Financial Performance - For the three and nine months ended September 30, 2025, the company reported net losses of $30.3 million and $75.9 million, respectively, with net cash used for operating activities amounting to $65.6 million[116]. - The company has not generated any revenue from product sales to date and does not expect to do so in the foreseeable future[137]. - Net loss for the nine months ended September 30, 2025, was $75.9 million, compared to a net loss of $57.9 million for the same period in 2024, reflecting a 31% increase in losses[157]. - The company expects to incur significant operating losses and negative cash flow for the foreseeable future as it continues clinical development and research activities[170]. Cash and Securities - As of September 30, 2025, the company had cash, cash equivalents, and marketable securities totaling $500.9 million, expected to fund operations for at least twelve months[117]. - Cash, cash equivalents, and marketable securities totaled $500.9 million as of September 30, 2025[169]. - Net cash used in operating activities was $65.6 million for the nine months ended September 30, 2025, compared to $39.0 million for the same period in 2024[174]. - Net cash used in investing activities was $74.7 million for the nine months ended September 30, 2025, primarily due to purchases of marketable securities[176]. - Net cash provided by financing activities was $170.0 million for the nine months ended September 30, 2025, mainly from the 2025 PIPE Financing[177]. - In October 2025, the company entered into a Sales Agreement to potentially raise up to $200.0 million through an at-the-market equity offering program[171]. Research and Development - The lead program, ORKA-001, targets IL-23p19 and has shown a half-life of approximately 100 days, with complete inhibition of STAT3 signaling observed through 24 weeks in trials[120]. - The Phase 2a clinical trial of ORKA-001, named EVERLAST-A, is expected to enroll approximately 80 patients, with primary endpoint PASI 100 at Week 16[121]. - A Phase 2b trial of ORKA-001, named EVERLAST-B, is planned to evaluate three dose levels, with dosing projected to begin before the completion of EVERLAST-A[122]. - ORKA-002, targeting IL-17A/F, is in Phase 1 trials with plans for a Phase 2 trial in the first half of 2026, aiming to share interim data by year-end 2025[124]. - The company expects research and development expenses to increase substantially in the foreseeable future as it continues to invest in its programs[139]. - Research and development expenses increased by $3.3 million, from $25.7 million for the three months ended September 30, 2024, to $29.0 million for the same period in 2025, representing a 13% increase[148]. - Research and development expenses rose by $23.4 million, from $49.6 million to $73.0 million, a 47% increase, driven by higher external research and development costs and personnel-related expenses[159]. Operating Expenses - Total operating expenses increased by $4.7 million, from $29.4 million for the three months ended September 30, 2024, to $34.1 million for the same period in 2025, a 16% increase[146]. - Total operating expenses increased by $29.8 million, from $57.8 million for the period from February 6, 2024, to September 30, 2024, to $87.6 million for the nine months ended September 30, 2025, representing a 52% increase[157]. - General and administrative expenses rose by $1.4 million, from $3.8 million for the three months ended September 30, 2024, to $5.1 million for the same period in 2025, a 36% increase[152]. - General and administrative expenses increased by $6.4 million, from $8.2 million to $14.6 million, a 77% increase, primarily due to higher personnel-related costs and professional services[162]. - Personnel-related expenses in general and administrative increased by $1.3 million, from $2.4 million for the three months ended September 30, 2024, to $3.8 million for the same period in 2025, a 55% increase[153]. Financing Activities - The company raised approximately $275.0 million in gross proceeds from a subscription agreement prior to the merger, incurring transaction costs of $20.5 million[128]. - In the 2024 PIPE Financing, the company raised approximately $188.7 million from the sale of 5,600,000 shares at $23.00 per share[130]. - In the 2025 PIPE Financing, the company raised approximately $169.6 million from the sale of 10,933,405 shares at $15.00 per share[132]. Other Financial Information - The company incurred milestone payments of $7.0 million for ORKA-001 and $4.0 million for ORKA-002 as of September 30, 2025[136]. - Interest income from cash equivalents and marketable securities was $3.8 million for the three months ended September 30, 2025, compared to $1.3 million for the same period in 2024[156]. - The company has incurred no interest expense for the three months ended September 30, 2025, compared to $0.5 million for the same period in 2024[156]. - The company is obligated to pay Paragon a low single-digit percentage royalty for antibody products for each of ORKA-001 and ORKA-002[135]. Compliance and Accounting - There were no changes to the company's critical accounting policies and significant judgments during the three months ended September 30, 2025[181]. - The company did not have any off-balance sheet arrangements as of September 30, 2025[182]. - The financial statements are prepared in accordance with U.S. GAAP, requiring estimates and assumptions that may affect reported amounts of assets and liabilities[180]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[183].
ARCA biopharma(ABIO) - 2025 Q3 - Quarterly Report