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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	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: 001-42938

Evommune, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	85-0742575
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1841 Page Mill Road, Suite 100 Palo Alto, CA	94304
(Address of principal executive offices)	(Zip Code)

(925) 247-4481

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common stock, par value $0.0001 per share

     EVMN

     New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of December 10, 2025, the registrant had 31,524,093 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets (unaudited)	1
	Condensed Consolidated Statements of Operations (unaudited)	2
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Deficit (unaudited)	3
	Condensed Consolidated Statements of Cash Flows (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26

PART II.	OTHER INFORMATION	27

Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77
Item 3.	Defaults Upon Senior Securities	77
Item 4.	Mine Safety Disclosures	77
Item 5.	Other Information	77
Item 6.	Exhibits	77
Signatures		79

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains express or implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•

the success, cost and timing of our product development activities and clinical trials of our most-advanced product candidates, EVO756 and EVO301, and any future product candidates;

•

the characteristics and potential advantages of our product candidates;

•

our need to raise additional funding before we can expect to generate any revenues from product sales;

•

our ability to obtain regulatory approval for our current or future product candidates that we may identify or develop;

•

our ability to ensure adequate supply of our current or future product candidates;

•

our ability to maintain third-party relationships necessary to conduct our business;

•

our heavy dependence upon the success of our research to generate and advance additional product candidates;

•

our ability to establish an adequate safety or efficacy profile for our current or future product candidates;

•

the implementation of our strategic plans for our business, our current or future product candidates we may develop and our technology;

•

our intellectual property position, including the scope of protection and contractual rights that we are able to establish and maintain for intellectual property rights covering our product candidates and technology;

•

estimates of the number of patients with certain diseases, market sizes for certain diseases, conditions we intend to treat and the number of subjects that we intend to enroll in our clinical trials;

•

our plans relating to the further development and manufacturing of our product candidates, including additional indications for which we may pursue;

•

the rate and degree of clinical utility for our current or future product candidates and their acceptance by physicians, patients, third-party payors and others in the medical community;

•

our estimates about the size of market opportunities relating to our product candidates;

•

our expectations related to our capital requirements and our needs for additional financing;

•

our ability to maintain and establish collaborations, licensing or other arrangements, including our ability to comply with our obligations pursuant to the terms of such agreements;

•

our financial performance and liquidity;

•

our ability to effectively manage our potential growth;

•

developments relating to our competitors and our industry, including the impact of government regulation and policy;

•

our ability to retain the continued service of our key professionals and consultants and to identify, hire and retain additional qualified professionals;

•

our ability to maintain adequate internal controls over financial reporting and to manage the business of the Company in accordance with applicable laws and the highly regulated industry in which we participate; and

•

other risks and uncertainties, including those listed under the section titled “Risk Factors.”

In some cases, forward-looking statements can be identified by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. These statements are only predictions. Investors should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could

materially affect results. Factors that may cause actual results to differ materially from those implied or projected by forward-looking statements include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. Investors should read this Quarterly Report on Form 10-Q, the documents that we reference in this Quarterly Report on Form 10-Q and the other documents that we file with the Securities and Exchange Commission (“SEC”), with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Investors should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

SPECIAL NOTE REGARDING COMPANY REFERENCES

Throughout this Quarterly Report on Form 10-Q, the “Company,” “we,” “us” and “our” refer to Evommune, Inc.

SPECIAL NOTE REGARDING TRADEMARKS

All trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.

iii

SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS

Our business faces significant risks and uncertainties. If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. You should carefully review and consider the full discussion of our risk factors in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. Some of the more significant risks include the following:

•

We will need substantial additional funding in order to maintain our operations and advance the development and commercialization of our product candidates. Failure to obtain this necessary capital when needed, or on acceptable terms, may force us to delay, reduce or eliminate certain of our product development or research operations.

•

Due to our limited resources and access to capital, we must, and have in the past decided to, prioritize development of certain product candidates over other potential product candidates. These decisions may prove to have been wrong and may adversely affect our ability to develop our own programs, our attractiveness as a commercial partner and may ultimately have an adverse impact on our commercial success.

•

Preclinical and clinical drug development is a lengthy and expensive process, with uncertain timelines and outcomes. If preclinical studies or clinical trials of our product candidates are prolonged or delayed, we may be unable to obtain required regulatory approvals, and therefore be unable to commercialize our therapeutic candidates or any of our future therapeutic candidates on a timely basis or at all.

•

Our clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of our product candidates or any future product candidates, which would prevent or delay or limit the scope of regulatory approval and commercialization.

•

Our product candidates may be associated with serious adverse, undesirable or unacceptable side effects or other properties or safety risks, which may delay or halt their clinical development, prevent their marketing approval, or lead to limited market demand, if approved. If such side effects are identified during the development of our product candidates or following approval, we may suspend or abandon our development of such product candidates, the commercial profile of any approved label may be limited, or we may be subject to other significant negative consequences following marketing approval.

•

Our product candidates are subject to extensive regulatory and compliance obligations, which is costly and time-consuming and which may cause unanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates.

•

We currently have no marketing, sales or distribution capabilities, and we may need to invest significant resources to develop these capabilities. If we are unable to establish marketing, sales or distribution capabilities or enter into agreements with third parties to perform such activities, we may not be able to generate product revenue.

•

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

•

We rely on third-party manufacturers, contract research organizations (“CROs”), contract development and manufacturing organizations (“CDMOs”) and suppliers to supply, develop and test components of our product candidates. The loss of our third-party manufacturers, CROs, CDMOs or suppliers, their failure to comply with applicable regulatory requirements or to supply sufficient quantities at acceptable quality levels or prices, or at all, or changes in methods of product candidate manufacturing, development or formulation would materially and adversely affect our business.

•

We are highly dependent on the services of our senior management team and if we are not able to retain members of our management team and recruit and retain additional management, clinical and scientific personnel, our business will be harmed.

•

Our existing collaborations are, and our future collaborations may be, important to our business. If we are unable to enter into new collaborations, or, if our collaborations are not successful, our business could be adversely affected.

•

We have licensed intellectual property rights from third parties and may do so in the future. Such licenses may be subject to early termination if we fail to comply with our obligations in our licenses with third parties, which could result in the loss of rights or technology that are material to our business.

•

We may rely on one or more in-licenses from third parties. If we lose these rights, our business may be materially adversely affected, and if disputes arise with one or more licensors, we may be subject to future litigation as well as the potential loss of or limitations on our ability to develop and commercialize products and technologies covered by these license agreements.

PART I—FINANCIAL INFORMATION

EVOMMUNE, INC.

Condensed Consolidated Balance Sheets (unaudited)

(In thousands, except share and per share amounts)


	September 30,			December 31,
	2025			2024
Assets
Current assets:
Cash and cash equivalents	$	26,818		$	16,255
Short-term investments		49,244			55,785
Prepaid expenses and other current assets		5,879			1,948
Total current assets		81,941			73,988
Operating lease right-of-use assets, net		160			472
Property and equipment, net		970			1,326
Restricted cash		1,412			208
Other non-current assets		61			61
Total assets	$	84,544		$	76,055

Liabilities, Convertible Preferred Stock, and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	3,576		$	8,264
Accrued liabilities		6,309			6,729
Operating lease liability, current portion		160			487
Convertible preferred stock forward		—			8,928
Deferred revenue		—			3,000
Other current liabilities		371			573
Total current liabilities		10,416			27,981
Other non-current liabilities		261			535
Total liabilities		10,677			28,516
Commitments and contingencies (Note 6)
Convertible preferred stock: $0.0001 par value — 157,657,729 shares authorized at September 30, 2025 and December 31, 2024, respectively, 157,657,729 and 116,716,142 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively (Liquidation preference $275,611 and $210,328 at September 30, 2025 and December 31, 2024, respectively)		257,004			191,776
Stockholders’ deficit:
Common stock, par value $0.0001 — 223,593,879 shares authorized at September 30, 2025 and December 31, 2024, respectively; 1,554,965 and 1,551,420 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		—			—
Additional paid-in capital		9,679			7,982
Accumulated deficit		(192,816	)		(152,219	)
Total stockholders’ deficit		(183,137	)		(144,237	)
Total liabilities, convertible preferred stock, and stockholders’ deficit	$	84,544		$	76,055

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

EVOMMUNE, INC.

Condensed Consolidated Statements of Operations (unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenues:
License revenue	$	10,000		$	—		$	13,000		$	7,000
Operating expenses:
Research and development		19,639			13,289			53,639			46,413
General and administrative		3,689			3,228			10,716			9,146
Total operating expenses		23,328			16,517			64,355			55,559
Loss from operations		(13,328	)		(16,517	)		(51,355	)		(48,559	)
Other income, net:
Change in fair value of convertible preferred stock forward		—			—			8,928			—
Interest income		862			618			1,880			2,515
Other expense, net		(9	)		(17	)		(50	)		(38	)
Total other income, net		853			601			10,758			2,477
Net loss		(12,475	)		(15,916	)		(40,597	)		(46,082	)
Net loss attributable to common stockholders		(12,475	)		(15,916	)		(40,597	)		(46,082	)
Basic and diluted net loss per share of common stock	$	(8.07	)	$	(10.47	)	$	(26.36	)	$	(30.69	)
Weighted average basic and diluted shares of common stock outstanding		1,545,010			1,520,814			1,540,243			1,501,635

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

EVOMMUNE, INC.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit (unaudited)

(In thousands, except share amounts)


For the Three Months Ended September 30, 2025
	Convertible Preferred stock				Common stock				Additional paid-in			Accumulated
	Shares		Amount		Shares		Amount		capital			Deficit			Total
Balance, July 1, 2025		157,657,729	$	257,004		1,554,965	$	—	$	9,108	$		(180,341	)	$	(171,233	)
Stock-based compensation		—		—		—		—		561			—			561
Vesting of early exercised options		—		—		—		—		10			—			10
Net loss		—		—		—		—		—			(12,475	)		(12,475	)
Balance, September 30, 2025		157,657,729	$	257,004		1,554,965	$	—	$	9,679	$		(192,816	)	$	(183,137	)


For the Three Months Ended September 30, 2024
	Convertible Preferred stock				Common stock				Additional paid-in			Accumulated
	Shares		Amount		Shares		Amount		capital			Deficit			Total
Balance, June 30, 2024		85,222,619	$	149,374		1,545,789	$	—	$	7,052	$		(114,077	)	$	(107,025	)
Stock-based compensation		—		—		—		—		401			—			401
Vesting of early exercised options		—		—		—		—		12			—			12
Net loss		—		—		—		—		—			(15,916	)		(15,916	)
Balance, September 30, 2024		85,222,619	$	149,374		1,545,789	$	—	$	7,465	$		(129,993	)	$	(122,528	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

EVOMMUNE, INC.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit (unaudited)

(In thousands, except share amounts)


For the Nine Months Ended September 30, 2025
	Convertible Preferred stock				Common stock				Additional paid-in			Accumulated
	Shares		Amount		Shares		Amount		capital			Deficit			Total
Balance, January 1, 2025		116,716,142	$	191,776		1,551,420	$	—	$	7,982	$		(152,219	)	$	(144,237	)
Issuance of common stock on exercise of options		—		—		3,545		—		6			—			6
Issuance of Series C convertible preferred stock, net of transaction costs		40,941,587		65,228		—		—		—			—			—
Stock-based compensation		—		—		—		—		1,660			—			1,660
Vesting of early exercised options		—		—		—		—		31			—			31
Net loss		—		—		—		—		—			(40,597	)		(40,597	)
Balance, September 30, 2025		157,657,729	$	257,004		1,554,965	$	—	$	9,679	$		(192,816	)	$	(183,137	)


For the Nine Months Ended September 30, 2024
	Convertible Preferred stock				Common stock				Additional paid-in			Accumulated
	Shares		Amount		Shares		Amount		capital			Deficit			Total
Balance, January 1, 2024		85,222,619	$	149,374		1,545,137	$	—	$	6,197	$		(83,911	)	$	(77,714	)
Issuance of common stock on exercise of options		—		—		652		—		2			—			2
Stock-based compensation		—		—		—		—		1,228			—			1,228
Vesting of early exercised options		—		—		—		—		38			—			38
Net loss		—		—		—		—		—			(46,082	)		(46,082	)
Balance, September 30, 2024		85,222,619	$	149,374		1,545,789	$	—	$	7,465	$		(129,993	)	$	(122,528	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

EVOMMUNE, INC.

Condensed Consolidated Statements of Cash Flows (unaudited)

(In thousands)


	Nine Months Ended
	September 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(40,597	)	$	(46,082	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		1,660			1,228
Accretion of discount on short-term investments		(1,184	)		(1,374	)
Depreciation and amortization		1,063			927
Change in fair value of convertible preferred stock forward		(8,928	)		—
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(1,998	)		(311	)
Accounts payable		(4,688	)		3,652
Accrued liabilities		(1,479	)		2,844
Operating lease liabilities		(591	)		(567	)
Deferred revenue		(3,000	)		—
Net cash used in operating activities		(59,742	)		(39,683	)
Cash flows from investing activities:
Purchases of short-term investments		(38,775	)		(45,675	)
Maturities of short-term investments		46,500			74,850
Purchase of property and equipment		(131	)		(88	)
Net cash provided by investing activities		7,594			29,087
Cash flows from financing activities:
Proceeds from issuance of convertible preferred stock, net of issuance costs		65,228			—
Proceeds from exercise of stock options		6			2
Payment of deferred offering costs		(874	)		—
Principal payments of finance lease liability		(287	)		(124	)
Principal payments of financing obligation		(158	)		(160	)
Net cash provided by (used in) financing activities		63,915			(282	)

Net increase (decrease) in cash, cash equivalents and restricted cash		11,767			(10,878	)
Cash, cash equivalents and restricted cash - beginning of period		16,463			29,232
Cash, cash equivalents and restricted cash - end of period	$	28,230		$	18,354

Reconciliation of cash, cash equivalents, and restricted cash to the amounts reports within the balance sheets
Cash and cash equivalents	$	26,818		$	18,146
Restricted cash		1,412			208
Total cash, cash equivalents, and restricted cash	$	28,230		$	18,354

Supplemental cash flow disclosures:
Cash paid for interest	$	7		$	28
Deferred offering costs in accrued expenses	$	1,059		$	—
Non-cash investing and financing activities:
Vesting of early exercised stock options	$	31		$	39
Assets acquired under finance leases	$	—		$	1,032
Operating lease liabilities arising from obtaining right-of-use assets	$	264		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

EVOMMUNE, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Organization and Description of the Business

Business and Organization

Evommune, Inc. and its subsidiaries (“Evommune” or the “Company”) is a Delaware corporation headquartered in Palo Alto, California. Evommune is a clinical stage biotechnology company developing innovative therapies that target key drivers of chronic inflammatory diseases.

Liquidity

The Company has incurred significant operating losses since inception and has relied primarily on equity financing and license revenue to fund its operations. As of September 30, 2025, the Company had an accumulated deficit of $192.8 million. The Company expects to continue to incur substantial losses, and its ability to achieve and sustain profitability will depend on the successful development, approval, and commercialization of product candidates and on the achievement of sufficient revenue to support its cost structure. The Company may never achieve profitability and, unless and until it does, the Company will need to continue to raise additional capital.

As previously disclosed in the Company’s consolidated financial statements for the year ended December 31, 2024, management identified conditions that raised substantial doubt about the Company’s ability to continue as a going concern. During the nine months ended September 30, 2025, management implemented plans that alleviated the substantial doubt. The principal factor leading to this conclusion is additional capital raised through the issuance of preferred stock (Note 7), and the issuance of common stock in the Company’s initial public offering (“IPO”) in November 2025 (Note 11), through which the Company raised gross proceeds of $172.5 million. As of September 30, 2025, management expects that existing cash, cash equivalents and short-term investments will be sufficient to fund the Company’s current operating plan for at least twelve months from the issuance date of these financial statements.

Significant Risks and Uncertainties

The Company operates in a dynamic and highly competitive industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows: its ability to obtain future financing; its ability to continue research and development of its product candidates; payment obligations under license or collaboration agreements; advances and trends in new technologies and industry standards; results of clinical trials; regulatory approval and market acceptance of the Company’s product candidates; development of sales, marketing and distribution infrastructure; competing therapies and marketing development; investment in or in-license other technologies; certain strategic relationships; competition from pharmaceutical or other biotechnology companies with greater financial resources or expertise; litigation or claims against its intellectual property portfolio, patent, product, regulatory, or other factors; operational, financial and management systems; and the Company’s ability to attract and retain employees necessary to support its growth.

Products candidates being developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance that any product candidates will receive the necessary approvals. If the Company is denied approval, approval is delayed or the Company is unable to maintain approval, it could have a material adverse impact on the Company.

The Company has expended and expects to continue to expend substantial funds to complete the research, development and pre-clinical and clinical testing of product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of product candidates that may receive regulatory approval. If adequate funds are unavailable from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs which would materially and adversely affect its business, financial condition and results of operations.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as defined by the Financial Accounting Standards Board (“FASB”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consistent of normal recurring adjustments, considered necessary for a fair statement have been included. Interim results are not necessarily indicative of results that may be expected for the fiscal year ending December 31, 2025 or other interim periods. The Condensed Consolidated Balance Sheet as of December 31, 2024 has been derived from the audited consolidated financial statements at that date but does not include all of the information required by GAAP for complete financial statements.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2024. Since the date of such consolidated financial statements, there have been no significant changes to the Company’s significant accounting policies, other than as described below.

Reverse Stock Split

On October 17, 2025, the Company effected a 1-for-8.5180 reverse stock split of its common stock. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the reverse stock split. There was no effect on the number of shares of common stock or preferred stock authorized for issuance under the Company’s certificate of incorporation or the par value of such securities. The shares of common stock underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. In addition, the conversion ratios for each series of the Company’s convertible preferred stock were proportionally adjusted (Note 7).

Segments

The Company operates in one segment considering the nature of the Company’s products and services, class of customers, methods used to distribute the products and the regulatory environment in which the Company operates. The Company’s chief operating decision maker (“CODM”), its Chief Executive Officer, manages and allocates resources to the operations of the company on a total company basis by assessing the overall level of resources available and how to best deploy these resources across functions and research and development projects that are in line with its long-term company-wide strategic goals. In making these decisions, the CODM uses consolidated financial information for purposes of evaluating performance and forecasting future period financial results. The CODM performs this assessment based on the Company’s consolidated net loss. Through this analysis, the CODM assesses performance by comparing actual net loss versus the budget, and then decides how to allocate resources to invest in the Company’s research and development programs. The following is a breakdown of net loss by category for the three and nine months ended September 30, 2025 and 2024 as managed by the CODM (in thousands).


	Three Months Ended								Nine Months Ended
		September 30,				September 30,				September 30,				September 30,
		2025				2024				2025				2024
License revenue	$		10,000		$		—		$		13,000		$		7,000
Operating Expenses:
EVO756			11,189				5,550				26,048				15,234
EVO301			1,087				2,412				5,489				17,418
Other research and development			4,547				2,804				14,059				6,701
Total external research and development	$		16,823		$		10,766		$		45,596		$		39,353
Research and development personnel costs			2,816				2,523				8,043				7,060
Total research and development operating expenses	$		19,639		$		13,289		$		53,639		$		46,413
General and administrative operating expenses			2,036				1,755				5,696				4,910
General and administrative personnel costs			1,653				1,473				5,020				4,236
Total general and administrative operating expenses	$		3,689		$		3,228		$		10,716		$		9,146
Total operating expenses	$		23,328		$		16,517		$		64,355		$		55,559
Other income, net			853				601				10,758				2,477
Net Loss	$		(12,475	)	$		(15,916	)	$		(40,597	)	$		(46,082	)

Other research and development consists of discovery research, pre-clinical programs and other early-stage development programs. The measure of segment assets, all of which are held in the United States, is reported on the condensed consolidated balance sheets as total assets. Additionally, segment depreciation expense is consistent with amounts reported within the consolidated statement of cash flows.

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers (“ASC 606”), the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it determines that it is probable it will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s consolidated balance sheets. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, non-current portion. Since inception, the Company’s only revenues have been generated through license agreements.

License Revenue

The terms of the Company’s license agreements typically may include payment to the Company of one or more of the following: nonrefundable, up-front license fees, research, development and commercial milestone payments; royalties and other contingent payments due based on the activities of the counterparty. Each of these types of revenue are recorded as license revenues in the Company’s consolidated statements of operations. See Note 5 for additional details regarding the Company’s license arrangements.

Transaction Price Allocated to Future Performance Obligations

ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of September 30, 2025. The guidance provides certain practical expedients that limit this requirement. The Company has various contracts that meet the following practical expedients provided by ASC 606:

The performance obligation is part of a contract that has an original expected duration of one year or less.

Revenue is recognized from the satisfaction of the performance obligations in the amount billable to the customer.

The variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation.

Cash, Cash Equivalents and Short-term Investments

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of September 30, 2025 and December 31, 2024, cash and cash equivalents consisted of cash and money market mutual funds. The Company has invested its excess cash in U.S. government securities, and intends and has the ability to hold these investments to maturity. All of the Company’s investments in U.S. government securities are classified as held to maturity and are reported as short-term or long-term based on maturity dates at time of purchase. All of the Company’s short-term investments had original maturity dates of less than 12 months. The fair values of held-to-maturity securities are measured using Level 2 inputs and approximate their amortized cost.

The following tables summarize the amortized cost of the Company’s short-term investments as of September 30, 2025 and December 31, 2024:


	September 30, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
Held-to-maturity securities	$	49,244	$	—	$	—	$		49,244
Total short-term investments	$	49,244	$	—	$	—	$		49,244


	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
Held-to-maturity securities	$	55,785	$	—	$	—	$		55,785
Total short-term investments	$	55,785	$	—	$	—	$		55,785

Restricted Cash

Restricted cash is defined as cash and cash equivalents that cannot be withdrawn or used for general operating activities. As of September 30, 2025 and December 31, 2024, the Company’s restricted cash was $1.4 million and $0.2 million, respectively, and was associated with letters of credit issued in connection with the Company’s office leases.

Convertible Preferred Stock Forward

Certain provisions of the Series C Preferred Stock Purchase Agreement (“Series C SPA”) obligated the Company to sell, and the investors to purchase, additional tranches of the Series C Convertible Preferred Stock (“Series C”) at a future date and specified price (the “tranche closings forward”) if certain clinical performance milestones were met. The tranche closings forward represented freestanding instruments as they are legally detachable and separately exercisable and, therefore, were accounted for separately from Series C as convertible preferred stock forwards (liability or asset). The tranche closings forward were settled in June 2025. See Note 7 for additional details regarding the Company’s convertible preferred stock.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires deferred tax assets and liabilities to be recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts and respective tax bases of existing assets and liabilities, as well as for net operating loss carryforwards and research and development credits. Valuation allowances are provided if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of a change in the tax laws is recorded in the period in which the law is enacted.

Net Loss Per Share

Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, the convertible preferred stock, common stock subject to repurchase, stock options, restricted stock units (“RSUs”), and stock appreciation rights (“SARs”) are considered to be potentially dilutive securities. Basic and diluted net loss per share is presented in conformity with the two-class method required for participating securities as the convertible preferred stock is considered a participating security. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss is attributed entirely to common stockholders. Because the Company has reported a net loss for the reporting periods presented, the diluted net loss per common share is the same as basic net loss per common share for those periods.

The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share amounts):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Numerator:
Net Loss	$	(12,475	)	$	(15,916	)	$	(40,597	)	$	(46,082	)
Denominator:
Weighted-average common shares outstanding		1,554,965			1,545,789			1,553,497			1,545,710
Less: weighted-average unvested founder shares		—			—			—			(13,373	)
Less: weighted-average unvested early-exercised options		(9,955	)		(24,975	)		(13,254	)		(30,702	)
Weighted-average common shares outstanding used to compute net loss per share, basic and diluted		1,545,010			1,520,814			1,540,243			1,501,635
Net loss per share, basic and diluted	$	(8.07	)	$	(10.47	)	$	(26.36	)	$	(30.69	)

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive:


	Three and Nine Months Ended
	2025		2024
Convertible preferred stock		19,147,559		10,643,818
Stock options outstanding		1,831,170		2,658,884
Restricted stock units outstanding		437,754		—
Stock appreciation rights outstanding		444,992		—
Common stock subject to repurchase		8,804		23,088
Total		21,870,279		13,325,790

The amounts above represent common stock equivalents, where applicable.

Deferred financing costs

The Company capitalizes costs that are directly associated with in-process equity and debt financings until such financings are consummated, at which time such costs are recorded against the gross proceeds from the applicable financing. If a financing is abandoned, deferred financing costs are expensed. As of September 30, 2025, the Company has incurred $2.1 million in fees associated with the IPO, $1.1 million of which has been paid as of September 30, 2025, which are recognized as a component of prepaid expenses and other current assets on the consolidated balance sheet.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09 “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which will require incremental income tax disclosures on an annual basis for all public entities. The amendments require that public business entities disclose specific categories in the rate reconciliation and provide additional information for reconciling items meeting a quantitative threshold. The amendments also require disclosure of income taxes paid to be disaggregated by jurisdiction, and disclosure of income tax expense disaggregated by federal, state and foreign. ASU 2023-09 is effective for annual reporting beginning with the fiscal year ending December 31, 2025. The Company does not expect this to have a material impact on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03 “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures” (“ASU 2024-03”), which will require additional expense disclosures for all public entities. The amendments require that at each interim and annual reporting period, an entity will disclose certain disaggregated expenses included in each relevant expense caption, as well as the total amount of selling expenses and, in annual periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for annual reporting periods beginning with the fiscal year ending December 31, 2027, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the incremental disclosures that will be required in its future consolidated financial statements.

3. Fair Value Measurements and Fair Value of Financial Instruments

The following table sets forth the Company’s consolidated financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):


	Fair Value Measurements at September 30, 2025
		Total			Level 1			Level 2			Level 3
Assets:
Cash Equivalents
Money market funds	$		26,780	$		26,780	$		—	$		—
Total fair value of assets	$		26,780	$		26,780	$		—	$		—


	Fair Value Measurements at December 31, 2024
		Total				Level 1			Level 2			Level 3
Assets:
Cash Equivalents
Money market funds	$		14,227		$		14,227	$		—	$		—
Total fair value of assets	$		14,227		$		14,227	$		—	$		—

Liabilities:
Convertible preferred stock forward	$		(8,928	)	$		—	$		—	$		(8,928	)
Total fair value of liabilities	$		(8,928	)	$		—	$		—	$		(8,928	)

Items classified as Level 1 within the valuation hierarchy consist of the Company’s cash equivalents held in money market funds. The Company measures these investments at fair value determined based on Level 1 observable quoted price market inputs. The Company’s money market funds are included in cash and cash equivalents in the consolidated balance sheets.

Items classified as Level 2 within the valuation hierarchy consist of the Company’s excess cash invested in U.S. government securities, measured at fair value based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. The Company’s U.S. government securities are included in short-term investments in the consolidated balance sheets.

Items classified as Level 3 within the valuation hierarchy consist of the Company’s convertible preferred stock forward (Note 7). The fair value of the convertible preferred stock forward has been estimated at the date of inception, and re-measured at the end of each reporting period until the forwards expire. The Company used a standard forward pricing valuation model to estimate the fair value of the forward contracts with the following significant assumptions:


	June 26, 2025				December 31, 2024
Fair value per share of Series C Tranche II	$		1.59		$		0.22
Strike price	$	1.59453			$	1.59453
Expected term		0.003 years				0.58 years
Discount rate			4.11	%			4.32	%

The following table is a roll-forward of Level 3 assets for the periods indicated (in thousands) (Note 7):


		Series C Tranche Two Forward
Balance at January 1, 2024	$		—
Issuance of convertible preferred stock forward			(8,928	)
Balance at December 31, 2024			(8,928	)
Change in fair value of convertible preferred stock forward			8,928
Balance at September 30, 2025	$		—

In June 2025, the Company issued 40,941,587 shares of Series C and settled the convertible preferred stock forward.

4. Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):


		September 30, 2025			December 31, 2024
Accrued research and development	$		1,949	$		2,828
Accrued compensation			2,852			3,634
Deferred financing costs			1,059			53
Other			449			214
Total	$		6,309	$		6,729

5. Strategic Collaborations and License Agreements

The Company has entered into several license agreements for products currently under development. The Company’s license agreements are disclosed in “Note 5. Strategic Collaborations and License Agreements” of the Company’s annual audited consolidated financial statements for the year ended December 31, 2024. Since the date of such consolidated financial statements, there have been no significant changes to the Company’s license agreements, other than the following.

Dermira

In December 2020, the Company entered into an exclusive license agreement with Dermira, Inc., a wholly owned subsidiary of Eli Lilly and Company (“Dermira”), to develop and commercialize EVO756 and two other development programs for the treatment of various inflammatory diseases (the “Dermira License Agreement”).

The Dermira License Agreement remains in effect on a product-by-product and a country-by-country basis until the expiration of the royalty term for such product in such country. The Dermira License Agreement may be terminated by either party due to the other party’s uncured material breach or bankruptcy.

Milestones and royalties are contingent upon future events and will be recorded when the milestones are achieved and when payments are due. For the nine months ended September 30, 2025, the Company has recorded $2.5 million as research and development expense upon achievement of a development milestone under the Dermira License Agreement. No other milestones were achieved under the Dermira License Agreement during the nine months ended September 30, 2025 and 2024.

Maruho Co., Ltd.

Maruho Japan Agreement

As of December 31, 2024, the Company had recorded short term deferred revenue of $3.0 million, attributable to the Company’s on-going performance obligations. The Company recognized $3.0 million in license revenue for the nine months ended September 30, 2025 upon the satisfaction of the performance obligation. There was no deferred revenue recorded as of any other period and no outstanding performance obligations remain under the agreement. In addition, in July 2025, the Company received payment from Maruho of $10.0 million upon the achievement of a development milestone, which is recognized as license revenue for the three and nine months ended September 30, 2025. No other milestone or royalty revenues related to this agreement have been earned as of September 30, 2025.

AprilBio

In June 2024, the Company entered into a License, Development and Commercialization Agreement with AprilBio Co., Ltd. (“AprilBio”) upon which AprilBio granted the Company an exclusive worldwide license to develop and commercialize an IL-18BP compound (“EVO301”). The Company is responsible for the payments of development milestones of up to $82.5 million, sales milestones of up to $377.5 million, and tiered royalty payments in the mid-to-high single digit percentage on covered product net worldwide sales. For the nine months ended September 30, 2025, the Company has recorded $1.5 million as research and development expense upon achievement of a development milestone under the AprilBio License, Development and Commercialization Agreement. No other milestones were achieved or recorded as research and development expenses for the nine months ended September 30, 2025 or 2024.

6. Commitments and Contingencies

Leases

The Company has operating leases for office space and equipment as well as finance leases of certain lab and office equipment. The Company’s lab and office equipment leases have the original lease terms of three years each. Generally, the Company’s leases are non-cancellable and do not have any residual value guarantees or any restrictions or covenants imposed by leases.

In July 2025, the Company executed a sixty-three-month lease agreement to lease office space in Palo Alto, California. The lease is expected to commence in January 2026 and includes annual lease payments during each of the first three years of approximately $1.5 million, with increases of approximately 3% each year thereafter for the remainder of the lease. The Palo Alto lease includes an option to terminate the lease after thirty-nine months, subject to a one-time termination fee equal to six months of base rent. The Palo Alto lease also includes a renewal option for one additional five-year period and does not have any residual value guarantees or any restrictions or covenants. The Company is not reasonably certain to exercise either the early-termination or renewal option, and therefore neither option is included in the measurement of the related right-of-use asset and lease liability.

In August 2025, the Company executed a sixty-month lease agreement to lease office space in New York, New York. The lease commenced in October 2025 and includes annual lease payments of approximately $0.4 million. The New York lease is non-cancellable and does not include a renewal option, any residual value guarantees or any restrictions or covenants.

As of September 30, 2025, future minimum lease payments included in the measurement of lease liabilities and financing obligations were as follows (in thousands):


		Operating lease				Finance lease				Financing obligation
2025	$		162		$		100		$		—
2026			—				400				—
2027			—				184				—
2028 and thereafter			—				—				—
Total undiscounted lease payments			162				684				—
Less: imputed interest			(2	)			(79	)			—
Total lease liability			160				605				—
Less: current portion			160				344				—
Operating and finance lease liability, net of current portion	$		—		$		261		$		—

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases and finance leases (in thousands):


	Nine Months Ended September 30, 2025			Nine Months Ended September 30, 2024
Operating lease:
Short-term lease cost	$	834	$		667
Variable lease cost		179			225
Operating lease cost		593			563
Total operating lease costs		1,606			1,455
Finance lease:
Amortization of right-of-use assets	$	287	$		124
Interest on lease liabilities		60			37
Financing obligation:
Interest expense		7			28
Total finance lease and financing obligation cost		354			189
Total lease cost	$	1,960	$		1,644

For the nine months ended September 30, 2025, cash payments were $0.4 million, $0.1 million and $0.3 million for operating leases, financing obligation and finance leases, respectively. For the nine months ended September 30, 2024, cash payments were $0.6 million, $0.2 million and $0.1 million for operating leases, financing obligation and finance leases, respectively. Interest expense is recorded within other expense in the Company’s unaudited condensed consolidated statements of operations. The weighted average discount rate and remaining terms are as follows:


	Nine Months Ended September 30, 2025		Nine Months Ended September 30, 2024
Weighted-average remaining lease term (in years)
Operating leases		0.3

Evommune, Inc. 10-Q