[10-Q] Repare Therapeutics Inc. Quarterly Earnings Report
Repare Therapeutics (RPTX) reported Q3 2025 results with net income of $3.3 million, led by $11.6 million of revenue from its Debiopharm license. Operating income was $1.1 million, supported by a $3.3 million gain from terminating a prior Debiopharm collaboration and $2.2 million of interest income. Basic and diluted EPS were $0.08.
Cash and cash equivalents were $72.8 million, with $39.8 million in marketable securities; total assets were $126.7 million and shareholders’ equity was $115.1 million. Year-to-date, the company recorded a net loss of $43.5 million and used $42.8 million in operating cash.
The company continued restructuring initiatives, incurring $1.8 million in Q3 and $8.5 million year-to-date. It also out‑licensed discovery platforms to DCx (9.99% equity stake and related rights) earlier in 2025.
Subsequent event: Repare signed a definitive agreement for acquisition by XenoTherapeutics. Holders will receive a cash payment per share based on cash at closing, plus one non‑transferable CVR per share; closing is subject to approvals and is expected in Q1 2026.
- None.
- None.
Insights
Q3 turns profitable on licensing; pending all-cash sale with CVR.
Repare Therapeutics posted Q3 net income of
Liquidity comprises
Subsequent transaction: the signed arrangement with XenoTherapeutics sets per‑share cash consideration tied to the company’s cash at closing, plus one CVR per share. Court and shareholder approvals apply, with expected close in
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the quarterly period ended
OR
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 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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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.
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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 October 31, 2025, there were
Table of Contents
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Page |
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS |
1 |
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PART I. |
FINANCIAL INFORMATION |
3 |
Item 1. |
Financial Statements (Unaudited) |
3 |
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Condensed Consolidated Balance Sheets |
3 |
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Condensed Consolidated Statements of Operations and Comprehensive Loss |
4 |
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Condensed Consolidated Statements of Shareholders’ Equity |
5 |
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Condensed Consolidated Statements of Cash Flows |
6 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
7 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
21 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
34 |
Item 4. |
Controls and Procedures |
34 |
PART II. |
OTHER INFORMATION |
36 |
Item 1. |
Legal Proceedings |
36 |
Item 1A. |
Risk Factors |
36 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
41 |
Item 3. |
Defaults Upon Senior Securities |
42 |
Item 4. |
Mine Safety Disclosures |
42 |
Item 5. |
Other Information |
42 |
Item 6. |
Exhibits |
43 |
Signatures |
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i
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future financial condition, future operations, research and development costs, plans and objectives of management, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “positioned,” “potential,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain.
The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:
Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected evolution, and involve known and unknown risks, uncertainties and other factors including, without limitation, risks, uncertainties and assumptions regarding the impact of the macroeconomic events on our business, operations, strategy, goals and anticipated timelines, our ongoing and planned preclinical activities, our ability to initiate, enroll, conduct or complete ongoing and planned clinical trials, our timelines for regulatory submissions and our financial position that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You are urged to carefully review the disclosures we make concerning these risks and other factors that may affect our business and operating results in this Quarterly Report on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Except as required by law, we do not intend, and undertake no obligation, to update any forward-looking information to reflect events or circumstances.
2
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Repare Therapeutics Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands of U.S. dollars, except share data)
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As of |
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As of |
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2025 |
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2024 |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Income tax receivable |
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Other current receivables |
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Prepaid expenses |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Income tax receivable |
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Investment in equity securities |
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Other assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Operating lease liability, current portion |
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Total current liabilities |
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Operating lease liability, net of current portion |
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TOTAL LIABILITIES |
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SHAREHOLDERS’ EQUITY |
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Preferred shares, |
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Common shares, |
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Warrants |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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( |
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( |
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Total shareholders’ equity |
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
3
Repare Therapeutics Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(Amounts in thousands of U.S. dollars, except share and per share data)
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Three Months Ended |
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Nine Months Ended |
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2025 |
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2024 |
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2025 |
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2024 |
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Revenue: |
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Collaboration agreements |
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$ |
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$ |
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$ |
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$ |
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Operating expenses: |
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Research and development, net of tax credits |
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General and administrative |
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Restructuring |
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Total operating expenses |
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Gain on sale of technology and other assets |
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Gain on termination of collaboration agreement |
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Income (loss) from operations |
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( |
) |
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( |
) |
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( |
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Other income, net |
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Realized and unrealized (loss) gain on foreign exchange |
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( |
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( |
) |
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Interest income |
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Other income (expense), net |
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( |
) |
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( |
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Total other income, net |
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Income (loss) before income taxes |
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( |
) |
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( |
) |
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( |
) |
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Income tax expense |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Net income (loss) |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Other comprehensive income (loss): |
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Unrealized gain (loss) on available-for-sale marketable |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Total other comprehensive income (loss) |
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( |
) |
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Comprehensive income (loss) |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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Net income (loss) per share attributable to common shareholders: |
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Basic |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Diluted |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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Weighted-average common shares outstanding: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
4
Repare Therapeutics Inc.
Condensed Consolidated Statements of Shareholders’ Equity
(Unaudited)
(Amounts in thousands of U.S. dollars, except share data)
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Common Shares |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Warrants |
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Capital |
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Income (Loss) |
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Deficit |
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Equity |
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|||||||
Balance, December 31, 2023 |
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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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Share-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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Exercise of stock options |
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— |
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( |
) |
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— |
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— |
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Issuance of common shares |
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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 shares |
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— |
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( |
) |
|
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— |
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— |
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|||
Other comprehensive 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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( |
) |
Net income |
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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, March 31, 2024 |
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$ |
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$ |
— |
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$ |
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$ |
( |
) |
|
$ |
( |
) |
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$ |
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||||
Share-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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||
Exercise of stock 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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— |
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Other comprehensive 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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( |
) |
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, June 30, 2024 |
|
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$ |
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$ |
— |
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$ |
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$ |
( |
) |
|
$ |
( |
) |
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$ |
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||||
Share-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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||
Issuance of common shares |
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— |
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( |
) |
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— |
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— |
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|||
Other comprehensive income |
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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, 2024 |
|
|
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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, December 31, 2024 |
|
|
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|
$ |
|
|
$ |
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|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Share-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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||
Issuance of common shares |
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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 shares |
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|
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— |
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( |
) |
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— |
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— |
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|||
Non-employee warrant |
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— |
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— |
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— |
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— |
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— |
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||
Other comprehensive 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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|
( |
) |
Net loss |
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— |
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|
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— |
|
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— |
|
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— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance, March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
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$ |
|
|
$ |
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|
$ |
( |
) |
|
$ |
|
||||||
Share-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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||
Issuance of common shares |
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|
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|
|
— |
|
|
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( |
) |
|
|
— |
|
|
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— |
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— |
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||
Non-employee warrant |
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— |
|
|
|
— |
|
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|
|
|
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— |
|
|
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— |
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— |
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||
Other comprehensive 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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( |
) |
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, June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Share-based compensation |
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— |
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— |
|
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— |
|
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— |
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|||
Issuance of common shares |
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— |
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|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|||
Non-employee warrant |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance, September 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
5
Repare Therapeutics Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in thousands of U.S. dollars)
|
|
Nine Months Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash Flows From Operating Activities: |
|
|
|
|
|
|
||
Net loss for the period |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Share-based compensation expense |
|
|
|
|
|
|
||
Depreciation expense |
|
|
|
|
|
|
||
Non-cash lease expense |
|
|
|
|
|
|
||
Foreign exchange gain |
|
|
( |
) |
|
|
( |
) |
Net accretion of marketable securities |
|
|
( |
) |
|
|
( |
) |
Gain on sale of technology and other assets |
|
|
( |
) |
|
|
|
|
Gain on termination of collaboration agreement |
|
|
( |
) |
|
|
|
|
Impairment loss on ROU asset |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Prepaid expenses |
|
|
|
|
|
( |
) |
|
Other current receivables |
|
|
|
|
|
|
||
Other non-current assets |
|
|
|
|
|
|
||
Accounts payable |
|
|
( |
) |
|
|
|
|
Accrued expenses and other current liabilities |
|
|
( |
) |
|
|
( |
) |
Operating lease liability, current portion |
|
|
( |
) |
|
|
( |
) |
Income taxes |
|
|
|
|
|
|
||
Operating lease liability, net of current portion |
|
|
( |
) |
|
|
( |
) |
Deferred revenue |
|
|
|
|
|
( |
) |
|
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash Flows From Investing Activities: |
|
|
|
|
|
|
||
Proceeds from sale of technology and other assets |
|
|
|
|
|
|
||
Proceeds from maturities of marketable securities |
|
|
|
|
|
|
||
Purchase of marketable securities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by investing activities |
|
|
|
|
|
|
||
Cash Flows From Financing Activities: |
|
|
|
|
|
|
||
Proceeds from exercise of stock options |
|
|
|
|
|
|
||
Proceeds from issuance of common stock under the 2020 Employee Share Purchase Plan |
|
|
|
|
|
|
||
Net cash provided by financing activities |
|
|
|
|
|
|
||
Effect of exchange rate fluctuations on cash held |
|
|
|
|
|
( |
) |
|
Net Decrease In Cash And Cash Equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental Disclosure Of Cash Flow Information: |
|
|
|
|
|
|
||
Non-cash consideration received from sale of technology and other assets |
|
$ |
|
|
$ |
|
||
Non-cash consideration received from sale of technology and other assets |
|
$ |
|
|
$ |
|
||
Consideration receivable from sale of technology and other assets |
|
$ |
|
|
$ |
|
||
Contracts transferred to acquirer as part of sale of technology and other assets |
|
$ |
( |
) |
|
$ |
|
|
Right-of-use asset obtained in exchange for new operating lease liability |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
6
REPARE THERAPEUTICS INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in U.S. dollars, unless otherwise specified)
1. Organization and Nature of Business
Repare Therapeutics Inc. (“Repare” or the “Company”) is a precision medicine oncology company focused on the development of synthetic lethality-based therapies for patients with cancer. The Company is governed by the Business Corporations Act (Québec). The Company’s common shares are listed on the Nasdaq Global Select Market under the ticker symbol “RPTX”.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements as of and for the year ended December 31, 2024, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s consolidated financial position as of September 30, 2025, the consolidated results of its operations for the three and nine months ended September 30, 2025 and 2024, its statements of shareholders’ equity for the three and nine months ended September 30, 2025 and 2024 and its consolidated cash flows for the nine months ended September 30, 2025 and 2024.
These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on March 3, 2025 (the “Annual Report”). The condensed consolidated balance sheet data as of December 31, 2024 presented for comparative purposes was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. The results for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results to be expected for the full year or for any other subsequent interim period.
The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2024 included in the Annual Report. There have been no changes to the Company’s significant accounting policies since the date of the audited consolidated financial statements for the year ended December 31, 2024 included in the Annual Report.
Principles of Consolidation
These unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiary, Repare Therapeutics USA Inc. (“Repare USA”), which was incorporated under the laws of Delaware on June 1, 2017. The financial statements of Repare USA are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group transactions, balances, income, and expenses are eliminated in full upon consolidation.
Smaller Reporting Company
Repare continues to qualify as a “smaller reporting company” under the Exchange Act as of June 30, 2025 because the market value of its common shares held by non-affiliates was less than $75 million as of June 30, 2025. As a smaller reporting company, Repare may rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. For so long as the Company remains a smaller reporting company, it is permitted and intends to rely on such exemptions from certain disclosure and other requirements that are applicable to other public companies that are not smaller reporting companies.
Segment Information
Operating segments refer to components of a company that engage in activities for which separate financial information is available and reviewed regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assessing performance. The CODM is the Company’s Chief Executive Officer and Chief Financial Officer. The Company manages its operations as a single operating segment, which is the research, development and eventual commercialization of precision oncology drugs targeting specific vulnerabilities of tumors in genetically defined patient populations.
7
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in consolidated financial statements and accompanying notes. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued research and development expenses, share-based compensation and income taxes. The Company bases its estimates on historical experience and other market specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB amended the guidance in ASU 740, Income Taxes, to provide disaggregated income tax disclosures on the rate reconciliation and income taxes paid. The new guidance is effective for public entities in fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company will adopt the new disclosure requirements in its 2025 Annual Report on Form 10-K.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, and ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-4): Clarifying the Effective Date in January 2025. These ASUs require public business entities to provide additional disclosures on specific expense categories in the notes to financial statements for both interim and annual reporting periods. While the amendments do not change current disclosure requirements, the amendments change where this information must be presented, requiring certain disclosures to be in a tabular format alongside other disaggregation details. These ASUs are effective for annual periods starting after December 15, 2026, and interim periods after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this ASU on its consolidated financial statements.
3. Cash and Cash Equivalents and Marketable Securities
Cash and cash equivalents and marketable securities were comprised of the following:
|
|
Amortized Cost |
|
|
Unrealized Gains |
|
|
Unrealized Losses |
|
|
Fair Value |
|
||||
|
|
(in thousands) |
|
|||||||||||||
As of September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Money market funds |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total cash and cash equivalents: |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total marketable securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Money market funds |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total cash and cash equivalents: |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury and government-sponsored |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Commercial paper |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Corporate debt securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total marketable securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
8
Interest receivable was $
There were
The Company recognized
The maturities of the Company’s marketable securities as of September 30, 2025 and December 31, 2024 were less than one year.
4. Sale of Technology and Other Assets
On May 1, 2025, the Company out-licensed its early-stage discovery platforms, including certain platform and program intellectual property, to DCx Biotherapeutics Corporation (“DCx”). Under the terms of the out-licensing agreement, the Company received a $
As the assets, rights and employees transferred to DCx constitute a business as defined in ASC 805, Business Combinations, the Company accounted for the disposal by applying the derecognition guidance in ASC 810, Consolidation, which requires that a gain or loss be recognized for the difference between the carrying value of the assets sold and the fair value of the consideration received or receivable. As of May 1, 2025, the total fair value of the consideration received or receivable was determined to be $
Milestones and sales royalties were determined to be contingent consideration by the Company, which will be recognized when amounts are probable and estimable in accordance with ASC 450, Contingencies.
5. Investment in Equity Securities
Pursuant to the out-licensing agreement entered into with DCx on May 1, 2025 (Note 4), the Company received a $
The initial $
On August 14, 2025, DCx issued additional anti-dilution shares to the Company such that the Company maintains its
9
6. Fair Value Measurements
Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values:
Description |
|
Financial Assets |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
As of September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total marketable securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Derivative financial asset |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Total financial assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury and government-sponsored |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Commercial paper |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Corporate debt securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total marketable securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Total financial assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|||
During the nine months ended September 30, 2025, there were
When developing fair value estimates, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. When available, the Company uses quoted market prices to measure the fair value. In determining the fair values of cash equivalents and marketable securities at each date presented above, the Company relied on quoted prices for similar securities in active markets or using other inputs that are observable or can be corroborated by observable market data.
10
Derivative Financial Asset
Pursuant to the out-licensing agreement entered into with DCx on May 1, 2025 (Note 4), anti-dilution protection rights were granted to the Company by DCx under which the Company is entitled to receive additional common shares in DCx, at no cost, guaranteeing the Company’s equity interest in DCx remains at
The fair value of the anti-dilution protection rights was established at $
7. Other Current Receivables
Other current receivables consisted of the following:
|
|
As of |
|
|
As of |
|
||
|
|
(in thousands) |
|
|||||
Consideration receivable from sale of technology and other assets |
|
$ |
|
|
$ |
|
||
Collaboration revenue receivable |
|
|
|
|
|
|
||
Research and development tax credits receivable |
|
|
|
|
|
|
||
Sales tax and other receivables |
|
|
|
|
|
|
||
Total other current receivables |
|
$ |
|
|
$ |
|
||
8. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
|
|
As of |
|
|
As of |
|
||
|
|
(in thousands) |
|
|||||
|
|
|
|
|
|
|
||
Accrued research and development expense |
|
$ |
|
|
$ |
|
||
Accrued compensation and benefits |
|
|
|
|
|
|
||
Accrued restructuring expenses |
|
|
|
|
|
|
||
Accrued professional services |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued expenses and other current liabilities |
|
$ |
|
|
$ |
|
||
9. Restructuring Expenses
In August 2024, the Company announced a strategic re-prioritization of the Company’s research and development activities to focus its efforts on the advancement of its portfolio of clinical-stage oncology programs. As part of this strategic refocus, the Company reduced its overall workforce by approximately
11
In the first quarter of 2025, the Company announced a further re-alignment of resources and a re-prioritization of its clinical portfolio and approved a phased reorganization plan pursuant to which it expects to reduce its workforce by approximately
For the three and nine months ended September 30, 2025, the Company incurred approximately $
10. Collaboration Arrangements and License Agreement
Debiopharm Clinical Study and Collaboration Agreement
In January 2024, the Company entered into a clinical study and collaboration agreement with Debiopharm International S.A. (“Debiopharm”), a privately-owned, Swiss-based biopharmaceutical company, with the aim to explore the synergy between the Company’s compound, lunresertib, and Debiopharm’s compound, Debio 0123, a WEE1 inhibitor (the “Debio Collaboration Agreement”). The Company and Debiopharm collaborated on the development of a combination therapy, with the Company sponsoring the global study, and with all costs related to the collaboration shared equally. The Company and Debiopharm each supplied their respective drugs and retained all commercial rights to their respective compounds, including as monotherapy or as combination therapies. The activities associated with the Debio Collaboration Agreement were coordinated by a joint steering committee, which was comprised of an equal number of representatives from the Company and Debiopharm.
Based on the terms of the Debio Collaboration Agreement, the Company concluded that the Debio Collaboration Agreement met the requirements of a collaboration within the guidance of ASC 808, Collaborative Arrangements, as both parties were active participants in the combination trial and were exposed to significant risks and rewards depending on the success of the combination trial. Accordingly, the net costs associated with the collaboration have been expensed as incurred and recognized within research and development expenses in the condensed consolidated statement of operations and comprehensive loss.
During the three and nine months ended September 30, 2025, the Company recognized
As part of the worldwide license agreement with Debiopharm signed on July 15, 2025 (Note 11), the Debio Collaboration Agreement was terminated effective July 1, 2025. The Company recorded a gain of $
12
11. Revenue Recognition from Collaboration and License Agreements
The following table presents revenue from collaboration and license agreements:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
||||
Debiopharm License Agreement |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Bristol-Myers Squibb Collaboration and License Agreement |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Roche Collaboration and License Agreement |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company’s revenue recognition accounting policy, as well as additional information on the Company’s collaboration and license agreements are disclosed in the audited consolidated financial statements for the year ended December 31, 2024 included in the Annual Report.
Debiopharm License Agreement
On July 15, 2025, the Company entered into an exclusive worldwide license agreement with Debiopharm (the “Debiopharm Agreement”) regarding its product candidate, lunresertib (also known as RP-6306). Under the terms of the Debiopharm Agreement, the Company received a $
The Company assessed the Debiopharm Agreement in accordance with ASC 606, Revenue from Contracts with Customers, and concluded that Debiopharm is a customer within the context of the agreement. At inception, the Company identified several performance obligations under the agreement, being (i) the exclusive license in and to lunresertib and (ii) the transfer of clinical trial materials on hand. The Company determined that the exclusive license and the transfer of clinical trial materials on hand were capable of being distinct and were distinct within the context of the Debiopharm Agreement given such activities are independent of each other and Debiopharm could benefit from either separately.
The Company established the transaction price at the onset of the agreement at $
Revenue associated with the license was recognized at a point in time upon the transfer of the license to Debiopharm on the effective date of the Debiopharm Agreement, as the Company concluded that the license was a functional intellectual property license that Debiopharm could benefit from as of the time of grant. Revenue associated with the transfer of the clinical trial materials was recognized at a point in time upon delivery of the clinical trial materials to Debiopharm in the third quarter of 2025.
Bristol-Myers Squibb Collaboration and License Agreement
In May 2020, the Company entered into a collaboration and license agreement (the “BMS Agreement”) with Bristol-Myers Squibb Company (“Bristol-Myers Squibb”), pursuant to which the Company and Bristol-Myers Squibb agreed to collaborate in the research and development of potential new product candidates for the treatment of cancer. The Company provided Bristol-Myers Squibb access to a selected number of its existing screening campaigns and novel campaigns. The Company was responsible for carrying out early-stage research activities directed to identifying potential targets for potential licensing by Bristol-Myers Squibb, in accordance with a mutually agreed upon research plan, and was solely responsible for such costs. The collaboration consisted of programs directed to both druggable targets and to targets commonly considered undruggable to traditional small molecule approaches. Upon Bristol-Myers Squibb’s election to exercise its option to obtain exclusive worldwide licenses for the subsequent development, manufacturing and commercialization of a program, Bristol-Myers Squibb will then be solely responsible for all such worldwide activities and costs.
13
Although the collaboration term expired in , the BMS Agreement will not expire until, on a licensed product-by-licensed product and country-by-country basis, the expiration of the applicable royalty term and in its entirety upon expiration of the last royalty term. Either party may terminate earlier upon an uncured material breach of the agreement by the other party, or the insolvency of the other party. Additionally, Bristol-Myers Squibb may terminate the BMS Agreement for any or no reason on a program-by-program basis upon specified written notice.
The Company is entitled to receive up to $
In March 2024, Bristol-Myers Squibb exercised its one remaining option for an undruggable target. As a result, the Company recognized $
In June 2025, the BMS Agreement was amended to enable Bristol-Myers Squibb to exercise an additional option for another druggable target. As a result, the Company recognized $
The Company recognized
Roche Collaboration and License Agreement
In June 2022, the Company entered into a collaboration and license agreement (the “Roche Agreement”) with Hoffmann-La Roche Inc. and F. Hoffmann-La Roche Ltd (collectively, “Roche”) regarding the development and commercialization of the Company’s product candidate camonsertib (also known as RP-3500) and specified other Ataxia-Telangiectasia and Rad3-related protein kinase (“ATR”) inhibitors (the “Licensed Products”). Pursuant to the Roche Agreement, the Company granted Roche a worldwide, perpetual, exclusive, sublicensable license to develop, manufacture, and commercialize the Licensed Products, as well as a non-exclusive, sublicensable license to certain related companion diagnostics. The Company agreed to complete specified ongoing clinical trials in accordance with the development plan in the Roche Agreement, as well as ongoing investigator sponsored trials (together, the “Continuing Trials”) at the Company’s expense. Roche assumed all subsequent development of camonsertib with the potential to expand development into additional tumors and multiple combination studies.
On February 7, 2024, the Company received a written notice from Roche of their election to terminate the Roche Agreement following a review of Roche’s pipeline and evolving external factors. The termination became effective May 7, 2024, at which time the Company regained global development and commercialization rights for camonsertib from Roche.
In February 2024, the Company received a $
In March 2024, the Company received a payment of $
The Company recognized
12. Leases
The Company has historically entered into lease arrangements for its facilities. As of September 30, 2025, the Company had
In the second quarter of 2025, the Company executed a lease amendment agreement whereby it surrendered its laboratory space under its Montréal, Québec headquarters lease agreement that expired in . Pursuant to this amendment, the Company vacated the surrendered premises on May 1, 2025 and had no further lease obligations with regards to the surrendered premises. The surrendered premises had been accounted for as a separate contract for lease accounting purposes. In connection with the lease
14
termination, the Company de-recognized its right-of-use asset and lease liability related to the surrendered premises, with a de minimis loss recognized in the three-months ended June 30, 2025.
In September 2025, as part of its strategic reprioritization, the Company vacated and ceased-use of its leased office space in Cambridge, Massachusetts. Although the Company’s lease obligations remain in effect through the end of its lease term in January 2026, the Company de-recognized the right-of-use asset related to this space and recorded an impairment loss of $
In Operating Leases
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Operating Leases - Lease Costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating lease costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Short-term lease costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Variable lease costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total lease costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
Nine Months Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands, except as specified otherwise) |
|
|||||
Other Operating Lease Information |
|
|
|
|
|
|
||
Operating cash flows used for operating leases |
|
$ |
|
|
$ |
|
||
Right-of-use assets obtained in exchange for new operating lease liability |
|
$ |
|
|
$ |
|
||
Weighted-average remaining lease term (in years) |
|
|
|
|
|
|
||
Weighted-average discount rate |
|
|
% |
|
|
% |
||
13. Share-Based Compensation
2020 Employee Share Purchase Plan
In June 2020, the Company’s board of directors adopted, and the Company’s shareholders approved the 2020 Employee Share Purchase Plan (“ESPP”). The number of shares reserved and available for issuance under the ESPP will automatically increase each January 1, beginning on January 1, 2021 and each January 1 thereafter through January 31, 2030, by the lesser of (1)
The Company issued
As of September 30, 2025, the number of common shares that may be issued under the ESPP is
2020 Equity Incentive Plan
In June 2020, the Company’s board of directors adopted, and the Company’s shareholders approved the 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan became effective on the effective date of the Company’s initial public offering (the “IPO”), at which time the Company ceased making awards under the Option Plan. The 2020 Plan allows the Company’s compensation committee to make equity-based and cash-based incentive awards to the Company’s officers, employees, directors and consultants including but not limited to stock options and restricted share units. The aggregate number of common shares reserved and available for issuance under the 2020 Plan has automatically increased on January 1 of each year beginning on January 1, 2021 and will continue to increase
15
on January 1 of each year through and including January 1, 2030, by
As of September 30, 2025, the number of common shares reserved for issuance under the 2020 Plan is
Inducement Plan
In April 2024, the Company’s board of directors approved the adoption of the 2024 Inducement Plan (the “Inducement Plan”), to be used exclusively for grants of awards to individuals who were not previously employees or directors (or following a bona fide period of non-employment) as a material inducement to such individuals’ entry into employment with the Company, pursuant to Nasdaq Listing Rule 5635(c)(4). The terms and conditions of the Inducement Plan are substantially similar to those of the 2020 Plan.
As of September 30, 2025, the number of common shares that may be issued under the Inducement Plan is
Warrants
In November 2024, the Company issued a warrant, as compensation for services to a consultant, to purchase up to
During the three and nine months ended September 30, 2025, the Company recognized $
Stock Options
The following table summarizes the Company’s stock option activity:
|
|
Number of |
|
|
Weighted |
|
||
Outstanding, January 1, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Cancelled or forfeited |
|
|
( |
) |
|
$ |
|
|
Outstanding, September 30, 2025 |
|
|
|
|
$ |
|
||
The fair value of stock options, and the assumptions used in the Black Scholes option-pricing model to determine the grant date fair value of stock options granted to employees and non-employees were as follows, presented on a weighted average basis:
|
|
Three Months Ended |
|
Nine Months Ended |
|
|||||||
|
|
2025 |
|
2024 |
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Fair value of stock options |
|
n/a |
|
n/a |
|
$ |
|
|
$ |
|
||
Risk-free interest rate |
|
n/a |
|
n/a |
|
|
% |
|
|
% |
||
Expected terms (in years) |
|
n/a |
|
n/a |
|
|
|
|
|
|
||
Expected volatility |
|
n/a |
|
n/a |
|
|
% |
|
|
% |
||
Expected dividend yield |
|
n/a |
|
n/a |
|
|
% |
|
|
% |
||
16
Restricted Share Units
The following table summarizes the Company’s restricted share unit activity:
|
|
Number of |
|
|
Weighted |
|
||
Outstanding, January 1, 2025 |
|
|
|
|
$ |
|
||
Awarded |
|
|
|
|
$ |
|
||
Vested and released |
|
|
( |
) |
|
$ |
|
|
Forfeited |
|
|
( |
) |
|
$ |
|
|
Outstanding, September 30, 2025 |
|
|
|
|
$ |
|
||
The fair value of each restricted share unit is estimated on the date of grant based on the fair value of the Company’s common shares on that same date.
Share-Based Compensation
Share-based compensation expense for all awards was allocated as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total share-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Share-based compensation expense by type of award was as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Stock options |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Restricted share units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
ESPP |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total share-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The three and nine months ended September 30, 2025 include a cumulative-effect adjustment, which reduced overall share-based compensation expense by
As of September 30, 2025, there was $
17
14. Net Income (Loss) per Share
The following table summarizes the computation of basic and diluted net loss per share attributable to common shareholders of the Company:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands, except share and per share amounts) |
|
|||||||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding — basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive impact of outstanding stock options, restricted share units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding — diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Diluted |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net income (loss) per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Options to purchase common shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted share units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Estimated shares issuable under the ESPP |
|
|
|
|
|
|
|
|
|
|
|
|
||||
15. Segment information
The Company operates and manages its business as a reporting and operating segment, which is the research and development of precision oncology drugs targeting specific vulnerabilities of tumors in genetically defined patient populations. The Company’s CODM is the .
18
The following table presents reportable segment net loss, including significant expense categories, attributable to the Company’s reportable segment for the three and nine months ended September 30, 2025 and 2024.
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Collaboration agreements |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Discovery costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct external costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Laboratory supplies and research materials |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Personnel related costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Facilities related costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Development costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct external costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Camonsertib program |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lunresertib program |
|
|
|
|
|
|
|
|
|
|
|
|
||||
RP-1664 program |
|
|
|
|
|
|
|
|
|
|
|
|
||||
RP-3467 and Polθ program |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Personnel related costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Facilities related costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debiopharm development cost reimbursement |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
R&D tax credits |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total research and development costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Personnel related costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other general administrative costs (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total general and administrative costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Restructuring costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Gain on sale of technology and other assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on termination of collaboration agreement |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from operations |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Other income, net (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
(1) Includes professional fees, directors and officers insurance costs, public company operating costs, information technology related costs, and other administrative costs.
(2) Includes interest income and other expenses.
The following presents segment revenue and long lived assets by geographic location, along with major collaborator information.
Revenue by location is as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Switzerland |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
United States |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
19
The Company’s property and equipment, net by country of domicile (Canada) and its subsidiary in the United States are as follows:
|
|
As of |
|
|
As of |
|
||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Canada |
|
$ |
|
|
$ |
|
||
United States |
|
|
|
|
|
|
||
Total property and equipment, net |
|
$ |
|
|
$ |
|
||
The Company’s right-of-use assets by country of domicile (Canada) and its subsidiary in the United States are as follows:
|
|
As of |
|
|
As of |
|
||
|
|
2025 |
|
|
2024 |
|
||
|
|
(in thousands) |
|
|||||
Canada |
|
$ |
|
|
$ |
|
||
United States |
|
|
|
|
|
|
||
Total right-of-use assets, net |
|
$ |
|
|
$ |
|
||
Major Customers
The Company had one customer that represents more than
16. Subsequent Event
On November 14, 2025, the Company announced that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with XenoTherapeutics, Inc., a Massachusetts non-profit corporation (“Parent”) and Xeno Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Parent (together with Parent, “Xeno”), pursuant to which Xeno will acquire all of the issued and outstanding common shares of the Company (the “Transaction”). Under the terms of the Arrangement Agreement, shareholders of the Company will receive a cash payment per common share that will be determined based upon the Company’s cash balance at closing of the Transaction, after deducting certain transaction costs and the aggregate amount of outstanding liabilities. In addition, each Repare shareholder will also receive one non-transferable contingent value right (each, a “CVR”) for each common share, entitling them to receive certain contingent cash payments. In addition to shareholder approval, the Transaction is subject to the approval of the Superior Court of Quebec and other customary closing conditions. The Transaction is expected to close in the first quarter of 2026. The Arrangement Agreement includes a termination fee of US$
20
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 (i) our unaudited condensed consolidated financial statements and related notes, appearing elsewhere in this Quarterly Report on Form 10-Q and (ii) the audited consolidated financial statements and related notes and management’s discussion and analysis of financial condition and results of operations for the fiscal year ended December 31, 2024 included in our Annual Report on Form 10-K (the “Annual Report”), filed with the Securities and Exchange Commission, (the “SEC”), on March 3, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, contains forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” sections of this Quarterly Report on Form 10-Q and our Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a clinical-stage precision oncology company enabled by our proprietary synthetic lethality approach to the discovery and development of novel therapeutics. Synthetic lethality (SL) represents a clinically validated approach to drug development. We have developed highly targeted cancer therapies focused on genomic instability, including DNA damage repair. SL arises when a deficiency in either of two genes is tolerated in cells, but simultaneous deficiencies in both genes cause cell death. Cancer cells that contain a mutation in one gene of a SL pair are susceptible to therapeutic intervention targeting the other gene pair.
Arrangement Agreement
On November 14, 2025, we entered into an Arrangement Agreement with XenoTherapeutics, Inc. and Xeno Acquisition Corp., jointly “Xeno”, pursuant to which Xeno will acquire all of our issued and outstanding common shares. Under the terms of the Arrangement Agreement, our shareholders will receive a cash payment per common share that will be determined based upon our cash balance at closing of the Transaction, after deducting certain transaction costs and the aggregate amount of outstanding liabilities (the “Closing Net Cash Amount”). Based on our current estimates of the Closing Net Cash Amount and the expected timing for Closing, it is currently estimated that each shareholder will receive a cash payment of US$1.82 per Common Share at Closing. In addition, each shareholder will also receive one non-transferable contingent value right (each, a “CVR”) for each common share, entitling them to receive certain contingent cash payments. In addition to shareholder approval, the Transaction is subject to the approval of the Superior Court of Quebec and other customary closing conditions. The Transaction is expected to close in the first quarter of 2026. The Arrangement Agreement includes a termination fee of US$2.0 million, payable by the Company under certain circumstances, including in connection with the Company’s entry into an agreement with respect to a Superior Proposal (as defined in the Arrangement Agreement).
Strategic Re-Prioritization
In January 2025, we announced a re-alignment of resources and a re-prioritization of our clinical portfolio to focus on the continued advancement of our Phase 1 clinical programs, RP-3467 and RP-1664.
On February 24, 2025, we approved a phased reorganization to reduce our workforce by approximately 75% by the fourth quarter of 2025, with our remaining employees primarily focused on the continued advancement of our Phase 1 clinical programs, RP-3467 and RP-1664.
In May 2025, we announced the out-licensing of our discovery platforms to DCx Biotherapeutics Corporation, or DCx, and in July 2025, we announced an exclusive out-licensing agreement with Debiopharm International S.A., or Debiopharm, for lunresertib.
In light of the Arrangement Agreement announced in November 2025, we expect to maintain a minimal workforce to finalize the Transaction.
Recent Developments
21
Our Pipeline
Liquidity Overview
As of September 30, 2025, we had cash and cash equivalents and marketable securities on hand of $112.6 million. We believe that our cash, cash equivalents, and marketable securities will be sufficient to fund our anticipated operating and capital expenditure requirements through 2027, after taking into account the re-alignment of resources, reduction in workforce and out-licensing transactions with Debiopharm and DCx. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect.
Since inception, we have incurred significant operating losses. Our net losses were $84.7 million and $93.8 million for the years ended December 31, 2024 and 2023, respectively, and $43.5 million for the nine months ended September 30, 2025. As of September 30, 2025, we had an accumulated deficit of $461.3 million.
We expect to continue to incur significant expenses and operating losses for the foreseeable future, as we advance our product candidates through clinical development and seek regulatory approvals, manufacture drug product and drug supply, as well as maintain and expand our intellectual property portfolio. For additional information regarding our liquidity, see the section titled “Liquidity and Capital Resources.”
Macroeconomic Considerations and Other Global Uncertainties
Unfavorable conditions in the economy in the United States, Canada and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including health pandemics, changes in inflation and interest rates as well as foreign currency exchange rates, global trade restrictions and the potential imposition of tariffs, natural disasters, supply chain
22
disruptions and the Russia-Ukraine and Middle-East conflicts, have led to economic uncertainty globally and could impact our overall business operations. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed.
In addition, because some of our manufacturers and suppliers are located in China, we are exposed to the possibility of clinical supply disruption and increased costs in the event of changes in the policies, laws, rules and regulations of the United States or Chinese governments, as well as political unrest or unstable economic conditions in China. For example, trade tensions between the United States and China have been escalating in recent years. Most notably, several rounds of U.S. tariffs have been placed on Chinese goods being exported to the United States by the U.S. government. Each of these U.S. tariff impositions against Chinese exports was followed by a round of a retaliatory tariffs by the Chinese government on U.S. exports to China. While our clinical supply has not been affected by these tariffs to date, our components may in the future be subject to these and additional tariffs, which could increase our manufacturing costs and could make our products, if successfully developed and approved, less competitive than those of our competitors whose inputs are not subject to these tariffs. We may otherwise experience supply disruptions or delays, and although we carefully manage our supply and lead-times, our suppliers may not continue to provide us with clinical supply in our required quantities, to our required specifications and quality levels or at attractive prices. In addition, certain Chinese biotechnology companies and CMOs may become subject to trade restrictions, sanctions, other regulatory requirements, or proposed legislation by the U.S. government, which could restrict or even prohibit our ability to work with such entities, thereby potentially disrupting the supply of material to us. Such disruption could have adverse effects on the development of our product candidates and our business operations.
For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors” elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC.
Components of Results of Operations
Revenue
To date, we have not recognized any revenue from product sales, and we do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts for our product candidates are successful and result in regulatory approval, or license agreements with third parties, we may generate revenue in the future from product sales. However, there can be no assurance as to when we will generate such revenue, if at all.
The following table presents revenue from our collaboration agreements:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
||||
Debiopharm License Agreement |
|
$ |
11,620 |
|
|
$ |
— |
|
|
$ |
11,620 |
|
|
$ |
— |
|
Bristol-Myers Squibb Collaboration and License Agreement |
|
|
— |
|
|
|
— |
|
|
|
250 |
|
|
|
2,589 |
|
Roche Collaboration and License Agreement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
50,888 |
|
Total revenue |
|
$ |
11,620 |
|
|
$ |
— |
|
|
$ |
11,870 |
|
|
$ |
53,477 |
|
License Agreement with Debiopharm
On July 15, 2025, we entered into an exclusive worldwide license agreement with Debiopharm (the “Debiopharm Agreement”) regarding our product candidate, lunresertib (also known as RP-6306). Under the terms of the Debiopharm Agreement, we received a $10 million upfront payment and a $1.6 million payment upon the transfer of clinical trial materials, and are eligible to receive up to $257 million in potential clinical, regulatory, commercial and sales milestones, as well as single-digit royalties on global net sales. Debiopharm assumed sponsorship of our MYTHIC study and has taken over existing and future development activities related to lunresertib. The Debiopharm Agreement builds upon the success of our pre-existing clinical study and collaboration agreement with Debiopharm to explore the synergy between lunresertib and Debio 0123, a potential best-in-class, brain penetrant and highly selective WEE1 inhibitor, which was terminated as part of our entry into the Debiopharm Agreement.
We recognized $11.6 million and nil for the three months ended September 30, 2025 and 2024, respectively, and $11.6 million and nil million for the nine months ended September 30, 2025 and 2024, respectively, as revenue in relation to the Debiopharm Agreement, reflecting the transfer of the license and the clinical trial materials to Debiopharm in the third quarter of 2025.
23
Collaboration and License Agreement with Bristol-Myers Squibb Company
In May 2020, we entered into a collaboration and license agreement, or the BMS Agreement, with the Bristol-Myers Squibb Company, or Bristol-Myers Squibb, pursuant to which we and Bristol-Myers Squibb agreed to collaborate in the research and development of potential new product candidates for the treatment of cancer. The collaboration consisted of programs directed to both druggable targets and to targets commonly considered undruggable to traditional small molecule approaches.
In March 2024, Bristol-Myers Squibb exercised its one remaining option for an undruggable target for a combined total of five druggable targets and one undruggable target over the course of the collaboration. As a result, we recognized the remaining deferred revenue of $2.6 million as revenue related to undruggable targets, including an option fee payment of $0.1 million.
In June 2025, the BMS Agreement was amended to enable Bristol-Myers Squibb to exercise an additional option for another druggable target. As a result, we recognized $0.3 million as revenue related to druggable targets in the second quarter of 2025, reflecting the option fee payment.
We recognized nil as revenue for the three months ended September 30, 2025 and September 30, 2024, and $0.3 million and $2.6 million for the nine months ended September 30, 2025 and 2024, respectively.
Collaboration and License Agreement with Hoffmann-La Roche Inc. and F. Hoffmann-La Roche Ltd
On June 1, 2022, we entered into a collaboration and license agreement, or the Roche Agreement, with Roche regarding the development and commercialization of our product candidate camonsertib (also known as RP-3500) and specified other ATR inhibitors, which we referred to as the Licensed Products.
We recognized $50.9 million for the six months ended June 30, 2024 as revenue associated with the Roche Agreement in relation to (i) the recognition of revenue upon a $40.0 million milestone achievement in the first quarter of 2024, as well as (ii) the full recognition of deferred revenue for research and development services performed towards the completion of the Continuing Trials during the period.
On February 7, 2024, we received a written notice from Roche of their election to terminate the Roche Agreement following a review of Roche’s pipeline and evolving external factors. The termination became effective May 7, 2024, at which time we regained global development and commercialization rights for camonsertib from Roche.
As of December 31, 2024, all revenue associated with the Roche Agreement was recognized as the related performance obligations were fully satisfied.
Operating Expenses
Debiopharm Collaboration Arrangement
In January 2024, we entered into a clinical study and collaboration agreement, or the Debio Collaboration Agreement, with Debiopharm International S.A., or Debiopharm, a privately-owned, Swiss-based biopharmaceutical company, with the aim to explore the synergy between our compound, lunresertib, and Debiopharm’s compound, Debio 0123, a WEE1 inhibitor. We collaborated with Debiopharm on the development of a combination therapy, with us sponsoring the global study, and shared all collaboration costs equally. Both parties each supplied their respective drugs and retained all commercial rights to their respective compounds, including as monotherapy or as combination therapies. The activities associated with the Debio Collaboration Agreement were coordinated by a joint steering committee, which was comprised of an equal number of representatives from both parties. Based on the terms of the Debio Collaboration Agreement, we concluded that the Debio Collaboration Agreement met the requirements of a collaboration within the guidance of ASC 808, “Collaborative Arrangements”, as both parties were active participants in the combination trial and were exposed to significant risks and rewards depending on the success of the combination trial. Accordingly, the net costs associated with the collaboration have been expensed as incurred and recognized within research and development expenses in our consolidated statement of operations and comprehensive loss.
During the three and nine months ended September 30, 2025, we recognized nil and $2.7 million, respectively, in net research and development costs with regards to the Debiopharm portion of the 50/50 cost sharing terms in the Debio Collaboration Agreement.
During the three and nine months ended September 30, 2024, we recognized $0.8 million and $2.1 million, respectively, in net research and development costs with regards to the Debiopharm portion of the 50/50 cost sharing terms in the Debio Collaboration Agreement.
24
As part of the worldwide license agreement with Debiopharm signed on July 15, 2025, the Debio Collaboration Agreement was terminated. We recorded a gain of $3.3 million on the termination of the Debio Collaboration Agreement in the third quarter of 2025, reflecting the recognition of our deferred collaboration cost recovery position as of the termination of the Debio Collaboration Agreement in our condensed consolidated statement of operations.
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts and the development of our product candidates, partially offset by fully refundable Canadian research and development tax credits. We expense research and development costs as incurred, which include:
Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks using data such as information provided to us by our vendors and analyzing the progress of our studies or other services performed. Significant judgment and estimates are made in determining the accrued expense or prepaid balances at the end of any reporting period.
We characterize research and development costs incurred prior to the identification of a product candidate as discovery costs. We characterize costs incurred once a product candidate has been identified as development costs.
Our direct external research and development expenses consist primarily of fees paid to outside consultants, CROs, CMOs and research laboratories in connection with our preclinical development, process development, manufacturing and clinical development activities. Our direct external research and development expenses also include fees incurred under license, acquisition, and option agreements. We track these external research and development costs on a program-by-program basis once we have identified a product candidate.
We do not allocate employee costs, costs associated with our discovery efforts, laboratory supplies, and facilities, including depreciation or other indirect costs, to specific programs because these costs are deployed across multiple programs and, as such, are not separately classified. We use internal resources primarily to conduct our research and discovery activities as well as for managing our preclinical development, process development, manufacturing, and clinical development activities.
25
The following table summarizes our research and development costs:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Discovery costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct external costs |
|
$ |
54 |
|
|
$ |
1,327 |
|
|
$ |
1,011 |
|
|
$ |
4,451 |
|
Laboratory supplies and research materials |
|
|
1 |
|
|
|
905 |
|
|
|
345 |
|
|
|
2,862 |
|
Personnel related costs |
|
|
92 |
|
|
|
2,412 |
|
|
|
1,842 |
|
|
|
8,830 |
|
Facilities related costs |
|
|
45 |
|
|
|
492 |
|
|
|
548 |
|
|
|
1,290 |
|
Other costs |
|
|
49 |
|
|
|
875 |
|
|
|
692 |
|
|
|
2,629 |
|
|
|
|
241 |
|
|
|
6,011 |
|
|
|
4,438 |
|
|
|
20,062 |
|
Development costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct external costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Camonsertib program* |
|
|
43 |
|
|
|
2,711 |
|
|
|
4,157 |
|
|
|
10,652 |
|
Lunresertib program* |
|
|
157 |
|
|
|
6,740 |
|
|
|
8,431 |
|
|
|
22,507 |
|
RP-1664 program |
|
|
1,545 |
|
|
|
2,603 |
|
|
|
4,466 |
|
|
|
5,611 |
|
RP-3467 and Polθ program |
|
|
1,933 |
|
|
|
1,554 |
|
|
|
4,571 |
|
|
|
3,882 |
|
Personnel related costs |
|
|
2,388 |
|
|
|
8,153 |
|
|
|
15,621 |
|
|
|
26,998 |
|
Facilities related costs |
|
|
542 |
|
|
|
225 |
|
|
|
1,022 |
|
|
|
646 |
|
Other costs* |
|
|
684 |
|
|
|
1,395 |
|
|
|
2,268 |
|
|
|
4,013 |
|
Debiopharm development cost reimbursement |
|
|
— |
|
|
|
(753 |
) |
|
|
(2,682 |
) |
|
|
(2,133 |
) |
|
|
|
7,292 |
|
|
|
22,628 |
|
|
|
37,854 |
|
|
|
72,176 |
|
R&D tax credits |
|
|
(31 |
) |
|
|
(238 |
) |
|
|
(237 |
) |
|
|
(792 |
) |
Total research and development costs |
|
$ |
7,502 |
|
|
$ |
28,401 |
|
|
$ |
42,055 |
|
|
$ |
91,446 |
|
*Certain amounts have been reclassified for presentation purposes.
The successful development of our product candidates is highly uncertain. As reflected in our financials for the quarter ended September 30, 2025, our research and development expenses have decreased as a result of the cost savings initiatives we implemented in connection with strategic re-prioritization activities implemented in August 2024 and in the first quarter of 2025, as well as the out-licensing of our early-stage discovery platforms to DCx in the second quarter of 2025 and the out-licensing of our lunresertib program to Debiopharm in July 2025. We cannot determine with certainty the duration, or the completion costs of current or future preclinical studies and clinical trials of our product candidates due to the inherently unpredictable nature of preclinical and clinical development. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments, and our ongoing assessments as to each product candidate’s commercial potential. We will need to raise substantial additional capital in the future. Our clinical development costs are expected to fluctuate significantly, particularly due to the numerous risks and uncertainties associated with developing product candidates, including the uncertainty of:
Any changes in the outcome of any of these variables with respect to the development of our product candidates in preclinical and clinical development could mean a significant change in the costs and timing associated with the development of these product candidates. We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected
26
results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on other product candidates. For example, if the U.S. Food and Drug Administration, or FDA, the European Medicines Agency, or EMA, or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect or if we experience significant delays in enrollment in any of our ongoing and planned clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development of that product candidate.
General and Administrative Expenses
General and administrative expense consists primarily of employee related costs, including salaries, bonuses, benefits, share-based compensation and other related costs, as well as expenses for outside professional services, including legal, accounting and audit services and other consulting fees, rent expense, directors and officers insurance expenses, investor relations expenses and other general administrative expenses.
We anticipate that our general and administrative expenses may increase in the future as we explore partnering alternatives for our portfolio, including potential legal, accounting and advisory expenses and other related charges. Subject to our strategic review process, we also anticipate that we will continue to incur significant accounting, audit, legal, regulatory, compliance and directors’ and officers’ insurance costs, as well as investor relations expenses.
Restructuring Expenses
In August 2024, we announced a strategic re-prioritization of our research and development activities to focus our efforts on the advancement of our portfolio of clinical-stage oncology programs. As part of this strategic refocus, we reduced our overall workforce by approximately 25%, with a majority of the headcount reductions from our preclinical group.
In the first quarter of 2025, we announced a re-alignment of resources and a re-prioritization of our clinical portfolio to focus on the continued advancement of our Phase 1 clinical programs, RP-3467 and RP-1664. We also approved a phased reorganization plan pursuant to which we expect to reduce our workforce by approximately 75% by the fourth quarter of 2025. As a result of this initiative, we accelerated the depreciation of our laboratory equipment by nil and $1.9 million for the three and nine months ended September 30, 2025, respectively, reflecting a shorter estimated remaining useful life for the equipment.
For the three and nine months ended September 30, 2025, we incurred approximately $1.8 million and $8.5 million, respectively, in costs as part of its restructuring efforts ($1.5 million for the three and nine months ended September 30, 2024), comprised of $1.8 million in severance and termination benefits for the three months ended September 30, 2025, and comprised of $6.2 million in severance and termination benefits and $1.9 million in accelerated depreciation expense, as well as $0.4 million in other restructuring charges for the nine months ended September 30, 2025.
Other Income (Expense), Net
Other income (expense), net consists primarily of realized and unrealized gains and losses on foreign exchange, interest income earned on cash and cash equivalents and marketable securities, and other expenses such as interest and bank charges.
Realized and unrealized gains and losses on foreign exchange consist of realized and unrealized gains and losses from holding cash and foreign currency denominated other receivables, accounts payable, accrued expenses and other current liabilities as well as operating lease liabilities.
27
Results of Operations
Comparison of the Three Months Ended September 30, 2025 and 2024
The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024:
|
|
Three Months Ended |
|
|
|
|
||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
|
|
(in thousands) |
|
|||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|||
Collaboration agreements |
|
$ |
11,620 |
|
|
$ |
— |
|
|
$ |
11,620 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Research and development, net of tax credits |
|
|
7,502 |
|
|
|
28,401 |
|
|
|
(20,899 |
) |
General and administrative |
|
|
4,548 |
|
|
|
6,444 |
|
|
|
(1,896 |
) |
Restructuring |
|
|
1,826 |
|
|
|
1,527 |
|
|
|
299 |
|
Total operating expenses |
|
|
13,876 |
|
|
|
36,372 |
|
|
|
(22,496 |
) |
Gain on sale of technology and other assets |
|
|
130 |
|
|
|
— |
|
|
|
130 |
|
Gain on termination of collaboration agreement |
|
|
3,257 |
|
|
|
— |
|
|
|
3,257 |
|
Income (loss) from operations |
|
|
1,131 |
|
|
|
(36,372 |
) |
|
|
37,503 |
|
Other income, net |
|
|
|
|
|
|
|
|
|
|||
Realized and unrealized loss on foreign exchange |
|
|
(41 |
) |
|
|
(19 |
) |
|
|
(22 |
) |
Interest income |
|
|
2,224 |
|
|
|
2,512 |
|
|
|
(288 |
) |
Other income (expense), net |
|
|
89 |
|
|
|
(42 |
) |
|
|
131 |
|
Total other income, net |
|
|
2,272 |
|
|
|
2,451 |
|
|
|
(179 |
) |
Income (loss) before income taxes |
|
|
3,403 |
|
|
|
(33,921 |
) |
|
|
37,324 |
|
Income tax expense |
|
|
(145 |
) |
|
|
(485 |
) |
|
|
340 |
|
Net income (loss) |
|
$ |
3,258 |
|
|
$ |
(34,406 |
) |
|
$ |
37,664 |
|
Revenue
Revenue was $11.6 million for the three months ended September 30, 2025, compared to nil for the three months ended September 30, 2024. The increase of $11.6 million was due to an increase in revenue recognized under the Debiopharm Agreement.
Research and Development Expenses, Net of Tax Credits
Research and development expenses were $7.5 million for the three months ended September 30, 2025, compared to $28.4 million for the three months ended September 30, 2024. The decrease of $20.9 million was due to:
General and Administrative Expenses
General and administrative expenses were $4.5 million for the three months ended September 30, 2025, compared to $6.4 million for the three months ended September 30, 2024. The decrease of $1.9 million in general and administrative expenses consisted of:
28
Restructuring Expenses
Restructuring expenses were $1.8 million and $1.5 million for the three months ended September 30, 2025 and 2024, respectively, as a result of costs incurred as part of our restructuring efforts announced in the first quarter of 2025. The third quarter of 2025 were comprised of $1.8 million in severance and termination benefits only.
Gain on Sale of Technology and Other Assets
Pursuant to the out-licensing agreement entered into with DCx in the second quarter of 2025, DCx issued additional anti-dilution shares to us such that we maintain our 9.99% equity interest in DCx. As such, we recognized a gain on sale of technology and other assets in the amount of $0.1 million and nil for the three months ended September 30, 2025 and 2024, respectively.
Gain on Termination of Collaboration Agreement
As part of the worldwide license agreement with Debiopharm signed in the third quarter of 2025, the Debio Collaboration Agreement was terminated. We recorded a gain of $3.3 million on the termination of the Debio Collaboration Agreement in the third quarter of 2025, reflecting the recognition of our deferred collaboration cost recovery position as of the termination of the Debio Collaboration Agreement in our condensed consolidated statement of operations.
Other Income (Expense), Net
Other income, net was $2.3 million and $2.5 million for the three months ended September 30, 2025 and 2024, respectively. The decrease of $0.2 million was primarily attributable to lower sums in cash and cash equivalents and marketable securities, offset with interest revenue received upon the collection of outstanding income tax receivables.
Income Tax Expense
Income tax expense was $0.1 million for the three months ended September 30, 2025, compared to $0.5 million for the three months ended September 30, 2024. The decrease of $0.4 million in income tax expense was primarily due to lower taxable income resulting from the re-alignment of resources and reductions in workforce implemented.
29
Comparison of the Nine Months Ended September 30, 2025 and 2024
The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024:
|
|
Nine Months Ended |
|
|
|
|
||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
|
|
(in thousands) |
|
|||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|||
Collaboration agreements |
|
$ |
11,870 |
|
|
$ |
53,477 |
|
|
$ |
(41,607 |
) |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Research and development, net of tax credits |
|
|
42,055 |
|
|
|
91,446 |
|
|
|
(49,391 |
) |
General and administrative |
|
|
18,229 |
|
|
|
23,379 |
|
|
|
(5,150 |
) |
Restructuring |
|
|
8,475 |
|
|
|
1,527 |
|
|
|
6,948 |
|
Total operating expenses |
|
|
68,759 |
|
|
|
116,352 |
|
|
|
(47,593 |
) |
Gain on sale of technology and other assets |
|
|
5,796 |
|
|
|
— |
|
|
|
5,796 |
|
Gain on termination of collaboration agreement |
|
|
3,257 |
|
|
|
— |
|
|
|
3,257 |
|
Loss from operations |
|
|
(47,836 |
) |
|
|
(62,875 |
) |
|
|
15,039 |
|
Other income, net |
|
|
|
|
|
|
|
|
|
|||
Realized and unrealized gain on foreign exchange |
|
|
23 |
|
|
|
18 |
|
|
|
5 |
|
Interest income |
|
|
4,998 |
|
|
|
8,374 |
|
|
|
(3,376 |
) |
Other income (expense), net |
|
|
49 |
|
|
|
(95 |
) |
|
|
144 |
|
Total other income, net |
|
|
5,070 |
|
|
|
8,297 |
|
|
|
(3,227 |
) |
Loss before income taxes |
|
|
(42,766 |
) |
|
|
(54,578 |
) |
|
|
11,812 |
|
Income tax expense |
|
|
(763 |
) |
|
|
(1,440 |
) |
|
|
677 |
|
Net loss |
|
$ |
(43,529 |
) |
|
$ |
(56,018 |
) |
|
$ |
12,489 |
|
Revenue
Revenue was $11.9 million for the nine months ended September 30, 2025, compared to $53.5 million for the nine months ended September 30, 2024. The decrease of $41.6 million was due to:
Research and Development Expenses, Net of Tax Credits
Research and development expenses were $42.1 million for the nine months ended September 30, 2025, compared to $91.5 million for the nine months ended September 30, 2024. The decrease of $49.4 million was due to:
30
General and Administrative Expenses
General and administrative expenses were $18.2 million for the nine months ended September 30, 2025, compared to $23.4 million for the nine months ended September 30, 2024. The decrease of $5.2 million in general and administrative expenses consisted of:
Restructuring Expenses
Restructuring expenses were $8.5 million and $1.5 million for the nine months ended September 30, 2025 and 2024, respectively, as a result of costs incurred as part of our restructuring efforts announced in the first quarter of 2025, comprised of $6.2 million in severance and termination benefits, $1.9 million in accelerated depreciation expense and $0.4 million in other restructuring charges.
Gain on Sale of Technology and Other Assets
Pursuant to the out-licensing agreement entered into with DCx on May 1, 2025, we recognized a gain on sale of technology and other assets in the amount of $5.8 million in the nine months ended September 30, 2025.
Gain on Termination of Collaboration Agreement
As part of the worldwide license agreement with Debiopharm signed on July 15, 2025, the Debio Collaboration Agreement was terminated. We recorded a gain of $3.3 million on the termination of the Debio Collaboration Agreement in the third quarter of 2025, reflecting the recognition of our deferred collaboration cost recovery position as of the termination of the Debio Collaboration Agreement in our condensed consolidated statement of operations.
Other Income, Net
Other income, net was $5.1 million and $8.3 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease of $3.2 million was primarily attributable to lower sums in cash and cash equivalents and marketable securities, offset with interest revenue received upon the collection of outstanding income tax receivables.
Income Tax Expense
Income tax expense was $0.8 million for the nine months ended September 30, 2025, compared to $1.4 million for the nine months ended September 30, 2024. The decrease of $0.6 million in income tax expense was primarily due to lower taxable income resulting from the re-alignment of resources and reductions in workforce implemented.
Liquidity and Capital Resources
Since our inception, we have not recognized any revenue from product sales and have incurred operating losses and negative cash flows from our operations. We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all. We have funded our operations to date with proceeds received from equity financings, including net proceeds of $232.0 million from our IPO in June 2020 and net proceeds of $94.3 million from a follow-on offering in November 2021. We have also received initial upfront and additional payments of approximately $254.4 million in the aggregate from collaboration and license agreements and the proceeds from the sale of technology and other assets.
In November 2024, we entered into a Common Shares Sale Agreement, or the 2024 Sales Agreement, with TD Securities (USA) LLC, pursuant to which we may sell up to $100.0 million in common shares. We have not issued or sold shares under the 2024 Sales Agreement.
In August 2024, we announced a strategic re-prioritization of our research and development activities to focus our efforts on the advancement of our portfolio of clinical-stage oncology programs. As part of this strategic refocus, we reduced our overall workforce by approximately 25%, with a majority of the headcount reductions from our preclinical group. Furthermore, in January 2025, we
31
announced a re-alignment of resources and a re-prioritization of our clinical portfolio to focus on the continued advancement of our Phase 1 clinical programs, RP-3467 and RP-1664, and in February 2025 we approved a phased reduction of our workforce by 75% by the fourth quarter of 2025. We also announced our intention to seek partnering opportunities across our portfolio.
Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct certain U.S.-based research and development expenditures in the current fiscal year and required taxpayers to amortize them over five years pursuant to Section 174 of the Internal Revenue Code of 1986, as amended, or IRC. This provision increased our 2023 and 2022 cash payments of income taxes significantly as compared to 2021 in compliance with IRC Section 174. In September 2023, new interim guidance was issued by the Department of Treasury and the Internal Revenue Service on IRC Section 174 that supports the deduction of such expenses. An income tax receivable in the amount of $1.8 million as of September 30, 2025, reflects the remaining overpayment of tax installments by our U.S. subsidiary. A refund in the amount of $9.0 million, plus $1.1 million interest was received in September 2025. Any changes to tax legislation may materially affect our cash flows. Changes in our tax provisions or an increase in our tax liabilities, whether due to changes in applicable laws and regulations or our interpretation or application thereof, could have a material adverse effect on our financial position, results of operations and/or cash flows.
We expect to incur significant expenses and operating losses for the foreseeable future. As of September 30, 2025, our cash and cash equivalents and marketable securities on hand was $112.6 million. Taking into account the anticipated cost savings associated with the announced re-alignment of resources, reduction in workforce and out-licensing transactions with Debiopharm and DCx, and subject to our strategic review process, we believe that our cash, cash equivalents, and marketable securities will be sufficient to fund our anticipated operating and capital expenditure requirements through 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect.
Because of the numerous risks and uncertainties associated with research, development, and commercialization of our product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future capital requirements will depend on many factors, including:
Until such time, if ever, as we can generate substantial product revenues to support our cost structure, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations and other potential transactions related to our evaluation of strategic alternatives. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common shareholders. Debt financing and equity financing, if available, may involve
32
agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common shares. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
Cash Flows
Comparison of the Nine Months Ended September 30, 2025 and 2024
The following table summarizes our cash flows for each of the periods presented:
|
|
Nine Months Ended |
|
|
|
|
||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
|
|
(in thousands) |
|
|||||||||
Net cash used in operating activities |
|
$ |
(42,824 |
) |
|
$ |
(49,121 |
) |
|
$ |
6,297 |
|
Net cash provided by investing activities |
|
|
30,743 |
|
|
|
17,882 |
|
|
|
12,861 |
|
Net cash provided by financing activities |
|
|
109 |
|
|
|
541 |
|
|
|
(432 |
) |
Effect of exchange rate fluctuations on cash held |
|
|
80 |
|
|
|
(29 |
) |
|
|
109 |
|
Net Decrease In Cash And Cash Equivalents |
|
$ |
(11,892 |
) |
|
$ |
(30,727 |
) |
|
$ |
18,835 |
|
Operating Activities
Net cash used in operating activities was $42.8 million for the nine months ended September 30, 2025, reflecting a net loss of $43.5 million, a net change of $0.4 million in our net operating assets, and a net change in non-cash charges of $1.1 million. The net change in our net operating assets was mainly due to a decrease of $13.8 million in accounts payable and accrued expenses and operating lease liability offset by an increase of $13.4 million in Federal income tax refund, prepaid expenses and other current and non-current assets. The change in non-cash charges primarily consist of an increase of $11.7 million in share-based compensation for option and restricted share unit grants to employees, as well as depreciation expense, including accelerated depreciation of our laboratory equipment, and non-cash lease expense offset by $10.6 million in gain on sale of technology and other assets, gain on termination of collaboration agreement and net accretion of marketable securities.
Net cash used in operating activities was $49.1 million for the nine months ended September 30, 2024, reflecting a net loss of $56.0 million, a net change of $10.3 million in our net operating assets, offset by non-cash charges of $17.2 million. The non-cash charges primarily consist of share-based compensation for option and restricted share unit grants to employees, as well as depreciation expense, and non-cash lease expense offset by the net accretion of marketable securities. The change in our net operating assets was due to decreases of $12.0 million in deferred revenue and $1.7 million in total operating lease liability, as well as increases of $2.0 million in prepaid expenses, with the payment of D&O insurance during the quarter, offset by increases of $2.4 million in accounts payable and accrued expenses and $1.5 million in income taxes payable and a decrease of $1.5 million in other current receivables and other non-current assets.
The $6.3 million increase in cash used in operating activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is mainly due to the upfront payment received from the Debiopharm Agreement and the tax refund we received in the quarter, as well as savings generated from our restructuring efforts.
Investing Activities
Net cash provided by investing activities was $30.7 million for the nine months ended September 30, 2025 and resulted primarily from proceeds on maturities of marketable securities of $83.8 million and proceeds on sale of technology and other assets of $1.0 million offset by the purchases of marketable securities of $54.1 million.
Net cash provided by investing activities was $17.9 million for the nine months ended September 30, 2024 and resulted primarily from proceeds on maturities of marketable securities of $132.0 million offset by the purchases of marketable securities of $114.1 million.
33
Financing Activities
Net cash provided by financing activities was $0.1 million and $0.5 million for the nine months ended September 30, 2025 and 2024, respectively, consisting primarily of net proceeds from the issuance of common shares under the ESPP.
Material Cash Requirements
There were no material changes to our material cash requirements during the nine months ended September 30, 2025, from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report.
Critical Accounting Estimates
This management’s discussion and analysis is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of expenses during the reported periods. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in estimates, if any, will be reflected in the consolidated financial statements prospectively from the date of change in estimates.
There have been no significant changes to our critical accounting estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Annual Report.
Recent Accounting Pronouncements
See Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a description of recent issued accounting pronouncements not yet adopted.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Under SEC rules and regulations, because we are considered to be a “smaller reporting company”, we are not required to provide the information required by this item in this Quarterly Report.
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 Securities Exchange Act of 1934, as amended, or 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/Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025. Based upon that evaluation, our Chief Executive Officer/Chief Financial Officer has concluded that, as of such date, our disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
34
Inherent Limitations on Effectiveness of Controls
Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.
35
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 are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have an adverse effect on our business, operating results or financial condition.
Item 1A. Risk Factors.
Investing in our common shares involves a high degree of risk. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risks described in the Annual Report, including the disclosure therein under Part I, Item 1A, “Risk Factors,” before deciding whether to invest in our common shares. These are not the only risks facing our business. Other risks and uncertainties that we are not currently aware of or that we currently consider immaterial also may materially adversely affect our business, financial condition and future results. Risks we have identified but currently consider immaterial could still also materially adversely affect our business, financial condition and future results of operations if our assumptions about those risks are incorrect or if circumstances change.
There were no material changes during the period covered in this Quarterly Report to the risk factors previously disclosed in Part I, Item 1A of the Annual Report, except as follows:
Risks Related to the Proposed Transactions with XenoTherapeutics
The proposed transactions with Xeno are subject to a number of conditions beyond our control. Failure to complete proposed transactions within the expected time frame, or at all, could have a material adverse effect on our business, operating results, financial condition and our share price.
On November 14, 2025, we entered into the Arrangement Agreement pursuant to which XenoTherapeutics, Inc. will acquire all of our issued and outstanding common shares through Xeno Acquisition Corp. Xeno’s obligation to consummate the transaction is subject to certain conditions.
We cannot predict whether or when these conditions will be satisfied. If one or more of these conditions are not satisfied, and as a result, we do not complete the proposed transactions, we would remain liable for significant transaction costs, and the focus of our management would have been diverted from seeking other potential strategic opportunities, in each case without realizing any benefits of the proposed transactions. Certain costs associated with the proposed transactions have already been incurred or may be payable even if the proposed transactions are not consummated. Finally, any disruptions to our business resulting from the announcement and pendency of the proposed transactions, including any adverse changes in our relationships with our partners, suppliers and employees, could continue or accelerate in the event that we fail to consummate the proposed transactions.
If we do not consummate the proposed transactions, the price of our common shares may decline significantly from the current market price, which may reflect a market assumption that the proposed transactions will be consummated. Any of these events could have a material adverse effect on our business, operating results and financial condition and could cause a decline in the price of our common shares.
Our shareholders may not receive any payment on the CVR and the CVR may expire valueless.
If the proposed transactions are completed, the holders of our common shares, RSUs and in the money options will be entitled to receive one CVR per share, representing the right to receive, subject to the terms and conditions of the CVR Agreement, a pro rata portion of contingent future cash payments. In the event that no CVR Proceeds (as defined in and determined in accordance with the CVR Agreement) become payable prior to the Expiration Date, holders of the CVRs will not receive any payment pursuant to the CVR Agreement. The CVRs will not be transferable, except in the limited circumstances specified in the CVR Agreement, will not have any voting or dividend rights, and will not represent any equity or ownership interest in us or any of our affiliates, and interest will not accrue on any amounts potentially payable on the CVRs. Accordingly, the right of any of our shareholders to receive any future payment on or derive any value from the CVRs will be contingent solely upon the occurrence of a disposition, as outlined above, and if no such dispositions or payments are achieved for any reason within the time periods specified in the CVR Agreement, no payments will be made under the CVRs, and the CVRs will expire valueless.
36
The Arrangement Agreement contains provisions that could discourage a potential competing acquirer.
The Arrangement Agreement provides that, upon the terms and subject to the conditions thereof, we and our representatives cannot directly or indirectly solicit, initiate, encourage or knowingly facilitate discussions with third parties regarding other proposals to acquire or combine with us and we are subject to restrictions on our ability to respond to any such proposal. In the event that we receive an acquisition proposal from a third party, we must notify Xeno of such proposal, and negotiate in good faith with Xeno prior to terminating the Arrangement Agreement or effecting a change in the recommendation of our board of directors to our shareholders with respect to the proposed transactions. The Arrangement Agreement also contains certain termination rights for Xeno and us and further provides that, upon termination of the Arrangement Agreement under specified circumstances, including certain terminations in connection with an alternative business combination transaction as permitted by the terms of the Arrangement Agreement, we will be required to pay Xeno a termination fee of $2.0 million. These provisions could discourage a potential third-party acquirer that might have an interest in acquiring all or a significant portion of us from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share cash or market value than the market value proposed to be received or realized in the transaction. These provisions also might result in a potential third-party acquirer proposing to pay a lower price to our shareholders than it might otherwise have proposed to pay due to the added expense of the termination fee that may become payable in certain circumstances. If the Arrangement Agreement is terminated and we decide to seek another business combination, we may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the proposed transactions with Xeno.
Shareholder or other litigation could prevent or delay the consummation of the proposed transactions with Xeno or otherwise negatively impact our business, operating results and financial condition.
Complaints or lawsuits may in the future be filed against us, our board of directors, Xeno, any of Xeno’s boards of directors and/or others in connection with the transactions contemplated by the Arrangement Agreement. The outcome of litigation is uncertain, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims, and we may not be successful in defending against any such future claims.
We may incur additional costs in connection with the defense or settlement of any future shareholder or other litigation in connection with the proposed transactions. Further, any such future litigation (including creditor opposition) could cause a delay in completion of the proposed transactions or may adversely affect our ability to complete the proposed transactions. We could incur significant costs in connection with any such litigation (including creditor opposition), including costs associated with the indemnification of our directors and executive officers, and lawsuits may, and divert the attention of our management and employees from our day-to-day business which could affect our operations and otherwise adversely affect us financially.
The announcement and pendency of the transactions with Xeno could adversely affect our business, financial results and/or operations.
Employee retention may be particularly challenging while the transaction is pending because employees may experience uncertainty about their roles following the transaction. A substantial amount of our management’s and employees’ attention is being directed toward the completion of the transactions and thus is being diverted from our day-to-day operations. The adverse effects of the pendency of the transaction could be exacerbated by any delays in the completion of the transaction or termination of the Arrangement Agreement. In addition, our executive officers and directors may have interests in the Arrangement that are different from, or are in addition to, those of our shareholders generally. These interests include without limitation the following: the receipt of transaction bonuses payable to executive officers under certain transaction bonus letters; and the potential receipt of severance payments and benefits by executive officers under their respective employment letters.
While the proposed transactions with Xeno are pending, we are subject to business uncertainties and contractual restrictions that could disrupt our business, and the proposed transactions may impair our ability to attract and retain qualified employees or retain and maintain relationships with our suppliers and other business partners.
Whether or not the proposed transactions are consummated, the proposed transactions may disrupt our current plans and operations, which could have an adverse effect on our business and financial results. The pendency of the proposed transactions may also divert management’s attention and our resources from ongoing business and operations and our employees. Other key personnel may have uncertainties about the effect of the proposed transactions, and the uncertainties may impact our ability to retain key personnel while the proposed transactions are pending or in the event that we are unable to consummate the proposed transactions within the expected time frames or at all. If key personnel depart because of such uncertainties, our business and results of operations may be adversely affected.
In addition, pending consummation of the proposed transactions, the Arrangement Agreement generally requires us to operate in the ordinary course of business consistent with past practice and our intent to wind down our activities, and restricts us from taking certain
37
actions with respect to our business and financial affairs without Xeno’s consent. Such restrictions will be in place until either the proposed transactions are consummated or the Arrangement Agreement is terminated. These restrictions could restrict our ability to, or prevent us from, pursuing attractive business opportunities (if any) that arise prior to the consummation of the proposed transactions. For these and other reasons, the pendency of the proposed transactions could adversely affect our business, operating results and financial condition.
We have incurred, and will continue to incur, direct and indirect costs as a result of the proposed transactions with Xeno.
We have incurred, and will continue to incur, significant costs and expenses, including fees for professional services and other transaction costs, in connection with the proposed transactions, including costs that we may not currently expect. We must pay substantially all of these costs and expenses whether or not the transaction is completed. If the Arrangement Agreement is terminated under certain circumstances specified in the Arrangement Agreement, including in connection with the Company’s entry into an agreement with respect to a superior proposal, we will be required to pay Xeno a termination fee of approximately $2.0 million. There are a number of factors beyond our control that could affect the total amount or the timing of these costs and expenses.
If we are not able to complete the proposed transactions with Xeno, we will likely pursue other strategic alternatives. We may not be successful in identifying and implementing any strategic business combination or other transaction and any strategic transaction that we may consummate in the future could have negative consequences. There can be no assurance that the terms of any such other transaction will be favorable.
As part of our strategic re-prioritization, we have undertaken a comprehensive assessment of strategic alternatives to maximize shareholder value. Our board of directors (i) unanimously determined that the terms of the proposed transactions under the Arrangement Agreement are in the best interests of the Company and the sustainable success of our business, having considered the interests of our shareholders, employees and other relevant stakeholders, (ii) duly authorized and approved the terms and conditions of the Arrangement Agreement and the execution, delivery and performance of our obligations under the Arrangement Agreement, and, (iii) resolved, on the terms and subject to the conditions set forth in the Arrangement Agreement, to support to recommend that our shareholders vote in favor of approval and adoption of the resolutions set forth in the Arrangement Agreement.
If we are not able to consummate the proposed transactions and decide to evaluate other strategic alternatives, there can be no assurance that this review process will result in us pursuing a transaction or that any transaction, if pursued, will be completed on attractive terms or at all. The process of evaluating other strategic alternatives may be time-consuming and complex, and we may incur significant costs related to this evaluation, such as for financial advisors, as well as legal and accounting fees and expenses and other related charges, in addition to those we have already incurred in connection with the proposed transactions. We may also incur additional unanticipated expenses in connection with this process. A considerable portion of these costs will be incurred regardless of whether any alternative strategic transaction is pursued or completed. Any such expenses will decrease the remaining cash available for use in our business and may diminish or delay any future distributions to our shareholders.
In addition, if we are not able to complete the proposed transactions and are required to pursue another strategic alternative, such alternative transaction may yield unexpected results that adversely affect our business and decrease the remaining cash available for use in our business or the execution of our strategic re-prioritization. There can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated, lead to increased shareholder value, value for stakeholders, or achieve its anticipated results. Any failure of such potential transaction to achieve its anticipated results could significantly impair our ability to enter into any future strategic transactions and may significantly diminish or delay any future distributions to our shareholders.
We may not realize any additional value in a strategic transaction.
Xeno has placed no value on our assets and intellectual property and may spend only limited resources as provided in the CVR Agreement to potentially monetize our assets. Other potential counterparties in a strategic transaction involving us may likewise place minimal or no value on our assets. Further, the development and any potential commercialization of our product candidates will require substantial additional cash to fund the costs associated with conducting the necessary preclinical and clinical testing and obtaining regulatory approval. Consequently, any potential counterparty in a strategic transaction involving us may choose not to spend additional resources and continue development of our product candidates and may likewise attribute little or no value, in such a transaction, to those assets.
If a strategic transaction is not consummated, our board of directors may decide to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to our shareholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.
38
There can be no assurance that the proposed transactions with Xeno or any other strategic transaction will be consummated. If the proposed transactions with Xeno or a strategic transaction is not consummated, the board of directors may decide to pursue a dissolution and liquidation of the Company. In such an event, the amount of cash available for distribution to our shareholders will depend heavily on the timing of such decision, as the amount of cash available for distribution will decline over time as we continue to fund our operations.
In addition, we may be subject to litigation (including creditor opposition), or other claims related to a dissolution and liquidation. If a dissolution and liquidation were pursued, our board of directors, in consultation with our advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of our common shares could lose all or a significant portion of their investment in the event of a liquidation, dissolution or winding up.
Our ability to consummate the proposed transactions with Xeno or complete another strategic transaction or our dissolution and liquidation depends on our ability to retain our employees and engage other advisors and consultants required to consummate such transactions.
As part of our strategic re-prioritization, we significantly reduced our workforce and expect to maintain a minimal workforce to finalize the Transaction. Our cash conservation activities may yield unintended consequences, such as attrition beyond our planned reduction in workforce, decline in employee productivity and reduced employee morale, which may cause remaining employees to seek alternative employment. Our ability to successfully consummate the proposed transactions or complete another strategic transaction or our dissolution and liquidation depends in large part on our ability to retain certain of our remaining personnel, the loss of whose services may adversely impact our ability to consummate such transaction, and engage other advisors and consultants. Due to our limited employee resources, we may not be able to effectively manage our operations or recruit and retain qualified personnel, which may result in weaknesses in our operations, risks that we may not be able to comply with legal and regulatory requirements.
General Risk Factors
International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition and results of operations.
We operate in a global economy, and our business depends on a global supply chain for the development, manufacturing, and distribution of our clinical trial drug products. There is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty.
We source our active pharmaceutical ingredients (APIs) and precursor chemicals from international suppliers, with significant reliance on foreign manufacturers, including those from China. The ongoing trade tensions between the United States and China have resulted in multiple rounds of tariffs affecting pharmaceutical ingredients, manufacturing equipment, and related supplies. Tariffs on our API chain directly or indirectly linked to Chinese manufacturing may significantly increase our manufacturing costs for our clinical trial drug products. Should the current tariffs on China hold or additional tariffs be imposed specifically targeting Chinese pharmaceutical imports, our manufacturing costs could rise significantly.
Current or future tariffs may result in increased research and development expenses, including with respect to increased costs associated with APIs and raw materials. Trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines. Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence and negatively impact our business, results of operations and, financial condition.
Trade disputes, tariffs, restrictions and other political tensions between the United States and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns. The ultimate impact of current or future tariffs and trade restrictions remains uncertain and could materially and adversely affect our business and financial condition. While we monitor these risks, any prolonged economic downturn or escalation in trade tensions could materially and adversely affect our business, ability to access the capital markets or other financing sources, results of operations and financial condition. In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in our Annual report on Form 10-K.
Enacted and future healthcare legislation may increase the difficulty and cost for us to progress our clinical programs and obtain marketing approval of and commercialize our product candidates and may affect the prices we may set.
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In the United States and other jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes to the healthcare system that could affect our future results of operations. For example, in March 2010, the Patient Protection and Affordable Care Act, or ACA, was enacted, which substantially changed the way healthcare is financed by both governmental and private insurers.
There have been judicial, Congressional and executive branch challenges and amendments to certain aspects of the ACA. For example, on August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminates the “donut-hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program. It is possible that the ACA will be subject to judicial or Congressional challenges in the future. It is also unclear how any such challenges and additional healthcare reform measures of the second Trump administration will impact the ACA and our business.
In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, on July 4, 2025, the annual reconciliation bill, the “One Big Beautiful Bill Act,” or OBBBA, was signed into law which is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. OBBBA also narrows access to ACA marketplace exchange enrollment and declines to extend the ACA enhanced advanced premium tax credits, set to expire at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. Additionally, in August 2011, the Budget Control Act of 2011, among other things, led to aggregate reductions of Medicare payments to providers of 2% per fiscal year. These reductions went into effect in April 2013 and, due to subsequent legislative amendments to the statute will remain in effect until 2032 unless additional action is taken by Congress. On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024. These new laws or any other similar laws introduced in the future may result in additional reductions in Medicare and other health care funding, which could negatively affect our customers and accordingly, our financial operations.
Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may develop new payment and delivery models, such as bundled payment models. In addition, recently there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. Congressional inquiries and proposed and enacted federal legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, and review the relationship between pricing and manufacturer patient programs. In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain high-expenditure, single-source drugs that have been on the market for at least 7 years and biologics that have been on the market for at least 11 years covered under Medicare (the “Medicare Drug Price Negotiation Program”) and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented. These provisions began to take effect progressively starting in fiscal year 2023. On August 15, 2024, HHS announced the agreed-upon reimbursement price for the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges. On January 17, 2025, HSS selected fifteen additional products covered under Part D for price negotiations in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program. Further, on December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced. On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. It is unclear whether the models will be utilized in any health reform measures in the future.
The current Trump administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. For example, on September 30, 2025, the current administration announced the first agreement with a major pharmaceutical company that requires the drug manufacturer to offer, through a direct to consumer platform, U.S. patients and Medicaid programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues. Other recent actions and proposals may, for example, include directives: (1) reducing agency workforce and cutting programs; (2) rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation (“CMMI”) to consider new payment and healthcare models to limit drug spending; (3) eliminating the Biden administration’s executive order that directed HHS to establishing an AI task force and developing a strategic plan; (4) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and
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establishing Most-Favored-Nation pricing for pharmaceutical products; (5) imposing tariffs on imported pharmaceutical products; (6) directing certain federal agencies to enforce existing law regarding hospital and plan price transparency and by standardizing prices across hospitals and health plans; and (7) as part of the Make America Healthy Again (MAHA) Commission’s recent Strategy Report, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising. These actions and policies may significantly reduce U.S. drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks. Additionally, in its June 2024 decision in Loper Bright Enterprises v. Raimondo (“Loper Bright”), the U.S. Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes. The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA.
We expect additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
Changes to tax laws could have a material adverse effect on us and reduce net returns to our shareholders.
Our tax treatment is subject to changes in tax laws, regulations and treaties, or the interpretation thereof, as well as tax policy initiatives and reforms under consideration and the practices of tax authorities in jurisdictions in which we operate. Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends received or, in the specific context of withholding tax, dividends paid.
In December 2017, the U.S. government enacted comprehensive tax legislation, the Tax Cuts and Jobs Act of 2017, or TCJA, significantly reformed the Code. As a result of this legislation, U.S.-based specified research and experimental expenditures are required to be capitalized and amortized ratably over a five-year period. Any such expenditures attributable to research conducted outside the United States must be capitalized and amortized over a 15-year period. Prior to the enactment of the TCJA, research and experimental expenditures were deductible in the year they were incurred for U.S. tax purposes.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, introducing significant changes to U.S. federal tax law. The OBBBA includes a broad range of changes to existing U.S. tax law, including but not limited to the reinstatement of current expensing of domestic research and development costs and one hundred percent bonus depreciation for certain qualified business property. We are evaluating the impact of the OBBBA for both 2025 and future tax years.
We are unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies or practices, could affect our financial position and overall or effective tax rates in the future in countries where we have operations, reduce post-tax returns to our shareholders, and increase the complexity, burden and cost of tax compliance.
New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could affect the tax treatment of our domestic and foreign earnings. Any new taxes could adversely affect our domestic and international business operations, and our business and financial performance. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. Changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future tax expenses.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
(a) Recent Sales of Unregistered Securities
None.
(b) Issuer Purchases of Equity Securities
None.
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Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Trading Arrangements
During the three months ended September 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)
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Item 6. Exhibits.
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Incorporated by Reference |
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Exhibit Number |
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Description |
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Schedule Form |
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File Number |
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Exhibit |
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Filing Date |
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3.1 |
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Articles of Continuance of Repare Therapeutics Inc. |
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8-K |
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001-39335 |
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3.1 |
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June 23, 2020 |
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3.2 |
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Amended and Restated Bylaws of Repare Therapeutics Inc. |
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8-K |
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001-39335 |
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3.2 |
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June 23, 2020 |
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10.1†* |
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Collaboration and License Agreement by and between the registrant Repare Therapeutics Inc. and Debiopharm International SA dated July 14, 2025. |
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31.1* |
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Certification of Principal Executive Officer and 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. |
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32.1** |
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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. |
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101.INS* |
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Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
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101.SCH* |
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Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
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104 |
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Inline Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
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* Filed herewith.
** This certification is being furnished solely to accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing of the registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
† Certain portions of this exhibit (indicated by asterisks) have been omitted because they are not material and would likely cause competitive harm to Repare Therapeutics Inc. if publicly disclosed.
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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.
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REPARE THERAPEUTICS INC. |
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Date: November 14, 2025 |
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By: |
/s/ Steve Forte |
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Steve Forte |
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President, Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) |
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FAQ
What were Repare Therapeutics (RPTX) Q3 2025 results?
What drove RPTX’s Q3 2025 revenue?
What is Repare’s cash position and liquidity?
How much did Repare spend year-to-date on operations?
What restructuring actions did RPTX take in 2025?
What was the DCx transaction and its impact?
What are the key terms of the XenoTherapeutics deal?
