Core Viewpoint - Tourmaline Bio, Inc. (TRML) has shown a significant price increase of 20.4% over the past four weeks, with a mean price target of $56.2 indicating a potential upside of 151% from the current trading price of $22.39 [1] Price Targets and Analyst Estimates - The mean estimate consists of 10 short-term price targets with a standard deviation of $10.22, where the lowest estimate of $35.00 suggests a 56.3% increase, and the highest estimate of $70.00 indicates a potential surge of 212.6% [2] - A low standard deviation among price targets suggests a high degree of agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [9] Earnings Estimates and Analyst Sentiment - Analysts are optimistic about TRML's earnings prospects, as indicated by a strong consensus in revising EPS estimates higher, which has historically correlated with near-term stock price movements [11] - Over the last 30 days, one estimate has increased, leading to a 0.6% rise in the Zacks Consensus Estimate for the current year [12] Zacks Rank and Investment Potential - TRML holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating a strong potential for upside in the near term [13]

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements and management's discussion and analysis [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section provides the company's unaudited condensed consolidated financial statements and explanatory notes for the periods presented [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's condensed consolidated balance sheets, showing assets, liabilities, and equity at period-end | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total assets | $269,295 | $309,001 | $(39,706) | | Total liabilities | $10,103 | $8,949 | $1,154 | | Total stockholders' equity | $259,192 | $300,052 | $(40,860) | | Cash and cash equivalents | $31,423 | $30,506 | $917 | | Short-term investments | $207,811 | $227,797 | $(19,986) | | Long-term investments | $17,184 | $36,633 | $(19,449) | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section presents the company's condensed consolidated statements of operations and comprehensive loss for the periods ended June 30, 2025 and 2024 | Metric (in thousands) | 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 | $19,634 | $15,734 | $39,892 | $27,110 | | General and administrative | $6,340 | $6,237 | $12,313 | $12,378 | | Total operating expenses | $25,974 | $21,971 | $52,205 | $39,488 | | Loss from operations | $(25,974) | $(21,971) | $(52,205) | $(39,488) | | Other income, net | $2,882 | $4,484 | $6,143 | $8,690 | | Net loss | $(23,092) | $(17,487) | $(46,062) | $(30,798) | | Net loss per share, basic and diluted | $(0.90) | $(0.68) | $(1.79) | $(1.24) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section details changes in stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit | Metric (in thousands) | Balance at December 31, 2024 | Balance at June 30, 2025 | Change | | :-------------------- | :--------------------------- | :----------------------- | :----- | | Common Stock Amount | $3 | $3 | $0 | | Additional Paid-In Capital | $435,014 | $440,391 | $5,377 | | Accumulated Other Comprehensive Income | $296 | $121 | $(175) | | Accumulated Deficit | $(135,261) | $(181,323) | $(46,062) | | Total Stockholders' Equity | $300,052 | $259,192 | $(40,860) | - Stock-based compensation expense for the six months ended June 30, 2025, was **$4.7 million**, contributing to the increase in additional paid-in capital[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's condensed consolidated statements of cash flows, detailing operating, investing, and financing activities | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash used in operating activities | $(41,943) | $(32,930) | $(9,013) | | Net cash provided by (used in) investing activities | $42,244 | $(199,000) | $241,244 | | Net cash provided by financing activities | $616 | $161,352 | $(160,736) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $917 | $(70,578) | $71,495 | | Cash, cash equivalents and restricted cash—End of period | $31,650 | $70,375 | $(38,725) | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes to the condensed consolidated financial statements, clarifying accounting policies and financial items [1. Nature of Business](index=10&type=section&id=1.%20Nature%20of%20Business) The company is a late-stage clinical biotechnology firm developing pacibekitug, with sufficient capital to fund operations for at least 12 months - Tourmaline Bio, Inc. is a late-stage clinical biotechnology company developing pacibekitug, a fully human monoclonal antibody targeting interleukin-6 for immune and inflammatory diseases[22](index=22&type=chunk)[85](index=85&type=chunk) - The company completed a reverse merger on **October 19, 2023**, with Legacy Tourmaline deemed the accounting acquirer[24](index=24&type=chunk)[28](index=28&type=chunk) - As of June 30, 2025, the company had **$256.4 million** in cash, cash equivalents, and investments, expected to fund operations for at least 12 months from August 13, 2025[32](index=32&type=chunk)[135](index=135&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) The financial statements follow SEC rules and GAAP, with ASU 2023-07 Segment Reporting adopted in fiscal year 2024 - The condensed consolidated financial statements are unaudited and prepared in accordance with SEC rules and GAAP[33](index=33&type=chunk)[34](index=34&type=chunk) - The company adopted ASU 2023-07, Segment Reporting, for the fiscal year ended December 31, 2024, which led to additional interim disclosures in Note 10[40](index=40&type=chunk) - No material changes in significant accounting policies occurred during the six months ended June 30, 2025[38](index=38&type=chunk) [3. Pfizer License Agreement](index=12&type=section&id=3.%20Pfizer%20License%20Agreement) The company holds an exclusive worldwide license from Pfizer for pacibekitug, involving upfront payments, equity, and potential future milestones and royalties - The company obtained an exclusive, worldwide license for pacibekitug from Pfizer in May 2022[43](index=43&type=chunk)[101](index=101&type=chunk) - Consideration included a **$5.0 million** upfront payment and **7,125,000 Series A preferred units** (valued at **$7.1 million**), representing a **15% interest**[43](index=43&type=chunk)[101](index=101&type=chunk) - Potential future payments include up to **$128.0 million** for development and regulatory milestones, up to **$525.0 million** for sales milestones, and low double-digit royalties, with no such payments made as of June 30, 2025[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[102](index=102&type=chunk)[104](index=104&type=chunk) [4. Fair Value Measurements](index=13&type=section&id=4.%20Fair%20Value%20Measurements) Fair value measurements for investments are categorized into Level 1 and Level 2, with total cash equivalents and investments decreasing to $248.9 million | Asset Category (in thousands) | June 30, 2025 Total | June 30, 2025 Level 1 | June 30, 2025 Level 2 | December 31, 2024 Total | December 31, 2024 Level 1 | December 31, 2024 Level 2 | | :---------------------------- | :------------------ | :-------------------- | :-------------------- | :---------------------- | :------------------------ | :------------------------ | | Money market funds | $23,889 | $23,889 | $— | $23,324 | $23,324 | $— | | Commercial paper | $48,037 | $— | $48,037 | $46,773 | $— | $46,773 | | Government securities | $65,156 | $55,682 | $9,474 | $70,058 | $57,701 | $12,357 | | Corporate debt securities | $111,802 | $— | $111,802 | $147,599 | $— | $147,599 | | Total cash equivalents and investments | $248,884 | $79,571 | $169,313 | $287,754 | $81,025 | $206,729 | [5. Investments](index=14&type=section&id=5.%20Investments) Total cash equivalents and investments decreased to $248.9 million, with unrealized losses on securities significantly increasing to $101.9 million | Investment Category (in thousands) | Amortized Cost (June 30, 2025) | Fair Value (June 30, 2025) | Amortized Cost (Dec 31, 2024) | Fair Value (Dec 31, 2024) | | :--------------------------------- | :----------------------------- | :------------------------- | :---------------------------- | :------------------------ | | Money market funds | $23,889 | $23,889 | $23,324 | $23,324 | | Commercial paper | $48,045 | $48,037 | $46,738 | $46,773 | | Government securities | $65,139 | $65,156 | $70,008 | $70,058 | | Corporate debt securities | $111,690 | $111,802 | $147,388 | $147,599 | | Total cash equivalents and investments | $248,763 | $248,884 | $287,458 | $287,754 | - The aggregate fair value of securities in an unrealized loss position for less than twelve months increased from **$30.6 million** as of December 31, 2024, to **$101.9 million** as of June 30, 2025[51](index=51&type=chunk) [6. Accrued Expenses and Other Current Liabilities](index=15&type=section&id=6.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses and other current liabilities increased by $1.7 million to $6.8 million, driven by clinical, manufacturing, and consulting costs | Accrued Expense (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :----------------------------- | :------------ | :---------------- | :----- | | Accrued bonus | $2,346 | $3,830 | $(1,484) | | Accrued clinical and manufacturing costs | $3,133 | $696 | $2,437 | | Accrued consulting fees | $893 | $153 | $740 | | Accrued external audit and tax fees | $223 | $73 | $150 | | Accrued legal fees | $67 | $— | $67 | | Other accrued expenses | $118 | $347 | $(229) | | Total | $6,780 | $5,099 | $1,681 | [7. Common Stock and Preferred Stock](index=15&type=section&id=7.%20Common%20Stock%20and%20Preferred%20Stock) As of June 30, 2025, the company had 25.7 million common shares outstanding and 140 million voting shares authorized, with no preferred stock - As of June 30, 2025, **25,692,268 shares** of common stock were issued and outstanding[15](index=15&type=chunk)[55](index=55&type=chunk) - The company is authorized to issue **140,000,000 shares** of voting common stock and **10,000,000 shares** of non-voting common stock, with no preferred stock issued[55](index=55&type=chunk)[56](index=56&type=chunk) - Total shares reserved for future issuance increased from **4,866,383** at December 31, 2024, to **6,240,444** at June 30, 2025, primarily for stock options and future issuances under the 2023 Equity Incentive Plan and 2023 ESPP[57](index=57&type=chunk) [8. Stock-Based Compensation](index=16&type=section&id=8.%20Stock-Based%20Compensation) Stock-based compensation expense increased to $4.7 million for H1 2025, with 3.9 million stock options outstanding and increased share reserves | Expense Category (in thousands) | 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 | $1,113 | $698 | $2,156 | $1,254 | | General and administrative | $1,353 | $1,091 | $2,583 | $1,923 | | Total stock-based compensation expense | $2,466 | $1,789 | $4,739 | $3,177 | - The 2023 Equity Incentive Plan's share reserve increased by **1,280,890 shares** on January 1, 2025, and **1,016,878 shares** on January 1, 2024, with **1,614,045 shares** available for issuance as of June 30, 2025[62](index=62&type=chunk)[63](index=63&type=chunk) - As of June 30, 2025, **3,859,916 stock options** were outstanding with a weighted-average exercise price of **$12.91**, and total unrecognized stock-based compensation expense related to unvested options was **$25.6 million**, to be recognized over approximately **2.7 years**[70](index=70&type=chunk)[71](index=71&type=chunk) [9. Net Loss per Share](index=20&type=section&id=9.%20Net%20Loss%20per%20Share) Basic and diluted net loss per share was $(0.90) for Q2 2025 and $(1.79) for H1 2025, with anti-dilutive equivalents excluded | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss per share, basic and diluted | $(0.90) | $(0.68) | $(1.79) | $(1.24) | - As of June 30, 2025, **3,963,063 common stock equivalents** (including outstanding stock options and unvested restricted stock units) were excluded from the diluted net loss per share calculation as their effect would be anti-dilutive[75](index=75&type=chunk) [10. Segment Information](index=20&type=section&id=10.%20Segment%20Information) The company operates as a single segment focused on pacibekitug drug discovery and development, with performance assessed by the CEO - The company operates as a single operating and reportable segment: the pacibekitug segment, focused on drug discovery and development[76](index=76&type=chunk) - The Chief Executive Officer, as CODM, assesses performance and allocates resources based on consolidated net loss and monitors budget versus actual results[77](index=77&type=chunk)[78](index=78&type=chunk) - Significant segment expenses for the six months ended June 30, 2025, included **$10.3 million** for R&D payroll, **$12.0 million** for clinical trial expenses, and **$7.5 million** for chemistry, manufacturing, and controls costs[79](index=79&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, results, liquidity, and risks related to pacibekitug development [Overview](index=22&type=section&id=Overview) Tourmaline Bio is a late-stage clinical biotechnology company developing pacibekitug for immune and inflammatory diseases, with positive Phase 2 ASCVD data and ongoing trials - Tourmaline Bio is a late-stage clinical biotechnology company focused on developing transformative medicines for immune and inflammatory diseases, with pacibekitug as its initial product candidate[84](index=84&type=chunk)[85](index=85&type=chunk) - Pacibekitug is being developed for cardiovascular inflammation (ASCVD and abdominal aortic aneurysm) and thyroid eye disease (TED)[87](index=87&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) - The Phase 2 TRANQUILITY trial for ASCVD reported positive topline data in May 2025, showing rapid, deep, and durable reductions in hs-CRP with high statistical significance across all pacibekitug arms, including **>85% reduction** with quarterly dosing[89](index=89&type=chunk) - The pivotal Phase 2b spiriTED trial for TED was initiated in September 2023, with topline data expected in early 2026[92](index=92&type=chunk) [License Agreements](index=24&type=section&id=License%20Agreements) The company holds exclusive licenses from Pfizer and non-exclusive licenses from Lonza for pacibekitug, with potential milestone and royalty payments - The company has an exclusive, sublicensable, royalty-bearing, worldwide license from Pfizer for pacibekitug, involving an upfront payment and equity, and potential future milestone and royalty payments[101](index=101&type=chunk)[102](index=102&type=chunk) - The company also has a non-exclusive, sublicensable license from Lonza for manufacturing and commercialization of pacibekitug, with potential low-single digit royalties on net sales and an annual fee[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - As of June 30, 2025, no milestone or royalty payments have been owed or paid under either the Pfizer or Lonza license agreements[104](index=104&type=chunk)[109](index=109&type=chunk) [Macroeconomic Considerations](index=25&type=section&id=Macroeconomic%20Considerations) The company monitors uncertain macroeconomic conditions, including inflation and geopolitical conflicts, anticipating future increases in operating costs - The company is monitoring uncertain macroeconomic conditions, including inflation, interest rate fluctuations, and geopolitical conflicts (e.g., war in Ukraine, Middle East hostilities)[110](index=110&type=chunk) - While inflation has not materially impacted financial position or results of operations to date, the company anticipates potential increases in operating costs, including labor and R&D, due to supply chain constraints, geopolitical conflicts, and wage increases[111](index=111&type=chunk) [Financial Operations Overview](index=25&type=section&id=Financial%20Operations%20Overview) The company has no revenue and expects R&D and G&A expenses to increase substantially with product development and public company operations - The company has not generated any revenue since its inception and does not expect to generate product sales revenue in the near future[112](index=112&type=chunk) - Research and development expenses, primarily related to clinical trials, manufacturing, and personnel, are expected to increase substantially as pacibekitug and future product candidates advance into later-stage clinical trials[113](index=113&type=chunk)[116](index=116&type=chunk) - General and administrative expenses are expected to increase to support R&D, pre-commercial activities, and public company compliance[119](index=119&type=chunk)[121](index=121&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) The company reported increased net losses for Q2 and H1 2025, driven by higher R&D expenses and decreased other income [Comparison of the Three Months Ended June 30, 2025 and 2024](index=28&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) Net loss for Q2 2025 increased by $5.6 million to $23.1 million, driven by higher R&D expenses and decreased other income | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :-------------------- | :------------------------------- | :------------------------------- | :----- | | Research and development | $19,634 | $15,734 | $3,900 | | General and administrative | $6,340 | $6,237 | $103 | | Total operating expenses | $25,974 | $21,971 | $4,003 | | Net loss | $(23,092) | $(17,487) | $(5,605) | | Other income, net | $2,882 | $4,484 | $(1,602) | - The increase in R&D expenses was primarily due to **$3.0 million** in increased clinical trial expenses (TRANQUILITY and spiriTED), **$1.5 million** in toxicology study expenses, and **$1.3 million** in payroll-related costs[124](index=124&type=chunk) - Other income, net, decreased by **$1.6 million**, mainly due to a **$1.8 million** decrease in investment income, partially offset by a **$0.3 million** increase in interest income[127](index=127&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=29&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Net loss for H1 2025 increased by $15.3 million to $46.1 million, driven by higher R&D expenses and decreased other income | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------- | :----------------------------- | :----------------------------- | :----- | | Research and development | $39,892 | $27,110 | $12,782 | | General and administrative | $12,313 | $12,378 | $(65) | | Total operating expenses | $52,205 | $39,488 | $12,717 | | Net loss | $(46,062) | $(30,798) | $(15,264) | | Other income, net | $6,143 | $8,690 | $(2,547) | - The increase in R&D expenses was primarily due to **$6.8 million** in increased clinical trial expenses, **$3.9 million** in payroll-related costs, and **$3.0 million** in toxicology study expenses[129](index=129&type=chunk)[132](index=132&type=chunk) - Other income, net, decreased by **$2.5 million**, mainly due to a **$3.1 million** decrease in investment income, partially offset by a **$0.6 million** increase in interest income[131](index=131&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company has incurred significant losses and negative cash flows, with an accumulated deficit of $181.3 million, but has $256.4 million in capital to fund operations into H2 2027 - The company has incurred significant operating losses and negative cash flows, with an accumulated deficit of **$181.3 million** as of June 30, 2025[133](index=133&type=chunk)[134](index=134&type=chunk) - As of June 30, 2025, the company had **$256.4 million** in cash, cash equivalents, and investments, expected to fund operations into the second half of 2027[135](index=135&type=chunk) - The company has an ATM Sales Agreement to sell up to **$100.0 million** of common stock, but no shares have been sold as of June 30, 2025[136](index=136&type=chunk)[137](index=137&type=chunk) [Contractual Obligations and Commitments](index=33&type=section&id=Contractual%20Obligations%20and%20Commitments) The company has vendor agreements for R&D and manufacturing, with contingent milestone and royalty payments under the Pfizer License Agreement - The company has agreements with CDMOs and CROs for manufacturing and clinical trial services, which may include purchase and termination obligations[148](index=148&type=chunk) - Milestone and royalty payments under the Pfizer License Agreement are contingent upon future development, regulatory, and sales achievements, and their timing and amount are currently unknown or uncertain[149](index=149&type=chunk) [Critical Accounting Policies and Critical Accounting Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Critical%20Accounting%20Estimates) Financial statements require management estimates for accrued expenses and stock-based compensation, with no significant changes to critical accounting policies - Financial statements require management to make estimates and assumptions, including for accrued expenses and stock-based compensation[150](index=150&type=chunk) - There have been no significant changes to the company's critical accounting policies from those disclosed in its 2024 Annual Report on Form 10-K[151](index=151&type=chunk) [Recently Issued and Adopted Accounting Pronouncements](index=34&type=section&id=Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) The company adopted ASU 2023-07 Segment Reporting in FY2024 and is evaluating ASU 2023-09 and ASU 2024-03 for future impacts - The company adopted ASU 2023-07, Segment Reporting, for the fiscal year ended December 31, 2024[40](index=40&type=chunk)[152](index=152&type=chunk) - The company is evaluating ASU 2023-09 (Income Tax Disclosures, effective FY2025) and ASU 2024-03 (Expense Disaggregation Disclosures, effective FY2026) for potential impacts on its financial statements[41](index=41&type=chunk)[42](index=42&type=chunk)[152](index=152&type=chunk) [Emerging Growth Company and Smaller Reporting Company Status](index=34&type=section&id=Emerging%20Growth%20Company%20and%20Smaller%20Reporting%20Company%20Status) The company qualifies as an EGC and smaller reporting company, benefiting from exemptions for accounting standards and reduced disclosures - The company is an "emerging growth company" (EGC) and has elected to use the extended transition period for complying with new or revised financial accounting standards[3](index=3&type=chunk)[153](index=153&type=chunk) - The company also qualifies as a "smaller reporting company," which provides reduced disclosure obligations, including an exemption from auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act[3](index=3&type=chunk)[155](index=155&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[156](index=156&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[157](index=157&type=chunk)[158](index=158&type=chunk) - No material changes in internal control over financial reporting occurred during the period covered by this report[159](index=159&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its financial position or results - The company believes there are no pending legal proceedings that could have a material adverse effect on its financial position, results of operations, or cash flows[162](index=162&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks that could materially harm the company's business, including limited operating history, pacibekitug dependence, and capital needs [Summary of Risk Factors](index=36&type=section&id=Summary%20of%20Risk%20Factors) Investing in the company's common stock involves high risk due to limited operating history, recurring losses, pacibekitug dependence, and capital needs - The company has a limited operating history, no commercialized products, and has incurred net losses since inception, with no product revenue[164](index=164&type=chunk)[167](index=167&type=chunk)[169](index=169&type=chunk) - Future success is highly dependent on pacibekitug's development, regulatory approval, and commercialization, requiring significant additional capital[164](index=164&type=chunk)[175](index=175&type=chunk)[180](index=180&type=chunk) - The company relies completely on CDMOs for manufacturing and CROs for clinical trials, exposing it to manufacturing risks and potential delays[164](index=164&type=chunk)[190](index=190&type=chunk)[194](index=194&type=chunk) [Risks Related to Our Financial Condition and Capital Needs](index=38&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition%20and%20Capital%20Needs) The company has a limited operating history, substantial net losses, and an accumulated deficit of $181.3 million, requiring significant additional capital - The company has a limited operating history and no history of commercializing products, making it difficult to assess future viability[167](index=167&type=chunk) - The company has incurred net losses every year since inception, with an accumulated deficit of **$181.3 million** as of June 30, 2025, and expects to continue incurring significant operating losses[169](index=169&type=chunk)[170](index=170&type=chunk) - Significant additional capital will be required for development and commercialization, and the company may not be able to access sufficient capital on acceptable terms, potentially leading to delays or discontinuation of product candidates[180](index=180&type=chunk)[185](index=185&type=chunk) [Risks Related to Our Dependence on Third Parties](index=42&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) The company heavily relies on third parties for development, manufacturing, and clinical trials, facing risks of delays, quality issues, and cybersecurity threats - The company depends on third parties (CROs, CDMOs, clinical investigators) for development, clinical trials, and manufacturing, and problems with these relationships could delay product development[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Complete reliance on CDMOs for manufacturing pacibekitug exposes the company to risks like product loss, quality control issues, supply disruptions, and non-compliance with cGMP regulations[194](index=194&type=chunk)[196](index=196&type=chunk)[198](index=198&type=chunk) - The company and its third-party partners are vulnerable to security incidents, cyberattacks, and data loss, which could disrupt operations, lead to regulatory actions, litigation, and reputational harm[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk)[224](index=224&type=chunk) [Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates](index=50&type=section&id=Risks%20Related%20to%20the%20Discovery%2C%20Development%20and%20Regulatory%20Approval%20of%20Our%20Product%20Candidates) Product candidates face lengthy, unpredictable clinical trials, with risks of delays, safety/efficacy failures, and competition - Clinical trials for pacibekitug are lengthy, expensive, and inherently unpredictable, with potential for delays, suspension, or termination due to various factors including regulatory disagreements, enrollment difficulties, or adverse events[240](index=240&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk) - Success in preclinical studies or earlier-stage clinical trials, or observations from other IL-6 inhibitors, may not be indicative of results in future or ongoing clinical trials for pacibekitug, and there is a substantial risk of failure in later stages[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) - Pacibekitug may cause undesirable side effects, adverse events, or induce anti-drug antibodies (ADAs), which could terminate development, lead to a lack of approval, or result in restrictive product labeling[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) - The company faces significant competition from other biotechnology and pharmaceutical companies in immune and inflammatory disease indications, including existing approved therapies and other IL-6 blockers in development[265](index=265&type=chunk)[266](index=266&type=chunk) [Risks Related to the Marketing and Commercialization of Our Product Candidates](index=59&type=section&id=Risks%20Related%20to%20the%20Marketing%20and%20Commercialization%20of%20Our%20Product%20Candidates) Approved products may fail market acceptance due to efficacy, safety, pricing, and competition, facing risks from unfavorable pricing and reimbursement - Market acceptance of approved products depends on efficacy, safety, advantages over alternatives, pricing, reimbursement, and marketing efforts[275](index=275&type=chunk)[277](index=277&type=chunk) - Unfavorable pricing regulations, reimbursement practices from third-party payors, and healthcare reform initiatives (e.g., IRA, OBBBA) in the U.S. and abroad could harm the company's ability to profitably sell its products[276](index=276&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk)[314](index=314&type=chunk)[316](index=316&type=chunk)[317](index=317&type=chunk) - Regulatory approval may come with an undesirable label, including black boxed warnings or significant safety restrictions, which could impede successful commercialization and competitiveness[281](index=281&type=chunk)[282](index=282&type=chunk) [Risks Related to Government Regulation](index=62&type=section&id=Risks%20Related%20to%20Government%20Regulation) Regulatory approval processes are lengthy and unpredictable, with ongoing compliance requirements and potential penalties, and tax/accounting changes pose risks - The regulatory approval processes by the FDA and comparable foreign health authorities are lengthy, unpredictable, and may not result in approval for pacibekitug or future product candidates[288](index=288&type=chunk)[289](index=289&type=chunk) - Even if approved, products are subject to extensive ongoing regulatory requirements, including manufacturing, quality control, safety surveillance, and advertising/promotion, with potential for significant expenses and penalties for non-compliance[301](index=301&type=chunk)[302](index=302&type=chunk)[304](index=304&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk) - Changes in tax laws (e.g., OBBBA) or financial accounting standards could adversely affect the company's business and financial condition, including limitations on net operating loss carryforwards[328](index=328&type=chunk)[329](index=329&type=chunk)[330](index=330&type=chunk) [Risks Related to Our Business Operations, Employee Matters and Managing Growth](index=71&type=section&id=Risks%20Related%20to%20Our%20Business%20Operations%2C%20Employee%20Matters%20and%20Managing%20Growth) The company faces risks from limited operating history, rapid growth, employee retention, potential internal control weaknesses, and international operations - The company expects significant growth in employees and operations, which may be difficult to manage effectively due to limited financial resources and management experience[339](index=339&type=chunk) - Attracting and retaining highly skilled employees, especially management, is crucial for success, and intense competition for personnel poses a risk to business execution[340](index=340&type=chunk)[341](index=341&type=chunk) - While previously identified material weaknesses in internal control over financial reporting were remediated as of December 31, 2024, future weaknesses could adversely affect financial reporting[337](index=337&type=chunk)[338](index=338&type=chunk) - International operations expose the company to various risks, including conflicting laws, regulatory hurdles, supply chain disruptions, financial risks (e.g., currency fluctuations), and geopolitical instability[343](index=343&type=chunk)[344](index=344&type=chunk) [Risks Related to Our Intellectual Property](index=76&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Success depends on obtaining and maintaining IP protection, relying on licensed patents, with risks of license termination or infringement lawsuits - Success depends significantly on obtaining and maintaining adequate intellectual property rights, including patents, for product candidates and technologies, which is an expensive and time-consuming process with no guarantee of success[355](index=355&type=chunk)[356](index=356&type=chunk)[357](index=357&type=chunk) - The company is dependent on license agreements with Pfizer and Lonza, and any termination, reduction, or narrowing of these licenses could result in the loss of significant rights and harm its ability to commercialize pacibekitug[362](index=362&type=chunk)[363](index=363&type=chunk)[364](index=364&type=chunk) - The company may become involved in lawsuits to protect or enforce its IP rights, or face allegations of infringing third-party IP, which could be expensive, time-consuming, and materially adverse to the business[372](index=372&type=chunk)[378](index=378&type=chunk)[382](index=382&type=chunk) [Risks Related to Our Common Stock](index=81&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) The common stock market price is expected to be volatile due to clinical results, financial projections, and regulatory changes, with no anticipated cash dividends - The market price of the common stock is expected to be volatile, influenced by clinical trial results, financial performance, competitive landscape, regulatory actions, and broader macroeconomic conditions[388](index=388&type=chunk)[389](index=389&type=chunk) - Provisions in the company's charter documents and Delaware law could make an acquisition more difficult and may discourage takeover attempts, potentially entrenching management[390](index=390&type=chunk)[391](index=391&type=chunk) - The company does not anticipate paying cash dividends in the foreseeable future, meaning stockholders' sole source of gain will be capital appreciation[395](index=395&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Securities](index=83&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Securities) No unregistered sales of equity securities, use of proceeds, or issuer purchases of securities were reported during the period - No unregistered sales of equity securities, use of proceeds, or issuer purchases of securities were reported[396](index=396&type=chunk) [Item 3. Defaults Upon Senior Securities](index=83&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item regarding defaults upon senior securities is not applicable to the company for the reporting period - This item is not applicable[397](index=397&type=chunk) [Item 4. Mine Safety Disclosures.](index=83&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item regarding mine safety disclosures is not applicable to the company for the reporting period - This item is not applicable[398](index=398&type=chunk) [Item 5. Other Information](index=83&type=section&id=Item%205.%20Other%20Information) No other material information was reported under this item for the current reporting period - No other information was reported[399](index=399&type=chunk) [Item 6. Exhibits](index=83&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the 10-Q report, including corporate documents, an offer letter amendment, and certifications - The exhibits include the Third Amended and Restated Certificate of Incorporation and Bylaws, an amendment to an offer letter, and certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act[400](index=400&type=chunk) [SIGNATURES](index=85&type=section&id=SIGNATURES) The report is signed by the Chief Executive Officer and Chief Financial Officer on August 13, 2025, certifying its submission - The report was signed by the Chief Executive Officer and Chief Financial Officer on August 13, 2025[405](index=405&type=chunk)

[Company Overview and Q2 2025 Highlights](index=1&type=section&id=Company%20Overview%20and%20Q2%202025%20Highlights) The company reported positive Phase 2 trial results for pacibekitug and outlined its future clinical development strategy [Q2 2025 Business Highlights](index=1&type=section&id=Q2%202025%20Business%20Highlights) The company announced positive Phase 2 trial results for pacibekitug and provided an update on its cash runway - Positive topline results from the Phase 2 TRANQUILITY trial of pacibekitug showed **rapid, deep, and durable reductions in high-sensitivity C-reactive protein (hs-CRP)** with quarterly dosing[1](index=1&type=chunk) - Additional data from the TRANQUILITY trial will be presented at the European Society of Cardiology Congress in August 2025[1](index=1&type=chunk) - The company is on track to initiate a Phase 2 proof-of-concept trial in abdominal aortic aneurysm (AAA) in the second half of 2025[4](index=4&type=chunk) - Planning is underway for a Phase 3 cardiovascular outcomes trial in atherosclerotic cardiovascular disease (ASCVD)[4](index=4&type=chunk) Cash Position as of June 30, 2025 | Metric | Amount (Millions USD) | | :----- | :-------------------- | | Cash, cash equivalents, and investments | $256.4 | | Expected cash runway | Into H2 2027 | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO highlighted pacibekitug's best-in-class potential following positive Phase 2 data and outlined plans for further development - Q2 2025 was a transformative period for Tourmaline with the first data readout for pacibekitug[2](index=2&type=chunk) - Topline results from the Phase 2 TRANQUILITY trial unlocked **pacibekitug's best-in-class potential** by demonstrating the viability of quarterly subcutaneous administration[2](index=2&type=chunk) - The company plans to advance pacibekitug into the next stage of development within cardiovascular inflammation, including a planned Phase 2 trial in AAA in H2 2025[2](index=2&type=chunk) [Clinical Development Updates](index=1&type=section&id=Clinical%20Development%20Updates) The company provided updates on its cardiovascular inflammation and Thyroid Eye Disease programs for pacibekitug [Cardiovascular Inflammation Program](index=1&type=section&id=Cardiovascular%20Inflammation%20Highlights) The pacibekitug program advanced with positive Phase 2 results and plans for Phase 3 trials in cardiovascular diseases [TRANQUILITY Phase 2 Trial Topline Results](index=1&type=section&id=TRANQUILITY%20Topline%20Results) The Phase 2 trial demonstrated statistically significant hs-CRP reductions with quarterly dosing and a favorable safety profile - Positive topline results from the ongoing Phase 2 TRANQUILITY trial were announced on May 20, 2025[5](index=5&type=chunk) - **Rapid, deep, and durable reductions in hs-CRP** through Day 90 were achieved across all pacibekitug arms with high statistical significance (p<0.0001) compared to placebo[5](index=5&type=chunk) - Pacibekitug is the **first and only IL-6 inhibitor known to demonstrate deep hs-CRP reductions with quarterly dosing** in a clinical trial, achieving >85% reduction from baseline[5](index=5&type=chunk) - The overall incidence rates of adverse events were comparable to placebo[5](index=5&type=chunk)[6](index=6&type=chunk) [Ongoing Development Activities](index=2&type=section&id=Ongoing%20Development%20Activities) The company is progressing with plans for a Phase 3 ASCVD trial and a Phase 2 AAA trial for pacibekitug - The TRANQUILITY trial serves as the starting point for pacibekitug's clinical development program for ASCVD and other inflammation-driven cardiovascular diseases[11](index=11&type=chunk) - Planning for a **Phase 3 cardiovascular outcomes trial in ASCVD** is progressing[11](index=11&type=chunk) - A successful pre-IND interaction with the FDA was completed for a Phase 2 proof-of-concept trial in AAA, with initiation on track for H2 2025[11](index=11&type=chunk) [Presentations and Publications](index=2&type=section&id=Presentations%20and%20Publications) Additional trial data will be presented at an upcoming cardiology congress, and the company contributed to a relevant publication - Additional data from the TRANQUILITY trial will be presented at the **European Society of Cardiology (ESC) Congress** on August 31, 2025[11](index=11&type=chunk) - Company representatives co-authored a review manuscript on IL-6 signaling in cardiovascular disease published in *Circulation: Genomic and Precision Medicine*[11](index=11&type=chunk) [Thyroid Eye Disease (TED) Program](index=2&type=section&id=Thyroid%20Eye%20Disease%20%28TED%29%20Highlights) The Phase 2b spiriTED trial is ongoing with topline data expected in early 2026 - The Phase 2b spiriTED trial for pacibekitug in TED remains ongoing[11](index=11&type=chunk) - **Topline data from the spiriTED trial is expected in early 2026**[11](index=11&type=chunk) - Tourmaline presented a poster on the prevalence of TED in the United States at the ARVO Annual Conference in May 2025[11](index=11&type=chunk) - Future development plans in TED will be determined after a review of the Phase 2b spiriTED trial data[11](index=11&type=chunk) [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) The company reported a higher net loss driven by increased operating expenses, while maintaining a cash runway into H2 2027 [Cash Position and Runway](index=2&type=section&id=Cash%20Position) Cash and investments totaled $256.4 million, providing a projected operational runway into the second half of 2027 Cash, Cash Equivalents, and Investments | Metric | June 30, 2025 (Millions USD) | December 31, 2024 (Millions USD) | Change (Millions USD) | | :----- | :--------------------------- | :------------------------------- | :-------------------- | | Cash, cash equivalents, and investments | $256.4 | $294.9 | -$38.5 | - Current cash, cash equivalents, and investments are anticipated to provide a **cash runway into the second half of 2027**[10](index=10&type=chunk)[12](index=12&type=chunk) [Operating Expenses](index=3&type=section&id=Operating%20Expenses) Total operating expenses rose to $26.0 million, primarily due to increased research and development activities Operating Expenses (Three Months Ended June 30) | Expense Category | Q2 2025 (Thousands USD) | Q2 2024 (Thousands USD) | YoY Change (Thousands USD) | YoY Change (%) | | :--------------- | :---------------------- | :---------------------- | :------------------------- | :------------- | | Research and development | $19,634 | $15,734 | $3,900 | 24.8% | | General and administrative | $6,340 | $6,237 | $103 | 1.6% | | **Total operating expenses** | **$25,974** | **$21,971** | **$4,003** | **18.2%** | - The increase in research and development expenses was primarily driven by **increased clinical trial expenses** and employee compensation costs[17](index=17&type=chunk) - The slight increase in general and administrative expenses was primarily driven by increased employee compensation costs[17](index=17&type=chunk) [Net Loss](index=3&type=section&id=Net%20Loss) The net loss for the quarter increased to $23.1 million, or $0.90 per share, reflecting higher operational spending Net Loss (Three Months Ended June 30) | Metric | Q2 2025 (Thousands USD) | Q2 2024 (Thousands USD) | YoY Change (Thousands USD) | YoY Change (%) | | :----- | :---------------------- | :---------------------- | :------------------------- | :------------- | | Net loss | $(23,092)$ | $(17,487)$ | $(5,605)$ | 32.0% | | Net loss per share, basic and diluted | $(0.90)$ | $(0.68)$ | $(0.22)$ | 32.4% | - The increase in net loss was attributable to **increased operating expenses** and the company's overall growth[17](index=17&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20%28unaudited%29) The statement details a Q2 2025 net loss of $23.1 million, an increase from $17.5 million in the prior-year period Condensed Consolidated Statements of Operations (Unaudited) | | Three Months Ended June 30, | | Six Months Ended June 30, | | :---------------------------------- | :---------- | :---------- | :---------- | :---------- | | **(amounts in thousands)** | **2025** | **2024** | **2025** | **2024** | | Research and development | $19,634 | $15,734 | $39,892 | $27,110 | | General and administrative | $6,340 | $6,237 | $12,313 | $12,378 | | Total operating expenses | $25,974 | $21,971 | $52,205 | $39,488 | | Loss from operations | $(25,974)$ | $(21,971)$ | $(52,205)$ | $(39,488)$ | | Other income, net | $2,882 | $4,484 | $6,143 | $8,690 | | **Net loss** | **$(23,092)$** | **$(17,487)$** | **$(46,062)$** | **$(30,798)$** | | Net loss per share, basic and diluted | $(0.90)$ | $(0.68)$ | $(1.79)$ | $(1.24)$ | | Weighted-average common shares outstanding, basic and diluted | 25,755 | 25,724 | 25,723 | 24,908 | [Selected Condensed Consolidated Balance Sheet Data](index=5&type=section&id=Selected%20Condensed%20Consolidated%20Balance%20Sheet%20Data%20%28unaudited%29) The balance sheet shows cash and investments of $256.4 million and total assets of $269.3 million as of June 30, 2025 Selected Condensed Consolidated Balance Sheet Data (Unaudited) | | June 30, 2025 (Thousands USD) | December 31, 2024 (Thousands USD) | | :------------------------------ | :------------------------------ | :-------------------------------- | | Cash, cash equivalents and investments | $256,418 | $294,936 | | Working capital | $239,006 | $259,933 | | Total assets | $269,295 | $309,001 | | Total stockholders' equity | $259,192 | $300,052 | [Company and Product Information](index=3&type=section&id=Company%20and%20Product%20Information) This section provides an overview of Tourmaline Bio's mission and its lead asset, pacibekitug [About Tourmaline Bio](index=3&type=section&id=About%20Tourmaline%20Bio) Tourmaline Bio is a late-stage clinical biotechnology company developing medicines for immune and inflammatory diseases - Tourmaline is a **late-stage clinical biotechnology company**[14](index=14&type=chunk) - Its mission is to develop transformative medicines for patients with life-altering immune and inflammatory diseases[14](index=14&type=chunk) - **Pacibekitug** is Tourmaline's lead asset[14](index=14&type=chunk) [About Pacibekitug](index=3&type=section&id=About%20Pacibekitug) Pacibekitug is a long-acting, anti-IL-6 monoclonal antibody being developed for cardiovascular and thyroid eye diseases - Pacibekitug is a long-acting, fully-human, anti-IL-6 monoclonal antibody with **best-in-class potential**[15](index=15&type=chunk) - Differentiated properties include a **naturally long half-life**, low immunogenicity, and high binding affinity to IL-6[15](index=15&type=chunk) - The product has been studied in approximately 450 participants across six completed clinical trials[15](index=15&type=chunk) - Pacibekitug is currently being developed for **atherosclerotic cardiovascular disease (ASCVD) and thyroid eye disease (TED)**, with plans to expand into other diseases[15](index=15&type=chunk) [Legal and Contact Information](index=3&type=section&id=Legal%20and%20Contact%20Information) This section contains the forward-looking statements disclaimer and contact details for inquiries [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note outlines the risks and uncertainties associated with forward-looking statements in the report - Statements in this press release that do not describe historical facts may constitute forward-looking statements[16](index=16&type=chunk) - These statements involve risks and uncertainties that could cause actual results to differ materially from projections[18](index=18&type=chunk) - Risks include those inherent in therapeutic product development, clinical trial delays, and changes in the regulatory environment[18](index=18&type=chunk) - Tourmaline assumes no obligation to update any forward-looking statements[18](index=18&type=chunk) [Contacts](index=6&type=section&id=Contacts) This section provides contact information for media and investor relations - Media Contact: Sarah Mishek at Scient PR (SMishek@ScientPR.com)[21](index=21&type=chunk) - Investor Contact: Lee M. Stern at Meru Advisors (lstern@meruadvisors.com)[21](index=21&type=chunk)

Core Insights - Tourmaline Bio, Inc. reported positive topline results from the Phase 2 TRANQUILITY trial of pacibekitug, indicating significant reductions in high-sensitivity C-reactive protein with quarterly dosing [1][6] - The company has a cash position of $256.4 million as of June 30, 2025, which is expected to fund operations into the second half of 2027 [1][9] Cardiovascular Inflammation Highlights - The TRANQUILITY trial demonstrated rapid, deep, and durable reductions in hs-CRP, achieving over 85% reduction from baseline in the 50 mg quarterly dosing arm after a single dose [6] - Pacibekitug is the first IL-6 inhibitor to show such results with quarterly dosing in a clinical trial, with statistical significance (p<0.0001) compared to placebo [6] Ongoing Development Activities - Tourmaline is on track to initiate a Phase 2 proof-of-concept trial in abdominal aortic aneurysm in the second half of 2025 [5][6] - Planning is underway for a Phase 3 cardiovascular outcomes trial in atherosclerotic cardiovascular disease [5] Financial Results - Research and development expenses for Q2 2025 were $19.6 million, up from $15.7 million in Q2 2024, primarily due to increased clinical trial costs [13] - The net loss for Q2 2025 was $23.1 million, resulting in a net loss per share of $0.90, compared to a net loss of $17.5 million and a loss per share of $0.68 in Q2 2024 [13][19] Cash Position - As of June 30, 2025, cash, cash equivalents, and investments were $256.4 million, down from $294.9 million at the end of 2024 [9][21] - The current cash position is expected to support operations through key data readouts and development activities related to pacibekitug [9]

Group 1 - The article discusses Tourmaline Bio (NASDAQ: TRML) and its focus on advancing beyond FcRn inhibition by targeting IL-6 [2] - The author operates the Biotech Analysis Central service, which provides in-depth analysis of pharmaceutical companies and includes a library of over 600 biotech investing articles [2] - The service offers a model portfolio of more than 10 small and mid-cap stocks, along with live chat and various analysis and news reports to assist healthcare investors [2] Group 2 - The article does not provide specific financial data or performance metrics related to Tourmaline Bio or the broader biotech industry [1][3][4]

Summary of Tourmaline Bio's Phase II TRANQUILITY Trial Conference Call Company and Industry - **Company**: Tourmaline Bio - **Industry**: Cardiovascular Medicine, specifically focusing on anti-inflammatory treatments for cardiovascular diseases Core Points and Arguments 1. **Trial Overview**: The TRANQUILITY trial is a Phase II study evaluating pacifecatug, an IL-6 inhibitor, aimed at reducing high sensitivity C-reactive protein (hsCRP), a biomarker for inflammation-related cardiovascular risk [5][6][7] 2. **Objectives**: The trial has three main objectives: - To test the efficacy of quarterly administration of an IL-6 inhibitor in reducing hsCRP levels - To gather safety data for Phase III development - To confirm the appropriate dosing for future studies [5][6] 3. **Results**: - Statistically significant reductions in hsCRP were observed across all dosing arms compared to placebo, with reductions of 75% for the 25 mg quarterly arm, 86% for the 50 mg quarterly arm, and 85% for the 15 mg monthly arm [18][19] - A significant percentage of patients achieved hsCRP levels below 2 mg/L, indicating reduced inflammatory risk: 81% in the 25 mg arm, 80% in the 50 mg arm, and 88% in the 15 mg arm [21][22] 4. **Safety Profile**: Pacifecatug was well tolerated, with adverse event rates comparable to placebo. No significant safety concerns were raised, and the incidence of serious adverse events was low [30][31] 5. **Unmet Need**: Cardiovascular disease remains a leading cause of morbidity and mortality, with a significant portion of patients experiencing inflammation that is not adequately addressed by current therapies [7][8] 6. **Future Directions**: - Plans to meet with the FDA to discuss Phase III trial design and confirm dosing strategy - Potential Phase II proof of concept study in abdominal aortic aneurysm (AAA) [43][43] - Exploration of longer dosing intervals, including potential six-month dosing [80][82] Additional Important Content 1. **Context of Inflammation**: The trial highlights the role of inflammation in cardiovascular disease, with hsCRP serving as a key marker. The evidence supporting IL-6 as a modifiable risk factor is growing, with genetic, epidemiological, and clinical trial data backing its significance [9][37] 2. **Placebo Response**: Variability in placebo responses was noted, consistent with other IL-6 inhibitor trials. The active treatment arms showed significant reductions in hsCRP, suggesting that the observed effects are not solely due to placebo [68][72] 3. **Regulatory Strategy**: The company aims to leverage existing data to support its regulatory submissions and is focused on high-risk patient populations that are currently underserved [41][61] This summary encapsulates the key findings and strategic directions from the conference call regarding Tourmaline Bio's ongoing efforts in cardiovascular treatment development.

Core Insights - Tourmaline Bio, Inc. announced positive topline results from its Phase 2 TRANQUILITY trial for pacibekitug, an IL-6 inhibitor, showing significant reductions in high-sensitivity C-reactive protein (hs-CRP) levels, a biomarker for cardiovascular risk [1][2][3] Trial Overview - The TRANQUILITY trial is a multicenter, randomized, double-blind, placebo-controlled Phase 2 study involving patients with elevated hs-CRP and chronic kidney disease (CKD) stages 3 or 4 [3][4] - Participants were assigned to receive pacibekitug at different dosing regimens or placebo over a treatment period of 6 months, followed by an additional 6 months of follow-up [3][4] Efficacy Results - All active treatment arms achieved rapid, deep, and durable reductions in hs-CRP, with the 50 mg quarterly dosing arm achieving an 86% reduction from baseline [1][9] - The primary endpoint showed a median time-averaged percent reduction in hs-CRP through Day 90 of 86% for the 50 mg quarterly group, compared to 15% for placebo [9] - The percentage of participants achieving hs-CRP levels below 2 mg/L was 83% in the 50 mg quarterly group, compared to 13% in the placebo group [9] Safety Profile - The overall incidence of adverse events (AEs) in the pacibekitug groups was comparable to placebo, with 54% in the pooled pacibekitug group versus 56% in the placebo group [10][11] - Serious adverse events (SAEs) occurred in 10% of the pacibekitug group compared to 11% in the placebo group, indicating a similar safety profile [10][11] - The most common AEs included urinary tract infections and COVID-19, with the majority being mild or moderate in severity [10][11] Future Development Plans - Tourmaline plans to advance pacibekitug into a Phase 3 cardiovascular outcomes trial for atherosclerotic cardiovascular disease (ASCVD) and a Phase 2 proof-of-concept trial for abdominal aortic aneurysm (AAA) [14][15] - The company anticipates sharing further data from the TRANQUILITY trial at upcoming medical conferences [2][14] Company Background - Tourmaline Bio is a late-stage clinical biotechnology company focused on developing transformative medicines for immune and inflammatory diseases, with pacibekitug as its lead asset [19][20]

Company Overview - Tourmaline Bio, Inc. is a late-stage clinical biotechnology company focused on developing transformative medicines for patients with immune and inflammatory diseases [3] - The company's lead asset is pacibekitug, a long-acting, fully-human, anti-IL-6 monoclonal antibody with potential best-in-class properties [4] Upcoming Event - Tourmaline will host a conference call and webcast on May 20, 2025, at 8:30 a.m. ET to present topline results from the Phase 2 TRANQUILITY trial evaluating pacibekitug in patients with elevated high-sensitivity C-reactive protein and chronic kidney disease [1] - Dr. Deepak L. Bhatt, a prominent figure in cardiovascular medicine, will join the management team during the presentation [1] Product Details - Pacibekitug has a naturally long half-life, low immunogenicity, and high binding affinity to IL-6, making it a promising candidate for various indications [4] - The drug has been previously studied in approximately 450 participants across six completed clinical trials, focusing on autoimmune disorders [4] - Tourmaline is currently developing pacibekitug for atherosclerotic cardiovascular disease (ASCVD) and thyroid eye disease (TED), with plans to expand into abdominal aortic aneurysm (AAA) and other diseases in the future [4]

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) [Registrant Information](index=1&type=section&id=Registrant%20Information) Tourmaline Bio, Inc, a Delaware corporation, is identified as the registrant filing a Form 10-Q for the period ended March 31, 2025 - Registrant: **TOURMALINE BIO, INC.**[2](index=2&type=chunk) - State of Incorporation: **Delaware**[2](index=2&type=chunk) - Principal Executive Offices: **27 West 24th Street, Suite 702, New York, NY 10010**[2](index=2&type=chunk) [Filer Status and Securities](index=1&type=section&id=Filer%20Status%20and%20Securities) The company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company Registrant Filer Status | Status | Designation | | :------------------------ | :---------- | | Large accelerated filer | o | | Accelerated filer | o | | Non-accelerated filer | x | | Smaller reporting company | x | | Emerging growth company | x | - Common Stock, $0.0001 par value per share, trades under symbol **TRML** on The Nasdaq Global Select Market[3](index=3&type=chunk) - Outstanding Common Stock as of April 25, 2025: **25,688,479 shares**[3](index=3&type=chunk) [TABLE OF CONTENTS](index=3&type=section&id=TABLE%20OF%20CONTENTS) [SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=4&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Nature of Forward-Looking Statements](index=4&type=section&id=Nature%20of%20Forward-Looking%20Statements) The report contains forward-looking statements regarding future operations and strategy that involve risks and uncertainties - All statements other than historical facts, including those regarding future results, business strategy, product candidates, and clinical trials, are **forward-looking statements**[8](index=8&type=chunk) - Forward-looking statements involve known and unknown risks, uncertainties, and other important factors that may cause **actual results to differ materially**[8](index=8&type=chunk) [Factors Affecting Future Performance](index=4&type=section&id=Factors%20Affecting%20Future%20Performance) Future performance is influenced by clinical trial success, regulatory approvals, funding, and macroeconomic conditions - Key factors include success, cost, and timing of development activities, non-clinical studies, and **clinical trials**[9](index=9&type=chunk) - Ability to obtain funding, extend operating capital, and secure **regulatory approval** for product candidates are critical[9](index=9&type=chunk) - **Macroeconomic and geopolitical conditions**, such as international trade relations, wars, potential bank failures, and global health crises, can affect the business[10](index=10&type=chunk) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the periods ended March 31, 2025 and 2024 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $287.5 million at March 31, 2025, driven by a reduction in investments Condensed Consolidated Balance Sheet Highlights (amounts in thousands) | Item | March 31, 2025 | December 31, 2024 | | :---------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $35,330 | $30,506 | | Short-term investments | $213,976 | $227,797 | | Total current assets | $258,144 | $268,842 | | Long-term investments | $26,000 | $36,633 | | Total assets | $287,498 | $309,001 | | Total current liabilities | $7,622 | $8,909 | | Total liabilities | $7,635 | $8,949 | | Total stockholders' equity | $279,863 | $300,052 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported an increased net loss for Q1 2025 due to a significant rise in research and development expenses Condensed Consolidated Statements of Operations Highlights (amounts in thousands, except per share) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $20,258 | $11,376 | | General and administrative | $5,973 | $6,141 | | Total operating expenses | $26,231 | $17,517 | | Loss from operations | $(26,231) | $(17,517) | | Other income, net | $3,261 | $4,206 | | Net loss | $(22,970) | $(13,311) | | Net loss per share, basic and diluted | $(0.89) | $(0.55) | | Comprehensive loss | $(23,039) | $(13,631) | - Research and development expenses **increased by $8.9 million (77.9%)** year-over-year[16](index=16&type=chunk) - Net loss **increased by $9.7 million (72.6%)** year-over-year[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) These statements detail changes in stockholders' equity, reflecting the impact of net loss and stock-based compensation Stockholders' Equity Changes (amounts in thousands) | Item | Balance at Dec 31, 2024 | Stock-based Comp. Expense | Net Loss | Balance at Mar 31, 2025 | | :-------------------------- | :---------------------- | :------------------------ | :------- | :---------------------- | | Additional Paid-In Capital | $435,014 | $2,273 | — | $437,864 | | Accumulated Deficit | $(135,261) | — | $(22,970) | $(158,231) | | Total Stockholders' Equity | $300,052 | $2,273 | $(22,970) | $279,863 | - Stock-based compensation expense for the three months ended March 31, 2025, was **$2.3 million**[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows show a net increase in cash of $4.8 million, a significant improvement driven by maturities of investments Condensed Consolidated Statements of Cash Flows Highlights (amounts in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Operating activities | $(21,679) | $(14,923) | | Investing activities | $25,941 | $(188,869) | | Financing activities | $562 | $161,352 | | Net increase (decrease) in cash | $4,824 | $(42,440) | | Cash, cash equivalents & restricted cash – End of period | $35,557 | $98,513 | - Net cash provided by investing activities in Q1 2025 was **$25.9 million**, a substantial change from **$188.9 million used** in Q1 2024, mainly due to investment maturities[21](index=21&type=chunk) - Net cash provided by financing activities decreased significantly from **$161.4 million** in Q1 2024 (due to public offering) to **$0.6 million** in Q1 2025 (primarily from stock option exercises)[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations for the financial statements, covering accounting policies and significant agreements [Note 1. Nature of Business](index=10&type=section&id=Note%201.%20Nature%20of%20Business) Tourmaline Bio is a late-stage clinical biotechnology company focused on developing pacibekitug for immune diseases - Company is a late-stage clinical biotechnology company developing **pacibekitug** for immune and inflammatory diseases[23](index=23&type=chunk) - Completed a **Reverse Merger** on October 19, 2023, with Legacy Tourmaline deemed the accounting acquirer[25](index=25&type=chunk)[29](index=29&type=chunk) - Concurrently with the merger, Legacy Tourmaline raised approximately **$75.0 million** in gross proceeds from a Pre-Merger Financing Transaction[31](index=31&type=chunk) [Note 2. Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) The financial statements are prepared in accordance with SEC rules and GAAP, reflecting all necessary recurring adjustments - Condensed consolidated financial statements are prepared in accordance with **SEC rules and U.S. GAAP**[34](index=34&type=chunk) - Adopted **ASU 2023-07 (Segment Reporting)** for fiscal year ended December 31, 2024, resulting in additional interim disclosures[41](index=41&type=chunk) - Currently evaluating **ASU 2023-09 (Income Tax Disclosures)** and **ASU 2024-03 (Expense Disaggregation Disclosures)** for potential impact[42](index=42&type=chunk)[43](index=43&type=chunk) [Note 3. Pfizer License Agreement](index=12&type=section&id=Note%203.%20Pfizer%20License%20Agreement) The company holds an exclusive, worldwide license from Pfizer for pacibekitug, with potential future milestone payments - Obtained exclusive, worldwide license for **pacibekitug** from Pfizer Inc. on May 3, 2022[44](index=44&type=chunk) - Consideration included a **$5.0 million** upfront payment and 7,125,000 Series A preferred units (15% interest)[44](index=44&type=chunk) - Obligated to pay up to **$128.0 million** for development/regulatory milestones and up to **$525.0 million** for sales milestones, plus low double-digit royalties[45](index=45&type=chunk)[46](index=46&type=chunk) [Note 4. Fair Value Measurements](index=13&type=section&id=Note%204.%20Fair%20Value%20Measurements) The company measures the fair value of its investments using Level 1 and Level 2 inputs, with no Level 3 inputs used Assets Measured at Fair Value (March 31, 2025, in thousands) | Item | Total | Level 1 | Level 2 | Level 3 | | :---------------------------------- | :------ | :------ | :------ | :------ | | Money market funds | $28,927 | $28,927 | $— | $— | | Commercial paper | $46,315 | $— | $46,315 | $— | | Government securities | $53,955 | $40,529 | $13,426 | $— | | Corporate debt securities | $113,706| $— | $113,706| $— | | Total cash equivalents and short-term investments | $242,903| $69,456 | $173,447| $— | | Long-term investments | $26,000 | $9,914 | $16,086 | $— | | Total cash equivalents and investments | $268,903| $79,370 | $189,533| $— | - No liabilities were measured at fair value on a recurring basis, and no changes in valuation techniques or transfers among fair value hierarchy levels occurred[50](index=50&type=chunk) [Note 5. Investments](index=14&type=section&id=Note%205.%20Investments) The company's investments primarily consist of money market funds, commercial paper, government, and corporate debt securities Cash Equivalents and Investments (March 31, 2025, in thousands) | Item | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | | :---------------------------------- | :------------- | :--------------- | :---------------- | :--------- | | Money market funds | $28,927 | $— | $— | $28,927 | | Commercial paper | $46,305 | $16 | $(6) | $46,315 | | Government securities | $53,947 | $17 | $(9) | $53,955 | | Corporate debt securities | $113,555 | $171 | $(20) | $113,706 | | Total cash equivalents and short-term investments | $242,734 | $204 | $(35) | $242,903 | | Long-term investments | $25,942 | $58 | $— | $26,000 | | Total cash equivalents and investments | $268,676 | $262 | $(35) | $268,903 | - Aggregate fair value of securities in an unrealized loss position for less than twelve months **increased from $30.6 million** at December 31, 2024, **to $68.1 million** at March 31, 2025[52](index=52&type=chunk) [Note 6. Accrued Expenses and Other Current Liabilities](index=15&type=section&id=Note%206.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses increased slightly, with a notable decrease in accrued bonus offset by higher clinical and manufacturing costs Accrued Expenses and Other Current Liabilities (in thousands) | Item | March 31, 2025 | December 31, 2024 | | :---------------------------------- | :------------- | :---------------- | | Accrued bonus | $1,170 | $3,830 | | Accrued clinical and manufacturing costs | $2,873 | $696 | | Accrued consulting fees | $502 | $153 | | Accrued external audit and tax fees | $204 | $73 | | Accrued legal fees | $148 | $— | | Other accrued expenses | $294 | $347 | | Total | $5,191 | $5,099 | - Accrued clinical and manufacturing costs **significantly increased from $696k to $2,873k**[53](index=53&type=chunk) [Note 7. Common Stock and Preferred Stock](index=15&type=section&id=Note%207.%20Common%20Stock%20and%20Preferred%20Stock) The company completed a public offering in January 2024, raising $161.4 million in net proceeds - Completed January 2024 Offering, issuing 4,615,384 common shares plus 692,307 shares from underwriter option, for net proceeds of approximately **$161.4 million**[54](index=54&type=chunk)[55](index=55&type=chunk) - As of March 31, 2025, 140,000,000 voting common shares and 10,000,000 non-voting common shares are authorized; **25,684,479 voting shares are issued and outstanding**[15](index=15&type=chunk)[56](index=56&type=chunk) - **No preferred stock** was issued or outstanding as of March 31, 2025, or December 31, 2024[57](index=57&type=chunk) [Note 8. Stock-Based Compensation](index=16&type=section&id=Note%208.%20Stock-Based%20Compensation) Stock-based compensation expense increased to $2.3 million in Q1 2025, reflecting higher R&D and G&A payroll-related costs Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $1,043 | $556 | | General and administrative | $1,230 | $832 | | Total | $2,273 | $1,388 | - The 2023 Equity Incentive Plan and 2023 Employee Stock Purchase Plan include **evergreen refresh provisions**, adding shares annually[61](index=61&type=chunk)[65](index=65&type=chunk) - As of March 31, 2025, total unrecognized stock-based compensation expense for unvested stock options was **$26.1 million**, to be recognized over approximately **2.9 years**[72](index=72&type=chunk) [Note 9. Net Loss per Share](index=20&type=section&id=Note%209.%20Net%20Loss%20per%20Share) The calculation of diluted net loss per share excludes common stock equivalents as their inclusion would be anti-dilutive Anti-Dilutive Common Stock Equivalents Excluded from EPS Calculation | Item | March 31, 2025 | March 31, 2024 | | :------------------------------------------------ | :------------- | :------------- | | Outstanding stock options (2022 Plan) | 1,188,953 | 1,403,409 | | Outstanding stock options (2023 Plan) | 2,521,343 | 1,111,311 | | Unvested restricted stock units (2023 Plan) | 12,465 | 17,451 | | Common stock subject to repurchase (early exercised options) | 126,509 | 341,198 | | Total | 3,849,270 | 2,873,369 | [Note 10. Segment Information](index=20&type=section&id=Note%2010.%20Segment%20Information) The company operates as a single operating and reportable segment focused on the development of pacibekitug - Operates as a **single operating and reportable segment**: the pacibekitug segment[77](index=77&type=chunk) - CODM assesses performance and allocates resources based on **net loss**, as the company is pre-commercial and does not yet generate revenue[78](index=78&type=chunk)[79](index=79&type=chunk) Significant Segment Expenses (in thousands) | Expense Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development payroll-related costs | $5,232 | $3,028 | | General and administrative payroll-related costs | $2,154 | $1,549 | | Clinical trial expenses | $6,009 | $2,195 | | Chemistry, manufacturing, and controls costs | $4,346 | $4,393 | | Medical affairs expenses | $555 | $286 | | Research and development consulting expenses | $1,372 | $832 | | General and administrative consulting expenses | $1,036 | $1,989 | | Other segment items | $2,266 | $(961) | | Segment and consolidated net loss | $22,970 | $13,311 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, results of operations, and focus on developing pacibekitug [Overview](index=22&type=section&id=Overview) Tourmaline Bio is a late-stage clinical biotechnology company developing its lead candidate, pacibekitug, for multiple indications - Company is a late-stage clinical biotechnology company developing **pacibekitug**, a long-acting anti-IL-6 antibody, for immune and inflammatory diseases[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - Strategic paths for pacibekitug include cardiovascular inflammation (Phase 2 TRANQUILITY trial, topline data expected **Q2 2025**) and thyroid eye disease (pivotal Phase 2b spiriTED trial, topline data expected **H2 2025**)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk) - Accumulated deficit of **$158.2 million** as of March 31, 2025, with net losses of **$23.0 million** and **$13.3 million** for Q1 2025 and Q1 2024, respectively[96](index=96&type=chunk) [Financial Operations Overview](index=25&type=section&id=Financial%20Operations%20Overview) The company has not generated revenue and expects significant R&D and G&A expenses to continue as it advances product candidates - **No revenue generated** since inception; future revenue depends on successful commercialization or collaboration/licensing agreements[113](index=113&type=chunk) - Research and development expenses are expected to **increase substantially** due to advancing pacibekitug into larger clinical trials and expanding R&D activities[117](index=117&type=chunk) - General and administrative expenses are expected to **increase** to support R&D, pre-commercial activities, and public company compliance[121](index=121&type=chunk)[122](index=122&type=chunk) [Revenue](index=25&type=section&id=Revenue) The company has not generated any revenue from product sales and does not anticipate doing so in the near future - **No revenue generated** from product sales since inception[113](index=113&type=chunk) - Future revenue is uncertain and dependent on product sales, collaboration, or license agreements[113](index=113&type=chunk) [Operating Expenses](index=25&type=section&id=Operating%20Expenses) Operating expenses are categorized into research and development (R&D) and general and administrative (G&A) [Research and Development Expenses](index=25&type=section&id=Research%20and%20Development%20Expenses) R&D expenses primarily cover clinical trials, manufacturing, and personnel costs and are expected to increase substantially - R&D expenses include personnel-related costs, payments to **CROs and CDMOs** for clinical trials and manufacturing, and preclinical development costs[114](index=114&type=chunk) - IPR&D assets purchased in asset acquisitions are **expensed as incurred** if they have not received regulatory approval and lack alternative future use[115](index=115&type=chunk) - R&D expenses are expected to **increase substantially** as pacibekitug and future product candidates advance into larger and later-stage clinical trials[117](index=117&type=chunk) [General and Administrative Expenses](index=27&type=section&id=General%20and%20Administrative%20Expenses) G&A expenses consist of personnel costs, professional fees, and public company-related expenses, which are expected to increase - G&A expenses primarily cover salaries, bonuses, benefits, stock-based compensation for operational/finance/administrative functions, and **professional fees**[120](index=120&type=chunk) - Expected to **increase** due to continued R&D, pre-commercial preparation, and public company expenses (accounting, audit, legal, investor relations)[121](index=121&type=chunk)[122](index=122&type=chunk) [Other Income, Net](index=28&type=section&id=Other%20Income,%20Net) Other income, net, is primarily derived from interest and investment income on the company's cash and investments - Other income, net, is mainly comprised of **interest and investment income**[123](index=123&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) The company's net loss increased significantly in Q1 2025 compared to the prior year, driven by higher R&D expenses Summary of Results of Operations (in thousands) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Research and development | $20,258 | $11,376 | $8,882 | | General and administrative | $5,973 | $6,141 | $(168) | | Total operating expenses | $26,231 | $17,517 | $8,714 | | Loss from operations | $(26,231) | $(17,517) | $(8,714) | | Other income, net | $3,261 | $4,206 | $(945) | | Net loss | $(22,970) | $(13,311) | $(9,659) | [Research and Development Expenses Analysis](index=28&type=section&id=Research%20and%20Development%20Expenses%20Analysis) R&D expenses increased by $8.9 million, or 78%, primarily due to higher clinical trial and payroll-related costs - R&D expenses **increased by $8.9 million**, from $11.4 million in Q1 2024 to $20.3 million in Q1 2025[125](index=125&type=chunk) - Primary drivers of increase: **$3.8 million** in clinical trial expenses, **$2.7 million** in payroll-related costs (including $0.5 million stock-based compensation), **$1.5 million** in toxicology study expenses, **$0.6 million** in R&D consulting, and **$0.3 million** in medical affairs expenses[127](index=127&type=chunk) [General and Administrative Expenses Analysis](index=28&type=section&id=General%20and%20Administrative%20Expenses%20Analysis) G&A expenses decreased by $0.2 million, or 2.7%, mainly due to lower consulting and legal expenses - G&A expenses **decreased by $0.2 million**, from $6.1 million in Q1 2024 to $6.0 million in Q1 2025[125](index=125&type=chunk) - Decrease primarily due to **$1.0 million decreased consulting expenses** and **$0.2 million decreased legal expenses**[125](index=125&type=chunk) - Partially offset by **$1.0 million increased payroll-related costs**, including $0.4 million increased stock-based compensation expense, due to increased headcount[125](index=125&type=chunk) [Other Income, Net Analysis](index=28&type=section&id=Other%20Income,%20Net%20Analysis) Other income, net, decreased by $0.9 million, or 22.5%, primarily due to a decline in investment income - Other income, net, **decreased by $0.9 million**, from $4.2 million in Q1 2024 to $3.3 million in Q1 2025[126](index=126&type=chunk) - Primarily due to a **$1.3 million decrease in investment income**, partially offset by a **$0.4 million increase in interest income**[126](index=126&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company has incurred significant losses and will require substantial additional capital to fund its operations - Incurred significant operating losses and negative cash flows, with an accumulated deficit of **$158.2 million** as of March 31, 2025[128](index=128&type=chunk)[129](index=129&type=chunk) - As of March 31, 2025, had **$275.3 million** in cash, cash equivalents, and investments, expected to fund operations into the **second half of 2027**[130](index=130&type=chunk) - Future cash needs will be financed through equity or debt financings, collaborations, licensing arrangements, and strategic alliances[33](index=33&type=chunk)[134](index=134&type=chunk) [Sources of Liquidity](index=30&type=section&id=Sources%20of%20Liquidity) The company's liquidity primarily stems from past equity financings, including a public offering in January 2024 - Funded operations primarily through Series A convertible preferred stock sales, Pre-Merger Financing Transaction, and January 2024 Offering, raising approximately **$359.7 million gross proceeds**[129](index=129&type=chunk) - Entered into an ATM Sales Agreement in November 2024 to sell up to **$100.0 million** of common stock, but no shares have been sold as of March 31, 2025[131](index=131&type=chunk)[132](index=132&type=chunk) [Future Capital Requirements](index=30&type=section&id=Future%20Capital%20Requirements) The company anticipates substantial additional capital will be required to complete development and commercialization - Will require **substantial additional capital** to develop and commercialize product candidates and fund operations for the foreseeable future[133](index=133&type=chunk) - Future funding requirements depend on factors like scope, timing, and costs of R&D, regulatory review, manufacturing, marketing, and intellectual property protection[136](index=136&type=chunk)[137](index=137&type=chunk) - Failure to obtain sufficient capital could force **delays, reductions, or curtailment** of research, product development, or commercialization efforts, or require licensing rights on less favorable terms[135](index=135&type=chunk) [Cash Flows Analysis](index=32&type=section&id=Cash%20Flows%20Analysis) Net cash used in operating activities increased, while investing activities shifted to a net provision of cash Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Operating activities | $(21,679) | $(14,923) | | Investing activities | $25,941 | $(188,869) | | Financing activities | $562 | $161,352 | | Net increase (decrease) | $4,824 | $(42,440) | - Net cash used in operating activities **increased by $6.8 million** due to overall growth in operations and headcount[140](index=140&type=chunk) - Shift in investing activities from net cash used to net cash provided primarily due to **maturities of investments**[141](index=141&type=chunk) [Contractual Obligations and Commitments](index=32&type=section&id=Contractual%20Obligations%20and%20Commitments) The company has agreements with vendors for R&D and manufacturing services, which may include purchase obligations - Agreements with CDMOs and CROs include provisions for **purchase and termination obligations**[143](index=143&type=chunk) - **Milestone and royalty payments** under the Pfizer License Agreement are contingent upon future activities and are not included in current contractual obligations[144](index=144&type=chunk) [Critical Accounting Policies and Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The preparation of financial statements requires management to make estimates, particularly for accrued expenses - Financial statements require management estimates and assumptions, including for **accrued expenses** and **stock-based compensation**[145](index=145&type=chunk) - **No significant changes** to critical accounting policies since the 2024 Form 10-K[146](index=146&type=chunk) [Recently Issued and Adopted Accounting Pronouncements](index=34&type=section&id=Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) The company adopted ASU 2023-07, Segment Reporting, in fiscal year 2024 and is evaluating other new pronouncements - Adopted **ASU 2023-07, Segment Reporting**, for the fiscal year ended December 31, 2024, resulting in additional interim disclosures[41](index=41&type=chunk)[147](index=147&type=chunk) - Evaluating **ASU 2023-09 (Income Tax Disclosures)** and **ASU 2024-03 (Expense Disaggregation Disclosures)** for future impact[42](index=42&type=chunk)[43](index=43&type=chunk)[147](index=147&type=chunk) [Emerging Growth Company and Smaller Reporting Company Status](index=34&type=section&id=Emerging%20Growth%20Company%20and%20Smaller%20Reporting%20Company%20Status) The company qualifies as an 'emerging growth company' and 'smaller reporting company,' allowing for reduced disclosure - Qualifies as an **'emerging growth company' (EGC)** and has elected to use the extended transition period for new or revised accounting standards[148](index=148&type=chunk) - Also qualifies as a **'smaller reporting company,'** allowing reduced disclosure obligations, including exemption from auditor attestation requirements of Section 404 of Sarbanes-Oxley Act[150](index=150&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Tourmaline Bio is not required to provide these disclosures - The company is a **smaller reporting company** and is not required to provide disclosures about market risk[151](index=151&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025 - Management concluded that disclosure controls and procedures were **effective at a reasonable assurance level** as of March 31, 2025[153](index=153&type=chunk) - **No material changes** in internal control over financial reporting occurred during the three months ended March 31, 2025[154](index=154&type=chunk) - Acknowledges **inherent limitations** in control systems, providing only reasonable, not absolute, assurance[155](index=155&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material pending legal proceedings - **No pending legal proceedings** are expected to have a material adverse effect on the company's financial position, results of operations, or cash flows[157](index=157&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks associated with investing in the company's common stock - Investment in common stock involves a **high degree of risk**, including those related to limited operating history, recurring losses, and dependence on pacibekitug[158](index=158&type=chunk)[159](index=159&type=chunk) - Key risks include the need for **significant additional capital**, reliance on third parties for development and manufacturing, and the unpredictable nature of clinical trials and regulatory approvals[159](index=159&type=chunk) - Other risks encompass market acceptance, pricing and reimbursement, government regulation, data privacy, managing growth, and protecting intellectual property[159](index=159&type=chunk) [Summary of Risk Factors](index=36&type=section&id=Summary%20of%20Risk%20Factors) A high-level overview of primary risks, including limited operating history, net losses, and reliance on pacibekitug - **Limited operating history** and no commercialized products make it difficult to assess future viability[159](index=159&type=chunk) - Incurred **net losses since inception** and expects to continue, with no current product revenue[159](index=159&type=chunk) - Business is **highly dependent** on the successful clinical development, regulatory approval, and commercialization of pacibekitug[159](index=159&type=chunk) [Risks Related to Our Financial Condition and Capital Needs](index=38&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition%20and%20Capital%20Needs) The company has a limited operating history, no product revenue, and has incurred significant net losses - **Limited operating history** since Legacy Tourmaline's formation in 2021, with no commercialized products[162](index=162&type=chunk) - Incurred net losses every year since inception, with an **accumulated deficit of $158.2 million** as of March 31, 2025[164](index=164&type=chunk)[165](index=165&type=chunk) - Requires **significant additional capital** to finance operations and product development, with current capital expected to fund operations into the **second half of 2027**[175](index=175&type=chunk)[176](index=176&type=chunk) [Risks Related to Our Dependence on Third Parties](index=42&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) The company heavily relies on third parties for development, manufacturing, and clinical trials of pacibekitug - Depends on third parties (**CROs, clinical investigators, CDMOs**) for development, clinical trials, manufacturing, and potential commercialization[185](index=185&type=chunk) - Relies completely on **CDMOs** for manufacturing and testing of pacibekitug, which is complex and highly regulated, posing risks of product loss, quality issues, and supply disruptions[189](index=189&type=chunk)[191](index=191&type=chunk) - **Security incidents, system disruptions, or cyberattacks** affecting the company or its third-party partners could lead to operational disruptions, data loss, regulatory investigations, and reputational harm[211](index=211&type=chunk)[212](index=212&type=chunk) [Risks Related to Data Privacy and Security](index=49&type=section&id=Risks%20Related%20to%20Data%20Privacy%20and%20Security) The company is subject to rapidly evolving and stringent data privacy and security laws globally - Subject to numerous evolving data privacy and security obligations, including **EU GDPR, UK GDPR, Swiss FADP, HIPAA**, and state-level laws like **CCPA**[223](index=223&type=chunk)[224](index=224&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk) - **Cross-border data transfer restrictions**, particularly from the EEA, UK, or Switzerland to the U.S., pose significant compliance challenges and potential for fines or injunctions[225](index=225&type=chunk)[226](index=226&type=chunk) - Use of **generative AI technologies** by personnel could lead to additional compliance costs, regulatory investigations, and lawsuits[232](index=232&type=chunk) [Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates](index=51&type=section&id=Risks%20Related%20to%20the%20Discovery,%20Development%20and%20Regulatory%20Approval%20of%20Our%20Product%20Candidates) The development and regulatory approval of pacibekitug are lengthy, expensive, and unpredictable - **Clinical trials are rigorous, expensive, and lengthy**, with potential for delays, suspension, or termination due to various factors including regulatory discussions, patient enrollment, and third-party performance[235](index=235&type=chunk)[236](index=236&type=chunk) - Preliminary or interim clinical trial results may change, and pacibekitug may cause undesirable side effects or adverse events, including **anti-drug antibodies (ADAs)**, which could terminate development or lead to restrictive product labels[253](index=253&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) - **Success in preclinical or earlier-stage trials**, or data from other IL-6 inhibitors, is not indicative of future results for pacibekitug, and the company faces significant competition in immune and inflammatory disease markets[247](index=247&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) [Risks Related to the Marketing and Commercialization of Our Product Candidates](index=59&type=section&id=Risks%20Related%20to%20the%20Marketing%20and%20Commercialization%20of%20Our%20Product%20Candidates) Even if approved, pacibekitug may fail to achieve market acceptance due to pricing, competition, and other factors - **Market acceptance** of approved product candidates depends on efficacy, safety, advantages over alternatives, pricing, and third-party payor coverage/reimbursement[271](index=271&type=chunk) - **Unfavorable pricing regulations**, limited reimbursement by government and private payors, or healthcare reform initiatives could significantly impact revenue and commercial success[273](index=273&type=chunk)[274](index=274&type=chunk) - **Product liability lawsuits**, whether related to clinical trials or commercialized products, could result in substantial liabilities, reputational harm, and limit development/commercialization efforts[280](index=280&type=chunk)[281](index=281&type=chunk) [Risks Related to Government Regulation](index=62&type=section&id=Risks%20Related%20to%20Government%20Regulation) The regulatory approval process is lengthy and unpredictable, with extensive ongoing requirements post-approval - **Regulatory approval processes** by the FDA and foreign health authorities are lengthy, unpredictable, and may not result in approval for pacibekitug[282](index=282&type=chunk)[283](index=283&type=chunk) - Approved products face extensive **ongoing regulatory requirements** for manufacturing, quality control, labeling, safety surveillance, and promotion, with violations leading to significant penalties[297](index=297&type=chunk)[300](index=300&type=chunk)[302](index=302&type=chunk) - **Healthcare reform measures** (e.g., Inflation Reduction Act, ACA) and changes in tax laws could negatively impact drug pricing, reimbursement, and the company's financial condition[309](index=309&type=chunk)[310](index=310&type=chunk)[321](index=321&type=chunk) [Risks Related to Our Business Operations, Employee Matters and Managing Growth](index=71&type=section&id=Risks%20Related%20to%20Our%20Business%20Operations,%20Employee%20Matters%20and%20Managing%20Growth) The company faces risks related to maintaining effective internal controls, managing growth, and retaining skilled personnel - Previously identified **material weaknesses in internal control** over financial reporting have been remediated as of December 31, 2024, but future weaknesses could adversely affect financial reporting[331](index=331&type=chunk)[332](index=332&type=chunk) - Expected **significant growth** in employees and operations, particularly in clinical development, regulatory affairs, and commercialization, poses management challenges[333](index=333&type=chunk) - **International operations** (manufacturing, clinical trials, future marketing) expose the company to risks including conflicting laws, supply chain disruptions, financial risks, and geopolitical instability[337](index=337&type=chunk)[338](index=338&type=chunk) [Global Trade Issues and Macroeconomic Conditions](index=74&type=section&id=Global%20Trade%20Issues%20and%20Macroeconomic%20Conditions) Global trade issues and unfavorable macroeconomic conditions could adversely impact the company's business and supply chain - **Global trade restrictions, tariffs, and disputes** could negatively impact demand, increase supply chain complexity and manufacturing costs, and reduce product competitiveness[340](index=340&type=chunk) - **Disease outbreaks, epidemics, and pandemics** could disrupt clinical trials, manufacturing, and supply chains, potentially delaying regulatory approvals or impacting product efficacy/safety[341](index=341&type=chunk)[342](index=342&type=chunk) - **Unfavorable domestic or global economic conditions** could weaken demand for product candidates and hinder the ability to raise additional capital[343](index=343&type=chunk) [Operational and Environmental Risks](index=75&type=section&id=Operational%20and%20Environmental%20Risks) The company's operations are vulnerable to interruptions from natural disasters and the use of hazardous materials - Operations are vulnerable to interruptions from fire, earthquake, power loss, telecommunications failure, and terrorist activity[344](index=344&type=chunk) - Use of **hazardous materials** in clinical development and manufacturing exposes the company to risks of personal injuries, environmental damage, and significant compliance costs[345](index=345&type=chunk) [Litigation Risks](index=75&type=section&id=Litigation%20Risks) The company may be exposed to various forms of litigation, including stockholder lawsuits, which could be costly - Exposure to **litigation** from stockholders, suppliers, and other third parties could adversely affect business and operations[346](index=346&type=chunk) - **Inherent limitations** in disclosure controls and procedures mean that not all errors or acts of fraud may be prevented or detected[347](index=347&type=chunk)[348](index=348&type=chunk) [Risks Related to Our Intellectual Property](index=75&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's success depends on obtaining and maintaining intellectual property protection for its products and technologies - Success depends on obtaining and maintaining adequate **intellectual property rights**, including patents, for technologies and product candidates, which is an expensive and time-consuming process[349](index=349&type=chunk)[350](index=350&type=chunk) - Dependent on **license agreements with Pfizer and Lonza**; termination or reduction of these licenses could result in loss of significant rights and harm commercialization of pacibekitug[357](index=357&type=chunk)[359](index=359&type=chunk) - Faces risks of **lawsuits to protect or enforce IP rights**, or allegations of infringement by third parties, which could be expensive, time-consuming, and unsuccessful[366](index=366&type=chunk)[372](index=372&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Securities](index=84&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Securities) The company repurchased 2,600 shares of common stock from a former employee during the quarter Issuer Purchases of Equity Securities (Three Months Ended March 31, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :-------------------------- | :------------------------------- | :--------------------------- | | March 1 through March 31, 2025 | 2,600 | $2.76 | | Three Months Ended March 31, 2025 | 2,600 | $2.76 | - Repurchased **2,600 shares** from a former employee related to unvested early exercised stock options at the original exercise price[389](index=389&type=chunk) - **No public repurchase program** was in place during the period[390](index=390&type=chunk) [Item 3. Defaults Upon Senior Securities](index=84&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - **Not Applicable**[391](index=391&type=chunk) [Item 4. Mine Safety Disclosures](index=84&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - **Not Applicable**[392](index=392&type=chunk) [Item 5. Other Information](index=84&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - **None**[393](index=393&type=chunk) [Item 6. Exhibits](index=85&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and officer certifications - Includes Third Amended and Restated Certificate of Incorporation and Bylaws[394](index=394&type=chunk) - **Certifications of Principal Executive Officer and Principal Financial Officer** pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed[394](index=394&type=chunk) [SIGNATURES](index=86&type=section&id=SIGNATURES) [Signatures](index=86&type=section&id=Signatures) The report is duly signed on behalf of the company by its CEO and CFO on May 2, 2025 - Report signed by **Sandeep Kulkarni, Chief Executive Officer**, and **Ryan Robinson, Chief Financial Officer**[399](index=399&type=chunk) - Date of signing: **May 2, 2025**[399](index=399&type=chunk)

Financial Performance - Cash, cash equivalents, and investments were $275.3 million as of March 31, 2025, down from $294.9 million as of December 31, 2024, providing a cash runway into the second half of 2027[10] - Net loss for Q1 2025 was $23.0 million, resulting in a basic and diluted net loss per share of $0.89, compared to a net loss of $13.3 million and a net loss per share of $0.55 in Q1 2024[14] - Total operating expenses for Q1 2025 were $26.2 million, compared to $17.5 million for Q1 2024[19] - Total stockholders' equity decreased to $279.9 million as of March 31, 2025, from $300.1 million as of December 31, 2024[20] - Tourmaline's working capital was $250.5 million as of March 31, 2025, down from $259.9 million as of December 31, 2024[20] Research and Development - Research and development expenses increased to $20.3 million for Q1 2025, compared to $11.4 million for Q1 2024, primarily due to increased clinical trial expenses[14] - The Phase 2 TRANQUILITY trial has enrolled 143 participants, exceeding the initial target of 120, with topline data expected in Q2 2025[7] - Tourmaline anticipates reporting topline data from the Phase 2b spiriTED trial in the second half of 2025[5] - Tourmaline plans to provide further details on the clinical development plan for pacibekitug in conjunction with the TRANQUILITY topline data[6] - The company expects to expand pacibekitug's indications to include abdominal aortic aneurysm (AAA) following the TRANQUILITY trial results[7]