UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended ~~September~~March 3031, ~~2025~~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: 001-40925

Xilio Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

     Delaware

     85-1623397

     (State or other jurisdiction of
incorporation or organization)

     (I.R.S. Employer
Identification Number)

     828 Winter Street, Suite 300
Waltham, Massachusetts

     02451

     (Address of principal executive offices)

     (Zip Code)

Registrant’s telephone number, including area code: (857) 524-2466

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


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	XLO	Nasdaq Capital Market

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

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

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


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☒

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

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

Number of shares of the registrant’'s common stock, $0.0001 par value per share, outstanding on ~~November~~May 118, ~~2025~~2026: 525,~~500~~982,~~328~~839

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References to Xilio

Unless otherwise stated, all references to “us,” “our,” “we,” “Xilio,” “Xilio Therapeutics,” “the Company” and similar references in this Quarterly Report on Form 10-Q refer to Xilio Therapeutics, Inc. and its consolidated subsidiaries. Xilio Therapeutics and its associated logos are registered trademarks of Xilio Therapeutics, Inc. Other brands, names and trademarks contained in this Quarterly Report on Form 10-Q are the property of their respective owners.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” or the negative of these words or other comparable terminology, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•

the initiation, timing, progress and results of our research and development programs, including preclinical studies and clinical trials;

•

our estimates regarding expenses, future revenue and capital requirements and our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash and cash equivalents;

•

our ability to establish and maintain collaborations and strategic partnerships and realize the expected benefits of such arrangements, including our collaboration agreement with AbbVie Group Holdings Limited, or AbbVie, and our license agreement with Gilead Sciences, Inc., or Gilead~~, and our clinical collaboration with F. Hoffmann-La Roche Ltd~~;

•

our expectations regarding milestones, option-related fees and other contingent payments under our collaboration agreement with AbbVie and our license agreement with Gilead;

•

the potential receipt of up to $~~100~~36.02 million in additional gross proceeds in the second half of 2026 if all of the Series ~~B and Series~~ C common stock warrants issued in connection with our June 2025 follow-on ~~public~~ offering are exercised at their current exercise price of $10.50 per warrant;

•

our ability to secure ~~sufficient~~ additional capital orin ~~implement other strategies needed to alleviate~~ the ~~substantial doubt about our ability to continue as a going concern~~future;

•

the potential advantages and benefits of our current and future product candidates, including our beliefs regarding the potential benefits of our current and future product candidates in combination with other agents;

•

our strategic plans to research, develop and, if approved, subsequently commercialize any product candidates we may develop;

•

our ability to identify additional products, product candidates or technologies with significant potential that are consistent with our research, development and commercial objectives;

•

our manufacturing capabilities and strategy, including our reliance on third parties to manufacture our current or future product candidates;

•

our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates;

•

the timing of and our ability to submit investigational new drug applications or biologic license applications for, and, if cleared or approved, maintain such regulatory applications or approvals for our product candidates;

•

our commercialization and marketing capabilities and strategy related to our product candidates, if approved;

•

the rate and degree of market acceptance of our product candidates, if approved;

•

our estimates regarding the addressable patient population and potential market opportunity for our current and future product candidates;

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•

developments relating to or impacting our competitors and our industry, including the impact of current or future government laws and regulations on us, third parties with whom we do business and our industry;

•

the impact of current or future government laws and regulations on us or third parties with whom we do business and our industry;

•

our competitive position and expectations regarding developments and projections relating to our current or future competitors and any competing therapies that are or become available;

•

our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act, or JOBS Act; and

•

the impact of general economic conditions, including inflation and the imposition of new or revised global trade tariffs.

Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly those described in the “Risk Factor Summary” and “Risk Factors” section in Part II, Item 1A of this Quarterly Report on Form 10-Q, that could cause actual results or events to differ materially from the forward-looking statements that we make. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or enter into.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results, performance or achievements may be materially different from what we expect. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

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Risk Factor Summary

Our business is subject to numerous risks that, if realized, could materially and adversely affect our business, financial condition, results of operations and future growth prospects. These risks are discussed more fully in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. These risks include, but are not limited to, the following:

•

~~Our~~We ~~recurring~~will ~~losses~~need ~~from~~to ~~operations~~obtain ~~raise~~ substantial ~~doubt regarding our ability to continue as a going concern. If we are unable to raise sufficient~~ additional capital, wein ~~will~~the ~~need~~future to ~~implement~~finance ~~additional~~our ~~cost~~operations ~~reduction~~and ~~strategies,~~complete ~~which~~the ~~could~~development ~~include~~of ~~delaying,~~any ~~limiting,~~current ~~reducing~~ or ~~eliminating~~future ~~both~~product ~~internal and external costs related to our operations and research and development programs~~candidates.

•

IfWe wehave ~~fail~~incurred tosignificant ~~regain~~operating ~~compliance~~losses ~~with~~since ~~the continued listing requirements of The Nasdaq Capital Market,~~ our ~~common~~inception ~~stock may be delisted~~ and ~~the~~expect ~~price~~to ofincur ~~our~~significant ~~common~~losses ~~stock~~for ~~and our ability to access~~ the ~~capital~~foreseeable ~~markets could be negatively impacted~~future.

•

Our business is highly dependent on the success of our current product candidates, which are in the early stages of development and will require significant additional preclinical and clinical development before we can seek regulatory approval for and commercially launch a product.

•

Our approach to the discovery and development of product candidates based on our technological approaches is unproven, and we do not know whether we will be able to develop any products of commercial value.

•

Preclinical development is uncertain. Our preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all, which would have an adverse effect on our business.

•

We may encounter substantial delays in the commencement or completion, or termination or suspension, of our clinical trials, which could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.

•

Our product candidates may cause undesirable or unexpectedly severe side effects that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

•

Interim top-line and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

•

We expect to develop certain of our product candidates in combination with third-party drugs and we will have limited or no control over the safety, supply, regulatory status or regulatory approval of such drugs.

•

Manufacturing biologics is complex, and we may experience manufacturing problems that result in delays in our development or commercialization programs. In addition, certain of our research and development and manufacturing activities take place in China through WuXi Biologics (Hong Kong) Limited, or WuXi Biologics. A significant disruption in our ability to rely on WuXi Biologics could materially adversely affect our business, financial condition and results of operations.

•

We face risk related to our reliance on our current and any future third-party contract development and manufacturing organizations, or CDMOs. For example, the CDMO on which we rely may not continue to meet regulatory requirements, may have limited capacity and may experience interruptions in supply, any of which could adversely affect our development and commercialization plans for our product candidates.

We expect to rely on third parties to conduct, supervise and monitor IND-enabling studies and clinical trials, and if these third parties perform in an unsatisfactory manner, it may harm our business, reputation and results of operations.

•

We have entered into, and may in the future seek to enter into, collaborations, licenses, or similar arrangements with third parties for the research, development and commercialization of certain of our current or future product candidates. If any such arrangements are not successful, we may not be able to capitalize on the market potential of those product candidates.

•

~~Certain~~We offace ~~our~~substantial ~~research~~competition, ~~and~~which ~~development~~may ~~and~~result ~~manufacturing activities take place~~ in ~~China~~others ~~through~~discovering, ~~WuXi~~developing ~~Biologics~~or ~~(Hong~~commercializing ~~Kong)~~products ~~Limited,~~before or ~~WuXi~~more ~~Biologics.~~successfully Athan ~~significant~~we ~~disruption in our ability to rely on WuXi Biologics could materially adversely affect our business, financial condition and results of operations~~do.

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•

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

If we are unable to obtain and maintain patent protection for any product candidates we develop or for other proprietary technologies we may develop, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize product candidates and technology similar or identical to our product candidates and technology, and our ability to successfully commercialize any product candidates we may develop, and our technology may be adversely affected.

•

We rely on in-license agreements for patent rights with respect to our product candidates and may in the future acquire or in-license additional third-party intellectual property rights on which we may similarly rely. We face risks with respect to such reliance, including the risk that we could lose these rights that are important to our business if we fail to comply with our obligations under these licenses or that we may be unable to acquire or in-license third-party intellectual property that may be necessary or important to our business operations.

•

Even if we complete the necessary preclinical studies and clinical trials, the regulatory approval process is expensive, time consuming and uncertain and may prevent us from obtaining approvals for the commercialization of some or all of our product candidates. As a result, we cannot predict when or if, and in which territories, we will obtain marketing approval to commercialize a product candidate.

•

The price of our common stock has been and, in the future, could be subject to volatility related or unrelated to our operations, and purchasers of our common stock could suffer a decline in value.

Availability of Other Information About Xilio Therapeutics, Inc.

Investors and others should note that we communicate with our investors and the public using our company website (www.xiliotx.com), including but not limited to investor presentations and scientific presentations, filings with the U.S. Securities and Exchange Commission, press releases, public conference calls and webcasts. You can also connect with us on LinkedIn. The information that we post on these channels and websites could be deemed to be material information. As a result, we encourage investors, the media and others interested in our company to review the information that we post on these channels, including our investor relations website, on a regular basis. This list of channels may be updated from time to time on our investor relations website (ir.xiliotx.com) and may include other social media channels than the ones described above. The contents of our website or these channels, or any other website that may be accessed from our website or these channels, shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

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TABLE OF CONTENTS

		Page
Part I	Financial Information	7
Item 1.	Financial Statements (unaudited)	7
	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	7
	Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	7
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2025 and 2024	8
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2026 and 2025	8
	Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the three and nine months ended September 30, 2025 and 2024	9
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025	9
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	11
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025	10
	Notes to Condensed Consolidated Financial Statements	1211
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2726
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4135
Item 4.	Controls and Procedures	4135
Part II	Other Information	4237
Item 1A.	Risk Factors	4237
Item 5.	Other Information	~~106~~100
Item 6.	Exhibits	~~107~~102
Signatures		~~108~~103

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

XILIO THERAPEUTICS, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

	September 30,			December 31,
	March 31,			December 31,
	2025			2024
	2026			2025
ASSETS
Current assets
Cash and cash equivalents	$	~~103~~150,~~764~~333		$	55137,~~291~~531
License agreement receivable		17,500			—
Collaboration and license agreement receivable		—			5,000
Prepaid expenses and other current assets		23,~~825~~874			42,~~943~~496
Total current assets		~~124~~154,~~089~~207			60145,~~234~~027
Restricted cash		1,~~801~~813			1,~~782~~807
Property and equipment, net		3,~~679~~680			43,~~472~~892
Operating lease right-of-use asset		43,~~125~~787			43,~~587~~959
Total assets	$	~~133~~163,~~694~~487		$	71154,~~075~~685
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	21,~~300~~064		$	23,~~574~~168
Accrued expenses		8,~~952~~970			911,~~981~~739
Deferred revenue, current portion		4331,~~846~~542			1340,~~518~~023
Operating lease liability, current portion		1,~~303~~384			1,~~188~~343
Total current liabilities		5642,~~401~~960			2756,~~261~~273
Deferred revenue, net of current portion		2516,~~498~~468			1920,~~262~~635
Operating lease liability, net of current portion		5,~~960~~254			65,~~954~~611
Common stock warrant liabilities		5326,~~930~~260			—29,560
Total liabilities		141,789			53,477
Liabilities to issue common stock		—			7,333
Total liabilities		90,942			119,412
Commitments and contingencies (Note 7)
Stockholders’ (deficit) equity
Stockholders’ equity
Preferred stock, $0.0001 par value; 5,000,000 shares authorized, no shares issued or outstanding		—			—
Common stock, $0.0001 par value; 600,000,000 shares authorized at September 30, 2025 and 200,000,000 shares authorized at December 31, 2024; 51,829,013 shares issued and outstanding at September 30, 2025; 45,756,773 shares issued and outstanding at December 31, 2024		5			5
Common stock, $0.0001 par value; 600,000,000 shares authorized; 5,782,536 shares issued and outstanding at March 31, 2026; 4,530,641 shares issued and outstanding at December 31, 2025		1			—
Additional paid-in capital		~~421~~500,~~049~~862			~~401~~454,~~346~~062
Accumulated deficit		(~~429~~428,~~149~~318	)		(~~383~~418,~~753~~789	)
Total stockholders’ (deficit) equity		(8,095	)		17,598
Total stockholders’ equity		72,545			35,273
Total liabilities and stockholders’ (deficit) equity	$	133,694		$	71,075
Total liabilities and stockholders’ equity	$	163,487		$	154,685

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

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XILIO THERAPEUTICS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2025			2024			2025			2024
	2026			2025
Revenue
Collaboration and license revenue	$	1912,~~066~~648		$	2,~~263~~930		$	~~30,080~~		$	~~4,620~~
Total revenue		1912,~~066~~648			2,~~263~~930			~~30,080~~			~~4,620~~
Operating expenses
Research and development	$	1419,~~321~~832		$	108,~~759~~266		$	~~37,917~~		$	~~32,375~~
General and administrative		6,~~674~~928			68,~~307~~515			~~22,309~~			~~18,261~~
Restructuring		—			(41	)		—			937
Total operating expenses		26,760			16,781
Total operating expenses		20,995			17,025			60,226			51,573
Loss from operations		(14,112	)		(13,851	)
Loss from operations		(1,929	)		(14,762	)		(30,146	)		(46,953	)
Other income, net
Other income (expense), net
Change in fair value of common stock warrant liabilities		3,300			—
Change in fair value of common stock warrant liabilities		(15,380	)		—			(15,430	)		—
Other income, net		1,283			586
Other income (expense), net		1,022			742			180			1,805
Total other income, net		4,583			586
Total other income (expense), net		(14,358	)		742			(15,250	)		1,805
Net loss and comprehensive loss	$	(9,529	)	$	(13,265	)
Net loss and comprehensive loss	$	(16,287	)	$	(14,020	)	$	(45,396	)	$	(45,148	)
Net loss per share, basic and diluted	$	(0.58	)	$	(2.49	)
Net loss per share, basic and diluted	$	(0.11	)		(0.22	)	$	(0.43	)	$	(0.91	)
Weighted average common shares outstanding, basic and diluted		16,347,538			5,335,740
Weighted average common shares outstanding, basic and diluted		144,106,869			63,465,063			105,339,205			49,762,800

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

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XILIO THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ ~~(Deficit)~~ Equity

For the three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025

(In thousands, except share data)

(Unaudited)

												Total
						Additional						Total
						Additional						Stockholders'
	Common Stock					Paid-In			Accumulated			Stockholders'
	Common Stock					Paid-In			Accumulated			(Deficit)
	Shares		Amount			Capital			Deficit			Equity
Balance at June 30, 2025		51,827,910	$		5	$		419,926	$	(412,862	)	$	7,069
Balance at December 31, 2025		4,530,641	$		—	$		454,062	$	(418,789	)	$	35,273
Exercise of stock options		1,103			—			—		—			—
Issuance of prefunded warrants in connection with a follow-on offering, net of issuance costs		—			—			37,256		—			37,256
Stock-based compensation expense		—			—			1,123		—			1,123
Issuance of common stock to settle the liabilities to issue common stock		708,223			1			7,332		—			7,333
Net loss		—			—			—		(16,287	)		(16,287	)
Issuance of common stock in connection with the exercise of prefunded warrants		535,611			—			—		—			—
Balance at September 30, 2025		51,829,013	$		5	$		421,049	$	(429,149	)	$	(8,095	)
Vesting of restricted stock units		7,952			—			—		—			—
Exercise of stock options		109			—			1		—			1
Stock-based compensation expense		—		—				2,211		—			2,211
Net loss	—			—			—			(9,529	)		(9,529	)
Balance at March 31, 2026		5,782,536	$		1	$		500,862	$	(428,318	)	$	72,545

						Additional						Total
	Common Stock					Paid-In			Accumulated			Stockholders'
	Shares		Amount			Capital			Deficit			Equity
Balance at June 30, 2024		43,951,922	$		4	$		390,052	$	(356,640	)	$	33,416
Balance at December 31, 2024		3,268,299	$		—	$		401,351	$	(383,753	)	$	17,598
Exercise of stock options		6,152			—			4		—			4
Issuance of common stock in connection with the AbbVie stock purchase agreement, net of issuance costs		310,559			—			2,810		—			2,810
Stock-based compensation expense		—			—			1,574		—			1,574
Issuance of common stock in connection with at-the-market offerings, net of issuance costs		110,747			—			2,017		—			2,017
Net loss		—			—			—		(14,020	)		(14,020	)
Vesting of restricted stock units		7,952			—			—		—			—
Balance at September 30, 2024		43,958,074	$		4	$		391,630	$	(370,660	)	$	20,974
Exercise of stock options		648			—			5		—			5
Stock-based compensation expense		—		—				1,535		—			1,535
Net loss	—			—			—			(13,265	)		(13,265	)
Balance at March 31, 2025		3,698,205	$		—	$		407,718	$	(397,018	)	$	10,700

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

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XILIO THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ (Deficit) Equity

For the nine months ended September 30, 2025 and 2024

(In thousands, except share data)

(Unaudited)

										Total
					Additional					Stockholders'
	Common Stock				Paid-In		Accumulated			(Deficit)
	Shares		Amount		Capital		Deficit			Equity
Balance at December 31, 2024		45,756,773	$	5	$	401,346	$	(383,753	)	$	17,598
Issuance of prefunded warrants in connection with a follow-on public offering, net of issuance costs		—		—		10,818		—			10,818
Issuance of common stock in connection with the AbbVie stock purchase agreement, net of issuance costs		4,347,826		—		2,810		—			2,810
Issuance of common stock in connection with at-the-market offerings, net of issuance costs		1,550,000		—		2,017		—			2,017
Issuance of common stock under employee stock purchase plan		45,505		—		40		—			40
Vesting of restricted stock units		111,375		—		—		—			—
Exercise of stock options		17,534		—		9		—			9
Stock-based compensation expense		—		—		4,009		—			4,009
Net loss		—		—		—		(45,396	)		(45,396	)
Balance at September 30, 2025		51,829,013	$	5	$	421,049	$	(429,149	)	$	(8,095	)

					Additional					Total
	Common Stock				Paid-In		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balance at December 31, 2023		27,607,646	$	3	$	362,336	$	(325,512	)	$	36,827
Issuance of common stock and prefunded warrants to Gilead and certain accredited investors in private placements, net of issuance costs		9,298,598		—		17,513		—			17,513
Issuance of common stock in connection with at-the-market offerings, net of issuance costs		7,000,000		1		6,824		—			6,825
Issuance of common stock under employee stock purchase plan		38,998		—		34		—			34
Vesting of restricted common stock		5,617		—		—		—			—
Exercise of stock options		7,215		—		5		—			5
Stock-based compensation expense		—		—		4,918		—			4,918
Net loss		—		—		—		(45,148	)		(45,148	)
Balance at September 30, 2024		43,958,074	$	4	$	391,630	$	(370,660	)	$	20,974

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

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XILIO THERAPEUTICS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2025			2024
	2026			2025
Cash flows from operating activities:
Net loss	$	(459,~~396~~529	)	$	(4513,~~148~~265	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		~~1,218~~344			~~1,268~~497
Stock-based compensation expense		42,~~009~~211			41,~~918~~535
Change in fair value of common stock warrant liabilities		15(3,~~430~~300	)		—
Issuance costs allocated to common stock warrant liabilities		2,284			—
Loss on disposal of property and equipment		—			2
Changes in operating assets and liabilities:
License agreement receivable		(17,500	)		—
Collaboration and license agreement receivable		5,000			—
Prepaid and other assets		2(1,~~580~~205	)		~~1,769~~964
Accounts payable		(~~276~~1,680	)		(76590	)
Accrued expenses and other liabilities		(1,~~907~~536	)		(16,~~458~~376	)
Deferred revenue		36(12,~~564~~648	)		3446,~~504~~213
Net cash used in operating activities		(2,994	)		(4,221	)
Net cash (used in) provided by operating activities		(22,343	)		28,978
Cash flows from investing activities:
Purchases of property and equipment		(~~423~~556	)		(3022	)
Net cash used in investing activities		(~~423~~556	)		(3022	)
Cash flows from financing activities:
Repayments of debt principal		—			(3,333	)
Proceeds from issuance of prefunded warrants in connection with a follow-on offering, net of issuance costs		37,256			—
Payments of finance lease		—			(49	)
Proceeds from issuance of common stock in connection with the AbbVie stock purchase agreement, net of issuance costs		—			2,810
Proceeds from issuance of common stock under employee stock purchase plan		40			34
Proceeds from issuance of common stock in connection with at-the-market offerings, net of issuance costs		—			2,017
Proceeds from exercise of stock options		91			5
Proceeds from issuance of prefunded warrants and common stock warrants in connection with a follow-on public offering, net of issuance costs		47,033			—
Payments of issuance costs included in accounts payable or accrued expenses at prior year end		(1,550	)		—
Proceeds from issuance of common stock in connection with the AbbVie stock purchase agreement, net of issuance costs		2,810			—
Net cash provided by financing activities		35,707			4,832
Proceeds from issuance of common stock in connection with at-the-market offerings, net of issuance costs		2,017			6,824
Increase in cash, cash equivalents and restricted cash		12,808			33,788
Proceeds from issuance of common stock and prefunded warrants to Gilead and certain accredited investors in private placements, net of issuance costs		—			17,513
Cash, cash equivalents and restricted cash, beginning of period		139,338			57,073
Net cash provided by financing activities		51,909			20,994
Cash, cash equivalents and restricted cash, end of period	$	152,146		$	90,861
Increase in cash, cash equivalents and restricted cash		48,492			16,743
Cash, cash equivalents and restricted cash, beginning of period		57,073			46,291
Cash, cash equivalents and restricted cash, end of period	$	105,565		$	63,034
Supplemental cash flow disclosure:
Cash paid for interest	$	—		$	62
Supplemental disclosure of non-cash activities:
Transfer of finance lease asset to property and equipment	$	—		$	85
Capital expenditures included in accounts payable or accrued expenses	$	19		$	292
Settlement of liabilities to issue common stock by issuing common stock	$	7,332		$	—
Reconciliation to amounts within the consolidated balance sheets:
Cash and cash equivalents	$	~~103~~150,~~764~~333		$	6189,~~259~~073
Restricted cash		1,~~801~~813			1,~~775~~788
Cash, cash equivalents and restricted cash, end of period	$	~~105~~152,~~565~~146		$	6390,~~034~~861

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

1110

Table of Contents

XILIO THERAPEUTICS, INC.

Notes to Condensed Consolidated Financial Statements

(Dollars in thousands, unless otherwise stated)

(Unaudited)

1. Description of Business, Liquidity and Going ConcernLiquidity

Xilio Therapeutics, Inc. (“Xilio” or the “Company”) is a clinical-stage biotechnology company dedicated to discovering and developing ~~tumor-activated~~masked immuno-oncology (“I-O”) therapies with the goal of significantly improving outcomes for people living with cancer without the systemic side effects of current I-O treatments. The Company was incorporated in Delaware in June 2020, and its headquarters are located in Waltham, Massachusetts.

InSince ~~June~~its ~~2025~~inception, the Company ~~received~~has ~~initial~~devoted ~~gross~~substantially ~~proceeds~~all of ~~$50.0~~its ~~million~~financial ~~upon~~resources ~~the~~and ~~closing~~efforts ofto aresearch ~~follow-on~~and ~~public~~development ~~offering~~activities. As of ~~prefunded~~March ~~warrants~~31, ~~and~~2026, ~~accompanying~~the ~~common~~Company ~~stock~~had ~~warrants.~~an Ifaccumulated ~~certain~~deficit of ~~the~~$428.3 ~~common~~million ~~stock~~and ~~warrants~~has ~~are~~incurred ~~exercised~~significant inoperating ~~cash~~losses, atincluding ~~their~~net ~~initial~~losses ~~exercise~~of ~~price~~$9.5 ofmillion and $013.753 ~~per~~million ~~warrant,~~for the three months ended March 31, 2026 and 2025, respectively. The Company ~~will~~expects ~~receive~~its upoperating losses and negative operating cash flows to ~~$100.0~~continue ~~million~~for ofthe ~~additional~~foreseeable ~~gross~~future ~~proceeds~~as byit continues to advance its product candidates through clinical trials, maintains the ~~second~~infrastructure ~~half~~necessary ofto ~~2026.~~support ~~See~~these ~~Note~~activities 8and ~~for~~continues ~~additional~~to ~~information~~incur costs associated with operating as a public company.

~~Since its inception, the Company has devoted substantially all of its financial resources and efforts to research and development activities.~~ As of ~~September~~March 3031, ~~2025~~2026, the Company had ancash ~~accumulated deficit of $429.1 million~~ and ~~has~~cash ~~incurred~~equivalents ~~significant operating losses, including net losses~~ of $45150.43 million ~~and $45~~.1 ~~million~~Based ~~for~~on ~~the~~its ~~nine~~current ~~months~~operating ~~ended September 30~~plans, ~~2025~~the ~~and 2024, respectively. The~~ Company ~~expects~~anticipates that its ~~operating~~existing ~~losses~~cash and ~~negative operating~~ cash ~~flows~~equivalents ~~to continue for the foreseeable future~~ as ~~it continues to advance its pipeline~~ of ~~novel,~~March ~~tumor-activated I-O molecules through preclinical and clinical development~~31, ~~maintains~~2026 ~~the~~will ~~infrastructure~~be ~~necessary~~sufficient to ~~support~~enable ~~these~~it ~~activities and continues~~ to ~~incur~~fund ~~costs~~its ~~associated with~~ operating asexpenses aand ~~public~~capital ~~company.~~expenditure ~~These~~requirements ~~conditions~~for ~~raise~~at ~~substantial~~least ~~doubt about the Company’s ability to continue as a going concern within~~ twelve months from the date of the issuance of these condensed consolidated financial statements.

~~In order to fund its operations~~However, the Company ~~will~~has ~~need~~based toits ~~raise~~estimates ~~additional capital, which could be obtained through the cash exercise of common stock warrants issued in connection with the June 2025 follow-~~on ~~public~~assumptions ~~offering,~~that ~~the~~may ~~receipt~~prove ofto ~~milestone~~be ~~payments,~~wrong. ~~option-related~~If ~~fees~~actual orresults ~~other~~differ ~~contingent~~from ~~payments under~~ the Company’s ~~existing agreements with Gilead Sciences~~estimates, Inc. (“Gilead”) and AbbVie Group Holdings Limited (“AbbVie”), additional public or private equity offerings, debt financings, additional collaborations, partnerships or licensing arrangements or other sources. In the ~~fourth quarter of 2025, the~~ Company ~~received~~could aexhaust ~~$17.5~~its ~~million~~available ~~development~~capital ~~milestone~~resources ~~payment~~sooner ~~from~~than ~~Gilead.~~it ~~However~~anticipates, ~~there~~in ~~can~~which becase, ~~no assurance that~~ the Company ~~will~~would ~~receive additional proceeds from the exercise of the common stock warrants or from contingent payments under its existing agreements with Gilead or AbbVie or that the Company will~~ be ~~able~~required to ~~complete~~seek ~~any~~ additional ~~transactions~~capital onsooner ~~acceptable terms~~ or ~~otherwise.~~curtail Ifplanned ~~the~~activities ~~Company is not able~~ to ~~secure~~reduce ~~sufficient~~operating ~~additional capital when needed~~expenses, ~~the~~which ~~Company~~ may ~~need~~have toan ~~implement~~adverse ~~additional~~impact ~~cost~~on reduction strategies, which could include delaying, limiting, further reducing or eliminating both internal and external costs related to its operations and research and development programs. In addition, the Company’s ~~has~~ability ~~based its estimates on assumptions that may prove~~ to beachieve ~~wrong, and the Company could exhaust~~ its ~~available~~business ~~capital resources sooner than it anticipates~~objectives.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business2. ~~The~~Summary ~~condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification~~ of ~~recorded~~Significant ~~asset~~Accounting ~~amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.~~Policies

2.Basis Summary of Significant Accounting PoliciesPresentation

~~Basis~~The Company’s unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”), and pursuant to the rules and regulations of ~~Presentation~~the U.S. Securities and Exchange Commission (the “SEC”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2025 and notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 23, 2026. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements contain all adjustments which are necessary to present fairly the Company’s financial position as of March 31, 2026 and the results of its operations for the three months ended March 31, 2026 and 2025 and cash flows for the three months ended March 31, 2026 and 2025. Such adjustments are of a normal and recurring nature. The results for the three months ended March 31, 2026 are not necessarily indicative of the results for the year ending December 31, 2026 or for any future period.

~~The~~On ~~Company’s~~March ~~unaudited~~13, ~~interim~~2026, ~~condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in~~ the ~~United~~Company ~~States~~effected ~~(“U.S.~~a ~~GAAP”),~~reverse ~~and~~stock ~~pursuant~~split ~~to the rules and regulations~~ of ~~the~~its ~~U.S.~~common ~~Securities~~stock ~~and~~at ~~Exchange~~a ~~Commission~~ratio ~~(the~~of ~~“SEC”)~~1-for-14. ~~Any~~The ~~reference~~reverse instock ~~these~~split ~~notes~~did tonot ~~applicable~~impact ~~guidance~~the isnumber ~~meant~~of toauthorized ~~refer~~shares toof ~~the~~common ~~authoritative~~stock ~~U.S.~~or ~~GAAP~~preferred asstock ~~found~~or in the ~~Accounting~~par ~~Standards~~value ~~Codification~~per ~~(“ASC”)~~share ~~and Accounting Standards Updates (“ASUs”)~~ of the ~~Financial~~common ~~Accounting~~stock ~~Standards~~or ~~Board~~preferred ~~(“FASB”)~~stock. ~~Certain~~All ~~information~~share and ~~footnote~~per ~~disclosures~~share ~~normally~~amounts ~~included~~ in ~~financial~~these ~~statements~~condensed ~~prepared~~consolidated infinancial ~~accordance~~statements ~~with~~and ~~U.S.~~notes ~~GAAP~~thereto have been ~~condensed~~adjusted orretroactively ~~omitted~~to ~~from~~reflect ~~this~~the ~~report,~~reverse asstock issplit ~~permitted~~for byall ~~such~~periods ~~rules and regulations~~presented. ~~Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited~~

1211

Table of Contents

financialPrinciples statements as of and for the year ended December 31, 2024 and notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 11, 2025. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements contain all adjustments which are necessary to present fairly the Company’s financial position as of September 30, 2025 and the results of its operations for the three and nine months ended September 30, 2025 and 2024 and cash flows for the nine months ended September 30, 2025 and 2024. Such adjustments are of a normal and recurring nature. The results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results for the year ending December 31, 2025 or for any future period.Consolidation

PrinciplesThe accompanying condensed consolidated financial statements include the accounts of Consolidationthe Company and its wholly owned subsidiaries: Xilio Development, Inc. (“Xilio Development”), a Delaware corporation, and Xilio Securities Corporation, a Massachusetts security corporation. All intercompany accounts and transactions have been eliminated in consolidation.

TheSignificant accompanyingAccounting condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: Xilio Development, Inc. (“Xilio Development”), a Delaware corporation, and Xilio Securities Corporation, a Massachusetts security corporation. All intercompany accounts and transactions have been eliminated in consolidation.Policies

The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements are described in Note 2, “Summary of Significant Accounting Policies” of the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

~~The~~Use ~~significant accounting policies used in preparation~~ of the unaudited condensed consolidated financial statements are described in Note 2, “Summary of Significant Accounting Policies” of the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Except as described below, there have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.Estimates

~~Common~~The ~~Stock~~preparation ~~Warrants~~of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of revenue and expenses during the reporting period. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these condensed consolidated financial statements. Factors that may affect estimates include expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. Significant estimates of accounting reflected in these condensed consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued expenses, the valuation of the common stock warrant liabilities, the valuation of stock-based compensation, including stock options and restricted stock units, useful life of long-lived assets and income taxes. Actual results could differ from those estimates.

~~The~~Concentrations ~~Company accounts for warrants to purchase shares~~ of ~~its~~Credit ~~common~~Risk stock in accordance with the guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The Company classifies warrants issued for the purchase of shares of its common stock as either equity or liability instruments based on an assessment of the specific terms and conditions of each respective contract. Such assessment includes determining whether the warrants are freestanding financial instruments or embedded in a host instrument, whether the warrants are liabilities within the scope of ASC 480, whether the warrants meet the definition of a derivative in ASC 815 and whether the warrants meet the requirements for equity classification pursuant to the indexation and equity classification criteria in ASC 815.

~~The~~Financial ~~Company~~instruments ~~determines~~that potentially expose the ~~classification~~Company ~~for~~to ~~its~~concentrations ~~warrants~~of atcredit ~~the~~risk ~~time~~consist primarily of ~~issuance~~cash and ~~updates~~cash ~~its~~equivalents. ~~assessment~~The asCompany ~~necessary.~~holds ~~Warrants~~all ~~that~~cash ~~meet~~and ~~all~~cash ofequivalents ~~the~~at ~~criteria~~accredited ~~for~~financial ~~equity~~institutions. ~~classification~~Bank ~~are~~accounts ~~recorded~~in asthe aUnited ~~component~~States ofare ~~additional~~generally ~~paid-in~~insured ~~capital~~by ~~and~~the ~~are~~Federal ~~not~~Deposit ~~subsequently~~Insurance ~~remeasured~~Corporation (“FDIC”) up to $250,000. ~~Warrants~~Substantially ~~that~~all ~~are~~of ~~classified~~the asCompany’s ~~liabilities~~cash ~~are~~and ~~recorded~~cash atequivalents ~~fair~~are ~~value~~FDIC oninsured, ~~the~~including ~~issuance~~funds ~~date~~held ~~and~~through ~~remeasured~~an toinsured ~~fair~~cash ~~value~~sweep atprogram. ~~each~~The ~~reporting~~Company ~~period,~~has ~~with~~not ~~the~~experienced ~~change~~any losses in ~~fair~~its ~~value~~cash ~~recorded~~and ascash aequivalents ~~component~~and ofdoes ~~other~~not ~~income~~believe ~~(expense),~~that ~~net,~~it onis subject to unusual credit risk beyond the ~~condensed~~normal ~~consolidated~~credit ~~statements~~risk ofassociated ~~operations~~with ~~and~~commercial ~~comprehensive~~banking ~~loss~~relationships.

~~Use of Estimates~~Segments

The ~~preparation~~Company ofhas ~~financial~~one ~~statements~~operating inand ~~accordance~~reportable ~~with~~segment, ~~GAAP~~the ~~requires~~consolidated ~~management~~Company tooperations, ~~make~~reflecting ~~estimates and judgments that may affect~~ the ~~reported~~integrated ~~amounts~~nature of ~~assets~~its ~~and~~business ~~liabilities~~focused ~~and~~on ~~related~~discovering ~~disclosures of contingent assets~~ and ~~liabilities~~developing atmasked ~~the~~I-O ~~date~~therapies. ofThe ~~the~~Company’s ~~financial~~chief ~~statements~~operating ~~and~~decision ~~the~~maker ~~related~~(“CODM”) ~~reporting~~is ofits ~~revenue~~chief ~~and~~executive ~~expenses during the reporting period~~officer. ~~Management~~The ~~considers~~CODM ~~many~~allocates ~~factors~~resources inand ~~selecting~~assesses ~~appropriate~~performance ~~financial~~on ~~accounting~~a ~~policies~~consolidated ~~and~~basis, ~~controls~~focused ~~and~~on inthe ~~developing~~Company’s ~~the~~cash ~~estimates~~resources and ~~assumptions~~an ~~that~~assessment ~~are~~of ~~used in~~ the ~~preparation~~probability of ~~these~~success ~~condensed~~of ~~consolidated~~its ~~financial~~ongoing ~~statements.~~research ~~Factors that may affect estimates include expected business~~ and ~~operational~~development ~~changes,~~activities. ~~sensitivity~~Resource ~~and~~allocation ~~volatility~~decisions ~~associated~~are ~~with~~informed ~~the~~by ~~assumptions~~forecasted ~~used~~cash inexpenditures ~~developing estimates,~~ and ~~whether~~actual ~~historical~~expenses ~~trends~~incurred ~~are expected~~ to ~~be representative of future trends~~date. The ~~estimation~~CODM ~~process~~is ~~often~~not ~~may~~regularly ~~yield~~provided awith ~~range~~disaggregated ofactual ~~potentially~~expense ~~reasonable~~information, ~~estimates~~other ofthan the ~~ultimate~~actual ~~future~~expense ~~outcomes~~information ~~and~~included ~~management must select an amount that falls within that range of reasonable estimates. Significant estimates of accounting reflected~~ in ~~these~~the ~~condensed~~ consolidated ~~financial~~ statements ~~include,~~of ~~but~~operations ~~are~~and ~~not~~comprehensive ~~limited to~~loss, ~~estimates~~as ~~related to revenue recognition, accrued expenses,~~ the ~~valuation~~Company’s ofintegrated ~~the~~operating ~~common~~model ~~stock~~emphasizes ~~warrant~~shared ~~liabilities,~~resources ~~the~~and ~~valuation~~centralized of decision-making.

13All of the Company’s collaboration and license revenue is generated in the United States and all of the Company’s long-lived assets are held in the United States.

~~Table of Contents~~12

~~stock-based~~Table ~~compensation, including stock options and restricted stock units, useful life~~ of ~~long-lived assets and income taxes. Actual results could differ from those estimates.~~ Contents

~~Concentrations~~Recent ofAccounting ~~Credit~~Pronouncements ~~Risk~~Not Yet Adopted

~~Financial~~In ~~instruments~~November ~~that~~2024 ~~potentially expose~~ the ~~Company~~FASB toissued ~~concentrations~~Accounting ofStandards ~~credit~~Update ~~risk~~No. ~~consist~~2024-03, ~~primarily~~Income ofStatement—Reporting ~~cash~~Comprehensive ~~and~~Income—Expense ~~cash~~Disaggregation ~~equivalents.~~Disclosures ~~The~~(Subtopic ~~Company~~220-40): ~~holds~~Disaggregation ~~all~~of ~~cash~~Income ~~and~~Statement ~~cash~~Expenses ~~equivalents~~(“ASU at2024-03”), ~~accredited~~which ~~financial~~requires ~~institutions.~~disclosure, ~~Bank accounts~~ in the ~~United~~notes ~~States~~to ~~are~~financial ~~generally~~statements, ~~insured~~of byspecified ~~the~~information ~~Federal~~about ~~Deposit~~certain ~~Insurance~~costs ~~Corporation~~and ~~(“FDIC”) up to $250,000~~expenses. ~~Substantially~~The ~~all~~guidance ofis ~~the~~effective ~~Company’s~~for ~~cash~~annual ~~and~~reporting ~~cash~~periods ~~equivalents~~beginning ~~are~~after ~~FDIC~~December ~~insured~~15, ~~including~~2026, ~~funds~~and ~~held~~interim ~~through~~reporting anperiods ~~insured~~beginning ~~cash~~after ~~sweep~~December ~~program~~15, 2027. ~~The~~Early ~~Company~~adoption ~~has~~is ~~not~~permitted. ~~experienced~~The ~~any~~Company ~~losses~~is incurrently ~~its~~evaluating ~~cash~~the ~~and~~potential ~~cash~~impact ~~equivalents~~of ~~and~~adopting ~~does~~this ~~not~~new ~~believe~~guidance ~~that~~on itits isconsolidated ~~subject~~financial tostatements ~~unusual~~and ~~credit~~related ~~risk beyond the normal credit risk associated with commercial banking relationships~~disclosures.

Segments

The Company has one operating and reportable segment, the consolidated Company operations, reflecting the integrated nature of its business focused on discovering and developing tumor-activated I-O therapies. The Company’s chief operating decision maker (“CODM”) is its chief executive officer. The CODM allocates resources and assesses performance on a consolidated basis, focused on the Company’s cash resources and an assessment of the probability of success of its ongoing research and development activities. Resource allocation decisions are informed by forecasted cash expenditures and actual expenses incurred to date. The CODM is not regularly provided with disaggregated actual expense information, other than the actual expense information included in the consolidated statements of operations and comprehensive loss, as the Company’s integrated operating model emphasizes shared resources and centralized decision-making.

All of the Company’s collaboration and license revenue is generated in the United States and all of the Company’s long-lived assets are held in the United States.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company anticipates that the adoption of ASU 2023-09 will expand its income tax footnote disclosures, including a more detailed effective tax rate reconciliation.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for public companies for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its condensed consolidated financial statements and related disclosures.

Table of Contents

3. Fair Value Measurements

~~The~~Liabilities ~~Company~~measured ~~measures the following liabilities~~ at fair value on a recurring basis consist of the following as of March 31, 2026:

	Quoted
	Prices in
	Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs
	Level 1		Level 2		Level 3		Total
Financial liabilities:
Series A warrant to purchase common stock	$	—	$	—	$	35,150	$	35,150
Series A warrants to purchase common stock	$	—	$	—	$	20,560	$	20,560
Series B warrant to purchase common stock		—		—		11,070		11,070
Series C warrants to purchase common stock		—		—		5,700		5,700
Series C warrant to purchase common stock		—		—		7,710		7,710
Total financial liabilities at March 31, 2026	$	—	$	—	$	26,260	$	26,260
Total financial liabilities	$	—	$	—	$	53,930	$	53,930

~~The~~Liabilities ~~fair~~measured ~~value~~at of the common stock warrant liabilities, which are described in more detail in Note 8, are calculated utilizing a Black-Scholes option pricing model for the Series A warrants and a Monte Carlo simulation model for the Series B warrants and the Series C warrants. The Black-Scholes option pricing model and the Monte Carlo simulation model both require the use of assumptions, certain of which are not observable in the market, which represent Level 3 measurements within the fair value ~~hierarchy.~~on ~~The~~a ~~Black-Scholes~~recurring ~~pricing~~basis ~~model~~consist ~~and the Monte Carlo simulation model assumptions include the warrant exercise price, the expected life~~ of the ~~warrant,~~following ~~the~~as ~~current price~~ of ~~the~~December ~~Company’s common stock~~31, expected volatility, the risk-free interest rate for the expected life of the warrant and expected dividend yield. The Monte Carlo simulation assumptions also include the potential impacts of the warrant strike price reset features.2025:

The inputs used in the fair market value of the Company’s common stock warrants liabilities as of the issuance date and September 30, 2025 were the following:


	Quoted
	Prices in
	Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs
	Level 1		Level 2		Level 3		Total
Financial liabilities:
Series A warrants to purchase common stock	$	—	$	—	$	23,100	$	23,100
Series C warrants to purchase common stock		—		—		6,460		6,460
Total financial liabilities at December 31, 2025	$	—	$	—	$	29,560	$	29,560

	June 5, 2025				September 30,
	(issuance date)				2025
Closing price of common stock	$		0.68		$		0.84
Warrant exercise price	$		0.75		$		0.75
Expected volatility			70	%			70	%
Risk free interest rate			3.91	%			3.67	%
Expected dividend yield			—				—
Expected term (in years)		0.57 - 5.00				0.17 - 4.68

The fair value of the common stock warrant liabilities, which are described in more detail in Note 8, are calculated utilizing a Black-Scholes option pricing model for the Series A warrants and a Monte Carlo simulation model for the Series C warrants. The Black-Scholes option pricing model and the Monte Carlo simulation model both require the use of assumptions, certain of which are not observable in the market, which represent Level 3 measurements within the fair value hierarchy. The Black-Scholes pricing model and the Monte Carlo simulation model assumptions include the warrant exercise price, the expected term of the warrant, the current price of the Company’s common stock, expected volatility, the risk-free interest rate for the expected term of the warrant and expected dividend yield. The Monte Carlo simulation assumptions also include the potential impacts of the warrant strike price reset features.

~~The following table summarizes the changes in the fair market value of the Company’s common stock warrant liabilities, which are classified within the Level 3 fair value hierarchy:~~13

							Total level 3
							financial
	Series A		Series B		Series C		liabilities
Balance at December 31, 2024	$	—	$	—	$	—	$	—
Initial fair value of common stock warrant liabilities		26,840		6,600		5,060		38,500
Change in fair value of common stock warrant liabilities		8,310		4,470		2,650		15,430
Balance at September 30, 2025	$	35,150	$	11,070	$	7,710	$	53,930

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The following assumptions were used in determining the fair value of the Company’s common stock warrant liabilities as of March 31, 2026 and December 31, 2025:


	March 31,				December 31,
	2026				2025
Closing price of common stock	$		8.41		$		8.96
Warrant exercise price	$		10.50		$		10.50
Expected volatility			70	%			70	%
Risk free interest rate			3.79	%			3.62	%
Expected dividend yield			—				—
Expected term (in years)		0.67 - 4.18				0.92 - 4.43

The following table summarizes the changes in the fair market value of the Company’s common stock warrant liabilities, which are classified within the Level 3 fair value hierarchy:



							Total level 3
							financial
	Series A			Series C			liabilities
Balance at December 31, 2025	$	23,100		$	6,460		$	29,560
Change in fair value of common stock warrant liabilities		(2,540	)		(760	)		(3,300	)
Balance at March 31, 2026	$	20,560		$	5,700		$	26,260

4. Property and Equipment, Net

Property and equipment, net consists of the following as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025:

	September 30,			December 31,
	March 31,			December 31,
	2025			2024
	2026			2025
Laboratory equipment	$	6,~~334~~943		$	56,~~911~~381
Computers and software		—			183
Furniture and fixtures		681			681
Leasehold improvements		5,124			5,124
Total property and equipment		12,139			11,899
Construction in process		29			459
Less: accumulated depreciation		(8,460	)		(7,427	)
Total property and equipment		12,777			12,645
Property and equipment, net	$	3,679		$	4,472
Less: accumulated depreciation		(9,097	)		(8,753	)
Property and equipment, net	$	3,680		$	3,892

The Company recognized depreciation and amortization expense related to property and equipment of $0.3 million and $0.45 million for the three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, respectively. ~~The Company recognized depreciation and amortization expense related to property and equipment of $1.2 million for each of the nine months ended September 30, 2025 and 2024.~~

5. Accrued Expenses

Accrued expenses consist of the following as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025:

	September 30,		December 31,
	March 31,		December 31,
	2025		2024
	2026		2025
External research and development	$	36,~~488~~160	$	43,~~899~~767
Personnel-related		41,~~194~~695		45,~~208~~733
Professional and consulting fees		~~1,182~~917		~~743~~2,156
Other		88198		~~131~~83
Total accrued expenses	$	8,~~952~~970	$	911,~~981~~739

~~6. Collaboration and License Agreements~~14

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6. Collaboration, License and Option Agreements

Collaboration, License and Option Agreement with AbbVie

In February 2025, Xilio Development entered into a collaboration, license and option agreement (the “Collaboration Agreement”) with AbbVie Group Holdings Limited ("AbbVie") for up to four programs leveraging the Company’s proprietary ~~tumor-activation~~masking technology and platform, consisting of (i) an exclusive license for a program to develop and commercialize a masked antibody-based immunotherapy (the “Collaboration Program”) and (ii) an exclusive option for (a) an initial program to discover, develop and commercialize masked T cell engager molecules for an agreed upon initial target and backup target (“Initial Option Program”), and (b) subject to the terms of the Collaboration Agreement, up to two additional programs (each, an “Additional Option Program” and together with the Initial Option Program, the “Option Programs”).

In connection with the Collaboration Program, Xilio Development is responsible for conducting all preclinical development through lead generation (“Collaboration Program Services”). For the Initial Option Program, AbbVie’s option right is exercisable beginning on the effective date of the Collaboration Agreement, and for each Additional Option Program, AbbVie’s option right is exercisable following delivery of written notice of nomination of such Additional Option Program. During the three-year period following the effective date of the Collaboration Agreement, AbbVie has the right to initiate up to two Additional Option Programs by (a) selecting an initial target and backup target for each such Additional Option Program (excluding the target known as prostate-specific membrane antigen and any other target for which Xilio Development has completed specified activities prior to lead selection) and (b) paying Xilio Development an additional program nomination fee for each Additional Option Program. For each Option Program, prior to option exercise, Xilio Development is responsible for conducting preclinical discovery and development up to the completion of investigational new drug application (“IND”) enabling studies, subject to AbbVie paying Xilio Development option extension fees upon completion of specified stages of preclinical discovery and development (“Option Program Services”). Unless AbbVie elects to extend preclinical development through the next stage and pays the applicable option extension fee, AbbVie’s option right terminates within a specified time period following completion of each stage of preclinical development. Upon exercising its option for an Option Program, AbbVie will be responsible for any remaining preclinical development, if applicable, and all clinical development, regulatory and commercialization activities with respect to licensed products under the applicable Option Program.

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time period following completion of each stage of preclinical development. Upon exercising its option for an Option Program, AbbVie will be responsible for any remaining preclinical development, if applicable, and all clinical development, regulatory and commercialization activities with respect to licensed products under the applicable Option Program.

In addition, on an Option Program-by-Option Program basis, prior to the initiation of specified activities related to lead optimization and selection for the initial target for such Option Program, AbbVie has a one-time right to substitute the initial target with the backup target agreed upon by the parties at the time of Option Program initiation, subject to the payment by AbbVie of a one-time substitution fee with respect to such substituted target and the other terms of the Collaboration Agreement.

In connection with the execution of the Collaboration Agreement, in February 2025, the Company also entered into a stock purchase agreement with AbbVie Inc. pursuant to which the Company issued and sold 4310,347,826559 shares of its common stock to AbbVie Inc. in a private placement at a purchase price of $232.3020 per share for an aggregate purchase price of $10.0 million.

As of SeptemberMarch 3031, 20252026, the Company has received $5257.0 million in payments under the AbbVie agreements, consisting of a $42.0 million upfront cash payment under the Collaboration Agreement, and $10.0 million in gross proceeds from the private placement under the stock purchase agreement and a $5.0 Inmillion additiondevelopment milestone related to the Collaboration Program, which was recorded as a receivable on the condensed consolidated balance sheet as of SeptemberDecember 3031, 2025 and was received in the first quarter of 2026. In the second quarter of 2026, the Company achieved an additional $6.0 million development milestone. The Company is eligible to receive up to approximately $2.1 billion in additional contingent payments under the Collaboration Agreement, consisting of (i) up to $305.0 million in aggregate program nomination fees, preclinical development option extension fees and option fees for the Option Programs and (ii) up to $1.8 billion in aggregate development, regulatory and sales-based milestones for all Option Programs and the Collaboration Program. In addition, the Company is eligible to receive tiered royalties ranging in the high single digits on annual global net product sales for the Option Program and is eligible to receive tiered royalties ranging in the mid-single digits on annual global net product sales for the Collaboration Program.

The Company considered the criteria of ASC 606, Revenue from Contracts with Customers (“ASC 606”) for combining contracts and determined the Collaboration Agreement and the stock purchase agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. The Company accounted for the common stock issued to AbbVie Inc. based on the fair market value of the common stock on the date of issuance. The fair market value of the common stock issued to AbbVie Inc. was $2.9 million, based on the closing price of the Company’s common stock on the date of issuance, resulting in a $7.1 million premium. The Company determined that the premium paid by AbbVie Inc. for the common stock purchased should be attributed to the transaction price of the Collaboration Agreement.

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Inc. was $2.9 million, based on the closing price of the Company’s common stock on the date of issuance, resulting in a $7.1 million premium. The Company determined that the premium paid by AbbVie Inc. for the common stock purchased should be attributed to the transaction price of the Collaboration Agreement.

The Company determined that the Collaboration Agreement represents a contract with a customer within the scope of ASC 606 and identified the following promises under the Collaboration Agreement: (i) the exclusive license granted to AbbVie related to the Collaboration Program, (ii) the Collaboration Program Services and (iii) the Option Program Services for the Initial Option Program. In addition, the Company identified several customer options that were evaluated to determine if such options represented material rights, each of which would be considered a performance obligation at contract inception only if the option provides a material right to AbbVie that it would not receive without entering into that contract.

The Company determined that the exclusive license and development services related to the Collaboration Program Services were not capable of being distinct on the basis that the services to be provided by Xilio Development are specialized in nature, specifically with respect to its specialized expertise in developing masked antibody-based immunotherapies and the Company’s proprietary platform for tumor-activatedmasked biologics. Accordingly, the Company concluded that these promises should be a combined performance obligation consisting of the exclusive license and the development services for the Collaboration Program Services. As such, the Company identified the following performance obligations at contract inception: (i) the performance obligation consisting of the exclusive license and the Collaboration Program Services (the “Collaboration Program Performance Obligation”); (ii) the Option Program Services for the Initial Option Program (the “Initial Option Program Performance Obligation”); (iii) a material right to receive an exclusive license to the Initial Option Program; (iv) a material right to receive additional services related to the Initial Option Program; and (v) a material right related to AbbVie’s one-time right to substitute the initial target with the backup target for the Initial Option Program.

For purposes of ASC 606, the transaction price at the outset of the arrangement was determined to be $49.1 million, which consisted of the upfront cash payment of $42.0 million under the Collaboration Agreement and the $7.1 million premium on the sale of common stock to AbbVie Inc. The Company used the most likely amount method to estimate variable consideration. During the year ended December 31, 2025, the overall transaction price was adjusted to include the achievement of the $5.0 million development milestone related to the Collaboration Program in the fourth quarter of 2025. All additional contingent payments are fully constrained as of SeptemberMarch 3031, 20252026, as the achievement of the milestones underlying such contingent payments is based on either the Company or AbbVie’s ability to execute under the development plan which is not certain at contact inception. Accordingly, all such contingent payments are excluded from the transaction price. The Company reevaluates the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur and may adjust the transaction price as necessary. Sales-based royalties, including milestone payments based on the level of sales, were also excluded from the transaction price, as the license is deemed to be the predominant item to which the royalties relate. The Company plans to recognize such revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

17The Company allocated the transaction price at the outset of the arrangements to the performance obligations on a relative selling price basis as follows: (i) $32.4 million related to the Collaboration Program Performance Obligation; (ii) $6.9 million related to the Initial Option Program Performance Obligation; (iii) $8.2 million related to the material right to receive an exclusive license to the Initial Option Program; (iv) $1.1 million related to the material right to receive additional services related to the Initial Option Program; and (v) $0.5 million related to the material right for AbbVie’s one-time right to substitute the initial target with the backup target for the Initial Option Program. The Company determined the estimated standalone selling price for the licenses using an adjusted market assessment approach, whereby the Company adjusted a comparable transaction previously entered into by the Company and comparable third-party transactions to reflect the stage of development of the Company’s assets under the Collaboration Agreement. The Company determined the estimated standalone selling price for services based on estimated costs to be incurred plus a reasonable margin. The Company determined the estimated standalone selling price for material rights by estimating the standalone selling price of the underlying performance obligations included in the material right and estimating the probability that AbbVie will exercise such material right.

TableRevenue associated with the Collaboration Program Performance Obligation and the Initial Option Program Performance Obligation is recognized as the underlying services are provided as control is transferred over time. The Company measures progress based on the amount of Contentscosts incurred relative to the total costs expected to fulfill the combined performance obligation. In management’s judgment, this input method is the best measure of progress towards satisfying the combined performance obligation and reflects a faithful depiction of the transfer of goods and services. Revenue associated with the material rights will be recognized upon expiry if the option is not

all such contingent payments are excluded from the transaction price. The Company reevaluates the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur and may adjust the transaction price as necessary. Sales-based royalties, including milestone payments based on the level of sales, were also excluded from the transaction price, as the license is deemed to be the predominant item to which the royalties relate. The Company plans to recognize such revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).16

~~The~~Table Company allocated the transaction price to the performance obligations on a relative selling price basis as follows: (i) $32.4 million related to the Collaboration Program Performance Obligation; (ii) $6.9 million related to the Initial Option Program Performance Obligation; (iii) $8.2 million related to the material right to receive an exclusive license to the Initial Option Program; (iv) $1.1 million related to the material right to receive additional services related to the Initial Option Program; and (v) $0.5 million related to the material right for AbbVie’s one-time right to substitute the initial target with the backup target for the Initial Option Program. The Company determined the estimated standalone selling price for the licenses using an adjusted market assessment approach, whereby the Company adjusted a comparable transaction previously entered into by the Company and comparable third-party transactions to reflect the stage of development of the Company’s assets under the Collaboration Agreement. The Company determined the estimated standalone selling price for services based on estimated costs to be incurred plus a reasonable margin. The Company determined the estimated standalone selling price for material rights by estimating the standalone selling price of the underlying performance obligations included in the material right and estimating the probability that AbbVie will exercise such material right. Contents

Revenue associated with the Collaboration Program Performance Obligation and the Initial Option Program Performance Obligation is recognized as the underlying services are provided as control is transferred over time. The Company measures progress based on the amount of costs incurred relative to the total costs expected to fulfill the combined performance obligation. In management’s judgment, this input method is the best measure of progress towards satisfying the combined performance obligation and reflects a faithful depiction of the transfer of goods and services. Revenue associated with the material rights will be recognized upon expiry if the option is not exercised. If the material right is exercised, the Company will evaluate the performance obligations underlying the option exercised and recognize the amount allocated to the material right and any additional consideration over the appropriate recognition period associated with the underlying performance obligations.

During the three and nine months ended SeptemberMarch 3031, 2026 and 2025, the Company recognized collaboration and license revenue of $8.30 million and $130.97 million, respectively, under the Collaboration Agreement and the stock purchase agreement. As of SeptemberMarch 3031, 20252026, the Company recorded deferred revenue of $3526.30 million, of which $2416.31 million was recorded as a current liability on the Company’s condensed consolidated balance sheet. The deferred revenue is expected to be recognized as collaboration and license revenue through at least 2026 depending on (i) the timing of services being provided for the Collaboration Program and the Initial Option Program and (ii) the timing of AbbVie’s exercise or expiration of the material rights.

License Agreement with Gilead Sciences, Inc.

In March 2024, Xilio Development entered into a license agreement (the "License Agreement") with Gilead Sciences, Inc. ("Gilead"), pursuant to which it granted Gilead an exclusive global license to develop and commercialize efarindodekin alfa ~~(XTX301)~~, the Company’s ~~tumor-activated~~masked IL-12 product candidate, and specified other molecules directed to IL-12. Xilio Development is responsible for conducting clinical development for efarindodekin alfa through an initial Phase 2 clinical trial. Following the delivery by Xilio Development of a specified clinical data package for efarindodekin alfa related to the Phase 1 clinical trial and the initial Phase 2 clinical trial, Gilead can elect to transition responsibilities for the development and commercialization of efarindodekin alfa to Gilead, subject to the terms of the ~~license~~License ~~agreement~~Agreement and payment by Gilead of a $75.0 million transition fee.

In connection with the execution of the ~~license~~License ~~agreement~~Agreement, in March 2024, the Company also entered into a stock purchase agreement with Gilead. Under the stock purchase agreement, Gilead purchased $25.0 million of the Company’s common stock and prefunded warrants in three private placements, consisting of an aggregate of 9650,~~105,451~~387 shares of common stock and prefunded warrants to purchase up to an aggregate of 9712,~~975,266~~514 shares of its common stock. The prefunded warrants are exercisable any time at an exercise price of $0.~~0001~~0014 per share, subject to Gilead not being deemed a beneficial owner of greater than 19.9% of the Company’s common stock upon the exercise of the prefunded warrants.

18The Company has received $72.5 million in payments under the Gilead agreements, consisting of the $30.0 million upfront cash payment under the License Agreement, $25.0 million in gross proceeds from private placements under the stock purchase agreement and a $17.5 million development milestone. As of March 31, 2026, the Company is eligible to receive up to $575.0 million in additional contingent payments, which consist of a $75.0 million transition fee if Gilead exercises its option for the IL-12 program and up to $500.0 million in specified development, regulatory and sales-based milestones after opt-in. In addition, the Company is eligible to receive tiered royalties ranging from high single digits to mid-teens on annual global net product sales.

The Company considered the ASC 606 criteria for combining contracts and determined the License Agreement and the stock purchase agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. The Company concluded the initial private placement and the additional private placements do not represent freestanding financial instruments as such instruments are not legally detachable due to contractual transfer restrictions. The Company accounted for the common stock issued to Gilead in the initial private placement based on the fair market value of the common stock on the date of issuance. The fair market value of the common stock issued to Gilead in the initial private placement was $4.4 million, based on the closing price of the Company’s common stock on the date of issuance, resulting in a $9.1 million premium. The Company determined that the premium paid by Gilead for the common stock purchased in the initial private placement should be attributed to the transaction price of the License Agreement.

The Company determined that the License Agreement represents a contract with a customer within the scope of ASC 606 and identified two promises under the License Agreement: (i) the exclusive licenses granted to Gilead related to the Company’s IL-12 program and (ii) the provision by Xilio Development and its affiliates of development services related to ongoing and planned clinical trials for efarindodekin alfa through an initial Phase 2 clinical trial. The Company determined that the exclusive license and development services were not capable of being distinct on the basis that the development services to be provided by Xilio Development are specialized in nature, specifically with respect to its specialized expertise related to efarindodekin alfa, the IL-12 program and the Company’s proprietary platform for masked biologics. Accordingly, the Company concluded that there is a single identified combined performance obligation consisting of the exclusive license and the development services.

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AsFor purposes of ~~September~~ASC 30606, ~~2025,~~ the ~~Company~~transaction ~~has~~price ~~received~~of ~~$55.0~~the ~~million~~License inAgreement ~~payments~~at ~~under~~the outset of the ~~Gilead~~arrangement ~~agreements,~~was ~~consisting~~determined ofto ~~the~~be $3039.01 million, which consisted of the upfront cash payment of $30.0 million under the ~~license~~License ~~agreement~~Agreement and the $259.01 million inpremium ~~gross~~on ~~proceeds~~the ~~from~~sale ~~private~~of ~~placements~~common ~~under the~~ stock ~~purchase~~to ~~agreement.~~Gilead Asin ofthe ~~September~~initial ~~30,~~private ~~2025~~placement, which was allocated to the single combined performance obligation. The Company isused ~~eligible~~the tomost ~~receive~~likely upamount method to ~~$592~~estimate variable consideration.5 ~~million~~During inthe ~~additional~~year ~~contingent~~ended ~~payments~~December 31, ~~which~~2025, ~~consist~~the overall transaction price was adjusted to include the achievement of athe $17.5 million development milestone ~~prior~~in tothe ~~opt-in,~~third aquarter ~~$75~~of 2025.0 ~~million~~All ~~transition~~additional ~~fee~~contingent ifpayments ~~Gilead~~are ~~exercises~~fully ~~its~~constrained ~~option~~as ~~for~~of March 31, 2026, as the ~~IL-12~~achievement ~~program~~of the milestones underlying such contingent payments are uncertain and uphighly susceptible to ~~$500.0~~factors ~~million~~outside inof ~~specified~~the ~~development~~Company’s control. Accordingly, ~~regulatory~~all ~~and~~such ~~sales-based~~additional ~~milestones~~contingent ~~after~~payments ~~opt-in~~are excluded from the transaction price. The Company ~~achieved~~reevaluates the ~~$17.5~~transaction ~~million~~price ~~development~~at ~~milestone~~the inend ~~the~~of ~~third~~each ~~quarter~~reporting ofperiod ~~2025~~and inas ~~connection~~uncertain ~~with~~events ~~the~~are ~~initiation~~resolved ofor ~~the~~other ~~Phase~~changes 2in ~~trial~~circumstances occur and ~~recorded~~may adjust the ~~milestone~~transaction price as anecessary. ~~receivable~~Sales-based royalties, including milestone payments based on the ~~condensed~~level ~~consolidated~~of ~~balance~~sales, ~~sheet~~were asalso ofexcluded ~~September~~from 30the transaction price, ~~2025~~as the license is deemed to be the predominant item to which the royalties relate. The Company ~~received~~plans ~~payment~~to ofrecognize such revenue at the ~~milestone~~later ~~from~~of ~~Gilead~~(i) ~~during~~when the ~~fourth~~related ~~quarter~~sales ofoccur ~~2025.~~or In(ii) ~~addition,~~when the ~~Company~~performance isobligation ~~eligible~~ to ~~receive~~which ~~tiered~~some ~~royalties~~or ~~ranging~~all ~~from~~of ~~high~~the ~~single~~royalty ~~digits~~has tobeen ~~mid-teens~~allocated onhas ~~annual~~been ~~global~~satisfied ~~net~~(or ~~product~~partially ~~sales~~satisfied).

The Company considered the ASC 606 criteria for combining contracts and determined the license agreement and the stock purchase agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. The Company concluded the initial private placement and the additional private placements do not represent freestanding financial instruments as such instruments are not legally detachable due to contractual transfer restrictions. The Company accounted for the common stock issued to Gilead in the initial private placement based on the fair market value of the common stock on the date of issuance. The fair market value of the common stock issued to Gilead in the initial private placement was $4.4 million, based on the closing price of the Company’s common stock on the date of issuance, resulting in a $9.1 million premium. The Company determined that the premium paid by Gilead for the common stock purchased in the initial private placement should be attributed to the transaction price of the license agreement.

The Company determined that the license agreement represents a contract with a customer within the scope of ASC 606 and identified two promises under the license agreement: (i) the exclusive licenses granted to Gilead related to the Company’s IL-12 program and (ii) the provision by Xilio Development and its affiliates of development services related to ongoing and planned clinical trials for efarindodekin alfa through an initial Phase 2 clinical trial. The Company determined that the exclusive license and development services were not capable of being distinct on the basis that the development services to be provided by Xilio Development are specialized in nature, specifically with respect to its specialized expertise related to efarindodekin alfa, the IL-12 program and the Company’s proprietary platform for tumor-activated biologics. Accordingly, the Company concluded that there is a single identified combined performance obligation consisting of the exclusive license and the development services.

For purposes of ASC 606, the transaction price of the license agreement at the outset of the arrangement was determined to be $39.1 million, which consisted of the upfront cash payment of $30.0 million under the license agreement and the $9.1 million premium on the sale of common stock to Gilead in the initial private placement, which was allocated to the single combined performance obligation. The Company used the most likely amount method to estimate variable consideration. During the three and nine months ended September 30, 2025, the overall transaction price was adjusted to include the achievement of the $17.5 million development milestone in the third quarter of 2025. All additional contingent payments are fully constrained as of September 30, 2025, as the achievement of the milestones underlying such contingent payments are uncertain and highly susceptible to factors outside of the Company’s control. Accordingly, all such additional contingent payments are excluded from the transaction price. The Company reevaluates the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur and may adjust the transaction price as necessary. Sales-based royalties, including milestone payments based on the level of sales, were also excluded from the transaction price, as the license is deemed to be the predominant item to which the royalties relate. The Company plans to recognize such revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Revenue associated with the combined performance obligation is recognized as services are provided as control is transferred over time. The Company measures progress based on the amount of costs incurred relative to the total costs expected to fulfill the combined performance obligation. In management’s judgment, this input method is the best measure of progress towards satisfying the combined performance obligation and reflects a faithful depiction of the transfer of goods and services.

During the three ~~and nine~~ months ended ~~September~~March 3031, 2026 and 2025, the Company recognized collaboration and license revenue of $104.7 million and $162.2 million, respectively, under the ~~license~~License ~~agreement~~Agreement and the stock purchase agreement with Gilead. ~~Each~~As of ~~the~~March ~~three~~31, ~~and~~2026, ~~nine~~the ~~months~~Company ~~ended~~recorded ~~September~~deferred ~~30,~~revenue ~~2025~~under ~~included~~the aLicense ~~cumulative~~Agreement ~~catch-up~~and ofthe ~~revenue~~stock purchase agreement of $722.0 million, ~~related to the adjustment~~ of ~~the~~which ~~overall transaction price due to the achievement of the~~ $1715.5 million ~~development~~was ~~milestone~~recorded ~~during~~as ~~the~~a ~~third~~current ~~quarter~~liability ofon ~~2025.~~the ~~During~~Company’s ~~the~~condensed ~~three~~consolidated ~~and~~balance ~~nine~~sheet. ~~months~~The ~~ended~~deferred ~~September~~revenue ~~30,~~is ~~2024,~~expected ~~the~~to ~~Company~~be recognized as collaboration and license revenue ofthrough ~~$2.3~~at ~~million~~least ~~and~~2027 ~~$4.6~~depending ~~million,~~on ~~respectively, under~~ the ~~license~~timing ~~agreement and the stock purchase agreement with Gilead. As~~ of ~~September~~certain ~~30,~~clinical ~~2025,~~development ~~the~~ activities.

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Company recorded deferred revenue under the license agreement and the stock purchase agreement of $34.1 million, of which $19.6 million was recorded as a current liability on the Company’s condensed consolidated balance sheet. The deferred revenue is expected to be recognized as collaboration and license revenue through at least 2027 depending on the timing of certain clinical development activities.

Summary of Contract Assets and Liabilities

The following table presents changes in the balances of the Company's contract liabilities:

	Gilead			AbbVie			Total
Deferred revenue as of December 31, 2024	$	32,780		$	—		$	32,780
Deferred revenue as of December 31, 2025	$	26,651		$	34,007		$	60,658
Additions		17,500			49,144			66,644
Collaboration and license revenue recognized		(4,653	)		(7,995	)		(12,648	)
Collaboration and license revenue recognized		(16,188	)		(13,892	)		(30,080	)
Deferred revenue as of March 31, 2026	$	21,998		$	26,012		$	48,010
Deferred revenue as of September 30, 2025	$	34,092		$	35,252		$	69,344

Clinical Trial Collaboration with F. Hoffmann-La Roche Ltd

In July 2023, the Company and F. Hoffmann-La Roche Ltd (“Roche”) entered into a clinical trial collaboration pursuant to a clinical supply agreement to evaluate vilastobart in combination with atezolizumab (Tecentriq®) in a Phase 1/2 clinical trial consisting of Phase 1 dose escalation assessing the combination in patients with advanced solid tumors and Phase 2 assessing the combination in patients with microsatellite stable metastatic colorectal cancer.

Under the clinical supply agreement, the Company is eligible to receive specified cost-sharing payments from Roche, and each company will supply its respective anti-cancer agent to support the Phase 1/2 clinical trial. As of SeptemberMarch 3031, 20252026, the Company has received $8.0 million in total cost-sharing payments from Roche. The Company is responsible for conducting the Phase 1/2 clinical trial and retains global development and commercialization rights to vilastobart.

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7. Commitments and Contingencies

The Company has an operating lease for its headquarters and a finance lease for certain lab equipment. In August 2019, the Company entered into a facility lease agreement with a landlord providing funding for tenant improvements and occupancy of approximately 27,830 square feet of office and laboratory space (the “premises”) at 828 Winter Street, Waltham, Massachusetts. The initial term of the lease expires in March 2030, unless terminated earlier in accordance with the terms of the lease. The Company has an option to extend the lease for an additional term of five years at then-market rates. The Company is obligated to pay its portion of real estate taxes and costs related to the premises, including costs of operations, maintenance, repair, replacement, and management of the leased premises, which it began paying simultaneous with the rent commencement date in March 2020. As of SeptemberMarch 3031, 20252026 and December 31, 20242025, the Company had a letter of credit for the benefit of its landlord in the amount of $1.8 million, collateralized by a money market account, which is recorded as restricted cash on the condensed consolidated balance sheets.

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8. Preferred Stock and Common Stock

Undesignated Preferred Stock

As of SeptemberMarch 3031, 20252026 and December 31, 20242025, the Company’s restated certificate of incorporation, as amended, authorizes the Company to issue up to 5,000,000 shares of undesignated preferred stock at $0.0001 par value per share. As of SeptemberMarch 3031, 20252026 and December 31, 20242025, there were no shares of preferred stock issued or outstanding.

Common Stock

As of ~~September~~March 3031, ~~2025,~~2026 ~~the~~and ~~Company’s restated certificate of incorporation, as amended, authorized the Company to issue up to 600,000,000 shares of common stock, $0.0001 par value per share. As of~~ December 31, ~~2024~~2025, the Company’s restated certificate of incorporation, as amended, authorized the Company to issue up to ~~200~~600,000,000 shares of common stock, $0.0001 par value per share.

February 2026 Follow-On ~~Public~~ Offering

In ~~June~~February ~~2025~~2026, the Company closed a follow-on ~~public~~ offering of prefunded warrants and ~~accompanying common stock warrants and~~ received ~~initial~~net ~~gross~~ proceeds of $5037.03 million ~~before deducting underwriting discounts and commissions and offering expenses payable by the Company~~. In connection with the offering, the Company issued prefunded warrants to purchase 665,~~676~~341,~~000~~404 shares of ~~common~~its ~~stock, accompanied by Series A warrants to purchase 66,676,000 shares of~~ common stock. ~~(or,~~Each ~~in certain circumstances,~~ prefunded ~~warrants)~~warrant ~~(the~~is ~~“Series~~exercisable Afor ~~warrants”),~~one ~~Series~~share ~~B warrants to purchase 66,676,000 shares~~ of ~~common stock (or, in certain circumstances, prefunded warrants) (~~the ~~“Series~~Company's ~~B warrants”), and Series C warrants to purchase 66,676,000 shares of~~ common stock ~~(or, in certain circumstances, prefunded warrants) (the “Series C warrants”)~~. The ~~combined~~purchase ~~public offering~~ price of ~~one~~each prefunded warrant, ~~one~~was ~~Series~~$7.4886. AEach ~~warrant,~~prefunded ~~one Series B~~ warrant ~~and~~has ~~one~~an ~~Series~~exercise Cprice ~~warrant,~~of ~~which were sold together but are immediately separable, was~~ $0.~~7499,~~0014 ~~which~~per ~~was~~share ~~equal~~and towill ~~the~~be ~~combined~~exercisable ~~offering~~from ~~price of~~ the ~~prefunded~~date ~~warrants,~~of ~~Series~~issuance Auntil ~~warrants,~~fully ~~Series B warrants and Series C warrants~~exercised, ~~less~~subject ~~the~~to ~~$0.0001~~beneficial ~~per~~ownership ~~share~~limitations ~~exercise~~for ~~price~~each ~~of the prefunded warrants~~holder.

~~The~~June ~~exercisability~~2025 ofFollow-On the prefunded warrants and common stock warrants is subject to limitations on exercise. Specifically, a holder will be prohibited from exercising any portion of any warrant if immediately prior to or following such exercise such holder (together with its affiliates) would beneficially own more than 4.99% (or up to 19.99% at the election of the holder) of the Company’s issued and outstanding common stock immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrant. However, any holder of any warrant may increase or decrease such percentage to any other percentage not in excess of 19.99%, provided that any such increase will not be effective until the 61st day after notice from the holder is delivered to the Company.Offering

~~Each~~In ~~Series~~June A2025, ~~warrant~~the ~~will~~Company beclosed ~~exercisable~~a follow-on ~~the~~offering ~~earlier~~ of ~~(i)~~prefunded ~~December~~warrants ~~1, 2025~~ and ~~(ii)~~accompanying ~~the~~common ~~trading~~stock ~~day~~warrants ~~immediately~~and ~~following~~received anet ~~period~~proceeds of ~~five~~$47.0 ~~consecutive~~million. ~~trading~~In ~~days~~connection onwith ~~which~~the offering, the ~~closing~~Company ~~sale~~issued ~~price~~prefunded ofwarrants ~~the~~to ~~Company’s~~purchase 4,762,533 shares of common stock, isaccompanied aby ~~minimum~~Series ofA ~~$1.50~~warrants ~~per~~to ~~share~~purchase ~~for~~4,762,533 ~~one~~shares ~~share~~ of common stock ~~and~~(or ~~will~~prefunded ~~have~~warrants anin ~~exercise~~lieu ~~price~~ of ~~$0.75 per share of~~ common stock.) In(the ~~addition, each~~ “Series A ~~warrant~~warrants”), ~~will~~Series ~~expire~~B ~~upon~~warrants ~~the~~to ~~earlier~~purchase of4,762,533 ~~(i)~~shares ~~June~~of 5,common ~~2030~~stock (or ~~(ii)~~prefunded ~~immediately~~warrants ~~upon~~in ~~the~~lieu ~~exercise~~ of ~~the~~common ~~corresponding~~stock) ~~prefunded~~(the ~~warrant~~“Series ~~held~~B bywarrants”), aand ~~holder~~Series inC ~~proportion~~warrants to ~~the~~purchase ~~extent~~4,762,533 ~~that~~shares ~~such~~of ~~corresponding~~common stock (or prefunded ~~warrant~~warrants isin ~~exercised~~lieu ~~prior~~of tocommon ~~December~~stock) 1,(the ~~2025;~~“Series ~~provided~~C ~~that~~warrants”). ~~this~~The ~~term~~combined ~~(ii)~~public ~~will~~offering noprice ~~longer~~of ~~apply~~one toprefunded ~~the~~warrant, one Series A ~~warrants~~warrant, ~~beginning~~one onSeries ~~the~~B ~~first~~warrant ~~trading~~and ~~day~~one ~~immediately~~Series ~~following~~C awarrant, ~~period~~which ofwere ~~five~~sold ~~consecutive~~together ~~trading~~but ~~days~~are onimmediately separable, was $10.4986, which was equal to the ~~closing~~combined ~~sale~~offering price of the ~~Company’s~~prefunded ~~common~~warrants, ~~stock~~Series isA awarrants, ~~minimum~~Series ofB warrants and Series C warrants, less the $10.500014 per share ~~for~~exercise ~~one~~price ~~share~~ of ~~common~~the ~~stock.~~prefunded warrants.

Each Series B warrant is exercisable beginning on November 1, 2025, with an exercise price of $0.75 per share of common stock, and will expire on December 2, 2025, provided that if the closing sale price of the Company’s common stock is below the exercise price on such date, the exercise price will reset to the closing sale price on December 1, 2025 and the expiration time will be extended to December 31, 2025.

Each Series C warrant will be exercisable on or after June 1, 2026, with an exercise price of $0.75 per share of common stock, and will expire on the earlier of (i) December 2, 2026 and (ii) the expiration time of the Series B warrant held by a holder in proportion to the extent that the corresponding Series B warrant expires without being exercised. In addition, if the closing sale price of the Company’s common stock is below the exercise price on December 2, 2026, the exercise price will reset to the closing sale price on December 1, 2026 and the expiration time will be extended to December 31, 2026.

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The prefunded warrants and Series A warrants may be exercised for cash or on a net exercise or “cashless” basis, and the Series B warrants and Series C warrants may be exercised for cash or on a net exercise or “cashless” basis in the event there is no effective registration statement or prospectus available which covers the Series B warrants and Series C warrants and shares of common stock issuable upon exercise of the Series B warrants and Series C warrants. There can be no assurance that any of the warrants will be exercised for cash or at all, and it is possible that the common stock warrants may expire without being exercised. If all of the Series B warrants and the Series C warrants sold in the offering are exercised in cash at their initial exercise price, the Company will receive additional gross proceeds of approximately $100.0 million by the end of 2026.

In the event of certain fundamental transactions, each holder of the prefunded warrants and the common stock warrants has the right to receive, upon exercise of such warrant, the same amount and kind of securities, cash or property as such holder would have been entitled to receive upon the occurrence of such fundamental transaction if it had been, immediately prior to such fundamental transaction, the holder of the number of shares of common stock underlying such holder’s warrant without regard to any limitations on exercise contained in such holder’s warrant. The holders of Series A warrants are alternatively entitled to elect to receive consideration in an amount equal to the Black Scholes value of the unexercised portion of such holder’s Series A warrants and if the fundamental transaction is within the Company’s control, the Series A warrant holders can require the Black Scholes value to be paid in cash.

In addition, for each dollar of non-dilutive capital received by the Company prior to the exercise or expiration of the ~~Series~~remaining Boutstanding ~~warrants and~~ Series C warrants, the Company may elect to cancel a number of warrant shares equal to $114.00 divided by the $010.7550 warrant exercise price (or one and one-third warrants) without any compensation paid by the Company to the warrant holders. ~~For example, if the Company received $30.0 million in non-dilutive capital, it could elect to cancel 40.0 million of warrant shares.~~ Subject to certain specified exceptions, non-dilutive capital includes: upfront payments under any future collaboration, license or similar agreement; milestone payments and option fees under any current or future collaboration, license or similar agreement; and net proceeds pursuant to any equity issuance where the purchase price per share is above $1.50.

The Company concluded that the prefunded warrants, the Series A warrants, the Series B warrants and the Series C warrants are freestanding financial instruments because each of these instruments can be transferred or assigned by the holder subject to compliance with the applicable securities laws and are legally detachable and separately exercisable. The Company determined the classification of each warrant based on the guidance in ASC 480 and ASC 815. As part of this assessment under ASC 815, the Company was required to allocate its available authorized shares of common stock to its outstanding contracts and commitments. The Company applied an accounting policy to first allocate available authorized shares of common stock based on the earliest issuance date of the contract. To the extent more than one contract or commitment made was issued on the same date, the available shares of common stock were allocated first to the contract with the earliest potential exercise date. The Company concluded that the prefunded warrants are classified as equity. The Company concluded the Series A warrants, the Series B warrants and the Series C warrants are required to be initially classified as liabilities as a result of their settlement provisions. The Series A warrants, the Series B warrants and the Series C warrants will continue to be classified as liabilities until such time as the applicable warrant is exercised, expires, or qualifies for equity classification. 19

The Company received initial gross proceeds from the offering of $50.0 million, before deducting approximately $3.0 million in aggregate issuance costs related to the offering, which consisted of underwriting discounts and commissions and offering expenses payable by the Company. The Company allocated the initial gross proceeds as follows: $26.8 million to the Series A warrants, $6.6 million to the Series B warrants and $5.1 million to the Series C warrants, in each case, based on the fair value of each instrument on the date of issuance with the remaining $11.5 million allocated to the prefunded warrants. The Company allocated the issuance costs to the financial instruments in a manner consistent with the allocation of the proceeds. The Company allocated approximately $2.3 million in issuance costs to the common stock warrants that are classified as liabilities, which was recorded as a component of other income (expense), net, on the condensed consolidated statements of operations and comprehensive loss during the nine months ended September 30, 2025. The Company allocated approximately $0.7 million in issuance costs to the prefunded warrants that are classified in equity, which was recorded as a reduction to additional paid in capital on the condensed consolidated balance sheets as of September 30, 2025.

During each of the three and nine months ended September 30, 2025, the Company recognized a loss of $15.4 million, related to the change in fair value of the common stock warrants, which is recorded as a component of the change in fair value of common stock warrant liabilities on the condensed consolidated statements of operations and comprehensive loss.

Private Placement

In March 2024, the Company entered into a securities purchase agreement with certain existing accredited investors pursuant to which the Company issued and sold an aggregate of 1,953,125 shares of its common stock at a purchase price of $0.64 per share and, in lieu

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ofagreement; ~~shares~~milestone ofpayments ~~the~~and ~~Company’s~~option ~~common~~fees ~~stock,~~under prefunded warrants to purchase up to an aggregate of 15,627,441 shares of its common stock at a purchase price of $0.6399 per prefunded warrant, through a private placement. The prefunded warrants are exercisable any ~~time~~current ator anfuture ~~exercise price of $0.0001 per share. The private placement closed in April 2024. The Company received aggregate gross proceeds of $11.3 million from the private placement~~collaboration, ~~before~~license ~~deducting~~or ~~placement~~similar ~~agent~~agreement; ~~fees~~ and ~~expenses~~net ~~payable~~proceeds ~~by the Company. The shares of common stock issued and sold in the private placement were registered for resale~~ pursuant to ~~the~~any ~~Company’s~~equity ~~registration~~issuance ~~statement~~where ~~on Form S-3 filed with~~ the ~~SEC~~purchase onprice ~~April~~per ~~30,~~share ~~2024,~~is ~~which~~above ~~became effective on May 6, 2024~~$21.00.

“At- the June 2025 issuance date, the Company concluded that the prefunded warrants, the Series A warrants, the Series B warrants and the Series C warrants are freestanding financial instruments because each of these instruments can be transferred or assigned by the holder subject to compliance with the applicable securities laws and are legally detachable and separately exercisable. The~~-Market”~~ ~~Offering~~Company ~~Program~~determined the classification of each warrant based on the guidance in ASC 480 and ASC 815. As part of this assessment under ASC 815, the Company was required to allocate its available authorized shares of common stock to its outstanding contracts and commitments. The Company applied an accounting policy to first allocate available authorized shares of common stock based on the earliest issuance date of the contract. To the extent more than one contract or commitment made was issued on the same date, the available shares of common stock were allocated first to the contract with the earliest potential exercise date. The Company concluded that the prefunded warrants are classified as equity. The Company concluded the Series A warrants, the Series B warrants and the Series C warrants are required to be initially classified as liabilities as a result of their settlement provisions. The Series B warrants that were exercised for common stock and prefunded warrants in lieu of shares of common stock were reclassified to equity on the later of the date of each exercise, or December 2, 2025, the date the remaining outstanding Series B warrants qualified for equity classification due to the settlement of the exercise price reset feature. The Series A warrants and the remaining outstanding Series C warrants will continue to be classified as liabilities until such time as the applicable warrant is exercised, expires, or qualifies for equity classification.

InThe ~~November 2022, the~~ Company ~~filed~~received ainitial ~~universal~~gross ~~shelf~~proceeds ~~registration~~from ~~statement on Form S-3 with~~ the ~~SEC~~offering toof ~~register for sale up to~~ $~~250~~50.0 million ~~of its common stock~~, ~~preferred~~before ~~stock,~~deducting ~~debt~~approximately ~~securities, units and warrants, which the Company could issue and sell from time to time in one or more offerings, which became effective on November 18, 2022 (333-268264) (the “Prior S-~~$3 ~~Shelf”)~~.0 Inmillion ~~November~~in ~~2022,~~underwriting ~~the~~discounts ~~Company entered into a sales agreement (the “Cowen Sales Agreement”) with Cowen~~ and ~~Company~~commissions ~~LLC under which the Company could issue~~ and ~~sell shares of its common stock, from time to time, having an aggregate~~ offering ~~price~~expenses ofpayable upby ~~to $75.0 million under a sales agreement prospectus filed as part of~~ the ~~Prior S-3 Shelf~~Company. ~~During~~The ~~the year ended December 31, 2024, the~~ Company ~~issued~~allocated ~~and sold 7,000,000 shares of its common stock pursuant to~~ the ~~Cowen~~initial ~~Sales Agreement at a price of $1.00 per share for aggregate~~ gross proceeds ofas follows: $726.08 million. ~~During~~to the ~~nine~~Series ~~months~~A ~~ended September 30~~warrants, ~~2025,~~$6.6 ~~the~~million ~~Company issued and sold an additional 1,550,000 shares of its common stock pursuant~~ to the ~~Cowen~~Series ~~Sales~~B ~~Agreement~~warrants atand ~~a weighted average price of~~ $15.~~3348 per share for aggregate gross proceeds of approximately $2.~~1 million. Into ~~March 2025,~~ the ~~Company~~Series ~~filed~~C ~~a universal shelf registration statement on Form S-3 with the SEC to register for sale up to $250.0 million of its common stock, preferred stock, debt securities, units and~~ warrants, ~~which the Company may issue and sell from time to time~~ in ~~one~~each ~~or more offerings~~case, ~~which~~based ~~became effective~~ on ~~May 8, 2025 (333-285703) (~~the ~~“New~~fair ~~S-3~~value ~~Shelf”).~~of Ineach ~~March~~instrument ~~2025,~~on the ~~Company~~date ~~terminated~~of ~~the~~issuance ~~Cowen Sales Agreement, and the Company entered into a new sales agreement~~ with ~~Leerink Partners, LLC (~~the ~~“Leerink~~remaining ~~Sales Agreement”), under which the Company may issue and sell shares of its common stock from time to time at an aggregate offering price of up to~~ $5011.05 million. ~~Prior~~allocated to the ~~effectiveness~~prefunded ofwarrants. ~~the~~The ~~New~~Company ~~S-3~~allocated ~~Shelf,~~ the ~~offering~~issuance ofcosts ~~shares~~to ~~under~~ the ~~Leerink~~financial ~~Sales~~instruments ~~Agreement~~in ~~was~~a ~~registered~~manner ~~under~~consistent ~~the Prior S-3 Shelf. In connection~~ with the ~~effectiveness~~allocation of the ~~New S-3 Shelf, the registration of such offering under the Prior S-3 Shelf was terminated and such offering was registered under the New S-3 Shelf~~proceeds.

During the three months ended March 31, 2026, the Company recognized a gain of $3.3 million, related to the change in fair value of the common stock warrants, which is recorded as a component of the change in fair value of common stock warrant liabilities on the condensed consolidated statements of operations and comprehensive loss.

The exercisability of the prefunded warrants and common stock warrants is subject to limitations on exercise. Specifically, a holder will be prohibited from exercising any portion of any warrant if immediately prior to or following such exercise such holder (together with its affiliates) would beneficially own more than 4.99% (or up to 19.99% at the election of the holder) of the Company’s issued and outstanding common stock immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrant. However, any holder of any warrant may increase or decrease such percentage to any other percentage not in excess of 19.99%, provided that any such increase will not be effective until the 61st day after notice from the holder is delivered to the Company.

During the year ended December 31, 2025, 524,033 prefunded warrants were exercised and 4,238,500 prefunded warrants remain outstanding as of December 31, 2025. No prefunded warrants were exercised during the three months ended March 31, 2026.

Each Series A warrant became exercisable on December 1, 2025, with an exercise price of $10.50 per share of common stock, and will expire on June 5, 2030. Through March 31, 2026, no Series A warrants have been exercised and 4,762,533 Series A warrants remain outstanding.

Each Series B warrant became exercisable on November 1, 2025 and was exercisable through December 31, 2025. During the year ended December 31, 2025, 3,443,388 of the Series B warrants were exercised for 1,008,415 shares of common stock and 2,434,973 prefunded warrants in lieu of shares of common stock. The Company received net proceeds of $34.3 million from the exercise of the Series B warrants, after deducting underwriting discounts and commissions and offering expenses payable by the Company. The remaining 1,319,145 Series B warrants were not exercised and expired on December 31, 2025. In addition, 1,319,145 Series C warrants expired according to their terms on December 31, 2025 in connection with the expiration of unexercised Series B warrants, and 3,443,388 of the Series C warrants remained outstanding as of December 31, 2025. Through March 31, 2026, none of the Series B warrants that were exercised for prefunded warrants in lieu of shares of common stock have been exercised for shares of common stock.

Each remaining Series C warrant will be exercisable on or after June 1, 2026, with an exercise price of $10.50 per share of common stock, and will expire on December 2, 2026. In addition, if the closing sale price of the Company's common stock is below the exercise

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price on December 2, 2026, the exercise price will reset to the closing sale price on December 1, 2026 and the expiration time will be extended to December 31, 2026.

The prefunded warrants and Series A warrants may be exercised for cash or on a net exercise or “cashless” basis, and the Series C warrants may be exercised for cash or on a net exercise or “cashless” basis in the event there is no effective registration statement or prospectus available which covers the Series C warrants and shares of common stock issuable upon exercise of the Series C warrants. There can be no assurance that any of the warrants that remain outstanding as of March 31, 2026 will be exercised for cash or at all, and it is possible that the common stock warrants may expire without being exercised. If all of the outstanding Series C warrants are exercised in cash at their current exercise price of $10.50 per warrant, the Company will receive up to $36.2 million in additional total gross proceeds by the end of 2026, before deducting underwriting discounts and commissions and any offering expenses.

Sales Agreement and “At-The-Market” Facility

In March 2025, the Company entered into an “at-the-market” (“ATM”) facility with Leerink Partners, LLC (“Leerink”) pursuant to which the Company could initially issue and sell shares of its common stock from time to time at an aggregate offering price of up to $50.0 million through Leerink as sales agent. In February 2026, the Company filed a prospectus supplement to reduce the amount of common stock it may offer and sell under the ATM facility to an aggregate offering price of up to $9.5 million. The Company did not issue any shares under the ATM facility during the three months ended March 31, 2026.

Shares Reserved for Future Issuance

~~The~~Shares ~~Company~~of ~~has~~common stock reserved for future ~~issuances~~issuance ~~the~~consists ~~following shares~~ of ~~common stock underlying~~ the ~~securities~~following ~~issued below~~ as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025:

	September 30,		December 31,
	March 31,		December 31,
	2025		2024
	2026		2025
Stock options and unvested restricted stock units		133,~~992~~192,~~630~~894		112,~~328~~963,~~134~~086
Employee stock purchase plan		1131,~~314,384~~321		~~901~~89,~~208~~603
Prefunded warrants		92,278,707		25,602,707
Common stock in process of settlement at period end		—		708,215
Common stock warrants		200,030,631		2,631
Prefunded warrants		13,307,918		8,502,224
Total shares reserved for future issuance		307,616,352		37,834,680
Common stock warrants		8,206,109		8,206,109
Total shares reserved for future issuance		24,838,242		20,469,237

9. Stock-Based Compensation

Equity Incentive Plans

2020 Stock Incentive Plan

Under the 2020 Stock Incentive Plan (as amended, the “2020 Plan”), the Company was authorized to issue shares of common stock to the Company’s employees, officers, directors, consultants and advisors in the form of options, restricted stock awards or other stock-based awards.

2021 Stock Incentive Plan

In September 2021, the Company’s board of directors and stockholders adopted the 2021 Stock Incentive Plan (the “2021 Plan”), which became effective immediately prior to the Company’s initial public offering of common stock (“IPO”) in October 2021. Upon effectiveness of the 2021 Plan, the Company ceased granting awards under the 2020 Plan. The 2021 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. The Company initially reserved 469,929 shares of common stock under the 2021 Plan. The 2021 Plan provides that the number of shares reserved and available for issuance under the 2021 Plan will be cumulatively increased on January 1 of each calendar year by 5% of the number of shares of common stock outstanding on such date or such lesser amount determined by the Company’s board of directors. On January 1, 2026, the number of shares reserved for issuance under the 2021 Plan automatically increased by 226,931 shares. As of March 31, 2026, there were 356,869 shares of common stock available for future issuance under the 2021 Plan.

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incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. The Company initially reserved 6,579,016 shares of common stock under the 2021 Plan. The 2021 Plan provides that the number of shares reserved and available for issuance under the 2021 Plan will be cumulatively increased on January 1 of each calendar year by 5% of the number of shares of common stock outstanding on such date or such lesser amount determined by the Company’s board of directors. On January 1, 2025, ~~the~~Stock ~~number~~Incentive ~~of shares reserved for issuance under the 2021~~ Plan ~~automatically increased by 2,293,405 shares. As of September 30, 2025, there were 1,907,013 shares of common stock available for future issuance under the 2021 Plan.~~

In November 2025, the Company’s stockholders adopted the 2025 Stock Incentive Plan (the “2025 Plan”), which had previously been adopted by the Company’s board of directors subject to stockholder approval. The 2025 Plan provides for the grant of stock options to employees for 2,285,592 shares of common stock, divided into four equal tranches of 571,398 total shares per tranche, with the vesting of each tranche of stock options tied to a tranche of the June 2025 warrants, which are further described in Note 8.

The stock options granted under the 2025 Plan vest as follows:

•

The first tranche of stock options vests in equal monthly installments over a period of three years, subject to the employee continuing to provide services to the Company on each vesting date.

•

The second tranche of stock options ("Tranche 2 Stock Options") will become eligible to vest based on the portion of such stock options that equals the percentage of the Series A warrants that are exercised by December 31 of each of 2025, 2026, 2027, 2028, and 2029 and on June 30, 2030 (each, a “measurement date”). Any Tranche 2 Stock Options will vest in three equal installments with one-third vesting on the applicable measurement date and the remaining two-thirds vesting in equal annual installments on each of the subsequent two anniversaries thereafter.

•

The third tranche of stock options ("Tranche 3 Stock Options") became eligible to vest based on the portion of such stock options that equaled the percentage of Series B warrants that were exercised by December 31, 2025. The Tranche 3 Stock Options vest in three equal installments with one-third vesting on December 31, 2025 and the remaining two-thirds vesting in equal annual installments on each of the subsequent two anniversaries thereafter.

•

The fourth tranche of stock options ("Tranche 4 Stock Options") will become eligible to vest based on the portion of such stock options that equal the percentage of the Series C warrants that are exercised or are cancelled due to the Company’s receipt of non-dilutive capital by December 31, 2026. Any Tranche 4 Stock Options that become eligible for vesting will vest in three equal installments with one-third vesting on December 31, 2026 and the remaining two-thirds vesting in equal annual installments on each of the subsequent two anniversaries thereafter.

As of March 31, 2026, there were 21,805 shares of common stock available for future issuance under the 2025 Plan.

2022 Inducement Plan

In 2022, the Company’s board of directors adopted the 2022 Inducement Stock Incentive Plan pursuant to Nasdaq Rule 5635(c)(4) (the “2022 Inducement Plan”). In accordance with Nasdaq Rule 5635(c)(4), stock-based incentive awards under the 2022 Inducement Plan may only be made to a newly hired employee who has not previously been a member of the Company’s board of directors, or an employee who is being rehired following a bona fide period of non-employment by the Company as a material inducement to the employee’s entering into employment with the Company. The Company initially reserved 27519,000642 shares of the Company’s common stock for issuance under the 2022 Inducement Plan. InThe November 2024, the number of shares reserved for issuance under the 2022 Inducement Plan was increased by 50035,000714 shares.in Inboth November 2024 and March 2025. In January 2026, the number of shares reserved for issuance under the 2022 Inducement Plan increased by an additional 50032,000485 shares. As of SeptemberMarch 3031, 20252026, there were 23852,300812 shares of common stock available for future issuance under the 2022 Inducement Plan.

2021 Employee Stock Purchase Plan

In 2021, the Company’s board of directors and stockholders adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which became effective immediately prior to the IPO in October 2021. The Company initially reserved ~~292~~20,~~031~~859 shares of common stock for issuance under the 2021 ESPP. The 2021 ESPP provides that the number of shares of common stock reserved for issuance under the 2021 ESPP will be cumulatively increased on January 1 of each calendar year by 1% of the number of shares of the Company’s common stock outstanding on such date or such lesser amount determined by the Company’s board of directors (up to a maximum increase of ~~584~~41,~~062~~718 shares of common stock per year). On January 1, ~~2025~~2026, the number of shares reserved for issuance under the 2021 ESPP was increased by ~~458~~41,~~681~~718 shares. During each of the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, the Company ~~issued~~did ~~45,505~~not ~~shares~~issue ofany ~~common stock and 38,998~~ shares of common stock under the 2021 ESPP~~, respectively~~. As of ~~September~~March 3031, ~~2025~~2026, there were 1131,~~314,384~~321 shares available for future issuance under the 2021 ESPP.

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Stock-Based Compensation Expense

During the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, the Company recorded compensation expense related to stock options, restricted stock units and restricted common stock for employees and non-employees and share purchases under the 2021 ESPP for employees, which was allocated as follows in the condensed consolidated statements of operations and comprehensive loss:

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2025		2024		2025		2024
	2026		2025
Research and development expense	$	~~319~~792	$	~~384~~389	$	~~1,054~~	$	~~1,275~~
General and administrative expense		~~804~~1,419		1,~~190~~146		~~2,955~~		~~3,643~~
Total stock-based compensation expense	$	12,~~123~~211	$	1,~~574~~535	$	~~4,009~~	$	~~4,918~~

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Stock Options

A summary of stock option activity under the Company’s 2020 Plan, 2021 Plan, 2025 Plan and 2022 Inducement Plan is as follows:

						Weighted
						Average
						Remaining		Aggregate
				Weighted		Contractual		Intrinsic
	Number of			Average		Term		Value (1)
	Stock Options			Exercise Price		(In years)		(In thousands)
Outstanding as of December 31, 2024		8,333,932		$	4.15		8.0	$	282
Outstanding as of December 31, 2025		2,785,102		$	14.40		9.1	$	27
Granted		39,~~882,830~~280		$	08.9036
Exercised		(~~17,534~~109	)	$	07.5870
Forfeited		(~~686~~26,~~036~~988	)	$	311.7040
Outstanding as of September 30, 2025		11,513,192		$	3.09		7.9	$	263
Outstanding as of March 31, 2026 (2)		2,767,285		$	14.41		8.9	$	19
Exercisable as of September 30, 2025		6,453,329		$	4.55		7.0	$	68
Exercisable as of March 31, 2026 (2)		726,042		$	21.28		7.4	$	8

(1)

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock as of the end of the period.

(2)

~~Using~~The ~~the Black~~weighted-~~Scholes~~average ~~option~~exercise ~~pricing~~price ~~model,~~per ~~the~~share ~~weighted average fair value~~ of ~~options granted to employees and directors during~~ the ~~nine~~options ~~months~~outstanding ~~ended September 30, 2025~~ and ~~2024~~exercisable ~~was~~as ~~$0.71~~of ~~per~~March ~~share and $0.68 per share~~31, ~~respectively.~~2026 ~~The~~includes ~~following assumptions were used in determining~~ the ~~fair~~impact ~~value~~ of ~~options granted during~~ the ~~nine~~stock ~~months~~option ~~ended~~repricing ~~September~~described ~~30, 2025 and 2024:~~below.

	Nine Months Ended September 30,
	2025			2024
Risk-free interest rate	3.9 - 4.4		%		3.7 - 4.6		%
Expected dividend yield		0	%			0	%
Expected term (in years)	5.5 - 6.1				5.5 - 6.1
Expected volatility	94.5 - 100.8		%		87.7 - 91.4		%

As of March 31, 2026, the Company had unrecognized stock-based compensation expense of $16.7 million related to stock options issued to employees and directors, including $9.8 million of unrecognized stock-based compensation expense related to awards with performance conditions for which the likelihood of satisfying such performance conditions are considered probable, which is expected to be recognized over a weighted-average period of 3.0 years.

AsUsing ofthe ~~September~~Black-Scholes ~~30,~~option ~~2025~~pricing model, the ~~Company~~weighted ~~had~~average ~~unrecognized~~fair ~~stock-based~~value ~~compensation~~of ~~expense~~options ofgranted ~~$4.1~~to ~~million~~employees ~~related~~and todirectors ~~stock~~during ~~options~~the ~~issued~~three tomonths ~~employees~~ended March 31, 2026 and ~~directors~~2025 was $6.82 per share and $10.36 per share, ~~which~~respectively. isThe ~~expected~~following toassumptions bewere ~~recognized~~used ~~over~~in adetermining ~~weighted-average~~the ~~period~~fair value of ~~2.8~~options ~~years.~~granted during the three months ended March 31, 2026 and 2025:


	Three Months Ended March 31,
	2026			2025
Risk-free interest rate	3.6 - 3.8		%			4.4	%
Expected dividend yield		0	%			0	%
Expected term (in years)	6.0 - 6.1				6.0 - 6.1
Expected volatility	102.3 - 103.3		%		94.5 - 95.6		%

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Stock Option Repricing

In October 2025, the Company's board of directors approved a stock option repricing (the “Option Repricing”), which was effective upon stockholder approval on November 21, 2025 (the “Repricing Date”). The Option Repricing applied to all outstanding options to purchase shares of common stock of the Company granted to employees under the Company’s 2020 Plan, 2021 Plan and 2022 Inducement Plan with an exercise price greater than $21.00 for members of the Company's executive team and $14.00 for all other employees (the “underwater options”) with grant dates prior to January 1, 2025 (the “Eligible Options”). The total number of shares of common stock underlying all Eligible Options was 354,200. Non-employee members of the Company’s board of directors were not eligible to participate in the Option Repricing. If such Eligible Options are exercised prior to the one-year anniversary of the Repricing Date (the "Retention Period"), the original exercise price must be paid.

The repricing of the Eligible Options was accounted for as a modification under ASC 718. Accordingly, the Company calculated incremental compensation cost on the modification date in an amount equal to the difference between the fair value of the awards before and after modification. The total amount of the incremental compensation expense to be recognized was determined to be $0.6 million, which is being recognized over the Retention Period.

Stock Options with Performance Conditions

The Company determined that the Tranche 2, Tranche 3 and Tranche 4 Stock Options contain performance conditions for which the likelihood of satisfying each of the performance conditions is considered probable as of March 31, 2026.

As of March 31, 2026 and December 31, 2025, no Tranche 2 Stock Options were eligible to vest as there have been no exercises of Series A warrants to date. Based on the Series B warrants exercised during the year ended December 31, 2025, 412,043 Tranche 3 Stock Options became eligible to vest and will vest in three equal annual installments beginning on December 31, 2025. On December 31, 2025, 157,875 Tranche 3 Stock Options were cancelled in proportion to the respective amount of unexercised Series B warrants. The Series C warrants are cancellable to the extent Series B warrants are not exercised or cancelled due to the Company’s receipt of non-dilutive capital. Therefore, on December 31, 2025, 157,875 Tranche 4 Stock Options were cancelled in proportion to the respective amount of unexercised Series B warrants.

Restricted Stock Units

In January 2024, the Company awarded ~~481~~34,~~500~~389 restricted stock units to certain employees of the Company. The restricted stock units vest in four equal annual installments beginning on the first anniversary of the grant date. The restricted stock units are generally forfeited if the individual’s service relationship with the Company or any subsidiary terminates prior to vesting.

A summary of the Company’s restricted stock unit activity and related information is as follows:

	Number			Weighted
	of Shares			Average
	of Restricted			Grant Date
	Stock Units			Fair Value
Unvested as of December 31, 2024		445,500		$	0.55
Unvested as of December 31, 2025		23,866		$	7.70
Granted		—		$	—
Vested		(~~111~~7,~~375~~952	)	$	07.5570
Forfeited		—		$	—
Unvested as of September 30, 2025		334,125		$	0.55
Unvested as of March 31, 2026		15,914		$	7.70

For each of the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, the Company recognized less than $0.1 million of stock-based compensation expense related to these awards. As of ~~September~~March 3031, ~~2025~~2026, the Company had unrecognized stock-based compensation expense of $0.21 million related to these restricted stock units, which is expected to be recognized over 21.37 years.

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The Company calculates basic net loss per share by dividing net loss by the weighted average number of shares of common stock outstanding. The weighted average number of shares of common stock used in the basic and diluted net loss per share calculation includes ~~the~~ prefunded warrants to purchase common stock ~~issued in connection with the Company’s private placements with certain existing investors and Gilead and the Company’s follow-on public offering~~, as the prefunded warrants are exercisable at any time for nominal cash consideration. As of ~~September~~March 3031, ~~2025~~2026, no1,059,743 prefunded warrants have been exercised for common stock and 9213,~~278~~307,~~707~~918 prefunded warrants are outstanding.

The following table sets forth the outstanding shares of common stock equivalents, presented based on amounts outstanding at each period end, that were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have been anti-dilutive:

	Nine Months Ended
	Three Months Ended
	September 30,
	March 31,
	2025		2024
	2026		2025
Unvested restricted stock units		~~334~~15,~~125~~914		~~445~~23,~~500~~866
Outstanding stock options		112,~~513~~767,~~192~~285		8775,~~006,371~~507
Common stock warrants		~~200~~8,~~030~~206,~~631~~109		~~2,631~~188
Unvested employee stock purchase plan shares		6269,~~339~~939		373,~~097~~250
Total common stock equivalents		~~211~~11,~~940~~059,~~287~~247		8802,~~491,599~~811

~~11. Subsequent Events~~25

OnTable ~~October 20, 2025, the Company filed a proxy statement seeking stockholder approval~~ of the following: (i) a one-time repricing of certain outstanding employee stock options and (ii) the Xilio Therapeutics, Inc. 2025 Stock Incentive Plan, with an aggregate of 32.0 million shares of common stock reserved for issuing stock options to employees. The stockholder meeting to vote on the proposals stated within the proxy statement is scheduled to be held on November 21, 2025.Contents

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

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a clinical-stage biotechnology company discovering and developing ~~tumor-activated, or~~ masked, immuno-oncology, or I-O, therapies with the goal of significantly improving outcomes for people living with cancer ~~without the systemic side effects of current I-O treatments~~. WeLeveraging ~~are leveraging~~ our ~~proprietary~~clinically-validated ~~platform~~masking totechnology ~~advance~~and acapabilities, ~~pipeline~~we ofare ~~novel,~~developing ~~tumor-activated~~ I-O ~~molecules~~therapies ~~that are~~ designed to ~~optimize~~selectively ~~the~~activate ~~therapeutic index by localizing anti-tumor activity~~ within the tumor microenvironment, ~~including~~to ~~masked~~achieve ~~antibodies,~~durable ~~bispecifics,~~efficacy ~~cytokines~~without ~~and~~the ~~immune~~severe ~~cell~~side ~~engagers.~~effects ~~Current~~associated ~~I-O therapies have curative potential for patients~~ with ~~cancer.~~systemically ~~However,~~active ~~their~~I-O ~~potential is significantly curtailed by systemic toxicity that results from activity of the therapeutic molecule outside the tumor microenvironment~~agents. Our ~~molecules~~integrated ~~are~~biology ~~engineered~~and toprotein ~~localize~~engineering ~~activity~~approach ~~within~~enables ~~the~~us ~~tumor microenvironment with minimal systemic effects, resulting in the potential~~ to ~~achieve~~design ~~enhanced anti-tumor activity~~ and ~~increasing~~develop ~~the~~highly ~~population of patients who may be eligible to receive our medicines. To date~~potent, wemasked ~~have~~biologics ~~presented~~that ~~data across our clinical-stage programs showing clinical validation for our tumor-activation platform. Our most advanced clinical-stage product candidates~~ are ~~vilastobart, a tumor-~~activated, ~~Fc-enhanced anti-CTLA-4 monoclonal antibody,~~ or ~~mAb~~unmasked, ~~and~~by ~~efarindodekin alfa (XTX301), a~~ tumor-~~activated,~~specific ~~engineered~~proteases ~~interleukin~~within ~~12,~~the ortumor ~~IL-12, therapy~~microenvironment. We are currently advancing ~~clinical~~multiple ~~development~~programs ~~for vilastobart~~ in ~~combination~~preclinical ~~with~~and ~~atezolizumab (Tecentriq®) in a Phase 2~~ clinical ~~trial in patients with microsatellite stable metastatic colorectal cancer~~development, orincluding ~~MSS~~masked ~~mCRC, under a co~~multi-~~funded clinical trial collaboration with F. Hoffmann-La Roche Ltd~~specifics, or Roche. In November 2025, we announced new data from the ongoing Phase 2 clinical trial at the Society for Immunotherapy of Cancer (SITC) 40th Annual Meeting in patients with MSS mCRC without liver metastases and ~~high~~our ~~plasma~~clinically-validated ~~tumor~~masking ~~mutational~~technology ~~burden,~~has orenabled ~~TMB,~~us ~~and we anticipate reporting additional data from the Phase 2 trial in the first half of 2026. Based on the promising clinical activity and safety profile demonstrated by vilastobart~~ to ~~date~~establish astop-tier astrategic ~~combination therapy~~partnerships, including inwith ~~patients~~AbbVie ~~who~~Group ~~had~~Holdings ~~high plasma TMB~~Limited, ~~we are actively seeking a partner to develop vilastobart in combination with PD-(L)1~~ or ~~PD1-VEGF in MSS mCRC and other tumor types. For efarindodekin alfa~~AbbVie, ~~in the third quarter of 2025, we initiated a Phase 2 trial in patients with advanced solid tumors~~ and ~~achieved a $17.5 million development milestone under our exclusive license agreement with~~ Gilead Sciences, Inc., or Gilead. We have completed enrollment in the Phase 1A monotherapy dose escalation and Phase 1B monotherapy dose expansion portions of our ongoing Phase 1/2 clinical trial, and evaluation of patients is ongoing. In addition to our clinical-stage product candidates, we are leveraging our proprietary tumor-activation platform to advance multiple preclinical programs for XTX501, a bispecific PD-1/masked IL-2 and our masked T cell engager molecules, including wholly owned programs targeting the tumor-associated antigens for PSMA, CLDN18.2 and STEAP1 and an additional program under our collaboration, license and option agreement with AbbVie Group Holdings Limited, or AbbVie.

Liquidity ~~and Going Concern~~ Overview

To date, we have financed our operations primarily from proceeds raised through private placements of ~~preferred~~equity ~~units~~securities, ~~convertible preferred stock, common stock and prefunded warrants;~~ sales of common stock in our initial public offering, or IPO, and through “at-the-market” offerings; the sale of prefunded warrants in our June 2025 and February 2026 follow-on offerings; the exercise of certain common stock warrants issued in aconnection with our June 2025 follow-on ~~public~~ offering; development event payments under our co-funded clinical trial collaboration with F. Hoffmann-La Roche Ltd., or Roche; and upfront payments and milestone payments under our collaboration and license agreements with AbbVie and Gilead. WeAll of our programs are in early clinical or preclinical development. As a result, we have not generated any revenue from product sales and do not expect to generate any revenue from product sales for at least the next several years, if at all. ~~All of our programs are in early clinical or preclinical development.~~ Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates, if approved. 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 profitability. Even if we are able to generate revenue from product sales, we may not become profitable.

InSince ~~June 2025~~inception, we ~~closed~~have aincurred ~~follow-on~~significant ~~public~~operating ~~offering~~losses, including net losses of ~~prefunded~~$9.5 ~~warrants~~million and ~~accompanying~~$13.3 ~~common~~million ~~stock~~for ~~warrants~~the three months ended March 31, 2026 and ~~received~~2025, respectively, and a net ~~proceeds~~loss of $4735.0 million ~~after~~for ~~deducting~~the ~~underwriting~~year ~~discounts~~ended ~~and~~December ~~commissions~~31, ~~and~~2025. ~~offering~~As ~~expenses~~of ~~payable~~March by31, us2026, we had an accumulated deficit of $428.3 Inmillion. ~~connection~~We expect to continue to incur significant expenses and operating losses for the foreseeable future, particularly to the extent we:

•

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with the offering, we issued prefunded warrants to purchase 66,676,000 shares of common stock, accompanied by Series A warrants to purchase 66,676,000 shares of common stock (or, in certain circumstances, prefunded warrants), Series B warrants to purchase 66,676,000 shares of common stock (or, in certain circumstances, prefunded warrants) and Series C warrants to purchase 66,676,000 shares of common stock (or, in certain circumstances, prefunded warrants). If all of the Series B warrants and Series C warrants are exercised in cash at their initial exercise price of $0.75 per warrant, we will receive up to $100.0 million of additional gross proceeds by the second half of 2026. For more information, refer to Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Since inception, we have incurred significant operating losses, including net losses of $45.4 million and $45.1 million for the nine months ended September 30, 2025 and 2024, respectively, and a net loss of $58.2 million for the year ended December 31, 2024. As of September 30, 2025, we had an accumulated deficit of $429.1 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future, particularly to the extent we:

continue to advance our current research programs and conduct additional research programs;

•

advance our current product candidates and any future product candidates we may develop into preclinical and clinical development;

•

seek marketing approvals for product candidates that successfully complete clinical trials, if any;

•

obtain, expand, maintain, defend and enforce our intellectual property;

•

continue to discover, validate and develop additional product candidates;

•

continue to manufacture increasing quantities of our current or future product candidates for use in preclinical studies, clinical trials and for any potential commercialization;

•

acquire or in-license other product candidates, technologies or intellectual property;

•

hire additional personnel to support current or future programs;

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•

establish a commercial and distribution infrastructure to commercialize products for which we may obtain marketing approval, if any; and

•

incur additional costs associated with current and future research, development and commercialization efforts and operations as a public company.

As a result, we will need substantial additional capital to support our continuing operations and pursue our strategy. As of ~~September~~March 3031, ~~2025~~2026, we had cash and cash equivalents of $~~103~~150.83 million. In the ~~fourth~~second quarter of ~~2025~~2026, we ~~received~~achieved a $176.50 million development milestone ~~under~~related ~~our~~to ~~license~~the collaboration agreement with ~~Gilead~~AbbVie. Based on our current operating plans, we anticipate that our existing cash and cash equivalents as of ~~September~~March 3031, ~~2025~~2026, together with the ~~$17.5 million~~ development milestone ~~received~~achieved under ~~our~~the ~~license~~AbbVie ~~agreement~~collaboration ~~with~~in ~~Gilead~~the second quarter of 2026, will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into ~~the~~early ~~first quarter of 2027~~2028. ~~However,~~This weestimate ~~have~~excludes ~~based~~any ~~our~~potential estimates on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we anticipate. In addition, we expect our operating losses and negative operating cash flows to continue for the foreseeable future as we continue to advance our pipeline of novel, tumor-activated I-O molecules through preclinical and clinical development, maintain the infrastructure necessary to support these activities and continue to incur costs associated with operating as a public company. These conditions raise substantial doubt about our ability to continue as a going concern. In order to fund our operations, we will need to raise additional ~~capital, which could be obtained through the cash exercise of the Series B warrants and Series C warrants issued in connection with our June 2025 follow-on public offering, the receipt of~~ milestone payments, option-related fees or other contingent payments under our existing ~~agreements~~collaboration ~~with Gilead~~ and ~~AbbVie,~~partnership additional public or private equity offerings, debt financings, additional collaborations, partnerships or licensing arrangements or other sources. However, there can be no assurance that we will receive additional proceeds from the exercise of the common stock warrants or from contingent payments under our existing agreements with ~~Gilead or~~ AbbVie orand ~~that~~Gilead weand ~~will~~excludes bethe ~~able~~potential toreceipt ~~complete~~of ~~any~~up ~~such~~to ~~transaction on acceptable terms or otherwise~~$36.2 Ifmillion wein ~~are not able to secure sufficient~~ additional ~~capital~~gross ~~when~~proceeds ~~needed,~~in wethe ~~may~~second ~~need~~half toof ~~implement~~2026 ~~additional~~if ~~cost~~all ~~reduction~~outstanding ~~strategies,~~Series ~~which~~C ~~could~~warrants ~~include~~are ~~delaying,~~exercised ~~limiting,~~at ~~further~~their ~~reducing~~current orexercise ~~eliminating both internal and external costs related to our operations and research and development programs~~price.

28In addition, we have based our estimates on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we anticipate. We expect our operating losses and negative operating cash flows to continue for the foreseeable future as we continue to advance our pipeline of novel, masked I-O molecules through preclinical and clinical development, maintain the infrastructure necessary to support these activities and continue to incur costs associated with operating as a public company.

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For more information regarding our liquidity and going concern, refer to “—Liquidity and Capital Resources—Capital Requirements and Going Concern” below and Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. For more information regarding the terms of the warrants we issued in our June 2025 follow-on public offering, refer to Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Financial Operations Overview

Revenue

We have not generated any revenue from the sale of products since inception and do not expect to generate any revenue from the sale of products for at least the next several years, if at all. If our development efforts for our current or future product candidates are successful and result in regulatory approval, we may generate revenue in the future from product sales. For the foreseeable future, we expect substantially all of our revenue, if any, would be generated from our collaboration and license agreements with AbbVie and Gilead. For more information on our collaboration, license and option agreement with AbbVie and our license agreement with Gilead, please see Note 6 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our discovery efforts, research activities and development and testing of our programs and product candidates. These expenses include:

•

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

•

costs incurred with third-party contract development and manufacturing organizations, or CDMOs, to acquire, develop and manufacture materials for both preclinical studies and current or future clinical trials;

•

costs of funding research performed by third parties that conduct research and development and preclinical activities on our behalf;

•

costs incurred with third-party contract research organizations, or CROs, and other third parties in connection with the conduct of our current or future clinical trials;

•

costs of sponsored research agreements and outside consultants, including their fees and related expenses;

•

costs incurred to maintain compliance with regulatory requirements;

•

fees for maintaining licenses and other amounts due under our third-party licensing agreements;

•

expenses incurred for the procurement of materials, laboratory supplies and non-capital equipment used in the research and development process; and

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•

depreciation, amortization and other direct and allocated expenses, including rent, maintenance of facilities and other operating costs, incurred as a result of our research and development activities.

We expense research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific deliverables 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 condensed consolidated balance sheets as prepaid expenses or accrued research and development expenses. We record cost-sharing payments under our clinical trial collaboration with Roche as a reduction of research and development costs upon the achievement of each study development event specified in the clinical supply agreement. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are capitalized as assets, even when there is no alternative future use for the research and development. The capitalized amounts are expensed as the related goods are delivered or the services are performed.

We use our personnel and infrastructure resources for our discovery efforts, including the advancement of our platform technology, developing programs and product candidates and managing external research efforts. A significant portion of our research and development costs have been, and will continue to be, external costs. We track these external costs, such as fees paid to CDMOs, CROs, preclinical study vendors and other third parties in connection with our manufacturing and manufacturing process development, clinical trials, preclinical studies and other research activities by program. Due to the number of ongoing programs and our ability to use resources across several projects, personnel-related expenses and indirect or shared operating costs incurred for our research and development programs are not recorded or maintained on a program-by-program basis.

29Research and development activities are central to our business model. Product candidates in later stages of clinical development 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. We expect that our research and development expenses will remain approximately the same or will continue to increase for the foreseeable future as we advance our programs and our current or future product candidates into and through the development phase. We expect our discovery research efforts and our related personnel costs to remain consistent with historical levels. In addition, as we progress our most advanced product candidates in clinical development, we may incur additional expenses related to milestone and royalty payments payable to third parties with whom we have entered into, or may enter into license, acquisition, option or other agreements to acquire the rights to future products and product candidates. In the event we are unable to raise sufficient additional capital to fund our operations in the future, we may need to implement cost reduction strategies that seek to maintain our ability to continue the development of our most advanced product candidates in clinical development while otherwise reducing our overall research and development expenses.

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preclinical study vendors and other third parties in connection with our manufacturing and manufacturing process development, clinical trials, preclinical studies and other research activities by program. Due to the number of ongoing programs and our ability to use resources across several projects, personnel-related expenses and indirect or shared operating costs incurred for our research and development programs are not recorded or maintained on a program-by-program basis.

Research and development activities are central to our business model. Product candidates in later stages of clinical development 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. We expect that our research and development expenses will remain approximately the same or will continue to increase for the foreseeable future as we advance our programs and our current or future product candidates into and through the development phase. We expect our discovery research efforts and our related personnel costs to remain consistent with historical levels. In addition, as we progress our most advanced product candidates in clinical development, we may incur additional expenses related to milestone and royalty payments payable to third parties with whom we have entered into, or may enter into license, acquisition, option or other agreements to acquire the rights to future products and product candidates. In the event we are unable to raise sufficient additional capital to fund our operations, we may need to implement cost reduction strategies that seek to maintain our ability to continue the development of our most advanced product candidates in clinical development while otherwise reducing our overall research and development expenses.

At this time, we cannot reasonably estimate or know the nature, timing and projected costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates or programs. This is due to the numerous risks and uncertainties associated with drug development, including the uncertainty of:

•

the scope, timing, costs and progress of preclinical and clinical development activities;

•

the number and scope of preclinical and clinical programs we decide to pursue;

•

our ability to implement and maintain cost reduction strategies, as well as the timing of such cost reductions;

•

our ability to maintain our current research and development programs;

•

our ability to establish an appropriate safety profile for our product candidates with IND-enabling studies;

•

our ability to hire and retain key research and development personnel;

•

the costs associated with the development of any additional product candidates we acquire or develop through collaborations, partnerships, licenses or similar transactions;

•

our successful enrollment in and completion of clinical trials;

•

our ability to successfully complete clinical trials with safety, potency and purity profiles that are satisfactory to the U.S. Food and Drug Administration, or the FDA, or any comparable foreign regulatory authority;

•

our receipt of regulatory approvals from applicable regulatory authorities;

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•

our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize, our product candidates;

•

our ability to commercialize products, if and when approved, whether alone or in collaboration with others;

•

the continued acceptable safety profiles of the product candidates following approval, if any;

•

our ability to establish and maintain agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if any of our product candidates are approved;

•

the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone payments thereunder, if any;

•

our ability to obtain and maintain patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates if and when approved; and

•

general economic conditions, including inflation and the imposition of new or revised global trade tariffs.

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A change in any of these variables with respect to the development of any of our product candidates would significantly change the costs, timing and viability associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any product candidate we may develop.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related costs, including salaries, bonuses, benefits, recruiting and stock-based compensation, for personnel in our executive, finance, legal, business development, human resources and other administrative functions. General and administrative expenses also include legal fees relating to corporate matters; professional and consulting fees for accounting, auditing, tax, human resources and administrative consulting services; board of directors’ fees; insurance costs; and facility-related expenses, which include depreciation costs and other allocated expenses for rent, maintenance of facilities and other general administrative costs. These costs relate to the operation of the business and are in support of but separate from the research and development function and our individual development programs. Costs to secure and defend our intellectual property are expensed as incurred and are classified as general and administrative expenses.

We anticipate that our general and administrative expenses will remain consistent with historical levels as we maintain our infrastructure to support our research and development activities. We also expect to continue to incur significant expenses associated with operating as a public company, including increased costs for accounting, audit, legal, regulatory and tax-related services attributable to maintaining compliance with exchange listing standards and U.S. Securities and Exchange Commission, or SEC, requirements, directors’ and officers’ liability insurance costs and investor and public relations costs. We also expect to continue to incur additional expenses related to intellectual property as we file patent applications to protect intellectual property arising from our research and development activities. In the event we are unable to obtain sufficient additional capital in the future, we may need to implement cost reduction strategies that seek to reduce our general and administrative expenses while maintaining sufficient infrastructure to support our planned research and development activities and operations as a public company.

RestructuringOther Income, Net

InChange ~~connection with the March 2024 strategic portfolio reprioritization and restructuring, we undertook efforts to reduce our expenses and streamline our operations, including a reduction~~ in ~~headcount~~Fair ofValue ~~15 employees, representing approximately 21%~~ of ~~our~~Common ~~workforce~~Stock ~~immediately~~Warrant prior to the workforce reduction. Restructuring expense consists of costs directly incurred as a result of restructuring initiatives, and includes employee severance payments, benefits continuation, outplacement services and related expenses.Liabilities

~~Other~~The ~~Income~~change ~~(Expense)~~in fair value of common stock warrant liabilities consists of the change in the fair value of the common stock warrant liabilities from December 31, ~~Net~~2025 to March 31, 2026.

~~Change~~Other inIncome, ~~Fair Value of Common Stock Warrant Liabilities~~Net

~~The~~Other ~~change~~income, innet ~~fair value of common stock warrant liabilities~~ consists ofprimarily ~~the change in the fair value~~ of ~~the~~interest ~~common~~income ~~stock~~earned ~~warrant liabilities~~ from ~~the~~our ~~issuance~~cash ~~date~~and ofcash ~~June 5, 2025 to September 30, 2025~~equivalents.

~~Other Income (Expense), Net~~29

~~Other~~Table ~~income (expense), net consists primarily~~ of the portion of the issuance costs we incurred in connection with the issuance of the prefunded warrants and common stock warrants in June 2025 in connection with a follow-on public offering which were allocated to the common stock warrant liabilities, interest income earned from our cash and cash equivalents, interest expense principally on the note payable under our former debt arrangement with Pacific Western Bank, or PacWest, and amortization of the debt discount related to debt issuance costs.Contents

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Results of Operations

Comparison of the three months ended SeptemberMarch 3031, 20252026 and 20242025

The following table summarizes our results of operations for the three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025 (in thousands):

	Three Months Ended
	September 30,
	March 31,
	2025			2024			Change
	2026			2025			Change
Revenue
Collaboration and license revenue	$	1912,~~066~~648		$	2,~~263~~930		$	169,~~803~~718
Total revenue		1912,~~066~~648			2,~~263~~930			169,~~803~~718
Operating expenses
Research and development	$	1419,~~321~~832		$	108,~~759~~266		$	311,~~562~~566
General and administrative		6,~~674~~928			68,~~307~~515			~~367~~(1,587	)
Restructuring		—			(41	)		41
Total operating expenses		26,760			16,781			9,979
Total operating expenses		20,995			17,025			3,970
Loss from operations		(14,112	)		(13,851	)		(261	)
Loss from operations		(1,929	)		(14,762	)		12,833
Other income, net
Other income (expense), net
Change in fair value of common stock warrant liabilities		3,300			—			3,300
Change in fair value of common stock warrant liabilities		(15,380	)		—			(15,380	)
Other income, net		1,283			586			697
Other income (expense), net		1,022			742			280
Total other income, net		4,583			586			3,997
Total other income (expense), net		(14,358	)		742			(15,100	)
Net loss	$	(9,529	)	$	(13,265	)	$	3,736
Net loss	$	(16,287	)	$	(14,020	)	$	(2,267	)

Collaboration and License Revenue

Collaboration and license revenue increased by $169.87 million from $2.39 million for the three months ended ~~September~~March 3031, ~~2024~~2025 to $1912.16 million for the three months ended ~~September~~March 3031, ~~2025~~2026. The increase was due to ~~collaboration and license revenue recognized under the collaboration, license and option agreement and stock purchase agreement that we entered into in February 2025 with AbbVie and~~ an increase in collaboration and license revenue recognized under ~~the~~our ~~license~~collaboration ~~agreement~~ and ~~stock~~license ~~purchase~~agreements ~~agreement~~ with ~~Gilead,~~AbbVie ~~which included a cumulative catch-up of collaboration~~ and ~~license revenue of $7~~Gilead.~~0 million related to the adjustment of the overall transaction price due to the achievement of the $17.5 million development milestone during the third quarter of 2025.~~

Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025 (in thousands):

	Three Months Ended
	September 30,
	March 31,
	2025		2024			Change
	2026		2025			Change
vilastobart	$	1,677	$	5,368		$	(3,691	)
XTX501	$	6,144	$	469		$	5,675
efarindodekin alfa (XTX301)		2,065		1,112			953
efarindodekin alfa		1,401		979			422
XTX501		2,189		—			2,189
vilastobart		1,084		(193	)		1,277
XTX202		93		(1,237	)		1,330
Other early programs and indirect research and development		5,212		2,427			2,785
Other early programs and indirect research and development		3,381		1,997			1,384
Personnel-related		5,991		4,584			1,407
Personnel-related		4,916		3,519			1,397
Total research and development expenses	$	19,832	$	8,266		$	11,566
Total research and development expenses	$	14,321	$	10,759		$	3,562

32Research and development expenses increased by $11.6 million from $8.3 million for the three months ended March 31, 2025 to $19.8 million for the three months ended March 31, 2026. The changes in research and development expenses were primarily due to the following:

•

~~Table~~XTX501 ofcosts ~~Contents~~increased by $5.7 million, primarily driven by an increase in manufacturing activities related to IND-enabling studies and preclinical development activities;

•

~~Research~~other early programs and indirect research and development ~~expenses~~costs increased by $32.~~6 million from $10.~~8 million, ~~for~~primarily ~~the~~driven ~~three~~by ~~months~~an ~~ended~~increase ~~September~~in ~~30,~~external ~~2024~~expenses related to ~~$14.3~~preclinical ~~million~~research ~~for~~and ~~the~~development ~~three~~activities, ~~months~~including ~~ended~~costs ~~September~~related ~~30,~~to ~~2025~~our CLDN18.2 ~~The~~program, ~~changes~~prostrate inprogram ~~research~~ and ~~development~~AbbVie ~~expenses were primarily due to the following:~~collaboration;

~~vilastobart costs decreased by $3.7 million, primarily driven by $3.5 million in aggregate development milestonesthat we incurred during the three months ended September~~ 30, 2024 under our CTLA-4 monoclonal antibodylicense agreement with WuXi Biologics (Hong Kong) Limited, or WuXi Biologics, and our amended and restatedexclusive license agreement with City of Hope, for which there was no comparable cost during the three months ended September 30, 2025;

~~efarindodekin~~Table ~~alfa costs increased by $1.0 million, primarily driven by a $0.8 million increase in clinical developmentactivities related to initiation~~ of ~~our Phase 2 clinical trial evaluating efarindodekin alfa as a monotherapy in patients with certain advanced solid tumors and a $0.2 million increase in manufacturing activities;~~Contents

•

~~XTX501~~vilastobart costs ~~for~~increased by $1.3 million, primarily driven by a $2.0 million cost-sharing payment earned under our Roche clinical collaboration during the three months ended ~~September~~March 3031, 2025, ~~consisted~~which ofwe ~~manufacturing~~recorded ~~activities~~as ~~related~~a toreduction ~~IND-enabling~~in ~~studies~~research and ~~pre-clinical~~ development ~~activities;~~expenses and for which there was no corresponding cost-sharing payment during the three months ended ~~September~~March 3031, ~~2024~~2026, ~~XTX501~~partially ~~costs~~offset ~~were~~by ~~not~~a ~~separately~~$0.7 ~~tracked~~million asdecrease wein ~~had~~clinical ~~not~~development ~~begun~~activities ~~performing~~related ~~IND-enabling~~to ~~studies~~our ongoing Phase 1/2 clinical trial evaluating vilastobart in combination with atezolizumab;

•

~~XTX202~~personnel-related costs ~~for~~increased ~~the~~by ~~three~~$1.4 ~~months ended September 30~~million, ~~2025~~primarily ~~consisted~~driven ofby ~~investigator~~a ~~costs~~$1.0 ~~invoiced~~million ~~during~~increase ~~the~~in ~~final~~salaries, ~~winddown~~bonuses ~~process~~and ofbenefits ~~the~~due ~~discontinued~~to ~~XTX202~~higher ~~study;~~research and ~~XTX202~~development ~~costs for the three months ended September 30~~headcount, ~~2024~~and ~~include~~a ~~the~~$0.4 ~~effect~~million ofincrease ~~invoiced~~in ~~investigator~~stock-based ~~costs being lower than previously estimated amounts~~compensation; and

•

~~other~~efarindodekin ~~early~~alfa ~~programs and indirect research and development~~ costs increased by $10.4 million, primarily driven by an increase in ~~external~~clinical ~~expenses~~development activities related to ~~preclinical~~our ~~research~~ongoing ~~and~~our ~~development~~Phase ~~activities;~~2 ~~and~~clinical trial evaluating efarindodekin alfa as a monotherapy in patients with certain advanced solid tumors.

~~personnel-related~~General ~~costs increased by $1.4 million, primarily driven by an increase in salaries, bonuses~~ and ~~benefits~~Administrative ~~due to higher research and development headcount.~~Expenses

~~General~~The following table summarizes our general and ~~Administrative~~administrative ~~Expenses~~expenses for the three months ended March 31, 2026 and 2025 (in thousands):

The following table summarizes our general and administrative expenses for the three months ended September 30, 2025 and 2024 (in thousands):


	Three Months Ended
	March 31,
	2026		2025		Change
Personnel-related	$	4,171	$	4,444	$	(273	)
Professional and consulting fees		1,997		3,238		(1,241	)
Facility-related and other general and administrative expenses		760		833		(73	)
Total general and administrative expenses	$	6,928	$	8,515	$	(1,587	)

	Three Months Ended
	September 30,
	2025		2024		Change
Personnel-related	$	3,414	$	3,688	$	(274	)
Professional and consulting fees		2,374		1,658		716
Facility-related and other general and administrative expenses		886		961		(75	)
Total general and administrative expenses	$	6,674	$	6,307	$	367

General and administrative expenses decreased by $1.6 million from $8.5 million for the three months ended March 31, 2025 to $6.9 million for the three months ended March 31, 2026. The changes in general and administrative expenses were primarily due to the following:

•

~~General~~personnel-related ~~and~~costs ~~administrative~~decreased ~~expenses increased~~ by $0.~~4 million from $6.~~3 million ~~for the three months ended September 30~~, ~~2024~~primarily todriven ~~$6.7~~by ~~million~~a ~~for~~decrease ~~the three months ended September 30, 2025. The changes~~ in ~~general~~severance costs and ~~administrative~~discretionary ~~expenses~~bonus ~~were~~costs; ~~primarily due to the following:~~ and

•

~~personnel-related~~professional ~~costs~~and consulting fees decreased by $01.32 million, primarily driven by a ~~$0.4 million~~ decrease in ~~stock-based~~legal ~~compensation~~fees and ~~a $0.2 million decrease in recruiting and~~ other ~~personnel-related~~professional costs~~, partially offset by a $0~~.3 ~~million increase in salaries, bonuses and benefits due to higher general and administrative headcount;~~

~~professional~~Change ~~and consulting fees increased by $0.7 million, primarily driven by an increase~~ in ~~legal~~Fair ~~fees~~Value ~~and~~of ~~other~~Common ~~professional~~Stock ~~costs;~~Warrant ~~and~~Liabilities

~~facility-related~~The ~~and~~change ~~other~~in ~~general~~fair ~~and~~value ~~administrative~~of ~~expenses~~common ~~decreased~~stock bywarrant liabilities for the three months ended March 31, 2026 was due to a gain of $03.13 million due to the decrease in the fair value of the common stock warrant liabilities between December 31, 2025 and March 31, 2026, which was primarily driven by a decrease in ~~costs~~the ~~related~~price toper ~~directors’~~share ~~and~~of ~~officers’~~our ~~liability~~common ~~insurance~~stock.

33Other Income, Net

~~Table~~Other ofincome, ~~Contents~~net, increased by $0.7 million from $0.6 million for the three months ended March 31, 2025 to $1.3 million for the three months ended March 31, 2026. The increase in other income, net was primarily due to an increase in interest income due to a higher average cash balance.

~~Restructuring~~Liquidity and Capital Resources

We did not recognize any restructuring expenses for the three months ended September 30, 2025. We recognized a credit of $41,000 in restructuring expenses for the three months ended September 30, 2024 related to a change in estimate for costs of continuation of certain employee benefits related to the workforce reduction announced in March 2024.

Change in Fair Value of Common Stock Warrant Liabilities

The change in fair value of common stock warrant liabilities for the three months ended September 30, 2025 was due to a loss of $15.4 million due to the increase in the fair value of the common stock warrant liabilities between June 30, 2025 and September 30, 2025, which was primarily driven by an increase in the price per share of our common stock.

Other Income (Expense), Net

Other income (expense), net, increased by $0.3 million from $0.7 million for the three months ended September 30, 2024 to $1.0 million for the three months ended September 30, 2025. The increase in other income (expense), net was primarily due to an increase in interest income due to a higher average cash balance.

Comparison of the nine months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024 (in thousands):

	Nine Months Ended
	September 30,
	2025			2024			Change
Revenue
Collaboration and license revenue	$	30,080		$	4,620		$	25,460
Total revenue		30,080			4,620			25,460
Operating expenses
Research and development	$	37,917		$	32,375		$	5,542
General and administrative		22,309			18,261			4,048
Restructuring		—			937			(937	)
Total operating expenses		60,226			51,573			8,653
Loss from operations		(30,146	)		(46,953	)		16,807
Other income (expense), net
Change in fair value of common stock warrant liabilities		(15,430	)		—			(15,430	)
Other income (expense), net		180			1,805			(1,625	)
Total other income (expense), net		(15,250	)		1,805			(17,055	)
Net loss	$	(45,396	)	$	(45,148	)	$	(248	)

Collaboration and License Revenue

Collaboration and license revenue increased by $25.5 million from $4.6 million for the nine months ended September 30, 2024 to $30.1 million for the nine months ended September 30, 2025. The increase was due to collaboration and license revenue recognized under the collaboration, license and option agreement and stock purchase agreement that we entered into in February 2025 with AbbVie and an increase in collaboration and license revenue recognized under the license agreement and stock purchase agreement with Gilead, which included a cumulative catch-up of collaboration and license revenue of $7.0 million related to the adjustment of the overall transaction price due to the achievement of the $17.5 million development milestone during the third quarter of 2025.

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Research and Development Expenses

The following table summarizes our research and development expenses for the nine months ended September 30, 2025 and 2024 (in thousands):

	Nine Months Ended
	September 30,
	2025		2024		Change
vilastobart	$	5,587	$	7,160	$	(1,573	)
efarindodekin alfa (XTX301)		4,869		4,176		693
XTX501		4,253		—		4,253
XTX202		70		3,364		(3,294	)
Other early programs and indirect research and development		8,835		5,695		3,140
Personnel-related		14,303		11,980		2,323
Total research and development expenses	$	37,917	$	32,375	$	5,542

Research and development expenses increased by $5.5 million from $32.4 million for the nine months ended September 30, 2024 to $37.9 million for the nine months ended September 30, 2025. The changes in research and development expenses were primarily due to the following:

vilastobart costs decreased by $1.6 million, primarily driven by $4.5 million in aggregate development milestones that we incurred during the nine months ended September 30, 2024 under our CTLA-4 monoclonal antibody license agreement with WuXi Biologics and our amended and restated exclusive license agreement with City of Hope, for which there was no comparable costs during the nine months ended September 30, 2025, partially offset by a $2.8 million increase in clinical development activities related to our ongoing Phase 1/2 clinical trial evaluating vilastobart in combination with atezolizumab;

efarindodekin alfa costs increased by $0.7 million, primarily driven by an increase in clinical development activities related to our ongoing Phase 1/2 clinical trial evaluating efarindodekin alfa as a monotherapy in patients with certain advanced solid tumors;

XTX501 costs for the nine months ended September 30, 2025 consisted of manufacturing activities related to IND-enabling studies and pre-clinical development activities; for the nine months ended September 30, 2024, XTX501 costs were not separately tracked as we had not begun performing IND-enabling studies;

XTX202 costs decreased by $3.3 million, primarily driven by a decrease in clinical development activities as a result of discontinuing further investment in XTX202;

other early programs and indirect research and development costs increased by $3.1 million, primarily driven by an increase in external expenses related to preclinical research and development activities; and

personnel-related costs increased by $2.3 million, primarily driven by a $2.4 million increase in salaries, bonuses and benefits due to higher research and development headcount and a $0.1 million increase in recruiting and other personnel-related costs, partially offset by a $0.2 million decrease in stock-based compensation.

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General and Administrative Expenses

The following table summarizes our general and administrative expenses for the nine months ended September 30, 2025 and 2024 (in thousands):

	Nine Months Ended
	September 30,
	2025		2024		Change
Personnel-related	$	11,985	$	10,894	$	1,091
Professional and consulting fees		7,799		4,522		3,277
Facility-related and other general and administrative expenses		2,525		2,845		(320	)
Total general and administrative expenses	$	22,309	$	18,261	$	4,048

General and administrative expenses increased by $4.0 million from $18.3 million for the nine months ended September 30, 2024 to $22.3 million for the nine months ended September 30, 2025. The changes in general and administrative expenses were primarily due to the following:

personnel-related costs increased by $1.1 million, primarily driven by a $1.4 million increase in salaries, bonuses and benefits due to higher general and administrative headcount and a $0.4 million increase in recruiting and other personnel-related costs, partially offset by a $0.7 million decrease in stock-based compensation;

professional and consulting fees increased by $3.3 million, primarily driven by an increase in legal fees and other professional costs; and

facility-related and other general and administrative expenses decreased by $0.3 million, primarily driven by a decrease in costs related to directors’ and officers’ liability insurance.

Restructuring

We did not recognize any restructuring expenses for the nine months ended September 30, 2025. We recognized $0.9 million in restructuring expenses for the nine months ended September 30, 2024. The restructuring expenses were associated with the workforce reduction announced in March 2024 and consisted of employee severance, benefits continuation and outplacement service costs.

Change in Fair Value of Common Stock Warrant Liabilities

The change in fair value of common stock warrant liabilities for the nine months ended September 30, 2025 was due to a loss of $15.4 million due to an increase in the fair value of the common stock warrant liabilities between the issuance date of June 5, 2025 and September 30, 2025, which was primarily driven by an increase in the price per share of our common stock.

Other Income (Expense), Net

Other income (expense), net of $0.2 million for the nine months ended September 30, 2025 included $2.3 million of the issuance costs we incurred in connection with the sale and issuance of the prefunded warrants and common stock warrants in June 2025 in connection with our follow-on public offering, which were allocated to the common stock warrant liabilities and were partially offset by $2.5 million of interest income. Other income (expense), net of $1.8 million for the nine months ended September 30, 2024 consisted of interest income.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have incurred significant operating losses and negative cash flows from operations. We have not yet commercialized any of our product candidates, which are in preclinical or early clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all. To date, we have financed our operations primarily from proceeds raised through private placements of ~~preferred~~equity ~~units, convertible preferred stock, common stock and prefunded warrants~~securities; sales of common stock in our IPO, and through “at-the-market” offerings; the sale of prefunded warrants ~~and~~in ~~common~~our ~~stock~~June ~~warrants~~2025 inand aFebruary 2026 follow-on ~~public~~offerings; the exercise of certain common stock warrants issued in

3631

Table of Contents

~~offering;~~connection ~~and~~with ~~upfront payments under~~ our ~~collaboration~~June ~~and license agreements with AbbVie and Gilead. Through September 30,~~ 2025, wefollow-on ~~have~~offering; ~~received~~development anevent ~~aggregate~~payments ofunder ~~$531.8~~our ~~million~~co-funded inclinical ~~gross~~trial ~~proceeds~~collaboration ~~from~~with ~~such~~Roche; ~~transactions, including $224.5 million in gross proceeds from the sale~~ and ~~issuance~~upfront ~~of preferred units~~ and ~~convertible~~milestone ~~preferred stock, $129.9 million in gross proceeds from our IPO, $72.0 million in upfront cash~~ payments under our collaboration and license agreements with AbbVie and Gilead~~, $46~~.3 ~~million~~All ~~in gross proceeds from the sale and issuance~~ of ~~common~~our ~~stock~~programs ~~and~~are ~~prefunded warrants~~ in ~~private~~early ~~placements~~clinical ~~with~~or ~~certain~~preclinical ~~existing~~development. ~~accredited~~As ~~investors,~~a ~~Gilead and AbbVie~~result, ~~$9.1~~we ~~million~~have innot ~~gross~~generated ~~proceeds~~any revenue from ~~the~~product ~~sale~~sales and ~~issuance~~do ofnot ~~common~~expect ~~stock~~to ~~through~~generate ~~at-the-market~~any ~~offerings~~revenue ~~and~~from ~~$50.0~~product ~~million~~sales infor ~~gross~~at ~~proceeds~~least ~~from~~ the ~~sale~~next ofseveral ~~prefunded~~years, ~~warrants~~if ~~and~~at ~~common~~all. ~~stock~~Our ~~warrants~~ability ~~through~~to agenerate ~~follow-on~~product ~~public~~revenue ~~offering.~~sufficient Asto ofachieve ~~September~~profitability ~~30,~~will ~~2025,~~depend weheavily ~~had~~on ~~cash~~the successful development and ~~cash~~eventual ~~equivalents~~commercialization of ~~$103.8~~one ~~million.~~or Inmore ~~the~~of ~~fourth~~our ~~quarter~~product ~~of 2025~~candidates, weif ~~received a $17~~approved.5 ~~million~~Because ~~development~~of ~~milestone~~the ~~under~~numerous ~~our~~risks ~~license~~and ~~agreement~~uncertainties associated with ~~Gilead.~~product ~~Based on our current operating plans~~development, we ~~anticipate~~are ~~that~~unable ~~our~~to ~~existing~~predict ~~cash~~the ~~and~~timing ~~cash~~or ~~equivalents~~amount as of ~~September~~increased ~~30,~~expenses ~~2025,~~or ~~together~~when ~~with~~or ~~the~~if ~~$17.5~~we ~~million development milestone received under our license agreement with Gilead,~~ will be ~~sufficient~~able to ~~enable~~achieve usprofitability. toEven ~~fund~~if ~~our~~we ~~operating~~are ~~expenses~~able ~~and~~to ~~capital~~generate ~~expenditure~~revenue ~~requirements~~from ~~into~~product ~~the~~sales, ~~first~~we ~~quarter~~may ofnot ~~2027~~become profitable.

In March 2025, we filed a universal shelf registration statement on Form SAt-3 with the SEC to register for sale up to $250.0 million of our common stock, preferred stock, debt securities, units and warrants, which we may issue and sell from time to time in one or more offerings, which became effective on May 8, 2025 (333-285703),Market orOffering the S-3 Shelf. In March 2025, we entered into a sales agreement with Leerink Partners, LLC, under which we may issue and sell shares of our common stock from time to time at an aggregate offering price of up to $50.0 million. Please see Note 8 to our condensed consolidated financial statements appearing elsewhere in our Quarterly Report on Form 10-Q for additional information about our at-the-market offering program. Program

In March 2025, we filed a universal shelf registration statement on Form S-3 with the SEC to register for sale up to $250.0 million of our common stock, preferred stock, debt securities, units and warrants, which we may issue and sell from time to time in one or more offerings, which became effective on May 8, 2025 (333-285703). In March 2025, we entered into a sales agreement with Leerink Partners, LLC, under which we could initially issue and sell shares of our common stock from time to time at an aggregate offering price of up to $50.0 million. In February 2026, we filed a prospectus supplement to our prospectus dated May 8, 2025 (333-285793) to reduce the amount of common stock we may offer and sell under the sales agreement to an aggregate offering price of up to $9.5 million.

Cash Flows

The following table provides information regarding our cash flows for each period presented (in thousands):

	Nine Months Ended
	Three Months Ended
	September 30,
	March 31,
	2025			2024
	2026			2025
Net cash provided by (used in):
Net cash (used in) provided by:
Operating activities	$	(222,~~994~~343	)	$	(428,~~221~~978	)
Investing activities		(~~423~~556	)		(3022	)
Financing activities		5135,~~909~~707			204,~~994~~832
Net increase in cash, cash equivalents and restricted cash	$	4812,~~492~~808		$	1633,~~743~~788

Operating Activities

Our cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements to support our business. We have historically experienced negative cash flows from operating activities as we invested in research and development of our product candidates, including preclinical studies, clinical trials, manufacturing and manufacturing process development. The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges, which are generally due to stock-based compensation, depreciation and amortization, as well as changes in components of operating assets and liabilities, which are generally due to increased expenses and timing of vendor payments.

During the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, net cash used in operating activities of $322.03 million was primarily driven by net changes in operating assets and liabilities of $1912.~~5 million, which includes the $49.~~1 million ~~received from AbbVie under the collaboration~~, ~~license~~our ~~and option agreement and stock purchase agreement that was recorded as deferred revenue at the outset of the arrangement, and~~ net ~~non-cash~~loss ~~expenses~~ of $~~22.~~9.5 million, ~~which~~and ~~includes~~ the $153.43 million ~~loss~~gain recorded on the change in fair value of our common stock warrant liabilities, partially offset by ~~our~~$2.2 ~~net~~million ~~loss~~ of stock-based compensation expense and $450.43 million of depreciation and amortization expense.

During the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, net cash ~~used~~provided inby operating activities of $429.20 million was primarily driven by ~~our net loss of $45.1 million, partially offset by~~ changes in operating assets and liabilities of $3440.82 million, which includes the $3949.1 million ~~received~~recorded ~~from~~as ~~Gilead~~deferred ~~under~~revenue ~~the~~in connection with our collaboration, license and option agreement and stock purchase agreement ~~that~~with ~~was~~AbbVie, ~~recorded~~and asnet ~~deferred~~non-cash ~~revenue~~expenses atof ~~the~~$2.0 ~~outset~~million, ofpartially ~~the~~offset ~~arrangement,~~by ~~and~~our net ~~non-cash~~loss ~~expenses~~ of $613.23 million.

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Investing Activities

During the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, net cash used in investing activities consisted of purchases of property and equipment.

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Financing Activities

During the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, net cash provided by financing activities of $5135.97 million primarily consisted of proceeds from the sale of prefunded warrants ~~and common stock warrants~~ through a follow-on ~~public~~ offering~~, proceeds from the sale and issuance of common stock to AbbVie in a private placement and proceeds from the sale and issuance of common stock through ATM offerings~~.

During the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, net cash provided by financing activities of $214.08 million consisted of proceeds from the sale and issuance of common stock ~~and~~to ~~prefunded~~AbbVie ~~warrants~~ in a private ~~placements~~placement ~~with certain existing accredited investors~~ and ~~Gilead and~~ proceeds from the sale and issuance of common stock ~~under~~through ~~our~~ATM ~~at-the-market offering program, partially offset by repayments of debt principal under our loan agreement with PacWest and payments on our finance lease for certain lab equipment~~offerings.

Capital Requirements and Going Concern

We expect our future capital requirements to increase substantially over time in connection with our ongoing research and development activities, particularly as we advance our current and planned clinical development of our product candidates and maintain the research efforts and preclinical activities associated with our other existing programs and discovery platform. In addition, we expect to continue to incur additional costs associated with operating as a public company. As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future.

Inflation generally affects us by increasing our cost of labor and certain services. We do not believe that inflation had a material effect on our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. However, the United States has recently experienced historically high levels of inflation. If the inflation rate continues to increase it may affect our expenses, such as employee compensation and research and development charges due to, for example, increases in the costs of labor and supplies. Additionally, the biotechnology industry is subject to a competitive wage environment that may also increase our operating costs in the future.

As of ~~September~~March 3031, ~~2025~~2026, we had cash and cash equivalents of $~~103~~150.83 million. ~~Based~~In onthe ~~our~~second ~~current~~quarter ~~operating~~of ~~plans~~2026, we ~~anticipate~~achieved ~~that~~a ~~our existing cash and cash equivalents as of September 30, 2025, together with the~~ $176.50 million development milestone ~~received~~related ~~under~~to ~~our~~the ~~license~~collaboration agreement with ~~Gilead, will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027~~AbbVie. ~~However,~~Based weon ~~have based~~ our ~~estimates~~current onoperating ~~assumptions that may prove to be wrong~~plans, ~~and~~ we ~~could exhaust our available capital resources sooner than we~~ anticipate. Inthat ~~addition, we expect~~ our ~~operating~~existing ~~losses~~cash and ~~negative operating~~ cash ~~flows~~equivalents ~~to continue for the foreseeable future~~ as weof ~~continue~~March to31, ~~advance our pipeline of novel~~2026, ~~tumor-activated~~together ~~I-O~~with ~~molecules~~the ~~through~~development ~~preclinical~~milestone ~~and~~achieved ~~clinical~~under ~~development, maintain~~ the ~~infrastructure~~AbbVie ~~necessary~~collaboration toin ~~support~~the ~~these~~second ~~activities~~quarter ~~and~~of ~~continue~~2026, towill ~~incur~~be ~~costs~~sufficient ~~associated with operating as a public company. These conditions raise substantial doubt about our ability~~ to ~~continue~~enable asus ~~a going concern. In order~~ to fund our ~~operations,~~operating weexpenses ~~will~~and ~~need to raise additional~~ capital, ~~which~~expenditure ~~could~~requirements beinto ~~obtained~~early ~~through~~2028. ~~the~~This ~~cash~~estimate ~~exercise~~excludes ofany ~~the~~potential ~~Series~~additional ~~B warrants and Series C warrants issued in connection with our June 2025 follow-on public offering, the receipt of~~ milestone payments, option-related fees or other contingent payments under our existing ~~agreements~~collaboration ~~with Gilead~~ and ~~AbbVie,~~partnership additional public or private equity offerings, debt financings, additional collaborations, partnerships or licensing arrangements or other sources. However, there can be no assurance that we will receive additional proceeds from the exercise of the common stock warrants or from contingent payments under our existing agreements with ~~Gilead or~~ AbbVie or that we will be able to complete any such transaction on acceptable terms or otherwise. If we are not able to secure sufficient additional capital when needed, we may need to implement additional cost reduction strategies, which could include delaying, limiting, further reducing or eliminating both internal and ~~external~~Gilead ~~costs related to our operations~~ and ~~research~~excludes ~~and~~the ~~development~~potential ~~programs.~~receipt ~~For~~of ~~more~~up ~~information regarding our liquidity and going concern, refer~~ to ~~Note~~$36.2 1million toin ~~our~~additional ~~condensed~~gross ~~consolidated~~proceeds ~~financial statements included elsewhere~~ in ~~this~~the ~~Quarterly~~second ~~Report~~half onof ~~Form~~2026 ~~10-Q.~~if ~~For~~all ~~more~~outstanding ~~information~~Series ~~regarding~~C ~~the terms of the~~ warrants weare ~~issued~~exercised inat ~~our~~their ~~June~~current ~~2025~~exercise ~~follow-on public offering, refer to Note 8 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q~~price.

~~The~~In ~~accompanying~~addition, ~~condensed~~we ~~consolidated~~have ~~financial~~based ~~statements~~our ~~included~~estimates ~~elsewhere~~on inassumptions ~~this~~that ~~Quarterly~~may ~~Report~~prove onto ~~Form~~be ~~10-Q~~wrong, ~~have~~and ~~been~~we ~~prepared~~could onexhaust aour ~~going~~available ~~concern~~capital ~~basis~~resources sooner than we anticipate. In addition, ~~which~~we ~~contemplates~~expect our operating losses and negative operating cash flows to continue for the ~~realization~~foreseeable offuture ~~assets~~as ~~and~~we ~~satisfaction~~continue to advance our pipeline of ~~liabilities~~novel, inmasked I-O molecules through preclinical and clinical development, maintain the ~~ordinary~~infrastructure ~~course~~necessary ofto support these activities and continue to incur costs associated with operating as a public company.

38Because of the numerous risks and uncertainties associated with product development, and because the extent to which we may enter into additional collaborations with third parties for the development of our product candidates is unknown, we may incorrectly estimate the timing and amounts of increased capital outlays and operating expenses associated with advancing the research and development of our product candidates.

~~Table~~Our offuture ~~Contents~~capital requirements, both short-term and long-term, will depend on many factors, including, but not limited to:

•

~~business~~the ~~for~~scope, ~~the~~progress, ~~foreseeable~~results ~~future.~~and ~~The~~costs ~~condensed~~of ~~consolidated~~research ~~financial~~and ~~statements~~development dofor ~~not~~our ~~include~~current ~~any~~and ~~adjustments~~future ~~relating~~product tocandidates, ~~the~~including ~~recoverability~~our current and ~~classification~~planned ofclinical ~~recorded~~trials ~~asset~~for ~~amounts~~our orclinical-stage ~~the~~product ~~amounts~~candidates, vilastobart and ~~classification~~efarindodekin ofalfa, ~~liabilities~~and ~~that~~ongoing ~~might~~preclinical ~~result~~development ~~from~~for ~~the~~our ~~outcome~~current ofand ~~this~~future ~~uncertainty.~~product candidates;

•

~~Because~~our ofability ~~the numerous risks and uncertainties associated with product development, and because the extent~~ to ~~which~~maintain ~~we may enter into additional collaborations with third parties for the development of~~ our ~~product~~collaboration ~~candidates is unknown, we may incorrectly estimate the timing~~ and ~~amounts~~license ofagreements ~~increased capital outlays and operating expenses associated~~ with ~~advancing~~AbbVie ~~the research~~ and ~~development of our product candidates.~~ Gilead;

•

~~Our~~the ~~future~~timing ~~capital~~and ~~requirements,~~amount ~~both~~of ~~short~~milestones, option-~~term~~related fees and ~~long-term~~other contingent payments under our collaboration, ~~will~~license ~~depend~~and onoption ~~many~~agreement ~~factors~~with AbbVie for masked immunotherapies and our license agreement with Gilead for efarindodekin alfa, ~~including~~as well as the scope, ~~but~~costs ~~not~~and ~~limited~~timing ~~to:~~of our development obligations under these agreements;

the scope, progress, results and costs of research and development for our current and future product candidates, including our current and planned clinical trials for our clinical-stage product candidates, vilastobart and efarindodekin alfa, and ongoing preclinical development for our current and future product candidates; 33

~~our~~Table ~~ability~~of ~~to maintain our collaboration and license agreements with AbbVie and Gilead;~~Contents

•

the ~~timing~~potential ~~and~~receipt ~~amount~~ of ~~milestones,~~up ~~option-related~~to ~~fees~~$36.2 ~~and~~million ~~other~~in ~~contingent~~additional ~~payments~~gross ~~under~~proceeds ~~our~~in ~~collaboration,~~the ~~license~~second ~~and~~half ~~option~~of ~~agreement~~2026 ~~with~~if ~~AbbVie~~all ~~for~~of ~~tumor-activated~~the ~~immunotherapies~~outstanding ~~and~~Series ~~our~~C ~~license~~common ~~agreement~~stock ~~with~~warrants ~~Gilead~~issued ~~for~~in ~~efarindodekin~~connection ~~alfa,~~with asour ~~well~~June as2025 ~~the~~follow-on ~~scope,~~offering ~~costs~~are ~~and~~exercised ~~timing~~at oftheir ~~our~~current ~~development~~exercise ~~obligations~~price ~~under~~of ~~these~~$10.50 ~~agreements~~per warrant;

•

our ability to ~~maintain~~secure ~~our~~additional ~~co-funded~~capital ~~clinical trial collaboration with Roche to further develop vilastobart~~ in ~~combination with atezolizumab, including~~ the ~~timing and amount of cost-sharing payments under the collaboration~~future;

•

the ~~potential receipt of up to $100.0 million in additional gross proceeds~~scope, ifprioritization ~~all of the Series B~~ and ~~Series~~number Cof ~~common stock warrants issued in connection with~~ our ~~June~~research ~~2025~~and ~~follow-on~~development ~~public offering are exercised~~programs;

•

~~our~~the ~~ability~~costs toof ~~secure~~securing ~~sufficient~~manufacturing ~~additional~~materials ~~capital~~for oruse ~~implement~~in ~~other~~preclinical ~~strategies~~studies, ~~needed~~clinical totrials ~~alleviate~~and, ~~the~~for ~~substantial~~any ~~doubt~~product ~~about~~candidates ~~our~~for ~~ability~~which towe ~~continue~~receive asregulatory aapproval, ~~going~~if ~~concern~~any, commercial supply;

•

the ~~scope~~costs and timing of preparing, ~~prioritization~~filing and ~~number~~prosecuting ofpatent applications, maintaining and enforcing our ~~research~~intellectual property and ~~development~~proprietary ~~programs~~rights and defending any intellectual property-related claims;

•

the ~~costs~~extent ofto ~~securing~~which ~~manufacturing~~we ~~materials~~may ~~for~~acquire ~~use~~or in-license ~~preclinical~~other ~~studies~~products, ~~clinical~~product ~~trials and~~candidates, ~~for~~technologies ~~any~~or ~~product~~intellectual ~~candidates~~property, ~~for~~as ~~which~~well weas ~~receive~~the ~~regulatory~~terms ~~approval,~~of if any, ~~commercial~~such ~~supply~~arrangements;

•

the scope, costs, ~~and~~ timing ~~of preparing, filing~~ and ~~prosecuting~~outcome ~~patent~~of ~~applications,~~regulatory ~~maintaining~~review ~~and~~of ~~enforcing~~ our ~~intellectual~~product ~~property and proprietary rights and defending any intellectual property-related claims~~candidates;

•

the ~~extent~~costs toand ~~which~~timing weof ~~may~~future ~~acquire~~commercialization oractivities ~~in-license~~for ~~other~~any ~~products,~~of our product candidates, ~~technologies~~for orwhich ~~intellectual~~we ~~property,~~receive asregulatory ~~well as the terms of any such arrangements~~approval;

•

the ~~scope,~~amount ~~costs,~~and timing ~~and~~of ~~outcome~~revenue, ofif ~~regulatory~~any, ~~review~~received from commercial sales of ~~our~~any product candidates for which we receive regulatory approval;

•

~~the~~general ~~costs~~economic ~~and~~conditions, ~~timing~~including ofinflation ~~future~~and ~~commercialization~~the ~~activities~~imposition ~~for any~~ of ~~our~~new ~~product~~or ~~candidates~~revised ~~for~~global ~~which~~trade wetariffs; ~~receive~~and ~~regulatory approval;~~

•

the ~~amount~~costs ~~and timing~~ of ~~revenue,~~maintaining ifour ~~any,~~operations ~~received~~and ~~from~~continuing ~~commercial~~to ~~sales~~operate ofas ~~any~~a ~~product~~public ~~candidates for which we receive regulatory approval;~~company.

~~general~~Identifying ~~economic~~potential ~~conditions~~product candidates and conducting preclinical studies and clinical trials is a time consuming, ~~including~~expensive ~~inflation~~and uncertain process that takes years to complete, and ~~the~~we ~~imposition~~may ofnever ~~new~~generate the necessary data or ~~revised~~results ~~global~~required ~~trade~~to ~~tariffs;~~obtain regulatory approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for several years, if ever. Accordingly, we will need to obtain substantial additional capital to achieve our business objectives.

~~the~~Our ~~costs~~expectation ofwith ~~maintaining~~respect to our ability to fund our currently planned operations ~~and~~is ~~continuing~~based on estimates that are subject to ~~operate~~various risks and uncertainties. Our operating plan may change as a ~~public~~result ~~company~~of many factors currently unknown to management and there can be no assurance that our current operating plan will be achieved in the time frame anticipated by us, and we may exhaust our available capital resources sooner than we expect.

~~Identifying~~Adequate ~~potential~~additional ~~product~~capital ~~candidates~~may ~~and~~not ~~conducting~~be ~~preclinical~~available ~~studies~~to ~~and~~us ~~clinical~~on ~~trials~~acceptable isterms, aor ~~time~~at ~~consuming~~all. Market volatility resulting from adverse changes in domestic and international fiscal, ~~expensive~~monetary and ~~uncertain~~other ~~process~~policies ~~that~~and ~~takes~~political ~~years~~relations, toregional ~~complete~~or global conflicts, ~~and~~uncertainty wearound ~~may~~global ~~never~~economic ~~generate~~conditions, instability in the ~~necessary~~financial ~~data~~markets, current or ~~results~~future ~~required~~pandemics or other factors could also adversely impact our ability to ~~obtain~~access ~~regulatory~~capital ~~approval~~as and ~~achieve~~when ~~product sales~~needed. InTo ~~addition~~the extent that we raise additional capital through the sale of equity or securities convertible into or exchangeable for equity, the ownership interest of our ~~product~~existing ~~candidates,~~stockholders ifmay ~~approved~~be diluted, and the terms of such securities may ~~not~~include ~~achieve~~liquidation ~~commercial~~or ~~success~~other preferences that adversely affect the rights of our existing stockholders. ~~Our~~Additional ~~commercial~~debt ~~revenues~~and preferred equity, if ~~any~~available, ~~will~~may bealso ~~derived~~involve ~~from~~agreements ~~sales~~that ofinclude ~~products~~covenants ~~that~~limiting weor dorestricting ~~not~~our ~~expect~~ability to betake ~~commercially~~specific ~~available~~actions, ~~for~~such ~~several~~as ~~years~~incurring additional debt, ifmaking ~~ever.~~capital ~~Accordingly,~~expenditures weor ~~will~~declaring ~~need~~dividends toand ~~obtain~~may ~~substantial~~require that we issue additional ~~capital~~warrants, towhich ~~achieve~~could potentially dilute the ownership interest of our ~~business~~existing ~~objectives~~stockholders.

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Our expectation with respect to our ability to fund our currently planned operations is based on estimates that are subject to various risks and uncertainties. Our operating plan may change as a result of many factors currently unknown to management and there can be no assurance that our current operating plan will be achieved in the time frame anticipated by us, and we may exhaust our available capital resources sooner than we expect.

Adequate additional capital may not be available to us on acceptable terms, or at all. Market volatility resulting from adverse changes in domestic and international fiscal, monetary and other policies and political relations, regional or global conflicts, uncertainty around global economic conditions, instability in the financial markets, current or future pandemics or other factors could also adversely impact our ability to access capital as and when needed. To the extent that we raise additional capital through the sale of equity or securities convertible into or exchangeable for equity, the ownership interest of our existing stockholders may be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. Additional debt and preferred equity, if available, may also involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may require that we issue additional warrants, which could potentially dilute the ownership interest of our existing stockholders.

Contractual Obligations

During the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, there have been no material changes to our contractual obligations as reported in our Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025.

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Critical Accounting Policies and Use of Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported revenue and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. Except as described in Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no changes to our critical accounting policies appearing in our Annual Report on Form 10-K for the year ended December 31, 2024, other than the estimates required in determining the fair value of the common stock warrant liabilities that are described in Note 3 to the condensed consolidated financial statements appearing elsewhere in our Quarterly Report on Form 10-Q2025.

Emerging Growth Company and Smaller Reporting Company Status

As an emerging growth company, or EGC, under the Jumpstart Our Business Startups Act of 2012, or JOBS Act, we may delay the adoption of certain accounting standards until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for EGCs include presentation of only two years of audited financial statements in a registration statement for an IPO, an exemption from the requirement to provide an auditor’s report on internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation, and less extensive disclosure about our executive compensation arrangements.

In addition, the JOBS Act provides that an EGC can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an EGC to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new or revised standard and may do so until such time that we either (1) irrevocably elect to “opt out” of such extended transition period or (2) no longer qualify as an emerging growth company. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. We expect to remain classified as an EGC until December 31, 2026.

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We are also a “smaller reporting company,” as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an EGC, in which case we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

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

Evaluation of 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, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our chief executive officer (our principal executive officer) and our chief financial and operating officer (our principal financial officer) evaluated the effectiveness of our disclosure controls and procedures as of ~~September~~March 3031, ~~2025~~2026. Based upon such evaluation, our principal ~~executive officer and principal financial officer have concluded that, as of September 30, 2025, our disclosure controls and procedures were effective at a reasonable assurance level.~~

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executive officer and principal financial officer have concluded that, as of March 31, 2026, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1A. Risk Factors

The following information sets forth risk factors that could cause our actual results to differ materially from those contained in forward-looking statements we have made in this Quarterly Report on Form 10-Q and those we may make from time to time. You should carefully consider the risks described below, in addition to the other information contained in this Quarterly Report on Form 10-Q and our other public filings. Our business, financial condition or results of operations could be harmed by any of these risks. The risks and uncertainties described below are not the only ones we face. Additional risks not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business operations.

As of ~~September~~March 3031, ~~2025~~2026, we had cash and cash equivalents of $~~103~~150.83 million. In the ~~fourth~~second quarter of ~~2025~~2026, we ~~received~~achieved a $176.50 million development milestone ~~under~~related ~~our~~to ~~license~~the collaboration agreement with ~~Gilead~~AbbVie Group Holdings Limited, or AbbVie. Based on our current operating plans, we anticipate that our existing cash and cash equivalents as of ~~September~~March 3031, ~~2025~~2026, together with the ~~$17.5 million~~ development milestone ~~received~~achieved under ~~our~~the ~~license~~AbbVie ~~agreement~~collaboration ~~with~~in ~~Gilead~~the second quarter of 2026, will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into ~~the~~early ~~first quarter of 2027~~2028. ~~However,~~This weestimate ~~have~~excludes ~~based~~any ~~our~~potential estimates on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we anticipate. In addition, we expect our operating losses and negative operating cash flows to continue for the foreseeable future as we continue to advance our pipeline of novel, tumor-activated immuno-oncology, or I-O, molecules through preclinical and clinical development, maintain the infrastructure necessary to support these activities and continue to incur costs associated with operating as a public company. These conditions raise substantial doubt about our ability to continue as a going concern. In order to fund our operations, we will need to raise additional ~~capital, which could be obtained through the cash exercise of the Series B warrants and Series C warrants issued in connection with our June 2025 follow-on public offering, the receipt of~~ milestone payments, option-related fees or other contingent payments under our existing ~~agreements~~collaboration ~~with~~and ~~AbbVie~~partnership ~~Group~~agreements ~~Holdings~~with ~~Limited, or~~ AbbVie, and Gilead Sciences, Inc., or Gilead, ~~additional~~and ~~public~~excludes orthe ~~private~~potential ~~equity~~receipt ~~offerings,~~of ~~debt~~up ~~financings,~~to ~~additional collaborations, partnerships or licensing arrangements or other sources~~$36.2 ~~However,~~million ~~there~~in ~~can be no assurance that we will receive~~ additional gross proceeds ~~from~~in the ~~exercise~~second half of ~~the~~2026 ~~common~~if ~~stock~~all ~~warrants~~outstanding orSeries ~~from~~C ~~contingent~~warrants ~~payments~~are ~~under~~exercised ~~our~~at ~~existing~~their ~~agreements~~current ~~with~~exercise ~~Gilead~~price. orIn ~~AbbVie~~addition, ~~or that~~ we ~~will~~have bebased ~~able~~our toestimates ~~complete any such transaction~~ on ~~acceptable~~assumptions ~~terms~~that ~~or otherwise. If we are not able to secure sufficient additional capital when needed, we~~ may ~~need~~prove to ~~implement~~be ~~additional cost reduction strategies~~wrong, ~~which could include delaying, limiting, further reducing or eliminating both internal~~ and ~~external~~we ~~costs~~could ~~related~~exhaust to our ~~operations~~available ~~and~~capital ~~research~~resources ~~and~~sooner ~~development~~than ~~programs.~~we ~~Please~~anticipate ~~see Note 1 to our condensed consolidated financial statements appearing elsewhere in our Quarterly Report on Form 10-Q for additional information about our liquidity~~ and ~~going~~may ~~concern.~~need ~~Please see Note 8~~ to ~~our~~seek ~~condensed consolidated financial statements appearing elsewhere in our Quarterly Report on Form 10-Q for~~ additional ~~information~~capital ~~about~~sooner ~~the~~than ~~terms of the warrants we issued in our June 2025 follow-on public offering, including certain potential adjustments to the exercise price of such warrants~~anticipated.

We expect to continue to incur operating losses in connection with our ongoing research and development activities, particularly as we advance our product candidates through clinical trials, maintain the infrastructure necessary to support these activities and incur costs associated with operating as a public company. We do not expect to generate any revenue from the sale of products for a number of years, if at all, and any such revenue will not be realized unless and until we obtain marketing approval for and successfully launch and commercialize a product candidate. If we obtain marketing approval for any current or future product candidates that we develop, we expect to incur significant commercialization expenses related to product sales, marketing, distribution and manufacturing. Some of these expenses may be incurred in advance of marketing approval and could be substantial.

Our future capital requirements, both short-term and long-term, will depend on many factors, including, but not limited to:

•

the scope, progress, results and costs of research and development for our current and future product candidates, including our current and planned clinical trials for our clinical-stage product candidates, vilastobart and efarindodekin alfa ~~(XTX301)~~, and ongoing preclinical development for our current and future product candidates;

•

our ability to maintain our collaboration and license agreements with AbbVie and Gilead;

•

42the timing and amount of milestones, option-related fees and other contingent payments under our collaboration, license and option agreement with AbbVie for masked immunotherapies and our license agreement with Gilead for efarindodekin alfa, as well as the scope, costs and timing of our development obligations under these agreements;

•

~~Table~~the potential receipt of ~~Contents~~up to $36.2 million in additional gross proceeds in the second half of 2026 if all of the outstanding Series C common stock warrants issued in connection with our June 2025 follow-on offering are exercised at their current exercise price of $10.50 per warrant;

•

~~the timing and amount of milestones, option-related fees and other contingent payments under~~ our ~~collaboration,~~ability ~~license~~to ~~and~~secure ~~option~~additional ~~agreement~~capital ~~with~~in ~~AbbVie for tumor-activated immunotherapies and our license agreement with Gilead for efarindodekin alfa, as well as~~ the ~~scope, costs and timing of our development obligations under these agreements~~future;

•

our ability to maintain our co-funded clinical trial collaboration with F. Hoffmann-La Roche Ltd, or Roche, to further develop vilastobart in combination with atezolizumab, including the timing and amount of cost-sharing payments under the collaboration;

the potential receipt of up to $100.0 million in additional gross proceeds if all of the Series B and Series C common stock warrants issued in connection with our June 2025 follow-on public offering are exercised;

our ability to secure sufficient additional capital or implement other strategies needed to alleviate the substantial doubt about our ability to continue as a going concern;

the scope, prioritization and number of our research and development programs;

•

the costs of securing manufacturing materials for use in preclinical studies, clinical trials and, for any product candidates for which we receive regulatory approval, if any, commercial supply;

•

the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property-related claims;

•

the extent to which we may acquire or in-license other products, product candidates, technologies or intellectual property, as well as the terms of any such arrangements;

•

the scope, costs, timing and outcome of regulatory review of our product candidates;

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•

the costs and timing of future commercialization activities for any of our product candidates for which we receive regulatory approval;

•

the amount and timing of revenue, if any, received from commercial sales of any product candidates for which we receive regulatory approval;

•

general economic conditions, including inflation and the imposition of new or revised global trade tariffs; and

•

the costs of maintaining our operations and continuing to operate as a public company.

AsOur aexisting ~~result,~~cash weand ~~will~~cash ~~need~~equivalents ~~substantial~~will ~~additional~~not ~~capital~~be sufficient to ~~support~~complete ~~our~~development ~~continuing~~of ~~operations~~any current or future product candidates, and ~~pursue~~we will require additional capital in the future to sustain our ~~strategy~~operations. We currently do not have any committed external sources of funds and will be required to obtain further funding in the future through public or private equity offerings, debt, collaborations, licensing arrangements, the conversion of common stock warrants for cash, or other sources. However, adequate additional capital may not be available to us in the future on acceptable terms, or at all. In addition, our ability to raise additional capital may be adversely impacted by potential worsening economic conditions, both inside and outside the United States, ~~or U.S.,~~ including without limitation heightened inflation, capital market volatility, interest rate and currency rate fluctuations, any potential economic slowdown or recession, future pandemics, geopolitical tensions, including trade wars or civil or political unrest, or wars or other armed conflicts. WeOur ~~can~~failure ~~give~~to noraise ~~assurance~~additional ~~that~~capital wein ~~will~~the befuture ~~able~~as toand ~~secure~~when ~~additional~~needed ~~capital~~ to support our operations, orwould ifhave ~~such~~a ~~funds~~material ~~are~~adverse ~~available~~effect toon ~~us, that such additional funding will be sufficient to meet~~ our ~~needs.~~financial ~~These~~condition, ~~factors raise substantial doubt about~~ our ability to ~~continue~~develop asand acommercialize ~~going~~our ~~concern,~~current and ~~our~~any ~~failure~~future toproduct ~~raise~~candidates ~~sufficient additional capital, on attractive terms~~ or atotherwise ~~all,~~pursue ~~would have a material adverse effect on~~ our business, ~~results of operations and financial condition~~strategy.

Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to product candidates or our technology. In addition, the issuance of shares of common stock upon the exercise of our outstanding prefunded warrants or common stock warrants will result in immediate and substantial dilution to our existing stockholders.

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more public or private offerings in the future, our existing stockholders will suffer further dilution. In addition, as a condition to providing additional funds to us, Gilead and AbbVie received rights superior to those of existing stockholders, and in connection with the issuance of prefunded warrants and common stock warrants in June 2025, we agreed to specified restrictions on our future equity issuances, such as minimum purchase price requirements, unless we obtain the requisite prior approval of the warrant holders. Future investors may similarly receive rights that are superior to those of existing investors or which place restrictions on our future equity issuances. In addition, the incurrence of any indebtedness would result in additional payment obligations and is likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, would be repaid before holders of our equity securities received any distribution of our corporate assets. Further, in raising funds through our collaborations and licensing arrangements with third parties, we have had to, and may in the future need to, relinquish valuable rights, partially or fully, to our technologies, future revenue streams, research programs or product candidates and grant licenses on terms unfavorable to us. In addition, securing additional capital would require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s ability to oversee the development of our product candidates.

If we fail to regain compliance with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.

On April 4, 2025, we received a deficiency letter from the Listing Qualifications Department, or the Nasdaq Staff, of the Nasdaq Stock Market LLC, or Nasdaq, notifying us that, for the last 30 consecutive business days, the bid price for our common stock had closed below $1.00 per share, which is the minimum bid price required to maintain continued listing on the Nasdaq Global Select Market, referred to as the minimum bid price requirement. In accordance with Nasdaq Listing Rules, we had an initial period of 180 calendar days, or until October 1, 2025, to regain compliance with the minimum bid price requirement.

On August 22, 2025, we received a second deficiency notice from the Nasdaq Staff notifying us that we were not in compliance with the minimum $10.0 million stockholders' equity requirement for continued listing on the Nasdaq Global Select Market. This second deficiency notice was only a notification of deficiency, not of imminent delisting, and had no immediate effect on the listing or trading of our securities on The Nasdaq Global Select Market.

On October 2, 2025, we received a letter from the Nasdaq Staff approving our application to list our securities on the Nasdaq Capital Market. Our securities were transferred to The Nasdaq Capital Market at the opening of business on October 6, 2025. In connection with the transfer to The Nasdaq Capital Market, Nasdaq granted us an additional 180 calendar day period, or until March 30, 2026, to regain compliance with the minimum bid price requirement. If, at any time before March 30, 2026, the closing bid price for our common stock is at least $1.00 per share for a minimum of 10 consecutive business days, the Nasdaq Staff will provide written notification to us that we are in compliance with the minimum bid price requirement, unless the Nasdaq Staff exercises its discretion to extend this 10-day period pursuant to the Nasdaq Listing Rules.

If we do not regain compliance with the minimum bid price requirement by March 30, 2026, or if we do not meet the other listing standards, the Nasdaq Staff will provide us with notice that our common stock may be delisted. At that time, we may appeal the Nasdaq Staff’s delisting determination to a Nasdaq Listing Qualifications Panel. However, there can be no assurance that, even if we appeal the Nasdaq Staff’s delisting determination to the panel, such appeal would be successful.

We intend to monitor the closing bid price of our common stock and may, if appropriate, consider available options to regain compliance with the minimum bid price requirement, which could include seeking to effect a reverse stock split. However, there can be no assurance that we will be able to regain compliance with the minimum bid price requirement or maintain compliance with any of the other Nasdaq continued listing requirements.

If we are unable to comply with applicable Nasdaq listing standards, shares of our common stock would be subject to delisting, which could have a material adverse effect on the market for, and liquidity and price of, our common stock and would adversely affect our ability to raise capital on terms acceptable to us, or at all. Delisting from Nasdaq could also have other negative results, including, without limitation, the potential loss of confidence by investors, customers and employees and fewer business development opportunities. Any delisting of our common stock from Nasdaq would also make it more difficult for our stockholders to sell their shares of our common stock in the public market.

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We have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future.

Since inception, we have incurred significant operating losses, including net losses of $459.45 million and $4513.13 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025, respectively, and ~~a net loss of~~ $5835.20 million for the year ended December 31, ~~2024~~2025. As of ~~September~~March 3031, ~~2025~~2026, we had an accumulated deficit of $~~429~~428.13 million. AsWe ofexpect ~~September~~our ~~30,~~operating ~~2025,~~losses weand ~~had~~negative operating cash ~~and~~flows ~~cash~~to ~~equivalents~~continue offor ~~$103.8~~the ~~million.~~foreseeable Tofuture ~~date,~~as we ~~have~~continue ~~financed~~to advance our ~~operations~~pipeline ~~primarily from proceeds raised through private placements~~ of ~~preferred units~~novel, ~~convertible~~masked ~~preferred stock~~immuno-oncology, ~~common~~or ~~stock~~I-O, ~~and~~molecules ~~prefunded~~through ~~warrants;~~preclinical ~~sales~~and ofclinical ~~common~~development, ~~stock~~maintain inthe ~~our~~infrastructure ~~initial~~necessary ~~public~~to ~~offering,~~support orthese ~~IPO,~~activities and ~~through~~continue ~~“at-the-market”~~to ~~offerings;~~incur ~~the~~costs ~~sale~~associated ofwith ~~prefunded~~operating ~~warrants~~as ~~and~~a ~~common~~public ~~stock~~company. ~~warrants~~We indo anot ~~follow-on~~expect ~~public~~to ~~offering;~~generate ~~and~~any ~~upfront~~revenue ~~payments~~from ~~under~~the ~~our~~sale ~~collaboration~~of ~~and~~products ~~license~~for ~~agreements~~a ~~with~~number ~~AbbVie~~of ~~and~~years, ~~Gilead.~~if ~~All~~at ofall, ~~our~~and ~~programs~~any ~~are~~such inrevenue ~~clinical~~will ornot ~~preclinical~~be ~~development.~~realized Asunless aand ~~result,~~until we ~~have~~obtain ~~not~~marketing ~~generated~~approval ~~any~~for ~~revenue~~and ~~from~~successfully ~~product~~launch ~~sales~~ and docommercialize ~~not~~a ~~expect~~product tocandidate. ~~generate~~If ~~any~~we ~~revenue~~obtain ~~from~~marketing ~~product~~approval ~~sales~~ for atany ~~least~~current ~~the~~or ~~next~~future ~~several~~product ~~years,~~candidates ifthat atwe ~~all.~~develop, ~~Our~~we ~~operating~~expect ~~expenses~~to ~~and~~incur ~~net~~significant ~~losses~~commercialization ~~may~~expenses ~~fluctuate~~related ~~significantly from quarter~~ to ~~quarter~~product ~~and~~sales, ~~year to year~~marketing, distribution and wemanufacturing. ~~expect~~Some toof ~~continue~~these ~~to incur significant~~ expenses ~~and~~may ~~operating~~be ~~losses~~incurred ~~for~~in ~~the~~advance ~~foreseeable~~of ~~future,~~marketing ~~particularly~~approval toand ~~the~~could ~~extent~~be ~~we:~~ substantial.

To date, we have financed our operations primarily from proceeds raised through private placements of equity securities; sales of common stock in our initial public offering, or IPO, and through “at-the-market” offerings; the sale of prefunded warrants in our June 2025 and February 2026 follow-on offerings; the exercise of certain common stock warrants issued in connection with our June 2025 follow-on offering; development event payments under our co-funded clinical trial collaboration with F. Hoffmann-La Roche Ltd, or Roche; and upfront and milestone payments under our collaboration and license agreements with AbbVie and Gilead. All of our programs are in clinical or preclinical development. As a result, we have not generated any revenue from product sales and do not expect to generate any revenue from product sales for at least the next several years, if at all.

We expect our operating losses and negative operating cash flows to continue for the foreseeable future as we continue to advance our pipeline of novel, masked I-O molecules through development. Our operating expenses and net losses may fluctuate significantly from quarter to quarter and year to year, and we expect to continue to incur significant expenses and operating losses for the foreseeable future, particularly to the extent we:

•

continue to advance our current research programs and conduct additional research programs;

•

advance our current product candidates and any future product candidates we may develop into preclinical and clinical development;

•

seek marketing approvals for product candidates that successfully complete clinical trials, if any;

•

obtain, expand, maintain, defend and enforce our intellectual property;

•

continue to discover, validate and develop additional product candidates;

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•

continue to manufacture increasing quantities of our current or future product candidates for use in preclinical studies, clinical trials and for any potential commercialization;

•

acquire or in-license other product candidates, technologies or intellectual property;

•

hire additional personnel to support current or future programs;

•

establish a commercial and distribution infrastructure to commercialize products for which we may obtain marketing approval, if any; and

•

incur additional costs associated with current and future research, development and commercialization efforts and operations as a public company.

Even if we successfully complete clinical trials and obtain regulatory approval for one or more of our product candidates, our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful commercialization of those product candidates. 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 profitability. In addition, even if we are able to generate revenue from product sales, we may not become profitable.

Raising additional capital in the future may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to product candidates or our technology. In addition, the issuance of shares of common stock upon the exercise of our outstanding prefunded warrants or common stock warrants will result in immediate and substantial dilution to our existing stockholders.

Unless and until we can generate a substantial amount of product revenue, we expect to seek additional capital through a combination of public or private equity offerings, debt, collaborations, licensing arrangements or other sources. Our issuance of additional securities, whether equity or debt, or the possibility of such issuance, may cause the market price of our common stock to decline, and our stockholders may not agree with our plans for additional capital or the terms of such capital. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. In addition, the issuance of shares of common stock upon the exercise of our outstanding prefunded warrants or common stock warrants will result in immediate and substantial dilution to our existing stockholders. Similarly, if we issue additional shares of our common stock in one or more public or private offerings in the future, our existing stockholders will suffer further dilution. In addition, as a condition to providing additional funds to us, Gilead and AbbVie received rights superior to those of existing stockholders, and in connection with the issuance of prefunded warrants and common stock warrants in June 2025, we agreed to specified restrictions on our future equity issuances, unless we obtain the requisite prior approval of the warrant holders. Future investors may similarly receive rights that are superior to those of existing investors or which place restrictions on our future equity issuances. In addition, the incurrence of any indebtedness would result in additional payment obligations and is likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, would be repaid before holders of our equity securities received any distribution of our corporate assets. Further, in raising funds through our collaborations and licensing arrangements with third parties, we have had to, and may in the future need to, relinquish valuable rights, partially or fully, to our technologies, future revenue streams, research programs or product candidates and grant licenses on terms unfavorable to us. In addition, securing additional capital would require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s ability to oversee the development of our product candidates.

We have no products approved for commercial sale and have not generated any revenue from product sales. We may never generate any revenue from product sales or become profitable and, if we achieve profitability, we may not be able to sustain it.

To date, we have not generated any revenue from product sales. We do not expect to generate any revenue from the sale of products for a number of years, and we may never generate revenue from the sale of products. Our ability to generate revenue from product sales depends on a number of factors, including our ability to:

•

successfully complete our ongoing and planned preclinical studies and clinical trials for any current or future product candidates;

•

successfully receive U.S. Food and Drug Administration, or FDA, clearance for any investigational new drug application, or IND, for any current or future product candidates;

successfully initiate and complete clinical trials for our clinical-stage product candidates and any other current or future product candidates, including all safety and efficacy studies necessary to obtain U.S. and foreign regulatory approval for our product candidates;39

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•

establish and maintain clinical and commercial manufacturing capabilities or make arrangements with third-party manufacturers for clinical supply and commercial manufacturing;

•

launch commercial sales of our products, if and when approved, whether alone or in collaboration with others;

•

obtain and maintain acceptance of the products, if and when approved, by patients, the medical community and third-party payors;

•

effectively compete with other therapies;

•

obtain and maintain healthcare coverage and adequate reimbursement for our products, if and when approved;

•

maintain a continued acceptable safety profile of our products following approval; and

•

enforce and defend intellectual property rights and claims.

Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we are unable to accurately predict the timing or amount of expenses we may incur in connection with these activities prior to generating revenue from product sales. In addition, we may never succeed in these activities, and, even if we do, we may never generate revenues that are significant enough to achieve profitability. Even 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 depress the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product candidates or even continue our operations. A decline in the value of our company could also cause our stockholders to lose all or part of their investment.

Our limited operating history may make it difficult for an investor to evaluate the success of our business to date and to assess our future viability.

We are a clinical-stage biotechnology company with a limited operating history upon which investors can evaluate our business and prospects. Since inception, we have devoted substantially all of our financial resources and efforts to performing research and development activities. Our approach to the discovery and development of ~~tumor~~masked I-~~activated~~O product candidates using our proprietary platform technology is unproven, and we do not know whether we will be able to develop any approved products of commercial value. In addition, each of our product candidates is either in early clinical or preclinical development, and all of our other development programs are still in discovery stages. We have not yet demonstrated an ability to successfully complete any late-stage clinical trials, obtain regulatory approvals, manufacture a commercial-scale product, or arrange for a third party to do so on our behalf, or conduct the sales and marketing activities necessary for successful product commercialization. Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing biopharmaceutical products.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

We have incurred substantial losses during our history. As of December 31, ~~2024~~2025, we had federal and state net operating loss, or NOL, carryforwards of $~~245~~263.5 million and $~~217~~234.56 million, respectively. We do not anticipate generating revenue from sales of products for the foreseeable future, if ever, and we do not know whether or when we will generate taxable income necessary to utilize our NOLs.

In general, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change (by value) in the ownership of its equity by certain stockholders over a three-year period), the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income is subject to limitations. InWe ~~the~~have ~~second~~experienced ~~quarter of 2024, we had an~~ ownership ~~change~~changes as defined by Sections 382 and 383 of the Code. As a result of these changes and any future ownership changes, if we earn net taxable income, our ability to use our pre-change NOL carryforwards and other pre-change tax attributes to offset such taxable income may be subject to limitations, which could result in increased future tax liability to us and could have an adverse effect on our future results of operations.

There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing

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NOLs could expire or otherwise become unavailable to offset future income tax liabilities. As described below in “Risks Related to Ownership of Our Common Stock—Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition,” the Tax Cuts and Jobs Act of 2017, or the Tax Act, as amended by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, includes changes to U.S. federal tax rates and the rules governing NOL carryforwards that may significantly impact our ability to utilize our NOLs to offset taxable income in the future. In addition, state NOLs generated in one state cannot be used to offset income generated in another state. For these reasons, even if we attain profitability, we may be unable to use a material portion of our NOLs and other tax attributes.

Risks Related to the Discovery and Development of Our Product Candidates

Our business and future success is highly dependent on our ability to obtain regulatory approval for, and if approved, successfully launch and commercialize, our current product candidates, including our clinical-stage, masked I-O product candidates: vilastobart and efarindodekin alfa. We are currently evaluating vilastobart in combination with atezolizumab (Tecentriq®) in an ongoing Phase 2 clinical trial in patients with microsatellite stable, or MSS, metastatic colorectal cancer, or mCRC, and we are currently evaluating efarindodekin alfa as a monotherapy in an ongoing Phase 2 clinical trial in patients with certain advanced solid tumors. We also have a portfolio of programs that are in earlier stages of development and may never advance to clinical-stage development, including XTX501, our bispecific PD-1/masked IL-2, which is designed to selectively stimulate PD-1 positive antigen-experienced T cells and enhance their function and is currently advancing in initial IND-enabling activities, and our wholly-owned preclinical programs for a multi-specific masked T cell engager targeting prostate-specific membrane antigen, or PSMA, and six-transmembrane epithelial antigen of prostate 1, or STEAP1, and a masked T cell engager targeting claudin 18.2, or CLDN18.2, as well as an additional masked T cell engager program in collaboration with AbbVie.

Commencing clinical trials in the U.S. is subject to acceptance by the FDA of an IND and finalizing the trial design based on discussions with the FDA and other regulatory authorities. In the event that the FDA requires us to complete additional preclinical studies, or we are required to satisfy other FDA requests prior to commencing clinical trials, the start of our clinical trials may be delayed. Even after we receive and incorporate guidance from these regulatory authorities, the FDA or other regulatory authorities could disagree that we have satisfied their requirements to commence any clinical trial or change their position on the acceptability of our trial design or the clinical endpoints selected, which may require us to complete additional preclinical studies or clinical trials or impose stricter approval conditions than we currently expect. There are equivalent processes and risks applicable to clinical trial applications in other countries, including countries in the European Union, or EU.

To date, we have only had limited interactions with the FDA regarding our clinical development plans. We may experience issues surrounding preliminary trial execution, such as delays in FDA acceptance of any future INDs, revisions in trial design and finalization of trial protocols, difficulties with patient recruitment and enrollment, quality and provision of clinical supplies, or early safety signals.

We are not permitted to market any biological product in the U.S. until we receive approval of a Biologics License Application, or BLA, from the FDA. We have not previously submitted a BLA to the FDA, or similar marketing application to comparable foreign regulatory authorities. A BLA must include extensive preclinical and clinical data and supporting information to establish that the product candidate is safe, pure and potent for each desired indication. A BLA must also include significant information regarding the chemistry, manufacturing and controls for the product, and the manufacturing facilities must complete a successful pre-license inspection.

FDA approval of a BLA is not guaranteed, and the review and approval process is expensive, uncertain and may take several years. The FDA also has substantial discretion in the approval process. The number and types of preclinical studies and clinical trials that will be required for BLA approval varies depending on the product candidate, the disease or the condition that the product candidate is designed to treat and the regulations applicable to any particular product candidate. Despite the time and expense associated with preclinical studies and clinical trials, failure can occur at any stage.

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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 candidate that we develop based on the completed clinical trials.

Generally, public concern regarding the safety of biopharmaceutical products could delay or limit our ability to obtain regulatory approval, result in the inclusion of unfavorable information in our labeling or require us to undertake other activities that may entail additional costs. We have not obtained FDA approval for any product. This lack of experience may impede our ability to obtain FDA approval in a timely manner, if at all, for any current or future product candidates.

The success of our business, including our ability to finance our company and generate any revenue in the future, will primarily depend on the successful development, regulatory approval and commercialization of our current and any future product candidates, which may never occur. However, given our early stage of development, it will be years before we are able to demonstrate the safety and efficacy of a treatment sufficient to warrant approval for commercialization, and we may never be able to do so. If we are unable to develop, or obtain regulatory approval for, or, if approved, successfully commercialize our current or any future product candidates, we may not be able to generate sufficient revenue to continue our business.

All our product candidates are still in the early clinical stage or preclinical stage of development, and their risk of failure is high. Before we can commence clinical trials for a product candidate, we must complete extensive preclinical testing and studies that support our planned INDs in the U.S., or similar applications in other jurisdictions. We cannot be certain of the timely completion or outcome of our preclinical testing and studies, and we cannot predict if the FDA or other regulatory authorities will accept our proposed clinical programs or if the outcome of our preclinical testing and studies will ultimately support the further development of our programs. As a result, we cannot be sure that we will be able to submit INDs or similar applications for our current or future preclinical programs, including without limitation, the planned IND for XTX501, on the timelines we expect, if at all, and we cannot be sure that submission of INDs or similar applications will result in the FDA or other regulatory authorities allowing clinical trials to begin.

Preclinical studies and clinical trials are expensive, time-consuming and difficult to design and implement, and involve uncertain outcomes. Furthermore, results of earlier preclinical studies and clinical trials may not be predictive of results of future preclinical studies or clinical trials.

The risk of failure for our current and any future product candidates is high. It is impossible to predict when or if any of our product candidates will successfully complete preclinical studies or clinical trials evaluating their safety and effectiveness in humans or will ultimately receive regulatory approval. To obtain the requisite regulatory approvals to market and sell any of our product candidates, we must demonstrate through extensive preclinical studies and clinical trials that our product candidates are safe and effective in humans for use in each target indication. Preclinical and clinical testing is expensive and can take many years to complete, and the outcome is inherently uncertain. Failure can occur at any time during the preclinical or clinical trial process. The outcome of preclinical testing and early clinical trials may not be predictive of the results of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. In particular, while we have conducted certain preclinical studies for each of our clinical stage product candidates, we do not know whether these product candidates will perform in our clinical trials as they have performed in these prior preclinical studies. Similarly, there can be no assurance that early, interim or preliminary clinical data or results will be predictive of or replicated in future clinical data or results, including without limitation, data reported to date for our Phase 1/2 trial for vilastobart in combination with atezolizumab and our Phase 1 trial for efarindodekin alfa. Many companies in the biopharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development and we cannot be certain that we will not face similar setbacks. These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway, or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events, or AEs. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.

In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in clinical trial procedures set forth in protocols, differences in the size and type

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of the patient populations, adherence to the dosing regimen and other clinical trial protocols, and the rate of dropout among clinical trial participants. If we fail to produce positive results in our planned and ongoing preclinical studies or clinical trials, or if we experience material changes in clinical data or results from those we have previously reported, the development timeline and regulatory approval and commercialization prospects for our product candidates, and, correspondingly, our business, financial condition and results of operations would be materially and adversely affected.

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidate for its intended indications. We cannot guarantee that any clinical trials, including our ongoing Phase 2 clinical trial evaluating vilastobart in combination with atezolizumab or our Phase 2 clinical trial evaluating efarindodekin alfa as a monotherapy, will be conducted as planned or completed on schedule, if at all. We may experience numerous unforeseen events leading up to, during or as a result of clinical trials that could delay or prevent the initiation or completion of a clinical trial or our ability to receive marketing approval or commercialize our product candidates, including:

•

we may be unable to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to obtain regulatory authorizations to commence a clinical trial;

•

we may experience issues in reaching a consensus with regulatory authorities on trial design;

•

regulators or institutional review boards, or IRBs, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;

•

we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective contract research organizations, or CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

•

clinical trial sites may deviate from a trial protocol or drop out of a trial or fail to conduct the trial in accordance with regulatory requirements;

•

the number of subjects required for clinical trials of our product candidates may be larger than we anticipate, or subjects may fail to enroll or remain in clinical trials at the rate we expect;

•

subjects that enroll in our studies may misrepresent their eligibility or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the subject from the trial, increase the needed enrollment size for the clinical trial or extend its duration;

•

subjects may choose an alternative treatment for the indication for which we are developing our product candidates, or participate in competing clinical trials;

•

subjects may experience severe or unexpected treatment-related adverse effects;

•

clinical trials of our product candidates may produce unfavorable, inconclusive, or clinically insignificant results;

•

we may decide to, or regulators, or IRBs, or ethics committees may require us to, make changes to a clinical trial protocol or conduct additional preclinical studies or clinical trials, or we may decide to abandon product development programs;

•

we may need to add new or additional clinical trial sites;

•

our third-party contractors, including those manufacturing our product candidates or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

•

we may experience manufacturing delays, and any changes to manufacturing processes or third-party contractors that may be necessary or desired could result in other delays;

•

we or our third-party contractors may experience delays due to complications resulting from the impact of public health crises, including epidemics and pandemics, or geopolitical tensions;

•

the cost of preclinical testing and studies and clinical trials of any product candidates may be greater than we anticipate or greater than our available financial resources;

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•

the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate or we may not be able to obtain sufficient quantities of combination therapies for use in current or future clinical trials;

•

reports may arise from preclinical or clinical testing of other cancer therapies that raise safety or efficacy concerns about our product candidates; and

•

regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate.

If we are required to conduct additional clinical trials or other testing of our product candidates beyond the clinical trials and testing that we contemplate, if we are unable to successfully complete clinical trials or other testing of our product candidates, if the results of these clinical trials or tests are unfavorable or are only modestly favorable or if there are safety concerns associated with any of product candidates, we may:

•

incur additional unplanned costs;

•

be required to suspend or terminate ongoing clinical trials;

•

be delayed in obtaining marketing approval, if at all;

•

obtain approval for indications or patient populations that are not as broad as intended or desired;

•

obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

•

be subject to additional post-marketing testing or other requirements;

•

be required to perform additional clinical trials to support approval;

•

have regulatory authorities withdraw, or suspend, their approval of the drug or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy, or REMS;

•

be subject to the addition of labeling statements, such as warnings or contraindications;

•

have the product removed from the market after obtaining marketing approval;

•

be subject to lawsuits; or

•

experience damage to our reputation.

Conducting clinical trials in foreign countries, as we may do for our product candidates, presents additional risks that may delay completion of our clinical trials. These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocols as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.

Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA or comparable foreign regulatory authorities. The FDA or comparable foreign regulatory authority may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the trial. The FDA or comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authorities, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates.

In addition to the factors above, we may make formulation or manufacturing changes to our product candidates, in which case we may need to conduct additional preclinical studies or clinical trials to bridge our modified product candidates to earlier versions, which may be costly, time consuming and may not be successful at all.

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guarantee that our clinical trials will begin as planned or be completed on schedule, if at all, or that we will not need to restructure our clinical trials. Significant preclinical study or clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates, which may harm our business and results of operations. In addition, many of the factors that cause, or lead to, delays of clinical trials may ultimately lead to the denial of regulatory approval of our product candidates.

If we experience delays or difficulties in the enrollment of patients in clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion. The enrollment of patients depends on many factors, including:

•

clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating;

•

the severity of the disease under investigation;

•

the patient eligibility and the inclusion and exclusion criteria defined in the protocol;

•

AEs in our clinical trials and in third-party clinical trials of agents similar to our product candidates;

•

the size and health of the patient population required for analysis of the trial’s primary endpoints;

•

the proximity of patients to trial sites;

•

the design of the trial;

•

our ability to recruit clinical trial investigators with the appropriate competencies and experience;

•

our ability to obtain and maintain patient consents;

•

our ability to monitor patients adequately during and after treatment;

•

the risk that patients enrolled in clinical trials will drop out of the trials before completion; and

•

factors we may not be able to control that may limit the availability of patients, principal investigators or staff or clinical sites, such as public health crises, including epidemics and pandemics.

In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial site.

Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or might require us to abandon one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our product candidates, slow down or halt our product candidate development and approval process and jeopardize our ability to seek and obtain the marketing approval required to commence product sales and generate revenue, which would cause the value of our company to decline and limit our ability to obtain sufficient additional capital.

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need to dose-reduce, dose-interrupt and discontinue many patients from treatment. As has been the case with traditional I-O treatments for cancer, it is possible that there may be severe side effects associated with the use of our current or future product candidates. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these or other side effects. In such an event, our clinical trials could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.

In addition, clinical trials rely on a sample of the potential patient population. With a limited number of patients and limited duration of exposure, rare and severe side effects of our product candidates may only be uncovered when a significantly larger number of patients is exposed to the product candidate. If our product candidates receive marketing approval and we or others identify undesirable side effects caused by such product candidates after such approval, a number of potentially significant negative consequences could result, including:

•

regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;

•

we may be required to create a medication guide outlining the risks of such side effects for distribution to patients;

•

regulatory authorities may require a REMS plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools;

•

we may be required to change the way such product candidates are distributed or administered, conduct additional clinical trials or change the labeling of the product candidates;

•

we may be subject to regulatory investigations and government enforcement actions;

•

regulatory authorities may withdraw or limit their approval of such product candidates;

•

we may decide to remove such product candidates from the marketplace;

•

we could be sued and held liable for injury caused to individuals exposed to or taking our product candidates; and

•

we may suffer reputational harm.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, results of operations and prospects.

From time to time, we may publish interim top-line or preliminary data from our clinical trials. For example, we most recently reported updated data from our Phase 2 clinical trial for vilastobart in combination with atezolizumab and from our Phase 1 clinical trial for efarindodekin alfa in November 2025 at the Society for Immunotherapy of Cancer (SITC) 40th Annual Meeting. Preliminary and interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or “top-line” data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects.

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~~There~~to isaccess ~~also~~such adrugs ~~risk~~on ~~that~~commercially ~~due~~reasonable toterms ~~regulatory~~for ~~changes,~~clinical ~~such~~trials asand ~~suspensions~~their onavailability ~~the~~for use ofwith ~~NOLs,~~our orcommercialized ~~other unforeseen reasons~~product, ~~our~~if ~~existing~~approved. ~~NOLs~~We ~~could~~cannot ~~expire~~be orcertain ~~otherwise~~that ~~become~~current ~~unavailable~~or topotential ~~offset~~ future ~~income~~commercial ~~tax~~relationships ~~liabilities.~~will Asprovide ~~described~~us ~~below~~with ina ~~“Risks~~steady ~~Related~~supply ~~to Ownership~~ of ~~Our~~such ~~Common~~drugs ~~Stock—Changes~~on incommercially ~~tax~~reasonable ~~laws~~terms or inat ~~their~~all. ~~implementation~~Any orfailure ~~interpretation~~to ~~may~~maintain ~~adversely~~or ~~affect~~enter ~~our~~into ~~business~~new ~~and~~successful ~~financial~~commercial ~~condition~~relationships,” or the ~~Tax~~expense ~~Cuts and Jobs Act~~ of ~~2017,~~purchasing orsuch ~~the~~third-party ~~Tax~~drugs ~~Act,~~in ~~as amended by~~ the ~~Coronavirus Aid~~market, ~~Relief,~~may ~~and~~delay ~~Economic~~our ~~Security~~development ~~Act~~timelines, orincrease ~~the~~our ~~CARES~~costs ~~Act, includes changes to U.S. federal tax rates~~ and ~~the~~jeopardize ~~rules governing NOL carryforwards that may significantly impact~~ our ability to ~~utilize~~develop our ~~NOLs~~current toproduct ~~offset~~candidates ~~taxable~~and ~~income~~any ~~in the~~ future. Inproduct ~~addition,~~candidates ~~state~~as ~~NOLs~~commercially ~~generated~~viable intherapies. ~~one~~If ~~state~~any ~~cannot~~of bethese ~~used~~occur, toour ~~offset~~business, ~~income~~financial ~~generated in another state. For these reasons~~condition, ~~even~~operating ifresults weor ~~attain~~prospects ~~profitability, we~~ may be ~~unable~~materially ~~to use a material portion of our NOLs and other tax attributes~~harmed.

~~Risks~~Moreover, ~~Related~~the development of product candidates for use in combination with another product or product candidate may present challenges that are not faced for single agent product candidates. For example, our plans to evaluate current or future product candidates in combination with other agents may result in AEs based on the ~~Discovery~~combination therapy that may negatively impact the reported safety profile of the monotherapy in clinical trials. In addition, the FDA or comparable foreign regulatory authorities may require us to use more complex clinical trial designs in order to evaluate the contribution of each product and ~~Development~~product candidate to any observed effects. It is possible that the results of ~~Our~~such ~~Product~~trials ~~Candidates~~could show that any positive previous trial results are attributable to the third-party drug and not our product candidate. Developments related to the third-party drug may also impact our clinical trials for the combination therapy as well as our commercial prospects should we receive regulatory approval. Such developments may include changes to the third-party drug’s safety or efficacy profile, changes to the availability of the third-party drug, quality, and manufacturing and supply issues with respect to the third-party drug.

~~Our~~If ~~business~~we isare ~~highly~~able ~~dependent~~to onobtain marketing approval, the ~~success~~FDA or comparable foreign regulatory authorities may require that products used in conjunction with each other be cross labeled for combined use. To the extent that we do not have rights to the third-party drug, this may require us to work with such third party to satisfy such a requirement. We would also continue to be subject to the risks that the FDA or comparable foreign regulatory authorities could revoke approval of ~~our~~the ~~current~~third-party drug used in combination with our product ~~candidates~~candidate or that safety, ~~which~~efficacy, ~~are~~manufacturing or supply issues could arise with such drug. Similarly, if the third-party drugs we use in combination with our product candidates are replaced as the ~~early~~standard ~~stages~~of care for the indications we choose for any of ~~development~~our ~~and~~product ~~will~~candidates, the FDA or comparable foreign regulatory authorities may require ~~significant~~us ~~additional~~to ~~preclinical~~conduct ~~and~~additional clinical ~~development~~trials. ~~before~~The weoccurrence ~~can~~of ~~seek~~any ~~regulatory~~of ~~approval~~these ~~for~~risks ~~and~~could ~~commercially~~result ~~launch~~in aour ~~product~~own products, if approved, being removed from the market or being less successful commercially.

~~Our~~We ~~business~~may ~~and~~not ~~future~~be ~~success~~successful isin ~~highly dependent on~~ our ~~ability~~efforts to ~~obtain~~use ~~regulatory approval for, and if approved, successfully launch and commercialize,~~ our ~~current~~platform ~~product~~technology ~~candidates,~~to ~~including~~enable our clinical-stage, tumor-activated product candidates: vilastobart and efarindodekin alfa. We are currently evaluating vilastobart in combination with atezolizumab (Tecentriq®) in Phase 1C combination dose escalation in patients with advanced solid tumors and in a Phase 2 clinical trial evaluating the ~~combination~~development inof ~~patients with microsatellite stable metastatic colorectal cancer, or MSS mCRC. We are evaluating efarindodekin alfa as~~ a ~~monotherapy~~pipeline ~~in patients with certain advanced solid tumors in an ongoing Phase 1/2 clinical trial under our exclusive license agreement with Gilead. We also have a portfolio~~ of ~~programs that are in earlier stages of development and may never advance to clinical-stage development, including XTX501, our bispecific PD-1/~~masked ILI-2,O ~~which~~product is designed to selectively stimulate PD-1 positive antigen-experienced T cells and enhance their function and is currently advancing in initial IND-enabling activities, and our wholly owned preclinical programs for masked T cell engagers targeting prostate-specific membrane antigen, or PSMA, claudin 18candidates.~~2, or CLDN18.2, and six-transmembrane epithelial antigen of prostate 1, or STEAP1, as well as an additional masked T cell engager program in collaboration with AbbVie.~~

~~Commencing~~A ~~clinical~~key ~~trials~~element inof ~~the U.S.~~our strategy is ~~subject~~ to ~~acceptance~~use byour ~~the~~novel ~~FDA~~platform oftechnology anto ~~IND~~engineer and ~~finalizing~~develop masked I-O molecules with the ~~trial~~potential ~~design~~to ~~based~~trigger onanti-tumor ~~discussions~~immunity with ~~the~~minimal ~~FDA~~systemic ~~and~~toxicity ~~other~~in ~~regulatory~~order ~~authorities.~~to Inadvance ~~the~~a ~~event~~pipeline ~~that~~of ~~the~~product ~~FDA~~candidates. ~~requires~~We usmay not be able to ~~complete~~continue ~~additional~~to ~~preclinical~~identify ~~studies,~~and ordevelop wenovel ~~are~~I-O ~~required~~therapies. toEven ~~satisfy~~if ~~other~~we ~~FDA~~are ~~requests~~successful ~~prior~~in continuing to ~~commencing~~advance ~~clinical~~our ~~trials~~pipeline, the ~~start~~potential ofproduct ~~our~~candidates ~~clinical~~that ~~trials~~we identify may not be ~~delayed~~suitable for clinical development. ~~Even~~For ~~after~~example, wepotential ~~receive~~product ~~and~~candidates ~~incorporate~~may ~~guidance~~be ~~from~~shown ~~these~~to ~~regulatory~~have ~~authorities,~~harmful ~~the~~side ~~FDA~~effects or other ~~regulatory~~characteristics ~~authorities~~that ~~could~~indicate ~~disagree~~ that wethey ~~have~~are ~~satisfied~~unlikely ~~their requirements~~ to ~~commence~~or ~~any~~will ~~clinical~~not ~~trial~~be ordrugs ~~change~~that ~~their~~will ~~position~~receive onmarketing ~~the~~approval ~~acceptability~~and ofachieve ~~our~~market ~~trial~~acceptance. ~~design~~If orwe ~~the~~do ~~clinical~~not ~~endpoints~~successfully ~~selected,~~develop ~~which~~and ~~may~~commercialize ~~require~~product uscandidates tobased ~~complete~~upon ~~additional~~our ~~preclinical~~platform ~~studies~~approach or ~~clinical~~take ~~trials~~longer orto ~~impose~~do ~~stricter~~so ~~approval conditions~~ than anticipated, we ~~currently~~will ~~expect.~~not ~~There~~or ~~are~~may ~~equivalent~~not ~~processes~~be ~~and~~able ~~risks applicable~~ to ~~clinical~~obtain ~~trial~~drug ~~applications~~revenues in ~~other~~future ~~countries~~periods, ~~including~~which ~~countries~~likely would result in ~~the~~significant ~~European~~harm ~~Union,~~to orour EUfinancial position and adversely affect our stock price.

~~To date, we have only had limited interactions with the FDA regarding our clinical development plans.~~ We may ~~experience~~not ~~issues~~be ~~surrounding~~successful ~~preliminary trial execution, such as delays~~ in ~~FDA~~our ~~acceptance~~efforts ofto ~~any~~identify ~~future INDs, revisions in trial design and finalization of trial protocols, difficulties with patient recruitment and enrollment, quality and provision of clinical supplies,~~ or ~~early~~discover ~~safety~~additional ~~signals.~~product candidates.

WeAlthough ~~are~~we ~~not~~intend ~~permitted~~ to ~~market~~explore ~~any~~other ~~biological~~therapeutic ~~product~~opportunities in ~~the U.S.~~addition ~~until~~to wethe ~~receive~~product ~~approval~~candidates ofthat awe ~~Biologics~~are ~~License~~currently ~~Application~~developing, orwe ~~BLA,~~may ~~from~~fail ~~the FDA. We have not previously submitted a BLA~~ to ~~the~~identify ~~FDA,~~ or ~~similar~~discover ~~marketing~~viable ~~application~~new toproduct ~~comparable~~candidates ~~foreign~~for ~~regulatory~~clinical ~~authorities.~~development Afor ~~BLA~~a ~~must~~number ~~include~~of ~~extensive~~reasons. ~~preclinical~~If ~~and~~we ~~clinical~~fail ~~data and supporting information~~ to ~~establish~~identify ~~that~~additional ~~the~~potential product ~~candidate is safe~~candidates, ~~pure~~our ~~and~~business ~~potent~~could ~~for~~be ~~each~~materially ~~desired indication~~harmed. ~~A BLA must also include significant information regarding the chemistry, manufacturing and controls for the product, and the manufacturing facilities must complete a successful pre-license inspection.~~

~~FDA~~Research ~~approval~~programs ofto apursue ~~BLA~~the isdevelopment ~~not~~of ~~guaranteed,~~our ~~and~~existing ~~the review~~ and ~~approval~~planned ~~process~~product iscandidates ~~expensive,~~for ~~uncertain~~additional indications and ~~may~~to ~~take~~identify ~~several~~new ~~years.~~product ~~The~~candidates ~~FDA~~and ~~also~~disease ~~has~~targets require substantial ~~discretion~~technical, infinancial ~~the~~and ~~approval~~human ~~process.~~resources ~~The~~whether ~~number~~or ~~and~~not ~~types~~they ofare ~~preclinical~~ultimately ~~studies~~successful. ~~and~~We ~~clinical~~may ~~trials~~in ~~that~~the ~~will~~future berely ~~required~~on ~~for~~third ~~BLA~~parties ~~approval~~for ~~varies~~certain ~~depending~~research, onand ~~the~~we ~~product~~will ~~candidate,~~not ~~the~~have ~~disease~~complete orcontrol ~~the~~over ~~condition~~their ~~that~~performance ~~the~~and ~~product~~ability ~~candidate~~to issuccessfully ~~designed~~develop toproduct ~~treat~~candidates. ~~and~~Our ~~the~~research ~~regulations~~programs ~~applicable~~may toinitially ~~any~~show ~~particular~~promise ~~product~~in ~~candidate.~~identifying ~~Despite~~potential ~~the~~indications ~~time~~ and/or ~~expense~~product ~~associated~~candidates, ~~with~~yet ~~preclinical~~fail ~~studies~~to ~~and~~yield results for clinical ~~trials,~~development ~~failure~~for ~~can~~a ~~occur~~number atof ~~any~~reasons, ~~stage.~~including:

•

47the research methodology used may not be successful in identifying potential indications and/or product candidates;

•

~~Table~~potential ofproduct ~~Contents~~candidates may, after further study, be shown to have harmful adverse effects or other characteristics that indicate they are unlikely to be effective drugs; and

~~Generally,~~Table ~~public concern regarding the safety~~ of biopharmaceutical products could delay or limit our ability to obtain regulatory approval, result in the inclusion of unfavorable information in our labeling or require us to undertake other activities that may entail additional costs. We have not obtained FDA approval for any product. This lack of experience may impede our ability to obtain FDA approval in a timely manner, if at all, for any current or future product candidates.Contents

•

~~The~~it ~~success~~may oftake ~~our~~greater ~~business,~~human ~~including our ability to finance our company~~ and ~~generate~~financial ~~any~~resources ~~revenue~~than inwe ~~the future,~~ will ~~primarily~~possess ~~depend~~to onidentify ~~the~~and ~~successful~~advance ~~development,~~additional ~~regulatory~~therapeutic ~~approval~~opportunities ~~and~~for ~~commercialization of~~ our ~~current and any future~~ product candidates, ~~which~~or ~~may never occur. However, given our early stage of development, it will be years before we are able~~ to ~~demonstrate~~develop ~~the~~suitable ~~safety~~potential ~~and~~product ~~efficacy~~candidates ofthrough ainternal ~~treatment~~research ~~sufficient to warrant approval for commercialization~~programs, ~~and~~thereby welimiting ~~may~~our ~~never~~ability ~~be able~~ to ~~do so. If we are unable to~~ develop, ordiversify ~~obtain~~and ~~regulatory~~expand ~~approval for, or, if approved, successfully commercialize~~ our ~~current or any future~~ product ~~candidates, we may not be able to generate sufficient revenue to continue our business~~portfolio.

~~Preclinical~~Accordingly, ~~development~~there iscan ~~uncertain.~~be ~~Our~~no ~~preclinical~~assurance ~~programs~~that ~~may~~we ~~experience~~will ~~delays~~ever orbe ~~may~~able ~~never advance~~ to ~~clinical~~identify ~~trials,~~additional ~~which~~therapeutic ~~would~~opportunities ~~adversely~~for ~~affect~~ our ~~ability~~current toproduct ~~obtain~~candidates ~~regulatory approvals~~ or ~~commercialize~~to ~~these~~develop ~~programs~~suitable onadditional aproduct ~~timely~~candidates ~~basis~~through orinternal atresearch ~~all~~programs, which ~~would~~could ~~have~~materially anadversely ~~adverse~~affect ~~effect~~our onfuture ~~our~~growth ~~business~~and prospects.

~~All~~Our ~~our~~approach ~~product~~to ~~candidates are still in~~ the ~~early~~discovery ~~clinical~~and ~~stage or preclinical stage of~~ development, ~~and their risk~~ of ~~failure is high. Before we can commence clinical trials for a~~ product ~~candidate,~~candidates webased ~~must~~on ~~complete extensive preclinical testing and studies that support~~ our ~~planned~~technological ~~INDs~~approaches inis ~~the U.S.~~unproven, ~~or similar applications in other jurisdictions. We cannot be certain of the timely completion or outcome of our preclinical testing~~ and ~~studies, and~~ we ~~cannot~~do ~~predict~~not ifknow ~~the~~whether FDA or other regulatory authorities will accept our proposed clinical programs or if the outcome of our preclinical testing and studies will ultimately support the further development of our programs. As a result, we ~~cannot be sure that we~~ will be able to ~~submit~~develop ~~INDs~~any orproducts ~~similar applications for our current or future preclinical programs on the timelines we expect, if at all, and we cannot be sure that submission~~ of ~~INDs~~commercial ~~or similar applications will result in the FDA or other regulatory authorities allowing clinical trials to begin~~value.

~~Preclinical~~The ~~studies~~success ~~and~~of ~~clinical~~our ~~trials~~business ~~are~~depends ~~expensive~~primarily upon our ability to discover, ~~time-consuming~~develop and ~~difficult~~commercialize toproducts ~~design~~based on our technological approaches. While we have had favorable preclinical and ~~implement~~early clinical results related to our clinical-stage product candidates, vilastobart and ~~involve~~efarindodekin ~~uncertain~~alfa, ~~outcomes.~~we ~~Furthermore,~~have ~~results~~not ofyet ~~earlier~~succeeded ~~preclinical~~and ~~studies~~may not succeed in demonstrating efficacy and safety for any product candidates in current or future clinical trials ~~may~~or in obtaining marketing approval thereafter. We rely on matrix metalloproteases, or MMPs, to activate our molecules within the tumor microenvironment. If MMP activity in human tumors is not besufficient ~~predictive~~to cleave the masking protein domain, the potential efficacy of ~~results~~our product candidates would be limited. We have no assurance that our product candidates will successfully progress through clinical development and ultimately marketing approval. We have invested substantially all of our efforts and financial resources in developing our initial product candidates and our future ~~preclinical~~success ~~studies~~is orhighly dependent on the outcome of our ongoing clinical trials and the successful development of our technology and product candidates.

~~The~~In ~~risk~~addition, ofthe ~~failure~~clinical ~~for~~trial ~~our~~requirements ~~current~~of the FDA and ~~any~~other ~~future~~regulatory ~~product~~agencies ~~candidates~~and isthe ~~high.~~criteria Itthese isregulators ~~impossible~~use to ~~predict~~determine ~~when~~the orsafety ifand ~~any~~efficacy of ~~our~~a product ~~candidates~~candidate ~~will~~may ~~successfully~~vary ~~complete~~according ~~preclinical~~to ~~studies~~the ortype, ~~clinical~~complexity, ~~trials~~novelty ~~evaluating~~and ~~their~~intended ~~safety~~use and ~~effectiveness~~market inof ~~humans~~the orpotential ~~will~~products. ~~ultimately~~The ~~receive~~ regulatory approval. Toprocess ~~obtain~~for ~~the~~novel ~~requisite regulatory approvals to market and sell any of our~~ product candidates, wecan ~~must~~be ~~demonstrate~~more ~~through extensive preclinical studies and clinical trials that our product candidates are safe and effective in humans for use in each target indication. Preclinical and clinical testing is~~ expensive and ~~can~~ take ~~many~~longer ~~years~~than tofor ~~complete~~other, ~~and~~better ~~the~~known ~~outcome~~or isextensively ~~inherently~~studied ~~uncertain.~~pharmaceutical ~~Failure can occur at any time during the preclinical~~ or ~~clinical~~other ~~trial~~product ~~process~~candidates. ~~The~~As ~~outcome~~a ofresult, ~~preclinical~~we ~~testing and early clinical trials~~ may ~~not~~face bea ~~predictive~~greater ofregulatory ~~the~~burden ~~results~~to ofinitiate ~~later~~ clinical trials, ~~and~~or ~~interim~~to ~~results~~obtain ofregulatory aapproval ~~clinical trial do not necessarily predict final results. In particular, while we have conducted certain preclinical studies for each~~ of our ~~clinical stage~~ product candidates, weas docompared ~~not~~to ~~know whether these~~ product candidates ~~will~~based ~~perform~~on inmore ~~our~~established ~~clinical trials as they have performed in these prior preclinical studies~~technology. ~~Similarly,~~In ~~there can be no assurance that early~~addition, ~~interim~~any orproduct ~~preliminary~~candidates ~~clinical~~for ~~data~~which orwe ~~results~~may ~~will~~ be ~~predictive~~able ofto orobtain ~~replicated~~marketing inapproval ~~future~~may ~~clinical~~be ~~data~~subject ~~or results, including without limitation, the Phase 1/2 data for vilastobart in combination with atezolizumab and the Phase 1 data for efarindodekin alfa reported~~ to ~~date.~~extensive ~~Many companies in the biopharmaceutical and biotechnology industries have suffered significant setbacks in late~~post-~~stage~~approval ~~clinical~~regulatory ~~trials after achieving positive results in early-stage development and we cannot be certain that we will not face similar setbacks. These setbacks have been caused by~~requirements, ~~among~~including ~~other~~requirements ~~things,~~pertaining ~~preclinical~~to ~~findings made while clinical trials were underway~~manufacturing, ordistribution ~~safety or efficacy observations made in preclinical studies~~ and ~~clinical trials, including previously unreported adverse events, or AEs~~promotion. ~~Moreover,~~We ~~preclinical~~may ~~and~~need ~~clinical data are often susceptible~~ to ~~varying~~devote ~~interpretations~~significant ~~and~~time ~~analyses,~~ and ~~many~~resources ~~companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed~~ to ~~obtain~~comply ~~marketing~~with ~~approval~~these ~~of their products~~requirements.

48We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

~~Table~~We have chosen to initially develop each of ~~Contents~~our clinical-stage product candidates for the treatment of various solid tumor types. Nevertheless, our development efforts will be limited to a small number of cancer types, and we may forego or delay pursuit of opportunities in other cancer types that may prove to have greater potential. Likewise, we may forego or delay the pursuit of opportunities with other potential product candidates that may prove to have greater commercial potential.

In ~~some instances~~addition, ~~there~~our ~~can~~resource beallocation ~~significant~~decisions ~~variability~~may incause ~~safety~~us orto ~~efficacy~~fail ~~results~~to ~~between~~capitalize ~~different~~on ~~clinical~~viable ~~trials~~commercial ofproducts ~~the~~or ~~same~~profitable ~~product~~market ~~candidate~~opportunities. ~~due~~Our tospending ~~numerous~~on ~~factors,~~current ~~including~~and ~~changes~~future inresearch ~~clinical~~and ~~trial~~development ~~procedures~~programs ~~set~~and ~~forth~~product incandidates ~~protocols,~~for ~~differences~~specific inindications ~~the~~may ~~size~~not ~~and~~yield ~~type~~any ofviable ~~the~~product ~~patient~~candidates. ~~populations~~Similarly, ~~adherence~~if towe ~~the~~do ~~dosing~~not ~~regimen~~accurately ~~and~~evaluate ~~other~~the ~~clinical~~commercial ~~trial~~potential ~~protocols,~~or ~~and~~target ~~the~~market ~~rate~~for ofa ~~dropout~~particular ~~among~~product ~~clinical~~candidate, ~~trial~~we ~~participants.~~may Ifrelinquish wevaluable ~~fail~~rights to ~~produce~~that ~~positive~~product ~~results~~candidate inthrough ~~our~~collaboration, ~~planned~~licensing ~~and ongoing preclinical studies~~ or ~~clinical~~other ~~trials,~~similar orarrangements ifin wecases ~~experience material changes~~ in ~~clinical~~which ~~data~~it orwould ~~results~~have ~~from~~been ~~those~~more weadvantageous ~~have~~for ~~previously~~us ~~reported,~~to ~~the~~retain sole development ~~timeline~~ and ~~regulatory approval and~~ commercialization ~~prospects~~rights ~~for~~to ~~our~~the product ~~candidates, and, correspondingly, our business, financial condition and results of operations would be materially and adversely affected~~candidate.

We may ~~encounter~~become ~~substantial~~exposed ~~delays~~to incostly ~~the~~and ~~commencement~~damaging orliability ~~completion~~claims, oreither ~~termination~~when ortesting ~~suspension, of~~ our ~~clinical~~product ~~trials,~~candidates ~~which~~in ~~could~~the ~~result~~clinic inor ~~increased~~following ~~costs~~commercial ~~to us~~sale, ~~delay~~and orany ~~limit~~product ~~our~~liability ~~ability~~insurance towe ~~generate~~may ~~revenue~~obtain ~~and~~may ~~adversely~~not ~~affect~~cover ~~our~~all ~~commercial~~damages ~~prospects~~from such claims.

~~Before~~We ~~obtaining~~are ~~marketing~~exposed ~~approval~~to ~~from~~potential ~~regulatory~~product ~~authorities~~liability ~~for~~risks ~~the~~that ~~sale~~are ofinherent ~~our~~in ~~product~~the ~~candidates~~research, wedevelopment, ~~must~~manufacturing, ~~conduct~~marketing ~~extensive~~and ~~clinical~~use ~~trials~~of tobiopharmaceutical ~~demonstrate~~products. ~~the~~The ~~safety~~use ~~and~~of ~~efficacy~~product ofcandidates ~~the~~by ~~product~~us ~~candidate~~in ~~for~~clinical ~~its~~trials, ~~intended~~and ~~indications.~~any Wesale ~~cannot~~of ~~guarantee~~approved ~~that~~products ~~any~~in ~~clinical~~the ~~trials~~future, ~~including~~may ~~our~~expose ~~Phase~~us 2to ~~clinical~~liability ~~trial~~claims. ~~evaluating~~For ~~vilastobart~~example, inwe ~~combination~~may ~~with~~be ~~atezolizumab~~sued orif our ~~Phase~~product 1candidates ~~clinical~~cause ~~trial~~or ~~evaluating~~are ~~efarindodekin~~perceived ~~alfa~~to ascause ainjury ~~monotherapy,~~or ~~will~~are befound ~~conducted~~to asbe ~~planned~~otherwise orunsuitable ~~completed~~during onclinical ~~schedule~~trials, ifmanufacturing, atmarketing ~~all~~or sale. WeAny ~~may~~such ~~experience~~product ~~numerous~~liability ~~unforeseen~~claims ~~events~~may ~~leading~~include upallegations ~~to,~~of ~~during~~defects orin asmanufacturing, adefects ~~result~~in ofdesign, ~~clinical~~a ~~trials~~failure ~~that~~to ~~could~~warn ~~delay~~of ordangers ~~prevent~~inherent in the ~~initiation~~product, ornegligence, ~~completion~~strict ofliability or a ~~clinical~~breach ~~trial~~of orwarranties. ~~our~~Claims ~~ability~~could toalso ~~receive~~be ~~marketing~~asserted ~~approval~~under orstate ~~commercialize~~consumer ~~our~~protection ~~product candidates, including:~~acts.

~~we may be unable to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to obtain regulatory authorizations to commence a clinical trial;~~48

weTable ~~may~~of ~~experience issues in reaching a consensus with regulatory authorities on trial design;~~Contents

~~regulators~~Although orthe ~~institutional~~clinical ~~review~~trial ~~boards~~process is designed to identify and assess potential side effects, orit ~~IRBs~~is always possible that a drug, even after regulatory approval, may exhibit unforeseen side effects. If any of our product candidates were to cause adverse side effects during clinical trials or ~~ethics~~after ~~committees~~approval thereof, we may be exposed to substantial liabilities. Physicians and patients may not ~~authorize~~comply uswith orany warnings that identify known potential adverse effects and patients who should not use our ~~investigators~~product candidates. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to ~~commence~~limit aor ~~clinical~~cease ~~trial~~the development or ~~conduct~~commercialization aof ~~clinical~~our ~~trial~~product atcandidates or any products for which we may have received marketing approval. Even a ~~prospective~~successful ~~trial~~defense ~~site;~~would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

•

wedelay ~~may experience delays in reaching,~~ or ~~fail~~termination ~~to reach, agreement on acceptable terms with prospective trial sites and prospective contract research organizations, or CROs, the terms~~ of ~~which~~clinical ~~can be subject to extensive negotiation and may vary significantly among different CROs and trial sites~~trials;

•

~~clinical~~decreased ~~trial~~demand ~~sites~~for ~~may~~any ~~deviate~~product ~~from~~candidates ~~a trial protocol~~ or ~~drop~~products ~~out~~that ofwe amay ~~trial or fail to conduct the trial in accordance with regulatory requirements~~develop;

•

~~the~~injury ~~number~~to ~~of subjects required for clinical trials of~~ our ~~product~~reputation ~~candidates~~and ~~may~~significant benegative ~~larger~~media ~~than~~and wesocial ~~anticipate,~~media ~~or subjects may fail to enroll or remain in clinical trials at the rate we expect~~attention;

•

~~subjects~~withdrawal ~~that~~of ~~enroll in our studies may misrepresent their eligibility or may otherwise not comply with the~~ clinical trial ~~protocol,~~participants ~~resulting~~or difficulties in ~~the~~recruiting ~~need~~new ~~to drop the subject from the~~ trial, ~~increase the needed enrollment size for the clinical trial or extend its duration~~participants;

•

~~subjects~~initiation ~~may~~of ~~choose~~investigations anby ~~alternative treatment for the indication for which we are developing our product candidates, or participate in competing clinical trials~~regulators;

•

~~subjects~~costs ~~may~~to ~~experience~~defend ~~severe~~ or ~~unexpected~~settle ~~treatment-~~the related ~~adverse effects~~litigation;

•

~~clinical~~a ~~trials~~diversion of ~~our~~management’s ~~product~~time ~~candidates~~and ~~may~~our ~~produce unfavorable, inconclusive, or clinically insignificant results~~resources;

•

wesubstantial ~~may~~monetary ~~decide~~awards to, ~~or regulators, or IRBs, or ethics committees may require us to, make changes to a clinical~~ trial ~~protocol~~participants or ~~conduct additional preclinical studies or clinical trials, or we may decide to abandon product development programs~~patients;

•

weproduct ~~may~~recalls, ~~need~~withdrawals toor ~~add~~labeling, ~~new~~marketing or ~~additional~~promotional ~~clinical trial sites~~restrictions;

•

~~our~~significant ~~third-party~~negative ~~contractors,~~financial including those manufacturing our product candidates or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at allimpact; and

•

wethe ~~may~~inability ~~experience~~to ~~manufacturing~~commercialize ~~delays, and~~ any ~~changes~~of toour ~~manufacturing~~product ~~processes~~candidates, orif ~~third-party contractors that may be necessary or desired could result in other delays;~~approved.

49Although we will seek to procure and maintain sufficient product liability insurance coverage, our current insurance coverage and any insurance coverage we obtain in the future may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage each time we commence a clinical trial and if we successfully commercialize any product candidate. As the expense of insurance coverage is increasing, we may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, our assets may not be sufficient to cover such claims and our business operations could be materially harmed.

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we or our third-party contractors may experience delays due to complications resulting from the impact of public health crises, including epidemics and pandemics, or geopolitical tensions;

the cost of preclinical testing and studies and clinical trials of any product candidates may be greater than we anticipate or greater than our available financial resources;

reports may arise from preclinical or clinical testing of other cancer therapies that raise safety or efficacy concerns about our product candidates; and

regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate.

incur additional unplanned costs;

be required to suspend or terminate ongoing clinical trials;

be delayed in obtaining marketing approval, if at all;

obtain approval for indications or patient populations that are not as broad as intended or desired;

obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

be subject to additional post-marketing testing or other requirements;

be required to perform additional clinical trials to support approval;

have regulatory authorities withdraw, or suspend, their approval of the drug or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy, or REMS;

be subject to the addition of labeling statements, such as warnings or contraindications;

have the product removed from the market after obtaining marketing approval;

be subject to lawsuits; or

experience damage to our reputation.

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Our failure to successfully initiate and complete clinical trials of our product candidates and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market any of our product candidates would significantly harm our business. We cannot guarantee that our clinical trials will begin as planned or be completed on schedule, if at all, or that we will not need to restructure our clinical trials. Significant preclinical study or clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates, which may harm our business and results of operations. In addition, many of the factors that cause, or lead to, delays of clinical trials may ultimately lead to the denial of regulatory approval of our product candidates.

If we experience delays or difficulties in the enrollment of patients in clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

the severity of the disease under investigation;

the patient eligibility and the inclusion and exclusion criteria defined in the protocol;

AEs in our clinical trials and in third-party clinical trials of agents similar to our product candidates;

the size and health of the patient population required for analysis of the trial’s primary endpoints;

the proximity of patients to trial sites;

the design of the trial;

our ability to recruit clinical trial investigators with the appropriate competencies and experience;

our ability to obtain and maintain patient consents;

our ability to monitor patients adequately during and after treatment;

the risk that patients enrolled in clinical trials will drop out of the trials before completion; and

factors we may not be able to control that may limit the availability of patients, principal investigators or staff or clinical sites, such as public health crises, including epidemics and pandemics.

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Undesirable or unexpectedly severe side effects caused by our product candidates could cause us to interrupt, delay or halt preclinical studies or could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. Traditional cytokine therapies and checkpoint inhibitors have long been associated with severe toxicities, which can be life-threatening or fatal, that have resulted in the need to dose-reduce, dose-interrupt and discontinue many patients from treatment. As has been the case with traditional immuno-oncology, or I-O, treatments for cancer, it is possible that there may be severe side effects associated with the use of our current or future product candidates. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of these or other side effects. In such an event, our clinical trials could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications. Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.

regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;

we may be required to create a medication guide outlining the risks of such side effects for distribution to patients;

we may be required to change the way such product candidates are distributed or administered, conduct additional clinical trials or change the labeling of the product candidates;

we may be subject to regulatory investigations and government enforcement actions;

regulatory authorities may withdraw or limit their approval of such product candidates;

we may decide to remove such product candidates from the marketplace;

we could be sued and held liable for injury caused to individuals exposed to or taking our product candidates; and

we may suffer reputational harm.

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result, interim and preliminary data should be viewed with caution until the final data are available. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects.

We intend to develop our clinical-stage product candidates, and likely other future product candidates, in combination with third-party cancer drugs, which may be either approved or unapproved. For example, we are currently evaluating vilastobart in combination with atezolizumab (Tecentriq®) in Phase 1 combination dose escalation in patients with advanced solid tumors and in a Phase 2 clinical trial evaluating the combination in patients with metastatic MSS mCRC. Our ability to develop and ultimately commercialize our current product candidates, and any future product candidates, used in combination with third-party drugs will depend on our ability to access such drugs on commercially reasonable terms for clinical trials and their availability for use with our commercialized product, if approved. We cannot be certain that current or potential future commercial relationships will provide us with a steady supply of such drugs on commercially reasonable terms or at all. Any failure to maintain or enter into new successful commercial relationships, or the expense of purchasing such third-party drugs in the market, may delay our development timelines, increase our costs and jeopardize our ability to develop our current product candidates and any future product candidates as commercially viable therapies. If any of these occur, our business, financial condition, operating results or prospects may be materially harmed.

Moreover, the development of product candidates for use in combination with another product or product candidate may present challenges that are not faced for single agent product candidates. For example, our plans to evaluate current or future product candidates in combination with other agents may result in AEs based on the combination therapy that may negatively impact the reported safety profile of the monotherapy in clinical trials. In addition, the FDA or comparable foreign regulatory authorities may require us to use more complex clinical trial designs in order to evaluate the contribution of each product and product candidate to any observed effects. It is possible that the results of such trials could show that any positive previous trial results are attributable to the third-party drug and not our product candidate. Developments related to the third-party drug may also impact our clinical trials for the combination therapy as well as our commercial prospects should we receive regulatory approval. Such developments may include changes to the third-party drug’s safety or efficacy profile, changes to the availability of the third-party drug, quality, and manufacturing and supply issues with respect to the third-party drug.

If we are able to obtain marketing approval, the FDA or comparable foreign regulatory authorities may require that products used in conjunction with each other be cross labeled for combined use. To the extent that we do not have rights to the third-party drug, this may require us to work with such third party to satisfy such a requirement. We would also continue to be subject to the risks that the FDA or comparable foreign regulatory authorities could revoke approval of the third-party drug used in combination with our product candidate or that safety, efficacy, manufacturing or supply issues could arise with such drug. Similarly, if the third-party drugs we use in combination with our product candidates are replaced as the standard of care for the indications we choose for any of our product candidates, the FDA or comparable foreign regulatory authorities may require us to conduct additional clinical trials. The occurrence of any of these risks could result in our own products, if approved, being removed from the market or being less successful commercially.

We may not be successful in our efforts to use our platform technology to enable the development of a pipeline of tumor-activated product candidates.

A key element of our strategy is to use our novel platform technology to engineer and develop tumor-activated molecules with the potential to trigger anti-tumor immunity with minimal systemic toxicity in order to advance a pipeline of product candidates. We may not be able to continue to identify and develop novel I-O therapies. Even if we are successful in continuing to advance our pipeline, the potential product candidates that we identify may not be suitable for clinical development. For example, potential product candidates may be shown to have harmful side effects or other characteristics that indicate that they are unlikely to or will not be drugs that will receive marketing approval and achieve market acceptance. If we do not successfully develop and commercialize product candidates based upon our platform approach or take longer to do so than anticipated, we will not or may not be able to obtain drug revenues in future periods, which likely would result in significant harm to our financial position and adversely affect our stock price.

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We may not be successful in our efforts to identify or discover additional product candidates.

Although we intend to explore other therapeutic opportunities in addition to the product candidates that we are currently developing, we may fail to identify or discover viable new product candidates for clinical development for a number of reasons. If we fail to identify additional potential product candidates, our business could be materially harmed.

Research programs to pursue the development of our existing and planned product candidates for additional indications and to identify new product candidates and disease targets require substantial technical, financial and human resources whether or not they are ultimately successful. We may in the future rely on third parties for certain research, and we will not have complete control over their performance and ability to successfully develop product candidates. Our research programs may initially show promise in identifying potential indications and/or product candidates, yet fail to yield results for clinical development for a number of reasons, including:

the research methodology used may not be successful in identifying potential indications and/or product candidates;

potential product candidates may, after further study, be shown to have harmful adverse effects or other characteristics that indicate they are unlikely to be effective drugs; and

it may take greater human and financial resources than we will possess to identify and advance additional therapeutic opportunities for our product candidates or to develop suitable potential product candidates through internal research programs, thereby limiting our ability to develop, diversify and expand our product portfolio.

Accordingly, there can be no assurance that we will ever be able to identify additional therapeutic opportunities for our current product candidates or to develop suitable additional product candidates through internal research programs, which could materially adversely affect our future growth and prospects.

The success of our business depends primarily upon our ability to discover, develop and commercialize products based on our technological approaches. While we have had favorable preclinical and early clinical results related to our clinical-stage product candidates, vilastobart and efarindodekin alfa, we have not yet succeeded and may not succeed in demonstrating efficacy and safety for any product candidates in current or future clinical trials or in obtaining marketing approval thereafter. We rely on matrix metalloproteases, or MMPs, to activate our molecules within the tumor microenvironment. If MMP activity in human tumors is not sufficient to cleave the masking protein domain, the potential efficacy of our product candidates would be limited. We have no assurance that our product candidates will successfully progress through clinical development and ultimately marketing approval. We have invested substantially all of our efforts and financial resources in developing our initial product candidates and our future success is highly dependent on the outcome of our ongoing clinical trials and the successful development of our technology and product candidates.

In addition, the clinical trial requirements of the FDA and other regulatory agencies and the criteria these regulators use to determine the safety and efficacy of a product candidate may vary according to the type, complexity, novelty and intended use and market of the potential products. The regulatory approval process for novel product candidates can be more expensive and take longer than for other, better known or extensively studied pharmaceutical or other product candidates. As a result, we may face a greater regulatory burden to initiate clinical trials or to obtain regulatory approval of our product candidates as compared to product candidates based on more established technology. In addition, any product candidates for which we may be able to obtain marketing approval may be subject to extensive post-approval regulatory requirements, including requirements pertaining to manufacturing, distribution and promotion. We may need to devote significant time and resources to comply with these requirements.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

We have chosen to initially develop each of our clinical-stage product candidates for the treatment of various solid tumor types. Nevertheless, our development efforts will be limited to a small number of cancer types, and we may forego or delay pursuit of opportunities in other cancer types that may prove to have greater potential. Likewise, we may forego or delay the pursuit of opportunities with other potential product candidates that may prove to have greater commercial potential.

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In addition, our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any viable product candidates. Similarly, if we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other similar arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to the product candidate.

We may become exposed to costly and damaging liability claims, either when testing our product candidates in the clinic or following commercial sale, and any product liability insurance we may obtain may not cover all damages from such claims.

We are exposed to potential product liability risks that are inherent in the research, development, manufacturing, marketing and use of biopharmaceutical products. The use of product candidates by us in clinical trials, and any sale of approved products in the future, may expose us to liability claims. For example, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical trials, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts.

Although the clinical trial process is designed to identify and assess potential side effects, it is always possible that a drug, even after regulatory approval, may exhibit unforeseen side effects. If any of our product candidates were to cause adverse side effects during clinical trials or after approval thereof, we may be exposed to substantial liabilities. Physicians and patients may not comply with any warnings that identify known potential adverse effects and patients who should not use our product candidates. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit or cease the development or commercialization of our product candidates or any products for which we may have received marketing approval. Even a successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

delay or termination of clinical trials;

decreased demand for any product candidates or products that we may develop;

injury to our reputation and significant negative media and social media attention;

withdrawal of clinical trial participants or difficulties in recruiting new trial participants;

initiation of investigations by regulators;

costs to defend or settle the related litigation;

a diversion of management’s time and our resources;

substantial monetary awards to trial participants or patients;

product recalls, withdrawals or labeling, marketing or promotional restrictions;

significant negative financial impact; and

the inability to commercialize any of our product candidates, if approved.

Although we will seek to procure and maintain sufficient product liability insurance coverage, our current insurance coverage and any insurance coverage we obtain in the future may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage each time we commence a clinical trial and if we successfully commercialize any product candidate. As the expense of insurance coverage is increasing, we may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, our assets may not be sufficient to cover such claims and our business operations could be materially harmed.

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Risks Relating to Manufacturing and Supply

Manufacturing biologics is complex, and we may experience manufacturing problems that result in delays in our development or commercialization programs.

The manufacturing of biologics is complex and difficult and we may experience production issues or interruptions in supply for our product candidates, including variability of raw material, consumable or starting material quality, cell line viability, productivity or stability issues, shortages of any kind, shipping, distribution, storage and supply chain failures, media contamination, equipment malfunctions or failures, operator errors, facility contamination, labor problems, quality system and regulatory inspection failures, adverse impacts from current or future trade sanctions, tariffs or similar actions, natural disasters, disruption in utility services, terrorist activities, or acts of god that are beyond our control or the control of our third-party contract development and manufacturing organizations, or CDMOs.

Given the nature of biologics manufacturing, there is a risk of contamination during manufacturing. Any contamination could materially harm our ability to produce product candidates on schedule and could harm our results of operations and cause reputational damage. In the event that raw materials required in our manufacturing process need to be derived from biologic sources, they may be difficult to procure and may be subject to contamination or recall.

Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects, out-of-specification analytical results or manufacturing failures that result in lot failures, product recalls, product liability claims, insufficient inventory or potentially delay progression of our preclinical or clinical development of any product candidates we may develop. If we successfully develop product candidates, we may encounter problems achieving adequate quantities and quality that meet FDA, European Medicines Agency, or EMA, or other comparable applicable foreign standards or specifications with consistent and acceptable production yields and costs. The ability to scale our manufacturing and maintain the manufacturing process at the same levels of quality and efficiency that we are currently manufacturing is yet to be tested. If we or our third-party CDMO is unable to scale our manufacturing and meet the same levels of quality and efficiency, or provide sufficient manufacturing campaign slots to generate materials, we may not be able to supply the required number of doses for clinical trials or commercial supply. A material shortage, contamination event or manufacturing failure in the manufacture of any product candidate we may develop or other adverse impact or disruption in the commercial manufacturing or the production of clinical material could materially harm our development timelines and our business, financial condition, results of operations and prospects.

We face risks related to our reliance on our current and any future CDMOs. For example, we and our CDMO are subject to significant regulation with respect to manufacturing our products. The manufacturing facilities of the CDMO on which we rely may not continue to meet regulatory requirements, may have limited capacity or may experience interruptions in supply, any of which could adversely affect our development and commercialization plans for our product candidates. All entities involved in the preparation and storage of therapeutics for clinical trials or commercial sale, including any CDMOs of any product candidates we may develop, are subject to extensive regulation. Components of a finished therapeutic product approved for commercial sale or used in clinical trials must be manufactured in accordance with current Good Manufacturing Practices, or cGMP. These regulations govern manufacturing processes and procedures (including record keeping) and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Poor control of production processes can lead to the introduction of adventitious agents or other contaminants or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing. We, in partnership with our CDMO, must supply all necessary documentation in support of an IND for clinical product, and later in support of a BLA for any potential commercial product, on a timely basis and must adhere to the FDA’s and EMA’s current Good Laboratory Practices and cGMP regulations enforced through the applicable regulatory authority’s facilities inspection program. Our facilities and quality systems and the facilities and quality systems of our CDMO must pass a pre-approval inspection, or PAI, to confirm validity of the information presented in the BLA and to confirm the capability of the facility to manufacture our product in compliance with the applicable regulations. The PAI is a condition of regulatory approval of any product candidates we may develop or any of our other potential products. If our or our CDMO’s quality systems or facilities involved with the preparation of our product candidates do not pass the PAI, FDA approval of such product candidates will not be granted. 49

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~~regulations~~inventory ~~occurs~~or ~~independent~~potentially ofdelay ~~such~~progression anof ~~inspection,~~our wepreclinical or ~~the~~clinical ~~relevant~~development ~~regulatory~~of ~~authority~~any product candidates we may ~~require~~develop. ~~remedial~~If ~~measures~~we ~~that~~successfully develop product candidates, we may beencounter ~~costly~~problems achieving adequate quantities and/ quality that meet FDA, European Medicines Agency, or ~~time-consuming~~EMA, ~~for~~or usother comparable applicable foreign standards or aspecifications ~~third~~with ~~party~~consistent toand ~~implement~~acceptable production yields and ~~that~~costs. ~~may~~The ~~include~~ability to scale our manufacturing and maintain the ~~temporary~~manufacturing orprocess ~~permanent~~at ~~suspension~~the same levels of aquality ~~clinical~~and ~~trial~~efficiency orthat ~~commercial~~we ~~sales,~~are ~~the~~currently ~~temporary~~manufacturing is yet to be tested. If we or ~~permanent~~our ~~closure~~third-party CDMO is unable to scale our manufacturing and meet the same levels of aquality ~~facility~~and efficiency, or ~~other~~provide ~~remedial~~sufficient ~~measures~~manufacturing ~~that~~campaign slots to generate materials, we may ~~delay~~not orbe ~~disrupt~~able to supply the ~~manufacture~~required number of doses for clinical trials or ~~release~~commercial supply. A material shortage, contamination event or manufacturing failure in the manufacture of ~~our~~any product ~~candidates~~candidate we may develop or other ~~potential~~adverse ~~products.~~impact ~~Any~~or ~~such~~disruption ~~remedial~~in ~~measures~~the ~~imposed~~commercial ~~upon~~manufacturing us or ~~third~~the ~~parties~~production ~~with~~of ~~whom~~clinical wematerial ~~contract~~ could materially harm our development timelines and our business, financial condition, results of operations and prospects.

In addition, the regulatory authorities may, at any time, conduct a routine or for-cause inspection of a manufacturing facility involved with the preparation of our product candidates, which inspection is related to other products manufactured at the site or the associated quality systems, for compliance with the regulations applicable to the activities being conducted. The regulatory authorities also may, at any time following approval of a product for sale, inspect our facilities or the manufacturing facilities of our CDMOs. If any such inspection identifies a failure to comply with applicable regulations, or if a violation of our product specifications or applicable regulations occurs independent of such an inspection, we or the relevant regulatory authority may require remedial measures that may be costly and/or time-consuming for us or a third party to implement and that may include the temporary or permanent suspension of a clinical trial or commercial sales, the temporary or permanent closure of a facility, or other remedial measures that may delay or disrupt the manufacture or release of our product candidates or other potential products. Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business.

If we or any CDMO with which we contract for manufacturing and supply fails to maintain regulatory compliance, the FDA can impose regulatory sanctions including, among other things, a clinical hold, refusal to approve a pending application for a new drug product or biologic product, revocation of a pre-existing approval, or an import alert. As a result, our business, financial condition and results of operations may be materially harmed.

Currently, we depend on WuXi Biologics (Hong Kong) Limited, or WuXi Biologics, for developing the manufacturing processes required to supply our product candidates. We cannot ensure that this manufacturer will remain in business or have sufficient capacity or supply to meet our needs. Our use of a single manufacturer exposes us to several risks, including price increases or manufacturing delays beyond our control. WuXi Biologics is based in and has significant operations in China, where our product candidates are manufactured, which subjects us to additional risks including those related to U.S. export control laws, potential sanctions or other trade restrictions imposed by the U.S. government. Moreover, reliance on third-party manufacturers generally entails risks to which we would not be subject if we manufactured the product candidates ourselves, including:

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restrictions imposed by the U.S. government. Moreover, reliance on third-party manufacturers generally entails risks to which we would not be subject if we manufactured the product candidates ourselves, including:

•

the inability to negotiate manufacturing agreements with third parties under commercially reasonable terms or at all, particularly if they are affiliated with our competitors;

•

reduced control as a result of using third-party manufacturers for all aspects of manufacturing activities, particularly if they are under contract with our competitors;

•

termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;

•

disruptions to the operations of our third-party manufacturers or suppliers caused by conditions unrelated to our business or operations, including geopolitical tensions or restrictions, such as export controls or sanctions, or the bankruptcy of the manufacturer or supplier;

•

the inability to import or obtain components or materials from alternate sources at acceptable prices or with acceptable quality in a timely manner; and

•

substantial delays or difficulties related to the establishment of replacement manufacturers who meet regulatory requirements.

Any of these events could lead to clinical trial delays or failure to obtain regulatory approval or impact our ability to successfully commercialize future products. Some of these events could be the basis for FDA action, including injunction, recall, seizure, import alert, or total or partial suspension of production.

Additionally, if supply from one approved manufacturer is interrupted, such as could be the case with our current CDMO, WuXi Biologics, there could be a significant disruption in supply. While we believe there are alternate manufacturers who can provide the manufacturing processes required to develop and manufacture our product candidates, if we have to switch to a replacement manufacturer, the manufacture and delivery of our product candidates could be interrupted for an extended period, which could adversely affect our business. Furthermore, an alternative manufacturer must be able to demonstrate successful technology transfer of the manufacturing process and associated assays, and, to do so, may need to modify the manufacturing process required to develop our product candidates, and the alternative manufacturer would need to be qualified through additional regulatory filings, all of which could result in further delay and significant costs. The regulatory agencies may also require additional studies or trials if a new manufacturer is relied upon for clinical or commercial production. Switching manufacturers may involve substantial costs and is likely to result in a delay in our desired clinical and commercial timelines.

These factors could cause the delay of clinical trials, regulatory submissions, required approvals or commercialization of our product candidates, cause us to incur higher costs and prevent us from commercializing our products successfully. Furthermore, if our suppliers fail to meet contractual requirements, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical trials may be delayed, or we could lose potential revenue or market share with respect to any product that has received marketing approval.

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substantially equivalent cost, our clinical trials may be delayed, or we could lose potential revenue or market share with respect to any product that has received marketing approval.

Certain of our research and development and manufacturing activities take place in China through WuXi Biologics. A significant disruption in our ability to rely on WuXi Biologics could materially adversely affect our business, financial condition and results of operations.

We have relied on WuXi Biologics in China to manufacture and supply certain raw materials used in our product candidates, and we expect to continue to use WuXi Biologics as our CDMO for such purposes. A natural disaster, epidemic or pandemic, such as the COVID‑19 pandemic, trade war, political unrest, economic conditions, changes in legislation, including the passage of the People’s Republic of China Biosecurity law, which became effective on April 15, 2021, and subsequent legislation that China or the U.S. may adopt in the future, or other events in China could disrupt our ability to continue to rely upon CROs, CDMOs, collaborators, manufacturers or other third parties with whom we conduct business now or in the future. ~~Any~~For ~~disruption in China or the U.S. that significantly impacts such third parties~~example, ~~including services provided by CROs for our research and development programs, or our manufacturers’ ability to produce and export raw or manufactured materials~~ in ~~adequate~~December ~~quantities to meet our needs~~2025, ~~could~~the ~~impair~~BIOSECURE ~~our~~Act ~~ability~~was tosigned ~~operate~~into ~~our~~law ~~business~~as onpart aof ~~day-to-day basis and impede, delay, limit or prevent~~ the ~~research,~~Fiscal ~~development~~Year or2026 ~~commercialization~~National ofDefense ~~our~~Authorization ~~current and future products or product candidates~~Act. InUnder ~~addition,~~the ~~for~~BIOSECURE ~~any activities conducted in China~~Act, ~~we are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies of the~~ U.S. orgovernment ~~Chinese~~agencies ~~governments,~~cannot ~~political~~(i) ~~unrest~~buy or ~~unstable~~obtain ~~economic~~biotechnology orequipment ~~geopolitical conditions, including sanctions in China~~ or ~~against~~services ~~certain~~provided ~~Chinese companies; changes in U.S. export laws or the imposition~~ by ~~the~~biotechnology ~~U.S.~~companies of ~~trade barriers; sanctions; limitations on uses of U.S. government executive agency contract~~concern, ~~grant~~ or ~~loan funds~~BCCs; or(ii) ~~other~~enter ~~restrictions on doing business with certain Chinese companies~~into, ~~including WuXi Biologics~~extend, ~~which~~or ~~could~~renew ~~have~~ a ~~material~~contract ~~adverse~~with ~~effect~~any onentity ~~our~~using ~~business.~~biotechnology ~~Additionally,~~equipment weor ~~may be exposed to fluctuations in the value of the local currency in China for goods and~~ services. ~~Our~~provided ~~costs~~by ~~for~~a ~~any~~BCC ofto ~~these~~perform ~~services or activities could also increase as~~ a ~~result~~government ofcontract; ~~future~~or ~~appreciation~~(iii) ofexpend ~~the~~loan ~~local currency in China~~ or ~~increased~~grant ~~labor~~funds ~~costs if the demand~~ for ~~skilled~~biotechnology ~~laborers~~equipment ~~increases and/~~or ~~the~~services ~~availability~~provided ofby ~~skilled~~a ~~labor declines in China.~~

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BCC, whether directly or through a loan or grant recipient. The BIOSECURE Act does not name specific companies as BCCs but treats any company on the Department of Defense 1260H list of “Chinese military companies” as a BCC. The 1260H list was updated by the Department of Defense in January 2024 and January 2025. In February 2026, the Department of Defense published an updated list, which included WuXi AppTec, but then abruptly withdrew the list. The implications of this action remain unclear.

Any disruption in China or the U.S. that significantly impacts WuXi Biologics or other third parties with whom we conduct business now or in the future, including CROs that provide services for our research and development programs, or manufacturers that produce and export raw or manufactured materials in adequate quantities to meet our needs, could impair our ability to operate our business on a day-to-day basis and impede, delay, limit or prevent the research, development or commercialization of our current and future products or product candidates. In addition, for any activities conducted in China, we are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies of the U.S. or Chinese governments, political unrest or unstable economic or geopolitical conditions, including sanctions in China or against certain Chinese companies; changes in U.S. export laws or the imposition by the U.S. of trade barriers; sanctions; limitations on uses of U.S. government executive agency contract, grant or loan funds; or other restrictions on doing business with certain Chinese companies, including WuXi Biologics, which could have a material adverse effect on our business. Additionally, we may be exposed to fluctuations in the value of the local currency in China for goods and services. Our costs for any of these services or activities could also increase as a result of future appreciation of the local currency in China or increased labor costs if the demand for skilled laborers increases and/or the availability of skilled labor declines in China.

If we or any CDMOs and suppliers we engage fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

We and any CDMOs and suppliers we engage are subject to numerous federal, state and local environmental, health, and safety laws, regulations and permitting requirements, including those governing laboratory procedures; the generation, handling, use, storage, treatment and disposal of biological or hazardous and regulated materials and wastes; the emission and discharge of hazardous materials into the ground, air and water; and employee health and safety. Our operations involve the use of hazardous and flammable materials, including chemicals and biological and radioactive materials. Our operations also produce hazardous waste. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. Under certain environmental laws, we could be held responsible for costs relating to any contamination at third-party facilities. We also could incur significant costs associated with civil or criminal fines and penalties.

Compliance with applicable environmental laws and regulations may be expensive, and current or future environmental laws and regulations may impair our research and product development efforts. In addition, we cannot entirely eliminate the risk of accidental injury or contamination from these materials or wastes. Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not carry specific biological or hazardous waste insurance coverage, and our property, casualty and general liability insurance policies specifically exclude coverage for damages and fines arising from biological or hazardous waste exposure or contamination. Accordingly, in the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources, and our clinical trials or regulatory approvals could be suspended, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws, regulations and permitting requirements. These current or future laws, regulations and permitting requirements may impair our research, development or production efforts. Failure to comply with these laws, regulations and permitting requirements also may result in substantial fines, penalties or other sanctions or business disruption, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

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substantial fines, penalties or other sanctions or business disruption, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Any third-party CDMOs and suppliers we engage will also be subject to these and other environmental, health and safety laws and regulations. Liabilities they incur pursuant to these laws and regulations could result in significant costs or an interruption in operations, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

WeTable expect to rely on CROs and research and clinical trial sites to ensure our IND-enabling studies and clinical trials are conducted properly and on time, and we expect to rely in the future on CROs for additional research programs. While we will have agreements governing their activities, we will have limited influence over their actual performance. We will control only certain aspects of our CROs’ activities. Nevertheless, we will be responsible for ensuring that each of these studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities.Contents

We expect to rely on third parties to conduct, supervise and monitor IND-enabling studies and clinical trials, and to perform other functions for us, and if these third parties perform in an unsatisfactory manner, it may harm our business, reputation and results of operations.

We expect to rely on third parties, including but not limited to, CROs and research and clinical trial sites to ensure our IND-enabling studies and clinical trials are conducted properly and on time, and we expect to rely in the future on third-party vendors for additional research programs as well as other functions. While we will have agreements governing their activities, we will have limited influence over their actual performance. We will control only certain aspects of our third-party vendors’ activities. Nevertheless, we will be responsible for ensuring that each of these studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on the third-party vendors does not relieve us of our regulatory responsibilities.

We and our CROs will be required to comply with the FDA’s Good Clinical Practices, or GCPs, for conducting, recording and reporting the results of IND-enabling studies and clinical trials to assure that the data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants are protected. The FDA enforces these GCPs through periodic inspections of study sponsors, principal investigators and clinical trial sites. If we or our CROs fail to comply with applicable GCPs, the preclinical and clinical data generated in our studies may be deemed unreliable and the FDA may require us to perform additional studies before approving any marketing applications. Upon inspection, the FDA may determine that our studies did not comply with GCPs.

Our CROs and other third-party vendors are not our employees, and we are therefore unable to directly monitor whether or not they devote sufficient time and resources to our clinical and nonclinical programs or other functions. These ~~CROs~~third-party vendors may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities that could harm our competitive position. If our ~~CROs~~third-party vendors do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols or regulatory requirements, or for any other reasons, our studies may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any product candidates we may develop. As a result, our financial results and commercial prospects would be harmed, our costs could increase, and our ability to generate revenues could be delayed.

We have entered into, and may in the future seek to enter into, licenses, collaborations or similar arrangements with third parties for the research, development and commercialization of certain of our current or future product candidates. If any such arrangements are not successful, we may not be able to capitalize on the market potential of those product candidates.

In March 2024, our wholly -owned subsidiary, Xilio Development, Inc., or Xilio Development, entered into a license agreement with Gilead, pursuant to which Gilead was granted an exclusive global license to develop and commercialize efarindodekin alfa, our ~~tumor~~masked ~~activated~~ IL-12, and other specified molecules directed toward IL-12. In February 2025, Xilio Development entered into a collaboration, license and option agreement with AbbVie, pursuant to which AbbVie was granted (i) an exclusive option for (a) an initial program to discover, develop and commercialize masked T cell engager molecules for an agreed upon initial target and backup target and (b) subject to the terms of the agreement, up to two additional programs to discover, develop, and commercialize masked T cell engager molecules for an initial target and backup target determined at the time of program initiation and (ii) an exclusive license to develop and commercialize a masked antibody-based immunotherapy. We may in the future seek third-party collaborators or licensors for the research, development and commercialization of other current or future product candidates. With respect to our agreements with Gilead and AbbVie, and what we expect will be the case with any future collaboration agreements we enter into, we have and would likely have limited control over whether such collaborators pursue the development of our product candidates or the amount and timing of resources that our collaborators dedicate to the development or commercialization of our product candidates that we seek to develop with them. For example, under the license agreement with Gilead, if Gilead exercises its right to transition responsibilities for the development and commercialization of efarindodekin alfa and the rest of our IL-12 program, it will have sole decision-making authority with respect to the continued development and future commercialization of our IL-12 program and may elect to prioritize other assets that it believes are more competitive, or it may exercise its right to terminate the license and return the licensed IL-12 program assets to us. Similarly, subject to limited exceptions, AbbVie has sole decision-making authority with respect to the development and commercialization of the masked antibody-based immunotherapy program. With respect to any T cell engager program for which AbbVie exercises its option, AbbVie will have sole decision-making authority with respect to the continued development and future commercialization of such option program and may elect to prioritize other assets that it believes are more competitive, or it may exercise its right to terminate the license and return the licensed T cell engager program assets to us. As a result, there can be no assurances that any of the programs covered by

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that it believes are more competitive, or it may exercise its right to terminate the license and return the licensed IL-12 program assets to us. Similarly, subject to limited exceptions, AbbVie has sole decision-making authority with respect to the development and commercialization of the masked antibody-based immunotherapy program. With respect to any T cell engager program for which AbbVie exercises its option, AbbVie will have sole decision-making authority with respect to the continued development and future commercialization of such option program and may elect to prioritize other assets that it believes are more competitive, or it may exercise its right to terminate the license and return the licensed T cell engager program assets to us. As a result, there can be no assurances that any of the programs covered by our existing or future collaborations or licenses will be developed further or reach commercialization. Further, our ability to generate revenues from these existing and future arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements. We cannot predict the success of any collaboration that we enter into.

Collaborations, licenses or similar arrangements involving our research programs or any product candidates currently pose, and will continue to pose, numerous risks to us, including the following:

•

collaborators or licensors have significant discretion in determining the efforts and resources that they will apply to these arrangements;

•

collaborators or licensors may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in such third party’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities;

•

collaborators or licensors may delay programs, preclinical studies or clinical trials, provide insufficient funding for programs, preclinical studies or clinical trials, stop a preclinical study or clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

•

collaborators or licensors could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;

•

collaborators or licenses may be acquired by a third party having competitive products or different priorities;

•

collaborators or licensors with marketing and distribution rights to one or more product candidates may not commit sufficient resources to the marketing and distribution of such product candidate(s);

•

collaborators or licensors may not properly obtain, maintain, enforce or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation;

•

disputes may arise between the collaborators or licensors and us that result in the delay or termination of the research, development, or commercialization of our product candidates or any of our product candidates or that result in costly litigation or arbitration that diverts management attention and resources or that jeopardize or invalidate our intellectual property or proprietary information;

•

we may lose certain valuable rights under certain circumstances, including if we undergo a change of control;

•

collaborations or licenses may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates; and

•

collaborations or license agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all. If a present or future collaborator or licensor of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished or terminated.

If our current or future collaborations, licenses or similar transactions do not result in the successful development and commercialization of product candidates, including if one of our current or future collaborators or licensors terminates its agreement with us, we may not receive any future payments for which we might otherwise be eligible under such agreement or we may incur significant costs in re-establishing the development and manufacturing of such product candidates. If we do not receive the funding we expect under these agreements, our development of product candidates could be delayed, and we may need additional resources to develop such product candidates. In addition, if one of our collaborators terminates its agreement with us, we may find it more difficult to find a suitable replacement collaborator or licensor or for us to attract new collaborators or licensors, and our development programs may be delayed or the perception of us in the business and financial communities could be adversely affected. All of the risks relating to product

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candidates. In addition, if one of our collaborators terminates its agreement with us, we may find it more difficult to find a suitable replacement collaborator or licensor or for us to attract new collaborators or licensors, and our development ~~programs may be delayed or the perception of us in the business and financial communities could be adversely affected. All of the risks relating to product development~~, regulatory approval and commercialization described in this ~~Quarterly~~Annual Report on Form 10-QK apply to the activities of our collaborators or licensors.

These relationships, or those like them, may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business. In addition, we could face significant competition in seeking appropriate collaborators, and the negotiation process is time-consuming and complex. Our ability to reach a definitive collaboration or license agreement with future partners will depend, among other things, upon our assessment of the resources and expertise of such third-party collaborator or licensor and the terms and conditions of the proposed collaboration or license. Further, if we license rights for use in any product candidates we or our collaborators may develop, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture.

If we are not able to establish collaborations on commercially reasonable terms, we may have to alter our development and commercialization plans.

Our product development and research programs and the potential commercialization of any product candidates we may develop will require substantial additional cash to fund expenses. For some of the product candidates we may develop, we have decided and may in the future decide to collaborate with other pharmaceutical and biotechnology companies for the development and potential commercialization of those product candidates.

We face significant competition in seeking appropriate collaborators. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration, and the proposed collaborator’s evaluation of a number of factors. Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA, the EMA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge, and industry and market conditions generally. The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us.

Collaborations are complex and time-consuming to negotiate and document. In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators.

We may not be able to negotiate future collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of the product candidates for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay their potential commercialization, reduce the scope of any sales or marketing activities, or increase our own expenditures on the development of the applicable product candidate.

We have never commercialized a product candidate and we may lack the necessary expertise, personnel and resources to successfully commercialize any products that receive regulatory approval, either on our own or together with collaborators.

We have never commercialized a product candidate. We currently have no sales force or marketing or distribution capabilities. To achieve commercial success of our product candidates, if any are approved, we will have to develop our own sales, marketing and supply capabilities or outsource these activities to one or more third parties. Factors that may affect our ability to commercialize our product candidates on our own include our ability to recruit and retain adequate numbers of effective sales and marketing personnel and obtain access to or persuade adequate numbers of physicians to prescribe our product candidates, as well as any unforeseen costs we may incur in connection with creating an independent sales and marketing organization. Developing a sales and marketing organization requires significant investment and substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which could delay the launch of our product candidates. We may not be able to build an effective sales and marketing organization in the U.S., the EU or other key global markets. To the extent we need to rely upon one or more third parties, we may have little or no control over the marketing and sales efforts of those third parties and our revenue from product sales may be lower than if we had commercialized our product candidates ourselves. We will also face competition in any search for third parties to assist us with sales and marketing efforts for our product candidates. If we are unable to build our own distribution

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~~more third parties, we may have little or no control over the marketing~~ and sales efforts of those third parties and our revenue from product sales may be lower than if we had commercialized our product candidates ourselves. We will also face competition in any search for third parties to assist us with sales and marketing ~~efforts for our product candidates. If we are unable to build our own distribution and marketing~~ capabilities or to find suitable partners for the commercialization of our product candidates, we may have difficulties generating revenue from them.

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

The development and commercialization of new products is highly competitive. We face competition with respect to our current product candidates and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical, specialty pharmaceutical and biotechnology companies among others. We compete in the segments of the pharmaceutical, biotechnology and other related markets that develop immunotherapies for the treatment of cancer. There are other companies working to develop immunotherapies for the treatment of cancer including divisions of pharmaceutical and biotechnology companies of various sizes. Some of these competitive therapies are based on scientific approaches that are the same as or similar to our approach, and others are based on entirely different approaches. Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

We are developing our most advanced clinical-stage, ~~tumor~~masked I-~~activated~~O product candidates for the treatment of cancer and have not completed clinical development or received marketing approval for either vilastobart or efarindodekin alfa. There are already a variety of available therapies marketed for cancer and some of the currently approved therapies are branded and subject to patent protection, and others are available on a generic basis. Many of these approved therapies are well-established and widely accepted by physicians, patients and third-party payors. Insurers and other third-party payors may also encourage the use of generic products. We expect that if our product candidates are approved, they will be priced at a significant premium over competitive generic products. This may make it difficult for us to achieve our business strategy of using our product candidates in combination with existing therapies or replacing existing therapies with our product candidates. Competition may further increase with advances in the commercial applicability of technologies and greater availability of capital for investment in these industries.

~~Vilastobart,~~With ifrespect ~~approved~~to XTX501, ~~may~~currently ~~face~~there ~~competition~~are ~~from~~no ~~other~~bispecific ~~anti~~PD-~~CTLA-4~~1 ~~based~~targeted ~~therapies. For example, Yervoy (ipilimumab), an anti~~IL-~~CTLA-4,~~2 istherapies approved tofor ~~treat~~the ~~melanoma,~~treatment ~~renal cell carcinoma and certain cancers~~ of ~~the large intestine, and Imjudo (tremelimumab) is approved as a combination therapy to treat unresectable hepatocellular carcinoma~~cancer. ~~In addition~~However, we are aware ~~that~~of several companies that have ~~anti~~bispecific PD-~~CTLA~~1 targeted IL-42 programs in development, including but not limited to ~~Adagene~~Anwita Biosciences, Inc., ~~Agenus~~Bright Peak Therapeutics, Inc., ~~AstraZeneca~~Innovent ~~plc~~Biologics, ~~BioAtla,~~ Inc., ~~Chugai~~(co-development with Takeda Pharmaceutical ~~Co.~~Company ~~Ltd.~~Limited), ~~CytomX~~Medicenna Therapeutics, ~~Inc~~Corp., ~~Harbour~~Regeneron ~~BioMed Co Ltd.~~Pharmaceuticals, ~~MacroGenics,~~ Inc., Roche and ~~OncoC4~~Teva Pharmaceutical Industries, ~~Inc~~Ltd.

With respect to ~~efarindodekin~~our ~~alfa~~masked T cell engager programs, currently there are no ~~IL-12~~T cell engager therapies targeting PSMA, CLDN18.2 or STEAP1 approved for the treatment of cancer. However, we are aware of ~~several~~ other companies that have ~~modified~~masked ~~IL-12~~T ~~delivery~~cell engager programs in development for PSMA, including but not limited to ~~Cullinan~~Janux ~~Management~~Therapeutics, Inc., ~~Dragonfly~~and ~~Therapeutics~~Vir Biotechnology, Inc., ~~ImmunityBio~~and at least one other company, Werewolf Therapeutics, Inc., ~~Shanghai~~that ~~KangaBio~~has Coa masked T cell engager program in development for STEAP1. To our knowledge, ~~Ltd~~there are no companies currently developing a masked T cell engager program targeting both PSMA and STEAP1 or a masked T cell engager program for CLDN18.2. However, ~~Mural~~we ~~Oncology~~are aware of several companies developing non-masked T cell engager programs for CLDN18.2, including but not limited to Amgen Inc., ~~PDS~~Astellas ~~Biotechnology~~Pharma ~~Corporation~~Inc., ~~Philogen~~AstraZeneca SPLC, GSK plc, Lunan Pharmacuetical Group Co.p Ltd.A and Qilu Pharmaceutical Co., ~~Sonnet~~for ~~BioTherapeutics~~PSMA, ~~Werewolf~~including ~~Therapeutics~~but not limited to Regeneron Pharmaceuticals Inc. and Xencor, Inc. (licensed to Johnson & Johnson), and for STEAP1, including but not limited to Xencor Inc. (licensed to Amgen Inc.) and ~~Zymeworks~~Shanghai Henlius Biotech, Inc.

With respect to ~~our~~efarindodekin ~~most advanced research-stage product candidate~~alfa, ~~XTX501,~~ currently, there are no ~~bispecific PD-1 targeted~~ IL-212 therapies approved for the treatment of cancer. However, if we ~~continue to advance development of XTX501, we~~ are aware of several ~~other~~ companies that have ~~modified PD-1 targeted~~ IL-212 ~~bispecific~~delivery ~~antibodies~~programs in development, including but not limited to ~~Anaveon~~PDS ~~AG,~~Biotechnology ~~Bright Peak Therapeutics~~Corporation, ~~Inc~~Philogen S.p.A., ~~Innovent~~Shanghai ~~Biologics,~~KangaBio ~~Inc~~Co., ~~Regeneron Pharmaceuticals, Inc~~Ltd., ~~Roche,~~ and ~~Teva~~Werewolf ~~Pharmaceutical Industries~~Therapeutics, ~~Ltd~~Inc.

With respect to our masked T cell engager programs, currently there are no T cell engager therapies targeting PSMA, CLDN18.2 or STEAP1 approved for the treatment of cancer. We are aware of several other companies that have masked T cell engager programs in development for PSMA, including but not limited to Janux Therapeutics, Inc. and Vir Biotechnology, Inc. We are aware of at least one other company, Werewolf Therapeutics, Inc., currently developing a masked T cell engager program for STEAP1. To our knowledge, there are no companies currently developing a masked T cell engager program for CLDN18.2. However, we are aware of several companies developing non-masked T cell engager programs for CLDN18.2, including but not limited to Amgen Inc., Astellas Pharma

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Inc., AstraZeneca PLC, Innovent Biologics, Inc., Transcenta Holding Ltd. and Zai Lab Limited, and for STEAP1, including Amgen Inc., Nutcracker Therapeutics and Xencor Inc.

Our competitors may succeed in developing, acquiring or licensing, on an exclusive basis, products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. We also compete with these organizations in establishing clinical trial sites and patient registration for clinical trials, as well as in recruiting and retaining qualified scientific and management personnel, which could negatively affect our level of expertise and our ability to execute our business plan.

Many of our competitors, either alone or with their collaborators, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than we do. Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel product candidates or to in-license novel product candidates that could make our product candidates less competitive or obsolete. Smaller or early-stage companies may also prove to be significant competitors, including through collaborative arrangements with large and established companies. In addition, any new product that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commercially successful. The availability of competing products could limit the demand and the price we are able to charge for product candidates we commercialize, if any. The inability to compete with existing or subsequently introduced products would harm our business, financial condition and results of operations.

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approved products than we do. Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel product candidates or to in-license novel product candidates that could make our product candidates less competitive or obsolete. Smaller or early-stage companies may also prove to be significant competitors, including through collaborative arrangements with large and established companies. In addition, any new product that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commercially successful. The availability of competing products could limit the demand and the price we are able to charge for product candidates we commercialize, if any. The inability to compete with existing or subsequently introduced products would harm our business, financial condition and results of operations.

If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect, the commercialization of any of our product candidates may be delayed, and our business could be harmed.

For planning purposes, we sometimes estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development objectives. These milestones may include our expectations regarding the commencement or completion of scientific studies and clinical trials, the submission of regulatory filings or commercialization objectives. From time to time, we may publicly announce the expected timing of some of these milestones, such as the release of clinical trial data, the completion of an ongoing clinical trial, the initiation of other clinical trials, receipt of regulatory approval or the commercial launch of a product. The achievement of many of these milestones may be outside of our control. All of these milestones are based on a variety of assumptions which may cause the timing of achievement of the milestones to vary considerably from our estimates, including:

•

our available capital resources or capital constraints we experience;

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the rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling conflicts with participating clinicians and collaborators;

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our ability to identify and enroll patients who meet clinical trial eligibility criteria;

•

our receipt of approvals by the FDA, EMA and comparable regulatory authorities in other jurisdictions, and the timing thereof;

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other actions, decisions or rules issued by regulators;

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our ability to access sufficient, reliable and affordable supplies of materials used in the manufacture of our product candidates;

•

our ability to manufacture and supply clinical trial materials to our clinical trial sites on a timely basis;

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the efforts of our collaborators with respect to the development of our product candidates or the potential commercialization of any of our product candidates, if approved; and

•

the securing of, costs related to, and timing issues associated with, commercial product manufacturing as well as sales and marketing activities.

If we fail to achieve announced milestones in the timeframes we expect, the commercialization of any of our product candidates may be delayed, and our business, results of operations, financial condition and prospects may be adversely affected.

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If approved, our product candidates that are licensed and regulated as biological products, or biologics, may face competition from biosimilars approved through an abbreviated regulatory pathway.

The Biologics Price Competition and Innovation Act of 2009, or BPCIA, was enacted as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the ACA, to establish an abbreviated pathway for the approval of biosimilar and interchangeable with an FDA-licensed reference biologic product. The regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable” based on its similarity to an approved biologic.

Under the BPCIA, reference biological product is granted 12 years of non-patent data exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product. In addition, the licensure of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12‑year period of exclusivity, another company may still develop and receive licensure of a competing biologic, so long as their BLA does not rely on the reference product or sponsor’s data or submit the application as a biosimilar application.

We believe that any of the product candidates we develop that is licensed in the U.S. as a biological product under a BLA should qualify for the 12‑year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider the subject product candidate to be a reference product for competing products, potentially creating the opportunity for biosimilar competition sooner than anticipated. Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of the reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing. The approval of a biosimilar of our product candidates could have a material adverse impact on our business due to increased competition and pricing pressure.57

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made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12‑year period of exclusivity, another company may still develop and receive licensure of a competing biologic, so long as their BLA does not rely on the reference product or sponsor’s data or submit the application as a biosimilar application.

We believe that any of the product candidates we develop that is licensed in the U.S. as a biological product under a BLA should qualify for the 12‑year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider the subject product candidate to be a reference product for competing products, potentially creating the opportunity for biosimilar competition sooner than anticipated. Further, the FDA may revise the standards governing approval of biosimilars so as to bring such products to the market more quickly. For example, in October 2025, the FDA issued draft guidance which proposes to eliminate the need for sponsors of biosimilar products to conduct comparative human clinical efficacy studies, allowing them to rely instead on analytical testing to demonstrate product differences from a reference product.

Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of the reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing. The approval of a biosimilar of our product candidates could have a material adverse impact on our business due to increased competition and pricing pressure.

If competitors are able to obtain regulatory approval for biosimilars referencing our product candidates, our product candidates may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences.

The sizes of the potential markets for our product candidates are difficult to estimate and, if any of our assumptions are inaccurate, the actual markets for our product candidates may be smaller than our estimates.

The potential market opportunities for our product candidates are difficult to estimate and, if our product candidates are approved, will ultimately depend on, among other things, the indications for which our product candidates are approved for sale, any products with which our product candidates are co-administered, the success of competing therapies and therapeutic approaches, acceptance by the medical community, patient access, product pricing, reimbursement and our ability to create meaningful value propositions for patients, prescribers and payors. Our estimates of the potential market opportunities for our product candidates are predicated on many assumptions, which may include industry knowledge and publications, third-party research reports and other surveys. Although we believe that our internal assumptions are reasonable, these assumptions involve the exercise of significant judgment on the part of our management, are inherently uncertain, and their reasonableness has not been assessed by an independent source. If any of the assumptions prove to be inaccurate, the actual markets for our product candidates could be smaller than our estimates of the potential market opportunities.

The successful commercialization of our product candidates will depend in part on the extent to which we obtain and maintain favorable insurance coverage, adequate reimbursement levels and cost-effective pricing policies with third-party payors.

The availability and adequacy of coverage and reimbursement by third-party payors, including governmental healthcare programs such as Medicare and Medicaid, managed care organizations, and private health insurers, are essential for most patients to be able to afford prescription medications such as our product candidates, if approved. Our ability to achieve acceptable levels of coverage and reimbursement for products by third-party payors will have an effect on our ability to successfully commercialize our product candidates. We cannot be sure that coverage and reimbursement in the U.S., the EU or elsewhere will be available for our product candidates, if approved, or any product that we may develop, and any reimbursement that may become available may be decreased or eliminated in the future.

64Third-party payors increasingly are challenging prices charged for pharmaceutical products and services, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs or biologics when an equivalent generic drug, biosimilar or a less expensive therapy is available. It is possible that a third-party payor may consider our product candidates as substitutable and only offer to reimburse patients for the less expensive product. Even if we show improved efficacy or improved convenience of administration with our product candidates, pricing of existing third-party therapeutics may limit the amount we will be able to charge for our product candidates. These payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in our product candidates, if approved. Even if our product candidates are approved and we obtain coverage for our product candidates by a third-party payor, such products may not be considered cost-effective and/or the resulting reimbursement payment rates may be insufficient or may require

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Third-party payors increasingly are challenging prices charged for pharmaceutical products and services, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs or biologics when an equivalent generic drug, biosimilar or a less expensive therapy is available. It is possible that a third-party payor may consider our product candidates as substitutable and only offer to reimburse patients for the less expensive product. Even if we show improved efficacy or improved convenience of administration with our product candidates, pricing of existing third-party therapeutics may limit the amount we will be able to charge for our product candidates. These payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in our product candidates, if approved. Even if our product candidates are approved and we obtain coverage for our product candidates by a third-party payor, such products may not be considered cost-effective and/or the resulting reimbursement payment rates may be insufficient or may require co-payments that patients find unacceptably high. Interim reimbursement levels for new medicines, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Net prices for medicines may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of medicines from countries where they may be sold at lower prices than in the U.S. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our product candidates, if approved, and may not be able to obtain a satisfactory financial return on our product candidates.

There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. The regulations that govern marketing approvals, pricing and reimbursement for new medicines vary widely from country to country. In the U.S., third-party payors play an important role in determining the extent to which new drugs and biologics will be covered. The Medicare and Medicaid programs increasingly are used as models in the U.S. for how third-party payors develop their coverage and reimbursement policies for drugs and biologics. Some third-party payors may require pre-approval of coverage for new or innovative devices or drug therapies before they will reimburse healthcare providers who use such therapies. We cannot predict at this time what third-party payors will decide with respect to the coverage and reimbursement for our product candidates, if approved.

No uniform policy for coverage and reimbursement for products exists among third-party payors in the U.S. and coverage and reimbursement for products can therefore differ significantly from payor to payor and coverage and reimbursement by one payor does not guarantee coverage and reimbursement by another payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. Our ability to demonstrate to these third-party payors that any of our approved product candidates creates a meaningful value proposition for patients, prescribers and payors will be important to gaining market access and reimbursement and there is no guarantee that we will be successful in doing so. Furthermore, rules and regulations regarding reimbursement change frequently, in some cases on short notice, and we believe that changes in these rules and regulations are likely.

Even if a product candidate we develop receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, hospitals, cancer treatment centers, third-party payors and others in the medical community necessary for commercial success.

If any product candidate we develop receives marketing approval, whether as a single agent or in combination with other therapies, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, hospitals, cancer treatment centers, third-party payors, and others in the medical community. For example, cancer treatments like chemotherapy, radiation therapy and certain existing immunotherapies are well established in the medical community, and doctors may continue to rely on these therapies. If the product candidates we develop do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable.

The degree of market acceptance of any product, if approved for commercial sale, will depend on a number of factors, including:

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the product’s efficacy, safety and potential advantages compared to alternative treatments;

•

the prevalence and severity of any side effects;

•

the product’s convenience and ease of administration compared to alternative treatments;

•

the clinical indications for which the product is approved;

•

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the willingness of the target patient population to try a novel treatment and of physicians to prescribe such treatments;

•

the recommendations with respect to the product in guidelines published by scientific organizations;

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the ability to obtain sufficient third-party insurance coverage and adequate reimbursement, including, if applicable, with respect to the use of the product as a combination therapy;

•

the strength of marketing, sales and distribution support;

•

the effectiveness of our sales and marketing efforts;

•

the approval of other new products for the same indications; and

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•

our ability to offer the product for sale at competitive prices.

If we obtain marketing approval for a product but such product does not achieve an adequate level of market acceptance, we may not generate or derive significant revenue from that product and our business, financial condition and results of operations may be adversely affected.

Our success depends in large part on our ability to obtain and maintain patent protection in the U.S. and other countries with respect to our product candidates, their respective components, formulations, combination therapies, methods used to manufacture them and methods of treatment and development that are important to our business. If we do not adequately protect our intellectual property rights, competitors may be able to erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability. To protect our proprietary position, we file patent applications in the U.S. and abroad related to our product candidates that are important to our business; we also license and may in the future license or purchase additional patents and patent applications filed by others. If we are unable to secure or maintain patent protection with respect to our product candidates and any proprietary products and technology we develop, our business, financial condition, results of operations and prospects could be materially harmed.

We cannot provide any assurances that any of our patents have, or that any of our pending patent applications that mature into issued patents will include, claims with a scope sufficient to protect our current and future product candidates or otherwise provide any competitive advantage. Specifically, our patents and pending patent applications, if issued, may not provide us with any meaningful protection or prevent competitors from designing around our patent claims to circumvent our patents by developing similar or alternative technologies or therapeutics in a non-infringing manner. For example, a third party may develop a competitive therapy that provides benefits similar to one or more of our product candidates but that uses a different masking moiety that falls outside the scope of our patent protection. If the patent protection provided by the patents and patent applications we hold or have licensed with respect to our product candidates is not sufficiently broad to impede such competition, our ability to successfully commercialize our product candidates could be negatively affected, which would harm our business.

The degree of patent protection we require to successfully compete in the marketplace may be unavailable or severely limited in some cases and may not adequately protect our rights or permit us to gain or keep any competitive advantage. The U.S. Patent and Trademark Office, or the USPTO, and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. Our or our licensor’s failure to comply with all such provisions during the patent process could result in abandonment or lapse of a patent or patent application that we own or license, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market and compete with us earlier than would otherwise have been the case. Moreover, the laws of foreign countries may not protect our rights to the same extent as the laws of the U.S. In addition, to the extent that we license intellectual property in the future, we cannot guarantee that those licenses will remain in force.

66Patent positions of life sciences companies can be uncertain and involve complex factual and legal questions and have in recent years been the subject of much litigation. No consistent policy governing the scope of claims allowable in the field of engineered therapeutic proteins has emerged in the U.S. The scope of patent protection in jurisdictions outside of the U.S. is also uncertain. Changes in either the patent laws or their interpretation in any jurisdiction that we seek patent protection may diminish our ability to protect our inventions, maintain and enforce our intellectual property rights; and, more generally, may affect the value of our intellectual property, including the narrowing of the scope of our patents and any that we may license. Under the Leahy-Smith America Invents Act enacted in 2011, or the AIA, the U.S. moved to a first-to-file system in early 2013 (whereby, assuming the other requirements for patentability are met, the first to file a patent application is entitled to the patent), from the previous system under which the first to make a claimed invention was entitled to the patent. Publications of discoveries in the scientific and academic literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we were the first to file for patent protection on the inventions claimed in our patents or

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Patent positions of life sciences companies can be uncertain and involve complex factual and legal questions and have in recent years been the subject of much litigation. No consistent policy governing the scope of claims allowable in the field of engineered therapeutic proteins has emerged in the U.S. The scope of patent protection in jurisdictions outside of the U.S. is also uncertain. Changes in either the patent laws or their interpretation in any jurisdiction that we seek patent protection may diminish our ability to protect our inventions, maintain and enforce our intellectual property rights; and, more generally, may affect the value of our intellectual property, including the narrowing of the scope of our patents and any that we may license. Under the Leahy-Smith America Invents Act enacted in 2011, or the AIA, the U.S. moved to a first-to-file system in early 2013 (whereby, assuming the other requirements for patentability are met, the first to file a patent application is entitled to the patent), from the previous system under which the first to make a claimed invention was entitled to the patent. Publications of discoveries in the scientific and academic literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we were the first to file for patent protection on the inventions claimed in our patents or pending patent applications. Furthermore, for U.S. applications in which all claims are entitled to a priority date before March 16, 2013, an interference proceeding can be provoked by a third-party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. We cannot be certain that we are the first to invent the inventions covered by pending patent applications and, if we are not, we may be subject to priority disputes. We may be required to disclaim part or all of the term of certain patents or all of the term of certain patent applications.

The patent prosecution process is complex, expensive, time-consuming and inconsistent across jurisdictions. We may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patent rights at a commercially reasonable cost or in a timely manner. In addition, we may not pursue or obtain patent protection in all relevant markets. It is possible that we will fail to identify important patentable aspects of our research and development efforts in time to obtain appropriate or any patent protection. While we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development efforts, including for example, our employees, external academic scientific collaborators, CROs, CDMOs, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose our confidential or proprietary information before a patent application is filed, thereby endangering our ability to seek patent protection.

The issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain. Pending patent applications cannot be enforced against third parties unless, and until, patents issue from such applications, and then only to the extent the issued claims cover the technology. There can be no assurance that our patent applications or any patent applications that we may license in the future will result in patents being issued. Further, the scope of the invention claimed in a patent application can be significantly reduced before the patent is issued, and this scope can be reinterpreted after issuance. Even if patent applications we currently own or that we may license in the future issue as patents, they may not issue in a form that will provide us with adequate protection to prevent competitors or other third parties from competing with us, or otherwise provide us with a competitive advantage. Any patents that eventually issue may be challenged, narrowed or invalidated by third parties. Consequently, we do not know whether any of our product candidates will be protectable or remain protected by valid and enforceable patent rights. Our competitors or other third parties may be able to evade our patent rights by developing new products that are similar to our product candidates, biosimilars of our product candidates, or alternative technologies or products in a non-infringing manner.

The issuance or grant of a patent is not irrefutable as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or patent offices in the U.S. and abroad. There may be prior art of which we are not aware that may affect the validity or enforceability of a patent claim. There also may be prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim, which may, nonetheless, ultimately be found to affect the validity or enforceability of a claim. We may in the future, become subject to a third-party pre-issuance submission of prior art, pre- or post-issuance opposition, derivation, revocation, re-examination, post-grant and inter partes review, or interference proceeding and other similar proceedings challenging our patent rights or the patent rights of others in the USPTO or other foreign patent office. An unfavorable determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us.

Furthermore, patents have a limited lifespan. In the U.S., the natural expiration of a patent is generally 20 years after it is filed. Various extensions may be available; however, the life of a patent, and the protection it affords, is limited. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. Moreover, third parties may have certain ownership interest in some of our owned and in-licensed patents and patent applications. If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology. In addition, we or our licensors may need the cooperation of any such co-owners of our owned and in-licensed patents in order to enforce such patents against third parties, and such cooperation may not be provided to us or our licensors. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

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third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology. In addition, we or our licensors may need the cooperation of any such co-owners of our owned and in-licensed patents in order to enforce such patents against third parties, and such cooperation may not be provided to us or our licensors. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Some of our patent applications have been granted or may be granted or allowed in the future. We cannot be certain that an allowed patent application will become an issued patent. There may be events that can cause the allowance of a patent application to be withdrawn. For example, after a patent application has been allowed, but prior to being issued, material that could be relevant to patentability may be identified. In such circumstances, the sponsor may pull the application from allowance in order for the USPTO to review the application in view of the new material. We cannot be certain that the USPTO will re-allow the application in view of the new material. Further, periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and following the issuance of a patent. Recently, the USPTO implemented new fee rules including Continuing Application Fee, which would increase our cost for obtaining and maintaining patent protection in the U.S. and potentially limit our ability of seeking additional patents in our existing patent families especially those early filed platform families that have been pending for close to or more than six years. We rely on our outside counsel and other professionals or our licensing partners to pay these fees due to the USPTO and non-U.S. government patent agencies and to help us comply with other procedural, documentary and other similar requirements and we are also dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.

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patent application will become an issued patent. There may be events that can cause the allowance of a patent application to be withdrawn. For example, after a patent application has been allowed, but prior to being issued, material that could be relevant to patentability may be identified. In such circumstances, the sponsor may pull the application from allowance in order for the USPTO to review the application in view of the new material. We cannot be certain that the USPTO will re-allow the application in view of the new material. Further, periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and following the issuance of a patent. Recently, the USPTO implemented new fee rules including Continuing Application Fee, which would increase our cost for obtaining and maintaining patent protection in the U.S. and potentially limit our ability of seeking additional patents in our existing patent families especially those early filed platform families that have been pending for close to or more than six years. We rely on our outside counsel and other professionals or our licensing partners to pay these fees due to the USPTO and non-U.S. government patent agencies and to help us comply with other procedural, documentary and other similar requirements and we are also dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.

Issued patents covering our product candidates or technology could be found invalid or unenforceable if challenged in court or the USPTO.

Despite the measures we take to obtain and maintain patent and other intellectual property rights with respect to our product candidates, our intellectual property rights could be challenged or invalidated. If we or one of our licensors initiate legal proceedings against a third party to enforce a patent covering one of our product candidates or our technology, the defendant could counterclaim that the patent covering our product candidate or technology, as applicable, is invalid and/or unenforceable. In patent litigation in the U.S., defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. Third parties may also raise similar claims before administrative bodies in the U.S. or abroad, even outside the context of litigation. Such mechanisms include re-examination, inter partes review, post-grant review and equivalent proceedings in foreign jurisdictions (such as opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates or technology. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, or if we are otherwise unable to adequately protect our rights, we would lose at least part, and perhaps all, of the patent protection on our product candidates or technology. Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize or license our technology and product candidates.

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Changes to patent law in the U.S. and in foreign jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.

As is the case with other biotechnology companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. In addition, the U.S. continues to adapt to wide-ranging patent reform legislation that became effective starting in 2012. Moreover, recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty regarding our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on new legislation and decisions by the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. For example, the U.S. Supreme Court, in the case Amgen v. Sanofi, held that broad functional antibody claims are invalid for lack of enablement. In addition, in Juno v. Kite, the Federal Circuit held claims reciting broad antibody genus based on function invalid for lack of written description. Recently, the Federal Circuit issued precedential decisions in In re Cellect and Allergan v. MSN that could shorten or eliminate an extended patent term awarded under patent term adjustment in certain patent family members if challenged on the basis of obviousness-type double patenting. While we do not believe that any of the patents owned or licensed by us will be found invalid based on these decisions, we cannot predict how future decisions by the courts, Congress or the USPTO may impact the value of our patents. Similarly, changes in the patent laws of other jurisdictions could adversely affect our ability to obtain and effectively enforce our patent rights, which would have a material adverse effect on our business and financial condition.

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members if challenged on the basis of obviousness-type double patenting. While we do not believe that any of the patents owned or licensed by us will be found invalid based on these decisions, we cannot predict how future decisions by the courts, Congress or the USPTO may impact the value of our patents. Similarly, changes in the patent laws of other jurisdictions could adversely affect our ability to obtain and effectively enforce our patent rights, which would have a material adverse effect on our business and financial condition.

We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world.

We have obtained allowed patents in the U.S. that we consider to be important for certain of our product candidates, however, we may have less robust intellectual property rights outside the U.S., and, in particular, we may not be able to pursue generic coverage of our product candidates outside of the U.S. Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the U.S. can be less extensive than those in the U.S. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the U.S. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the U.S., or from selling or importing products made using our inventions in and into the U.S. or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the U.S. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Most of our patent portfolio is at the very early stage. We will need to decide whether and in which jurisdictions to pursue protection for the various inventions in our portfolio prior to applicable deadlines.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

In addition, many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. Many countries also limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or any of our licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business and financial condition may be adversely affected.

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We rely on third-party license agreements pursuant to which we have non-exclusive and exclusive rights to technology that is incorporated into our development programs and product candidates. For example, under our license agreement with City of Hope, we have exclusively in-licensed certain patent rights that cover our anti-CTLA-4 antibody. We also have a license agreement with WuXi Biologics pursuant to which we received an exclusive worldwide license to specified mAbs and patent rights and know-how controlled by WuXi Biologics, including certain patent rights related to our anti-CTLA-4 mAb program. These license agreements impose diligence, milestone payment, royalty payment and other obligations on us.

Moreover, the growth of our business may depend in part on our ability to acquire, in-license or use additional third-party intellectual property rights. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. Licenses to additional third-party intellectual property, technology, processes, and materials that may be required for the development and commercialization of our product candidates or technology may not be available at all or on commercially reasonable terms. In that event, we may be required to expend significant time and resources to redesign our product candidates or manufacturing processes, or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize our future product candidates or technologies, which could materially harm our business, financial condition, results of operations and growth prospects.

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established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. Licenses to additional third-party intellectual property, technology, processes, and materials that may be required for the development and commercialization of our product candidates or technology may not be available at all or on commercially reasonable terms. In that event, we may be required to expend significant time and resources to redesign our product candidates or manufacturing processes, or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize our future product candidates or technologies, which could materially harm our business, financial condition, results of operations and growth prospects.

In addition, while we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future products, if any, in the event we do in-license third-party intellectual property rights, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in products that we successfully develop and commercialize, if any. Therefore, even if we successfully develop and commercialize products, we may be unable to achieve or maintain profitability.

Under our agreement with City of Hope, we are responsible for the achievement of certain diligence milestones, and our failure to timely achieve such milestones could result in City of Hope’s termination of the agreement or conversion of our exclusive licenses under the licensed patents to non-exclusive licenses. If City of Hope terminates the agreement or converts our licenses to non-exclusive licenses as a result of our failure to meet these diligence milestones, then our ability to commercialize products comprising our anti-CTLA-4 antibody may be impaired or we may face increased competition in the commercialization of anti-CTLA-4 antibody products. Furthermore, our agreement with City of Hope is subject to, and we expect our future license agreements may also be subject to, a reservation of rights by one or more third parties, including the licensor.

Disputes may arise regarding intellectual property subject to our current or any future license agreements, including:

•

the scope of rights granted under the license agreement and other interpretation-related issues;

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the amount and timing of payments owed under the license agreements;

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our or our licensor’s ability to defend intellectual property and to enforce intellectual property rights against third parties;

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the extent to which our technology, product candidates and processes infringe, misappropriate or otherwise violate any intellectual property of the licensor that is not subject to the licensing agreement;

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the sublicensing of patent and other rights under the license agreement;

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our diligence obligations under the license agreement and what activities satisfy those diligence obligations;

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the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and any partners of ours; and

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the priority of invention of patented technology.

70If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates. We are generally also subject to all of the same risks described in this Annual Report on Form 10-K with respect to protection of intellectual property that we license as we are for intellectual property that we own. If we or our licensors fail to adequately obtain or protect this intellectual property, our ability to commercialize products could suffer.

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Our current and any potential future licensors might conclude that we have materially breached our license agreements and might therefore terminate the relevant license agreements, thereby removing our ability to develop and commercialize products and technology covered by such license agreements. If any of our current or future inbound license agreements are terminated, or if the underlying patents fail to provide the intended exclusivity, competitors would have the freedom to seek regulatory approval of, and to market, products that are covered by such license agreements and underlying patents, which might be identical or similar to our products or product candidates. This could have a material adverse effect on our competitive position, business, financial conditions, results of operations and growth prospects. Our business also would suffer if any current or future licensors fail to abide by the terms of the license or fail to enforce licensed patents against infringing third parties, if the licensed patents or other rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms. Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights.

Any licensor of ours may have relied on third-party consultants or collaborators or on funds from third parties, such as the United States government, such that such licensor is not the sole and exclusive owners of the patents we in-licensed. If other third parties have ownership rights or other rights to our in-licensed patents, they may be able to license such patents to our competitors, and our competitors could market competing products and technology. This could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

If our efforts to protect the proprietary nature of the intellectual property related to our technologies and product candidates are not adequate, we may not be able to compete effectively in our market.

Biotechnology and pharmaceutical companies generally, and we in particular, compete in a crowded competitive space characterized by rapidly evolving technologies and aggressive development of intellectual property.

We rely upon a combination of patents, confidentiality agreements, trade secret protection and license agreements to protect the intellectual property related to our technologies and our product candidates. Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements and product candidates, thus eroding our competitive position in our market. We, or any future partners, collaborators, or licensees, may fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them. Therefore, we may miss potential opportunities to strengthen our patent position.

It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments. If we or our partners, collaborators, licensees or licensors fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If our partners, collaborators, licensees or licensors are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised. If there are material defects in the form, preparation, prosecution, or enforcement of our patents or patent applications, such patents may be invalid and/or unenforceable, and such applications may never result in valid, enforceable patents. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.

The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain. We cannot be certain that the claims in any of our issued patents will be considered valid by courts in the U.S. or foreign countries. Third parties may challenge the validity, enforceability or scope thereof. No assurance can be given that if challenged, our patents would be declared by a court to be valid or enforceable or that even if found valid and enforceable, a competitor’s technology or product would be found by a court to infringe our patents. Various post-grant review proceedings, such as inter partes review, post-grant review and derivation proceedings, are available and may be pursued by any interested third party in the USPTO to challenge the patentability of claims issued in patents to us or our licensors. No assurance can be given as to the outcome of any such post-grant review proceedings. If the breadth or strength of protection provided by the patents and patent applications we hold with respect to our product candidates or technology is threatened, it could dissuade companies from collaborating with us to develop, and threaten our ability to commercialize, our product candidates. Further, if we encounter delays in our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced.

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candidates or technology is threatened, it could dissuade companies from collaborating with us to develop, and threaten our ability to commercialize, our product candidates. Further, if we encounter delays in our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced.

We may analyze patents or patent applications of our competitors that we believe are relevant to our activities, and consider that we are free to operate in relation to our product candidates, but our competitors may achieve issued claims, including in patents we consider to be unrelated, which block our efforts or may potentially result in our product candidates or our activities infringing such claims. On the other hand, the possibility exists that others will develop products which have the same effect as our products on an independent basis which do not infringe our patents or other intellectual property rights, or will design around the claims of patents that we have had issued that cover our products.

Recent or future patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. For example, the AIA implemented in March 2013, moved the U.S. from a “first to invent” to a “first-to-file” system. Under a “first-to-file” system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to a patent on the invention regardless of whether another inventor had made the invention earlier. The AIA includes a number of other significant changes to U.S. patent law, including provisions that affect the way patent applications are prosecuted, redefine prior art and establish a USPTO-administered post-grant review system that has affected patent litigation. The AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.

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from a “first to invent” to a “first-to-file” system. Under a “first-to-file” system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to a patent on the invention regardless of whether another inventor had made the invention earlier. The AIA includes a number of other significant changes to U.S. patent law, including provisions that affect the way patent applications are prosecuted, redefine prior art and establish a USPTO-administered post-grant review system that has affected patent litigation. The AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.

The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example:

•

others may be able to make or use polypeptides or nucleic acids that are similar to our product candidates or components of our product candidates but that are not covered by the claims of our patents;

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1. Description of Business, Liquidity and Going ConcernLiquidity

2.Basis Summary of Significant Accounting PoliciesPresentation

3. Fair Value Measurements

4. Property and Equipment, Net

5. Accrued Expenses

6. Collaboration, License and Option Agreements

Collaboration, License and Option Agreement with AbbVie

License Agreement with Gilead Sciences, Inc.

Clinical Trial Collaboration with F. Hoffmann-La Roche Ltd

7. Commitments and Contingencies

8. Preferred Stock and Common Stock

Undesignated Preferred Stock

Common Stock

9. Stock-Based Compensation

Equity Incentive Plans

2022 Inducement Plan

Stock-Based Compensation Expense

Stock Options

Restricted Stock Units

10. Net Loss Per Share

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

Overview

Financial Operations Overview

Revenue

Operating Expenses

RestructuringOther Income, Net

Results of Operations

Comparison of the three months ended SeptemberMarch 3031, 20252026 and 20242025

Comparison of the nine months ended September 30, 2025 and 2024

Sources of Liquidity

Cash Flows

Capital Requirements and Going Concern

Contractual Obligations

Critical Accounting Policies and Use of Estimates

Emerging Growth Company and Smaller Reporting Company Status

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

PART II—OTHER INFORMATION

Item 1A. Risk Factors

Risks Related to Our Limited Operating History, Financial Position and Capital Requirements

Risks Relating to Manufacturing and Supply

Risks Related to our Dependence on Third Parties

Risks Related to Commercialization

Risks Related to Our Intellectual Property

Filing Compare · Xilio Therapeutics, Inc.