UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41294 Onconetix, Inc. (Exact name of registrant as specified in its charter) | Delaware | 81-2262816 | | --- | --- | | (State or oth ...

Acquisition and Corporate Structure - The company acquired Proteomedix on December 15, 2023, gaining Proclarix, an in vitro diagnostic test for prostate cancer approved for sale in the EU[23]. - Onconetix acquired Proteomedix for approximately $75 million, issuing 1,081 shares of Common Stock and 2,696,729 shares of Series B Preferred Stock convertible into 79,315 shares of Common Stock[67]. - Following the acquisition, Proteomedix became a wholly owned subsidiary of Onconetix, with the Sellers owning approximately 87.2% of Onconetix's outstanding equity interests[70]. - Onconetix's stockholders prior to the acquisition retained approximately 5.3% of the outstanding equity interests post-transaction[70]. - The Share Exchange Agreement with Realbotix Corp. was signed on February 11, 2026, involving the acquisition of Realbotix Interests in exchange for newly issued shares of Common Stock[34]. Financial Performance and Position - As of December 31, 2025, the company had cash of approximately $5.2 million, a working capital deficit of approximately $3.1 million, and an accumulated deficit of approximately $131.2 million[31]. - The company has incurred net losses since inception and expects to continue doing so in the foreseeable future, with a cash balance insufficient to fund operations for one year from the issuance of the financial statements[31]. - The net loss for the year ended December 31, 2025, was $14.0 million, compared to a net loss of $58.7 million for the year ended December 31, 2024[214]. - The Company expects to incur substantial and increasing operating losses over the next several years, raising doubts about its ability to continue as a going concern[215]. - Total current liabilities as of December 31, 2025, were approximately $9.1 million, including accounts payable of approximately $1.8 million[221]. Product Development and Commercialization - Proclarix is expected to generate growing revenues starting in 2026, which will help offset some expenses related to its commercialization[27]. - Proclarix, the company's lead product, is an in vitro diagnostic test for prostate cancer, approved for sale in the EU and designed to reduce unnecessary biopsies[96]. - The company aims to enhance Proclarix by integrating additional biomarkers and imaging data into its clinical decision support system[96]. - Proclarix generated revenues of $23,091 in 2025, while Proteomedix had total sales of $67,380 prior to its acquisition by Onconetix in 2023[97]. - Proclarix has demonstrated a high sensitivity of 90% and a negative predictive value of 95% for clinically significant prostate cancer, potentially reducing unnecessary biopsies by approximately 43% compared to clinical comparators[108]. Regulatory Compliance and Market Access - Regulatory compliance is critical for marketing Proclarix, with varying requirements across countries, including the EU and the U.S.[149]. - The FDA and other regulatory authorities impose extensive regulations on the development and marketing of diagnostic products, impacting timelines and processes[148]. - The new regulatory framework for medical devices in the EU, including the Medical Devices Regulation (MDR) and In Vitro Diagnostic Medical Devices Regulation (IVDR), was implemented to address significant gaps in market surveillance and compliance[172]. - Proteomedix AG has successfully transitioned its Proclarix devices to comply with the IVDR, making them one of the first IVDs under the new EU regime[178]. - The IVDR provides a systematic post-market surveillance data collection from Proclarix devices, which supports the clinical evidence of their validity[178]. Funding and Capital Structure - The company entered into Series D and Series E PIPE financings in September and October 2025, respectively, to support near-term operations[31]. - The company will need to raise additional capital to fund ongoing operations and product development, raising substantial doubt about its ability to continue as a going concern[32]. - The company entered into a Subscription Agreement for a private placement of $5.0 million, with each unit comprising one share of Common Stock and a warrant to purchase 0.3 shares at an exercise price of $3.40 per share[76]. - The Series C Preferred Stock issuance resulted in net cash proceeds of $1.9 million from the sale of 3,499 shares to institutional investors[206]. - The Company sold 16,099 shares of Series D convertible preferred stock for approximately $12.9 million, resulting in net cash proceeds of $9.3 million[210]. Market and Competitive Landscape - The global in vitro diagnostic (IVD) market is projected to reach $109 billion by 2025, with Europe and North America being the largest markets[130]. - The molecular diagnostics field is highly competitive, with many companies having greater financial and market resources, posing challenges for Proclarix[135]. - Proclarix's competitive positioning is complemented by the growing adoption of MRI-based diagnosis, which requires supportive diagnostic tools for effective patient selection[142]. - Approximately 60% of men undergoing prostate biopsies do not have clinically significant cancer, highlighting the need for improved diagnostic tools like Proclarix[132]. Employee and Operational Aspects - As of March 10, 2026, Proteomedix employed 2 full-time and 6 subcontracted employees, maintaining good relations with its workforce[201]. - The company has a monthly lease of $2,000 for its office and lab space in Switzerland, renewed for a two-year term[203]. - The company has recorded common stock of $2 and additional paid-in capital of $995,036 related to the issuance of 241,514 shares due to the Make-Whole Provision[82]. Partnerships and Collaborations - In the United States, Proteomedix entered an exclusive partnership with LabCorp in 2023 for the development and commercialization of Proclarix, receiving an upfront license fee and future royalty payments[123]. - A licensing agreement with Immunovia in September 2025 includes payments of $300,000 each and a 3% royalty on net sales of PancreaSure from January 1, 2026, through December 31, 2032[192]. - In 2022, Proteomedix partnered with Immunovia AB to enhance research and development productivity, accelerating the roll-out of the IMMray PanCan-d test[191].

Acquisition and Growth - The Company completed the acquisition of seven retail bank branches from Columbia State Bank, adding approximately $425.5 million in deposits and $66.1 million in loans[26]. - Total deposits increased by $334,224 thousand, or 14.29%, to $2,673,642 thousand at December 31, 2025, from $2,339,418 thousand in 2024[114]. - The company reported a net increase in brokered deposits of $219,137 thousand in 2025, compared to a decrease of $288,225 thousand in 2024[114]. Loan Portfolio - As of December 31, 2025, the total loans amounted to $2.131 billion, with $1.298 billion in fixed interest rate loans and $832.9 million in adjustable rate loans[39]. - The Company’s commercial real estate (CRE) loans totaled $969.5 million, representing 36.5% of the gross loan portfolio[45]. - The largest lending relationship at December 31, 2025, totaled $37.2 million, consisting of two multi-family real estate loans[43]. - The Company has a diversified lending strategy, focusing on various types of loans including commercial real estate, multi-family, and consumer loans[37]. - The Company’s internal lending limit is set at $35 million, with any loans exceeding this amount requiring Board approval[43]. - As of December 31, 2025, total outstanding construction and development loans amounted to $396.5 million, representing 14.9% of the gross loan portfolio, an increase from $330.7 million in 2024[50][51]. - The largest single commercial or multi-family real estate loan at December 31, 2025, was a performing $20.1 million loan secured by a 159-unit apartment building in Tacoma, Washington[48]. - The Company originated $739.5 million of one-to-four-family mortgages in 2025, with $555.2 million sold to investors, including $209.1 million sold to government-sponsored entities[61]. - Total outstanding second lien mortgage and home equity loans reached $88.3 million, or 3.3% of the gross loan portfolio, at December 31, 2025[60]. - The Company's residential speculative construction lending program includes loans for both speculative and pre-sold one-to-four-family residences, with a maximum loan amount of 95% of cost or 75% of appraised value[52]. - Indirect home improvement loans totaled $525.8 million, or 19.8% of gross loans, and 88.1% of total consumer loans at December 31, 2025[64]. - The commercial business loan portfolio totaled $329.3 million, representing 12.4% of the gross loan portfolio as of December 31, 2025[72]. Credit Quality and Risk Management - The allowance for credit losses (ACL) on loans was $31.9 million, or 1.20% of gross loans receivable, as of December 31, 2025, compared to 1.26% in 2024[101]. - The provision for credit losses on loans for the year ended December 31, 2025, was $9.0 million, an increase from $5.6 million in 2024[100]. - Nonaccrual loans as a percentage of total loans outstanding increased to 0.71% in 2025 from 0.54% in 2024[104]. - The Company experienced net charge-offs of $8.9 million for the year ended December 31, 2025, compared to $5.3 million in 2024[104]. - The ACL on loans as a percentage of nonaccrual loans at year end was 170.59% in 2025, down from 234.55% in 2024[104]. - The most significant qualitative adjustment in 2025 was related to elevated reserves for commercial construction and consumer lending due to higher levels of past due and nonperforming loans[101]. - The Company classified an additional $10.5 million of assets as special mention as of December 31, 2025[93]. - Management remains vigilant regarding the adequacy of the ACL, recognizing potential increases due to declining economic conditions[102]. Market and Economic Conditions - The unemployment rate in Washington was estimated at 4.7% as of December 31, 2025, slightly above the national average of 4.4%[35]. - The primary market area for the Company includes the Seattle-Tacoma-Bellevue MSA, which has a diverse economy supported by major industries such as aerospace and technology[30]. Capital and Regulatory Compliance - As of December 31, 2025, 1st Security Bank's total risk-based capital ratio was 13.96%, exceeding the required minimum of 8.00%[163]. - The Tier 1 risk-based capital ratio was 12.73%, above the minimum requirement of 6.00%[163]. - The Common Equity Tier 1 (CET1) capital ratio stood at 12.73%, surpassing the minimum of 4.50%[163]. - The Bank was categorized as "well capitalized" under FDIC regulations as of December 31, 2025[163]. - The capital conservation buffer required is an additional 2.5% of risk-weighted assets above the minimum capital ratios[161]. - The Bank paid $24.0 million in dividends to the holding company in 2025[174]. Employee and Workplace Culture - The company hired 95 new employees in 2025, increasing the total employee count to 581 as of December 31, 2025[147]. - Volunteer hours increased to approximately 9,500 hours in 2025, up from about 6,000 hours in 2024[148]. - The employee turnover rate decreased to 17.5% in 2025 from 19% in 2024[150]. - Employee health benefits have not increased in contribution costs since 2014, and the company offers a 401k match of up to 5% of contributions[149]. - The company provides education reimbursement of up to $5,000 per year for accredited programs[149]. - The workforce composition shows 68% female representation among individual contributors and managers[146]. - The average tenure for management positions is eight years and two months[146]. - 91.4% of employees reside in Washington State, with the remaining in Oregon, Arizona, Idaho, Colorado, and Texas[150]. - The company has a commitment to a balanced work/life schedule and offers flexible working arrangements[144]. - The company emphasizes a diverse workplace, with 1% Alaska Native or American Indian, 12% Asian, 2% Black, 11% Hispanic/Latino, and 69% White employees[146]. Regulatory Environment - FS Bancorp is subject to comprehensive regulation by the Federal Reserve and must file quarterly and annual reports, ensuring it operates in a safe and sound manner[187]. - The Federal Reserve has established minimum regulatory capital requirements for bank holding companies with consolidated assets exceeding $3.0 billion[191]. - The Gramm-Leach-Bliley Act requires 1st Security Bank to disclose its privacy policy and inform consumers of their rights regarding information sharing[180]. - The SEC adopted rules in July 2023 requiring registrants to disclose material cybersecurity incidents and annual information on cybersecurity risk management[182]. - The Dodd-Frank Act established the CFPB, which oversees consumer protection regulations applicable to 1st Security Bank, although its enforcement activities have been significantly scaled back[185]. - Noncompliance with federal or state privacy and cybersecurity laws could lead to substantial regulatory fines and reputational harm for 1st Security Bank[181].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-39936 UNITED HOMES GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 85-3460766 (State or ...

Financial Performance - UHG's revenue for the year ended December 31, 2025, was approximately $406.7 million, a decrease of 12.3% from $463.7 million in 2024[240] - The company reported a net loss of approximately $16.3 million for 2025, compared to a net income of $46.9 million in 2024, representing a decline of 134.6%[240] - Gross profit for the year ended December 31, 2025 was $71.7 million, a decrease of $8.1 million (10.1%) from $79.8 million for the year ended December 31, 2024, with gross profit as a percentage of revenue increasing to 17.6%[255] - Adjusted gross profit for the year ended December 31, 2025 was $80.1 million, a decrease of $12.3 million (13.3%) from $92.4 million for the year ended December 31, 2024, with adjusted gross margin slightly decreasing to 19.7%[256] - Adjusted EBITDA for 2025 was $22.5 million, with an adjusted EBITDA margin of 5.5%, down from $31.6 million and 6.8% in 2024[280] Sales and Orders - Net new orders decreased by 12.3% to 1,227 units in 2025, down from 1,399 units in 2024[240] - Home closings fell by 16.7% to 1,192 in 2025, compared to 1,431 in 2024[240] - The cancellation rate for orders increased to 13.0% in 2025, compared to 11.4% in 2024, indicating potential challenges in maintaining order volume[249] - Backlog as of December 31, 2025 was 192 units, an increase of 35 units (22.3%) from 157 units as of December 31, 2024[273] Costs and Expenses - Cost of sales for the year ended December 31, 2025 was $335.0 million, a decrease of $48.9 million (12.7%) from $383.9 million for the year ended December 31, 2024, primarily due to a 16.7% decrease in home closings[254] - Selling, general and administrative expense for the year ended December 31, 2025 was $71.8 million, a decrease of $2.9 million (3.9%) from $74.7 million for the year ended December 31, 2024[256] - Total other expense, net for the year ended December 31, 2025 was $9.3 million, a decrease of $3.2 million (25.6%) from $12.5 million for the year ended December 31, 2024, primarily due to a $3.3 million reduction in interest expense[257] Tax and Income - Income before taxes for the year ended December 31, 2025 was $495,000, a decrease of $36.7 million (98.7%) from $37.2 million for the year ended December 31, 2024[264] - Income tax expense for the year ended December 31, 2025 was $16.7 million compared to an income tax benefit of $9.7 million for the year ended December 31, 2024, resulting in an estimated annual effective tax rate of 3,351.3%[268] Cash Flow and Financing - Net cash used in operating activities was $19.6 million for 2025, a decrease of $35.0 million compared to cash provided by operating activities of $15.4 million in 2024[294] - Net cash provided by financing activities was $21.6 million for 2025, a significant increase of $55.6 million compared to net cash used of $34.0 million in 2024[296] - As of December 31, 2025, UHG had approximately $24.4 million in cash and cash equivalents, an increase of $1.8 million from $22.6 million in 2024[281] Debt and Liabilities - The Syndicated Line of Credit had an outstanding balance of $78.2 million as of December 31, 2025, with $56.4 million available under the line[286] - The term loan had an outstanding balance of $67.5 million as of December 31, 2025, with a weighted average interest rate of 11.52%[289] - UHG's outstanding debt under the Syndicated Line and term loan as of December 31, 2025, was $78.2 million and $67.5 million, respectively, with weighted average interest rates of 7.48% and 11.52%[322] Strategic Initiatives - UHG plans to expand its mortgage joint venture, Homeowners Mortgage, to enhance revenue and improve buyer traffic conversion[236] - A merger agreement was signed on February 22, 2026, with Stanley Martin Homes, where UHG shareholders will receive $1.18 per share in cash[242] - The company has a pipeline of approximately 7,200 lots as of December 31, 2025, indicating potential future growth[234] Risk Factors - UHG's operations are sensitive to interest rate fluctuations, which may adversely affect revenues, gross profits, and net income[320] - A 100 basis point increase in overall interest rates would negatively affect UHG's net income by approximately $1.5 million[322] - The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks[308] - Changes in estimates and assumptions used to fair value the Company's derivative instruments could materially impact results of operations and financial condition[310] Goodwill and Impairment - UHG recorded a total goodwill impairment charge of $1.1 million for the year ended December 31, 2025, with no impairment recorded for the year ended December 31, 2024[313] - Goodwill is analyzed for impairment annually, with a qualitative assessment followed by a quantitative assessment if necessary[312]

Capital Adequacy - As of December 31, 2025, the Corporation's and the Bank's regulatory capital ratios were above the applicable well-capitalized standards and met the capital conservation buffer[39] - The required minimum leverage ratio for all banks and bank holding companies is 4%[35] - The Corporation and the Bank are subject to the following risk-based capital ratios: 6.5% CET1 to risk-weighted assets, 8.0% Tier 1 capital to risk-weighted assets, and 10.0% total capital to risk-weighted assets[43] - The capital conservation buffer of 2.5% above each of the minimum risk-based capital ratio requirements must be met for the Corporation to pay dividends or engage in share buybacks[35] - The Corporation is categorized as "well-capitalized" and "well-managed" as of December 31, 2025[47] - The Bank is required to maintain adequate capital in compliance with regulatory guidelines, affecting its ability to pay dividends[53] Employment - The Bank had 362 full-time equivalent employees as of December 31, 2025, consisting of 341 full-time employees and 38 part-time employees[26] Regulatory Environment - The Corporation has not opted into the Community Bank Leverage Ratio framework and continues to follow the capital requirements under the Basel III Capital Rules[42] - The Corporation is subject to extensive regulation under federal and state law, which can affect growth and earnings performance[30] - The Bank is subject to extensive regulation regarding permissible types and amounts of loans, investments, and capital adequacy[56] - The Bank's deposits are insured by the FDIC up to applicable limits, and it is subject to deposit insurance assessments based on financial ratios[57] - The FRB requires prior approval for any cash dividend increase exceeding 10% over the prior year, ensuring dividends are funded by net income[54] - The Change in Bank Control Act creates a presumption of control if a person or group acquires 10% or more of the Bank's outstanding common stock[52] - The Bank must notify the FRB before any purchase or redemption of its own equity securities if the gross consideration equals 10% or more of its consolidated net worth[55] - The federal banking agencies have adopted guidelines for cybersecurity standards, emphasizing risk management and business continuity planning[69] - The Bank is subject to various consumer protection laws, including the Truth in Lending Act and the Equal Credit Opportunity Act, which regulate lending practices[71] - The Dodd-Frank Act established the CFPB, which enforces consumer protection regulations impacting residential mortgage lending[72] Market and Economic Factors - The banking and financial services industry is highly competitive, with significant factors including interest rates on loans and deposits[25] - The banking industry's earnings and growth are influenced by the credit policies of monetary authorities, including the FRB[73] - The FRB employs various monetary policy instruments, such as open market operations and changes in reserve requirements, to regulate bank credit supply[73] - Future legislation and regulatory initiatives may significantly alter the banking environment, impacting costs and permissible activities[75] - The effects of future monetary policies on the company's business and earnings remain unpredictable[74] - The nature and extent of future legislative changes affecting financial institutions are highly uncertain[75] Risk Disclosures - Market risk disclosures are referenced in the Management's Discussion and Analysis section of the financial report[229]

Financial Position - As of December 31, 2025, off-balance sheet sweep funds totaled approximately $736.6 million, with $449.0 million, or 61%, available to be swept onto the Bank's balance sheet[62] - The multifamily and commercial real estate loan portfolios comprise $372.8 million, or 21.2%, and $107.3 million, or 6.1%, of total loans, respectively, as of December 31, 2025[78] - The combined multifamily and CRE portfolio, excluding one nonaccrual loan, totaled $473.2 million with a current weighted average DSCR of approximately 1.60 and an original LTV of 55%[79] - At December 31, 2025, the Bank had $455.5 million of available borrowing capacity with the FHLB and $48.1 million with the FRB discount window[83] - The Bank's investment portfolio had a fair value of $302.0 million, consisting of U.S. Government Agency collateralized mortgage obligations and mortgage-backed securities[80] - The Bank's regulatory limit on loans-to-one borrower was $43.5 million as of December 31, 2025[73] - The Bank's consumer loans include personal loans and post-settlement consumer loans, with LTV ratios generally limited to 50% of the net settlement amount[66] - The Bank has no exposure to office and construction loans and minimal exposure to hospitality, totaling $14.0 million as of December 31, 2025[78] Capital and Compliance - The bank's capital standards require a common equity Tier 1 capital ratio of at least 4.5%, a Tier 1 capital ratio of at least 6%, and a total capital ratio of at least 8%[100] - As of December 31, 2025, Esquire Bank was classified as "well capitalized" under prompt corrective action requirements, meeting all necessary capital ratios[107] - The FDIC increased the initial base deposit insurance assessment rate schedules by two basis points starting in the first quarterly assessment period of 2023[96] - Esquire Bank's aggregate loans to any single borrower or group of related borrowers are generally limited to 15% of the bank's capital and surplus, plus an additional 10% if secured by specified collateral[93] - The bank has not elected to utilize the community bank leverage ratio alternative framework as of December 31, 2025, which is set at 9%[103] - The bank's loans to insiders are subject to strict limitations, with aggregate loans not exceeding the bank's unimpaired capital and surplus[112] Community Engagement - Esquire Bank supports community-based organizations through a comprehensive grant and lending program as part of its Community Reinvestment Act obligations[87] - Esquire Bank was rated "outstanding" in its Community Reinvestment Act compliance during its most recent OCC evaluation[116] Employee Development - At December 31, 2025, the Bank employed 151 full-time equivalent individuals, with approximately 60% being minorities or women[84] - The bank has implemented a collaborative environment for employee development, promoting internal mobility and competitive compensation to enhance employee retention[85] Regulatory Environment - Esquire Bank is a national bank with deposits insured by the Deposit Insurance Fund (DIF) and is subject to extensive regulation by the Office of the Comptroller of the Currency (OCC) and the FDIC[89] - The Federal Reserve Board (FRB) has reduced reserve requirement ratios to zero, with no current plans to re-impose them[114] - Esquire Bank is subject to significant penalties for non-compliance with anti-money laundering regulations, including the Bank Secrecy Act and the USA PATRIOT Act[119] - The Company has adopted policies to comply with federal privacy and cybersecurity laws, including the Gramm-Leach-Bliley Act[122] - The FRB requires bank holding companies to maintain capital adequacy guidelines, which the Company is currently exempt from due to its asset size being below $3 billion[127] - The Company has elected to become a financial holding company, allowing it to engage in a broader array of financial activities[128] - Esquire Bank must notify its primary federal regulator of any significant computer-security incidents within 36 hours[123] - The Company is required to report material cybersecurity incidents on Form 8-K as per SEC regulations[124] Corporate Governance - The FRB evaluates acquisition applications based on financial condition, management resources, and community needs[131] - The SEC adopted a final rule in October 2022 for clawback provisions under the Dodd-Frank Act, requiring companies to recover erroneously awarded incentive-based compensation[139] - NASDAQ's proposed clawback listing standards were approved by the SEC on June 9, 2023, with an effective date delayed to October 2, 2023[139] - The Company's board of directors has approved a clawback policy that complies with NASDAQ standards[139]

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2025 or Washington, D.C. 20549 FORM 10-K For the transition period from ________ to ________ Commission File Number: 001-38437 OP BANCORP (Exact Name of Registrant as Specified in its Charter) (State or other jurisdiction of incor ...

Product Sales and Market Position - ETUARY® (pirfenidone) generated annual sales of $106.1 million in 2025, maintaining a leading market position in the treatment of pulmonary fibrosis [32]. - Etorel® (nintedanib) was launched in June 2025 and generated $4.6 million in sales in 2025, expanding treatment options for patients with pulmonary fibrosis [34]. - Contiva® (avatrombopag) was launched in March 2025 and generated $5.5 million in sales in 2025, targeting thrombocytopenia associated with chronic liver disease [37]. - Sales of ETUARY® reached $106.1 million in 2025, although its market share has declined due to increased competition [65]. - Gyre Pharmaceuticals has achieved sustained profitability due to increased market demand for ETUARY®, facing limited competition in the IPF drug market [203]. Clinical Trials and Drug Development - In a Phase 3 trial, Hydronidone achieved a primary endpoint with 52.85% of treated patients showing ≥1-stage fibrosis regression at Week 52, compared to 29.84% in the placebo group (p=0.0002) [46]. - Hydronidone is expected to submit a New Drug Application (NDA) for conditional approval in the first half of 2026, following positive Phase 3 trial results [47]. - A Phase 1 clinical trial of Hydronidone for MASH-Associated Liver Fibrosis was completed, showing no serious adverse events and a mean elimination half-life of approximately five to six hours [90][93]. - The planned Phase 2 clinical trial for Hydronidone is expected to be filed in 2026, aiming to obtain preliminary proof-of-concept data [94][95]. - A Phase 3 trial of pirfenidone for the treatment of PD completed enrollment in 2025 with a total of 272 patients across 18 clinical research centers in China [99]. - The Phase 2 clinical trial of F573 initiated in March 2023 aims to evaluate efficacy and safety in patients with liver injury, with a total of 16 patients enrolled in the first stage [102]. - The Phase 1 clinical trial of F230 was approved in May 2024, with the first subject enrolled in May 2025, consisting of single and multiple ascending dose studies [104]. Market Trends and Prevalence - The prevalence of Idiopathic Pulmonary Fibrosis (IPF) in China increased from 89,144 patients in 2018 to 161,000 patients in 2024, with a CAGR of 10.24% [63]. - The total market size of IPF in China grew from $23.9 million in 2018 to $196.1 million in 2024, reflecting a CAGR of 42% [63]. - The prevalence of Chronic Obstructive Pulmonary Disease (COPD) is a significant global health burden, with a need for treatments that may slow long-term disease progression [60]. - The prevalence of Chronic Hepatitis B (CHB)-associated liver fibrosis globally increased from 228.9 million patients in 2018 to 272.2 million patients in 2024 [73]. - The prevalence of Acute Liver Failure (ALF) in China was 42,440 patients in 2018 and is expected to decline to 29,020 patients by 2032, with a market size projected to decrease from $274.2 million in 2018 to $191.1 million by 2032 [83]. - The prevalence of PAH in China increased from 50,600 patients in 2018 to 61,700 patients in 2024, projected to reach 71,300 patients by 2032 [86]. - The prevalence of COPD in China rose from 103.5 million patients in 2018 to 108.4 million patients in 2024, projected to reach 118.7 million patients by 2032 [89]. Regulatory and Compliance - The FDA's review process for an NDA typically aims to be completed within ten months for standard applications and six months for priority reviews [137]. - The company must submit an IND to the FDA before beginning any clinical trials, which becomes effective 30 days after submission unless safety concerns arise [128]. - The FDA may issue an approval letter or a Complete Response letter after evaluating an NDA, detailing any deficiencies identified [138]. - The FDA may grant orphan drug designation to products intended to treat rare diseases affecting fewer than 200,000 individuals in the U.S. [146]. - Orphan drug exclusivity grants a product seven years of exclusive approval after the first FDA approval for the designated disease, preventing other applications for the same indication [147]. - The FDA requires compliance with regulatory standards post-approval, including record-keeping and reporting of adverse experiences [152]. - The FDA enforces strict regulations on marketing and promotion, allowing only claims approved in the product's labeling [155]. Company Operations and Structure - The company completed a business combination to acquire an indirect controlling interest in Gyre Pharmaceuticals on October 30, 2023 [123]. - As of December 31, 2025, the company has seven full-time employees in the United States [121]. - The company is headquartered in San Diego, California, and commenced operations in 2002 [123]. - As of December 31, 2025, Gyre Pharmaceuticals had 618 total employees, with a significant portion in sales and marketing roles [206]. - The company has a dedicated in-house R&D team of 66 employees in the PRC, focusing on drug discovery, chemistry, manufacturing and control, clinical development, medical affairs, and regulatory affairs [215]. Intellectual Property and Patents - Gyre owns 18 granted patents globally and has multiple pending patent applications that are material to its business, with a focus on protecting its core technology and intellectual property [109]. - Patent owners can apply for a patent extension of up to five years post-NDA approval, with a maximum total patent term of 14 years [164]. Financial and Market Challenges - Coverage and reimbursement from third-party payors are critical for product acceptance, with significant uncertainty regarding reimbursement levels for approved products [182][184]. - Third-party payors increasingly challenge medical product pricing and assess medical necessity, which can affect product sales and physician utilization [184]. - The Inflation Reduction Act of 2022 allows CMS to negotiate prices for high-spend drugs, with the first ten drugs announced for negotiation on August 29, 2023 [187]. - The IRA introduces an "inflation rebate" for Medicare patients, requiring drug manufacturers to pay rebates if prices increase faster than inflation, effective from 2023 [187]. Compliance and Legal Risks - The company may face legal risks and compliance costs due to evolving privacy laws and regulations regarding artificial intelligence and machine learning [180][181]. - Compliance with data privacy laws, such as HIPAA and state-specific regulations, is essential to avoid penalties and protect personal information [175][179]. - The company has formed a labor union to represent employees and has maintained good working relationships without material claims or disputes in 2025 [209].

Product Sales and Market Position - ETUARY® (pirfenidone) generated annual sales of $106.1 million in 2025, maintaining a leading market position in the treatment of pulmonary fibrosis [32]. - Etorel® (nintedanib) was launched in June 2025 and generated $4.6 million in sales in 2025, expanding treatment options for patients with pulmonary fibrosis [34]. - Contiva® (avatrombopag) was launched in March 2025 and generated $5.5 million in sales in 2025, targeting thrombocytopenia associated with chronic liver disease [37]. - Sales of ETUARY® reached $106.1 million in 2025, although its market share has declined due to increased competition [65]. Clinical Trials and Product Development - Hydronidone met its primary endpoint in a Phase 3 trial, with 52.85% of treated patients achieving ≥1-stage fibrosis regression at Week 52 compared to 29.84% in the placebo group (p=0.0002) [46]. - A Phase 1 clinical trial for Hydronidone in the U.S. was completed, with plans to file a U.S. IND in 2026 for a Phase 2 clinical trial in MASH-associated liver fibrosis [48]. - F573, a clinical-stage product candidate for acute liver failure, is currently in a multi-stage Phase 2 clinical trial initiated in March 2023 [54]. - A Phase 1 clinical trial of Hydronidone for MASH-Associated Liver Fibrosis showed no serious adverse events, with treatment-emergent AEs including headache (25.0%) and constipation (16.7%) [93]. - The planned Phase 2 clinical trial of Hydronidone is expected to be initiated in 2026, pending regulatory feedback from the U.S. FDA [94]. - A Phase 3 trial of pirfenidone for the treatment of PD in China enrolled 272 patients across 18 clinical research centers [99]. - The Phase 1 clinical trial of F573 evaluated doses from 0.5 mg/kg to 2.0 mg/kg, with no evidence of drug accumulation observed [101]. - The Phase 2 clinical trial of F573 is designed in three stages, with the first stage completed in December 2024 [102]. Market Trends and Prevalence - The prevalence of Idiopathic Pulmonary Fibrosis (IPF) in China increased from 89,144 patients in 2018 to 161,000 patients in 2024, with a CAGR of 10.24% [63]. - The total market size of IPF in China grew from $23.9 million in 2018 to $196.1 million in 2024, reflecting a CAGR of 42% [63]. - The prevalence of Chronic Obstructive Pulmonary Disease (COPD) is significant, with a need for treatments that may slow long-term disease progression [60]. - The prevalence of RILI in China increased from 69,300 patients in 2018 to 91,800 patients in 2024, with a market size expected to reach $495.6 million by 2032 [71]. - The prevalence of CHB-associated liver fibrosis globally increased from 228.9 million patients in 2018 to 272.2 million patients in 2024, with a projected market growth to $817.2 million by 2032 [73]. - The prevalence of Acute Liver Failure (ALF) in China was 42,440 patients in 2018, expected to decline to 29,020 patients by 2032, with a market size projected to be $191.1 million [83]. - The prevalence of PAH in China increased from 50,600 patients in 2018 to 61,700 patients in 2024, projected to reach 71,300 patients by 2032 [86]. - The market size of PAH in China grew from $310 million in 2018 to $400 million in 2024, expected to reach $480 million by 2032, with a CAGR of 2.28% from 2024 to 2032 [86]. - The prevalence of COPD in China rose from 103.5 million patients in 2018 to 108.4 million patients in 2024, projected to reach 118.7 million patients by 2032 [89]. - The COPD pharmaceutical market in China increased from $880 million in 2018 to $1.13 billion in 2024, expected to reach $1.62 billion by 2032, representing a CAGR of 4.66% from 2024 to 2032 [89]. Regulatory Environment - The FDA requires substantial time and financial resources for obtaining regulatory approvals, which includes preclinical and clinical trials [127]. - The NDA submission process includes a substantial application user fee unless a waiver applies [134]. - The FDA's goal is to review standard applications within ten months and priority reviews within six months after filing [137]. - The company must navigate various regulatory requirements for drug development, including compliance with Good Laboratory Practices and Good Clinical Practices [125][127]. - The FDA may grant orphan drug designation to products intended to treat rare diseases affecting fewer than 200,000 individuals in the U.S. [146]. - Orphan drug exclusivity grants a product seven years of exclusive approval after the first FDA approval for the designated disease, preventing other applications for the same indication [147]. - Products with fast track designation can have more frequent interactions with the FDA review team and may be eligible for priority review, aiming for action within six months [141][144]. - Accelerated approval may be granted if a product shows effects on a surrogate endpoint likely to predict clinical benefit, with post-marketing studies required to verify this [142]. - Breakthrough therapy designation allows for expedited development and review for products showing substantial improvement over existing therapies [143]. - The FDA requires that any changes to approved products, including new indications, undergo prior review and approval [152]. - The FDA enforces strict regulations on marketing and promotion, allowing only claims approved in the product's labeling [155]. - Non-compliance with FDA regulations can lead to severe consequences, including product withdrawal, fines, and potential criminal penalties [156]. - The Hatch-Waxman Amendments allow for the approval of generic drugs through abbreviated new drug applications (ANDAs) once exclusivity periods for the reference listed drug expire [157][158]. - A Paragraph IV certification allows ANDA applicants to challenge existing patents, potentially delaying approval for up to 30 months if a lawsuit is initiated [160]. - The FDA allows 505(b)(2) New Drug Applications to rely on existing studies, potentially reducing the need for new clinical trials [162]. - Patent owners can apply for a patent extension of up to five years post-NDA approval, with a maximum total patent term of 14 years [164]. - Pharmaceutical companies must comply with various healthcare regulations, including the Anti-Kickback Statute and the False Claims Act, which can lead to significant penalties for violations [165][167]. - The Physician Payments Sunshine Act requires manufacturers to report payments to healthcare professionals, impacting transparency and compliance efforts [170]. Company Operations and Workforce - The company completed a business combination to acquire an indirect controlling interest in Gyre Pharmaceuticals on October 30, 2023 [123]. - As of December 31, 2025, the company has received all material permissions and approvals required for business operations, including a Drug Production License valid from August 2025 to July 2030 [213]. - The company has a dedicated in-house R&D team of 66 employees in the PRC, focusing on drug discovery, chemistry, manufacturing and control, clinical development, medical affairs, and regulatory affairs [215]. - The company is focused on addressing unmet clinical needs through cross-functional collaboration within its R&D organization [215]. - As of December 31, 2025, Gyre Pharmaceuticals had 618 total employees, with a significant portion in sales and marketing roles across the nation [206]. - The company has seven full-time employees in the United States as of December 31, 2025 [121]. - The company is headquartered in San Diego, California, and commenced operations in 2002 [123]. - Gyre Pharmaceuticals has maintained good working relationships with employees, with no material claims or labor disputes reported during the year ended December 31, 2025 [209]. - The company aims to provide competitive salary and benefits to its employees, exceeding local legal requirements [122]. Innovation and Intellectual Property - As of the date of the Annual Report, Gyre owns 18 granted patents globally and has multiple pending patent applications that are material to its business [109]. - As of December 31, 2025, the company owns four registered artwork copyrights, 28 registered software copyrights, and 65 registered trademarks in the PRC [118]. - The company emphasizes the importance of diversifying and expanding its product pipeline through both in-house R&D and external collaboration for long-term competitiveness [214]. - The company has obtained a High-tech Enterprise Certificate valid from October 2025 to October 2028, reflecting its commitment to innovation and technology [213]. - The Zhongguancun High-tech Enterprise status is valid from December 2024 to December 2027, further supporting the company's innovation strategy [213]. Compliance and Legal Risks - Coverage and reimbursement from third-party payors are critical for product acceptance, with significant uncertainty regarding reimbursement levels for approved products [182][184]. - Third-party payors increasingly challenge medical product pricing and may adopt restrictive policies that limit sales of approved products [184]. - Compliance with data privacy laws, such as HIPAA and state-specific regulations, is essential to avoid penalties and protect personal information [174][176]. - The company may face legal risks and compliance costs due to evolving privacy laws, including the California Consumer Privacy Act [179]. - The use of artificial intelligence and machine learning in operations may be subject to regulatory scrutiny regarding data bias and discrimination [180]. - Failure to comply with healthcare laws can result in civil, criminal penalties, and reputational harm, impacting overall business operations [173][181]. Legislative Impact - The Inflation Reduction Act of 2022 allows CMS to negotiate prices for high-spend drugs, with the first ten drugs announced for negotiation on August 29, 2023 [187]. - The IRA introduces an "inflation rebate" for Medicare patients, requiring drug manufacturers to pay rebates if prices increase faster than inflation, effective from 2023 [187]. - The ACA has significantly impacted the pharmaceutical industry, including changes to Medicaid Drug Rebate calculations and the elimination of the "donut hole" in Medicare Part D starting in 2025 [192]. - The IRA's impact on commercialization and competition remains uncertain, with ongoing legislative interest in drug pricing practices [196].