Definium Therapeutics Q3 net loss narrows to $51M
Definium expects a DT402 study assessing multiple dosing paradigms to begin in 2027.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Definium Therapeutics, Inc. reported a third-quarter 2026 net loss of $51.0 million, compared with $67.3 million a year earlier; for the first nine months, net loss was $287.0 million versus $133.4 million. Nine-month research and development expense was $136.3 million, compared with $84.1 million, and operating cash use was $148.4 million versus $88.6 million.
Two Phase 3 trials of DT120 ODT for generalized anxiety disorder met their primary and key secondary endpoints. Week 12 LS mean differences versus placebo were -5.4 points in Voyage and -5.1 in Panorama, each with p<0.0001. The Phase 3 Emerge study of DT120 for major depressive disorder also met its primary and key secondary endpoints, with a Week 6 LS mean difference of -8.1 points versus placebo.
As of September 30, 2026, Definium had approximately $1.0 billion in cash, cash equivalents and investments. Management believes those resources will fund operations into 2030 under its current operating plan and anticipated milestones. The company has not generated revenue.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Major pointTwo Phase 3 GAD trials met primary and secondary endpoints in 2026.
- Minor pointQuarterly net loss was $51.0 million, compared with $67.3 million in 2025.
Negative
- Moderate pointNine-month net loss was $287.0 million, versus $133.4 million in 2025.
- Moderate pointNine-month operating cash use was $148.4 million, versus $88.6 million in 2025.
Filing Explained
Most of the disclosed future commitments are cancellable on notice, rather than all being unavoidable payments.
Definium reports that its
As of
For the nine months ended
Key Figures
Key Terms
breakthrough designation regulatory
treatment-emergent adverse events medical
open-label treatment medical
available-for-sale securities financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much did DFTX raise in its June 2026 offering?
What is DFTX planning next for DT402?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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
(Exact name of Registrant as specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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(The Nasdaq Global Select 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.
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).
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 |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 2, 2026, the registrant had
Table of Contents
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Page |
PART I |
FINANCIAL INFORMATION |
4 |
Item 1. |
Financial Statements |
4 |
|
Condensed Consolidated Balance Sheets |
4 |
|
Condensed Consolidated Statements of Operations and Comprehensive Loss |
5 |
|
Condensed Consolidated Statements of Shareholders' Equity |
6 |
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Condensed Consolidated Statements of Cash Flows |
7 |
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Notes to Condensed Consolidated Financial Statements |
8 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
29 |
Item 4. |
Controls and Procedures |
29 |
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PART II |
OTHER INFORMATION |
30 |
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Item 1. |
Legal Proceedings |
30 |
Item 1A. |
Risk Factors |
30 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
30 |
Item 3. |
Defaults Upon Senior Securities |
30 |
Item 4. |
Mine Safety Disclosures |
30 |
Item 5. |
Other Information |
30 |
Item 6. |
Exhibits |
31 |
Signatures |
|
32 |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q ("Quarterly Report") contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” previously disclosed in Part I, Item 1A. in our Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission (“SEC”) on February 26, 2026 (the “2025 Annual Report”) and in Part II, Item 1A in this Quarterly Report and the section titled “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report. And while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law. 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. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.
We may announce material business and financial information to our investors using our investor relations website (https://ir.definiumtx.com/). We therefore encourage investors and others interested in our company to review the information that we make available on our website, in addition to following our filings with the SEC, webcasts, press releases and conference calls. Our website and information included in or linked to our website are not part of this Quarterly Report. Unless otherwise noted or the context indicates otherwise, references in this Quarterly Report to the “Company,” “Definium,” “we,” “us,” and “our” refer to Definium Therapeutics, Inc. and its consolidated subsidiaries.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Definium Therapeutics, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share amounts) |
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September 30, 2026 |
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December 31, 2025 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term investments |
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Prepaid and other current assets |
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Total current assets |
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Goodwill |
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Other non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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2022 USD Financing Warrants |
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Total current liabilities |
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Credit facility, long-term |
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Other non-current liabilities |
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Total liabilities |
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Shareholders' equity: |
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Common shares, |
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Additional paid-in capital |
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Accumulated other comprehensive (loss) income |
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( |
) |
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Accumulated deficit |
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( |
) |
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( |
) |
Total shareholders' equity |
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Total liabilities and shareholders' equity |
|
$ |
|
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$ |
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||
See accompanying notes to unaudited condensed consolidated financial statements.
4
Definium Therapeutics, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
|
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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(in thousands, except share and per share amounts) |
|
2026 |
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2025 |
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2026 |
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2025 |
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Operating expenses: |
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Research and development |
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$ |
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$ |
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$ |
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$ |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
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Other income/(expense): |
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Interest income |
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Interest expense |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
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Foreign exchange loss, net |
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( |
) |
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( |
) |
|
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( |
) |
|
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( |
) |
|
Change in fair value of 2022 USD Financing Warrants |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
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( |
) |
|
|
Total other income/(expense) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Net loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gain/(loss) on investments |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
||
Loss on foreign currency translation |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Comprehensive loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Net loss per common share, basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Net loss per common share, diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Weighted-average common shares, basic |
|
|
|
|
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|
|
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|
|
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||||
Weighted-average common shares, diluted |
|
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|
||||
See accompanying notes to unaudited condensed consolidated financial statements.
5
Definium Therapeutics, Inc.
(Unaudited)
|
|
Common Shares |
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Additional Paid-In Capital |
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Accumulated Other Comprehensive Income (Loss) |
|
|
|
|
|
|
|
|||||||||
(in thousands, except share amounts) |
|
Shares |
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Amount |
|
|
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Accumulated Deficit |
|
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Total |
|
||||||||||
Balance, December 31, 2025 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common shares under ESPP |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Issuance of common shares upon settlement of restricted share unit ("RSU") awards |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Exercise of 2022 USD Financing Warrants |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Exercise of pre-funded warrants |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Amortization of deferred ATM costs |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Net loss and comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance, March 31, 2026 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common shares, net of shares issuance cost |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Issuance of common shares upon conversion of term loan principal |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Issuance of common shares upon settlement of RSU awards |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Exercise of 2022 USD Financing Warrants |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Exercise of pre-funded warrants |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Amortization of deferred ATM costs |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Net loss and comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance, June 30, 2026 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common shares under ESPP |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Issuance of common shares upon settlement of RSU awards |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Exercise of 2022 USD Financing Warrants |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Amortization of deferred ATM costs |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Exercise of stock options, net of shares withheld for exercise and tax |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Net loss and comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance, September 30, 2026 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, December 31, 2024 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common shares under ESPP |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Issuance of common shares upon settlement of RSU awards |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Exercise of 2022 USD Financing Warrants |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Net loss and comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance, March 31, 2025 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common shares upon settlement of RSU awards |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Exercise of stock options, net of shares withheld for exercise and tax |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Net loss and comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance, June 30, 2025 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common shares under ESPP |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Issuance of common shares upon settlement of RSU awards |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Exercise of 2022 USD Financing Warrants |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Issuance of common shares upon conversion of loan principal |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Exercise of stock options, net of shares withheld for exercise and tax |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Net loss and comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance, September 30, 2025 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
See accompanying notes to unaudited condensed consolidated financial statements.
6
Definium Therapeutics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Nine Months Ended September 30, |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Change in fair value on directors' deferred share units ("DDSU") |
|
|
|
|
|
|
||
Change in fair value of the 2022 USD Financing Warrants |
|
|
|
|
|
|
||
Accretion of discount on investments, net |
|
|
( |
) |
|
|
( |
) |
Amortization of debt issuance costs |
|
|
|
|
|
|
||
Other non-cash adjustments |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Interest receivable |
|
|
( |
) |
|
|
( |
) |
Prepaid and other current assets |
|
|
|
|
|
|
||
Other non-current assets |
|
|
( |
) |
|
|
|
|
Accounts payable |
|
|
|
|
|
|
||
Accrued expenses |
|
|
|
|
|
|
||
Other liabilities, long-term |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities |
|
|
|
|
|
|
||
Purchases of investments |
|
|
( |
) |
|
|
( |
) |
Maturity of investments |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities |
|
|
|
|
|
|
||
Proceeds from equity offerings |
|
|
|
|
|
|
||
Payment of equity offering costs |
|
|
( |
) |
|
|
|
|
Proceeds from credit facility |
|
|
|
|
|
|
||
Repayment of credit facility |
|
|
|
|
|
( |
) |
|
Payment of credit facility issuance costs |
|
|
|
|
|
( |
) |
|
Proceeds from exercise of pre-funded warrants |
|
|
|
|
|
|
||
Proceeds from exercise of 2022 USD Financing Warrants |
|
|
|
|
|
|
||
Proceeds from exercise of options |
|
|
|
|
|
|
||
Proceeds from issuance of common shares under ESPP |
|
|
|
|
|
|
||
Net cash provided by financing activities |
|
|
|
|
|
|
||
Effect of exchange rate changes on cash |
|
|
( |
) |
|
|
( |
) |
Net decrease in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
||
Supplemental Cash Flow Information |
|
|
|
|
|
|
||
Cash paid for interest and final payment for credit facility |
|
$ |
|
|
$ |
|
||
Supplemental Noncash Disclosures |
|
|
|
|
|
|
||
Conversion of 2022 USD Financing Warrants to common shares upon exercise of warrants |
|
|
|
|
|
|
||
Proceeds from exercise of 2022 USD Financing Warrants in prepaid and other current assets |
|
|
|
|
|
|
||
Issuance of common shares upon conversion of term loan principal |
|
|
|
|
|
|
||
Lease liabilities arising from obtaining right-of-use assets |
|
|
|
|
|
|
||
Amortization of deferred financing costs |
|
|
|
|
|
|
||
Withholding taxes payable on option exercises |
|
|
|
|
|
|
||
See accompanying notes to unaudited condensed consolidated financial statements.
7
Definium Therapeutics, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Definium Therapeutics, Inc. (the “Company” or “Definium”) is incorporated under the laws of the Province of British Columbia, Canada. Its wholly-owned subsidiaries, Definium Therapeutics US, Inc. (“Definium US”) and HealthMode, Inc. are both incorporated in the State of Delaware, United States. Definium US was incorporated on May 30, 2019, and HealthMode, Inc. was incorporated on December 13, 2017.
On January 9, 2026, the Company changed its corporate name from Mind Medicine (MindMed) Inc. to Definium Therapeutics, Inc. On January 12, 2026, the Company changed the name of its wholly-owned subsidiary from Mind Medicine, Inc. to Definium Therapeutics US, Inc.
Definium is a late-stage clinical biopharmaceutical company developing a new generation of therapeutics intended to address underlying causes of psychiatric and neurological disorders. The Company's mission is to forge a new era of psychiatry by applying scientific rigor to psychedelics, with the goal of developing accessible treatments that unlock healing at scale. This specifically includes pharmaceutically optimized product candidates derived from the psychedelic and empathogen drug classes, including DT120 and DT402, respectively, the Company's lead product candidates.
Liquidity
As of September 30, 2026, the Company had an accumulated deficit of $
As the Company continues its expansion, it may seek additional financing and/or strategic investments; however, there can be no assurance that any additional financing or strategic investments will be available to the Company on acceptable terms, if at all. If events or circumstances occur such that the Company does not obtain additional funding, it will most likely be required to reduce its plans and/or certain discretionary spending, which could have a material adverse effect on the Company’s ability to achieve its intended business objectives. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if it were unable to continue as a going concern. Management believes that it has sufficient cash, cash equivalents and investments to fund operations through at least the next twelve months from the date of the issuance of these unaudited condensed consolidated financial statements.
Emerging Growth Company Status
The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use the extended transition period for complying with new or revised accounting standards, and as a result of this election, the unaudited condensed consolidated financial statements may not be comparable to companies that comply with public company Financial Accounting Standards Board (“FASB”) standards’ effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of the first sale of its common equity securities under an effective Securities Act of 1933 (the "Securities Act") registration statement, which is December 31, 2026.
8
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). 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 as amended by Accounting Standards Updates of FASB. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2025, which are included in the Company’s 2025 Annual Report on Form 10-K filed with the SEC on February 26, 2026 (the “2025 Annual Report”). The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the periods ended December 31, 2025 and 2024, included in the 2025 Annual Report. Since the date of those financial statements, there have been no changes to the Company's significant accounting policies.
The preparation of financial statements in conformity with U.S. GAAP requires management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates under different assumptions or conditions.
Intercompany balances and transactions, and any unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the unaudited condensed consolidated financial statements.
In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the Company's financial position and results of operations and cash flows for the periods presented.
Cash Equivalents
The Company considers all investments with an original maturity date at the time of purchase of three months or less to be cash equivalents. As of September 30, 2026, the Company’s cash equivalents consisted of U.S. government money market funds at high-credit quality and U.S. federally insured financial institutions. The Company’s accounts may, at times, exceed federally insured limits. The Company had cash equivalents of $
Short-Term Investments
All investments are carried at fair value as determined based upon quoted market prices or pricing models for similar securities at period end. The Company has classified these investments as available-for-sale securities, as the sale of such investments may be required prior to maturity to implement management strategies, and therefore has classified all investments with maturity dates beyond three months at the date of purchase as current assets in the accompanying unaudited balance sheets. Dividend and interest income are recognized when earned. Realized gains and losses are included in earnings and are derived using the specific identification method for determining the cost of securities sold. Unrealized gains and losses are reported as a component of accumulated other comprehensive (loss) income.
The Company reviews its portfolio of available-for-sale debt securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost have resulted from a credit-related loss or other factors. If the decline in fair value is due to credit-related factors, a loss is recognized in the statements of operations, whereas if the decline in fair value is not due to credit-related factors, the loss is recorded in other comprehensive loss. The fair value of the Company's investments was $
9
Net Loss per Share
The following table sets forth the computation of basic and diluted net loss per share attributable to common shareholders (in thousands, except share and per share amounts). As the exercise price of the Company’s pre-funded warrants is $
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to common shareholders, basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Change in fair value of the 2022 USD Financing Warrants |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss attributable to common shareholders, diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average pre-funded warrants used in computing net loss per share attributable to common shareholders, basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares used in computing net loss per share attributable to common shareholders, basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total weighted-average shares used in computing net loss per share attributable to common shareholders, basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Incremental shares from 2022 USD Financing Warrants |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total weighted-average shares used in computing net loss per share attributable to common shareholders, diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The following potentially dilutive securities have been excluded from the calculation of diluted net loss per share due to their anti-dilutive effect:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
||||
2022 USD Financing Warrants |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|||
Stock options |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
RSUs |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Conversion Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Estimated ESPP shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
For the three months ended September 30, 2026,
Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations, or cash flows upon adoption.
10
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) which requires public entities to provide additional disclosures about certain expense categories in the income statement. The amendments are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. As an emerging growth company, the Company is currently evaluating the timing and impact of adoption, including the potential effect of losing emerging growth company status as of December 31, 2026. The Company expects the amendments to primarily impact the presentation and disclosure of research and development and general and administrative expenses.
The Company's available-for-sale investments consisted of the following (in thousands):
|
|
As of September 30, 2026 |
|
|||||||||||||
|
|
Amortized Cost |
|
|
Unrealized Gain |
|
|
Unrealized Losses |
|
|
Estimated Fair Value |
|
||||
Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. agency bonds |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Total |
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
As of December 31, 2025 |
|
|||||||||||||
|
|
Amortized Cost |
|
|
Unrealized Gain |
|
|
Unrealized Losses |
|
|
Estimated Fair Value |
|
||||
Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. agency bonds |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
As of September 30, 2026, all U.S. agency bonds were in a continuous unrealized loss position for less than 12 months.
The following table summarizes the maturities of the Company's investments at September 30, 2026:
(in thousands) |
|
Amortized Cost |
|
|
Estimated Fair Value |
|
||
Due in one year or less |
|
$ |
|
|
$ |
|
||
Due in one to two years |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
The Company has determined that there were no material declines in the fair value of its investments due to credit-related factors as of September 30, 2026 or December 31, 2025.
11
|
|
As of September 30, 2026 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
U.S. agency bonds |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
DDSU Liability |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
2022 USD Financing Warrant Liability |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
As of December 31, 2025 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
U.S. agency bonds |
|
|
— |
|
|
|
|
|
|
— |
|
|
$ |
|
||
Total |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
DDSU Liability |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
2022 USD Financing Warrant Liability |
|
|
— |
|
|
|
— |
|
|
|
|
|
$ |
|
||
Total |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|||
There were
The Company issued liability-classified warrants to purchase Common Shares in its underwritten public offering that closed on September 30, 2022 (the “2022 USD Financing Warrants”). The warrant liability is measured at fair value on a recurring basis and is classified as Level 3 in the fair value hierarchy. Its fair value is determined using the Black-Scholes option pricing model using the following assumptions:
|
|
As of September 30, 2026 |
|
As of December 31, 2025 |
Share price |
|
$ |
|
$ |
Expected volatility |
|
|
||
Risk-free rate |
|
|
||
Expected life |
|
|
During the nine months ended September 30, 2026, the Company made
12
At September 30, 2026 and December 31, 2025, accrued expenses consisted of the following (in thousands):
|
|
As of |
|
|
As of |
|
||
Accrued compensation |
|
$ |
|
|
$ |
|
||
Accrued clinical trial costs |
|
|
|
|
|
|
||
Accrued other research and development costs |
|
|
|
|
|
|
||
Professional services |
|
|
|
|
|
|
||
Other accruals |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Accrued expenses increased by $
Common Shares
The Company is authorized to issue an unlimited number of Common Shares, which have
At-The-Market Facility
On June 28, 2024, the Company filed a shelf registration statement on Form S-3 (the “2024 Registration Statement”), as well as an accompanying prospectus supplement for an at-the-market offering program (“ATM Prospectus”). In connection with the filing of the 2024 Registration Statement and the ATM Prospectus, the Company entered into a sales agreement (the "Sales Agreement") with Leerink Partners LLC (the “Sales Agent”) pursuant to which the Company may issue and sell from time to time Common Shares for an aggregate offering price of up to $
June 2026 Offering
On June 23, 2026, the Company entered into an underwriting agreement (the “2026 Underwriting Agreement”) with J.P. Morgan Securities LLC, Jefferies LLC, Leerink Partners LLC and BofA Securities, Inc., as representatives of the several underwriters named therein (the “2026 Underwriters”), in connection with an underwritten public offering (the “June 2026 Offering”) of
The gross proceeds to the Company from the June 2026 Offering, including the full exercise by the 2026 Underwriters of their option to purchase additional Common Shares, were approximately $
October 2025 Offering
On October 29, 2025, the Company entered into an underwriting agreement (the “2025 Underwriting Agreement”) with Jefferies LLC, Leerink Partners LLC and Evercore Group L.L.C., as representatives of the several underwriters named therein (the “2025 Underwriters”), in connection with an underwritten public offering (the “October 2025 Offering”) of
13
Underwriters an option, exercisable for
The gross proceeds to the Company from the October 2025 Offering, including the full exercise by the 2025 Underwriters of their option to purchase additional Common Shares, were approximately $
2022 USD Financing Warrants
On September 30, 2022, the Company closed an underwritten public offering of
The table below represents the activity associated with the Company's outstanding liability-classified 2022 USD Financing Warrants for the nine months ended September 30, 2026:
|
|
2022 USD Financing Warrants |
|
|
Balance at December 31, 2025 |
|
|
|
|
Issued |
|
|
|
|
Exercised |
|
|
( |
) |
Expired |
|
|
|
|
Balance at September 30, 2026 |
|
|
|
|
The 2022 USD Financing Warrants are liability-classified. Accordingly, the 2022 USD Financing Warrants are recognized at fair value upon issuance and are adjusted to fair value at the end of each reporting period. Any change in fair value is recognized on the condensed consolidated statements of operations and comprehensive loss.
The below table summarizes the activity of the outstanding liability for the 2022 USD Financing Warrants for the nine months ended September 30, 2026 (in thousands):
|
|
Warrant Liability |
|
|
Balance at December 31, 2025 |
|
$ |
|
|
Change in fair value of the warrant liability |
|
|
|
|
Warrant exercises |
|
|
( |
) |
Balance at September 30, 2026 |
|
$ |
|
|
In June 2025, the Company adopted the Definium Therapeutics, Inc. 2025 Equity Incentive Plan (the “2025 Plan”), consisting of (a)
14
In June 2026, the Company's shareholders approved an amendment to the 2025 Plan to increase the number of Common Shares reserved for issuance by
As of September 30, 2026,
The Company also grants inducement equity awards consisting of stock options, RSUs or PSUs to newly hired employees as an inducement material to the employees entering into employment with the Company. All inducement grants granted prior to the adoption of the Definium Therapeutics, Inc. 2026 Inducement Plan (the “Inducement Plan”) were granted outside of the 2020 Option Plan, the 2020 PRSU Plan and the 2025 Plan. All inducement grants are approved by the Compensation Committee of the Company’s Board of Directors prior to issuance. During the nine months ended September 30, 2026, the Company issued inducement grants consisting of
In June 2026, the Company's Board of Directors approved the Inducement Plan consisting of
Stock Options
The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2026:
|
|
Number of Options |
|
|
Weighted Average Exercise Price |
|
|
Weighted Average Remaining Contractual Life (Years) |
|
|
Aggregate Intrinsic |
|
||||
Options outstanding at December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Forfeited |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Expired |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Options outstanding at September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Options vested and exercisable at September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
The expense recognized related to options for the three months ended September 30, 2026 and 2025 was $
Restricted Share Units
The following table summarizes the Company's RSU activity for the nine months ended September 30, 2026:
|
|
|
|
|
|
|
||
|
|
Number of RSUs |
|
|
Weighted Average Grant Date Fair Value |
|
||
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
Cancelled |
|
|
( |
) |
|
|
|
|
Balance at September 30, 2026 |
|
|
|
|
$ |
|
||
During the nine months ended September 30, 2026, RSUs granted include
15
The expense recognized related to RSUs for the three months ended September 30, 2026 and 2025 was $
Employee Share Purchase Plan
In August 2024, the Company commenced the first offering under the ESPP. Subsequent to this offering, new offerings under the ESPP commence automatically every six months until the earlier of (i) termination or modification by the Compensation Committee of the Company’s Board of Directors and (ii) such time when all Common Shares reserved under the ESPP have been issued. During the nine months ended September 30, 2026, the Company recognized $
Stock-based Compensation Expense
Stock-based compensation expense for all equity arrangements for the three and nine months ended September 30, 2026 and 2025 was as follows (in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
As of September 30, 2026, there was approximately $
Directors' Deferred Share Unit Plan
On April 16, 2021, the Company adopted the Director’s Deferred Share Unit Plan (the “DDSU Plan”). The DDSU Plan sets out a framework to grant non-employee directors DDSUs, which are cash settled awards. The DDSUs generally vest ratably over twelve months after grant and are settled within 90 days of the date the director ceases service to the Company. For the three months ended September 30, 2026, a stock-based compensation benefit of $
During the nine months ended September 30, 2026, the Company did not issue any additional DDSUs. There were
As of September 30, 2026, the Company had obligations to make future payments, representing significant research and development contracts and other commitments that are known and committed in the amount of approximately $
The Company enters into research, development and license agreements in the ordinary course of business where the Company receives research services and rights to proprietary technologies. Milestone and royalty payments that may become due under various agreements are dependent on, among other factors, clinical trials, regulatory approvals and ultimately the successful development of a new drug, the outcome and timing of which are uncertain.
16
The Company periodically enters into research and license agreements with third parties that include indemnification provisions customary in the industry. These guarantees generally require the Company to compensate the other party for certain damages and costs incurred as a result of claims arising from research and development activities undertaken by or on behalf of the Company. In some cases, the maximum potential amount of future payments that could be required under these indemnification provisions could be unlimited. These indemnification provisions generally survive termination of the underlying agreement. The nature of the indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay. Historically, the Company has not made any indemnification payments under such agreements and no amount has been accrued in the unaudited condensed consolidated financial statements with respect to these indemnification obligations.
From time to time, the Company may become involved in litigation or other legal proceedings arising in the ordinary course of business. The Company will accrue a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of September 30, 2026 and December 31, 2025, the Company is not a party to any material litigation, and the Company does not currently have any contingencies related to ongoing legal matters.
On August 11, 2023, the Company and certain of its subsidiaries party thereto, as co-borrowers (together with the Company, the “Borrowers”) entered into a Loan and Security Agreement (the “Loan Agreement”) with K2 HealthVentures LLC (“K2HV”), as administrative agent and Canadian collateral agent for lenders thereunder (K2HV, together with any other lender from time to time, the "Lenders"), and Ankura Trust Company, LLC, as collateral trustee for the Lenders, providing for an aggregate principal amount of term loans of up to $
On April 18, 2025 (the “Effective Date”), the Borrowers, entered into the First Amendment to the Loan Agreement with K2HV (as amended by the First Amendment, the “Amended Loan Agreement”).
The Amended Loan Agreement provides for, among other things: (i) an aggregate principal amount of term loans (the “Amendment Term Loans”) of up to $
On July 22, 2025, May 27, 2026 and June 25, 2026, under the terms of the Amended Loan Agreement, K2HV converted a total of $
The Amendment Term Loans mature on
17
In accordance with ASC Topic 470-50, Debt Modifications and Extinguishments, the Company evaluated the Amended Loan Agreement to determine whether it should be accounted for as a modification or extinguishment. As a result of this analysis, the Amended Loan Agreement was accounted for as a modification and no gain or loss was recognized. Transaction costs incurred from or paid on behalf of K2HV of approximately $
The Company recorded $
Future expected repayments of the principal amount due on the credit facility as of September 30, 2026 were as follows (in thousands):
Remainder of 2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Total principal repayments |
|
|
|
|
Unamortized debt issuance costs |
|
|
( |
) |
Accrued final payment fee |
|
|
|
|
Total credit facility, non-current, net |
|
$ |
|
As of September 30, 2026, the Company estimated the fair value of the credit facility to be $
12. SEGMENT REPORTING
The Company has
The Company’s Chief Operating Decision Maker (the “CODM”), its , reviews the Company’s operations, including reviewing budgets and trial-related data, and decides how to allocate resources and assess performance. When evaluating the Company’s financial performance, the CODM regularly reviews total expenses and total assets and the CODM makes decisions using this information on a consolidated basis.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Research and development: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Internal expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
External expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Internal expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
External expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from operations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total other income/(expense), net |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this "Quarterly Report"). This Quarterly Report, including the following sections, contains forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those expressed or implied by such forward-looking statements. For a detailed discussion of these risks and uncertainties, see Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report") and this Quarterly Report. See also “Special Note Regarding Forward-Looking Statements.” We caution the reader not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this Quarterly Report. We undertake no obligation to update forward-looking statements, which reflect events or circumstances occurring after the date of this Quarterly Report, except as required by law.
Our U.S. GAAP accounting policies are referred to in Note 2 of the Condensed Consolidated Financial Statements in this Quarterly Report as well as the Consolidated Financial Statements included in our 2025 Annual Report. All amounts are in United States dollars, unless otherwise indicated.
Overview
We are a late-stage clinical biopharmaceutical company developing a new generation of therapeutics intended to address underlying causes of psychiatric and neurological disorders. Our mission is to forge a new era of psychiatry by applying scientific rigor to psychedelics, with the goal of developing accessible treatments that unlock healing at scale. This specifically includes pharmaceutically optimized product candidates derived from the psychedelic and empathogen drug classes, including DT120 and DT402, respectively, our lead product candidates.
DT120 ODT
Our lead product candidate, DT120 (Lysergide) orally disintegrating tablet (“ODT”), is a proprietary, pharmaceutically optimized form of lysergide D-tartrate that we are developing for the treatment of adults with generalized anxiety disorder (“GAD”), major depressive disorder (“MDD”) and posttraumatic stress disorder (“PTSD”).
Generalized Anxiety Disorder
In March 2024, we announced that the U.S. Food and Drug Administration (“FDA”) granted breakthrough designation to our DT120 program for the treatment of GAD. In September 2025, we announced that the full results from our Phase 2b clinical trial of DT120 in GAD had been published in the Journal of the American Medical Association.
Our Phase 3 clinical program for DT120 ODT for GAD consists of two clinical trials: the Voyage study (DT120-300) and the Panorama study (DT120-301). Both trials are comprised of two parts: Part A, which is a 12-week, randomized, double-blind, placebo-controlled, parallel-group trial assessing the efficacy and safety of DT120 ODT versus placebo; and Part B, which is a 40-week extension period during which participants will be eligible for open-label treatment with DT120 ODT, subject to certain conditions for treatment eligibility. The primary endpoint for each trial is the change from baseline on the Hamilton Anxiety Rating Scale (“HAM-A”) at Week 12 between DT120 ODT 100 µg and placebo.
On August 12, 2026, we announced that the Voyage study met its primary endpoint and all key secondary efficacy endpoints, demonstrating a statistically significant and clinically meaningful improvement from baseline compared with placebo, as measured by the change in HAM-A total score at Week 12. The Least Squares (“LS”) mean change from baseline in HAM-A total score at Week 12 in participants who received DT120 ODT 100 µg was -11.6 compared with -6.2 for participants who received placebo, an LS mean difference of -5.4 points (p<0.0001), corresponding to a standardized effect size of d=0.81. Efficacy was rapid, with changes seen as early as Day 2 and sustained at all post-baseline timepoints in Part A.
DT120 ODT 100 µg was generally well tolerated, with treatment-emergent adverse events (“TEAEs”) mild to moderate in severity, transient, and predominantly occurring on the day of dosing in Part A. No new safety signals were identified, including no suicidality signal or suicidal behavior. There were no drug-related serious adverse events in Part A. Overall discontinuation rates were similar between DT120 ODT 100 µg and placebo groups (10% and 12%). The overall TEAE rate for DT120 ODT 100 µg and placebo was 99% and 69%. The most common TEAEs (>10%) in the DT120 ODT 100 µg arm on dosing day were illusion (75%), nausea (38%), euphoric mood (26%) and headache (24%).
On September 14, 2026, we announced that the Panorama study met its primary endpoint and all key secondary efficacy endpoints, demonstrating a statistically significant and clinically meaningful improvement from baseline
19
compared with placebo, as measured by the change in HAM-A total score at Week 12. The LS mean change from baseline in HAM-A total score at Week 12 in participants who received DT120 ODT 100 µg was -9.8 compared with -4.7 for participants who received placebo, an LS mean difference of -5.1 points (p<0.0001), corresponding to a standardized effect size of d=0.64. Efficacy was rapid, with changes seen as early as Day 2 and sustained at all post-baseline timepoints in Part A.
Panorama included a DT120 ODT 50 µg control arm (n=52) that was not designed or powered for statistical comparisons. Consistent with the dose-response profile demonstrated in our Phase 2b trial, for DT120 in GAD, DT120 ODT 50 µg demonstrated a placebo-adjusted change of -3.5 and -3.6 at weeks 4 and 12, approximately 50% and 29% lower than was observed for DT120 ODT 100 µg.
DT120 ODT 100 µg was generally well tolerated, with most TEAEs mild to moderate in severity, transient, and predominantly occurring on the day of dosing. No new safety signals were identified, including no suicidality signal or suicidal behavior. There were no drug-related serious adverse events in Part A. Overall discontinuation rates were similar between DT120 ODT 100 µg, DT120 50 µg, and placebo groups (10.4%, 11.5%, and 10.3%). The overall TEAE rate for DT120 ODT 100 µg, DT120 50 µg, and placebo was 94.8%, 96.1%, and 62.9%. The most common TEAEs (>10%) in the DT120 ODT 100 µg and 50 µg arms on dosing day were illusion (68%, 61%), nausea (37%, 26%), and headache (24%, 28%).
Major Depressive Disorder
In addition to our Phase 3 clinical program for GAD, we are developing DT120 ODT for the treatment of adults with MDD. Our Phase 3 clinical program for MDD consists of two clinical trials: the Emerge study (DT120-310) and the Ascend study (DT120-311). Both trials are comprised of two parts: Part A, which is a 12-week, randomized, double-blind, placebo-controlled, parallel group trial assessing the efficacy and safety of DT120 ODT versus placebo; and Part B, which is a 40-week extension period during which participants will be eligible for open-label treatment with DT120 ODT, subject to certain conditions for treatment eligibility. The primary endpoint is the change from baseline in Montgomery Asberg Depression Rating Scale (“MADRS”) score at Week 6 between DT120 ODT 100 µg and placebo. In September 2026, we announced that the FDA granted breakthrough designation to our DT120 program for the treatment of MDD.
On June 22, 2026, we announced that the Emerge study met its primary and all key secondary efficacy endpoints, demonstrating a statistically significant (p<0.0001) and clinically meaningful improvement from baseline compared with placebo, as measured by the change in MADRS total score at week 6. LS mean change from baseline in MADRS total score at Week 6 in participants who received DT120 ODT 100 µg was -13.3 compared with -5.2 for patients who received placebo (LS mean difference -8.1 points; p<0.0001).
In the Emerge study, DT120 ODT was generally well tolerated with 99% of TEAEs mild to moderate in severity, transient, and predominantly occurring on the day of dosing, and being consistent with expected acute effects of the study drug. No new safety signals were identified, including no suicidality signal or suicidal behavior. There were no drug-related serious adverse events in Part A. Overall discontinuation rates were similar between DT120 ODT 100 µg and placebo groups (15% and 18%). The overall TEAE rate for DT120 ODT 100 µg and placebo groups were 99% and 57%. The most common TEAEs (>10%) in the DT120 ODT 100 µg arm on dosing day were illusion (48%), euphoric mood (29%), and nausea (27%).
We also activated sites in our Ascend study in the first quarter of 2026 and announced that the first patient was dosed in May 2026. Ascend is anticipated to enroll approximately 165 participants (randomized 2:1:2 to receive DT120 ODT 100 µg, DT120 ODT 50 µg or placebo). The primary endpoint is the change from baseline in MADRS score at Week 6 between DT120 ODT 100 µg and placebo. We anticipate a topline readout (Part A results) for Ascend in 2027.
Posttraumatic Stress Disorder
In April 2026, we announced the Haven study as part of our planned Phase 3 clinical program for DT120 ODT for the treatment of adults with PTSD. The Haven study is anticipated to be comprised of two parts: Part A, which is a 12-week, randomized, double-blind, placebo-controlled, parallel group trial assessing the efficacy and safety of DT120 ODT versus placebo; and Part B, which is a 40-week extension period during which participants will be eligible for open-label treatment with DT120 ODT, subject to certain conditions for treatment eligibility. Haven is anticipated to enroll approximately 200 participants randomized 1:1 to receive DT120 ODT 100 µg or placebo. The primary endpoint is anticipated to be the change from baseline in Clinician-Administered PTSD Scale for DSM-5 (CAPS-5) at Week 8 between DT120 ODT 100 µg and placebo. Haven is expected to initiate in 2027.
20
DT402
Our second lead product candidate, DT402, also referred to as R(-)-MDMA, is our proprietary form of the R-enantiomer of 3,4-methylenedioxymethamphetamine, which we are developing for the treatment of adults with autism spectrum disorder (“ASD”). MDMA is a synthetic molecule that is often referred to as an empathogen because it is reported to increase feelings of connectedness and compassion. Preclinical studies of R(-)-MDMA demonstrated its acute pro-social and empathogenic effects, while its diminished dopaminergic activity suggests that it has the potential to exhibit less stimulant activity, neurotoxicity, hyperthermia and abuse liability compared to racemic MDMA or the S(+)-enantiomer. In October 2024, we completed our first clinical trial of DT402, a single-ascending dose trial in adult healthy volunteers. The data from this Phase 1 clinical trial helped to characterize the tolerability, pharmacokinetics and pharmacodynamics of DT402.
In the fourth quarter of 2025, we initiated a Phase 2a trial of DT402 in adults with ASD. The 200 mg single-dose, single arm, open-label study enrolled five participants and was designed to characterize the pharmacodynamic and clinical effects of DT402 and explore changes across measures of socialization, communication and other functional outcomes. The study endpoints were considered exploratory and were not powered to draw statistical conclusions. Following treatment, improvements were observed across several measures, including reduced rigidity and fixation and increased engagement in social settings, as well as increases in empathy and closeness to others and reductions in anxiety and irritability. DT402 was well tolerated, with the most common adverse events being euphoria, fatigue and enhanced relaxation. Based on the initial findings observed in these participants, we ended enrollment in the Phase 2a study and now plan to further evaluate DT402 in a study that will investigate the safety and clinical activity of multiple dosing paradigms, which is expected to begin in 2027.
Pipeline
Beyond our clinical stage product candidates, we are exploring additional programs, including through external collaborations, which we seek to expand our drug development pipeline and broaden the potential applications of our lead product candidates. These research and development programs may include nonclinical, preclinical and human clinical trials of current and new product candidates and research compounds with our collaborators.
Our business is premised on a growing body of research supporting the use of novel psychoactive compounds to treat a myriad of brain health disorders. For all product candidates, we intend to proceed through research and development, and with marketing of the product candidates that may ultimately be approved pursuant to the regulations of the FDA and the regulations in other jurisdictions. This entails, among other things, conducting clinical trials with research scientists, using internal and external clinical drug development teams, producing and supplying product candidates according to current Good Manufacturing Practices, and conducting all trials and development in accordance with the regulations of the FDA, and other regulations in other jurisdictions.
Our Product Pipeline
The following table summarizes the status of our lead product candidates:
21
Components of Operating Results
Operating Expenses
Research and Development
Research and development expenses account for a significant portion of our operating expenses. Research and development expenses consist primarily of direct and indirect costs incurred for the development of our product candidates.
External expenses include:
We may also incur in‑process research and development expenses when we acquire or in‑license assets from other parties. Technology acquisitions are expensed or capitalized based on management’s assessment of the ultimate recoverability of the amounts paid and the potential for alternative future use. Acquired in‑process research and development costs that have no alternative future use are immediately expensed.
Internal expenses include employee-related costs such as salaries, related benefits and non-cash stock-based compensation expense for employees engaged in research and development functions.
We expect our research and development expenses to increase throughout 2026 as we continue the clinical development of our product candidates and other preclinical programs in GAD, MDD, PTSD and ASD and other potential or future indications, including initiating additional and larger clinical trials.
We expense research and development costs in the periods in which they are incurred. External expenses are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers or our estimate of the level of service that has been performed at each reporting date. We track external costs by program, clinical or preclinical. We do not track internal costs by program because these costs are deployed across multiple programs and, as such, are not separately classified.
General and Administrative
General and administrative expenses consist primarily of compensation costs, including stock-based compensation, for executive management and administrative employees, including finance and accounting, legal, human resources and other administrative functions, professional services fees, advisory and professional service fees in connection with financing transactions, insurance expenses, costs to support our commercialization efforts and allocated expenses.
We expect our general and administrative expenses to continue to increase for the foreseeable future as we continue to advance our research and development programs, grow our business and, if any of our product candidates receive marketing approval, commence commercialization activities.
22
Results of Operations
Comparison of the Three and Nine Months Ended September 30, 2026 and 2025
The following tables summarize our results of operations for the periods presented (in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
$ |
46,141 |
|
|
$ |
30,978 |
|
|
$ |
136,290 |
|
|
$ |
84,144 |
|
General and administrative |
|
|
26,138 |
|
|
|
14,691 |
|
|
|
70,286 |
|
|
|
34,587 |
|
Total operating expenses |
|
|
72,279 |
|
|
|
45,669 |
|
|
|
206,576 |
|
|
|
118,731 |
|
Loss from operations |
|
|
(72,279 |
) |
|
|
(45,669 |
) |
|
|
(206,576 |
) |
|
|
(118,731 |
) |
Other income/(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
10,139 |
|
|
|
2,262 |
|
|
|
17,183 |
|
|
|
7,469 |
|
Interest expense |
|
|
(1,150 |
) |
|
|
(1,274 |
) |
|
|
(3,628 |
) |
|
|
(4,214 |
) |
Foreign exchange loss, net |
|
|
(21 |
) |
|
|
(39 |
) |
|
|
(97 |
) |
|
|
(107 |
) |
Change in fair value of 2022 USD Financing Warrants |
|
|
12,350 |
|
|
|
(22,545 |
) |
|
|
(93,927 |
) |
|
|
(17,774 |
) |
Total other income/(expense) |
|
|
21,318 |
|
|
|
(21,596 |
) |
|
|
(80,469 |
) |
|
|
(14,626 |
) |
Net loss |
|
$ |
(50,961 |
) |
|
$ |
(67,265 |
) |
|
$ |
(287,045 |
) |
|
$ |
(133,357 |
) |
Operating Expenses
Research and Development (in thousands):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
External costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
DT120 program |
|
|
|
|
|
|
|
|
|
|
|
|
||||
DT120 GAD |
|
$ |
14,685 |
|
|
$ |
16,219 |
|
|
$ |
55,556 |
|
|
$ |
44,010 |
|
DT120 MDD |
|
|
8,116 |
|
|
|
3,466 |
|
|
|
23,582 |
|
|
|
7,244 |
|
DT120 other* |
|
|
4,587 |
|
|
|
1,723 |
|
|
|
11,156 |
|
|
|
4,901 |
|
Total DT120 program |
|
|
27,388 |
|
|
|
21,408 |
|
|
|
90,294 |
|
|
|
56,155 |
|
DT402 program |
|
|
428 |
|
|
|
619 |
|
|
|
1,296 |
|
|
|
1,526 |
|
Preclinical and other programs |
|
|
1,229 |
|
|
|
660 |
|
|
|
3,100 |
|
|
|
2,575 |
|
Total external costs |
|
|
29,045 |
|
|
|
22,687 |
|
|
|
94,690 |
|
|
|
60,256 |
|
Internal costs |
|
|
17,096 |
|
|
|
8,291 |
|
|
|
41,600 |
|
|
|
23,888 |
|
Total research and development expenses |
|
$ |
46,141 |
|
|
$ |
30,978 |
|
|
$ |
136,290 |
|
|
$ |
84,144 |
|
* DT120 other consists of expenses that support the broader DT120 program, including nonclinical studies and consulting expenses.
Research and development expenses of $46.1 million for the three months ended September 30, 2026 increased by $15.1 million, or 49%, compared to $31.0 million for the three months ended September 30, 2025. The increase was primarily due to an increase of $8.8 million in internal personnel costs associated with the expansion of our research and development organization, $5.9 million in expenses related to our DT120 development programs, and an increase of $0.6 million in preclinical and other program expenses, partially offset by a decrease of $0.2 million in DT402 program expenses.
Research and development expenses of $136.3 million for the nine months ended September 30, 2026 increased by $52.1 million, or 62%, compared to $84.2 million for the nine months ended September 30, 2025. The increase was primarily due to an increase of $34.1 million in expenses related to our DT120 development programs, an increase of $17.7 million in internal personnel costs associated with the expansion of our research and development organization, and an increase of $0.5 million in preclinical and other program expenses, partially offset by a decrease of $0.2 million in DT402 program expenses.
23
General and Administrative
General and administrative expenses of $26.1 million for the three months ended September 30, 2026 increased by $11.4 million, or 78%, compared to $14.7 million for the three months ended September 30, 2025. The increase was primarily due to increases of $3.5 million in corporate and government affairs expenses, $3.4 million in commercial-preparedness related expenses, $3.3 million in personnel-related expenses as we expanded our organizational capabilities, $0.7 million in legal and patent expenses, $0.4 million in other miscellaneous administrative expenses, and $0.1 million in stock-based compensation expenses.
General and administrative expenses of $70.3 million for the nine months ended September 30, 2026 increased by $35.7 million, or 103%, compared to $34.6 million for the nine months ended September 30, 2025. The increase was primarily due to increases of $11.6 million in stock-based compensation expenses, $7.4 million in corporate and government affairs expense, $6.8 million in personnel-related expenses as we expanded our organizational capabilities, $6.6 million in commercial-preparedness related expenses, $2.5 million in legal and patent expenses, and $0.8 million in other miscellaneous administrative expenses.
Other Income (Expense)
Other income for the three months ended September 30, 2026 was $21.3 million compared to other expense for the three months ended September 30, 2025 of $21.6 million. The variance was primarily attributable to an $34.9 million change in the fair value of the 2022 USD Financing Warrants, driven largely by the decrease in our share price from $47.04 at June 30, 2026 to $38.06 at September 30, 2026.
Other expense for the nine months ended September 30, 2026 and September 30, 2025 was $80.5 million and $14.6 million, respectively. The variance was primarily attributable to an $76.2 million change in the fair value of the 2022 USD Financing Warrants, driven largely by the increase in our share price from $13.39 at December 31, 2025 to $38.06 at September 30, 2026.
Liquidity and Capital Resources
Sources of Liquidity
Since inception, we have financed our operations primarily from the issuance of equity and debt under our Amended Loan Agreement (as defined below). Our primary capital needs are for funds to support our scientific research and development activities including staffing, manufacturing, preclinical studies, clinical trials, commercialization planning, administrative costs and for working capital.
We have experienced operating losses and cash outflows from operations since inception and will require ongoing financing in order to continue our research and development activities. We have not earned any revenue or reached commercialization of any of our product candidates. Our future operations are dependent upon our ability to finance our cash requirements which will allow us to continue our research and development activities and the commercialization of our product candidates, if approved. There can be no assurance that we will be successful in continuing to finance our operations.
Our cash, cash equivalents and investments and our working capital at September 30, 2026, were approximately $1.0 billion and $984.0 million, respectively. Based on our current operating plan and anticipated milestones, we believe that our cash, cash equivalents and investments as of September 30, 2026 will be sufficient to fund our operations into 2030.
ATM Program
On June 28, 2024, we entered into a sales agreement (the "Sales Agreement") with Leerink Partners LLC (the “Agent”) to create an at-the-market equity program under which we from time to time may offer and sell the ATM Shares (as defined below), through or to the Agent. We also filed a prospectus supplement on June 28, 2024 allowing for up to $150.0 million of Common Shares (the “ATM Shares”) to be sold under the Sales Agreement.
Subject to the terms and conditions of the Sales Agreement, the Agent will use its commercially reasonable efforts to sell the ATM Shares from time to time, based upon our instructions. The Agent will be entitled to a commission of up to 3.0% of the aggregate gross proceeds from each sale of the ATM Shares effectuated through or to the Agent.
24
We have no obligation to sell any of the ATM Shares and may, at any time suspend offers under the Sales Agreement or terminate the Sales Agreement. We had not sold any Common Shares under the 2024 ATM as of September 30, 2026.
October 2025 Offering
On October 29, 2025, we entered into an underwriting agreement with Jefferies LLC, Leerink Partners LLC and Evercore Group L.L.C., as representatives of the several underwriters named therein, in connection with an underwritten public offering (the “October 2025 Offering”) of 18,375,000 Common Shares, at an offering price of $12.25 per Common Share, less underwriting discounts and commissions. In addition, under the terms of the underwriting agreement, we granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 2,756,250 Common Shares at the same price, which was exercised by the underwriters in full on October 30, 2025.
The gross proceeds to us from the October 2025 Offering, including the full exercise by the underwriters of their option to purchase additional Common Shares, were approximately $258.9 million. Net proceeds were approximately $242.8 million, after deducting underwriting discounts and commissions and other offering expenses payable by us.
June 2026 Offering
On June 23, 2026, we entered into an underwriting agreement with J.P. Morgan Securities LLC, Jefferies LLC, Leerink Partners LLC, and BofA Securities, Inc., as representatives of the several underwriters named therein, in connection with an underwritten public offering (the “June 2026 Offering”) of 20,588,236 Common Shares, at an offering price of $34.00 per Common Share. In addition, under the terms of the underwriting agreement, we granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 3,088,235 Common Shares at the same price, which was exercised by the underwriters in full on June 24, 2026.
The gross proceeds to us from the June 2026 Offering, including the full exercise by the underwriters of their option to purchase additional Common Shares, were approximately $805 million. Net proceeds were approximately $757.9 million, after deducting underwriting discounts and commissions and other offering expenses payable by us.
K2 Credit Facility
On August 11, 2023, we entered into a Loan and Security Agreement (the “Loan Agreement”) with K2 HealthVentures LLC (“K2HV”) as administrative agent and Canadian collateral agent for lenders thereunder (K2HV, together with any other lender from time to time, the “Lenders”), and Ankura Trust Company, LLC, as collateral trustee for the Lenders, providing for an aggregate principal amount of term loans of up to $50.0 million (the “Term Loans”). On April 18, 2025 (the “Effective Date”), we entered into the First Amendment to the Loan Agreement with K2HV (as amended by the First Amendment, the “Amended Loan Agreement”). The Amended Loan Agreement provides for, among other things, an aggregate principal amount of term loans of up to $120.0 million, consisting of (A) a new Restatement First Tranche Term Loan (as defined in the Amended Loan Agreement) of $42.0 million, which was funded on the Effective Date, a portion of the proceeds of which was used on the Effective Date to refinance in full all term loans outstanding under the original Loan Agreement, and to pay fees and expenses in connection with the Amended Loan Agreement and the refinancing of the existing term loans, (B) subsequent tranches of term loans totaling up to $28.0 million, subject to the occurrence of certain time-based clinical and regulatory milestones and (C) an additional tranche of term loans of up to $50.0 million upon our request, subject to review by the Lenders of certain information from us and discretionary approval by the Lenders.
On July 22, 2025, May 27, 2026 and June 25, 2026, under the terms of the Amended Loan Agreement, K2HV converted a total of $5.5 million of the outstanding term loans into 843,393 Common Shares. As of September 30, 2026, K2HV may convert up to an additional $1.5 million of the outstanding term loans into Common Shares at a conversion price of $9.00 per share.
Future Funding Requirements
To date, we have not generated any revenue. We do not expect to generate any meaningful revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates, and we do not know when, or if it will occur at all. We will continue to require additional capital to develop our product candidates and to fund operations for the foreseeable future. Moreover, we expect our expenses to increase in connection with our ongoing activities, particularly as we continue the development of and seek regulatory approvals for our product candidates, as well as prepare for the potential commercialization of our product candidates. Further, we are subject to all the risks incidental to the development
25
of new pharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business. Our expenses will increase if, and as, we:
Based on our current operating plan and anticipated milestones, we believe that our cash, cash equivalents and investments as of September 30, 2026 will be sufficient to fund our operations into 2030. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. In order to complete the development of our product candidates and to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize our product candidates, if approved, we may require additional funding. Until we can generate a sufficient amount of revenue from the commercialization of our product candidates, we may seek to raise any necessary additional capital through the sale of equity, debt financings or other capital sources, which could include income from collaborations, strategic partnerships or marketing, distribution or licensing arrangements with third parties or from grants. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common shareholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, including restricting our operations and limiting our ability to incur liens, issue additional debt, pay dividends, repurchase our Common Shares, make certain investments or engage in merger, consolidation, licensing or asset sale transactions. If we raise funds through collaborations, strategic partnerships and other similar arrangements with third parties, we may be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We may be unable to raise additional funds or enter into such agreements or arrangements on favorable terms, or at all. If we are unable to raise additional funds when needed, we may be required to delay, reduce or eliminate our product development or future commercialization efforts. We have based our projections of operating capital requirements on our current operating plan, which is based on several assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount and timing of our working capital requirements. Our future funding requirements will depend on many factors, including:
26
Cash Flows (in thousands)
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net cash used in operating activities |
|
$ |
(148,389 |
) |
|
$ |
(88,585 |
) |
Net cash used in investing activities |
|
|
(647,534 |
) |
|
|
(186,590 |
) |
Net cash provided by financing activities |
|
|
779,239 |
|
|
|
21,401 |
|
Foreign exchange impact on cash |
|
|
(3 |
) |
|
|
(8 |
) |
Net decrease in cash and cash equivalents |
|
$ |
(16,687 |
) |
|
$ |
(253,782 |
) |
Cash flows from operating activities
Cash used in operating activities for the nine months ended September 30, 2026 was $148.4 million, which consisted of a net loss of $287.0 million, offset by a net change of $14.6 million in our net operating assets and liabilities, and $124.0 million in non-cash charges. The non-cash charges primarily consisted of a change in fair value on the 2022 USD Financing Warrants liability of $93.9 million, stock-based compensation expense of $27.5 million, change in fair value of DDSU of $4.9 million, offset by accretion of discount on investments, net of $3.0 million.
Cash used in operating activities for the nine months ended September 30, 2025 was $88.6 million, which consisted of a net loss of $133.4 million, offset by a net change of $11.7 million in our net operating assets and liabilities, and $33.1 million in non-cash charges. The non-cash charges primarily consisted of a change in fair value on the 2022 USD Financing Warrants liability of $17.8 million, stock-based compensation expense of $14.5 million, change in fair value of DDSU of $1.0 million, offset by accretion of discount on investments, net of $0.3 million.
Cash flows from investing activities
Cash used in investing activities for the nine months ended September 30, 2026 consisted of purchases of investments of $798.5 million, offset by maturities of investments of $151.0 million.
Cash used in investing activities for the nine months ended September 30, 2025 consisted of purchases of investments of $262.3 million, offset by maturities of investments of $75.8 million.
Cash flows from financing activities
Cash provided by financing activities for the nine months ended September 30, 2026, was $779.2 million, which consisted of $758.7 million of net proceeds from the June 2026 Offering, $15.2 million of proceeds from the exercise of certain of the 2022 USD Financing Warrants, $4.6 million in proceeds from the exercise of stock options, and $0.7 million in proceeds from the issuance of Common Shares under the Employee Share Purchase Plan.
Cash provided by financing activities for the nine months ended September 30, 2025, was $21.4 million, which consisted of $20.0 million in net proceeds from the Amended Loan Agreement, $1.0 million of proceeds from the exercise of the 2022 USD Financing Warrants, $0.4 million in proceeds from the exercise of options, $0.4 million in proceeds from the issuance of Common Shares under the Employee Share Purchase Plan, partially offset by $0.4 million of Amended Loan Agreement issuance costs.
27
Contractual Obligations and Contingencies
See Note 10 to our unaudited condensed consolidated financial statements located in “Part I – Financial Information, Item 1. Notes to Condensed Consolidated Financial Statements” in this Quarterly Report for a description of our contractual obligations and contingencies.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited interim condensed consolidated financial statements as of September 30, 2026, which have been prepared in accordance with U.S. GAAP, and on a basis consistent with those accounting principles followed by us and disclosed in Note 2 to our audited consolidated financial statements in the 2025 Annual Report. The preparation of these unaudited condensed consolidated financial statements requires our management to make judgments and estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated 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 from these judgments and estimates under different assumptions or conditions and any such differences may be material.
Other than as described under Note 2 of our unaudited interim condensed consolidated financial statements, there have been no material changes to our critical accounting policies and estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2025 Annual Report.
Recent Accounting Pronouncements
See Note 2 to our unaudited condensed consolidated financial statements located in “Part I – Financial Information, Item 1. Notes to Condensed Consolidated Financial Statements” in the Quarterly Report for a description of recent accounting pronouncements applicable to our financial statements.
Emerging Growth Company Status
We are an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
We have elected to use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the last day of the fiscal year following the fifth anniversary of our first sale of common equity securities under an effective Securities Act of 1933 registration statement or such earlier time that we no longer are 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 will no longer be an emerging growth company after December 31, 2026.
28
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide the information required by this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time period specified in the SEC's rules and forms, and that such information is accumulated and communicated to management including our Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure. As of September 30, 2026, our Chief Executive Officer and Chief Financial Officer carried out an evaluation with the participation of management of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2026.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Securities Exchange Act of 1934 that occurred during the quarter ended September 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
A control system, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. In addition, the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
29
Part Ii - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in litigation or other legal proceedings arising in the ordinary course of our business. We are not currently a party to any material litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business.
Item 1A. Risk Factors.
During the three months ended September 30, 2026, there were no material changes to the "Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2025. You should carefully consider the information described therein and in this Quarterly Report on Form 10-Q, which could materially affect our business condition, results of operations and cash flows.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
For a description of certain working capital restrictions, including limitations upon the payment of dividends, see the description of our Amended Loan Agreement in Note 11 to our unaudited interim condensed consolidated financial statements located in “Part I – Financial Information, Item 1. Notes to Condensed Consolidated Financial Statements” in this Quarterly Report.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable
Item 5. Other Information.
Rule 10b5-1 Trading Arrangements
During the fiscal quarter ended September 30, 2026, no director or officer of the Company
30
Item 6. Exhibits.
Exhibit Number |
|
Description |
Incorporated by Reference |
|||
|
|
|
Form |
Exhibit No. |
Filing Date |
File No. |
3.1 |
|
Amended and Restated Articles of Definium Therapeutics, Inc., effective as of January 9, 2026. |
10-K |
3.1 |
February 26, 2026 |
001-40360 |
3.2 |
|
Notice of Articles, Incorporated on July 26, 2010, effective as of January 29, 2026. |
S-8 |
4.2 |
June 16, 2026 |
001-296812 |
3.3 |
|
Certificate of Name Change, dated January 9, 2026. |
8-K |
3.2 |
January 12, 2026 |
001-40360 |
31.1* |
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
31.2* |
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
32.1*+ |
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
32.2*+ |
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
|
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |
|
|
|
|
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
|
|
|
|
* Filed or furnished herewith.
+ These certifications are being furnished herewith solely to accompany this Quarterly Report pursuant to 18 U.S.C. Section 1350, and are not
being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
31
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
Definium Therapeutics, Inc. |
|
|
|
|
|
Date: November 9, 2026 |
|
By: |
/s/ Robert Barrow |
|
|
|
Robert Barrow |
|
|
|
Chief Executive Officer
|
|
|
|
|
Date: November 9, 2026 |
|
By: |
/s/ Brandi L. Roberts |
|
|
|
Brandi L. Roberts, CPA |
|
|
|
Chief Financial Officer |
|
|
|
|
32