (Section 302) | Filed | | 31.2 | Certification of Principal Financial Officer (Section 302) | Filed | | 32.1 | Certifications of Principal Executive Officer and Principal Financial Officer (Section 906) | Furnished | | 101.INS | Inline XBRL Instance Document | Filed | | 104 | Cover Page Interactive Data File | Filed | - **Certifications under Exhibit 32.1 are furnished, not filed, and are not incorporated by reference into other Company filings**[138](index=138&type=chunk) SIGNATURES - Report signed by Barry D. Quart, Pharm.D., **CEO**, and Lisa Peraza, **SVP of Finance**, on **August 13, 2025**[142](index=142&type=chunk) ```