PART I. FINANCIAL INFORMATION Item 1. Financial Statements (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 receptor32 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 Condensed Consolidated Statements of Operations and Comprehensive Loss Condensed Consolidated Statement of Redeemable Convertible Preferred Stock and Stockholders' Deficit Condensed Consolidated Statement of Stockholders' Equity Condensed Consolidated Statements of Cash Flows Notes to Unaudited Condensed Consolidated Financial Statements 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 verekitug32 - 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, 202536 - 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 ratios34 - 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 statements37 1. Nature of the business and basis of presentation 2. Summary of Significant Accounting Policies 3. Fair value measurements 4. Prepaid expenses and other current assets 5. Property and equipment, net 6. Accrued expenses and other current liabilities 7. Leases 8. Redeemable convertible preferred stock 9. Common stock 10. Stock-based compensation 11. Income Taxes 12. Net loss per share 13. Commitments and contingencies 14. License agreements 15. Revenue 16. Related parties 17. Segment reporting Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 2025114 - 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, respectively116147154 - 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 2027116163173 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 Asset purchase and license agreements Components of our results of operations Results of operations Liquidity and capital resources Contractual obligations and other commitments Critical accounting estimates and significant judgments Recently issued and adopted accounting pronouncements Emerging growth company and smaller reporting company status Item 3. Quantitative and Qualitative Disclosures About Market Risk 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 risk191 Item 4. Controls and Procedures 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 level193 - There have been no material changes in the company's internal control over financial reporting during the quarter ended June 30, 2025194 Management's evaluation of disclosure controls and procedures Changes in internal control over financial reporting PART II. OTHER INFORMATION Item 1. Legal Proceedings 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 business95196 Item 1A. Risk Factors 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 success200201 - 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 process213215218 - 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 scrutiny305321322 - The company faces significant competition in the inflammatory disease market from major pharmaceutical and biotechnology companies with greater resources and established market presence288291 - 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 claims396398403 Risks related to our limited operating history, financial condition and need for additional capital Risks related to our business Risks related to the discovery and development of verekitug or any other potential future product candidates Risks related to the commercialization of verekitug or any other potential future product candidates Risks related to government regulation Risks related to our intellectual property Risks related to ownership of our common stock Other general risks Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Confirms no unregistered equity sales and no material change in planned IPO proceeds use - No unregistered sales of equity securities occurred during the period486 - There has been no material change in the planned use of proceeds from the IPO487 Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities489 Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable to the company490 Item 5. Other Information 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, 2025491 Item 6. Exhibits 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 Officer493 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, 2025499
Upstream Bio, Inc.(UPB) - 2025 Q2 - Quarterly Report