Core Insights - Upstream Bio, Inc. is advancing its clinical-stage monoclonal antibody, verekitug, which targets the TSLP receptor, showing potential for treating severe respiratory diseases [1][10] - Recent data presented at the European Respiratory Society Congress indicate verekitug's unique mechanism of action may lead to differentiated therapeutic effects across various TSLP-driven inflammatory diseases [1][2] Mechanism of Action - Verekitug prevents TSLP from binding to its receptor by occupying ligand binding sites and outcompetes TSLP even in the presence of preformed receptor complexes [1][6] - The high affinity of verekitug (KD < 1 pM) allows it to inhibit proinflammatory signaling initiated by TSLP effectively [6][8] Clinical Development - Verekitug has shown rapid and sustained TSLP receptor inhibition for up to 24 weeks post-administration, indicating a potential for less frequent dosing compared to existing biologic therapies [2][9] - The recently completed VIBRANT trial demonstrated that a single dose of 100 mg verekitug every 12 weeks met both primary and secondary endpoints in patients with chronic rhinosinusitis with nasal polyps [7][10] - Ongoing trials include the VALIANT trial for severe asthma and the VENTURE trial for moderate-to-severe chronic obstructive pulmonary disease (COPD) [7][10] Preclinical and Clinical Data - Preclinical studies have shown verekitug's high occupancy of the TSLP receptor and its ability to inhibit cytokine production from CD4+ T cells and ILC2 cells [8] - In Phase 1 trials, verekitug was well tolerated and demonstrated significant reductions in fractional exhaled nitric oxide (FeNO) and blood eosinophils in asthma patients [9] Company Overview - Upstream Bio is focused on developing treatments for inflammatory diseases, particularly severe respiratory disorders, with verekitug being the only known antagonist targeting the TSLP receptor currently in clinical development [10]

Upstream Bio Conference Call Summary Company Overview - Upstream Bio is a clinical-stage biotechnology company focused on developing Viraqita, the only known antagonist of the TSLP receptor in clinical development [2][3] - The company is currently funded through a successful IPO last year, with funding expected to last until 2027 [3][4] Product Development - Viraqita is being developed for three indications: 1. Chronic rhinosinusitis with nasal polyps (CRSwNP) 2. Severe asthma 3. Chronic obstructive pulmonary disease (COPD) - The company is in Phase 2 trials for all three indications, aiming to support a Biologics License Application (BLA) with these trials [3][4] Unique Mechanism of Action - Upstream Bio targets the TSLP receptor rather than the ligand, which is a significant differentiation from competitors [5][6] - Viraqita can fully occupy 100% of free TSLP receptors within two weeks and maintain this occupancy for up to 24 weeks after the last dose [6] Clinical Data and Efficacy - The Phase 2 trial for CRSwNP has shown promising results, with Viraqita's efficacy potentially meeting or exceeding that of other biologics in the market [14][15] - The dosing interval for Viraqita is every 12 weeks, which is significantly less frequent than competitors like Tezepelumab (13 times a year) and Dupilumab (26 times a year) [15][16] - The delta nasal polyp score (NPS) for Viraqita was -1.8, compared to -1.7 for Tezepelumab and -1.6 for Dupilumab, indicating competitive efficacy [15] Trial Design and Regulatory Considerations - The trial design follows FDA guidance with a placebo-controlled approach and includes endpoints such as change in endoscopic nasal polyp score and nasal congestion score [12][13] - The company aims for the nasal polyps data to serve as one of two pivotal studies for BLA submission [12] Patient Population and Baseline Characteristics - The patient population in the trial was designed to be similar to those in other studies, with comparable disease severity and eosinophil counts [17][18] - The lack of prior steroid use in some patients could indicate a more severe population, but this is not seen as a significant tailwind [19] Future Outlook - The company is optimistic about the read-through of nasal polyp data to asthma, with expectations of similar efficacy and a less frequent dosing regimen [21][22] - Upcoming data in asthma is anticipated to provide further insights into the drug's potential [22]

Core Insights - Upstream Bio, Inc. is a clinical-stage biotechnology company focused on developing treatments for inflammatory diseases, particularly severe respiratory disorders [3] - The company is advancing its lead candidate, verekitug, which targets the receptor for thymic stromal lymphopoietin (TSLP), into Phase 2 trials for chronic rhinosinusitis with nasal polyps, severe asthma, and chronic obstructive pulmonary disease [3] - The CEO, Rand Sutherland, will participate in a fireside chat at the Stifel 2025 Virtual Immunology and Inflammation Forum on September 15, 2025 [1] Company Overview - Upstream Bio is dedicated to addressing unmet medical needs in patients underserved by current treatments [3] - Verekitug is the only known antagonist in clinical development targeting TSLP, a key cytokine in inflammatory responses [3] - The company aims to leverage verekitug's unique properties to improve patient outcomes in various immune-mediated diseases [3] Event Information - A live webcast of the CEO's fireside chat will be available on the company's website, with a replay posted afterward [2]

Core Points - Upstream Bio is hosting a conference call to discuss the Phase II VIBRANT top-line results of their lead asset, Verekitug [1][4] - The call includes forward-looking statements regarding the company's expectations and beliefs about future events [2] - Comparisons of Verekitug against existing treatments are based on third-party published data, with caution advised due to differences in trial designs and patient characteristics [3] Company Overview - Upstream Bio's CEO, Dr. Rand Sutherland, and Chief Medical Officer, Dr. Aaron Deykin, are present to discuss the results and future plans for Verekitug [4] - The agenda includes an overview of the results and a detailed review of the Phase II VIBRANT clinical study top-line results [4]

Summary of Upstream Bio Phase Two Vibrant Top-Line Results Conference Call Company Overview - **Company**: Upstream Bio - **Lead Asset**: Virecotag, an antagonist of the TSLP receptor - **Focus**: Severe respiratory diseases, including chronic rhinosinusitis with nasal polyps (CRS with NP), severe asthma, and COPD [7][24] Industry Context - **Market Size**: Sales of therapies for CRS with NP exceed $1 billion annually and are projected to grow due to new agents and expanded use [9] - **Current Treatments**: Comparison with existing treatments like Tezepelumab and Dupilumab, highlighting the need for more frequent dosing in other agents [6][20][21] Key Clinical Trial Results - **Trial Design**: Phase Two, randomized, double-blind, placebo-controlled trial with 81 participants [11][12] - **Primary Endpoint**: Significant reduction in endoscopic nasal polyp score (NPS) by 1.8 points and nasal congestion score (NCS) by 0.8 points at 24 weeks [16][17] - **Secondary Endpoints**: Improvements in sinus opacification, total symptom score, and a 76% reduction in the need for steroids or surgery [17][22] - **Safety Profile**: Virecotag was well tolerated with no serious adverse events reported; common treatment emergent adverse events included upper respiratory infections and sinusitis [15][16] Mechanism of Action - **Potency**: Virecotag is approximately 300-fold more potent than Tezepelumab due to its unique mechanism targeting the TSLP receptor [8] - **Dosing Interval**: Administered every 12 weeks, significantly less frequent than other biologics [6][20] Future Development Plans - **Upcoming Trials**: - Valiant trial in severe asthma expected to report top-line data in Q1 2026 [7][25] - Ongoing Venture trial in COPD [7] - **Potential Expansion**: Plans to explore Virecotag's efficacy in other therapeutic areas, including dermatology and gastrointestinal diseases [7] Market Opportunity - **Unmet Need**: High interest among allergists and ENT specialists for biologics targeting TSLP in CRS with NP [9] - **Commercial Strategy**: Focus on maximizing the value of Virecotag across multiple indications with substantial unmet needs [7][24] Additional Insights - **Subgroup Analysis**: Preliminary data suggests consistent efficacy across various patient subgroups, including those with comorbid asthma [19][40] - **Long-term Efficacy**: Anticipation of greater treatment effects with longer studies, as seen with other agents [38][46] Conclusion - **Overall Sentiment**: Positive trial results reinforce the potential of Virecotag as a differentiated treatment option for CRS with NP and other respiratory diseases, with a favorable safety profile and significant clinical benefits [22][24]

VIBRANT Phase 2 Study Results - The Phase 2 VIBRANT study of verekitug in CRSwNP met the primary endpoint, demonstrating a statistically significant reduction in Nasal Polyp Score (NPS) of -1.8 (p<0.0001) [11, 71, 85] - Key secondary endpoints were also met, including a Nasal Congestion Score (NCS) reduction of -0.8 (p=0.0003) [11, 71, 85] and a 76% reduction in the need for surgery or systemic steroids (p=0.03) [11, 71, 85] - Verekitug, dosed every 12 weeks, showed clinical activity at week 24 similar to tezepelumab dosed every 4 weeks [14, 65] - In the VIBRANT trial, 93% of subjects completed the study [38] Safety and Tolerability - Verekitug was generally well tolerated, with no serious adverse events (SAEs) observed [11, 71, 85] - The incidence of adverse events (AEs) was similar across treatment groups, with treatment-emergent adverse events (TEAEs) related to study treatment occurring more frequently in the placebo group [48] Verekitug's Potential - Upstream Bio is developing verekitug as an antagonist of the TSLP receptor, with the goal of achieving rapid, complete, and sustained receptor occupancy for up to 24 weeks after the last dose [21] - Current biologics sales in CRSwNP alone are estimated to exceed $1 billion globally [29] - Upstream Bio is studying verekitug across multiple indications with high unmet need, including severe asthma (VALIANT trial, topline data expected in Q1 2026) and COPD (VENTURE trial, currently enrolling) [22, 23]

Core Insights - Upstream Bio, Inc. announced positive top-line results from the Phase 2 VIBRANT trial for verekitug, demonstrating significant efficacy in treating chronic rhinosinusitis with nasal polyps (CRSwNP) [1][6][12] Study Results - The VIBRANT trial met its primary endpoint with a statistically significant placebo-adjusted reduction in endoscopic nasal polyp score (NPS) of -1.8 (p<0.0001) at Week 24 [1][4] - Key secondary endpoints showed a reduction in nasal congestion score (NCS) by -0.8 (p=0.0003) and a 76% reduction (p=0.03) in the need for surgery or systemic corticosteroids [1][2][5] - The trial involved 81 adults and was designed as a global, randomized, double-blind, placebo-controlled study over 24 weeks [3][12] Safety Profile - Verekitug was generally well tolerated, with no serious adverse events (SAEs) reported, consistent with previous studies [1][5][6] Mechanism and Potential - Verekitug is a monoclonal antibody targeting the thymic stromal lymphopoietin (TSLP) receptor, which is unique in its mechanism of action compared to existing therapies [1][13][18] - The results suggest that verekitug could advance the standard of care for CRSwNP and may have potential applications in other respiratory diseases, including severe asthma [6][7][18] Future Plans - Upstream Bio plans to engage with global regulatory authorities for further development and potential product approval of verekitug [7][12] - The company will present additional details from the VIBRANT trial at an upcoming medical conference [8]

Group 1 - Upstream Bio, Inc. is a clinical-stage biotechnology company focused on developing treatments for inflammatory diseases, particularly severe respiratory disorders [4] - The company is advancing verekitug, a monoclonal antibody targeting the receptor for thymic stromal lymphopoietin (TSLP), which is involved in inflammatory responses [4] - The Phase 2 VIBRANT trial is designed to evaluate the efficacy and safety of verekitug in adults with chronic rhinosinusitis with nasal polyps (CRSwNP) [2] Group 2 - The VIBRANT trial is a global, randomized, placebo-controlled study where participants receive either 100 mg of verekitug or a placebo every 12 weeks for 24 weeks [2] - The primary endpoint of the trial is the change in endoscopic nasal polyp score (NPS) at Week 24 [2] - Top-line data from the VIBRANT trial will be reported on September 2, 2025, during a conference call and webcast [1][3]

Core Insights - Upstream Bio reported significant clinical advancements and financial results for Q2 2025, with a focus on its lead drug candidate, verekitug, aimed at treating respiratory diseases [1][5][12] Financial Performance - Revenue for Q2 2025 was $0.9 million, exceeding the estimate of $0.69 million and showing an 80% increase from $0.5 million in Q2 2024 [2][8] - Research and development expenses surged to $37.9 million, up 168.8% from $14.1 million in Q2 2024, primarily due to increased clinical and manufacturing costs related to verekitug [2][7] - General and administrative expenses rose to $7.4 million, an 85% increase from $4.0 million in Q2 2024 [2][7] - The net loss widened to $40.0 million compared to $14.7 million in Q2 2024, reflecting the transition to more expensive Phase 2 trials [2][8] - Cash reserves stood at $393.6 million as of June 30, 2025, expected to sustain operations through 2027 [8][12] Clinical Development - Upstream Bio is advancing verekitug through multiple Phase 2 clinical trials, with significant milestones achieved in severe asthma and chronic rhinosinusitis with nasal polyps (CRSwNP) [1][4] - Patient enrollment for the VALIANT Phase 2 trial for severe asthma was completed in June 2025, with top-line results anticipated in early 2026 [5][12] - The VIBRANT Phase 2 trial for CRSwNP completed patient enrollment by January 2025, with efficacy data expected in Q3 2025 [5][12] - The company initiated dosing in the VENTURE Phase 2 trial for chronic obstructive pulmonary disease (COPD) in July 2025 [6][12] Product Pipeline and Competitive Position - Verekitug is the only monoclonal antibody in human trials targeting the TSLP receptor, which may offer longer intervals between doses compared to existing biologics [10][11] - The competitive landscape remains uncertain as there are no approved products or recent head-to-head data against other biologics [11] - The regulatory strategy focuses on trial endpoints that could support future marketing applications if successful [11] Future Outlook - Management highlighted two key upcoming catalysts: top-line data from the VIBRANT CRSwNP Phase 2 trial in Q3 2025 and the VALIANT severe asthma Phase 2 readout in Q1 2026 [12][13] - Investors are expected to closely monitor the outcomes of these trials, as positive results could lead to regulatory submissions and potential partnerships [13]

[PART I. FINANCIAL INFORMATION](index=8&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=8&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited financial statements for a clinical-stage biopharmaceutical firm, showing an accumulated deficit of **$258.0 million** - Upstream Bio, Inc. is a clinical-stage biopharmaceutical company focused on developing treatments for inflammatory diseases, with its primary product candidate being verekitug, a monoclonal antibody targeting the Thymic Stromal Lymphopoietin receptor[32](index=32&type=chunk) Condensed Consolidated Balance Sheets (Amounts in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $45,458 | $325,892 | | Short-term investments | $348,123 | $144,559 | | Total current assets | $418,272 | $479,160 | | Total assets | $420,521 | $481,719 | | Total current liabilities | $10,929 | $10,737 | | Total liabilities | $11,778 | $11,867 | | Total stockholders' equity | $408,743 | $469,852 | | Accumulated deficit | $(258,016) | $(190,780) | Condensed Consolidated Statements of Operations and Comprehensive Loss (Amounts in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Collaboration revenue | $937 | $510 | $1,503 | $1,150 | | Research and development expenses | $37,865 | $14,069 | $63,662 | $25,760 | | General and administrative expenses | $7,419 | $3,981 | $14,201 | $7,943 | | Net loss | $(39,966) | $(14,678) | $(67,236) | $(25,572) | | Net loss per share, basic and diluted | $(0.74) | $(6.50) | $(1.25) | $(11.18) | Condensed Consolidated Statements of Cash Flows (Amounts in thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(80,404) | $(25,598) | | Net cash used in investing activities | $(200,608) | $(102,802) | | Net cash provided by financing activities | $578 | $149,903 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(280,434) | $21,503 | | Cash, cash equivalents and restricted cash at end of period | $45,652 | $47,336 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) [Condensed Consolidated Statement of Redeemable Convertible Preferred Stock and Stockholders' Deficit](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Redeemable%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Deficit) [Condensed Consolidated Statement of Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20Equity) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Details business, accounting policies, and financial components, highlighting verekitug, operating losses, and external funding reliance - The company was incorporated in April 2021 and is focused on developing treatments for inflammatory diseases, with an initial focus on severe respiratory disorders, primarily advancing verekitug[32](index=32&type=chunk) - The company has incurred recurring losses and negative cash flows from operations since its inception, with net losses of **$67.2 million** and **$25.6 million** for the six months ended June 30, 2025 and 2024, respectively, and an accumulated deficit of **$258.0 million** as of June 30, 2025[36](index=36&type=chunk) - On October 4, 2024, the company effected a **1.049-for-one stock split** of its common stock and proportional adjustment to preferred stock conversion ratios[34](index=34&type=chunk) - The company expects its cash, cash equivalents, and short-term investments to be sufficient to fund operating expenses and capital expenditure requirements for at least the next twelve months from the issuance date of these financial statements[37](index=37&type=chunk) [1. Nature of the business and basis of presentation](index=13&type=section&id=1.%20Nature%20of%20the%20business%20and%20basis%20of%20presentation) [2. Summary of Significant Accounting Policies](index=15&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) [3. Fair value measurements](index=16&type=section&id=3.%20Fair%20value%20measurements) [4. Prepaid expenses and other current assets](index=18&type=section&id=4.%20Prepaid%20expenses%20and%20other%20current%20assets) [5. Property and equipment, net](index=18&type=section&id=5.%20Property%20and%20equipment,%20net) [6. Accrued expenses and other current liabilities](index=18&type=section&id=6.%20Accrued%20expenses%20and%20other%20current%20liabilities) [7. Leases](index=18&type=section&id=7.%20Leases) [8. Redeemable convertible preferred stock](index=18&type=section&id=8.%20Redeemable%20convertible%20preferred%20stock) [9. Common stock](index=19&type=section&id=9.%20Common%20stock) [10. Stock-based compensation](index=20&type=section&id=10.%20Stock-based%20compensation) [11. Income Taxes](index=22&type=section&id=11.%20Income%20Taxes) [12. Net loss per share](index=22&type=section&id=12.%20Net%20loss%20per%20share) [13. Commitments and contingencies](index=23&type=section&id=13.%20Commitments%20and%20contingencies) [14. License agreements](index=23&type=section&id=14.%20License%20agreements) [15. Revenue](index=25&type=section&id=15.%20Revenue) [16. Related parties](index=25&type=section&id=16.%20Related%20parties) [17. Segment reporting](index=27&type=section&id=17.%20Segment%20reporting) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, verekitug development, operating losses, R&D/G&A expenses, and funding needs through **2027** - Upstream Bio is a clinical-stage biotechnology company developing verekitug for inflammatory diseases, with Phase 2 trials for severe asthma, CRSwNP, and COPD. Enrollment for CRSwNP Phase 2 completed in January 2025 (top-line data expected Q3 2025), severe asthma Phase 2 completed in June 2025 (top-line data expected Q1 2026), and COPD Phase 2 initiated in July 2025[114](index=114&type=chunk) - The company has incurred significant net operating losses since inception, reporting net losses of **$40.0 million** and **$14.7 million** for the three months ended June 30, 2025 and 2024, respectively, and **$67.2 million** and **$25.6 million** for the six months ended June 30, 2025 and 2024, respectively[116](index=116&type=chunk)[147](index=147&type=chunk)[154](index=154&type=chunk) - As of June 30, 2025, the company had cash, cash equivalents, and short-term investments of **$393.6 million**, which are believed to be sufficient to fund operating expenses and capital expenditure requirements through **2027**[116](index=116&type=chunk)[163](index=163&type=chunk)[173](index=173&type=chunk) Key Financial Changes (Three Months Ended June 30, 2025 vs 2024, in thousands) | Item | 2025 | 2024 | Change | | :-------------------------- | :----- | :----- | :----- | | Collaboration revenue | $937 | $510 | $427 | | Research and development | $37,865 | $14,069 | $23,796 | | General and administrative | $7,419 | $3,981 | $3,438 | | Net loss | $(39,966) | $(14,678) | $(25,288) | Key Financial Changes (Six Months Ended June 30, 2025 vs 2024, in thousands) | Item | 2025 | 2024 | Change | | :-------------------------- | :----- | :----- | :----- | | Collaboration revenue | $1,503 | $1,150 | $353 | | Research and development | $63,662 | $25,760 | $37,902 | | General and administrative | $14,201 | $7,943 | $6,258 | | Net loss | $(67,236) | $(25,572) | $(41,664) | [Overview](index=28&type=section&id=Overview) [Asset purchase and license agreements](index=30&type=section&id=Asset%20purchase%20and%20license%20agreements) [Components of our results of operations](index=32&type=section&id=Components%20of%20our%20results%20of%20operations) [Results of operations](index=35&type=section&id=Results%20of%20operations) [Liquidity and capital resources](index=39&type=section&id=Liquidity%20and%20capital%20resources) [Contractual obligations and other commitments](index=43&type=section&id=Contractual%20obligations%20and%20other%20commitments) [Critical accounting estimates and significant judgments](index=43&type=section&id=Critical%20accounting%20estimates%20and%20significant%20judgments) [Recently issued and adopted accounting pronouncements](index=45&type=section&id=Recently%20issued%20and%20adopted%20accounting%20pronouncements) [Emerging growth company and smaller reporting company status](index=45&type=section&id=Emerging%20growth%20company%20and%20smaller%20reporting%20company%20status) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Upstream Bio, Inc. 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[191](index=191&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated disclosure controls and procedures as effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, at the reasonable assurance level[193](index=193&type=chunk) - There have been no material changes in the company's internal control over financial reporting during the quarter ended June 30, 2025[194](index=194&type=chunk) [Management's evaluation of disclosure controls and procedures](index=45&type=section&id=Management's%20evaluation%20of%20disclosure%20controls%20and%20procedures) [Changes in internal control over financial reporting](index=47&type=section&id=Changes%20in%20internal%20control%20over%20financial%20reporting) [PART II. OTHER INFORMATION](index=48&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material litigation or legal proceedings probable to have a material adverse effect on its business - The company is not currently involved in any material legal proceedings or claims that are probable to have a material adverse effect on its business[95](index=95&type=chunk)[196](index=196&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) Details significant risks: limited operating history, financial losses, capital needs, verekitug development, competition, third-party reliance, and IP challenges - The company is a clinical-stage biopharmaceutical company with a limited operating history, has incurred significant financial losses since inception, and anticipates continued losses, making it difficult to evaluate future success[200](index=200&type=chunk)[201](index=201&type=chunk) - Verekitug is the company's only product candidate, making the business entirely dependent on its successful development, regulatory approval, and commercialization, which is a lengthy, expensive, and highly uncertain process[213](index=213&type=chunk)[215](index=215&type=chunk)[218](index=218&type=chunk) - The company relies on third parties for clinical trials and manufacturing, increasing risks related to supply, quality, regulatory compliance, and potential delays, especially with current manufacturing partner WuXi Biologics facing legislative scrutiny[305](index=305&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk) - The company faces significant competition in the inflammatory disease market from major pharmaceutical and biotechnology companies with greater resources and established market presence[288](index=288&type=chunk)[291](index=291&type=chunk) - Protecting intellectual property is crucial but uncertain due to the complex patent application process, potential challenges to existing patents, and the risk of third-party infringement claims[396](index=396&type=chunk)[398](index=398&type=chunk)[403](index=403&type=chunk) [Risks related to our limited operating history, financial condition and need for additional capital](index=48&type=section&id=Risks%20related%20to%20our%20limited%20operating%20history,%20financial%20condition%20and%20need%20for%20additional%20capital) [Risks related to our business](index=53&type=section&id=Risks%20related%20to%20our%20business) [Risks related to the discovery and development of verekitug or any other potential future product candidates](index=66&type=section&id=Risks%20related%20to%20the%20discovery%20and%20development%20of%20verekitug%20or%20any%20other%20potential%20future%20product%20candidates) [Risks related to the commercialization of verekitug or any other potential future product candidates](index=77&type=section&id=Risks%20related%20to%20the%20commercialization%20of%20verekitug%20or%20any%20other%20potential%20future%20product%20candidates) [Risks related to government regulation](index=95&type=section&id=Risks%20related%20to%20government%20regulation) [Risks related to our intellectual property](index=111&type=section&id=Risks%20related%20to%20our%20intellectual%20property) [Risks related to ownership of our common stock](index=126&type=section&id=Risks%20related%20to%20ownership%20of%20our%20common%20stock) [Other general risks](index=133&type=section&id=Other%20general%20risks) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=142&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Confirms no unregistered equity sales and no material change in planned IPO proceeds use - No unregistered sales of equity securities occurred during the period[486](index=486&type=chunk) - There has been no material change in the planned use of proceeds from the IPO[487](index=487&type=chunk) [Item 3. Defaults Upon Senior Securities](index=142&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities[489](index=489&type=chunk) [Item 4. Mine Safety Disclosures](index=142&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[490](index=490&type=chunk) [Item 5. Other Information](index=142&type=section&id=Item%205.%20Other%20Information) No other information to report, and no Rule 10b5-1 trading arrangement changes by directors or officers - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[491](index=491&type=chunk) [Item 6. Exhibits](index=143&type=section&id=Item%206.%20Exhibits) Lists Form 10-Q exhibits: corporate charter documents, stock certificates, and officer certifications - The exhibits include the Third Amended and Restated Certificate of Incorporation, Second Amended and Restated Bylaws, Specimen Common Stock Certificate, and certifications from the Principal Executive Officer and Principal Financial Officer[493](index=493&type=chunk) [Signatures](index=144&type=section&id=Signatures) The report is duly signed by E. Rand Sutherland (CEO) and Michael Paul Gray (CFO/COO) on August 6, 2025 - The report was signed by E. Rand Sutherland, Chief Executive Officer, and Michael Paul Gray, Chief Financial and Operating Officer, on August 6, 2025[499](index=499&type=chunk)