Evommune nine-month net loss widens to $84.8M
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.
Evommune reported no revenue for the nine months ended September 30, 2026, versus $13.0 million a year earlier, and a net loss of $84.8 million versus $40.6 million. Cash, cash equivalents and investments totaled $262.3 million at September 30, 2026. Management expects those resources, together with February 2026 private-placement proceeds, to fund its current plan into the second half of 2029.
Two EVO756 Phase 2b trials missed their primary endpoints: CSU results announced in June 2026 and AD results in September 2026. Evommune discontinued development for both indications but continues its migraine Phase 2b trial, with initial results expected in the second half of 2027.
After quarter-end, Evommune licensed EVO570 from Hinova for a $20.0 million upfront cash payment and pre-funded warrants for up to 1,262,413 shares; potential milestone payments are up to $1.1 billion, plus tiered royalties. On November 4, 2026, it sold 4,966,889 shares at $6.04 per share for $30.0 million in gross proceeds.
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.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate point. Forward-looking: it has not happened yet and may not happen.Management expected $262.3 million plus placement proceeds to fund plans into the second half of 2029.
Negative
- Major pointEVO756 Phase 2b trials missed primary endpoints in CSU and AD; development ended for both.
- Moderate pointNine-month revenue fell from $13.0 million to zero.
- Moderate pointNine-month net loss increased to $84.8 million from $40.6 million.
Filing Explained
The Hinova upfront payment and warrant value are expected to appear as fourth-quarter acquired research-and-development expense.
The November 4 private placement was completed; as of
The Hinova pre-funded warrants were issued and are immediately exercisable at
Evommune expects to recognize the
Key Figures
Key Terms
Phase 2b medical
Urticaria Activity Score over seven days (UAS7) medical
monthly migraine days (MMD) medical
molecular glue degrader medical
pre-funded warrants financial
held-to-maturity securities financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What revenue and net loss did EVMN report for the first nine months of 2026?
How long does Evommune expect its cash to last?
Why did EVMN stop developing EVO756 for CSU and AD?
What were the terms of EVMN's November 2026 private placement?
What are the payment terms of Evommune's EVO570 license from Hinova?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 |
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(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 |
Trading Symbol(s) |
Name of each exchange on which registered |
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, 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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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 10, 2026, the registrant had
Table of Contents
Table of Contents
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PART I. |
FINANCIAL INFORMATION |
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Item 1. |
Financial Statements (unaudited) |
5 |
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Condensed Consolidated Balance Sheets (unaudited) |
5 |
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Condensed Consolidated Statements of Operations (unaudited) |
6 |
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Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) (unaudited) |
7 |
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Condensed Consolidated Statements of Cash Flows (unaudited) |
8 |
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Notes to the Condensed Consolidated Financial Statements (unaudited) |
9 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
27 |
Item 4. |
Controls and Procedures |
27 |
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PART II. |
OTHER INFORMATION |
28 |
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Item 1. |
Legal Proceedings |
28 |
Item 1A. |
Risk Factors |
28 |
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 |
31 |
Item 6. |
Exhibits |
32 |
Signatures |
33 |
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Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains express or implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
In some cases, forward-looking statements can be identified by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. These statements are only predictions. Investors should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from those implied or projected by forward-looking statements include, among other things, those listed under the section titled “Risk Factors” in Part I, Item 1A in our Annual Report on Form 10-K for our fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission, or SEC, on March 5, 2026, and elsewhere in this Quarterly Report.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
3
Table of Contents
SPECIAL NOTE REGARDING COMPANY REFERENCES
Throughout this Quarterly Report on Form 10-Q, the “Company,” “we,” “us” and “our” refer to Evommune, Inc.
SPECIAL NOTE REGARDING TRADEMARKS
All trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.
4
Table of Contents
PART I—FINANCIAL INFORMATION
EVOMMUNE, INC.
Condensed Consolidated Balance Sheets (unaudited)
(in thousands, except share and per share amounts)
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September 30, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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Short-term investments |
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Prepaid expenses and other current assets |
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Total current assets |
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Operating lease right-of-use assets, net |
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Property and equipment, net |
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Long-term investments |
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Restricted cash |
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Other non-current assets |
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Total assets |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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Accrued liabilities |
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Operating lease liability, current portion |
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Other current liabilities |
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Total current liabilities |
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Operating lease liability, non-current portion |
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Finance lease liability, non-current portion |
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Total liabilities |
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Stockholders’ equity: |
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Common stock, par value $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
Table of Contents
EVOMMUNE, INC.
Condensed Consolidated Statements of Operations (unaudited)
(in thousands, except share and per share amounts)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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Revenues: |
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License revenue |
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$ |
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$ |
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$ |
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$ |
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Total revenue |
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Operating expenses: |
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Research and development |
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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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Other income, net: |
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Change in fair value of convertible preferred stock forward |
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— |
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— |
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— |
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Interest income |
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Other expense, net |
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( |
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( |
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( |
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Total other income, net |
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Net loss |
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( |
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( |
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( |
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( |
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Basic and diluted net loss per share of common stock |
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$ |
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( |
) |
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$ |
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( |
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$ |
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( |
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$ |
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( |
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Weighted average basic and diluted shares of common stock outstanding |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
Table of Contents
EVOMMUNE, INC.
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) (unaudited)
(in thousands, except share amounts)
For the Three Months Ended September 30, 2026 |
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Convertible preferred stock |
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Common stock |
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Additional |
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Accumulated |
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Shares |
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Amount |
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Shares |
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Amount |
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capital |
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deficit |
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Total |
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Balance, July 1, 2026 |
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— |
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$ |
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— |
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$ |
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$ |
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$ |
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( |
) |
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$ |
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Issuance of common stock on exercise of options |
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— |
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— |
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Issuance of common stock under ESPP |
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— |
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— |
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— |
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— |
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Issuance of common stock in private placement, net of transaction costs |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance, September 30, 2026 |
|
|
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— |
|
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$ |
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— |
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$ |
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$ |
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$ |
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( |
) |
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$ |
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||||
For the Three Months Ended September 30, 2025 |
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Convertible preferred stock |
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Common stock |
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Additional |
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Accumulated |
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Shares |
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Amount |
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Shares |
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Amount |
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capital |
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deficit |
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Total |
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|||||||||||
Balance, July 1, 2025 |
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$ |
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$ |
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— |
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$ |
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$ |
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( |
) |
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$ |
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( |
) |
||||
Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Vesting of early exercised options |
|
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
|
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— |
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|
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( |
) |
|
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( |
) |
Balance, September 30, 2025 |
|
|
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$ |
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|
|
|
|
|
|
$ |
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— |
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$ |
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|
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$ |
|
( |
) |
|
$ |
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( |
) |
||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
For the Nine Months Ended September 30, 2026 |
|
||||||||||||||||||||||||||||||||||
|
|
|
Convertible preferred stock |
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Common stock |
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Additional |
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Accumulated |
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|
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|
||||||||||||||||
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Shares |
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Amount |
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Shares |
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Amount |
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capital |
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deficit |
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Total |
|
|||||||||||
Balance, January 1, 2026 |
|
|
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— |
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$ |
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— |
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$ |
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|
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$ |
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$ |
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( |
) |
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$ |
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|
||||
Issuance of common stock on exercise of options |
|
|
|
— |
|
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— |
|
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|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
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|
|||
Issuance of common stock under ESPP |
|
|
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— |
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— |
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— |
|
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|
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|
— |
|
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|||
Issuance of common stock in private placement, net of transaction costs |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
— |
|
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||||
Stock-based compensation |
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|
|
— |
|
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|
— |
|
|
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|
— |
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— |
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|
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|
|
— |
|
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||
Vesting of early exercised options |
|
|
|
— |
|
|
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|
— |
|
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|
— |
|
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|
|
— |
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|
|
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|
|
— |
|
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||
Net loss |
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|
— |
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|
— |
|
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|
— |
|
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|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
|
|
|
( |
) |
Balance, September 30, 2026 |
|
|
|
— |
|
|
$ |
|
— |
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
( |
) |
|
$ |
|
|
||||
For the Nine Months Ended September 30, 2025 |
|
||||||||||||||||||||||||||||||||||
|
|
|
Convertible preferred stock |
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|
Common stock |
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|
Additional |
|
|
|
Accumulated |
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|
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|
||||||||||||||||
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Shares |
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|
Amount |
|
|
|
Shares |
|
|
Amount |
|
|
capital |
|
|
|
deficit |
|
|
Total |
|
|||||||||||
Balance, January 1, 2025 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
— |
|
|
$ |
|
|
|
$ |
|
( |
) |
|
$ |
|
( |
) |
||||
Issuance of common stock on exercise of options |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|||
Issuance of Series C convertible preferred stock, net of transaction costs |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
||
Stock-based compensation |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
||
Vesting of early exercised options |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
||
Net loss |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
( |
) |
|
|
|
( |
) |
Balance, September 30, 2025 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
— |
|
|
$ |
|
|
|
$ |
|
( |
) |
|
$ |
|
( |
) |
||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
Table of Contents
EVOMMUNE, INC.
Condensed Consolidated Statements of Cash Flows (unaudited)
(in thousands)
|
|
Nine Months Ended |
|
|||||||
|
|
September 30, |
|
|||||||
|
|
2026 |
|
|
2025 |
|
||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
||
Net loss |
|
$ |
|
( |
) |
|
$ |
|
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
||
Stock-based compensation expense |
|
|
|
|
|
|
|
|
||
Net amortization of premiums and accretion of discounts on investments |
|
|
|
( |
) |
|
|
|
( |
) |
Depreciation and amortization |
|
|
|
|
|
|
|
|
||
Change in fair value of convertible preferred stock forward |
|
|
|
|
|
|
|
( |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
||
Prepaid expenses and other assets |
|
|
|
( |
) |
|
|
|
( |
) |
Accounts payable |
|
|
|
|
|
|
|
( |
) |
|
Accrued liabilities |
|
|
|
|
|
|
|
( |
) |
|
Operating lease liabilities |
|
|
|
( |
) |
|
|
|
( |
) |
Deferred revenue |
|
|
|
|
|
|
|
( |
) |
|
Net cash used in operating activities |
|
|
|
( |
) |
|
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
||
Purchases of investments |
|
|
|
( |
) |
|
|
|
( |
) |
Maturities of investments |
|
|
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
|
( |
) |
|
|
|
( |
) |
Net cash (used in) provided by investing activities |
|
|
|
( |
) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
||
Proceeds from private placement financing, net of transaction costs |
|
|
|
|
|
|
|
|
||
Proceeds from issuance of convertible preferred stock, net of issuance costs |
|
|
|
|
|
|
|
|
||
Proceeds from exercise of stock options |
|
|
|
|
|
|
|
|
||
Proceeds from issuance of ESPP shares |
|
|
|
|
|
|
|
|
||
Payment of deferred offering costs |
|
|
|
— |
|
|
|
|
( |
) |
Principal payments of finance lease liabilities |
|
|
|
( |
) |
|
|
|
( |
) |
Principal payments of financing obligation |
|
|
|
|
|
|
|
( |
) |
|
Net cash provided by financing activities |
|
|
|
|
|
|
|
|
||
Net increase in cash, cash equivalents and restricted cash |
|
|
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, beginning of period |
|
|
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash, end of period |
|
$ |
|
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
Components of cash, cash equivalents, and restricted cash |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
||
Restricted cash |
|
|
|
|
|
|
|
|
||
Total cash, cash equivalents, and restricted cash |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
Supplemental cash flow disclosures: |
|
|
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
|
$ |
|
|
||
Deferred offering costs in accrued expenses |
|
|
|
|
|
|
|
|
||
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
||
Property and equipment purchases in accounts payable |
|
|
|
|
|
|
|
|
||
Vesting of early exercised stock options |
|
|
|
|
|
|
|
|
||
Right-of-use assets obtained in exchange for operating lease liabilities |
|
|
|
|
|
|
|
|
||
Right-of-use assets obtained in exchange for finance lease liabilities |
|
|
|
|
|
|
|
|
||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
Table of Contents
EVOMMUNE, INC.
Notes to the Condensed Consolidated Financial Statements (unaudited)
1. Organization and Description of the Business
Business and Organization
Evommune, Inc. and its subsidiaries (“Evommune” or the “Company”) is a Delaware corporation headquartered in Palo Alto, California. Evommune is a clinical stage biotechnology company developing innovative therapies that target key drivers of chronic inflammatory diseases.
Liquidity
The Company has incurred significant operating losses since inception and has relied primarily on equity financing and license revenue to fund its operations. As of September 30, 2026, the Company had an accumulated deficit of $
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as defined by the Financial Accounting Standards Board (“FASB”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement have been included. Interim results are not necessarily indicative of results that may be expected for the fiscal year ending December 31, 2026 or other interim periods.
These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2025, and the notes thereto, included in the Annual Report on Form 10-K that was filed with the SEC on March 5, 2026 (“Form 10-K”). Since the date of such consolidated financial statements, there have been no significant changes to the Company’s significant accounting policies, other than as described below. The Condensed Consolidated Balance Sheet as of December 31, 2025 has been derived from the audited Consolidated Balance Sheet as of December 31, 2025 included in the Company's Form 10-K but does not include all of the information required by GAAP for complete financial statements.
Restricted Cash
Restricted cash is defined as cash and cash equivalents that cannot be withdrawn or used for general operating activities. As of September 30, 2026 and December 31, 2025, the Company’s restricted cash was approximately $
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03 “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures” (“ASU 2024-03”), which will require additional expense disclosures for all public entities. The amendments require that at each interim and annual reporting period, an entity will disclose certain disaggregated expenses included in each relevant expense caption, as well as the total amount of selling expenses and, in annual periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for annual reporting periods beginning with the fiscal year ending December 31, 2027, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the incremental disclosures that will be required in its future consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11 “Interim Reporting: Narrow-Scope Improvements”, which enhances interim disclosure requirements by clarifying scope, providing a comprehensive list of required disclosures, and requiring disclosure of material events occurring since the most recent annual reporting period. The amendments are effective for interim reporting periods for fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the incremental disclosures that will be required in its future consolidated financial statements.
9
Table of Contents
3. Fair Value Measurements and Fair Value of Financial Instruments
The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):
|
|
Fair Value Measurements at September 30, 2026 |
|
|||||||||||||
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Total fair value of assets |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
|
|
Fair Value Measurements at December 31, 2025 |
|
|||||||||||||
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Total fair value of assets |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Items classified as Level 1 within the valuation hierarchy consist of the Company’s cash equivalents held in money market funds. The Company measures these investments at fair value determined based on Level 1 observable quoted price market inputs. The Company’s money market funds are included in cash and cash equivalents in the unaudited Condensed Consolidated Balance Sheets.
4. Cash, Cash Equivalents, Short-term and Long-term Investments
As of September 30, 2026 and December 31, 2025, cash and cash equivalents consisted of cash and money market mutual funds.
|
|
September 30, 2026 |
|
|||||||||||||||||
|
|
Amortized Cost |
|
|
Gross |
|
|
Gross |
|
|
|
Fair Value |
|
|||||||
Short-term investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Held-to-maturity securities |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
( |
) |
|
|
|
|
|||
Total short-term investments |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
Long-term investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Held-to-maturity securities |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
Total long-term investments |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
Total investments |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
( |
) |
|
$ |
|
|
|||
|
|
December 31, 2025 |
|
|||||||||||||||||
|
|
Amortized Cost |
|
|
Gross |
|
|
Gross |
|
|
|
Fair Value |
|
|||||||
Short-term investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Held-to-maturity securities |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
( |
) |
|
|
|
|
|||
Total short-term investments |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
Long-term investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Held-to-maturity securities |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
Total long-term investments |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
Total investments |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
( |
) |
|
$ |
|
|
|||
10
Table of Contents
The Company classifies its investment in debt securities as held-to-maturity, which are carried at amortized cost. Although held-to-maturity securities are recorded at amortized cost, the Company discloses their fair value in accordance with ASC 825-10. The estimated fair value of these securities is categorized within Level 2 of the fair value hierarchy, as the fair values are determined using third-party evaluated pricing based on observable market inputs other than quoted prices in active markets for identical instruments. As of September 30, 2026, the estimated fair value consisted of $
As of September 30, 2026, the Company had
Accrued interest receivable is excluded from the amortized cost and estimated fair value of the Company's investment securities. Accrued interest receivable of $
5. Property and Equipment, Net
Fixed Assets consisted of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||||
|
|
2026 |
|
|
2025 |
|
||||
Leasehold improvements |
|
$ |
|
|
|
$ |
|
|
||
Office equipment and furniture |
|
|
|
|
|
|
|
|
||
Machinery and laboratory equipment |
|
|
|
|
|
|
|
|
||
Lab and office equipment under finance right-of-use asset |
|
|
|
|
|
|
|
|
||
Construction-in-progress |
|
|
|
|
|
|
|
|
||
|
|
$ |
|
|
|
$ |
|
|
||
Less accumulated depreciation and amortization |
|
|
|
( |
) |
|
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
|
$ |
|
|
||
Depreciation and amortization expense of property and equipment, net totaled $
6. Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||||
|
|
2026 |
|
|
2025 |
|
||||
Accrued research and development |
|
$ |
|
|
|
$ |
|
|
||
Accrued compensation |
|
|
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
|
|
||
Total |
|
$ |
|
|
|
$ |
|
|
||
11
Table of Contents
7. Strategic Collaborations and License Agreements
The Company has entered into several license agreements for products currently under development. The Company’s license agreements are disclosed in “Note 5. Strategic Collaborations and License Agreements” to the Company’s annual audited consolidated financial statements for the year ended December 31, 2025 included in the Form 10-K. Since the date of such consolidated financial statements, there have been no significant changes to the Company’s license agreements, other than the following.
Maruho Co., Ltd.
Maruho Japan Agreement
As of December 31, 2024, the Company had recorded short term deferred revenue of $
AprilBio
In June 2024, the Company entered into a License, Development and Commercialization Agreement with AprilBio Co., Ltd. (“AprilBio”), upon which AprilBio granted the Company an exclusive worldwide license to develop and commercialize an IL-18BP compound (“EVO301”). For the nine months ended September 30, 2026 and 2025, the Company has recorded $
Accutar Biotechnology, Inc.
In November 2023, the Company entered into a strategic partnership with Accutar Biotechnology, Inc. (“Accutar”) to discover novel small molecule drug candidates in chronic inflammatory diseases (the “Accutar Agreement”). The Accutar Agreement will leverage Accutar’s proprietary AI platform as well as the Company’s expertise in the design and development of novel oral small molecule treatments against targets that are the root cause of chronic immune-mediated inflammatory diseases. For the three and nine months ended September 30, 2026, the Company recorded $
8. Commitments and Contingencies
Leases
The Company’s commitments are disclosed in “Note 6. Commitments and Contingencies” to the Company’s annual audited consolidated financial statements for the year ended December 31, 2025 included in the Form 10-K. Since the date of the Form 10-K, there have been no material changes to the Company’s commitments or contingencies, including leases, other than as described below.
In July 2025, the
In connection with the buildout of the leased premises, the Company also entered into certain finance leases for leasehold improvements. As of the lease commencement date, these arrangements resulted in the recognition of approximately $
As of September 30, 2026, future minimum lease payments included in the measurement of lease liabilities were as follows (in thousands):
12
Table of Contents
|
|
Operating leases |
|
|
Finance leases |
|
||
2026 |
|
|
|
|
|
|
||
2027 |
|
|
|
|
|
|
||
2028 |
|
|
|
|
|
|
||
2029 and thereafter |
|
|
|
|
|
|
||
Total undiscounted lease payments |
|
|
|
|
|
|
||
Less: imputed interest |
|
|
( |
) |
|
|
( |
) |
Total lease liabilities |
|
|
|
|
|
|
||
Less: current portion |
|
|
|
|
|
|
||
Operating and finance lease liabilities, net of current portion |
|
$ |
|
|
$ |
|
||
The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases and finance leases (in thousands):
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Operating leases: |
|
|
|
|
|
|
||
Short-term lease cost |
|
$ |
|
|
$ |
|
||
Variable lease cost |
|
|
|
|
|
|
||
Operating lease cost |
|
|
|
|
|
|
||
Total operating lease costs |
|
|
|
|
|
|
||
Finance leases: |
|
|
|
|
|
|
||
Amortization of right-of-use assets |
|
$ |
|
|
$ |
|
||
Interest on lease liabilities |
|
|
|
|
|
|
||
Financing obligation: |
|
|
|
|
|
|
||
Interest expense |
|
|
|
|
|
|
||
Total finance lease and financing obligation cost |
|
|
|
|
|
|
||
Total lease cost |
|
$ |
|
|
$ |
|
||
For the nine months ended September 30, 2026, cash payments were $
|
|
As of September 30, |
|
|
|
|
2026 |
|
|
Weighted-average remaining lease term (in years) |
|
|
|
|
Operating leases |
|
|
|
|
Finance leases |
|
|
|
|
Financing obligation |
|
|
— |
|
Weighted-average discount rate (percent) |
|
|
|
|
Operating leases |
|
|
% |
|
Finance leases |
|
|
% |
|
License Agreements
Except as disclosed in Note 7, no such other milestone events occurred during the three and nine months ended September 30, 2026 and 2025.
Legal proceedings
The Company was not subject to any material legal proceedings during the nine months ended September 30, 2026 and 2025, and no material legal proceedings are currently pending or threatened.
13
Table of Contents
9. Net Loss Per Share
Basic net loss per share of common stock is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, the convertible preferred stock, common stock subject to repurchase, stock options, restricted stock units (“RSUs”), and stock appreciation rights (“SARs”) are considered to be potentially dilutive securities. Basic and diluted net loss per share is presented in conformity with the two-class method required for participating securities as the convertible preferred stock is considered a participating security. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss is attributed entirely to common stockholders. Because the Company has reported a net loss for the reporting periods presented, the diluted net loss per share of common stock is the same as basic net loss per share of common stock for those periods.
The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share amounts):
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to common stockholders |
$ |
|
( |
) |
|
$ |
|
( |
) |
|
$ |
|
( |
) |
|
$ |
|
( |
) |
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares of common stock outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: weighted-average unvested early-exercised options |
|
|
|
|
|
|
( |
) |
|
|
|
( |
) |
|
|
|
( |
) |
|
Weighted-average shares of common stock outstanding used to compute net loss per share, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share, basic and diluted |
$ |
|
( |
) |
|
$ |
|
( |
) |
|
$ |
|
( |
) |
|
$ |
|
( |
) |
The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive:
|
|
September 30, |
|
||||||
|
|
2026 |
|
|
|
2025 |
|
||
Convertible preferred stock |
|
|
|
|
|
|
|
||
Stock options outstanding |
|
|
|
|
|
|
|
||
Restricted stock units outstanding |
|
|
|
|
|
|
|
||
Stock appreciation rights outstanding |
|
|
|
|
|
|
|
||
Common stock subject to repurchase |
|
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
|
||
The amounts above represent common stock equivalents, where applicable.
14
Table of Contents
10. Common Stock
As of September 30, 2026, the Company is authorized to issue
In February 2026, the Company received net proceeds of $
The Company has reserved common stock for future issuance as follows:
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Outstanding options |
|
|
|
|
|
|
||
Outstanding restricted stock |
|
|
|
|
|
|
||
Options available for grants |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
11. Share-based Compensation
2025 Equity Incentive Plan
A total of
The following table summarizes the Company’s stock option activity:
|
|
Stock Options |
|
|
Weighted-Average Exercise Price |
|
|
|
Weighted-Average Remaining Contractual Term (years) |
|
|
|
Aggregate Intrinsic Value (in thousands) |
|
|||||
Outstanding at January 1, 2026 |
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
||||
Options granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Options exercised |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Options forfeited |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Outstanding at September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
||||
Exercisable at September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
||||
Vested and expected to vest at September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
||||
The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2026 and 2025 was $
As of September 30, 2026, the total unrecognized stock-based compensation expense for stock options was $
15
Table of Contents
The fair value of the stock options granted was estimated using the following assumptions:
|
|
Nine Months Ended September 30, |
|||
|
|
2026 |
|
|
2025 |
Expected term |
|
|
|
||
Expected volatility |
|
|
|
||
Risk-free interest rate |
|
|
|
||
Fair value of common stock |
|
$ |
|
|
$ |
Dividend yield |
|
|
|
||
Restricted Stock Units
In December 2024, certain employees were granted a total of
Stock Appreciation Rights
In December 2024, an executive officer was granted
Stock-Based Compensation Expense
Stock compensation expense recorded for the three and nine months ended September 30, 2026 and 2025, consisted of expense for stock options, RSUs, SARs and Employee Stock Purchase Plan.
|
|
Three Months Ended September 30, 2026 |
|
|
|
Three Months Ended September 30, 2025 |
|
|
|
Nine Months Ended September 30, 2026 |
|
|
|
Nine Months Ended September 30, 2025 |
|
||||
General and administrative |
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
||||
2025 Employee Stock Purchase Plan
A total of
16
Table of Contents
12. Segments
The Company operates in
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||||||
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||||
License revenue |
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
EVO756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
EVO301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other research and development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total external research and development |
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
||||
Research and development personnel costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total research and development operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative personnel costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total general and administrative operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
||||
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
$ |
|
( |
) |
|
$ |
|
( |
) |
|
$ |
|
( |
) |
|
$ |
|
( |
) |
Other research and development consists of discovery research, pre-clinical programs and other early-stage development programs. The measure of segment assets, all of which are held in the United States, is reported on the condensed consolidated balance sheets as total assets. Additionally, segment depreciation expense is consistent with amounts reported within the unaudited condensed consolidated statements of cash flows.
17
Table of Contents
13. Income Taxes
The Company’s interim income tax provision consists of U.S. federal and state income taxes based on the estimated annual effective tax rate that the Company expects for the full year together with the tax effect of discrete items. Each quarter the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary. As of September 30, 2026, and December 31, 2025, the Company was in a pre-tax loss position and is anticipated to remain so throughout the year. For the nine months ended September 30, 2026 and 2025, the Company did
In assessing the realizability of deferred tax assets, management evaluates whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating losses can be utilized. Management assesses all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized. This evidence includes, but is not limited to, prior earnings history, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. Significant weight is given to positive and negative evidence that is objectively verifiable. Based on these factors, including cumulative losses in recent years, the Company continues to maintain a full valuation allowance against its net deferred tax assets as of September 30, 2026 and December 31, 2025.
14. Subsequent Events
Maruho Greater Asia
In October 2026, the Company completed its Phase 2b clinical trial of EVO756 in CSU, including the final clinical study report, which triggered a $
Hinova Pharmaceuticals Inc.
In November 2026, the Company entered into a license agreement (the “Hinova License Agreement”) with Hinova Pharmaceuticals Inc. (“Hinova”) under which Hinova granted the Company an exclusive license to develop and commercialize EVO570, an oral VAV1 molecular glue degrader, and certain related compounds worldwide, excluding mainland China, Hong Kong, Macau and Taiwan. Under the Hinova License Agreement, the Company agreed to make an upfront payment of $
The pre-funded warrants have an initial exercise price per share of $
November 2026 Private Placement
On November 4, 2026, the Company entered into a Securities Purchase Agreement with certain investors pursuant to which the Company, in a private placement, sold an aggregate of
18
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes appearing in this Quarterly Report on Form 10-Q and our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans, and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements of our plans, objectives, expectations, intentions, forecasts and projections. Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors including, but not limited to, those set forth under the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and you should carefully read the section titled “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.” You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.
Overview
Evommune is a clinical-stage biotechnology company developing innovative therapies that target key drivers of chronic inflammatory diseases, with initial clinical development programs focusing on atopic dermatitis (“AD”), migraine and ulcerative colitis (“UC”). Chronic inflammation is a significant healthcare problem in the world, substantially impacting patients’ quality of life and leading to life-threatening conditions.
Our mission is to improve patients’ daily lives and prevent the long-term effects of uncontrolled inflammation that are a consequence of the limitations of existing therapies. To achieve this, we are advancing a portfolio of differentiated product candidates that target key drivers of chronic inflammation.
Among our portfolio of programs, we currently have two product candidates, EVO301 and EVO756, in Phase 2 development, and two product candidates, EVO646 and EVO570, in pre-clinical development. We are developing EVO301 for the treatment of AD and UC, EVO756 for the treatment of migraine, and EVO646 and EVO570 for the treatment of autoimmune diseases and rheumatoid arthritis, respectively. We see broad expansion potential for all programs across additional chronic inflammatory diseases. We also intend to advance additional preclinical programs into clinical development.
For EVO301, we have completed work on a high concentration of subcutaneous formulation, and manufacturing has been initiated. Our planned Phase 2b, placebo-controlled, dose-ranging clinical trial will include three dosing regimens of EVO301 tested against placebo over a 16-week treatment period, with an off-drug follow-up period at 24 weeks, with a planned commencement in mid-2027 following completion of standard scale-up and toxicology activities. We also plan to initiate a Phase 2b trial in UC in the first quarter of 2027 and expect to report initial results in 2028.
In June 2026, we announced top-line results from our randomized, double-blind, placebo-controlled, dose-ranging Phase 2b trial evaluating EVO756 in adults with moderate-to-severe CSU. The trial did not meet its primary endpoint of mean change in Urticaria Activity Score over seven days (UAS7) at 12 weeks at any dose, and based on these results, we have decided to cease development of EVO756 for CSU. In September 2026, we announced top-line results from our randomized, double-blind, placebo-controlled, dose-ranging Phase 2b trial evaluating EVO756 in adults with moderate-to-severe AD. The trial did not meet the primary endpoint in any of the doses studied, and based on these results, we have decided to cease development of EVO756 for AD.
We are continuing to evaluate EVO756 in migraine and have initiated a Phase 2b trial of EVO756 in migraine prophylaxis in July 2026. We expect to report initial results in the second half of 2027. The trial is a global randomized, double-blind, placebo-controlled Phase 2b dose-ranging clinical trial in migraine prophylaxis, evaluating EVO756 in adults with refractory migraine experiencing ≥6 migraine days per month. Approximately 330 patients will be randomized across two active dose arms and placebo for 12 weeks of treatment. The trial is exploring daily doses of up to 100 mg. The primary endpoint of the Phase 2b trial is the mean change from baseline in monthly migraine days (MMD). Key secondary endpoints include the proportion of patients achieving ≥50% and ≥75% reductions in MMD, change from baseline in monthly headache days and monthly acute migraine medication use.
In November 2026, we in-licensed exclusive rights from Hinova Pharmaceuticals Inc. (“Hinova”) to develop, manufacture and commercialize its Vav Guanine Nucleotide Exchange Factor 1 (“VAV1”) degraders, including the molecular glue degrader EVO570, worldwide excluding mainland China, Hong Kong, Macau and Taiwan (“Greater China”). We plan to initiate a Phase 1 trial in the first quarter of 2027 and a Phase 2 trial in rheumatoid arthritis in 2027.
In September 2026, we announced a new pre-clinical program EVO646, an oral TLR 7/8 antagonist. We expect to initiate Phase 1 clinical trials in the first half of 2027.
19
Table of Contents
We were incorporated under the laws of the State of Delaware in April 2020 under the name “Evommune, Inc.” We have two wholly owned subsidiaries: Evommune Research, LLC and Evommune Biologics, LLC.
We have incurred significant operating losses in each year since our inception. As of September 30, 2026, we had an accumulated deficit of $305.9 million. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses, general and administrative expenses and capital expenditures will continue to increase. In particular, we expect our expenses to increase as we continue our development of, and seek regulatory approvals for, our product candidates, as well as hire additional personnel, pay fees to outside consultants, lawyers and accountants, and incur other increased costs associated with being a public company. In addition, if and when we seek and obtain regulatory approval to commercialize any product candidate, we will also incur increased expenses in connection with commercialization and marketing of any such product. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.
We expect to continue to incur significant and increasing net operating losses for the next several years as we:
As a result, we will require substantial additional funding to further develop our product candidates and support our continuing operations. To date, we have not had any products approved for sale and, therefore, have not generated any approved product-related revenue. We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which will not be for at least the next several years, if ever. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. As a result, until such time, if ever, that we can generate substantial product revenue, we expect to finance our cash requirements through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on commercially acceptable terms, if at all. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies, including our research and development activities. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs.
20
Table of Contents
Strategic Collaborations and License Agreements
Dermira, Inc.
In December 2020, we entered into a License, Development and Commercialization Agreement with Dermira (the “Dermira License Agreement”), pursuant to which we obtained an exclusive, worldwide license to develop and commercialize certain compounds, including EVO756.
The Dermira License Agreement remains in effect on a product-by-product and a country-by-country basis until the expiration of the royalty term, unless earlier terminated by either party due to the other party’s uncured material breach or bankruptcy. Additionally, we may terminate the Dermira License Agreement for convenience upon a set number of days’ prior notice.
Under the terms of the Dermira License Agreement, we are obligated to pay up to $45.0 million in development milestones for the development of EVO756 (or up to $135.0 million for the development of all licensed products), and up to $240.0 million in sales milestones for the development of EVO756 (or up to $720.0 million for the development of all licensed products) as well as tiered royalty payments in mid-single digit to low-tens percentages on worldwide sales of the licensed products.
As of September 30, 2026, we have paid a total of $11.0 million in upfront payments and development milestones under the Dermira License Agreement. No development milestones were achieved under the Dermira License Agreement during the nine months ended September 30, 2026 and 2025. Milestones and royalties are contingent upon future events and will be recorded when the milestones are achieved and when payments are due.
Under the Dermira License Agreement, we may sublicense EVO756 to third parties. Dermira has consented to our sublicense of EVO756 to Maruho in Japan and certain Asian countries as described below.
Maruho Co., Ltd.
Maruho Japan Agreement
In September 2023, we entered into a strategic collaboration with Maruho and granted Maruho an exclusive license to develop and commercialize EVO756 in Japan (the “Maruho Japan Agreement”). Under the Maruho Japan Agreement, we are eligible to receive up to $60.0 million in upfront and customary milestone payments and royalty payments on future sales of EVO756 in Japan. As of September 30, 2026, we have received a total of $18.0 million in upfront payments and development milestones under the Maruho Japan Agreement. No other development or sales milestones have been achieved as of September 30, 2026.
Maruho Greater Asia Agreement
In March 2024, we entered into a second strategic collaboration with Maruho (the “Maruho Greater Asia Agreement”) and granted Maruho the exclusive license to develop and commercialize EVO756 in Greater China and certain other Asian countries. Under the Maruho Greater Asia Agreement, we are eligible to receive up to $61.5 million in upfront and customary milestone payments. As of September 30, 2026, we have received a total of $7.0 million in upfront payments under the Maruho Greater Asia Agreement. No other development or sales milestones have been achieved as of September 30, 2026.
AprilBio Co., Ltd.
In June 2024, we entered into a license agreement with AprilBio (the “AprilBio License Agreement”) under which AprilBio granted us an exclusive worldwide license to develop and commercialize EVO301. Under the AprilBio License Agreement, we paid an upfront payment of $15.0 million and may be required to pay milestone payments up to $460.0 million upon achievement of future milestones and royalties on future sales of EVO301. For the nine months ended September 30, 2026 and 2025, we recorded $0.5 million and $1.5 million, respectively, as research and development expense upon achievement of development milestones under the AprilBio License Agreement. No other development or sales milestones have been achieved as of September 30, 2026.
Accutar Biotechnology, Inc.
In November 2023, we entered into a strategic partnership with Accutar Biotechnology, Inc. (“Accutar”) to discover novel small molecule drug candidates in chronic inflammatory diseases (the “Accutar Agreement”). The Accutar Agreement will leverage Accutar’s proprietary AI platform as well as our expertise in the design and development of novel oral small molecule treatments against targets that are the root cause of chronic immune-mediated inflammatory diseases.
Under the Accutar Agreement, we paid an upfront fee of $3.0 million to Accutar, which was recognized as research and development expense during the year ended December 31, 2023. On a target-by-target basis, if we select the compounds for further development, we are required to pay, upon achievement of specific milestones, up to $155.5 million and royalty payments of mid-single digit percentage on worldwide sales of the licensed products. For the nine months ended September 30, 2026, we recorded $1.0 million as research and development expense upon achievement of a development milestone under the Accutar Agreement. No other milestones have been achieved as of September 30, 2026.
21
Table of Contents
Hinova Pharmaceuticals Inc.
In November 2026, we entered into an exclusive license agreement with Hinova (the “Hinova License Agreement”), pursuant to which Hinova granted us exclusive, sublicensable rights to develop, manufacture, commercialize and otherwise exploit Hinova’s VAV1 degraders, including the oral molecular glue degrader EVO570, for all human and animal indications throughout the world, excluding Greater China. Hinova retained all rights to the licensed compounds in Greater China.
Under the Hinova License Agreement, we agreed to make a one-time, non-refundable upfront cash payment to Hinova of $20.0 million and to issue to a wholly owned subsidiary of Hinova pre-funded warrants to purchase up to 1,262,413 shares of our common stock, representing $10.0 million of common stock based on the average closing price of our common stock for the 45 consecutive trading days immediately preceding the date of the Hinova License Agreement. Hinova is also eligible to receive up to $150.0 million upon the achievement of specified development and regulatory milestones and up to $920.0 million upon the achievement of specified commercial milestones, as well as tiered royalty payments at percentages ranging from the mid single-digits to the low double-digits, subject to customary reductions, on net sales of licensed products. Royalties are payable on a product-by-product and country-by-country basis until the latest of the expiration of the last valid claim of the licensed patents covering such product in such country, the expiration of regulatory exclusivity for such product in such country and the tenth anniversary of the first commercial sale of such product in such country. We expect to account for the transaction as an asset acquisition and to recognize the upfront cash payment and the fair value of the pre-funded warrants as acquired in-process research and development expense in the fourth quarter of 2026.
Investigational new drug applications for EVO570 have been submitted in China and accepted in the United States. We expect to initiate a Phase 1 clinical trial of EVO570 in the near term and plan to initiate a Phase 2 clinical trial of EVO570 in rheumatoid arthritis in 2027.
Results of Operations
Three and Nine Months ended September 30, 2026 and 2025
The following sets forth our results of operations:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||||
Revenue |
|
$ |
|
— |
|
|
$ |
|
10,000 |
|
|
$ |
|
— |
|
|
$ |
|
13,000 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
|
24,551 |
|
|
|
|
19,639 |
|
|
|
|
68,282 |
|
|
|
|
53,639 |
|
General and administrative |
|
|
|
8,775 |
|
|
|
|
3,689 |
|
|
|
|
23,894 |
|
|
|
|
10,716 |
|
Total operating expenses |
|
|
|
33,326 |
|
|
|
|
23,328 |
|
|
|
|
92,176 |
|
|
|
|
64,355 |
|
Loss from operations |
|
|
|
(33,326 |
) |
|
|
|
(13,328 |
) |
|
|
|
(92,176 |
) |
|
|
|
(51,355 |
) |
Other income, net |
|
|
|
2,449 |
|
|
|
|
853 |
|
|
|
|
7,379 |
|
|
|
|
10,758 |
|
Net loss |
|
$ |
|
(30,877 |
) |
|
$ |
|
(12,475 |
) |
|
$ |
|
(84,797 |
) |
|
$ |
|
(40,597 |
) |
Revenue
For the nine months ended September 30, 2026, we did not recognize any revenue. For the nine months ended September 30, 2025, we recognized $13.0 million in revenue through our license agreements. The decrease was due to non-recurring license revenue recognized under the Maruho Japan Agreement in 2025 of $3.0 million upon the satisfaction of the performance obligation and $10.0 million recognized upon completion of development milestones.
22
Table of Contents
Operating Expenses
Research and Development
The following table summarizes our research and development expenses for each of the periods indicated:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||||
EVO756 |
|
$ |
|
7,464 |
|
|
$ |
|
11,189 |
|
|
$ |
|
27,365 |
|
|
$ |
|
26,048 |
|
EVO301 |
|
|
|
2,851 |
|
|
|
|
1,087 |
|
|
|
|
4,346 |
|
|
|
|
5,489 |
|
Discovery research |
|
|
|
10,749 |
|
|
|
|
4,547 |
|
|
|
|
26,442 |
|
|
|
|
14,059 |
|
Personnel costs |
|
|
|
3,487 |
|
|
|
|
2,816 |
|
|
|
|
10,129 |
|
|
|
|
8,043 |
|
Total research and development expenses |
|
$ |
|
24,551 |
|
|
$ |
|
19,639 |
|
|
$ |
|
68,282 |
|
|
$ |
|
53,639 |
|
Research and development expenses increased $14.6 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily due to increase in preclinical research expenses for undisclosed discovery programs, which is classified as discovery research expense in the table above, and personnel costs. This was partially offset by a decrease in clinical trial expenses for EVO301. Research and development expenses increased $4.9 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily due to increase in preclinical research expenses for undisclosed discovery programs and personnel costs, partially offset by decrease in clinical trial expenses for EVO756.
General and Administrative
The following table summarizes our general and administrative expenses for each of the periods indicated:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||||||
Personnel costs |
|
$ |
|
2,251 |
|
|
$ |
|
1,653 |
|
|
$ |
|
6,416 |
|
|
$ |
|
5,020 |
|
Stock-based compensation |
|
|
|
2,907 |
|
|
|
|
341 |
|
|
|
|
8,109 |
|
|
|
|
1,015 |
|
Professional fees |
|
|
|
1,673 |
|
|
|
|
728 |
|
|
|
|
3,705 |
|
|
|
|
1,905 |
|
Other general and administrative expenses |
|
|
|
1,944 |
|
|
|
|
967 |
|
|
|
|
5,664 |
|
|
|
|
2,776 |
|
Total general and administrative expenses |
|
$ |
|
8,775 |
|
|
$ |
|
3,689 |
|
|
$ |
|
23,894 |
|
|
$ |
|
10,716 |
|
General and administrative expenses increased $5.1 million and $13.2 million for the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025, respectively. The increase was primarily due to stock-based compensation for RSUs and SARs, which commenced upon our IPO, as well as lease expense and other general and administrative expenses incurred to support public company operations, including increased personnel costs and insurance coverage.
Other Income, Net
Other income, net decreased $3.4 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily due to a gain recognized in the prior year period upon the settlement of the convertible preferred stock forward of $8.9 million, partially offset by an increase in interest income received from cash, cash equivalents, and investments. Other income, net increased $1.6 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily due to an increase in interest income received from cash, cash equivalents, and investments.
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Table of Contents
Liquidity and Capital Resources
Sources of Liquidity
Our operations to date have been financed primarily by aggregate net proceeds from the issuance of convertible preferred stock and common stock. As of September 30, 2026, we maintained $262.3 million in cash, cash equivalents and investments. In February 2026, we received net proceeds of $117.1 million from the issuance of 4,494,279 shares of common stock in a private placement at a price of $27.88 per share. We expect that our cash, cash equivalents, and investments as of September 30, 2026, together with the proceeds we received from the Private Placement, will enable us to fund our operating expenses and capital expenditures requirements into the second half of 2029, based on our current business plan.
Cash Flows
The following table summarizes our cash flows for the periods indicated:
|
|
Nine Months Ended September 30, |
|
|||||||
|
|
2026 |
|
|
2025 |
|
||||
Net cash used in operating activities |
|
$ |
|
(73,701 |
) |
|
$ |
|
(59,742 |
) |
Net cash (used in) provided by investing activities |
|
|
|
(40,742 |
) |
|
|
|
7,594 |
|
Net cash provided by financing activities |
|
|
|
117,737 |
|
|
|
|
63,915 |
|
Net increase in cash, cash equivalents and restricted cash |
|
$ |
|
3,294 |
|
|
$ |
|
11,767 |
|
Operating Activities
Cash used in operating activities of $73.7 million during the nine months ended September 30, 2026 was attributable to our net loss of $84.8 million, and a net decrease of $1.0 million in our working capital, partially offset by non-cash items, including stock-based compensation, accretion of discount on investments and depreciation and amortization expense totaling $12.1 million.
Cash used in operating activities of $59.7 million during the nine months ended September 30, 2025 was attributable to our net loss of $40.6 million, and a net decrease of $11.8 million in our working capital, and a non-cash income upon settlement of preferred stock forward of $8.9 million, partially offset by non-cash items, including stock-based compensation, accretion of discount on short-term investments and depreciation and amortization expense totaling $1.5 million.
Investing Activities
Cash used in investing activities of $40.7 million during the nine months ended September 30, 2026 comprised purchases of investments of $173.9 million and property and equipment of $0.5 million, partially offset by maturities of investments of $133.7 million.
Cash provided by investing activities in the nine months ended September 30, 2025 comprised maturities of short-term investments of $46.5 million, partially offset by purchases of short-term investments of $38.8 million and property and equipment of $0.1 million.
Financing Activities
Cash provided by financing activities for the nine months ended September 30, 2026 was $117.7 million, which comprised net proceeds from the sale and issuance of common stock in our 2026 Private Placement of $117.1 million and proceeds from exercise of stock options of $1.0 million, partially offset by principal payments on finance leases of $0.4 million.
Cash provided by financing activities for the nine months ended September 30, 2025 was $63.9 million, which comprised net proceeds from the sale and issuance of our Series C Preferred Stock, in June 2025 of $65.2 million, partially offset by payments of deferred offering costs of $0.9 million and principal payments on finance leases and financing obligations of $0.4 million.
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Table of Contents
Future Funding Requirements
Our primary uses of capital are, and we expect will continue to be, compensation and related expenses; costs related to third-party clinical research, manufacturing and development services; costs relating to the build-out of our headquarters and other offices, our laboratories and our manufacturing facility; license payments or milestone obligations that may arise; laboratory expenses and costs for related supplies; clinical costs; manufacturing costs; legal and other regulatory expenses and general overhead costs. We expect that our research and development expenses, general and administrative expenses and capital expenditures will continue to increase. Any product candidates we may develop may never achieve commercialization and we anticipate that we will continue to incur losses for the foreseeable future.
We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds, which may be through equity offerings, debt financings or other capital sources, including potential collaborations, out-licenses or dispositions and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through offerings of equity or equity-linked securities, the ownership interest of our existing stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that may adversely affect our stockholders’ rights. Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs.
Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:
A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current and future preclinical and clinical product candidates. Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development activities.
25
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Contractual Obligations and Commitments
As of September 30, 2026, we did not have any commitments related to operating leases with non-cancelable terms of less than 12 months. In July 2025, we executed a sixty-three month lease agreement to lease approximately 32,016 square feet of office space in Palo Alto, California. The lease commenced in March 2026 and includes annual lease payments during each of the first three years of approximately $1.5 million, with increases of approximately 3% each year thereafter for the remainder of the lease. We enter into contracts in the normal course of business with third-party service providers for clinical trials, preclinical research studies and testing, manufacturing and other services and products for operating purposes. We may also enter into additional research, manufacturing, supplier and other agreements in the future, which may require up-front payments and even long-term commitments of cash.
Critical Accounting Estimates
There have been no material changes to our critical accounting estimates from those described in our Annual Report on Form 10-K for the year ended December 31, 2025.
Recently Adopted Accounting Pronouncements
Refer to Note 2, “Summary of Significant Accounting Policies,” of the notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a summary of recently issued and adopted accounting pronouncements.
Emerging Growth Company and Smaller Reporting Company Status
As an “emerging growth company” under the JOBS Act, we may delay the adoption of certain accounting standards until such time as those standards apply to private companies. Other exemptions and reduced reporting requirements under the JOBS Act for emerging growth companies include presentation of only two years of audited consolidated financial statements in a registration statement for an IPO, an exemption from the requirement to provide an auditor’s report on internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation and less extensive disclosure about our executive compensation arrangements.
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
We may remain classified as an emerging growth company until the end of the fiscal year following the fifth anniversary of our IPO or such earlier time that we are no longer an emerging growth company. If the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of June 30 of any year, or if we have annual gross revenues of $1.235 billion or more in any fiscal year, we would cease to be an emerging growth company as of December 31 of the applicable year. We also would cease to be an emerging growth company if we issue more than $1.0 billion of non-convertible debt over a three-year period.
We are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures until the fiscal year following the determination that (i) our voting and non-voting common stock held by non-affiliates is at least $250.0 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue is at least $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is at least $700.0 million measured on the last business day of our second fiscal quarter.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2026. Based on the evaluation of our disclosure controls and procedures as of September 30, 2026, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Table of Contents
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We do not have any pending litigation that, separately or in the aggregate, would, in the opinion of management, have a material adverse effect on our results of operations, financial condition, or cash flows.
Item 1A. Risk Factors.
In addition to the information set forth in this report, you should carefully consider the risks discussed under the heading "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 5, 2026, and subsequent filings with the SEC, which could have a material adverse effect on our business or financial statements, results of operations, and cash flows. Additional risks not currently known, or risks that are currently believed to be not material, may also impair business operations. There have been no material changes to our risk factors since the filing of our Annual Report on Form 10-K for the year ended December 31, 2025, except as set forth below.
Our use and provision of AI-powered solutions could lead to operational or reputational damage, competitive harm, legal and regulatory risk and additional costs.
Our employees and personnel use artificial intelligence (“AI”) technologies in the course of performing their work, and the disclosure and use of personal, confidential, or other proprietary data in AI technologies is subject to various laws and other obligations, including those related to third-party intellectual property, data privacy and information security, publicity, contractual or other rights. Governments have passed and are likely to pass additional laws regulating AI. Several jurisdictions around the globe, including Europe and certain U.S. states, have proposed, enacted, or are considering laws governing the development and use of AI technologies, such as the EU’s AI Act, the Colorado Artificial Intelligence Act, California Bot Disclosure Law, the Utah Artificial Intelligence Policy Act, and the CCPA regulations on automated decision-making technology. For example, the EU AI Act sets out a risk-based framework, subjecting certain AI technologies to numerous compliance obligations, including transparency, conformity and risk assessment, monitoring and human oversight requirements. Under the EU AI Act, non-compliant companies may be subject to administrative fines of up to €35 million or 7% of a company’s total worldwide annual turnover for the preceding financial year, whichever is higher. Certain of our activities subject us to the EU AI Act and depending on how the EU AI Act is implemented and interpreted, we may have to adapt our business practices, contractual arrangements, and services to comply with such obligations. We expect other jurisdictions will adopt similar laws.
Our use of this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits. If we are unable to use AI, it could make our business less efficient and result in competitive disadvantages. Our use of AI technologies and tools may inadvertently reduce our effectiveness and efficiency or cause unintentional or unexpected outputs that are incorrect, do not match our business goals, standards and values, do not comply with our policies or procedures, harm our brand and reputation, or negatively impact the performance of our business.
Additionally, sensitive information of ours could be leaked, disclosed, or revealed as a result of or in connection with the use of AI technologies by our employees, clinical research organizations or vendors, including if sensitive information is used to train any third parties’ AI technology. Additionally, where an AI technology model ingests personal or sensitive data and makes connections using such data, those technologies may reveal other personal or sensitive information generated by the model. Inadvertent disclosure of such information could result in adverse impact to our business, reputation and operations.
We may derive results and data for EVO570 from clinical trials conducted by Hinova in Greater China. Our access to the clinical results and data, or our access to clinical trial support services or clinical supply, may be limited and there is no assurance that the clinical data from any such trials will be accepted or considered by the FDA or other comparable regulatory authorities.
Hinova is developing EVO570 in a clinical trial in Greater China in autoimmune diseases. While this trial may provide us with clinical data that can inform our future development strategy, we do not have control over the protocols, administration, or conduct of the trial or its compliance with regulatory requirements. There is also no assurance that the clinical data from any such clinical trial will be accepted or considered by the FDA or other comparable regulatory authorities. We have no control over the conduct and timing of, and communications with the National Medical Products Administration (“NMPA”) or other foreign regulatory agencies in Greater China with respect to, the trial that Hinova is conducting for EVO570. Any data integrity issues or patient safety issues arising out of any of these trials would be beyond our control, yet could adversely affect our reputation and damage the clinical and commercial prospects for our product candidates.
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Table of Contents
In connection with the development of EVO570 or any of our other product candidates, we may rely upon one or more companies located in China, or that are owned or operated by Chinese companies, to provide non-clinical or clinical trial support services or clinical supply. If so, the process of changing these vendors could have an adverse impact on our current clinical development programs if they were no longer permitted to provide services or products due to geopolitical pressures, including legislative activities or executive orders aimed at prohibiting certain Chinese or Chinese-owned biotechnology companies from engaging in biotechnology or biopharmaceutical research activities. We could experience delays in finding suitable replacement service providers located outside China or not otherwise owned by or associated with Chinese companies, which could have a material adverse effect on our development activities and our business. We are unable to predict whether or when proposed legislative or executive actions would be effective, and whether such changes would materially and adversely affect our liquidity, access to capital and our ability to conduct our clinical development programs or other business operations. Any failure on our part to comply with changing government regulations and policies could result in the loss of our ability to develop or manufacture our product candidates.
Changes in U.S. regulatory or trade policy affecting the development or importation of drug candidates originating in China could adversely impact our development plans for EVO570.
EVO570 was in-licensed from Hinova, a China-based biotechnology company, and our development plans for EVO570 depend in part on our ability to receive technology transfer, know-how, and materials originating in China, and to rely on data and other information generated in connection with Hinova’s China-based development activities. Changes in U.S. laws, regulations, executive orders, or government policy that make it more difficult to develop, import, or rely on drug candidates, materials, or data originating in China could adversely affect our ability to execute our development plans for EVO570.
Such changes could include, among others:
Any of the foregoing could delay or prevent our ability to obtain necessary materials, technology, or data from Hinova, require us to identify alternative sources or generate duplicative data at significant additional cost and delay, or otherwise impair our ability to advance EVO570 on our anticipated timelines or at all. We have limited or no ability to control or predict changes in U.S. regulatory or trade policy, and we cannot assure you that our development plans will not be adversely affected by future legislative, regulatory, or administrative action targeting China-originated pharmaceutical development. Any such disruption could have a material adverse effect on our business, financial condition, and results of operations.
We are substantially dependent on Hinova for the transfer of technology, know-how, and supply of certain materials necessary to execute our development and commercialization plans for EVO570, and any disruption in this relationship could materially harm our business.
We are substantially dependent on our in-licensing partner, Hinova, for the transfer of technical knowledge and know-how, and for the supply of certain materials, including active pharmaceutical ingredients, intermediates, and other components, necessary to execute our development, manufacturing, and commercialization plans for EVO570. Our ability to advance these programs on our anticipated timelines, and ultimately to develop, manufacture, and commercialize EVO570 successfully, depends in substantial part on Hinova’s willingness and ability to timely and completely transfer the requisite technology, documentation, and institutional know-how, and to supply us, or third parties on our behalf, with materials that meet applicable specifications and quality standards.
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Table of Contents
This dependence subjects us to a number of risks, including that:
If Hinova fails to perform its obligations to us in a timely manner or in accordance with applicable regulatory requirements, or if our relationship with Hinova is disrupted or terminated for any reason, we may experience significant delays in the development, manufacturing, or commercialization of EVO570, incur substantial additional costs, or be unable to advance these programs at all. Any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Use of Proceeds from Initial Public Offering
On November 5, 2025, our registration statement on Form S‑1 became effective for our IPO. At the closing of our IPO on November 7, 2025, we sold 10,781,250 shares of common stock, which included the exercise in full by Morgan Stanley & Co. LLC, Leerink Partners LLC, Evercore Group L.L.C. and Cantor Fitzgerald & Co. of their over-allotment option to purchase 1,406,250 additional shares, at an initial public offering price of $16.00 per share and received gross proceeds of $172.5 million, which resulted in aggregate net proceeds to us of approximately $160.4 million, after deducting underwriting discounts and commissions.
Following our announcements in June 2026 and September 2026 of our decisions to discontinue the clinical development of EVO756 in CSU and AD, we currently expect to use our cash, cash equivalents, and investments, which include the net proceeds from our IPO, to advance our remaining clinical programs, including EVO301 for the treatment of AD and UC and the EVO756 for the treatment of migraine, as well as for general corporate purposes.
Item 3. Defaults Upon Senior Securities.
Not Applicable
Item 4. Mine Safety Disclosures.
Not Applicable
30
Table of Contents
Item 5. Other Information.
(c) Rule 10b5-1 Trading Plans
During the fiscal quarter ended September 30, 2026, our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated the contracts, instructions or written plans for the purchase or sale of our securities set forth in the table below.
|
|
|
|
Type of Trading Arrangement |
|
|
|
Name |
Title |
Action |
Effective Date |
Rule 10b5-1* |
Non-Rule 10b5-1** |
Total Shares of Common Stock to be Sold |
Scheduled Expiration Date |
X |
|
||||||
X |
|
— |
— |
||||
X |
|
||||||
X |
|
— |
— |
||||
X |
|
||||||
*Contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.
**"Non-Rule 10b5-1 trading arrangement" as defined in Item 408(c) of Regulation S-K under the Exchange Act.
Each trading plan is intended to permit transactions in the Company’s securities at times when the individual may otherwise be in possession of material nonpublic information.
Other than as described above, during the three months ended September 30, 2026, no director or officer of the Company
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Table of Contents
Item 6. Exhibits.
The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index, which is incorporated herein by reference.
|
|
|
Incorporated by Reference |
|||
Exhibit Number |
|
Description |
From |
File No. |
Exhibit |
Filing Date |
3.1 |
|
Amended and Restated Certificate of Incorporation of the Registrant. |
8-K |
001-42938 |
3.1 |
November 7, 2025 |
3.2 |
|
Amended and Restated Bylaws of the Registrant. |
S-1 |
333-290793 |
3.4 |
October 9, 2025 |
4.1 |
|
Form of Warrant. |
8-K |
001-42938 |
4.1 |
November 4, 2026 |
10.1 |
|
Form of Securities Purchase Agreement. |
8-K |
001-42938 |
10.1 |
November 4, 2026 |
10.2 |
|
Form of Registration Rights Agreement. |
8-K |
001-42938 |
10.2 |
November 4, 2026 |
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 and 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 herewith.
* These certifications are being furnished 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 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.
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Table of Contents
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.
|
|
Evommune, Inc. |
|
|
|
|
|
Date: November 12, 2026 |
|
By: |
/s/ Luis Peña |
|
|
|
Luis Peña |
|
|
|
President and Chief Executive Officer |
|
|
|
(Principal Executive Officer) |
|
|
|
|
Date: November 12, 2026 |
|
By: |
/s/ Kyle Carver |
|
|
|
Kyle Carver, CPA, MBA |
|
|
|
Chief Financial Officer |
|
|
|
(Principal Financial and Accounting Officer) |
33