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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended 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: 001-40971

AURA BIOSCIENCES, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	32-0271970
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
80 Guest Street Boston, MA	02135
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 500-8864

(Former Name or Former Address, if Changed Since Last Report)

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 $0.00001 per share

     AURA

     Nasdaq Global Market LLC

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

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

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


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

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

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

As of May 8, 2026, the Registrant had 103,386,558 shares of common stock, $0.00001 par value per share, outstanding.

Summary of the Material Risks Associated with Our Business

Our business is subject to numerous material and other risks and uncertainties that you should be aware of in evaluating our business. These risks are described more fully in Part II, “Item 1A—Risk Factors,” in this Quarterly Report on Form 10-Q and include, but are not limited to, the following:

•

We have incurred significant net losses since our inception and anticipate that we will continue to incur losses for the foreseeable future.

•

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish proprietary rights to our technologies or product candidates.

•

Our ability to generate revenue and achieve profitability depends significantly on our ability to achieve our objectives relating to the discovery, development, regulatory approval and commercialization of our product candidates.

•

We are heavily dependent on the success of belzupacap sarotalocan, or bel-sar, our only product candidate to date.

•

If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for bel-sar, we will not be able to commercialize, or will be delayed in commercializing, our product candidates, and our ability to generate revenue will be materially impaired.

•

We have initiated but not yet completed a pivotal clinical trial nor have we commercialized any pharmaceutical products, which may make it difficult to evaluate our future prospects.

•

If we fail to develop additional product candidates, or obtain additional indications of our first product candidate, our commercial opportunity could be limited.

•

The U.S. Food and Drug Administration’s agreement to a Special Protocol Assessment with respect to the study design of our global Phase 3 trial of bel-sar for the treatment of early choroidal melanoma does not guarantee any particular outcome from regulatory review, including ultimate approval, and may not lead to a successful review or approval process.

•

We rely on third parties to conduct our clinical trials and some aspects of our research and preclinical testing, and expect to continue to do so, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research or testing.

•

We currently rely on third-party contract development and manufacturing organizations, or CDMOs, for the production of clinical supply of bel-sar and may continue to rely on CDMOs for the production of commercial supply of bel-sar, if approved. This reliance on CDMOs increases the risk that we will not have sufficient quantities of such materials, product candidates, or any therapies that we may develop and commercialize, or that such supply will not be available to us at an acceptable cost, which could delay, prevent, or impair our development or commercialization efforts.

•

If bel-sar or any future product candidates do not achieve broad market acceptance, the revenue that we generate from their sales may be limited, and we may never become profitable.

•

If the market opportunity for bel-sar is smaller than we estimate or if any regulatory approval that we obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability will be adversely affected, possibly materially.

•

Our ability to compete may decline if we do not adequately protect our proprietary rights, and our proprietary rights do not necessarily address all potential threats to our competitive advantage.

•

If we lose key management personnel, or if we fail to recruit additional highly skilled personnel, our ability to pursue our business strategy will be impaired, could result in loss of markets or market share and could make us less competitive.

•

Artificial intelligence presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data.

•

Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.

•

Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant influence over matters subject to stockholder approval.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, “continue” or the negative of these terms or other comparable terminology. These statements are not guarantees of future results or performance and involve substantial risks and uncertainties. Forward-looking statements in this Quarterly Report include, but are not limited to, statements about:

•

the initiation, timing, progress, results and cost of our research and development programs and our current and future nonclinical, preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs;

•

our ability to efficiently develop our existing product candidates and discover new product candidates;

•

our ability to successfully manufacture our drug substances and product candidates for preclinical use, for clinical trials and on a larger scale for commercial use, if approved;

•

the ability and willingness of our third-party strategic collaborators to continue research and development and other activities relating to our development candidates and product candidates;

•

our ability to obtain funding for our operations necessary to complete further development and commercialization of our product candidates;

•

our ability to obtain and maintain regulatory approval of our product candidates;

•

our ability to commercialize our products, if approved;

•

the pricing and reimbursement of our product candidates, if approved;

•

the implementation of our business model, and strategic plans for our business and product candidates;

•

the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates;

•

estimates of our future expenses, revenues, capital requirements and our needs for additional financing;

•

the potential benefits of strategic collaboration agreements, our ability to enter into strategic collaborations or arrangements and our ability to attract collaborators with development, regulatory and commercialization expertise;

•

future agreements with third parties in connection with the commercialization of product candidates and any other approved product;

•

the size and growth potential of the markets for our product candidates and our ability to serve those markets;

•

our financial performance;

•

the rate and degree of market acceptance of our product candidates;

•

regulatory developments in the United States and foreign countries;

•

our ability to produce our products or product candidates with advantages in turnaround times or manufacturing cost;

•

the success of competing therapies that are or may become available;

•

our ability to attract and retain key scientific or management personnel;

•

the impact of laws and regulations;

•

developments relating to our competitors and our industry;

•

the effects of macroeconomic conditions, including rising interest rates, inflation, capital market disruptions, changes in governmental agencies, government shutdowns, international tariffs, trade protection measures, economic sanctions and economic slowdowns or recessions, on our business operations; and

•

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

Table of Contents


		Page

	SUMMARY OF RISKS	i

PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

PART II.	OTHER INFORMATION	30

Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
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	77
Item 6.	Exhibits	78
	Signatures	79

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Aura Biosciences, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share amounts)


	March 31, 2026			December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	84,793		$	59,515
Marketable securities		29,940			84,726
Prepaid expenses and other current assets		3,771			5,498
Total current assets		118,504			149,739
Restricted cash and deposits		768			768
Right-of-use assets - operating lease		15,416			15,828
Other long-term assets		517			471
Property and equipment, net		2,472			2,624
Total Assets	$	137,677		$	169,430
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		2,573			1,549
Short-term operating lease liability		3,267			3,243
Accrued expenses and other current liabilities		10,866			13,591
Total current liabilities		16,706			18,383
Long-term operating lease liability		13,724			14,134
Total Liabilities		30,430			32,517
Commitments and Contingencies (Note 12)
Stockholders’ Equity:
Common stock, $0.00001 par value, 150,000,000 authorized at March 31, 2026 and December 31, 2025, and 64,150,468 and 63,587,777 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively		—			—
Additional paid-in capital		621,557			617,433
Accumulated deficit		(514,103	)		(480,418	)
Accumulated other comprehensive loss		(207	)		(102	)
Total Stockholders’ Equity		107,247			136,913
Total Liabilities and Stockholders’ Equity	$	137,677		$	169,430

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

Aura Biosciences, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share data)


	Three Months Ended March 31,
	2026			2025
Operating Expenses:
Research and development	$	27,960		$	23,343
General and administrative		6,906			5,692
Total operating expenses		34,866			29,035
Total operating loss		(34,866	)		(29,035	)
Other income (expense):
Interest income, including amortization and accretion income		1,190			1,594
Other income (expense)		2			(24	)
Total other income		1,192			1,570
Loss before income taxes		(33,674	)		(27,465	)
Income tax provision, net		(11	)		(18	)
Net loss	$	(33,685	)	$	(27,483	)
Net loss per common share—basic and diluted	$	(0.50	)	$	(0.55	)
Weighted average common stock outstanding—basic and diluted		67,447,576			50,126,148
Comprehensive loss:
Net loss	$	(33,685	)	$	(27,483	)
Other comprehensive income (loss):
Unrealized loss on marketable securities		(78	)		(137	)
Currency translation adjustment		(27	)		(21	)
Total other comprehensive loss		(105	)		(158	)
Total comprehensive loss	$	(33,790	)	$	(27,641	)

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

Aura Biosciences, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(in thousands, except share data)


					Additional					Accumulated			Total
	Common Stock				Paid-In		Accumulated			Other Comprehensive			Stockholders’
	Shares		Amount		Capital		Deficit			Loss			Equity
Balance, December 31, 2025		63,587,777	$	—	$	617,433	$	(480,418	)	$	(102	)	$	136,913
Stock-based compensation expense		—		—		3,824		—			—			3,824
Employee Stock Purchase Plan issuance		24,214		—		121		—			—			121
Stock option exercises		12,733		—		56		—			—			56
Common stock warrant exercises		25,000		—		123		—			—			123
Vesting of restricted stock		500,744		—		—		—			—			—
Unrealized loss on marketable securities		—		—		—		—			(78	)		(78	)
Currency translation adjustment		—		—		—		—			(27	)		(27	)
Net loss		—		—		—		(33,685	)		—			(33,685	)
Balance, March 31, 2026		64,150,468	$	—	$	621,557	$	(514,103	)	$	(207	)	$	107,247

					Additional					Accumulated			Total
	Common Stock				Paid-In		Accumulated			Other Comprehensive			Stockholders’
	Shares		Amount		Capital		Deficit			Income			Equity
Balance, December 31, 2024		49,998,279	$	—	$	525,934	$	(374,227	)	$	263		$	151,970
Stock-based compensation expense		—		—		3,514		—			—			3,514
Employee Stock Purchase Plan issuance		15,263		—		96		—			—			96
Vesting of restricted stock		211,770		—		—		—			—			—
Unrealized loss on marketable securities		—		—		—		—			(137	)		(137	)
Currency translation adjustment		—		—		—		—			(21	)		(21	)
Other		—		—		27		—			—			27
Net loss		—		—		—		(27,483	)		—			(27,483	)
Balance, March 31, 2025		50,225,312	$	—	$	529,571	$	(401,710	)	$	105		$	127,966

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

Aura Biosciences, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Three Months Ended March 31,
	2026			2025
Cash flows from operating activities:
Net loss	$	(33,685	)	$	(27,483	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		274			291
Accretion income on marketable securities		(292	)		(501	)
Stock-based compensation expense		3,824			3,514
Other non-cash items		—			27
Non-cash lease expense		412			374
Changes in operating assets and liabilities:
Prepaid expenses and other assets		1,727			3,003
Other long-term assets		(46	)		518
Accounts payable		1,024			(298	)
Accrued expenses and other liabilities		(2,745	)		(2,475	)
Operating lease liabilities		(386	)		(325	)
Net cash used in operating activities		(29,893	)		(23,355	)
Cash flows from investing activities:
Purchases of property and equipment		(102	)		(187	)
Maturities of marketable securities		55,000			30,000
Net cash provided by investing activities		54,898			29,813
Cash flows from financing activities:
Proceeds from exercise of stock options		56			—
Proceeds from exercise of common stock warrants		123			—
Proceeds from ESPP purchases		121			96
Net cash provided by financing activities		300			96
Net increase in cash, cash equivalents and restricted cash		25,305			6,554
Effect of exchange rate changes on cash and cash equivalents		(27	)		(21	)
Cash, cash equivalents and restricted cash at beginning of period		60,283			32,461
Cash, cash equivalents and restricted cash at end of period	$	85,561		$	38,994
Supplemental disclosure of cash flow information:
Purchases of property and equipment in accounts payable and accrued expenses and other liabilities		20			—
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same such amounts shown in the unaudited condensed consolidated statements of cash flows (in thousands):
	March 31,
	2026			2025
Cash and cash equivalents, end of period	$	84,793		$	38,226
Long-term restricted cash, end of period		768			768
Cash, cash equivalents and restricted cash at end of period	$	85,561		$	38,994

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

Aura Biosciences, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Description of Business

Aura Biosciences, Inc., or the Company or Aura, is a clinical-stage biotechnology company developing precision therapies to treat solid tumors designed to preserve organ function. Within these unaudited condensed consolidated financial statements, unless the context otherwise requires, references to the Company or Aura refer to Aura Biosciences, Inc. and its subsidiaries on a consolidated basis. The Company’s proprietary platform is designed to enable the targeting of a broad range of solid tumors using Virus-Like Particles, or VLPs, that can be conjugated with drugs or loaded with nucleic acids to create Virus-Like Drug Conjugates, or VDCs. VDCs are a novel class of drugs with a dual mechanism of action that promote cancer cell death by both the delivery of the cytotoxic payload to generate acute necrosis and activation of a secondary immune mediated response. The Company’s initial focus is in ocular and urologic oncology, both areas of high unmet medical need where local targeted therapies may enable early intervention. The Company is evaluating the safety and efficacy of its lead candidate, bel-sar, as a potential vision-sparing therapy in its ongoing global Phase 3 CoMpass trial for the first-line treatment of adult patients with small choroidal melanoma and/or indeterminate lesions, or early choroidal melanoma. Bel-sar is also in clinical development in metastases to the choroid and bladder cancer and is being explored for cancers of the ocular surface. The Company envisions the potential for development of bel-sar in additional therapeutic areas. Aura’s headquarters are located in Boston, Massachusetts.

The Company’s operations to date have consisted primarily of conducting research and development and raising capital.

The Company is subject to risks common to companies in the biotechnology industry, including, but not limited to, the successful development and commercialization of products, fluctuations in operating results and financial risks, need for additional financing or alternative means of financial support or both to fund its current operating plan, protection of proprietary technology and patent risks, compliance with government regulations, dependence on key personnel, collaborative partners, contract development and manufacturing organizations and other third-parties, competition, customer demand, management of growth, and the effectiveness of marketing by the Company.

Liquidity

Through March 31, 2026, the Company has funded its operations primarily with proceeds from the initial and additional closings of its convertible preferred stock financings, and through its initial public offering, or IPO, follow-on offerings and at-the-market offerings, or ATM. In connection with the 2026 Follow-On Offering (as defined below), on May 5, 2026, the Company issued and sold (i) 46,099,650 shares of common stock, which includes 6,508,650 shares sold upon the underwriters’ exercise in full of their option to purchase additional shares of common stock on May 4, 2026, and (ii) in lieu of common stock to certain investors, pre-funded warrants to purchase an aggregate of up to 3,800,000 shares of its common stock, or the 2026 Follow-On Offering. Each such share of common stock was sold at a price to the public of $6.00 per share and each such pre-funded warrant was offered and sold at a price to the public of $5.99999 per pre-funded warrant. The Company received approximately $280.8 million in net proceeds from the 2026 Follow-On Offering, after deducting underwriting discounts and commissions and estimated offering expenses, of which approximately $39.0 million were used by the Company to repurchase 6,922,870 shares of common stock from Matrix Capital Management Master Fund, LP, or Matrix, at a price per share of $5.64, on May 7, 2026, or the Matrix Repurchase. The 2026 Follow-On Offering was made pursuant to the Company’s shelf registration statement on Form S-3, or the 2024 Shelf, filed with the SEC on March 27, 2024 in relation to the registration of up to an aggregate offering price of $350.0 million of common stock, preferred stock, debt securities, warrants and units or any combination thereof, which was declared effective on April 5, 2024, and a related registration statement pursuant to Rule 462(b), filed with the SEC and effective on May 4, 2026. On May 16, 2025, the Company issued and sold 11,735,565 shares of common stock, pre-funded warrants to purchase up to 3,571,435 shares of common stock, and accompanying warrants to purchase an aggregate of 3,826,750 shares of common stock, or the 2025 Follow-On Offering. The common stock and pre-funded warrants were sold in the 2025 Follow-On Offering in combination with an accompanying common stock warrant to purchase 0.25 of a share of common stock for each share of common stock or pre-funded warrant sold. Each such share of common stock was offered and sold together with an accompanying common stock warrant at a combined offering price of $4.90, and each such pre-funded warrant was offered and sold together with an accompanying common stock warrant at a combined offering price of $4.89999. The Company received approximately $69.9 million in net proceeds from the 2025 Follow-On Offering after deducting underwriting discounts and commissions and offering expenses. On November 9, 2023, the Company issued and sold 11,000,000 shares of common stock at a price to the public of $9.00 per share for aggregate gross proceeds of $99.0 million, or the 2023 Follow-On Offering. The Company received approximately $92.6 million in net proceeds from the 2023 Follow-On Offering after deducting underwriting discounts and commissions and offering expenses. On November 1, 2022, the Company filed a shelf registration statement on Form S-3, or the 2022 Shelf, with the SEC in relation to the registration of up to an aggregate offering price of $250.0 million of common stock, preferred stock, debt securities, warrants and units or any combination thereof. The Company also simultaneously entered into the Open Market Sale AgreementSM, or Sales Agreement, with Jefferies LLC, or the Sales Agent, to provide for the offering, issuance and sale by the Company of up to an aggregate of $75.0 million of common stock from time to time in the ATM under the 2022 Shelf and subject to the limitations thereof. In connection with the 2023 Follow-On Offering, on November 6, 2023, the Company delivered written notice to Jefferies that the Company was suspending and terminating the prospectus related to the shares issuable in the ATM pursuant to the terms of the Sales Agreement. On March 27, 2024, the Company filed the 2024 Shelf, which superseded the 2022 Shelf. The 2024 Shelf included a prospectus supplement to provide for offerings in the ATM under the Sales Agreement. The Company did not issue any shares of common stock during the three months ended March 31, 2026 under the ATM, and issued 1,055,362 shares of common stock at a weighted average price of $6.36 for aggregate gross proceeds of $6.7 million during the year ended December 31, 2025 under the ATM. In connection with the 2026 Follow-On Offering, on May 4, 2026, the Company delivered written notice to Jefferies that the Company was suspending and terminating the prospectus related to the shares issuable in the ATM pursuant to the terms of the Sales Agreement. As a result, the Company will not make any sales of its securities pursuant to the Sales Agreement, unless and until a new prospectus, prospectus supplement, or a new registration statement relating to the shares eligible to be sold in the ATM is filed. Other than the termination of the prospectus, the Sales Agreement remains in full force and effect.

As disclosed in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2025, events and conditions existed which raised substantial doubt about the Company’s ability to continue as a going concern, primarily due to recurring operating losses, negative cash flows from operations and liquidity constraints. Subsequent to year end, the Company completed the 2026 Follow-On Offering, raising approximately $241.8 million in net proceeds after completion of the Matrix Repurchase. Based on the successful execution of this financing, management has concluded that the events and conditions that previously raised substantial doubt have been alleviated. As of the issuance date of these unaudited condensed consolidated financial statements for the three months ended March 31, 2026, the Company expects that its cash and cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next 12 months. The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the Company’s financial position, results of operations, and cash flows. The financial data and other information disclosed in these notes related to the three months ended March 31, 2026 and 2025 are also unaudited. The unaudited condensed results of operations are not necessarily indicative of the operating results that may occur for the full fiscal year ending December 31, 2026. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the United States Securities and Exchange Commission, or the SEC. Management believes that the disclosures provided here are adequate to make the information presented not misleading when these unaudited condensed consolidated financial statements are read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2025, in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2026. There have been no changes to the Company’s significant accounting policies.

New 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. The standard requires the Company to provide further disaggregated information of relevant expense captions within its consolidated statements of operations, including employee compensation and depreciation, as well as the inclusion of other specific expenses, gains and losses required by existing U.S. GAAP. The standard is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The standard may be applied prospectively or retrospectively. While the standard will require additional disclosures related to certain expenses included in the consolidated statements of operations, the standard is not expected to have any impact on the Company’s consolidated operating results, financial condition or cash flows.

3. Fair Value of Assets and Liabilities

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


Description	March 31, 2026		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial assets
Cash equivalents:
Money market funds	$	84,194	$	84,194	$	—	$	—
Marketable securities:
U.S. Government agencies		29,940		—		29,940		—
Total financial assets	$	114,134	$	84,194	$	29,940	$	—


Description	December 31, 2025		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial assets
Cash equivalents:
Money market funds	$	58,688	$	58,688	$	—	$	—
Marketable securities:
U.S. Government agencies		84,726		—		84,726		—
Total financial assets	$	143,414	$	58,688	$	84,726	$	—

There were no transfers within the fair value hierarchy during the three months ended March 31, 2026.

4. Property and Equipment, Net

Property and equipment, net, consisted of the following (in thousands):


	March 31, 2026			December 31, 2025
Assets under construction	$	307		$	228
IT equipment		451			451
Leasehold improvements		471			471
Lab equipment		8,569			8,526
	$	9,798		$	9,676
Less—accumulated depreciation		(7,326	)		(7,052	)
Property and equipment, net	$	2,472		$	2,624

Depreciation expense was $0.3 million for each of the three months ended March 31, 2026 and 2025.

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	March 31, 2026		December 31, 2025
Prepaid insurance	$	1,158	$	1,666
Prepaid research and development expenses		1,551		2,657
Other		1,062		1,175
Prepaid expenses and other current assets	$	3,771	$	5,498

6. Marketable Securities

Marketable securities consisted of the following (in thousands):


	March 31, 2026
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Government agencies	$	29,931	$	9	$	—	$	29,940
Total	$	29,931	$	9	$	—	$	29,940


	December 31, 2025
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Government agencies		84,638		88		—	$	84,726
Total	$	84,638	$	88	$	—	$	84,726

As of March 31, 2026, the current credit ratings of the Company's investments are all within the guidelines of the investment policy of the Company, and the Company does not expect the issuers to settle any security at a price less than the amortized cost basis of the investment. The Company does not intend to sell the investments, and it is not probable that the Company will be required to sell the investments before recovery of their amortized cost basis.

As of March 31, 2026, no marketable securities with a contractual maturity of one year or less were in an unrealized loss position, and all marketable securities held by the Company had remaining contractual maturities of one year or less.

As of March 31, 2025, one marketable security with contractual maturity of one year or less was in an unrealized loss position totaling $0.02 million, and all marketable securities held by the Company had remaining contractual maturities of one year or less.

There were no impairments of the Company’s marketable securities measured and carried at fair value during the three months ended March 31, 2026 and 2025.

7. 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 expenses	$	7,536	$	7,006
Accrued compensation		2,589		6,005
Accrued professional fees		363		338
Other		378		242
Accrued expenses and other current liabilities	$	10,866	$	13,591

8. Stockholders' Equity

The Company had 150,000,000 authorized shares of common stock, par value $0.00001 per share, of which 64,150,468 and 63,587,777 shares were issued and outstanding at March 31, 2026 and December 31, 2025, respectively.

In addition, the Company had 10,000,000 authorized shares of preferred stock, par value $0.00001 per share, all of which shares of preferred stock are undesignated. No authorized shares of preferred stock were issued and outstanding at March 31, 2026 and December 31, 2025.

Financings

On May 16, 2025, the Company issued and sold 11,735,565 shares of common stock, pre-funded warrants to purchase up to 3,571,435 shares of common stock, and accompanying warrants to purchase an aggregate of 3,826,750 shares of common stock. The common stock and pre-funded warrants were sold in the 2025 Follow-On Offering in combination with an accompanying common stock warrant to purchase 0.25 of a share of common stock for each share of common stock or pre-funded warrant sold. Each such share of common stock was offered and sold together with an accompanying common stock warrant at a combined offering price of $4.90, and each such pre-funded warrant was offered and sold together with an accompanying common stock warrant at a combined offering price of $4.89999. The Company received approximately $69.9 million in net proceeds from the 2025 Follow-On Offering after deducting underwriting discounts and commissions and offering expenses.

On March 27, 2024, the Company filed the 2024 Shelf with the SEC in relation to the registration of up to an aggregate offering price of $350.0 million of common stock, preferred stock, debt securities, warrants and units or any combination thereof, which superseded the 2022 Shelf. The 2024 Shelf included a prospectus supplement to provide for offerings in the ATM under the Sales Agreement. The Company did not issue any shares of common stock during the three months ended March 31, 2026 under the ATM, and issued 1,055,362 shares of common stock at a weighted average price of $6.36 for aggregate gross proceeds of $6.7 million during the year ended December 31, 2025 under the ATM.

On November 9, 2023, the Company issued and sold 11,000,000 shares of common stock at a price to the public of $9.00 per share for aggregate gross proceeds of $99.0 million in the 2023 Follow-On Offering. The Company received approximately $92.6 million in net proceeds from the 2023 Follow-On Offering after deducting underwriting discounts and commissions and offering expenses.

On November 1, 2022, the Company filed the 2022 Shelf with the SEC in relation to the registration of up to an aggregate offering price of $250.0 million of common stock, preferred stock, debt securities, warrants and units or any combination thereof. The Company also simultaneously entered into the Sales Agreement with the Sales Agent to provide for the offering, issuance and sale by the Company of up to an aggregate of $75.0 million of common stock from time to time in the ATM under the 2022 Shelf and subject to the limitations thereof. The Company issued 261,807 shares of common stock at a weighted average price of $12.49 for aggregate gross proceeds of $3.3 million during the year ended December 31, 2023 under the ATM.

9. Stock-Based Compensation

2018 Stock Option and Incentive Plan

On December 12, 2018, the Company adopted the Aura Biosciences, Inc. 2018 Equity Incentive Plan, or the 2018 Plan. The 2018 Plan will expire in 2028. Under the 2018 Plan, Aura may grant incentive stock options, non-qualified stock options, restricted and unrestricted stock awards and stock rights. The Board of Directors, or the Board, has determined not to make any further awards under the 2018 Plan as of November 2, 2021. However, the 2018 Plan will continue to govern outstanding equity awards granted thereunder.

2021 Stock Option and Incentive Plan

The 2021 Stock Option and Incentive Plan, or the 2021 Plan, was adopted by the Board on October 7, 2021, approved by the Company’s stockholders on October 22, 2021 and became effective on November 1, 2021. The 2021 Plan permits the granting of several award types, including restricted stock units and both options to purchase common stock intended to qualify as incentive stock options under Section 422 of the United States Internal Revenue Code, or the Code, and options that do not so qualify. The number of shares initially reserved for issuance under the 2021 Plan was 3,352,166, which increased on January 1, 2022 and will continue to increase each January 1 thereafter, by 5% of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s compensation committee. The maximum number of shares of common stock that may be issued in the form of incentive stock options shall not exceed the initial limit, cumulatively increased on January 1, 2022 and on each January 1 thereafter by the lesser of the annual increase for such year or 3,352,166 shares of common stock. On January 1, 2026, the shares reserved for issuance was increased to 14,328,694 shares. With the transfer of shares to the 2021 Plan in connection with the termination or expiration of awards under the 2018 Plan, together with shares otherwise available under the 2021 Plan, there were 4,398,111 shares available for grant under the 2021 Plan at March 31, 2026.

2021 Employee Stock Purchase Plan

The 2021 Employee Stock Purchase Plan, or the ESPP, was adopted by the Board on October 7, 2021, approved by the Company’s stockholders on October 22, 2021 and became effective on November 1, 2021. A total of 335,217 shares of common stock were initially reserved for issuance under this plan, which increased on January 1, 2022 and will continue to increase each January 1 thereafter through January 1, 2031, by the least of (i) 335,217 shares of common stock, (ii) 1% of the outstanding number of shares of common stock on the immediately preceding December 31 or (iii) such lesser number of shares of common stock as determined by the administrator of the ESPP. On January 1, 2026, the shares reserved for issuance were increased to 1,900,688 shares. The purchase price of the shares under the ESPP is at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the purchase date. As of March 31, 2026, 1,876,474 shares were available to be issued under the ESPP. The Company recognized $0.03 million and $0.02 million in stock-based compensation expense related to the ESPP for the three months ended March 31, 2026 and 2025, respectively.

Stock Options

The Board is authorized to administer the 2021 Plan. In accordance with the provisions of the 2021 Plan, the Board determines the terms of Aura options and other awards issued pursuant thereto, including the following:

▪

which employees, directors and consultants shall be granted awards;

▪

the number of shares of common stock subject to options and other awards;

▪

the exercise price of each option, which generally shall not be less than fair market value of the common stock on the date of grant;

▪

the termination or cancellation provisions applicable to options;

▪

the terms and conditions of other awards, including conditions for repurchase, termination or cancellation, issue price and repurchase price; and

▪

all other terms and conditions upon which each award may be granted in accordance with the 2021 Plan.

In addition, the Board may award restricted shares of common stock and restricted stock units to participants subject to such conditions and restrictions as it may determine. The Board or any committee to which the Board delegates authority may, with the consent of the affected plan participants, re-price or otherwise amend outstanding awards consistent with the terms of the 2021 Plan.

The following table summarizes stock option activity under the 2018 Plan and 2021 Plan for the three months ended March 31, 2026:


	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2025		6,467,582		$	7.93		6.96	$	1,503
Granted		1,637,093			6.13
Exercised		(12,733	)		4.43
Cancelled/Forfeited		(104,767	)		10.12
Outstanding at March 31, 2026		7,987,175		$	7.54		7.38	$	4,879
Exercisable at March 31, 2026		4,232,959		$	8.04		5.84	$	3,672

The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2026 and 2025 was $5.00 and $5.88 per share, respectively. The fair value of options vested during each of the three months ended March 31, 2026 and 2025 was $2.6 million. The total intrinsic value of options exercised was $0.02 million and $0 million for the three months ended March 31, 2026 and 2025, respectively.

The fair value of the stock options granted for the three months ended March 31, 2026 and 2025 was measured with the following weighted-average assumptions:


	Three Months Ended March 31,
	2026			2025
Risk-free interest rate		3.72	%		4.38	%
Expected term (years)		6.08			6.06
Expected volatility of the underlying stock		102.43	%		90.89	%
Expected dividend rate		—	%		—	%

Restricted Stock Units

The Company has granted restricted stock units with service-based and performance-based vesting conditions. Unvested restricted stock units may not be sold or transferred by the holder.

A summary of the restricted stock units activity during the three months ended March 31, 2026 is as follows:


	Restricted Stock Units			Weighted- Average Grant Date Fair Value
Unvested at December 31, 2025		2,690,777		$	7.74
Granted		1,123,568			6.12
Vested/Released		(500,744	)		8.00
Forfeited		(27,360	)		8.39
Unvested at March 31, 2026		3,286,241		$	7.14

For the three months ended March 31, 2026, 500,744 restricted stock units vested with a fair value of $4.0 million.

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Research and development	$	2,190	$	1,915
General and administrative		1,634		1,599
Total	$	3,824	$	3,514

As of March 31, 2026, there was $19.3 million of unrecognized stock-based compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 3.02 years.

As of March 31, 2026, there was $20.9 million of unrecognized stock-based compensation expense related to restricted stock units, which is expected to be recognized over a weighted-average period of 2.90 years.

10. Warrants

In May 2025, in connection with the 2025 Follow-On Offering, the Company issued pre-funded warrants to purchase up to 3,571,435 shares of common stock and warrants to purchase an aggregate of 3,826,750 shares of common stock. Each pre-funded warrant has an initial exercise price per share of $0.00001, subject to certain adjustments. The pre-funded warrants are exercisable immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full. Each common stock warrant has an initial exercise price per share of $4.90, subject to certain adjustments. The common stock warrants are immediately exercisable from the date of issuance until expiration five years after the date of issuance. Pursuant to ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, the pre-funded warrants and common stock warrants were classified within permanent equity. As of March 31, 2026, 3,571,435 pre-funded warrants and 3,801,750 common stock warrants remained outstanding.

In February 2015 and May 2015, the Company issued warrants to purchase 1,650,098 and 887,536 shares of Series B convertible preferred stock, respectively, at an exercise price of $1.24235 per share, or the Series B Warrants. Each Series B Warrant was immediately exercisable and expired ten years from the original date of issuance. Pursuant to ASC 480, Distinguishing Liabilities from Equity, the Series B Warrants were classified as a liability and were re-measured to fair value at each balance sheet date. A total of 173,827 of the Series B Warrants were outstanding and were converted into warrants to purchase 12,686 shares of common stock with an exercise price of $17.03 upon the completion of the IPO in November 2021. As a result, the 12,686 common stock warrants were converted into equity instruments. All of these common stock warrants expired in 2025, and none remain outstanding as of March 31, 2026.

The following is a summary of warrant activity for the three months ended March 31, 2026:


	Number of Warrants
	Equity classified			Total
Outstanding as of December 31, 2025		7,398,185			7,398,185
Exercised		(25,000	)		(25,000	)
Outstanding as of March 31, 2026		7,373,185			7,373,185

11. Compensation

In January 2012, the Company adopted the Aura Biosciences 401(k) Profit Sharing Plan and Trust (the “401(k) Plan”) for its employees, which is designed to be qualified under Section 401(k) of the Code. Eligible employees are permitted to contribute to the 401(k) Plan within statutory and 401(k) Plan limits. The Company makes matching contributions of 100% of the first 6% of employee contributions. The Company made matching contributions of $0.4 million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively.

12. Commitments and Contingencies

Lease Commitments

The Company has historically entered into lease arrangements for its facilities. The Company has one operating lease for its office and laboratory facility with required future minimum payments as of March 31, 2026.

On May 16, 2022, the Company entered into an office and laboratory lease in Boston, Massachusetts with an initial 10-year term and one renewal option to extend the lease for an additional seven years which has not been deemed probable of being exercised by the Company as of March 31, 2026. The lease commenced on August 1, 2022, and estimated payments due under the initial term are approximately $35.2 million. The lease requires a letter of credit totaling $0.8 million which is classified as long-term restricted cash and deposits on the unaudited condensed consolidated balance sheets.

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s leases for the three months ended March 31, 2026 and 2025 (in thousands):


	Three Months Ended March 31,
	2026		2025
Lease Costs
Operating lease costs	$	867	$	867
Variable lease costs		536		269
Total lease costs	$	1,403	$	1,136


Cash paid for amounts included in the measurement of lease liabilities—operating leases	$	841		$	816
Weighted-average remaining lease term—operating leases (years)		6.34			7.34
Weighted-average discount rate—operating leases		10.71	%		10.71	%

The following table reconciles the future minimum commitments to the Company’s operating lease liabilities at March 31, 2026 (in thousands):


	Operating lease payments as of March 31, 2026
2026	$	2,565
2027		3,507
2028		3,611
2029		3,715
2030		3,827
Thereafter		6,281
Total lease payments		23,506
Less: interest		(6,515	)
Total lease liabilities at March 31, 2026		16,991
Less: current portion of lease liabilities		3,267
Lease liabilities, net of current portion	$	13,724

License Agreements

The Company has entered into the following key agreements that relate to the core technology under development:

Rakuten License and Supply Agreement

In May 2024, the Company received notice from LI-COR, Inc., or LI-COR, that as of April 16, 2024, LI-COR assigned, and Rakuten Medical, Inc., or Rakuten, assumed, the 2014 Exclusive Agreement and the 2014 Non-Exclusive Agreement (each described below), each originally entered into by and between the Company and LI-COR. The 2014 Exclusive Agreement and 2014 Non-Exclusive Agreement were not otherwise modified by this assignment and assumption and remain in effect.

2014 Exclusive Agreement

In January 2014, the Company entered into an Exclusive License and Supply Agreement, or the 2014 Exclusive Agreement, with LI-COR for the license of IRDye 700DX and related licensed patent (now expired) for the treatment and diagnosis of ocular cancers in humans, as amended in January 2016, July 2017, April 2018 and April 2019. The 2014 Exclusive Agreement required a one-time upfront license issue fee of $0.1 million and aggregate milestone payments of up to $0.2 million upon certain regulatory and development milestones. The Company is also required to pay Rakuten low-single digit royalties on net sales. The term of the 2014 Exclusive Agreement expires on a country-by-country basis, until the longer of (i) ten years from the first commercial sale of a licensed product in such country and (ii) the last to expire valid claim in such country.

The Company recognized no expenses related to this agreement and related amendments for the three months ended March 31, 2026 and 2025, respectively.

2014 Non-Exclusive Agreement

In December 2014, the Company entered into a Non-Exclusive License Agreement, or the 2014 Non-Exclusive Agreement, with LI-COR for the supply of IRDye 700DX to the Company for the treatment and diagnosis of non-ocular solid tumor cancers in humans. Under the 2014 Non-Exclusive Agreement, the Company paid a license issue fee of $0.03 million on the effective date. The Company must also pay Rakuten a non-refundable, non-creditable fee of $0.03 million per each licensed product upon pre-IND designation, as defined of such licensed product, aggregate milestone payments of up to $0.3 million upon certain regulatory and development milestones; and during the term, the Company must pay Rakuten a low-single digit percentage royalty on net sales. Rakuten receives 10% of all sublicensee income within 30 days of the Company’s receipt from the sublicensee. The 2014 Non-Exclusive Agreement also required the Company to make certain payments upon the achievement of specified development and commercial milestones of up to $0.4 million in aggregate. During the three months ended March 31, 2026 and 2025, the Company recognized no expenses related to milestones associated with this agreement.

Life Technologies Corporation License Agreements

In December 2014, the Company entered into a non-exclusive, perpetual license agreement with Life Technologies Corporation, or the Life Technologies, which allows for five licensed products. Under this agreement the Company is required to pay an initial license fee of $0.1 million for each product. An annual development fee of $0.1 million is due within a year from payment of the initial license fee and due annually or earlier of (i) payment of a commercialization fee or (ii) all development work is terminated. The commercialization fee is a one-time, non-refundable, non-creditable fee of $0.3 million due upon receipt of approval of a licensed product. In the event of a change of control, there will be a change of control fee of $0.2 million.

In January 2022, the Company entered into the First Amendment to the non-exclusive, perpetual license agreement with Life Technologies for use of the license in an additional indication. The cost of this amendment was a one-time fee of $0.05 million. During the three months ended March 31, 2026 and 2025, the Company recognized no milestones related to this agreement.

Effective in September 2022, the Company entered into a new non-exclusive, perpetual license agreement with Life Technologies for licensed products. Under this agreement, the Company is required to pay an initial license fee of $0.4 million for the first licensed product and $0.5 million for each additional licensed product. In addition, the agreement allows the Company the right to sublicense which would lead to a $0.2 million payment for each sublicense per licensed product and a $0.03 million payment for use of the cell line document package. In the event of a change of control, there will be a change of control fee of $0.5 million. During the three months ended March 31, 2026 and 2025, the Company recognized no expenses related to this agreement.

National Institute of Health (NIH)-Collaboration Research and Development Agreement

In July 2011, the Company entered into a Collaboration Research and Development Agreement, or CRADA, with Dr. John Schiller at the NIH, for a period of two years with the rights to an exclusive license to all technology generated within the collaboration. Under this agreement, the Company is required to make annual payments of $0.03 million to fund the research activities, the first payment of which was paid within 30 days of the effective date. Subsequent payments are due within 30 days of the anniversary of the effective date. This agreement was previously amended in 2012, 2013, 2014, 2015, 2016, 2018, 2020, and 2022. During the three months ended March 31, 2026 and 2025, the Company paid no research collaboration fees related to this agreement.

A ninth amendment was effective in September 2024, requiring payment of $0.06 million within 30 days of November 30, 2024, and payment of another $0.05 million within 30 days of September 30, 2025. This ninth amendment extended the term of the CRADA to September 30, 2026. During the three months ended March 31, 2026 and 2025, the Company did not recognize any expenses related to this agreement.

National Institute of Health (NIH)-Exclusive Patent License Agreement

In September 2013, the Company entered into an exclusive patent license agreement, or the NIH Exclusive License Agreement, with the NIH, that required the Company to pay a license issue royalty of $0.1 million and reimburse the NIH for any patent expenses incurred. Under the agreement, the Company is required to make low single-digit percentage royalty payments based on specified levels of annual net sales of licensed products subject to certain specified reductions. The Company is required to make development and regulatory milestone payments of up to $0.7 million in aggregate and sales milestone payments up to $0.6 million in the aggregate. The Company is also required to pay the NIH a mid-single to low teen-digit percentage of any sublicensing revenue the Company receives. Additionally, the Company’s payment obligations to the NIH are subject to an annual minimum royalty payment of low five figures. The Company did not recognize any patent licensing fees for the three months ended March 31, 2026 and 2025.

In 2015, 2018 and 2019, the Company amended its exclusive patent license to include updates on the status of the commercial development and update/expand the list of licensed patents and patent applications. Each of those amendments required a $0.03 million payment that the Company paid.

Inserm-Transfert License Agreement

In November 2009, the Company entered into an exclusive, royalty-bearing patent license agreement with Inserm-Transfert of France. The agreement expires on a country-by-country basis based on the last to expire of any patent encompassed within the scope of the patent rights or 10 years from the date of the first commercial sales by the Company, whichever is later. The IND filing milestone of €0.01 million was accrued in 2016 and paid in 2017 by the Company. The milestones for the successful Phase I, II and III clinical trials are based on receiving a final report and achieving the primary endpoints defined in that trial; the Phase I and Phase II milestones have been achieved as of March 31, 2026. Upon the sublicense by the Company of a product for which royalties are payable under the agreement, low- to mid-single-digit royalty payments would be due by the Company. The non-milestone payments in this agreement are subject to an anti-stacking clause. The Company did not incur any expenses related to milestones in the three months ended March 31, 2026 and 2025.

Clearside License Agreement

In July 2019, the Company entered into an exclusive license agreement, as amended, or the Clearside License Agreement, with Clearside Biomedical, Inc., or Clearside Biomedical, for the license of Clearside Biomedical’s Suprachoroidal Microneedle Technology for use in the treatment of indeterminate lesions and choroidal tumors. The Clearside License Agreement was subsequently assigned by Clearside Biomedical to Clearside Royalty LLC, or Clearside. Upon execution of the Clearside License Agreement, the Company paid Clearside Biomedical an upfront payment of $0.1 million which was expensed as incurred. Pursuant to an amendment to the Clearside License Agreement in March 2026, the Company paid Clearside an upfront payment of $1.0 million, and is required to make a one-time payment of $1.5 million upon the occurrence of a specified regulatory achievement. Under the Clearside License Agreement, the Company is also required to pay milestones up to $21.0 million in the aggregate upon the achievement of specified regulatory and development milestones, and upon the achievement of certain commercial sales milestones. The Company is also required to pay low to mid-single digit royalties on net sales. If the Company sublicenses a product for which royalties are payable, then the Company is required to pay the greater of 20% received or low single digit royalties on net sales.

The Clearside License Agreement expires on a country-by-country basis upon the later of the last to expire patent or ten years from the date of the first commercial sale of a product.

The Company recognized $1.0 million in expenses related to the Clearside License Agreement for the three months ended March 31, 2026. The Company did not incur any expenses related to the Clearside License Agreement for the three months ended March 31, 2025.

13. Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. The Company has included the pre-funded warrants to purchase 3,571,435 shares of common stock issued at an exercise price of $0.00001 in connection with the 2025 Follow-On Offering in its computation of basic net loss per share. Diluted net loss per share is the same as basic net loss per share for the periods presented since the effects of potentially dilutive securities are antidilutive given the net loss of the Company.

The Company has calculated basic and diluted net loss per share for the three months ended March 31, 2026 and 2025 as follows (in thousands, except share and per share data):


	Three Months Ended March 31,
	2026			2025
Numerator:
Net loss	$	(33,685	)	$	(27,483	)
Denominator:
Weighted-average common stock outstanding—basic and diluted		67,447,576			50,126,148
Net loss per common share—basic and diluted	$	(0.50	)	$	(0.55	)

The following potentially dilutive securities were excluded from the computation of the diluted net loss per share for the periods presented because their effect would have been antidilutive:


	Three Months Ended March 31,
	2026		2025
Stock options to purchase common stock		7,987,175		6,575,452
Restricted stock units that vest into common stock		3,286,241		2,751,873
Warrants to purchase common stock		7,373,185		5,021
Total potential dilutive shares		18,646,601		9,332,346

14. Income Taxes

For the three months ended March 31, 2026 and 2025, the Company recorded an income tax provision of $0.01 million and $0.02 million, respectively, resulting in an effective tax rate of 0.1% in each period. The income tax provision for the three months ended March 31, 2026 is attributable to state and foreign income taxes. The difference in the statutory rate and the effective tax rate is primarily the result of the valuation allowance recorded on all deferred tax assets.

Due to the Company’s history of operating losses since inception, there is not enough positive evidence at this time to support a position that the Company will generate future income of a sufficient amount and nature to utilize the benefits of its net deferred tax assets. Accordingly, the deferred tax assets have been reduced by a full valuation allowance since the Company does not currently believe that realization of its deferred tax assets is more likely than not.

As of March 31, 2026, the Company had no unrecognized income tax benefits that would reduce the Company’s effective tax rate if recognized.

15. Segment Reporting

Segment reporting is prepared on the same basis that the Company's Chief Executive Officer, who is its chief operating decision maker, or CODM, manages the business and makes operating decisions to allocate resources across departments and functions in line with the Company's strategic goals. The Company operates in one reportable segment which includes all activities related to the research and development of ocular and urologic oncology targeted therapies for a range of cancer indications with high unmet medical need. The CODM assesses performance and allocates resources based on comparing actual consolidated net loss to the budget. The measure of segment assets used in determining how to manage and allocate resources is reported within the Company's unaudited condensed consolidated balance sheets as cash and cash equivalents and marketable securities.

As a single reportable segment entity, the Company’s segment performance measure is consolidated net loss. Significant segment expenses are presented below.


	Three Months Ended March 31,
	2026			2025
	(in thousands)
Clinical, Preclinical, and R&D Operations (1)	$	(19,367	)	$	(16,386	)
Chemistry, Manufacturing, and Controls (1)		(8,594	)		(6,957	)
General and Administrative (1)		(6,906	)		(5,692	)
Other Segment Items (2)		1,182			1,552
Net loss	$	(33,685	)	$	(27,483	)

(1) Includes depreciation expense directly allocated to respective activities.

(2) Other segment items primarily include interest and accretion income, realized gains and losses, and income taxes.

16. Subsequent Events

Subsequent events have been evaluated through the date of filing of the unaudited condensed consolidated financial statements. The Company has identified the following subsequent events that require disclosure:

2026 Follow-On Offering

In connection with the 2026 Follow-On Offering (as defined below), on May 5, 2026, the Company issued and sold (i) 46,099,650 shares of common stock, which includes 6,508,650 shares sold upon the underwriters’ exercise in full of their

option to purchase additional shares of common stock on May 4, 2026, and (ii) in lieu of common stock to certain investors, pre-funded warrants to purchase an aggregate of up to 3,800,000 shares of its common stock, or the 2026 Follow-On Offering. Each such share of common stock was sold at a price to the public of $6.00 per share and each such pre-funded warrant was offered and sold at a price to the public of $5.99999 per pre-funded warrant for aggregate gross proceeds of $299.4 million in the 2026 Follow-On Offering. The Company received approximately $280.8 million in net proceeds from the 2026 Follow-On Offering, after deducting underwriting discounts and commissions and estimated offering expenses, of which approximately $39.0 million were used to effectuate the Matrix Repurchase.

Suspension and Termination of ATM Prospectus Supplement

In connection with the 2026 Follow-On Offering, on May 4, 2026, the Company delivered written notice to Jefferies that the Company was suspending and terminating the prospectus related to the shares issuable in the ATM pursuant to the terms of the Sales Agreement. As a result, the Company will not make any sales of its securities pursuant to the Sales Agreement, unless and until a new prospectus, prospectus supplement, or a new registration statement relating to the shares eligible to be sold in the ATM is filed. Other than the termination of the prospectus, the Sales Agreement remains in full force and effect.

Matrix Repurchase

On April 30, 2026, the Company and Matrix entered into a stock purchase agreement, or the Repurchase Agreement, pursuant to which the Company agreed to repurchase, in a privately negotiated transaction, up to 6,922,870 shares of its common stock, which the Company believes represents all shares of its common stock held by Matrix as of such date. Pursuant to the Repurchase Agreement, on May 7, 2026, the Company used approximately $39.0 million of the net proceeds received by the Company in the 2026 Follow-On Offering to repurchase 6,922,870 shares of its common stock from Matrix at a price per share equal to $5.64, the price per share at which the underwriters purchased shares from the Company in the 2026 Follow-On Offering. Such repurchased shares have become authorized but unissued shares.

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

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. This discussion and analysis and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. You should carefully read the “Risk Factors” section of this Quarterly Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Overview

We are a clinical-stage biotechnology company developing precision therapies to treat solid tumors designed to preserve organ function. Our lead candidate bel-sar is in late-stage clinical development for the treatment of patients with early choroidal melanoma (defined as small choroidal melanoma and/or indeterminate lesions) and is also in clinical development for other ocular oncology indications and bladder cancer.

There is significant unmet need for novel treatments for patients with choroidal melanoma, given the limitations of the current standard of care, or SoC, and patient reluctance to undergo radiotherapy in the form of either plaque brachytherapy or proton beam therapy, both highly-invasive therapies that result in significant vision loss, and potential legal blindness in the treated eye. Enucleation, or surgical removal of the affected eye, is another treatment option for patients with choroidal melanoma, in which patients lose all vision without the possibility of vision restoration. We are evaluating the safety and efficacy of bel-sar as a potential vision-sparing therapy in our ongoing global Phase 3 CoMpass trial for the first-line treatment of adult patients with early choroidal melanoma. Moreover, we intend to assess the safety and efficacy of bel-sar in treating a range of other solid tumors, beginning with metastases to the choroid and bladder cancer where bel-sar is in clinical development as well as cancers of the ocular surface. We believe bel-sar, if approved, has the potential to change the current treatment paradigm for patients with ocular and urologic cancers and other solid tumors.

Bel-sar has shown clinical benefit and has been generally well-tolerated in clinical trials to date. In a Phase 2 study (ClinicalTrials.gov ID: NCT04417530) evaluating suprachoroidal, or SC, administration of bel-sar for the first-line treatment of early choroidal melanoma, patients were closely monitored over a twelve-month follow-up period to assess tumor control, visual acuity preservation, and tumor growth rate. A total of 22 patients were enrolled in the study. Bel-sar achieved an 80% tumor control rate (n=8/10) among Phase 3-eligible patients who received the therapeutic regimen, with complete cessation of growth following treatment among responders (post-treatment average growth rate of 0.011 mm/yr among responders compared to 0.351 mm/yr prior to study entry; p<0.0001). Visual acuity preservation was achieved in 90% of these ten patients. Importantly, 80% of these ten patients were at high risk for vision loss with tumors close to the fovea or optic disc, highlighting the potential for vision preservation with this novel class of drugs. The safety profile of bel-sar was highly favorable in all participants regardless of dose. We believe the Phase 2 results are a significant achievement considering the typically poor prognosis associated with choroidal melanoma, a rare and life-threatening ocular cancer, where there are no approved vision-preserving therapies to date.

We believe bel-sar has the possibility to transform the field of ocular oncology beyond choroidal melanoma and we are expanding clinical development in two additional indications: metastases to the choroid and cancers of the ocular surface. We continue to enroll patients in an ongoing Phase 2 clinical trial in metastases to the choroid and are initiating a Phase 1 proof-of-concept trial in cancers of the ocular surface.

Virus-like drug conjugates, or VDCs, are a novel class of drugs with a dual mechanism of action that promote cancer cell death by both the delivery of the cytotoxic payload to generate acute necrosis and activation of a secondary immune mediated response. Bel-sar, our lead VDC candidate, consists of modified capsid proteins of the human papilloma virus, or HPV, conjugated to hundreds of light-activated molecules.

Light activation of bel-sar is designed to result in precise tumor cell killing with minimal damage to surrounding healthy tissues. In the absence of bel-sar activation or binding to the tumor cell membrane, there is no cytotoxic effect. Multiple light activations, following a single dose of bel-sar, increase antitumor activity because of the reoxygenation of the tumor and the photostability of bel-sar. Finally, acute necrosis triggers immunogenic cell death leading to the generation of an adaptive, long-term antitumor immune response. The tumor targeting specificity of VDCs is driven by the selective binding of the virus-like particles, or VLPs, to a subset of modified tumor associated glycosaminoglycans, or GAGs, that are part of the heparan sulphate chain of heparan sulfate proteoglycans, or HSPGs, expressed on the tumor cell membrane. This targeting mechanism enables the delivery of multiple types of cytotoxic payloads directly to a wide range of solid tumors.

Beyond ocular cancers, bel-sar is in clinical development in bladder cancer. Bladder cancer is the ninth most common cancer worldwide and the majority of cases are diagnosed early as non-muscle invasive bladder cancer, or NMIBC, with a prevalence of approximately 80,000 cases per year in the United States. Despite the early diagnosis, patients with NMIBC have a high risk of recurrence and progression with current SoC treatments. In 2025, we announced positive data from our Phase 1 trial in NMIBC (NCT05483868). Based on the positive results from the completed Phase 1 trial, we are advancing the clinical development of bel-sar in NMIBC. We have an ongoing Phase 1b/2 trial in NMIBC evaluating additional doses and cycles in intermediate and high-risk NMIBC patients.

We were incorporated as a Delaware corporation in 2009 and our headquarters are located in Boston, Massachusetts. Since our inception, we have focused our efforts on identifying and developing potential product candidates, conducting preclinical studies and clinical trials, organizing and staffing our company, business planning, establishing and maintaining our intellectual property portfolio, raising capital, conducting discovery, research and development activities and providing general and administrative support for these operations. We do not have any product candidates approved for sale and have not generated any revenue to date. We have funded our operations primarily through the sale of convertible preferred stock, common stock, and warrants. From inception through May 5, 2026, we have raised an aggregate of approximately $797.8 million of gross proceeds primarily from private placements of our equity and convertible preferred stock as well as through the issuance of our common stock. On May 5, 2026, we issued and sold (i) 46,099,650 shares of common stock, which includes 6,508,650 shares sold upon the underwriters’ exercise in full of their option to purchase additional shares of common stock on May 4, 2026, at a price to the public of $6.00 per share, and (ii) in lieu of common stock to certain investors, pre-funded warrants to purchase an aggregate of up to 3,800,000 shares of common stock at a price to the public of $5.99999 per pre-funded warrant, or the 2026 Follow-On Offering. We received approximately $280.8 million in net proceeds from the 2026 Follow-On Offering after deducting underwriting discounts and commissions and offering expenses, of which approximately $39.0 million was used to repurchase 6,922,870 shares from Matrix Capital Management Master Fund, LP, or Matrix, at a price per share of $5.64, on May 7, 2026, or the Matrix Repurchase. On May 16, 2025, we issued and sold 11,735,565 shares of common stock, pre-funded warrants to purchase up to 3,571,435 shares of common stock, and accompanying warrants to purchase an aggregate of 3,826,750 shares of common stock, or the 2025 Follow-On Offering. The common stock and pre-funded warrants were sold in the 2025 Follow-On Offering in combination with an accompanying common stock warrant to purchase 0.25 of a share of common stock for each share of common stock or pre-funded warrant sold. Each such share of common stock was offered and sold together with an accompanying common stock warrant at a combined offering price of $4.90, and each such pre-funded warrant was offered and sold together with an accompanying common stock warrant at a combined offering price of $4.89999. We received approximately $69.9 million in net proceeds from the 2025 Follow-On Offering after deducting underwriting discounts and commissions and offering expenses. On November 9, 2023, we issued and sold 11,000,000 shares of common stock at a price to the public of $9.00 per share for aggregate gross proceeds of $99.0 million, or the 2023 Follow-On Offering. We received approximately $92.6 million in net proceeds from the 2023 Follow-On Offering after deducting underwriting discounts and commissions and offering expenses. On December 5, 2022, we issued and sold 7,705,000 shares of common stock, including the full exercise of the underwriters’ option to purchase additional shares at a price to the public of $12.00 per share, for aggregate gross proceeds of $92.5 million, or the 2022 Follow-On Offering. We received approximately $86.7 million in net proceeds from the 2022 Follow-On Offering after deducting underwriting discounts, commissions and offering expenses. On November 1, 2022, we filed a shelf registration statement on Form S-3, or the 2022 Shelf, with the Securities and Exchange Commission, or the SEC, in relation to the registration of up to an aggregate offering price of $250.0 million of common stock, preferred stock, debt securities, warrants and units or any combination thereof. We also simultaneously entered into an Open Market Sale AgreementSM, or the Sales Agreement, with Jefferies LLC, or the Sales Agent, to provide for the offering, issuance and sale by us of up to an aggregate of $75.0 million of its common stock from time to time in “at-the-market” offerings, or the ATM, under the 2022 Shelf and subject to the limitations thereof. In connection with the 2023 Follow-On Offering, on November 6, 2023, we delivered written notice to Jefferies that we were suspending and terminating the prospectus related to the shares issuable in the ATM pursuant to the terms of the Sales Agreement. During the year ended December 31, 2023, we issued a total of 261,807 shares of common stock at a weighted average price of $12.49 for aggregate gross proceeds of $3.3 million under the ATM. On March 27, 2024, we filed a new shelf registration statement on Form S-3, or the 2024 Shelf, with the SEC in relation to the registration of up to an aggregate offering price of $350.0 million of common stock, preferred stock, debt securities, warrants and units or any combination thereof, which superseded the 2022 Shelf. The 2024 Shelf included a prospectus supplement to provide for offerings in the ATM under the Sales Agreement. In connection with the 2026 Follow-On Offering, we filed a related registration statement to the 2024 Shelf pursuant to Rule 462(b), which was filed with the SEC and effective on May 4, 2026. We did not issue any shares of common stock during the three months ended March 31, 2026 under the ATM, and issued 1,055,362 shares of common stock at a weighted average price of $6.36 for aggregate gross proceeds of $6.7 million during the year ended December 31, 2025 under the ATM. In connection with the 2026 Follow-On Offering, on May 4, 2026, we delivered written notice to Jefferies that we were suspending and terminating the prospectus related to the shares issuable in the ATM pursuant to the terms of the Sales Agreement.

We have incurred significant operating losses in every year since our inception in 2009 and have not generated any revenue. We expect to continue to incur significant expenses and operating losses for the foreseeable future. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and commercialization of one or more of our product candidates. Our net losses were $33.7 million and $27.5 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $514.1 million. In addition, our losses from operations may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

We anticipate that our expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly as we advance the preclinical studies and clinical trials of our product candidates. In addition, we incur additional costs associated with operating as a public company. We expect that our expenses and capital requirements will increase substantially if and as we:

▪

conduct our current and future clinical trials of bel-sar;

▪

progress the preclinical and clinical development of new indications;

▪

establish our manufacturing capability, including establishing and developing our contract development and manufacturing relationships;

▪

seek to identify and develop additional product candidates;

▪

seek regulatory approval of our current and future product candidates;

▪

expand our operational, financial, and management systems and increase personnel, including personnel to support our preclinical and clinical development, manufacturing and commercialization efforts;

▪

maintain, expand and protect our intellectual property portfolio; and

▪

incur additional legal, accounting, or other expenses in operating our business, including the additional costs associated with operating as a public company.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations or other strategic transactions. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed 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 product candidates.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain marketing approval for our product candidates. The lengthy process of securing marketing approvals for new drugs requires the expenditure of substantial resources. Any delay or failure to obtain regulatory approvals would materially adversely affect the development efforts of our product candidates and our business overall. Because of the numerous risks and uncertainties associated with product development, we are unable to 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 revenue from 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 marketable securities of $114.7 million. We believe that our existing cash and cash equivalents and marketable securities, including the net proceeds from the 2026 Follow-On Offering after completion of the Matrix Repurchase, will enable us to fund our operations into the second half of 2028. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “Liquidity and Capital Resources” below.

Components of Our Results of Operations

Revenue

Since inception, we have not generated any revenue and do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts for one or more of our product candidates are successful and result in regulatory approval, or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from collaboration or license agreements. We cannot predict if, and when, or to what extent, we will generate revenue from the commercialization and sale of our product candidates or from collaboration or licensing agreements, if at all. We may never succeed in obtaining regulatory approval and may never enter into collaboration or licensing agreements for any of our product candidates.

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our bel-sar program, and include:

▪

employee-related expenses, including salaries, benefits and stock-based compensation expense for employees engaged in research and development functions;

▪

fees paid to consultants for services directly related to our product development and regulatory efforts;

▪

expenses associated with conducting preclinical studies and clinical trials performed by ourselves, outside vendors or academic collaborators;

▪

expenses incurred under agreements with contract research organizations, or CROs, as well as consultants that conduct and provide supplies for our preclinical studies and clinical trials;

▪

the cost of manufacturing bel-sar, including the cost of CDMOs that manufacture product for use in our preclinical studies and clinical trials and perform analytical testing, scale-up and other services in connection with our development activities;

▪

costs associated with preclinical activities and clinical development activities;

▪

costs associated with our intellectual property portfolio;

▪

costs related to compliance with regulatory requirements; and

▪

allocated expenses for utilities and other facility-related costs.

We expense research and development costs as incurred. Costs for external development activities are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our financial statements as prepaid or accrued research and development expenses. We allocate our direct external research and development costs across the entire bel-sar program. Preclinical expenses consist of external research and development costs associated with activities to support our current and future clinical programs but are not allocated by specific indications due to the overlap of the potential benefit of those efforts across the entire bel-sar program.

Research and development activities are central to our business. We expect that our research and development expenses will increase for the foreseeable future as we continue clinical development for bel-sar and continue to discover and develop additional product candidates. If any of our product candidates enter into later stages of clinical development, they will generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive and finance functions. General and administrative expenses also include professional fees for legal, accounting, auditing, tax and consulting services; travel expenses; and facility-related expenses, which include allocated expenses for rent and maintenance of facilities and other operating costs not included in research and development.

We expect that our general and administrative expenses will increase in the near term as we continue to build a team to support our administrative, accounting and finance, communications, commercial strategy, legal and business development efforts. We expect to incur increased expenses associated with our growth, including costs of accounting, audit, legal, regulatory and tax compliance services; director and officer insurance costs; and investor and public relations costs.

Other Income (Expense)

Our other income (expense) consists of accretion, interest income and realized gains and losses on marketable securities, interest income on our invested cash balances, and gains and losses on disposals of equipment.

Income Tax Provision, Net

For the year ended December 31, 2025, we recorded a $0.1 million income tax provision related to current state income taxes. Since our inception, we have not recorded any U.S. federal or state tax benefits for our net operating loss carryforwards or research and development tax credits due to the realizability of future taxable income to utilize these tax attributes. As of December 31, 2025, we had accumulated federal and state net operating loss carryforwards of approximately $318.9 million and $274.4 million, respectively, which may be available to offset future taxable income before applicable expiration periods. As of December 31, 2025, we had federal and state research and development credit carryforwards of $8.5 million and $3.8 million, respectively, which may be available to offset future income tax liabilities before applicable expiration periods. Additionally, we had $20.4 million of federal orphan drug credits that begin to expire in 2039. We have recorded a full valuation allowance against the tax benefits, as the determination of the realization of the deferred tax assets was not determined to be more likely than not.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:


	Three Months Ended March 31,
	2026			2025			Change
	(in thousands)
Operating expenses:
Research and development	$	27,960		$	23,343		$	4,617
General and administrative		6,906			5,692			1,214
Total operating expenses		34,866			29,035			5,831
Loss from operations		(34,866	)		(29,035	)		(5,831	)
Other income (expense):
Interest income, including amortization and accretion income		1,190			1,594			(404	)
Other income (expense):		2			(24	)		26
Total other income		1,192			1,570			(378	)
Loss before income taxes		(33,674	)		(27,465	)		(6,209	)
Income tax provision, net		(11	)		(18	)		7
Net loss	$	(33,685	)	$	(27,483	)	$	(6,202	)

Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended March 31, 2026 and 2025:


	Three Months Ended March 31,
	2026		2025		Change
	(in thousands)
Preclinical	$	234	$	243	$	(9	)
Clinical trials		11,008		8,003		3,005
Manufacturing development		5,679		4,434		1,245
Personnel/overhead expenses		11,039		10,663		376
Total research and development expenses	$	27,960	$	23,343	$	4,617

Research and development expenses increased to $28.0 million for the three months ended March 31, 2026 from $23.3 million for the three months ended March 31, 2025, primarily due to ongoing clinical and CRO costs associated with the progression of our global Phase 3 trial of bel-sar in early choroidal melanoma and manufacturing and development costs for bel-sar.

General and Administrative Expenses

General and administrative expenses increased to $6.9 million for the three months ended March 31, 2026 from $5.7 million for the three months ended March 31, 2025, primarily driven by higher personnel expenses related to growth of our company and increased professional fees.

Liquidity and Capital Resources

To date we have funded our operations primarily through the sale of convertible preferred stock, warrants and common stock. Through May 5, 2026, we have raised an aggregate of approximately $797.8 million of gross proceeds primarily from private placements of our equity and convertible preferred stock and warrants, as well as through the issuance of our common stock. On May 5, 2026, we issued and sold (i) 46,099,650 shares of common stock, which includes 6,508,650 shares sold upon the underwriters’ exercise in full of their option to purchase additional shares of common stock on May 4, 2026, and (ii) in lieu of common stock to certain investors, pre-funded warrants to purchase an aggregate of up to 3,800,000 shares of its common stock. Each such share of common stock was sold at a price to the public of $6.00 per share and each such pre-funded warrant was offered and sold at a price to the public of $5.99999 per pre-funded warrant for aggregate gross proceeds of $299.4 million in the 2026 Follow-On Offering. We received approximately $280.8 million in net proceeds from the 2026 Follow-On Offering, after deducting underwriting discounts and commissions and estimated offering expenses, of which approximately $39.0 million were used to effectuate the Matrix Repurchase. The 2026 Follow-On Offering was made pursuant to our 2024 Shelf and a related registration statement pursuant to Rule 462(b), filed with the SEC and effective on May 4, 2026. On May 16, 2025, we issued and sold 11,735,565 shares of common stock, pre-funded warrants to purchase up to 3,571,435 shares of common stock, and accompanying warrants to purchase an aggregate of 3,826,750 shares of common stock. The common stock and pre-funded warrants were sold in the 2025 Follow-On Offering in combination with an accompanying common stock warrant to purchase 0.25 of a share of common stock for each share of common stock or pre-funded warrant sold. Each such share of common stock was offered and sold together with an accompanying common stock warrant at a combined offering price of $4.90, and each such pre-funded warrant was offered and sold together with an accompanying common stock warrant at a combined offering price of $4.89999. We received approximately $69.9 million in net proceeds from the 2025 Follow-On Offering after deducting underwriting discounts and commissions and offering expenses. On November 9, 2023, we issued and sold 11,000,000 shares of common stock at a price to the public of $9.00 per share for aggregate gross proceeds of $99.0 million in the 2023 Follow-On Offering. We received approximately $92.6 million in net proceeds from the 2023 Follow-On Offering after deducting underwriting discounts and commissions and offering expenses. On December 5, 2022, we issued and sold 7,705,000 shares of common stock, including the full exercise of the underwriters’ option to purchase additional shares at a price to the public of $12.00 per share for aggregate gross proceeds of $92.5 million in the 2022 Follow-On Offering. We received approximately $86.7 million in net proceeds from the 2022 Follow-On Offering after deducting underwriting discounts, commissions and offering expenses. On November 1, 2022, we filed the 2022 Shelf with the SEC in relation to the registration of up to an aggregate offering price of $250.0 million of common stock, preferred stock, debt securities, warrants and units or any combination thereof. We also simultaneously entered into the Sales Agreement with the Sales Agent to provide for the offering, issuance and sale by us of up to an aggregate of $75.0 million of our common stock from time to time in the ATM under the 2022 Shelf and subject to the limitations thereof. In connection with the 2023 Follow-On Offering, on November 6, 2023, we delivered written notice to Jefferies that we were suspending and terminating the prospectus related to the shares issuable in the ATM pursuant to the terms of the Sales Agreement. During the year ended December 31, 2023, we issued a total of 261,807 shares of common stock at a weighted average price of $12.49 for aggregate gross proceeds of $3.3 million under the ATM. On March 27, 2024, we filed the 2024 Shelf with the SEC in relation to the registration of up to an aggregate offering price of $350.0 million of common stock, preferred stock, debt securities, warrants and units or any combination thereof, which superseded the 2022 Shelf. The 2024 Shelf included a prospectus supplement to provide for offerings in the ATM under the Sales Agreement. We did not issue any shares of common stock during the three months ended March 31, 2026 under the ATM, and issued 1,055,362 shares of common stock at a weighted average price of $6.36 for aggregate gross proceeds of $6.7 million during the year ended December 31, 2025 under the ATM. In connection with the 2026 Follow-On Offering, on May 4, 2026, we delivered written notice to Jefferies that we were suspending and terminating the prospectus related to the shares issuable in the ATM pursuant to the terms of the Sales Agreement. As a result, we will not make any sales of our securities pursuant to the Sales Agreement, unless and until a new prospectus, prospectus supplement, or a new registration statement relating to the shares eligible to be sold in the ATM is filed. Other than the termination of the prospectus, the Sales Agreement remains in full force and effect.

Cash Flows

The following table summarizes our cash flows for each of the periods presented:


	Three Months Ended March 31,
	2026			2025
	(in thousands)
Net cash used in operating activities	$	(29,893	)	$	(23,355	)
Net cash provided by investing activities		54,898			29,813
Net cash provided by financing activities		300			96
Net increase in cash, cash equivalents, and restricted cash	$	25,305		$	6,554

Operating Activities

During the three months ended March 31, 2026, net cash used in operating activities was $29.9 million primarily due to our net loss of $33.7 million and a decrease in accrued expenses and other current liabilities related to timing of vendor invoicing and payments, partially offset by stock-based compensation expense.

During the three months ended March 31, 2025, net cash used in operating activities was $23.4 million, primarily due to our net loss of $27.5 million and a decrease in accrued expenses related to timing of vendor invoicing and payments, partially offset by stock-based compensation expense and a decrease in prepaid expenses related to work completed for CRO activities associated with our global Phase 3 trial of bel-sar in early choroidal melanoma.

Investing Activities

Net cash provided by investing activities during the three months ended March 31, 2026 was $54.9 million primarily due to maturities of marketable securities partially offset by purchases of property and equipment.

Net cash provided by investing activities during the three months ended March 31, 2025 was $29.8 million primarily due to maturities of marketable securities partially offset by purchases of property and equipment.

Financing Activities

During the three months ended March 31, 2026, net cash provided by financing activities was $0.3 million primarily from proceeds from stock options and warrant exercises, and issuance of common stock under the ESPP.

During the three months ended March 31, 2025, net cash provided by financing activities was $0.1 million primarily from proceeds from issuance of common stock under the ESPP.

Funding Requirements

Our plan of operation is to continue implementing our business strategy, continue research, development and manufacture of bel-sar and any other product candidates we may acquire or develop and continue to expand our research pipeline and our internal research and development capabilities. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our current and future product candidates, manufacture our current and future product candidates, and prepare to commercialize our products (if approved). In addition, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or terminate our research and development programs or future commercialization efforts. Our future capital requirements will depend on many factors, including:

▪

the scope, timing, progress, costs, and results of discovery, preclinical development, and clinical trials for our current and future product candidates;

▪

the number of clinical trials required for regulatory approval of our current and future product candidates;

▪

the costs, timing, and outcome of regulatory review of any of our current and future product candidates;

▪

the cost of manufacturing clinical and commercial supplies of our current and future product candidates;

▪

the costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval;

▪

the costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights;

▪

our ability to maintain existing, and establish new, strategic collaborations, licensing, or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty, or other payments due under any such agreement;

▪

the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

▪

expenses to attract, hire and retain, skilled personnel;

▪

the costs of operating as a public company;

▪

if our product candidates are approved, our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payors;

▪

the effect of competing technological and market developments;

▪

the extent to which we acquire or invest in businesses, products, and technologies; and

▪

unfavorable global economic conditions, which may exacerbate the magnitude of the factors discussed above.

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. As of March 31, 2026, we had cash and cash equivalents and marketable securities of $114.7 million. Based on our current operating plan, we believe that our existing cash and cash equivalents and marketable securities, including the net proceeds from the 2026 Follow-On Offering after completion of the Matrix Repurchase, are sufficient to fund our operations into the second half of 2028. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Until such time we can generate significant revenue from product sales, if ever, we expect to finance our operations from the sale of additional equity or debt financings, or other capital which comes in the form of strategic collaborations, licensing, or other arrangements, or a combination of some or all thereof. We may not be able to raise additional funds on terms acceptable to us, or at all. If we raise additional funds through the issuance of equity or convertible preferred stock, it may result in dilution to our existing stockholders. Debt financing or preferred equity financing, if available, may result in increased fixed payment obligations, and the existence of securities with rights that may be senior to those of our common stock. If we incur indebtedness, we could become subject to covenants that would restrict our operations.

If we raise funds through strategic collaboration, licensing or other arrangements, we may relinquish significant rights or grant licenses on terms that are not favorable to us.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Material Cash Requirements

The following table summarizes our contractual obligations and commitments as of March 31, 2026.


					Payments Due by Period
		Total			Less than 1 Year			1 to 3 Years			3 to 5 Years			More than 5 Years
		(in thousands)
Operating lease commitments (1)	$		23,506	$		3,431			7,170			7,598			5,307
Total	$		23,506	$		3,431	$		7,170	$		7,598	$		5,307

(1)

Amounts in the table above reflect payments due for our lease of office and lab space in Boston, MA, that expires in August 2032.

On May 16, 2022, we entered into an office and laboratory lease in Boston, MA with an initial 10-year term and one renewal option to extend the lease for an additional seven years. The lease commenced on August 1, 2022.

Except as disclosed in the table above, we have no long-term debt or finance leases and no material non-cancelable purchase commitments with service providers, as we have generally contracted on a cancelable, purchase-order basis. We enter into contracts in the normal course of business with equipment and reagent vendors, CROs, CDMOs and other third parties for clinical trials, preclinical research studies and testing and manufacturing services. These contracts are cancelable by us upon prior notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including noncancelable obligations of our service providers, up to the date of cancellation. We have also acquired exclusive and non-exclusive rights to use, research, develop and offer for sale certain products and patents under license agreements. The license agreements obligate us to make payments to the licensors for license fees, milestones, license maintenance fees and royalties. These payments are not included in the preceding table as the amount and timing of such payments are not known.

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of our unaudited condensed consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our unaudited condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. During the three months ended March 31, 2026, there were no material changes to our critical accounting policies from those described in the section titled “Management’s Discussion and Analysis of Financial Condition and Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC.

Recent Accounting Pronouncements

We assessed the recent accounting pronouncements for the three months ended March 31, 2026 and determined no pronouncements have material impact to the unaudited condensed consolidated financial statements.

Emerging Growth Company and Smaller Reporting Company Status

The Jumpstart Our Business Startups Act of 2012, or the JOBS Act, permits that an “emerging growth company” may take advantage of the extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act. Accordingly, our consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. The JOBS Act also exempts us from having to provide an auditor attestation of internal control over financial reporting under Sarbanes-Oxley Act Section 404(b).

We will remain an “emerging growth company” until the earliest of: the last day of the fiscal year in which we have more than $1.235 billion in annual revenue; the date we qualify as a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates; the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities; or the last day of the fiscal year ending after the fifth anniversary of our initial public offering, or IPO.

We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million.

If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we will not be required to obtain a separate attestation of internal control over financial reporting from an outside auditor.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial and Business Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report. Based on such evaluation, our Chief Executive Officer and Chief Financial and Business Officer have concluded that as of March 31, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Quarterly Report was (a) reported within the time periods specified by the SEC rules and regulations, and (b) communicated to our management, including our Chief Executive Officer and Chief Financial and Business Officer, to allow timely decisions regarding any required disclosure.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become subject to various legal proceedings and claims that arise in the ordinary course of our business activities. Although the results of litigation and claims cannot be predicted with certainty, as of March 31, 2026, we do not believe we are party to any claim or litigation, the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors.

Investing in our common stock involves a high degree of risk. You should carefully read and consider all of the risks described below, as well as the other information in this Quarterly Report, including our unaudited condensed consolidated financial statements and related notes thereto and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations and growth prospects. Unless otherwise indicated, references to our business being harmed in these risk factors will include harm to our business, reputation, financial condition, results of operations and future prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations and the market price of our common stock.

Risks Related to Our Financial Position, and Additional Capital Needs

We have incurred significant net losses since our inception and anticipate that we will continue to incur losses for the foreseeable future.

Investment in biotechnology product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a product candidate will fail to gain regulatory approval or fail to become commercially viable. Our net losses were $33.7 million and $27.5 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $514.1 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect our research and development expenses to increase significantly as we continue clinical development for bel-sar and continue to discover and develop additional product candidates. In addition, if we obtain regulatory approval for our product candidates, we will incur significant sales, marketing and manufacturing expenses. We incur costs, and will incur additional costs, associated with operating as a public company. As a result, we expect to continue to incur significant and increasing operating losses for the foreseeable future. Because of the numerous risks and uncertainties associated with developing pharmaceutical products, we are unable to predict the extent of any future losses or when we will become profitable, if at all. To date, we have not generated any revenue from any product sales. Our ability to become profitable depends upon our ability to generate revenue. We have no products approved for commercial sale and, therefore, have never generated any revenue from product sales, and we do not expect to in the foreseeable future. Further, we do not anticipate generating any revenue from product sales until after we have received marketing approval for the commercial sale of a product candidate, if ever. Our ability to generate revenue and achieve profitability depends significantly on our success in achieving a number of goals, including:

▪

initiating and completing research regarding, and preclinical and clinical development of, bel-sar in early choroidal melanoma and additional oncology indications, including metastases to the choroid and bladder cancer as well as any other research programs from our VDC technology platform and any future product candidates;

▪

obtaining marketing approval for bel-sar and any future product candidates for which we complete clinical trials;

▪

transferring our manufacturing process to, and developing and maintaining it with, a CDMO for bel-sar and any future product candidates, including establishing and maintaining commercially viable supply and manufacturing relationships with third parties;

▪

launching and commercializing bel-sar and any future product candidates for which we obtain marketing approvals, either directly or with a collaborator or distributor;

▪

obtaining market acceptance of bel-sar and any future product candidates as viable treatment options;

▪

addressing any competing technological and market developments;

▪

identifying, assessing, acquiring and developing new product candidates from our VDC technology platform;

▪

negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter;

▪

obtaining, maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and

▪

attracting, hiring, and retaining qualified personnel.

Even if bel-sar or any future product candidates that we develop are approved for commercial sale, we anticipate incurring significant costs associated with commercializing any such product candidate. Our expenses could increase beyond expectations if we are required by the FDA or comparable foreign regulatory authorities to change our manufacturing processes or assays, or to perform clinical, nonclinical, or other types of studies in addition to those that we currently anticipate.

If we are successful in obtaining regulatory approvals to market bel-sar or any future product candidates, our revenue will be dependent, in part, upon the size of the markets in the territories for which we gain marketing approval, the accepted price for the product, the ability to get reimbursement at any price, and whether we own the commercial rights for that territory. If the number of our addressable patients is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, the labels for bel-sar and any future product candidates contain significant safety warnings, regulatory authorities impose burdensome or restrictive distribution requirements, or the reasonably accepted patient population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products, even if approved. If we are not able to generate revenue from the sale of any approved products, we could be prevented from or significantly delayed in achieving profitability.

Even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our development efforts, obtain product approvals, diversify our offerings or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.

We will require substantial additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce or terminate one or more of our research and development programs, future commercialization efforts, product development or other operations.

Since our inception, we have used substantial amounts of cash to fund our operations, and our expenses will increase substantially in the foreseeable future in connection with our ongoing activities, particularly as we continue the research and development of, initiate and complete clinical trials of, and seek marketing approval for bel-sar. Identifying and developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive and uncertain process that takes years to complete. Even if one or more of bel-sar or any future product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with sales, marketing, manufacturing and distribution activities. Our expenses could increase beyond expectations if we are required by the FDA, the EMA or other regulatory agencies to perform clinical trials or nonclinical studies in addition to those that we are currently conducting or anticipate. Other unanticipated costs may also arise. Because the design and outcome of our current and planned clinical trials are highly uncertain, we cannot reasonably estimate the actual amount of resources and funding that will be necessary to successfully complete the development and commercialization of bel-sar or any future product candidates that we develop. We also expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in order to continue our operations.

Based on our current operating plan, we believe that our existing cash and cash equivalents and marketable securities, including the net proceeds from the 2026 Follow-On Offering after completion of the Matrix Repurchase, are sufficient to fund our operations into the second half of 2028. Advancing the development of bel-sar and other research programs will require a significant amount of capital. Our existing cash and cash equivalents and marketable securities may not be sufficient to fund bel-sar through regulatory approvals, and we anticipate needing to raise additional capital to complete the development and commercialization of bel-sar. Our estimate as to how long we expect our existing cash and cash equivalents and marketable securities to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

We will be required to obtain further funding through public or private equity financings, debt financings, collaborative agreements, licensing arrangements or other sources of financing, which may dilute our stockholders or restrict our operating activities. We do not have any committed external source of funds. Adequate additional financing may not be available to us on acceptable terms, or at all. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize product candidates. Disruptions in financial markets due to unfavorable global economic conditions and inflationary pressures may make equity and debt financings more difficult to obtain and may have a material adverse effect on our ability to meet our fundraising needs. To the extent that we raise additional capital through the sale of equity or convertible preferred stock, or through the exercise of the warrants that were issued in May 2025, each investor’s ownership interests will be diluted, and the terms may include liquidation or other preferences that adversely affect each investor’s rights as a stockholder. Debt financing may result in imposition of debt covenants, increased fixed payment obligations or other restrictions that may affect our business. If we raise additional funds through upfront payments or milestone payments pursuant to strategic collaborations with third parties, we may have to relinquish valuable rights to our product candidates or grant licenses on terms that are not favorable to us. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to commercialize bel-sar if and when approved and develop our product candidates.

Our failure to raise capital as and when needed or on acceptable terms would have a negative impact on our financial condition and our ability to pursue our business strategy, and we may have to delay, reduce the scope of, suspend or eliminate one or more of our clinical trials, research and development programs, future commercialization efforts or other operations.

Recent volatility in capital markets may affect our ability to access new capital through sales of shares of our common stock or issuance of indebtedness.

Our operations consume substantial amounts of cash, and we intend to continue to make significant investments to support our business growth, respond to business challenges or opportunities, develop new solutions, retain or expand our current levels of personnel, improve our existing solutions, enhance our operating infrastructure, and potentially acquire complementary businesses and technologies. Our future capital requirements may be significantly different from our current estimates and will depend on many factors, including the need to:

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finance unanticipated working capital requirements;

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develop or enhance our technological infrastructure and our existing solutions;

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pursue acquisitions or other strategic relationships; and

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respond to competitive pressures.

Accordingly, we may need to pursue equity or debt financings to meet our capital needs. With uncertainty in the capital markets and other factors, such financing may not be available on terms favorable to us or at all. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. Any debt financing secured by us in the future could involve additional restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we are unable to obtain adequate financing or financing on terms satisfactory to us, we could face significant limitations on our ability to invest in our operations and otherwise suffer harm to our businesses.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish proprietary rights to our technologies or product candidates.

We do not have any committed external source of funds or other support for our development efforts and we cannot be certain that additional funding will be available on acceptable terms, or at all. Until we can generate sufficient product or royalty revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing or distribution arrangements. If we raise additional funds through public or private equity offerings, the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. Further, to the extent that we raise additional capital through the sale of common stock or securities convertible or exchangeable into common stock, or through the exercise of warrants we have issued, existing stockholder ownership interest will be diluted. In addition, any debt financing may subject us to fixed payment obligations and covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Such restrictions could adversely impact our ability to conduct our operations and execute our business plan.

If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. We also could be required to seek commercial or development partners for our lead products or any future product candidate at an earlier stage than otherwise would be desirable or relinquish our rights to product candidates or technologies that we otherwise would seek to develop or commercialize ourselves.

We rely on our team’s expertise in drug discovery, translational research and patient-driven precision medicine to develop our product candidates. Our business depends significantly on the success of this engine and the development and commercialization of the product candidates that we discover with this engine. We have no products approved for commercial sale and do not anticipate generating any revenue from product sales in the near term, if ever. Our ability to generate revenue and achieve profitability depends significantly on our ability to achieve several objectives, including:

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successful and timely completion of preclinical and clinical development of bel-sar in small choroidal melanoma and indeterminate lesions and additional oncology indications, including but not limited to metastases to the choroid, and bladder cancer, other research programs from our VDC technology platform, and any other future programs;

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establishing and maintaining relationships with CROs and clinical sites for the clinical development of bel-sar, other research programs from our VDC technology platform, and any other future programs;

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timely receipt of marketing approvals from applicable regulatory authorities for any product candidates for which we successfully complete clinical development;

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transferring our manufacturing process to, and developing or maintaining it with, a CDMO including obtaining finished products that are appropriately packaged for sale;

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establishing and maintaining commercially viable supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical development and meet the market demand for our product candidates, if approved;

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successful commercial launch following any marketing approval, including the development of a commercial infrastructure, whether in-house or with one or more collaborators;

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a continued acceptable safety profile following any marketing approval of our product candidates;

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commercial acceptance of our product candidates by patients, the medical community and third-party payors;

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satisfying any required post-marketing approval commitments to applicable regulatory authorities;

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identifying, assessing and developing new product candidates from our VDC technology platform;

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obtaining, maintaining and expanding patent protection, trade secret protection and regulatory exclusivity, both in the United States and internationally;

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defending against third-party interference or infringement claims, if any;

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entering into, on favorable terms, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates;

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obtaining coverage and adequate reimbursement by third-party payors for our product candidates;

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addressing any competing therapies and technological and market developments; and

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attracting, hiring and retaining qualified personnel.

We may never be successful in achieving our objectives and, even if we do, may never generate revenue that is significant or large enough to achieve profitability. If we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to maintain or further our research and development efforts, raise additional necessary capital, grow our business and continue our operations.

Risks Related to the Discovery and Development of our Product Candidates

We are heavily dependent on the success of bel-sar, our only product candidate to date.

We currently have no products that are approved for commercial sale and may never be able to develop marketable products. We expect that a substantial portion of our efforts and expenditures over the next several years will be devoted to development of bel-sar in multiple oncology indications, which is currently our only product candidate. Accordingly, our business currently depends heavily on the successful development, regulatory approval, and commercialization of bel-sar. We can provide no assurance that bel-sar will receive regulatory approval or be successfully commercialized even if we receive regulatory approval. If we were required to discontinue development of bel-sar or if bel-sar does not receive regulatory approval or fails to achieve significant market acceptance, we would be delayed by many years in our ability to achieve profitability, if ever.

The research, testing, manufacturing, safety, efficacy, recordkeeping, labeling, approval, licensure, sale, marketing, advertising, promotion and distribution of bel-sar is, and will remain, subject to comprehensive regulation by the FDA and foreign regulatory authorities. Failure to obtain regulatory approval for bel-sar in the United States, Europe and other major markets around the world will prevent us from commercializing and marketing bel-sar in such jurisdictions.

Even if we were to successfully obtain approval from the FDA and foreign regulatory authorities for bel-sar, any approval might contain significant limitations related to use, including limitations on the stage or type of cancer bel-sar is approved to treat, as well as restrictions for specified age groups, warnings, precautions or contraindications, or requirement for a risk evaluation and mitigation strategy, or REMS. Any such limitations or restrictions could similarly impact any supplemental marketing approvals we may obtain for bel-sar. Furthermore, even if we obtain regulatory approval for bel-sar, we will still need to develop a commercial infrastructure or develop relationships with collaborators to commercialize, establish a commercially viable pricing structure and obtain coverage and adequate reimbursement from third-party payors, including government healthcare programs. If we, or any future collaborators, are unable to successfully commercialize bel-sar, we may not be able to generate sufficient revenue to continue our business.

Our product candidates and the activities associated with their development and commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, distribution, import and export are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable authorities in other countries. Before we can commercialize any of our product candidates, we must obtain marketing approval. We have not received approval to market any of our product candidates from regulatory authorities in any jurisdiction and it is possible that none of our product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval. We utilize third-party CROs and/or regulatory consultants to assist us in the regulatory approval process globally and expect to continue to do so in the future. Securing regulatory approval requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the drug candidate’s safety and efficacy. Securing regulatory approval also requires the submission of information about the drug manufacturing process to, and inspection of manufacturing facilities and clinical sites by the relevant regulatory authority. Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use.

The process of obtaining regulatory approvals, both in the United States and abroad, is expensive, may take many years if additional clinical trials are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted IND, Premarket Approval, or PMA, or biologics license application, or BLA, or equivalent application types, may cause delays in the approval or rejection of an application. The FDA and comparable authorities in other countries have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies. Because the activity of bel-sar in ocular melanoma requires a drug delivery device and activation by a laser, the regulatory complexity of the product candidate is greater than for products that do not utilize a device, which creates uncertainties in the requirements for regulatory approval. Our product candidates could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including the following:

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the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;

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we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication;

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the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

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we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

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the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

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the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an BLA or other submission or to obtain regulatory approval in the United States or elsewhere;

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the FDA or comparable foreign regulatory authorities may fail to approve our manufacturing processes or facilities or those of third-party manufacturers with which we contract for clinical and commercial supplies; and

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the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

Of the large number of drugs in development, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized. The lengthy approval process, as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, results of operations and prospects.

Our novel VDC product candidates are based on a technology that we are in the process of developing. We expect the novel nature of such product candidates to create further challenges in obtaining regulatory approval. As a result, our ability to develop product candidates and obtain regulatory approval may be significantly impacted.

The FDA may also require a panel of experts, referred to as an Advisory Committee, to deliberate on the adequacy of the safety and efficacy data to support approval. The opinion of the Advisory Committee, although not binding, may have a significant impact on our ability to obtain approval of any product candidates that we develop based on the completed clinical trials. Additionally, the conduct of Advisory Committee meetings may be disrupted or delayed and the impact that may have on the overall timing of regulatory approvals is uncertain.

In addition, even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.

If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenues will be materially impaired.

We have initiated but not yet completed a pivotal clinical trial nor have we commercialized any pharmaceutical products, which may make it difficult to evaluate our future prospects.

We will need to successfully complete pivotal clinical trials in order to obtain the approval of the FDA, the EMA, or other regulatory agencies to market bel-sar or any future product candidate. Carrying out later-stage clinical trials is a complicated process. Our operations to date have been limited to financing and staffing our company, developing our technology and conducting preclinical research and Phase 1 and Phase 2 clinical trials for our product candidates, primarily related to our bel-sar program in small choroidal melanoma and indeterminate lesions. Although we have an ongoing global Phase 3 trial in small choroidal melanomas and indeterminate lesions, we have not yet demonstrated an ability to successfully complete pivotal clinical trials, obtain marketing approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. In order to complete later stage or pivotal trials, we are expanding our clinical operations, CMC and regulatory capabilities, and we may be unable to recruit and train qualified personnel or sign a contract with a global clinical research organization to conduct such trials on our behalf. Consequently, we may be unable to successfully and efficiently design, execute and complete necessary clinical trials in a way that leads to approval of bel-sar or future product candidates. We may require more time to enroll patients and incur greater costs than our competitors and may not succeed in obtaining global regulatory approvals of product candidates that we develop. Furthermore, we may conduct a pivotal trial based on an adaptive design, which could increase the time spent on or costs associated with this trial. We have transferred our manufacturing process to our external CDMO manufacturer, but transfers to additional CDMOs may occur in the future. Further, some modifications to our manufacturing process or a manufacturing facility change may be needed, including to ensure manufacturability and ability to scale-up the process to commercial batch sizes and to meet worldwide regulatory standards for commercial manufacture. We intend to perform an analytical comparability assessment between the current clinical process and the intended commercial process, however, if this analytical process comparability assessment is unsuccessful, clinical comparability or other studies may be required, which may result in delayed regulatory approval. We do not anticipate a change in our ocular formulation. However, failure to commence or complete, or delays in, our planned clinical trials, could prevent us from or delay us in commercializing our product candidates. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by clinical-stage biopharmaceutical companies such as ours. Any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products.

If we fail to develop additional product candidates, or obtain additional indications of our first product candidate, our commercial opportunity could be limited.

We expect to focus our resources on the development of bel-sar in the near term. Developing, obtaining marketing approval for, and commercializing any future product candidates will require substantial additional funding and will be subject to the risks of failure inherent in drug product development. We cannot assure you that we will be able to successfully advance any future product candidates through the development process.

Even if we obtain approval from the FDA or comparable foreign regulatory authorities to market any future product candidates for any indication, we cannot assure you that any such product candidates will be successfully commercialized, widely accepted in the marketplace, or more effective than other commercially available alternatives. If we are unable to successfully develop and commercialize additional product candidates, our commercial opportunity may be limited and our business, financial condition, results of operations, stock price and prospects may be materially harmed.

Aura Biosciences, Inc. 10-Q