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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 March 31, 2026


☐	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: 001-40544

Jade Biosciences, Inc.

(Exact name of registrant as specified in its charter)


Nevada	83-1377888
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
221 Crescent Street, Building 23, Suite 105 Waltham, Massachusetts	02453
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 781-312-3013

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

     JBIO

     The Nasdaq Capital Market

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, a 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 May 1, 2026, the registrant had 49,359,875 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION	2

Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss	3
	Condensed Consolidated Statement of Convertible Preferred Stock and Stockholders’ Equity (Deficit)	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II.	OTHER INFORMATION	36

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	76
Item 3.	Defaults Upon Senior Securities	76
Item 4.	Mine Safety Disclosures	76
Item 5.	Other Information	76
Item 6.	Exhibits	77
Signatures		79

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

JADE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except share amounts)


	March 31, 2026			December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	55,085		$	88,438
Investments		256,210			247,720
Prepaid expenses and other current assets		7,222			12,658
Total current assets		318,517			348,816
Property and equipment, net		157			170
Operating lease right-of-use asset		690			726
Other assets		69			69
Total assets	$	319,433		$	349,781
Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable		3,979			2,151
Accrued expenses and other current liabilities		14,852			9,419
Related party accrued expenses and other current liabilities		794			4,969
Warrant liability, related party		2,667			—
Total current liabilities		22,292			16,539
Long-term liabilities:
Long-term lease liability		679			724
Total liabilities		22,971			17,263
Commitments and contingencies (Note 12)
Stockholders’ equity:
Series A non-voting convertible preferred stock, $0.0001 par value; 12,622 shares authorized as of both March 31, 2026 and December 31, 2025; 12,622 shares issued and outstanding as of both March 31, 2026 and December 31, 2025		2			2
Common stock, $0.0001 par value; 300,000,000 shares authorized as of March 31, 2026 and December 31, 2025, respectively; 49,345,967 and 49,316,287 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively		5			5
Additional paid-in capital		511,554			506,771
Accumulated other comprehensive (loss) income		(342	)		129
Accumulated deficit		(214,757	)		(174,389	)
Total stockholders’ equity		296,462			332,518
Total liabilities and stockholders' equity	$	319,433		$	349,781

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

JADE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended March 31, 2026			Three Months Ended March 31, 2025
Operating expenses:
Research and development(1)	$	36,053		$	20,023
General and administrative(2)		7,392			3,361
Total operating expenses		43,445			23,384
Loss from operations		(43,445	)		(23,384	)
Other income (expense):
Interest income		3,102			615
Change in fair value of Convertible Notes payable(3)		—			(15,400	)
Other expense		(9	)		—
Total other income (expense), net		3,093			(14,785	)
Net loss before income tax expense		(40,352	)		(38,169	)
Income tax expense		(16	)		—
Net loss	$	(40,368	)	$	(38,169	)
Other comprehensive income (loss):
Currency translation adjustment		2			—
Unrealized loss on investments		(473	)		—
Comprehensive loss	$	(40,839	)	$	(38,169	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.57	)	$	(12.10	)
Net loss per share attributable to Series A non-voting convertible preferred stockholders, basic and diluted	$	(573.44	)	$	—
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted		57,777,165			3,155,500
Weighted-average shares used in computing net loss per share attributable to Series A non-voting convertible preferred stockholders, basic and diluted		12,622			—

(1) Includes related party amounts of $4.3 million and $7.8 million for the three months ended March 31, 2026 and March 31, 2025, respectively (see Note 10).

(2) Includes related party amounts of $0.2 million and $0.1 million for the three months ended March 31, 2026 and March 31, 2025, respectively (see Note 10).

(3) Includes no related party amounts for the three months ended March 31, 2026 and $3.3 million for the three months ended March 31, 2025 (see Note 6).

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

JADE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)

(In thousands, except share amounts)


	Series Seed Convertible Preferred Stock				Series A Convertible Preferred Stock				Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		(Loss) Income			Deficit			Equity (Deficit)
Balance at December 31, 2024		20,000,000	$	2		—		—		3,672,794	$	1	$	179	$	—		$	(46,979	)	$	(46,799	)
Stock-based compensation		—		—		—		—		—		—		1,458		—			—			1,458
Net loss		—		—		—		—		—		—		—		—			(38,169	)		(38,169	)
Balance at March 31, 2025		20,000,000	$	2		—	$	—		3,672,794	$	1	$	1,637	$	—		$	(85,148	)	$	(83,510	)

	Series Seed Convertible Preferred Stock				Series A Convertible Preferred Stock				Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		(Loss) Income			Deficit			Equity
Balance at December 31, 2025		—	$	—		12,622		2		49,316,287	$	5	$	506,771	$	129		$	(174,389	)	$	332,518
Exercise of stock options		—		—		—		—		29,680		—		45		—			—			45
Currency translation adjustment		—		—		—		—		—		—		—		2			—			2
Unrealized loss on investments		—		—		—		—		—		—		—		(473	)		—			(473	)
Stock-based compensation		—		—		—		—		—		—		4,738		—			—			4,738
Net loss		—		—		—		—		—		—		—		—			(40,368	)		(40,368	)
Balance at March 31, 2026		—	$	—		12,622	$	2		49,345,967	$	5	$	511,554	$	(342	)	$	(214,757	)	$	296,462

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

JADE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

(In thousands)


	Three Months Ended March 31, 2026			Three Months Ended March 31, 2025
Cash flows from operating activities:
Net loss	$	(40,368	)	$	(38,169	)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of Convertible Notes payable		—			15,400
Stock-based compensation		7,405			2,423
Non-cash lease expense		26			8
Accretion/amortization on investments		(493	)		—
Depreciation expense		9			—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		5,444			(507	)
Other assets		—			(60	)
Accounts payable		2,328			2,677
Accrued expenses and other current liabilities		5,772			(1,948	)
Related party accrued expenses and other current liabilities		(4,175	)		1,410
Operating lease liabilities		(29	)		9
Net cash used in operating activities		(24,081	)		(18,757	)
Cash flows from investing activities:
Purchases of investments		(73,898	)		—
Proceeds from sales/maturities of investments		65,428			—
Net cash used in investing activities	$	(8,470	)	$	—
Cash flows from financing activities:
Payment of deferred offering costs		—			(700	)
Issuance costs from the December PIPE Financing		(809	)		—
Issuance costs from the October PIPE Financing		(31	)		—
Proceeds from stock option exercises		45			—
Net cash used in financing activities		(795	)		(700	)
Effect on exchange rates on cash and cash equivalents		(7	)		—
Net decrease in cash and cash equivalents		(33,353	)		(19,457	)
Cash and cash equivalents at beginning of period		88,438			69,386
Cash and cash equivalents at end of period	$	55,085		$	49,929

Supplemental disclosure of non-cash operating, investing, and financing activities:
Purchases of property and equipment in accounts payable	$	—		$	5
Deferred offering costs in accounts payable or accrued expenses and other current liabilities	$	—		$	1,091
Operating lease liability arising from obtaining right-of-use asset	$	—		$	773

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

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Nature of the Business and Basis of Presentation

Background and Basis of Presentation

Jade Biosciences, Inc. together with its subsidiaries (“Jade” or the “Company”), formerly known as Aerovate Therapeutics, Inc., is the resulting company of the Merger and Redomestication discussed below. Prior to the Merger and Redomestication, the private corporation Jade Biosciences, Inc. (“Pre-Merger Jade”) was established and incorporated under the laws of the state of Delaware on June 18, 2024 (referred to in these notes as the inception of the Company). Jade is focused on developing therapies to address critical unmet needs in autoimmune diseases. Its lead product candidate, JADE101, is a monoclonal antibody (“mAb”) targeting a cytokine called “A PRoliferation Inducing Ligand” (“APRIL”) that modulates plasma cell survival and immunoglobulin production, which the Company plans to initially develop for the treatment of IgA nephropathy (“IgAN”). Jade’s second product candidate is JADE201, a mAb targeting B cell activating factor receptor (“BAFF-R”) for the treatment of multiple autoimmune disorders, and is currently in pre-clinical development. Jade’s pipeline also includes JADE301 which is designed to target an undisclosed pathway, and for which the Company’s is conducting preclinical research. Jade was launched based on assets licensed from Paragon Therapeutics Inc. (“Paragon”), an antibody discovery engine founded by healthcare investor Fairmount Funds Management LLC (“Fairmount”).

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2026, its results of operations for the three months ended March 31, 2026 and March 31, 2025 and cash flows for the three months ended March 31, 2026 and March 31, 2025. The condensed consolidated balance sheet at December 31, 2025 was derived from the audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements for the period ended December 31, 2025 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 6, 2026 (the “Annual Report”). The accompanying condensed consolidated statements include accounts of the Company and its wholly owned subsidiaries, Jade Biosciences Canada ULC, Jade Biosciences MA Security Corporation, and Aerovate MA Securities Corporation (dissolved on December 29, 2025). All intercompany amounts are eliminated in consolidation.

Reverse Recapitalization and Pre-Closing Financing

On April 28, 2025 (the “Closing Date”), the Company consummated the previously announced transaction (the “Closing”) pursuant to that certain Agreement and Plan of Merger and Reorganization, dated as of October 30, 2024, (the “Merger Agreement”) by and among Pre-Merger Jade, Aerovate Therapeutics, Inc., a Delaware corporation (“Aerovate”), Caribbean Merger Sub I, Inc., a Delaware corporation and wholly-owned subsidiary of Aerovate (“First Merger Sub”), and Caribbean Merger Sub II, LLC, a Delaware limited liability company and wholly-owned subsidiary of Aerovate (“Second Merger Sub”). As part of the Closing, First Merger Sub merged with and into Pre-Merger Jade, with Pre-Merger Jade continuing as a wholly owned subsidiary of Aerovate and the surviving corporation of the merger (the “First Merger” and such time, the “First Effective Time”), and Pre-Merger Jade merged with and into Second Merger Sub, with Second Merger Sub being the surviving entity of the merger (the “Second Merger” and, together with the First Merger, the “Merger”). In connection with the Merger, Second Merger Sub changed its name to “Jade Biosciences, LLC” and Aerovate changed its name to “Jade Biosciences, Inc.” Subsequently, Jade Biosciences, LLC merged with and into Jade Biosciences, Inc. The combined company following the Merger is the “Company.” The Company is led by Pre-Merger Jade’s management team and focuses on developing differentiated biologic therapies for patients living with autoimmune diseases.

In accordance with an exchange ratio determined in accordance with the terms of the Merger Agreement (the “Exchange Ratio”), as a result of and upon the First Effective Time, (i) each then-outstanding share of common stock, par value $0.0001 per share, of Pre-Merger Jade (the “Pre-Merger Jade common stock”) (including shares of Pre-Merger Jade common stock issued in connection with the Pre-Closing Financing (as defined below)) immediately prior to the First Effective Time (excluding shares cancelled pursuant to the Merger Agreement and excluding dissenting shares) automatically converted into the right to receive a number of shares of common stock, par value $0.0001, of Aerovate (the “Company common stock” and prior to the effective time of the Merger, the “Aerovate common stock”) equal to the Exchange Ratio, (ii) each then-outstanding share of Series Seed Convertible Preferred Stock, par value $0.0001 per share, of Pre-Merger Jade (the “Pre-Merger Jade Series Seed Convertible Preferred Stock”) immediately prior to the First Effective Time (excluding shares cancelled pursuant to the Merger Agreement and excluding dissenting shares) automatically converted into the right to receive a number of shares of Series A Non-Voting Convertible Preferred Stock, par value $0.0001 per share, of Aerovate (the “Series A Preferred Stock”), which are each convertible into 1,000 shares of Company common stock, equal to the Exchange Ratio divided by 1,000, (iii) each then-outstanding option to purchase Pre-Merger Jade common

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

stock was assumed by Aerovate and was converted into an option to purchase shares of Company common stock, subject to adjustment as set forth in the Merger Agreement, and (iv) each then-outstanding pre-funded warrant to purchase shares of Pre-Merger Jade common stock (including any pre-funded warrants to purchase shares of Pre-Merger Jade common stock issued in the Jade Pre-Closing Financing) was converted into a pre-funded warrant to purchase shares of Company common stock (subject to adjustment as set forth in the Merger Agreement and the form of pre-funded warrant).

The Exchange Ratio was calculated as 0.6311 shares of Aerovate common stock for each share of Pre-Merger Jade common stock (and 0.0006311 shares of Series A Preferred Stock for each share of Pre-Merger Jade Series Seed Convertible Preferred Stock) on the Closing Date, which gives effect to a 1-for-35 reverse stock split of shares of Aerovate common stock immediately prior to the Merger. The par value per share and the number of authorized shares were not adjusted as a result of the Exchange Ratio. The shares of Company common stock underlying outstanding stock options, restricted stock awards, 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. All references to common stock, options to purchase common stock, common stock share data, per share data, and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Exchange Ratio for all periods presented, unless otherwise specifically indicated or the context otherwise requires.

Immediately prior to the completion of the Merger, and in order to provide Jade with additional capital for its development programs, Pre-Merger Jade entered into a subscription agreement with certain investors (the “Subscription Agreement”), pursuant to which Pre-Merger Jade issued and sold, and certain new and existing investors purchased, 43,947,116 shares of Pre-Merger Jade common stock and 12,305,898 pre-funded warrants, exercisable for 12,305,898 shares of pre-exchange Pre-Merger Jade common stock (before giving effect to the Exchange Ratio), at a purchase price of $5.9407 per share or $5.9406 per Pre-Merger Jade pre-funded warrant, for an aggregate amount of $334.2 million, which included $95.0 million of proceeds previously received from the issuance of Convertible Notes (as defined herein) and accrued interest of $8.3 million on such Convertible Notes and the related conversion of the Convertible Notes into shares of Pre-Merger Jade common stock and Pre-Merger Jade pre-funded warrants (the “Pre-Closing Financing”). At the Closing, based on the Exchange Ratio, the Pre-Merger Jade common stock and Pre-Merger Jade pre-funded warrants subscribed for were converted into the right to receive 27,734,940 shares of Aerovate common stock and 7,766,247 Aerovate pre-funded warrants.

The Merger was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Pre-Merger Jade was deemed to be the accounting acquirer for financial reporting purposes. This determination was primarily based on the fact that, immediately following the Merger: (i) Pre-Merger Jade stockholders owned a substantial majority of the voting rights in the combined company; (ii) Pre-Merger Jade’s largest stockholders retained the largest interest in the combined company; (iii) Pre-Merger Jade designated a majority of the initial members of the board of directors of the combined company; and (iv) Pre-Merger Jade’s executive management team became the management team of the combined company. Accordingly, for accounting purposes: (i) the Merger was treated as the equivalent of Pre-Merger Jade issuing stock to acquire the net assets of Aerovate, and (ii) the reported historical operating results of the combined company prior to the Merger are those of Pre-Merger Jade. No goodwill or intangible assets were recognized as a result of the Merger.

Redomestication

On April 28, 2025, Jade changed its jurisdiction of incorporation from the State of Delaware to the State of Nevada (the “Redomestication”) pursuant to a plan of conversion. The Redomestication became effective on April 28, 2025.

The common stock of the Nevada corporation resulting from the conversion continues to be traded on The Nasdaq Capital Market (“Nasdaq”) under the symbol “JBIO.” The Redomestication did not cause any interruption in the trading of such common stock.

Liquidity and Going Concern

Since its inception, the Company has devoted substantially all of its resources to advancing the development of its portfolio of programs, organizing and staffing the Company, business planning, raising capital, and providing general and administrative support for these operations. Current and future programs will require significant research and development efforts, including preclinical and clinical trials, and, if the Company is successful in obtaining regulatory approval for one or more product candidates, significant commercialization efforts. Until such time as the Company can generate significant revenue from product sales, if ever, the Company expects to finance its operating activities principally through equity offerings.

The Company has not generated any revenue from product sales or other sources and has incurred significant operating losses and

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

negative cash flows from operations since inception. The Company has incurred a net loss of $40.4 million and $38.2 million for the three months ended March 31, 2026 and March 31, 2025, respectively. For the three months ended March 31, 2026, the Company used net cash of $24.1 million for its operating activities. As of March 31, 2026, the Company had cash and cash equivalents of $55.1 million, and investments of $256.2 million.

The Company expects that its research and development and general and administrative costs will continue to increase significantly, including in connection with conducting future pre-clinical activities and clinical trials and manufacturing for its product candidates and providing general and administrative support for its operations, including the costs associated with operating as a public company. The Company expects that its existing cash and cash equivalents, and investments of $311.3 million as of March 31, 2026, will be sufficient to fund its forecasted operating expenses and capital expenditure requirements for at least twelve months from the date these unaudited condensed consolidated financial statements were issued.

2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are disclosed in Note 2 to the Annual Report, beginning on page F-9. Since the date of those financial statements, there have been no changes to the Company's significant accounting policies.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). The amendments in ASU 2024-03 require public entities to disclose specified information about certain costs and expenses. ASU 2024-03 is effective for the Company’s annual reporting period beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In May 2025 the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”), which revises current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity that meets the definition of a business. The amendments require that an entity consider the same factors that are currently required for determining which entity is the accounting acquirer in other acquisition transactions. ASU 2025-03 is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-03 is required to be applied prospectively. As of the date of these unaudited condensed consolidated financial statements, the Company has not early adopted ASU 2025-03, therefore it did not apply the amendment to the Merger which closed on April 28, 2025.

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (“ASU 2025-07”). This update introduces a scope exception from derivative accounting for certain non-exchange-traded contracts and clarifies that Topic 606 applies initially to share-based noncash consideration received from a customer. ASU 2025-07 is effective for the Company’s annual reporting period beginning after December 15, 2026 and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company does not expect the adoption of this standard to have a significant impact upon the financial statements.

3. Investments

The following is a summary of the Company’s investment portfolio (in thousands):


	As of March 31, 2026
	Amortized Cost		Unrealized gains		Unrealized losses			Fair value
Investments:
Current marketable securities:
U.S treasury securities	$	45,005	$	4	$	(27	)	$	44,982
U.S. government-sponsored agency securities		61,008		1		(133	)		60,876
Commercial paper		9,884		—		(3	)		9,881
Corporate debt securities		140,629		10		(168	)		140,471
Total	$	256,526	$	15	$	(331	)	$	256,210

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)


	As of December 31, 2025
	Amortized Cost		Unrealized gains		Unrealized losses			Fair value
Investments:
Current marketable securities:
U.S treasury securities	$	54,881	$	46	$	—		$	54,927
U.S. government-sponsored agency securities		61,310		25		(20	)		61,315
Commercial paper		8,904		3		—			8,907
Corporate debt securities		122,468		104		(1	)		122,571
Total	$	247,563	$	178	$	(21	)	$	247,720

As of March 31, 2026, all of the Company’s investments are available to the Company for use in current operations. As a result, the Company has classified all of these securities as current assets even though the stated maturity of some individual securities may be one year or more beyond the balance sheet date. The following table shows the fair value of the Company’s investments, by contractual maturity, as of March 31, 2026 (in thousands):


	As of March 31, 2026
	Due within one year		Due after one year through five years		Total
Contractual Maturities:
U.S. treasury securities	$	44,982	$	—	$	44,982
U.S. government-sponsored agency securities		16,638		44,238		60,876
Commercial paper		9,881		—		9,881
Corporate debt securities		102,267		38,204		140,471
Total	$	173,768	$	82,442	$	256,210

The following table shows the fair value of the Company’s investments, by contractual maturity, as of December 31, 2025 (in thousands):


	As of December 31, 2025
	Due within one year		Due after one year through five years		Total
Contractual Maturities:
U.S. treasury securities	$	49,893	$	5,034	$	54,927
U.S. government-sponsored agency securities		10,045		51,270		61,315
Commercial paper		8,907		—		8,907
Corporate debt securities		60,659		61,912		122,571
Total	$	129,504	$	118,216	$	247,720

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

4. Fair Value Measurements

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine the fair value (in thousands):


	March 31, 2026
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	54,471	$	—	$	—	$	54,471
Current investments:
U.S. treasury securities		—		44,982		—		44,982
U.S. government-sponsored agency securities		17,939		42,937		—		60,876
Commercial paper		—		9,881		—		9,881
Corporate debt securities		131,518		8,953		—		140,471
Total	$	203,928	$	106,753	$	—	$	310,681


	December 31, 2025
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	87,989	$	—	$	—	$	87,989
Current investments:
U.S. treasury securities		—		54,927		—		54,927
U.S. government-sponsored agency securities		14,024		47,290		—		61,314
Commercial paper		—		8,907		—		8,907
Corporate debt securities		109,075		13,497		—		122,572
Total	$	211,088	$	124,621	$	—	$	335,709

As of March 31, 2026, cash equivalents consist of money market funds, which were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy.

Additionally, the Company has current investments including corporate debt securities, and certain U.S. government-sponsored agency securities, which represent a Level 1 measurement within the fair value hierarchy. Furthermore, the Company has commercial paper, U.S. treasury securities, and certain U.S. government-sponsored agency securities which were valued by the Company based on observable inputs, which represent a Level 2 measurement within the fair value hierarchy.

As of December 31, 2025, cash equivalents consist of money market funds, which were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. Additionally, the Company has current investments including corporate debt securities, and certain U.S. government-sponsored agency securities, which represent a Level 1 measurement within the fair value hierarchy. Furthermore, the Company has commercial paper, U.S. treasury securities, corporate debt securities and certain U.S. government-sponsored agency securities which were valued by the Company based on observable inputs, which represent a Level 2 measurement within the fair value hierarchy.

For the three months ended March 31, 2026, there were no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy.

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

5. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	March 31, 2026		December 31, 2025
Accrued research and development contract costs	$	11,389	$	3,323
Accrued employee compensation and benefits		2,746		4,729
Accrued professional and consulting		717		1,367
	$	14,852	$	9,419

6. Convertible Notes Payable

In July 2024, the Company entered into the Purchase Agreement with a series of investors, pursuant to which the Company issued the convertible notes (the “Convertible Notes”) with an initial principal amount of $80.0 million (of which $20.0 million is from Fairmount, a related party). In September 2024, the Company received an additional $15.0 million in gross proceeds from issuing additional Convertible Notes to additional investors. Under the terms of the Convertible Notes, the principal amount and all accrued interest of the Convertible Notes would automatically convert into the Company’s common stock, pre-funded warrants or preferred stock in connection with the closing of a Next Equity Financing or certain other events (e.g., a sale of substantially all Company assets, a merger, etc.). On April 28, 2025, this automatic conversion took place. The Convertible Notes accrued interest at a rate of 12.0% per annum, compounded annually. All unpaid interest and principal were scheduled to mature on December 31, 2026 (the “Maturity Date”). Prepayment was not permitted without prior written consent of the majority of the holders of the Convertible Notes. The principal payment along with the accrued interest on each Convertible Note was due in full on the Maturity Date.

In connection with the automatic conversion described above, the Convertible Notes were convertible into a number of shares of common stock equal to the quotient obtained by dividing the initial purchase price plus accrued and unpaid interest by the conversion price of the Convertible Notes, which is the product resulting from multiplying the price per share in the Next Equity Financing by 80% (“conversion price”).

The Convertible Notes were recorded at the fair value of $95.0 million on the respective issuance dates and were remeasured to the fair value of $107.6 million as of December 31, 2024. The Convertible Notes were remeasured immediately prior to the Closing with a fair value of $129.2 million. For the three months ended March 31, 2025, the change in fair value incurred was $15.4 million, which includes accrued interest of $2.8 million, and was recorded within other expense, net in the Company's condensed consolidated statement of operations and comprehensive loss. The Convertible Notes converted on April 28, 2025 and, as such, there was no change in fair value for the three months ended March 31, 2026.

Immediately prior to the effective time of the Merger, the Convertible Notes converted into shares of Pre-Merger Jade common stock and Pre-Merger Jade pre-funded warrants based on the aggregate principal amount of $95.0 million plus unpaid accrued interest divided by the conversion price in connection with the Pre-Closing Financing. As of March 31, 2026 and December 31, 2025, there were no Convertible Notes outstanding. At the effective time of the Merger, the Pre-Merger Jade shares and warrants issued upon conversion of the Convertible Notes (including accrued interest) automatically converted into 9,433,831 shares of Pre-Merger Jade common stock and 4,289,744 Pre-Merger Jade pre-funded warrants.

7. Convertible Preferred Stock and Stockholders' Equity

Pre-Funded Warrants

In April 2025, pursuant to the Subscription Agreement and immediately prior to the Closing, certain new and current investors purchased Pre-Merger Jade pre-funded warrants, which, at the effective time of the Merger, were exercisable for 7,766,247 shares of Pre-Merger Jade Common Stock, at a price of $0.0001 per share. At the Closing, the Pre-Merger Jade common stock and Pre-Merger Jade pre-funded warrants were converted into shares of the Company common stock and Company pre-funded warrants, respectively.

The pre-funded warrants were recorded as a component of stockholders’ equity within additional paid-in-capital and have no expiration date. As of March 31, 2026, 390,853 of the pre-funded warrants have been exercised and 7,375,394 pre-funded warrants remain outstanding.

In October 2025, in connection with a private placement, the Company issued and sold 1,402,092 pre-funded warrants, at a purchase price of $9.1399 per warrant, exercisable for 1,402,092 shares of the Company’s common stock at an exercise price of

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

$0.0001 per share. As of March 31, 2026, none of the pre-funded warrants have been exercised and 1,402,092 pre-funded warrants remain outstanding related to the October financing.

Convertible Preferred Stock

In June 2024, Pre-Merger Jade issued 20,000,000 shares of Series Seed Convertible Preferred Stock to a related party, Fairmount Healthcare Fund II L.P., an affiliate fund of Fairmount, at a purchase price of $0.0001 per share for gross proceeds of less than $0.1 million.

Upon the issuance of the Series Seed Convertible Preferred Stock, the Company assessed the embedded conversion and liquidation features of the securities as described below and determined that such features did not require the Company to separately account for these features as embedded derivatives.

In April 2025, upon the Closing, the Pre-Merger Jade Series Seed Convertible Preferred Stock was converted to 12,622 shares of Series A Preferred Stock.

As of March 31, 2026, Series A Preferred Stock consisted of the following (in thousands, except share amounts):


	March 31, 2026
	Preferred Stock Authorized		Preferred Stock Issued and Outstanding		Carrying Value		Common Stock Issuable Upon Conversion
Series A Preferred Stock		12,622		12,622	$	2		12,622,000
		12,622		12,622	$	2		12,622,000

Pursuant to the Certificate of Designation of Preferences, Rights and Limitations of the Series A Preferred Stock (the “Series A Certificate of Designation”) filed in connection with the Redomestication, holders of Series A Preferred Stock are entitled to receive dividends on shares of Series A Preferred Stock equal to, on an as-if-converted-to-Company common stock basis, and in the same form as, dividends actually paid on shares of Company common stock. Except as provided in the Series A Certificate of Designation or as otherwise required by law, the Series A Preferred Stock does not have voting rights. The Series A Preferred Stock shall rank on parity with the Company common stock as to the distribution of assets upon any liquidation, dissolution, or winding-up of the Company. Each share of Series A Preferred Stock is convertible at the option of the holder, at any time, and without the payment of additional consideration by the holder. As of March 31, 2026, each outstanding share of Series A Preferred Stock was convertible into common stock at a ratio of approximately 1:1,000.

Common Stock

As of March 31, 2026, the Company has the authority to issue a total of 300,000,000 shares of common stock at a par value of $0.0001 per share. As of March 31, 2026, 49,345,967 shares of common stock, including 307,142 restricted stock awards (“RSAs”), were issued and outstanding. Each share of common stock entitles the holder to one vote, together with the holders of Series A Preferred Stock, on all matters submitted to the stockholders for a vote. The holders of common stock are entitled to receive dividends, if any, as declared by the Company’s board of directors (the “Board of Directors”), subject to the preferential dividend rights of the holders of Series A Preferred Stock.

As of March 31, 2026, there were 35,357,823 shares of common stock reserved for issuance for the potential conversion of shares of Series A Preferred Stock into common stock, shares issuable under the exercise of pre-funded warrants, shares reserved under the 2025 Stock Plan (as defined below), shares reserved under the 2025 ESPP (as defined below), and shares reserved under the 2024 Stock Plan (as defined below).

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

8. Stock-Based Compensation

2024 Equity Incentive Plan

The Jade Biosciences, Inc. 2024 Equity Incentive Plan (“2024 Plan”) was adopted by the board of directors of Pre-Merger Jade on June 18, 2024. The 2024 Plan provided for Pre-Merger Jade to grant stock options, restricted stock awards and other stock-based awards to employees, officers, directors, consultants, and advisors. Stock options granted under the 2024 Plan generally vest over four years, subject to the participant’s continued service, and expire after ten years, although stock options have been granted with vesting terms of less than four years. As of March 31, 2026, there are no shares remaining for future grant under the 2024 Plan.

2025 Equity Incentive Plan

The Jade Biosciences, Inc. 2025 Stock Incentive Plan (“2025 Stock Plan”) was approved by the board of directors of Aerovate on February 19, 2025, and by Aerovate stockholders on April 16, 2025. The 2025 Stock Plan allows for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, other stock-based awards and incentive bonuses. The 2025 Stock Plan is administered by the Compensation Committee of the Board of Directors (the “Compensation Committee”) or another committee designated by the Board of Directors to administer the 2025 Stock Plan. Current employees, officers, non-employee directors, and other individual service providers of the Company and its subsidiaries are eligible to participate in the 2025 Stock Plan.

The initial share pool under the 2025 Stock Plan is 8,018,700 shares of Company common stock. The shares that may be issued under the 2025 Stock Plan will be automatically increased on January 1 of each year beginning in 2026 and ending with a final increase on January 1, 2035 in an amount equal to 5% of the diluted stock (including Company common stock, preferred stock and unexercised pre-funded warrants) on the preceding December 31, unless a lower, or no, increase is determined by the Compensation Committee. As of January 1, 2026, the Company's share pool increased by 3,535,788 shares. As of March 31, 2026, there are 6,255,862 shares remaining in the pool

2025 Employee Stock Purchase Plan

The Jade Biosciences, Inc. 2025 Employee Stock Purchase Plan (the “ESPP”) was approved by the board of directors of Aerovate on February 19, 2025, and by Aerovate stockholders on April 16, 2025. The ESPP became effective on April 28, 2025 at which time 526,241 shares were reserved for issuance under the ESPP. The shares that may be issued under the ESPP will be automatically increased on January 1 of each year beginning in 2026 and ending with a final increase on January 1, 2035 in an amount equal to the lesser of 1% of the diluted stock (including Company common stock, preferred stock and unexercised pre-funded warrants) on the preceding December 31, or 2,000,000, unless a lower, or no, increase is determined by the Compensation Committee. As of January 1, 2026, the Company's share pool increased by 707,157 shares. As of March 31, 2026, 49,290 shares have been issued under the ESPP.

2026 Employment Inducement Stock Incentive Plan

The Jade Biosciences, Inc. 2026 Employment Inducement Stock Incentive Plan (the “2026 Inducement Plan”) was approved by the Board of Directors on March 31, 2026. The 2026 Inducement Plan allows for the grant of non-qualified stock options, stock appreciation rights, RSAs, restricted stock units (“RSUs”), other shareholder-based awards and incentive bonuses. The 2026 Inducement Plan is administered by the Compensation Committee or another committee designated by the Board of Directors to administer the plan. The initial share pool under the 2026 Inducement Plan was 1,750,000 common shares, as of March 31, 2026, no shares had been granted under the 2026 Inducement Plan.

On April 22, 2026 the Board of Directors granted the Company’s Chief Medical Officer (the “CMO”), non-qualified stock options to purchase an aggregate of 500,000 shares of the Company’s common stock under the 2026 Inducement Plan. The option grant was granted as inducement material to the CMO’s entering into employment with Jade in accordance with Nasdaq Listing Rule 5635(c)(4).

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

Stock Option Valuation

The following table summarizes the weighted-average assumptions used in calculating the fair value of the awards during the three months ended March 31, 2026:


	Three Months Ended March 31, 2026
Expected volatility		95.17	%
Expected term (in years)		6.06
Risk-free interest rate		3.79	%
Expected dividend yield		—	%

Stock Options

The following table summarizes the stock option activity for the three months ended March 31, 2026:


	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
Balance as of December 31, 2025		9,736,078		$	5.91		9.1	$	92,693
Granted		2,957,066			14.79
Exercised		(29,680	)		1.53
Forfeited		(7,000	)		6.76
Outstanding at March 31, 2026		12,656,464		$	8.00		9.1	$	78,823
Options vested and exercisable as of March 31, 2026		2,440,507		$	5.01		8.8	$	21,988

The weighted average grant-date fair value of stock options granted for the three months ended March 31, 2026 was $11.62 per option. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had an exercise price lower than the fair value of the Company’s common stock. The aggregate intrinsic value of options exercised for the three months ended March 31, 2026 $0.4 million.

Restricted Stock Units

The Company’s RSUs have time-based vesting conditions only and vest over a four-year period, during which time all unvested shares are subject to forfeiture by the Company in the event the holder’s service with the Company voluntarily or involuntarily terminates. For RSUs, the estimated fair value is the fair market value of the underlying stock on the grant date.

The following table summarizes the RSU activity for the three months ended March 31, 2026:


	Number of RSUs		Weighted Average Grant Date Fair Value
Unvested balance as of December 31, 2025		—	$	—
Granted		497,354		14.81
Vested		—		—
Forfeited		—		—
Unvested balance as of March 31, 2026		497,354	$	14.81

Restricted Stock Awards

The Company’s RSAs have service-based vesting conditions only and vest over a four-year period, during which time all unvested shares are subject to forfeiture by the Company in the event the holder’s service with the Company voluntarily or involuntarily terminates.

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

The following table summarizes the RSA activity for the three months ended March 31, 2026:


	Number of RSAs			Weighted Average Grant Date Fair Value
Unvested balance as of December 31, 2025		339,473		$	—
Granted		—			—
Vested		(32,331	)		—
Forfeited		—			—
Unvested balance as of March 31, 2026		307,142		$	—

The fair value of restricted stock awards that vested during the three months ended March 31, 2026 was $0.5 million.

Parade Warrant Obligation

In July 2024, the Company entered into the Paragon Option Agreement (as defined below) with Paragon and Parade Biosciences Holding, LLC (“Parade”). Under the terms of the Paragon Option Agreement, Parade will be entitled to grants of warrants to purchase a number of shares equal to 1.00% of the then outstanding shares of the Company’s stock, on a fully diluted basis, on December 31, 2025 and December 31, 2026, at the fair market value determined by the Board of Directors (the “Parade Warrant Obligation”). The grant dates for the issuance of warrants are expected to be December 31, 2025 and December 31, 2026, as all terms of the award, including number of shares and exercise price, will be known by all parties. Parade’s research and discovery related activities has a service inception period for the grant preceding the grant date, with the full award being vested as of the grant date with no post-grant date service requirement. On December 31, 2025 Jade issued a warrant to purchase 804,519 shares of common stock to Parade, with an exercise price of $15.43. For the three months ended March 31, 2025, $1.0 million was recognized as stock-based compensation expense related to the Parade Warrant Obligation grant which occurred on December 31, 2025. The liability was reclassified to equity upon grant as of December 31, 2025.

The Company also expects to issue warrants, under the terms of the Paragon Option Agreement, on December 31, 2026. For the three months ended March 31, 2026, the Company recognized $2.7 million, as stock-based compensation expense related to the Parade Warrant Obligation. The warrants expected to be granted to Parade are liability-classified and after the initial recognition, the liability is adjusted to fair value at the end of each reporting period, with changes in fair value recorded in the consolidated statements of operations and comprehensive loss within research and development. The total fair value of the December 31, 2026 warrants is $10.7 million as of March 31, 2026. The remaining unrecognized compensation relating to the December 31, 2026 warrants is $8.0 million and is expected to be recognized over the remaining average term of 0.8 years.

The following table summarizes the assumptions used in calculating the fair value of the warrant obligation for the three months ended March 31, 2026:


	Three Months Ended March 31, 2026
Expected volatility		94.5	%
Expected term (in years)		10.0
Risk-free interest rate		4.3	%
Expected dividend yield		—	%

Stock-Based Compensation Expense

The following table summarizes the classification of the Company’s stock-based compensation expense in the condensed consolidated statement of operations and comprehensive loss (in thousands):


	Three Months Ended March 31, 2026		Three Months Ended March 31, 2025
Research and development	$	4,917	$	1,666
General and administrative		2,488		757
Total	$	7,405	$	2,423

As of March 31, 2026, total unrecognized compensation cost related to the unvested stock options was $65.5 million, which is expected to be recognized over a weighted average period of approximately 3.2 years. As of March 31, 2026, total unrecognized

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

compensation cost related to the unvested RSAs was less than less than $0.1 million, which is expected to be recognized over a weighted average period of 2.4 years.

As of March 31, 2026, total unrecognized compensation cost related to the unvested RSUs was $7.1 million, which is expected to be recognized over a weighted average period of 3.9 years.

The following table summarizes the stock-based compensation based on type of award for the three months ended March 31, 2026:


	Three Months Ended March 31, 2026		Three Months Ended March 31, 2025
Parade warrant obligation	$	2,667	$	965
Stock options		4,502		1,458
Restricted stock units		236		—
Total	$	7,405	$	2,423

9. Income Taxes

The Company records a provision or benefit for income taxes on pre-tax income or loss based on its estimated effective tax rate for the year. Given the Company’s uncertainty regarding future taxable income, the Company maintains a full valuation allowance on its domestic deferred tax assets. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business tax provisions. OBBBA did not have a material impact on the Company’s effective tax rate, financial condition, or results of operations in 2025 or for the three months ended March 31,2026. For the Jade Biosciences Canada ULC foreign subsidiary, the Company has computed a forecasted annual effective income tax rate for the year and applies this annual effective income tax rate to the year-to-date activity for the quarter. The Company has recorded a small year-to-date tax liability of less than $0.1 million related to the Jade Biosciences Canada ULC foreign subsidiary.

10. Significant Agreements

Paragon Option Agreement

In July 2024, the Company entered into an Antibody Discovery and Option Agreement with Paragon and Parade (the “Paragon Option Agreement”) for the selected target, APRIL, for the Company’s initial research program, JADE101. The Paragon Option Agreement was amended in September 2024 to add two additional targets for JADE201 and JADE301. Under the Paragon Option Agreement, Jade has the exclusive option (an “Option”), on a Research Program-by-Research Program (as defined below) basis, to enter into a separate agreement with Paragon consistent with a set of terms that are pre-negotiated and attached to the Paragon Option Agreement as an exhibit (a “License Agreement”). If the Company exercises an Option and finalizes the related license agreement, it will be required to make non-refundable milestone payments to Paragon of up to $12.0 million under such license agreement upon the achievement of certain clinical development milestones, up to $10.0 million under such license agreement upon the achievement of certain regulatory milestones, as well as tiered royalty payments in the low-to-mid single-digits beginning on the first commercial sale of each developed product. From time to time, the Company can choose to add additional targets to the Paragon Option Agreement by mutual agreement with Paragon.

Under the terms of the Paragon Option Agreement, Paragon agreed to perform certain research activities to discover, generate, identify, and characterize one or more antibody candidates directed to certain mutually agreed therapeutic targets of interest to Jade (each, a “Research Program”). The Option with respect to each Research Program is exercisable at Jade’s sole discretion at any time during the period beginning on the initiation of activities under the associated Research Program and ending a specified number of days following the delivery of the data package from Paragon related to the results of the Research Program (an “Option Period”). The Paragon Option Agreement requires Jade, Paragon, and Parade to develop a research plan for each target that includes design, modeling, synthesis, evaluation, and other mutually agreed activities (each, a “Research Plan”), which activities may include performing preclinical studies. Paragon will perform the activities set forth in each Research Plan on the timelines set forth in such Research Plan and in compliance with a mutually agreed budget. Each Research Program will be overseen and coordinated by a joint development committee consisting of two employees from Jade and two employees from Paragon, with Jade and Paragon each having one vote with respect to decisions of the committee. When Paragon and Parade have produced an antibody against a selected target,

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

and upon the completion of each Research Program, Paragon and Parade will deliver to Jade a data package that includes sequence information for all then-existing antibodies and information directed to such target. Jade, Paragon and Parade have developed a Research Plan for JADE101, JADE201, and JADE301 consistent with the foregoing, and Paragon and Parade have delivered the respective antibodies in accordance with the Research Plans.

Any License Agreement entered into with respect to a given Research Program is expected to be consistent with pre-negotiated terms attached to the Paragon Option Agreement and shall contain the same milestone payment obligations as the Paragon Option Agreement, provided that any milestone set in the Paragon Option Agreement that has not yet been achieved and is duplicated in such License Agreement shall no longer be achievable and payable under the terms of the Paragon Option Agreement and shall only be achievable under the terms of the License Agreement. For the avoidance of doubt, if a milestone is achieved and paid by Jade pursuant to the Paragon Option Agreement for a certain Research Program, then there shall be no milestone payment due for the achievement of such milestone under a subsequently executed License Agreement for such Research Program. Further, under a License Agreement, Jade would also be required to make royalty payments to Paragon in the low to mid-single-digit percentage range based on net sales of products, subject to certain reductions. The royalty term will terminate on a product-by-product and country-by-country basis upon the later of the expiration of the last-to-expire valid claim within the relevant patent rights or the twelfth anniversary of the first commercial sale of such product in such country.

Unless terminated earlier, the Paragon Option Agreement shall continue in force on a Research Program-by-Research Program basis until the later of: (i) the end of the Option Period for such Research Program, as applicable, if such Option is not exercised by the Company; (ii) if the Company exercises its Option with respect to a Research Program, but the parties are unable to finalize and execute a License Agreement within 30 days, the expiration of such 30-day period (subject to any mutually agreed extension of such period); and (iii) the expiration of the applicable Research Term (as defined under the Paragon Option Agreement). The Company may terminate the Paragon Option Agreement or any Research Program at any time for any or no reason upon 30 days’ prior written notice to Paragon, provided that the Company must pay certain unpaid fees due to Paragon upon such termination, as well as any non-cancellable obligations reasonably incurred by Paragon in connection with its activities under any terminated Research Program. Paragon may terminate the Paragon Option Agreement or a Research Program immediately upon written notice to the Company if, as a result of any action or failure to act by the Company or its affiliates, such Research Program or all material activities under the applicable Research Plan are suspended, discontinued or otherwise delayed for a certain consecutive number of months. Each party has the right to terminate the Paragon Option Agreement or any Research Program upon (i) 30 days’ prior written notice of the other party’s material breach that remains uncured for the 30-day period and (ii) the other party’s bankruptcy.

Under the Paragon Option Agreement, the Company is responsible for any additional development costs incurred by Paragon relating to APRIL. There were no development costs related to APRIL for the three months ended March 31, 2026. For the three months ended March 31, 2025, the development fees totaled $1.4 million, of which $1.3 million was recognized as research and development expense in the Company’s condensed consolidated statement of operations and comprehensive loss during the three months ended March 31, 2025. As of March 31, 2026, there were no amounts relating to APRIL remaining in related party accrued expenses and other current liabilities in the Company’s condensed consolidated balance sheet.

Additionally, the Company is responsible for any additional development costs incurred by Paragon relating to JADE201. There were no development costs related to JADE201 for the three months ended March 31, 2026. For the three months ended March 31, 2025 the development fees totaled $3.3 million and was recognized as research and development expense in the Company’s condensed consolidated statement of operations and comprehensive loss during the three months ended March 31, 2025. As of March 31, 2026, there were no amounts relating to JADE201 remaining in related party accrued expenses and other current liabilities in the Company’s condensed consolidated balance sheet.

Additionally, the Company is responsible for any additional development costs incurred by Paragon relating to JADE301, which totaled $0.8 million for the three months ended March 31, 2026, of which $0.6 million was recognized as research and development expense, and $0.7 million for the three months ended March 31, 2025 which was recognized as research and development expense. As of March 31, 2026, a total of $0.8 million related to JADE301 remains in related party accrued expenses and other current liabilities in the Company’s condensed consolidated balance sheet.

Additionally, as part of the Paragon Option Agreement, on each of December 31, 2025 and December 31, 2026, Jade will grant Parade warrants to purchase a number of shares equal to 1.00% of Jade’s outstanding capital stock as of the date of the grant on a fully-diluted basis, with an exercise price equal to the fair market value of the underlying shares of Jade common stock on each respective grant date. On December 31, 2025, Jade granted a warrant to purchase 804,519 shares of common stock to Parade which fulfilled the obligation for the 2025 warrant. Parade is an entity formed by Paragon as a vehicle to hold equity in Jade in order to share profits with certain employees of Paragon and will not perform any substantive role under the Paragon Option Agreement other than to receive such warrants.

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

In December 2025, Jade completed its selection of the JADE301 development candidate, and Jade recorded a $1.5 million milestone fee and recorded the accrual as research and development expense in the 2025 financial statements. This milestone fee was paid in January 2026.

JADE101 License Agreement

In October 2024, Jade entered into a License Agreement with Paragon (the “JADE101 License Agreement”), pursuant to which Paragon granted Jade a royalty-bearing, worldwide, exclusive and sublicensable license to use, make, sell, import, export and otherwise exploit certain monospecific antibodies and products targeting APRIL in the field of prophylaxis, palliation, treatment and diagnosis of human disease and disorders in all therapeutic areas (the “field”). Among other rights, Paragon specifically granted Jade a royalty-bearing, worldwide, exclusive and sublicensable license in the field to Paragon’s patents covering the antibodies generated under the APRIL Research Plan performed by Paragon under the Option Agreement, and their method of use and method of manufacture. Under the terms of the JADE101 License Agreement, Jade is obligated to pay Paragon up to $22.0 million based on specific development and regulatory milestones, including a $1.5 million fee for nomination of a development candidate, which was paid in December 2024, and a further milestone payment of $2.5 million upon the first dosing of a human participant in a Phase 1 trial, which was paid in September 2025. On a product-by-product basis, we are obligated to pay sublicensing fees of up to approximately $20.1 million, mainly upon the achievement of commercial milestones. Jade will pay Paragon a low to mid-single-digit percentage royalty based on annual net sales of the monospecific products in the field and a mid single-digit percentage royalty based on annual net sales of the multispecific products in the field and in the territory, subject to a 30% reduction if there is no valid patent covering the product in the country of sale. On a country-by-country basis, the royalty term for a product ends on the later of (i) the twelfth anniversary of the date of first sale of the product or (ii) the expiration of the last-to-expire valid patent covering the product in the country at issue.

Paragon will not conduct any new campaigns that generate APRIL monospecific antibodies in the field for at least five years. Jade and Paragon may pursue the development and commercialization of multispecific antibodies and products directed to APRIL in the field, and Jade has a right of first negotiation for any such multispecific antibodies and products proposed by Paragon for a period of five years from the execution of the JADE101 License Agreement. The JADE101 License Agreement may be terminated on 60 days’ notice by us; on material breach without cure; and to the extent permitted by law, on a party’s insolvency or bankruptcy.

No milestone payments under the JADE101 License Agreement were incurred or paid during each of the three months ended March 31, 2026 and 2025.

JADE201 License Agreement

In October 2025, Jade and Paragon entered into a License Agreement (the “JADE201 License Agreement”), pursuant to which Paragon granted the Company a royalty-bearing, worldwide, exclusive and sublicensable license to use, make, sell, import, export and otherwise exploit certain antibodies and products targeting BAFF-R in the field. Among other rights, Paragon specifically granted Jade a royalty-bearing, worldwide, exclusive and sublicensable license in the field to Paragon’s patents covering the antibodies generated under the BAFF-R Research Plan performed by Paragon under the Option Agreement, and their method of use and method of manufacture. Under the terms of the JADE201 License Agreement, Jade is obligated to pay Paragon up to $22.0 million based on specific development, regulatory and clinical milestones for Jade’s first monospecific product to reach such milestones, including a $1.5 million fee for nomination of a development candidate, which was paid in April 2025, and a further milestone payment of $2.5 million upon the first dosing of a human participant in a Phase 1 trial. Jade will pay Paragon a low to mid-single-digit percentage royalty based on annual net sales of monospecific products in the field, subject to a 30% reduction if there is no valid patent covering the product in the country of sale. On a country-by-country basis, the royalty term for a monospecific product ends on the later of (i) the twelfth anniversary of the date of first sale of the monospecific product or (ii) the expiration of the last-to-expire valid patent covering the monospecific product in the country at issue.

Paragon will not conduct any new campaigns that generate anti-BAFF-R monospecific antibodies in the field for at least 5 years. Paragon may pursue the development and commercialization of multispecific antibodies and products directed at the BAFF-R target in the field, subject to certain rights held by Jade, and Jade has a right of first negotiation for any such multispecific antibodies and products proposed by Paragon for a period of five years from the execution of the JADE201 License Agreement. Jade is obligated to pay Paragon up to $24.0 million based on specific development, regulatory and clinical milestones for each Jade multispecific product to reach such milestones and will pay Paragon a mid-single-digit percentage royalty based on annual net sales of all Jade multispecific products in the field, subject to a 30% reduction if there is no valid patent covering the product in the country of sale. On a country-by-country basis, the royalty term for a multispecific product ends on the later of (i) the twelfth anniversary of the date of first sale of the multispecific product or (ii) the expiration of the last-to-expire valid patent covering the multispecific product in the country at issue. The JADE201 License Agreement may be terminated on 60 days’ notice by Jade; on material breach without cure; and to the extent permitted by law, on a party’s insolvency or bankruptcy.

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

In March 2025, Jade completed its selection of its development candidate for the JADE201 program, and Jade paid Paragon the related $1.5 million monospecific milestone payment and recorded the payment as research and development expense. In January 2026, Jade paid Paragon a $1.0 million non-refundable, non-creditable fee (the “Reservation Fee”) to obtain exclusive rights to develop a bispecific antibody directed to a specific target combination for a period of five years. The Reservation Fee was recorded as research and development expense in the three months ending March 31, 2026.

Cell Line License Agreement

On February 3, 2025, the Company entered into an amended and restated cell line license agreement (the “Cell Line License Agreement”) with WuXi Biologics Ireland Limited (“WuXi Biologics Ireland”). Under the Cell Line License Agreement, the Company received a non-exclusive, worldwide, sublicensable license to certain of WuXi Biologics Ireland’s patent rights, know-how, cell line, biological materials and media and feeds to develop, manufacture, have manufactured, make, have made, import, sell, keep, commercialize and otherwise deal in, use and exploit certain therapeutic products produced through the use of the cell lines licensed by WuXi Biologics Ireland under the Cell Line License Agreement (the “WuXi Biologics Ireland Licensed Products”). JADE101 is, and Jade anticipates that JADE201 and JADE301 will be, manufactured using a cell line licensed under the Cell Line License Agreement.

In consideration for the license, the Company incurred a non-refundable license fee of $0.2 million in November 2024, which was recorded as research and development expense. Additionally, in June 2025 the Company incurred a non-refundable license fee of $0.1 million, which was recorded as research and development expense. Additionally, if the Company manufactures all of its commercial supplies of bulk drug product for a particular product with a manufacturer other than WuXi Biologics Ireland or its affiliates, it is required to make royalty payments to WuXi Biologics Ireland in an amount equal to a fraction of a single digit percentage of global net sales of the WuXi Biologics Ireland Licensed Products manufactured by a third-party manufacturer (the “Royalty”). If the Company manufactures part of its commercial supplies of the WuXi Biologics Ireland Licensed Products with WuXi Biologics Ireland or its affiliates, then the Royalty will be reduced accordingly on a pro rata basis. The Company has the option, at any time, to pay WuXi Biologics Ireland a non-refundable lump-sum royalty buyout payment on a drug product-by-drug product basis to extinguish future Royalty obligations with respect to such drug product.

The Cell Line License Agreement will continue indefinitely unless terminated (i) by the Company upon six months’ prior written notice and its payment of all undisputed amounts due to WuXi Biologics Ireland through the effective date of termination, (ii) by either party for a material breach by the other party that remains uncured for 60 days after written notice, (iii) by WuXi Biologics Ireland if the Company fails to make a payment and such failure continues for 30 days after receiving notice of such failure, or (iv) by either party upon the other party’s bankruptcy.

11. Leases

In February 2025, the Company entered into a noncancelable operating lease agreement for office space located in Vancouver, Canada. The lease commencement date was March 1, 2025, with an initial term of 67 months. The rent commencement date is October 1, 2025. The total lease payment is expected to be approximately $1.2 million of principal payments plus $0.4 million of interest payments over the initial lease term. Payments for rent are made in Canadian dollars and therefore subject to foreign exchange impact. Lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate when measuring operating lease liabilities as discount rates were not implicit or readily determinable.

As of March 31, 2026, the Company had $0.7 million of operating lease ROU asset and long-term lease liability of $0.7 million on its condensed consolidated balance sheets. As of March 31, 2026, the operating lease arrangement had a remaining lease term of 4.5 years and an internal borrowing rate of return of 14.24%. For each of the three months ended March 31, 2026 and 2025, the Company recorded operating lease expense of less than $0.1 million, respectively, in general and administrative expenses in its condensed consolidated statements of operations and comprehensive loss.

As of March 31, 2026, the total remaining operating lease payments included in the measurement of lease liabilities was as follows (in thousands):

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)


Period ended December 31,
remaining 9 months in 2026		170
2027		231
2028		236
2029		240
2030		183
Total maturities	$	1,060
Less: Imputed interest		(252	)
Total present value of operating lease liability	$	808

12. Commitments and Contingencies

401(k) Plan

The Company maintains a defined-contribution plan under Section 401(k) of the Internal Revenue Code of 1986 (the “401(k) Plan”). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Matching contributions to the 401(k) Plan may be made at the discretion of management. For the three months ended March 31, 2026 the Company recorded an expense related to 401(k) match contributions of $0.2 million and none for the three months ended March 31, 2025.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with each of its directors and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or executive officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any indemnification arrangements that could have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of March 31, 2026.

Legal Proceedings

From time to time, the Company may become involved in legal proceedings or other litigation relating to claims arising in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and estimated exposure amount. Legal fees and other costs associated with such proceedings are expensed as incurred. As of March 31, 2026, the Company was not a party to any material legal proceedings or claims.

13. Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders and Series A Preferred stockholders as of March 31, 2026 was calculated as follows (in thousands, except share and per share amounts):


	Three Months Ended March 31, 2026
	Loss Allocation			Weighted Average Shares Outstanding		Loss Per Share - Basic and Diluted
Common Stock	$	(33,130	)		57,777,165	$	(0.57	)
Series A Preferred Stock (1)		(7,238	)		12,622	$	(573.44	)
Net loss	$	(40,368	)

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

(1) The weighted average number of shares of as-converted Series A Preferred Stock used in the loss allocation was 12,622,000 for the three months ended March 31, 2026.

Basic and diluted net loss per share attributable to common stockholders as of March 31, 2025 was calculated as follows (in thousands, except share and per share amounts):


	Three Months Ended March 31, 2025
	Loss Allocation			Weighted Average Shares Outstanding		Loss Per Share - Basic and Diluted
Net Loss attributable to common stockholders	$	(38,169	)		3,155,500	$	(12.10	)

For the computation of basic net loss per share attributable to common stockholders, the amount of weighted-average common shares outstanding excludes all shares of unvested restricted common stock as such shares are not considered outstanding for accounting purposes until vested. The amount of weighted-average shares outstanding includes the pre-funded warrants as the exercise price is negligible and these warrants are fully vested and exercisable.

The Company’s potentially dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The potentially dilutive securities are as follows:


	Three Months Ended March 31, 2026		Three Months Ended March 31, 2025
Outstanding and unvested RSAs		307,142		819,672
Outstanding and issued common stock options		12,656,464		12,585,509
Series Seed convertible preferred stock (as converted)		—		20,000,000
Outstanding and unvested Restricted stock units		497,354		—
Outstanding and issued warrant to Parade		804,519		—
Total		14,265,479		33,405,181

14. Related Party Transactions

Paragon and Parade each beneficially own less than 5% of the Company’s share capital through their respective holdings of Company’s common stock.

Fairmount beneficially owns more than 5% of the Company’s capital, currently has two representatives appointed to the board of directors and beneficially owns more than 5% of Paragon.

The following is a summary of related party accounts payable and other current liabilities (in thousands):


	March 31, 2026		December 31, 2025
Reimbursable fees under the terms of the Paragon Option Agreement	$	580	$	4,942
Paragon reimbursable legal fees		214		27
	$	794	$	4,969

15. Segment Reporting

The Company has one reportable segment relating to the research and development of its programs, JADE101, JADE201, and JADE301. The Company’s chief operating decision maker (“CODM”), its Chief Executive Officer, manages the Company’s operations on a consolidated basis and uses consolidated net loss for the allocation of resources and the assessment of performance. Although the Company’s financial reporting package that is reviewed and approved by the CODM disaggregates significant expenses

JADE BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -— Continued

(unaudited)

such as program-level external research and development costs, personnel costs, including stock-based compensation expense, and professional and consulting fees, all decisions made by the CODM are based upon reviewing operating metrics and performance indicators at the Company-wide consolidated level and consolidated net loss. The CODM uses consolidated net loss to evaluate loss generated from the Company’s business activities in deciding how to allocate company resources and in monitoring budget versus actual results. Assets are also managed on a Company-wide consolidated basis.

The table below is a summary of the significant expenses categories regularly provided to the CODM (in thousands):


	Three Months Ended March 31, 2026		Three Months Ended March 31, 2025
Operating expenses:
JADE101 external research and development costs	$	15,423	$	9,767
JADE201 external research and development costs		2,877		5,154
JADE301 external research and development costs		5,922		733
Research and development personnel-related costs (including stock-based compensation)		10,648		3,952
Other research and development costs		1,183		417
General and administrative personnel-related costs (including stock-based compensation)		5,298		1,713
General and administrative professional, consulting, and other fees		2,094		1,648
Total operating expenses	$	43,445	$	23,384

16. Subsequent Events

On May 7, 2026, the Company entered into an Open Market Sale AgreementSM (the “Sales Agreement”), with Jefferies LLC (the “Sales Agent”), under which the Company may, from time to time, sell shares of its common stock having an aggregate offering price of up to $200.0 million in “at the market” offerings through the Sales Agent. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale or as otherwise agreed with the Sales Agent. The Sales Agent will receive a commission from the Company of up to 3.0% of the gross proceeds of any shares of common stock sold under the Sales Agreement. Sales of the Company’s common stock made pursuant to the Sales Agreement would be made under its shelf registration statement on Form S-3 which is expected to be filed with the SEC on May 7, 2026 and has not yet been declared effective by the SEC. The Company is not obligated to sell, and the Sales Agent is not obligated to buy or sell, any shares of the Company’s common stock under the Sales Agreement. To date the Company has not sold any shares under the Sales Agreement.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the related notes included in Part 1 - Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 (this “Quarterly Report”). The following discussion contains forward-looking statements that reflect our current plans, estimates and beliefs and involve risks and uncertainties. Words such as “may,” “might,” “will,” “would,” “shall,” “objective,” “intend,” “target,” “should,” “could,” “can,” expect,” “anticipate,” “believe,” “design,” “estimate,” “forecast,” “predict,” “potential,” “plan,” “seek,” or “continue” and variations of such words and any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, and similar expressions are intended to identify forward-looking statements. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Our actual results and the timing of events could differ materially from those discussed in the forward-looking statements as a result of various factors. Factors that could cause or contribute to these differences include, but are not limited to, those discussed in the section of this Quarterly Report titled “Risk Factors” and elsewhere in this Quarterly Report. These and many other factors could affect our future financial and operating results. We undertake no obligation to update any forward-looking statement to reflect events after the date of this Quarterly Report. As used in this Quarterly Report, unless the context suggests otherwise, “we,” “us,” “our,” “the Company,” or “Jade,” refer to Jade Biosciences, Inc. and its consolidated subsidiaries, taken as a whole.

Overview

We are a clinical-stage biopharmaceutical company developing novel biologic therapies for patients living with autoimmune diseases. Our goal is to improve meaningfully upon the existing treatment paradigm through the delivery of improved dosing and convenience, a comparable safety profile, and potentially increased clinical activity. Our approach is to discover and efficiently develop biologics that address emerging targets supported by third-party clinical data and that overcome shortcomings of existing product candidates in development, such as potency, bioavailability, formulation, and pharmacokinetic properties.

Our lead product candidate, JADE101, is a monoclonal antibody (“mAb”) targeting a cytokine called “A PRoliferation Inducing Ligand” (“APRIL”) that modulates plasma cell survival and immunoglobulin production, which we plan to initially develop for the treatment of IgA nephropathy (“IgAN”). We initiated a Phase 1 clinical trial of JADE101 in healthy volunteers in New Zealand in August 2025. We expect interim data, including mechanistic biomarker data, in the second quarter of 2026. We plan to initiate an open-label Phase 2 clinical trial in IgAN patients in the second quarter of 2026, with interim data expected in 2027. Our second product candidate is JADE201, a mAb targeting B cell activating factor receptor (“BAFF-R”) for the treatment of multiple autoimmune disorders. We plan to initiate a Phase 1 clinical trial evaluating JADE201 in patients with rheumatoid arthritis in the second quarter of 2026, and we expect interim data in 2027. Our third product candidate is JADE301, targeting an undisclosed pathway. We expect to initiate a Phase 1 clinical trial for JADE301 in the first half of 2027.

Since our inception, we have devoted substantially all of our resources to raising capital, organizing and staffing the company, business and scientific planning, conducting discovery and research activities, establishing arrangements with third parties, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales. To date, we have funded our operations primarily with proceeds from the issuance of convertible notes (“Convertible Notes”), from which we received gross proceeds of $80.0 million in July 2024 and $15.0 million in September 2024, $205.0 million in gross proceeds from the Pre-Closing Financing (as defined and described in “—Corporate Transactions—Pre-Closing Financing” below), approximately $135.0 million in gross proceeds from a private placement in October 2025, (the “October 2025 PIPE”) and $45.0 million in gross proceeds from a private placement in December 2025 (the “December 2025 PIPE”) (as described in “—Liquidity and Capital Resources—Sources of Liquidity” below).

We have incurred operating losses since inception. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of JADE101, JADE201, JADE301, and any future product candidates we may develop. We have generated net losses of $40.4 million for the three months ended March 31, 2026. As of March 31, 2026, we had an accumulated deficit of $214.8 million. For the three months ended March 31, 2026, we used net cash of $24.1 million for our operating activities. We expect to continue to incur significantly increased expenses for the foreseeable future if and as we continue our development of, seek regulatory approval for and potentially commercialize any of our product candidates.

We will not generate revenue from product sales unless and until we successfully initiate and complete clinical development and obtain regulatory approval for any product candidates. If we obtain regulatory approval for any of our product candidates and do not enter into a commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, manufacturing, marketing, and distribution.

As a result of all the foregoing, we expect to need substantial additional funding to support our continued operations and growth strategy. Until such a time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. We may be unable to raise additional funds or enter into such other agreements on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our programs.

Because of the numerous risks associated with product development, we are unable to accurately predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of March 31, 2026, we had cash and cash equivalents, and investments of $311.3 million. We expect that our existing cash and cash equivalents, and investments, will be sufficient to fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance date of our unaudited condensed consolidated financial statements for the period ended March 31, 2026.

Corporate Transactions

The Merger

On April 28, 2025, we consummated the previously announced transaction (the “Closing”) pursuant to that certain Agreement and Plan of Merger, dated as of October 30, 2024 (the “Merger Agreement”), by and among Jade Biosciences, Inc., a private Delaware corporation (“Pre-Merger Jade”), Aerovate Therapeutics, Inc., a Delaware corporation (“Aerovate”), Caribbean Merger Sub I, Inc., a Delaware corporation and wholly-owned subsidiary of Aerovate (“First Merger Sub”), and Caribbean Merger Sub II, LLC, a Delaware limited liability company and wholly-owned subsidiary of Aerovate (“Second Merger Sub”). As part of the Closing, First Merger Sub merged with and into Pre-Merger Jade, with Pre-Merger Jade continuing as a wholly owned subsidiary of Aerovate and the surviving corporation of the merger (the “First Merger” and such time, the “First Effective Time”), and Pre-Merger Jade merged with and into Second Merger Sub, with Second Merger Sub being the surviving entity of the merger (the “Second Merger” and, together with the First Merger, the “Merger”). In connection with the Merger, Second Merger Sub changed its name to “Jade Biosciences, LLC” and Aerovate changed its name to “Jade Biosciences, Inc.” Subsequently, Jade Biosciences, LLC merged with and into Jade Biosciences, Inc. We are led by Pre-Merger Jade’s management team and focus on developing differentiated biologic therapies for patients living with autoimmune diseases.

Following the Reverse Stock Split (as defined below), which occurred immediately prior to the Closing of the Merger, and as a result of and upon the First Effective Time, (i) each then-outstanding share of common stock, par value $0.0001 per share, of Pre-Merger Jade (the “Pre-Merger Jade common stock”) (including shares of Pre-Merger Jade common stock issued in connection with the Pre-Closing Financing) immediately prior to the First Effective Time (excluding shares cancelled pursuant to the Merger Agreement and excluding dissenting shares) automatically converted into the right to receive a number of shares of common stock, par value $0.0001, of Aerovate (the “Company common stock” and prior to the effective time of the Merger, the “Aerovate common stock”) equal to an exchange ratio determined in accordance with the Merger Agreement (the “Exchange Ratio”), (ii) each then-outstanding share of Series Seed Convertible Preferred Stock, par value $0.0001 per share, of Pre-Merger Jade immediately prior to the First Effective Time (excluding shares cancelled pursuant to the Merger Agreement and excluding dissenting shares) automatically converted into the right to receive a number of shares of Series A Non-Voting Convertible Preferred Stock, par value $0.0001 per share, of Aerovate, which are each convertible into 1,000 shares of Company common stock, equal to the Exchange Ratio divided by 1,000, (iii) each then-outstanding option to purchase Pre-Merger Jade common stock was assumed by Aerovate and was converted into an option to purchase shares of Company common stock, subject to adjustment as set forth in the Merger Agreement, and (iv) each then-outstanding pre-funded warrant to purchase shares of Pre-Merger Jade common stock (including any pre-funded warrants to purchase shares of Pre-Merger Jade common stock issued in the Pre-Closing Financing) was converted into a pre-funded warrant to purchase shares of Company common stock (subject to adjustment as set forth in the Merger Agreement and the form of pre-funded warrant).

The Exchange Ratio was calculated using a formula intended to allocate existing Aerovate and Pre-Merger Jade security holders a percentage of the Company. Based on Aerovate’s and Pre-Merger Jade’s values as of the date of the Merger Agreement and capitalization as of April 28, 2025, the Exchange Ratio (as adjusted for the Reverse Stock Split (as defined below)) was 0.6311 shares of Aerovate common stock for each share of Pre-Merger Jade common stock.

Pre-Merger Jade designated a majority of the initial members of the board of directors of the combined company; and (iv) Pre-Merger Jade’s executive management team became the management team of the combined company. Accordingly, for accounting purposes: (i) the Merger was treated as the equivalent of Pre-Merger Jade issuing stock to acquire the net assets of Aerovate, and (ii) the reported historical operating results of the combined company prior to the Merger are those of Pre-Merger Jade. Additional information regarding the Merger is included in Note 1 to the condensed consolidated financial statements included in Part I – Item 1 of this Quarterly Report.

Pre-Closing Financing

In connection with the Merger, Pre-Merger Jade entered into a subscription agreement with certain new and existing investors of Pre-Merger Jade, in order to provide Jade with additional capital for its development programs, pursuant to which Pre-Merger Jade issued and sold, and certain new and existing investors purchased, 43,947,116 shares of common stock of Pre-Merger Jade (“Pre-Merger Jade common stock”) and 12,305,898 pre-funded warrants, exercisable for 12,305,898 shares of Pre-Merger Jade common stock (“Pre-Merger Jade pre-funded warrants”), at a purchase price of $5.9407 per share or a purchase price of $5.9406 per pre-funded warrant, for an aggregate amount of $334.2 million, which included $95.0 million of proceeds previously received from the issuance of Convertible Notes (as defined herein) and accrued interest of $8.3 million on such Convertible Notes and the conversion of the Convertible Notes into shares of Pre-Merger Jade pre-funded warrants (the “Pre-Closing Financing”).

Under the Merger Agreement, these shares of Pre-Merger Jade common stock and Pre-Merger Jade pre-funded warrants were converted into shares of Company common stock and pre-funded warrants to purchase Company common stock in accordance with the Exchange Ratio.

Reverse Stock Split

Immediately prior to the consummation of the Merger, Aerovate effected a 1-for-35 reverse stock split of Aerovate common stock, which became legally effective on April 28, 2025 (the “Reverse Stock Split”). The Company common stock commenced trading on a post-Reverse Stock Split, post-Merger basis at the open of trading on April 29, 2025. All references to common stock, options to purchase common stock, outstanding common stock warrants, common stock share data, per share data, and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented, unless otherwise specifically indicated or the context otherwise requires.

Redomestication

On April 28, 2025, we changed our jurisdiction of incorporation from the State of Delaware to the State of Nevada (the “Redomestication”) pursuant to a plan of conversion. The Redomestication became effective on April 28, 2025.

The common stock of the Nevada Corporation resulting from the Redomestication continues to be traded on The Nasdaq Capital Market (“Nasdaq”) under the symbol “JBIO.” The Redomestication did not cause any interruption in the trading of such common stock.

Components of Results of Operations

Operating Expenses

Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.

Research and Development

Research and development expenses consist primarily of costs incurred in connection with the research and development of our programs. These expenses include:

•

external research and development expenses incurred under agreements with third parties that conduct research and development activities on our behalf, including services rendered under the Antibody Discovery and Option Agreement (the “Paragon Option Agreement”) with Paragon Therapeutics, Inc. (“Paragon”) and Parade Biosciences Holding, LLC (“Parade”), with respect to JADE101 for the selected target APRIL, JADE201 for the selected target BAFF-R and our JADE301 program, which has a currently undisclosed target;

•

external expenses incurred under agreements with third parties, contract research organizations (“CROs”), as well as investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development services, costs related to compliance with quality and regulatory requirements, costs of laboratory supplies and acquiring and developing preclinical and clinical trial materials, including expenses associated with our third-party manufacturers; and

•

personnel-related expenses, including recruiting costs, salaries, bonuses, benefits and equity-based compensation expense.

We expense research and development costs as incurred. For the three months ended March 31, 2026, we recognized $4.3 million of expenses, in connection with services provided by Paragon under the Paragon Option Agreement and the JADE101 License Agreement as well as the Parade warrants in our condensed consolidated statement of operations and comprehensive loss compared to $7.8 million for the three months ended March 31, 2025. We track direct costs on a program specific basis. Indirect internal costs are applied broadly across multiple programs rather than to any single program, and as such, are not separately classified.

Research and development activities are central to our business model. We expect that our research and development expenses will increase significantly for the foreseeable future as we continue to identify and develop product candidates, particularly as more of our product candidates move into clinical development and later stages of clinical development. The successful development of any of our product candidates or product candidates we may develop in the future is highly uncertain. Preclinical and clinical development timelines, the probability of success and total development costs can differ materially from expectations. We anticipate that we will make determinations as to which product candidates and indications to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments, and our ongoing assessments as to each product candidate’s commercial potential. Therefore, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development and commercialization of any of our product candidates. This is due to the numerous risks and uncertainties associated with developing product candidates, many of which are outside of our control. We may never succeed in obtaining regulatory approval for any of our product candidates.

Our future research and development expenses may vary significantly based on a wide variety of factors such as:

•

the number and scope, rate of progress, expense and results of preclinical activities and clinical trials;

•

per participant trial costs;

•

the number of trials required for approval;

•

the number of sites included in the trials;

•

the countries in which the trials are conducted;

•

the length of time required to enroll eligible participants;

•

the number participants; that participate in the trials;

•

the number of doses that participants; receive;

•

the drop-out or discontinuation rates of participants;

•

the potential additional safety monitoring requested by regulatory agencies;

•

the duration of subject participation in the trials and follow-up;

•

the cost and timing of manufacturing our product candidates;

•

the phase of development of our candidates;

•

the extent of changes in government regulation and regulatory guidance;

•

the efficacy and safety profile of our product candidates;

•

the timing, receipt, and terms of any approvals from applicable regulatory authorities; and

•

the extent to which we establish collaboration, license, or other arrangements.

A change in the outcome of any of these variables with respect to development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate.

General and Administrative

General and administrative expenses consist primarily of personnel-related expenses, including recruiting costs, salaries, bonuses, benefits, and equity-based compensation, for individuals in our executive, finance, operations, human resources, legal, business development and other administrative functions. Other significant general and administrative expenses include legal fees relating to corporate matters and patent-related activities, insurance costs, information technology, and professional and consulting fees associated with accounting, audit, tax and investor and public relations.

We expect that our general and administrative expenses will increase substantially for the foreseeable future as we increase our headcount to support our expected growth. We also incurred and expect to continue to incur increased expenses associated with becoming a public company, including increased costs of accounting, audit, legal, regulatory and tax related services associated with

maintaining compliance with SEC requirements, additional director and officer insurance costs, and investor and public relations costs. We also expect to incur additional intellectual property-related expenses as we file patent applications to protect innovations arising from our research and development activities.

Other Income (Expense)

Other income primarily relates to interest income. Change in fair value of convertible notes payable relates to the fair value adjustment related to our Convertible Notes.

Income Taxes

We have recorded a full valuation allowance against our domestic net deferred tax assets at each balance sheet date, as we believe it is more likely than not that the benefit won't be realized due to our cumulative losses generated to date and expectation of future losses.

Results of Operations for the Three Months ended March 31, 2026 and March 31, 2025:

The following table summarizes our interim condensed consolidated statement of operations and comprehensive loss for the periods presented (in thousands):


	Three Months Ended March 31, 2026			Three Months Ended March 31, 2025			Change
Operating expenses
Research and development(1)	$	36,053		$	20,023		$	16,030
General and administrative(2)		7,392			3,361			4,031
Total operating expenses		43,445			23,384			20,061
Loss from operations		(43,445	)		(23,384	)		(20,061	)
Other income (expense):
Interest income		3,102			615			2,487
Change in fair value of convertible notes payable(3)		—			(15,400	)		15,400
Other expense		(9	)		—			(9	)
Total other income (expense), net		3,093			(14,785	)		17,878
Net loss before income tax expense		(40,352	)		(38,169	)		(2,183	)
Income tax expense		(16	)		—			(16	)
Net loss	$	(40,368	)	$	(38,169	)	$	(2,199	)

(1) Includes related party amounts of $4.3 million for the three months ended March 31, 2026 and $7.8 million for the three months ended March 31, 2025.

(2) Includes related party amounts of $0.2 million for the three months ended March 31, 2026 and $0.1 million for the three months ended March 31, 2025.

(3) Includes no related party amounts for the three months ended March 31, 2026 and $3.3 million for the three months ended March 31, 2025.

Research and Development Expenses

The following table summarizes our research and development expenses incurred for the periods presented (in thousands):


	Three Months Ended March 31, 2026		Three Months Ended March 31, 2025		Change
External research and development costs:
JADE101(1)	$	15,423	$	9,767	$	5,656
JADE201(2)		2,877		5,154		(2,277	)
JADE301(3)		5,922		733		5,189
Other research and development costs:
Personnel-related (including stock-based compensation)(4)		10,648		3,952		6,696
Other (including general allocated shared costs, licenses, insurance and regulatory)		1,183		417		766
Total research and development expenses	$	36,053	$	20,023	$	16,030

(1)

Includes no related party amounts for the three months ended March 31, 2026 and $1.3 million for the three months ended March 31, 2025.

(2)

Includes related party amounts of $1.0 million for the three months ended March 31, 2026 and $4.8 million for the three months ended March 31, 2025.

(3)

Includes related party amounts of $0.6 million for the three months ended March 31, 2026 and $0.7 million for the three months ended March 31, 2025.

(4)

Includes related party amounts of $2.7 million for the three months ended March 31, 2026 and $1.0 million for the three months ended March 31, 2025.

Research and development expenses were $36.1 million for the three months ended March 31, 2026 and consisted primarily of the following:

•

$15.4 million in JADE101 costs including $12.5 million related to chemistry, manufacturing and controls, $1.8 million related to costs incurred in the early stages of our clinical trials, and $1.1 million additional general research and development costs related to JADE101;

•

$2.9 million in JADE201 costs including $1.0 million of research and development expense related to a non-refundable, non-creditable fee (the “Reservation Fee”) paid to Paragon to obtain exclusive rights to develop a bispecific antibody directed to a specific target combination for JADE201, $0.7 million in early clinical spend, $0.5 million in toxicology studies, and $0.7 million in other general research and development costs;

•

$5.9 million in JADE301 costs including $4.8 million in chemistry, manufacturing and controls, $0.6 million under the Paragon option agreement, $0.5 million in toxicology studies and less than $0.1 million in other research and development;

•

$8.0 million of personnel-related costs related to recruiting costs, salaries, benefits, and other compensation-related costs, of which $2.2 million related to stock-based compensation expense, and an additional $2.7 million related to stock-based compensation expense related to the pre-funded warrants issuable to Parade under the Paragon Option Agreement (the “Parade Warrants”); and

•

$1.2 million of other research and development expenses.

Research and development expenses were $20.0 million for the three months ended March 31, 2025 and consisted primarily of the following:

•

$1.3 million of research and development expense related to services rendered by Paragon under the Paragon Option Agreement for JADE101 and the License Agreement for JADE101;

•

$4.8 million of research and development expense related to services rendered by Paragon under the Paragon Option Agreement for JADE201 including $1.5 million for achievement of the nomination of a development candidate milestone;

•

$0.7 million of research and development expense related to services rendered by Paragon under the Paragon Option Agreement for JADE301;

•

$4.0 million of personnel-related costs related to recruiting costs, salaries, benefits, and other compensation-related costs, of which $0.7 million related to stock-based compensation expense, and $1.0 million related to stock-based compensation expense related to the Parade Warrants (as defined below);

•

$5.7 million of chemistry, manufacturing and controls related costs to manufacture our raw materials and for developing drug product for our future clinical trial;

•

$3.0 million related to toxicology studies; and

•

$0.5 million of other research and development expenses.

General and Administrative Expenses

The following table summarizes our total general and administrative expenses for the periods presented (in thousands):


	Three Months Ended March 31, 2026		Three Months Ended March 31, 2025		Change
Professional, consulting and other fees(1)	$	2,094	$	1,648	$	446
Personnel-related (including stock-based compensation)		5,298		1,713		3,585
Total general and administrative expenses	$	7,392

Jade Biosciences, Inc. 10-Q