6. Acquisitions and Related Arrangements

LAVA Acquisition

On August 3, 2025, the Company entered into the LAVA Purchase Agreement, as amended on October 17, 2025, pursuant to which the Company acquired LAVA for (i) $1.04 in cash per LAVA ordinary share and (ii) one non-transferable CVR per share. In-the-money options were vested immediately upon closing of the initial tender offer and were entitled to (i) $1.04 less the exercise price per LAVA option in cash and (ii) one non-transferable CVR per option.

The acquisition was structured as a two-step transaction. The initial tender offer closed on November 17, 2025, when approximately 87% of LAVA’s outstanding ordinary shares were validly tendered. The subsequent offering and the post-offer reorganization were completed on November 20, 2025, when the remaining LAVA outstanding ordinary shares were either tendered or cancelled, and LAVA became a wholly-owned subsidiary of the Company. The Company concluded that November 17, 2025, the initial tender offer closing date, was the acquisition date as this was the date the Company obtained control of LAVA.

LAVA entered into partnered programs with J&J in May 2020 and Pfizer in September 2022. Under the J&J Collaboration and License Agreement, J&J agreed to develop JNJ-89853413, a Phase 1 clinical asset that targets CD33 and hematologic cancers. Under the Pfizer License Agreement, Pfizer agreed to develop PF-08046052, a Phase 1 clinical asset that utilizes LAVA’s proprietary Gammabody technology to target EGFR-positive tumors. LAVA is entitled to receive certain milestone and royalty payments under these partnered programs.

Under the LAVA CVR Agreement dated November 17, 2025, CVR holders are entitled to 75% of the net proceeds from ongoing and future collaborations related to these partnered programs over a 10-year period. The Company concluded that any contingent consideration related to LAVA’s partnered programs is a contingent liability under ASC 450 and will be recognized when probable and reasonably estimable. As of December 31, 2025, the Company does not expect to receive any milestone or royalty payments under these partnered programs, and no contingent consideration was considered probable.

Under the LAVA CVR Agreement, CVR holders are also entitled to 75% of the net proceeds from the sale, transfer, license, assignment, or other divestiture of LAVA-1266, a clinical program for acute myeloid leukemia and myelodysplastic syndrome acquired as part of the LAVA Purchase Agreement. The Company concluded that any contingent consideration related to LAVA-1266 is a contingent liability under ASC 450 and will be recognized when probable and estimable. As of December 31, 2025, the Company has not yet sold or licensed LAVA-1266 and no contingent consideration was considered probable.

Additionally, CVR holders are also entitled to 100% of the amount by which LAVA’s closing net cash exceeds the amount of closing net cash as determined by the LAVA Merger Agreement, minus any permitted deductions, as well as 100% of the tax reserve in the amount of $6.3 million minus any permitted tax reserve matter expenses. The Company concluded that each of these elements are contingent liabilities under ASC 450 and will be recognized when probable and reasonably estimable. As of the acquisition date, the Company recognized contingent liabilities for both the closing net cash CVR payment and tax reserve CVR payment at an amount deemed probable and reasonably estimable.

The total purchase consideration for LAVA, as of November 17, 2025, was as follows (in thousands):

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The LAVA acquisition was accounted for as an asset acquisition under ASC 805 because the assets acquired did not satisfy the definition of a “business” under ASC 805. As such, the Company recognized the acquired assets and liabilities based on the total purchase consideration using a relative fair value basis. The value of the acquired IP assets

was reduced by the excess of the fair value of the net assets acquired over the initial consideration based on the relative fair value of each IP.

The following table shows the allocation of the purchase consideration based on the relative fair value of assets acquired and liabilities assumed by the Company as of November 17, 2025 (in thousands):

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HilleVax Acquisition

On August 4, 2025, the Company entered into the HilleVax Merger Agreement through a tender offer for (i) $1.95 in cash per share of HilleVax common stock and per RSU, plus (ii) one non-transferable CVR per share of HilleVax common stock and per RSU. The merger closed on September 17, 2025, and XRA 4 merged with and into HilleVax. Following the merger, HilleVax continued as the surviving entity in the merger and became a wholly-owned subsidiary of the Company.

Under the HilleVax CVR Agreement, CVR holders are entitled to 90% of the net proceeds from the subsequent licensing or other disposition of HIL-216, a pre-clinical vaccine candidate for norovirus acquired as part of the HilleVax Merger Agreement, if sold within two years of the merger and 100% of the unused funds in the related expense fund at the end of the two-year period. The Company concluded that any contingent consideration related to HIL-216 is a contingent liability under ASC 450 and will be recognized when probable and estimable. As of December 31, 2025, the Company has not yet sold or licensed HIL-216 and no contingent consideration was considered probable.

Additionally, CVR holders are entitled to 100% of security deposit receipts associated with the Boston Lease. As of December 31, 2025, the Company has $40.7 million held in restricted cash to pay the Boston Lease obligations. If the Boston Lease is terminated, assigned, or subleased within twelve months of the HilleVax Merger Closing Date, 100% of lease payment obligations saved or the amount received from any subtenant will be distributed to CVR holders. If the Boston Lease is terminated, assigned, or subleased after twelve months of the HilleVax Merger Closing Date, 90% of the applicable savings or receipts will be distributed to CVR holders.

In March 2022, HilleVax entered into the Boston Lease for office and laboratory space, which was historically classified as an operating lease. The lease commenced in April 2022, with base rental payments beginning in January 2023 and ending in December 2032. As of September 17, 2025, the Company concluded that the Boston Lease should be classified as an acquired lease and, in accordance with ASC 805, the Company retained the historical operating lease classification for the lease. In accordance with ASC 842, the Company accounted for the lease as if it commenced on the HilleVax Merger Closing Date. The Company recognized operating lease liabilities of $22.4 million as of September 17, 2025.

On July 31, 2025, HilleVax entered into a sublease agreement with a sublessee for a portion of the Boston Lease premises, with a duration of three years and two months. HilleVax remains liable for the full lease payments under the original lease agreement. The Company expects to recognize sublease income as received and maintain obligations under the head lease in its balance sheet since no legal provisions relieve the Company of its primary obligation under the head lease.

As part of the HilleVax Merger Agreement, the Company acquired the lease and the sublease agreement. The Company concluded that any contingent consideration related to the receipts associated with the Boston Lease is a contingent liability under ASC 450 and will be recognized when probable and estimable. As the return of security deposit and the sublease payments represent probable and estimable payments for which the CVR holders are entitled to 100% of the proceeds, the Company recorded a CVR liability for $5.7 million. Under the HilleVax CVR Agreement, the Company is responsible for the collection and disbursement to Broadridge, the HilleVax CVR holders’ rights agent, of any proceeds to which HilleVax CVR holders could be entitled.

In August 2021, HilleVax entered into the Swiss Lease for its facility in Switzerland, which was historically classified as an operating lease. The Swiss Lease will expire in September 2026, with an option to extend the lease for five years that the Company does not plan to exercise. As part of the merger, the Company also acquired the Swiss Lease and will pay $0.1 million in lease payments over the remaining term of the lease.

As of September 17, 2025, the Company concluded that the Swiss Lease should be classified as an acquired lease and, in accordance with ASC 805, the Company retained the historical operating lease classification for the lease. In accordance with ASC 842, the Company accounted for the lease as if it had commenced on the HilleVax Merger Closing Date. The Company recognized operating lease liabilities of $0.1 million as of September 17, 2025.

The total purchase consideration for HilleVax, as of September 17, 2025, was as follows (in thousands):

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The HilleVax acquisition was accounted for as an asset acquisition under ASC 805 because the assets acquired did not meet the definition of a “business” under ASC 805. As such, the Company recognized the acquired assets and liabilities based on the total purchase consideration using a relative fair value basis. The acquired assets primarily included cash and cash equivalents, restricted cash, and operating lease right-of-use assets. The value of the acquired right-of-use assets were reduced to zero due to acquisition impacts, including the bargain purchase adjustment. As the fair value of net assets acquired exceeded the total purchase consideration, a bargain purchase gain was recognized on the acquisition of HilleVax in the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2025.

The following table shows the allocation of the purchase consideration based on the relative fair value of assets acquired and liabilities assumed by the Company as of September 17, 2025 (in thousands):

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Under the HilleVax CVR Agreement, the CVR payments are adjusted for the excess and shortfall in the closing net cash, which is accounted for as a working capital adjustment to the purchase price and no contingent liability was recorded as of the acquisition date. In December 2025, the Company recalculated the final closing net cash of HilleVax, and recognized a reduction to the contingent value rights liabilities – long-term in its consolidated balance sheet for the cash shortfall of $0.7 million, with the corresponding income recorded in other income, net in its consolidated statement of operations.

Turnstone Acquisition

On June 26, 2025, the Company entered into the Turnstone Merger Agreement, pursuant to which the Company acquired Turnstone via a tender offer for (i) $0.34 in cash per share of Turnstone common stock and per RSU, plus (ii) one non-transferable CVR per share of Turnstone common stock and per RSU. The merger closed on August 11, 2025, and XRA 3 merged with and into Turnstone, with Turnstone continuing as the surviving entity in the merger and a wholly-owned subsidiary of the Company.

Under the Turnstone CVR Agreement, CVR holders are entitled to up to 100% of the net proceeds from specified legacy Turnstone assets, including tax receivables and a lease security deposit. The consideration to be transferred under the Turnstone CVR Agreement is not contingent on any future event or conditions being met and represents a return of Turnstone’s legacy assets to the CVR holders. As a result, the CVR consideration is accounted for as a working capital adjustment to the purchase price and there is no contingent liability recorded. The Company will recognize any subsequent adjustments to CVR payment amounts in earnings.

The total purchase consideration for Turnstone, as of August 11, 2025, was as follows (in thousands):

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As part of the merger, the acquired assets included certain short-term financial assets, primarily consisting of cash, receivables, and prepaid expenses and other current assets, as well as other long-term assets. The Company has also acquired a short-term lease expiring in February 2026 with a related sublease agreement.

The Turnstone acquisition was accounted for as an asset acquisition under ASC 805 because the assets acquired did not satisfy the definition of a “business” under ASC 805. As such, the Company recognized the acquired assets and liabilities based on the total purchase consideration, on a relative fair value basis. As the fair value of net assets acquired exceeded the total purchase consideration, a bargain purchase gain was recognized on the acquisition of Turnstone in the consolidated statements of operations for the year ended December 31, 2025.

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The following table shows the allocation of the purchase consideration based on the relative fair value of assets acquired and liabilities assumed by the Company as of August 11, 2025 (in thousands):

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Mural Acquisition

On August 20, 2025, the Company entered into the Mural Transaction Agreement with Mural, pursuant to which the Company acquired Mural for a cash price of $2.035 per Mural ordinary share and RSU. The final total cash consideration per share was determined to be $2.035 per share. The acquisition closed on December 5, 2025. Following the closing date, Mural became a wholly-owned subsidiary of the Company.

The total purchase consideration for Mural, as of December 5, 2025, was as follows (in thousands):

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The Mural acquisition was accounted for as an asset acquisition under ASC 805 because the assets acquired did not satisfy the definition of a “business” under ASC 805. As such, the Company recognized the acquired assets and

liabilities based on the total purchase consideration, on a relative fair value basis. As the fair value of net assets exceeded the total purchase consideration, a bargain purchase gain was recognized on the acquisition of Mural in the consolidated statements of operations for the year ended December 31, 2025.

The following table shows the allocation of the purchase consideration based on the relative fair value of assets acquired and liabilities assumed by the Company as of December 5, 2025 (in thousands):

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Kinnate Acquisition

In April 2024, the Company completed the acquisition of Kinnate through a tender offer for $2.5879 per share plus CVRs, for a total purchase consideration of $126.4 million. As part of the merger, the Company acquired an IPR&D asset related to KIN-3248 (a Phase 1 clinical trial candidate) as well as several pre-clinical assets.

Under the Kinnate CVR Agreement, Kinnate CVR holders are entitled to 100% of the net proceeds of the $30.5 million potential milestone related to the sale of exarafenib to Pierre Fabre in February 2024. The Exarafenib milestone contingent consideration is accounted for as a derivative under ASC 815. As of December 31, 2025, the fair value of the Exarafenib milestone contingent consideration was $3.6 million, which had an estimated fair value of $3.2 million as of December 31, 2024.

The Company accounts for potential contingent consideration related to KIN-3248, KIN-8741, KIN-7136, and KIN-2524 as period expenses when incurred. During the year ended December 31, 2025, the Company sold KIN-3248, KIN-8741 and KIN-7136 to third parties, and recognized $0.6 million in other income, net on the consolidated statements of operations. As of December 31, 2025, the contingent consideration of $0.6 million, net of expenses, had been paid to Kinnate CVR holders.

During the third quarter of 2025, the Company recorded a reduction to the gains on acquisitions of $1.7 million, a reduction to prepaid expenses and other current assets of $0.3 million, a reduction to other assets – long term of $1.0 million, and a reduction to general and administrative expenses of $0.4 million to correct the gain previously recognized and remove a previously recognized prepaid asset for the Kinnate acquisition that occurred in 2024.

Pulmokine Acquisition

In November 2024, the Company acquired Pulmokine for $20.5 million to obtain an economic interest in seralutinib, a Phase 3 asset being studied in pulmonary arterial hypertension. The acquisition included an intangible asset related to seralutinib with an estimated useful life of 12 years. The Company recognized $2.2 million and $0.2 million of amortization expense for the years ended December 31, 2025 and 2024, respectively. No impairment indicators were identified and no impairment was recorded during the years ended December 31, 2025 and 2024.

Contingent consideration related to the seralutinib asset could be payable subject to certain development and commercial milestones. As of December 31, 2025 and 2024, there were no contract assets or contract liabilities related to this agreement and no revenue was recognized during the years ended December 31, 2025 and 2024.