| Condensed Consolidated Financial Statements Details |
3. Condensed Consolidated Financial Statements Details
Investment in Equity Securities
As of March 31, 2026 and December 31, 2025, investment in equity securities was $0.5 million and $0.4 million, respectively. For the three months ended March 31, 2026 and 2025, the Company recognized an unrealized gain of $0.1 million and unrealized loss of $1.1 million, respectively, due to the change in fair value of its investment in equity securities in the other income (expense), net line item of the condensed consolidated statements of operations.
Intangible Assets, Net
The following table summarizes the cost, accumulated amortization, and net carrying value of the Company’s intangible assets as of March 31, 2026 (in thousands):
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|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
Net Carrying |
|
|
Cost |
|
Amortization |
|
Value |
As of March 31, 2026 |
|
|
|
|
|
|
|
|
|
Pulmokine - Seralutinib IP (Note 6) |
|
$ |
26,115 |
|
$ |
2,926 |
|
$ |
23,189 |
BioInvent - Contract-based Intangible Asset (Note 5) |
|
|
20,725 |
|
|
1,115 |
|
|
19,610 |
LAVA - Partnered Program IPs (Note 6) |
|
|
934 |
|
|
16 |
|
|
918 |
LAVA-1266 IP (Note 6) |
|
|
149 |
|
|
2 |
|
|
147 |
Total intangible assets |
|
$ |
47,923 |
|
$ |
4,059 |
|
$ |
43,864 |
The following table summarizes the cost, accumulated amortization, and net carrying value of the Company’s intangible assets as of December 31, 2025 (in thousands):
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|
|
|
|
|
|
|
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|
|
|
|
Accumulated |
|
Net Carrying |
|
|
Cost |
|
Amortization |
|
Value |
As of December 31, 2025 |
|
|
|
|
|
|
|
|
|
Pulmokine - Seralutinib IP (Note 6) |
|
$ |
26,115 |
|
$ |
2,383 |
|
$ |
23,732 |
BioInvent - Contract-based Intangible Asset (Note 5) |
|
|
20,725 |
|
|
780 |
|
|
19,945 |
LAVA - Partnered Program IPs (Note 6) |
|
|
934 |
|
|
3 |
|
|
931 |
LAVA-1266 IP (Note 6) |
|
|
149 |
|
|
1 |
|
|
148 |
Total intangible assets |
|
$ |
47,923 |
|
$ |
3,167 |
|
$ |
44,756 |
The estimated remaining life of the intangible assets ranges from 10.7 years to 19.7 years. The following table presents the projected future amortization expense (in thousands):
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|
|
|
|
Intangible Asset |
|
|
Amortization |
2026 (excluding the three months ended March 31, 2026) |
|
$ |
2,676 |
2027 |
|
|
3,567 |
2028 |
|
|
3,567 |
2029 |
|
|
3,567 |
2030 |
|
|
3,567 |
Thereafter |
|
|
26,920 |
Total |
|
$ |
43,864 |
Net Income Per Share Available to Common Stockholders
The following table includes the computation of basic and diluted net income per share available to common stockholders (in thousands, except per share amounts):
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|
|
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|
|
|
Three Months Ended March 31, |
|
|
2026 |
|
2025 |
Numerator |
|
|
|
|
|
|
Net income |
|
$ |
4,465 |
|
$ |
2,367 |
Less: Series A accumulated dividends |
|
|
(530) |
|
|
(530) |
Less: Series B accumulated dividends |
|
|
(922) |
|
|
(838) |
Less: Allocation of undistributed earnings to participating securities |
|
|
(892) |
|
|
(294) |
Net income available to common stockholders, basic |
|
$ |
2,121 |
|
$ |
705 |
Add: Adjustments to undistributed earnings allocated to participating securities |
|
|
892 |
|
|
294 |
Net income available to common stockholders, diluted |
|
$ |
3,013 |
|
$ |
999 |
|
|
|
|
|
|
|
Denominator |
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|
|
|
|
Weighted-average shares used in computing net income per share available to common stockholders, basic |
|
|
11,894 |
|
|
11,969 |
Effect of dilutive Series X Preferred Stock |
|
|
5,003 |
|
|
5,003 |
Effect of dilutive warrants for common stock |
|
|
3 |
|
|
2 |
Effect of dilutive PSUs |
|
|
— |
|
|
273 |
Effect of dilutive common stock options |
|
|
517 |
|
|
534 |
Weighted-average shares used in computing net income per share available to common stockholders, diluted |
|
|
17,417 |
|
|
17,781 |
Net income per share available to common stockholders, basic |
|
$ |
0.18 |
|
$ |
0.06 |
Net income per share available to common stockholders, diluted |
|
$ |
0.17 |
|
$ |
0.06 |
Potentially dilutive securities are excluded from the calculation of diluted net income per share available to common stockholders if their inclusion is anti-dilutive.
The following table shows the shares from outstanding securities considered anti-dilutive and therefore excluded from the computation of diluted net income per share available to common stockholders (in thousands):
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|
|
Three Months Ended March 31, |
|
|
2026 |
|
2025 |
Common stock options |
|
641 |
|
1,094 |
Contingently issuable PSUs |
|
164 |
|
— |
Warrants for common stock |
|
120 |
|
120 |
Unvested RSUs |
|
102 |
|
— |
Total |
|
1,027 |
|
1,214 |
For PSUs with market conditions, if the market conditions have not been satisfied by the end of the reporting period, the number of shares that would be issuable is based on the market price at the end of the reporting period. This approach treats the end of the reporting period as if it were the end of the contingency period for calculating diluted earnings per share. For PSUs with market conditions that have not yet been satisfied, no shares would be issuable for calculating diluted earnings per share for the three months ended March 31, 2026, based on the 30-day average market price of $27.97 per share.
For PSUs that have satisfied the market conditions but have not satisfied service conditions by the end of the reporting period, the number of shares issuable is included in the calculation of diluted earnings per share if the effect is
dilutive. This includes PSUs that achieved the $30.00 stock price hurdle in November 2024 and the $35.00 stock price hurdle in September 2025, respectively, but still have remaining time-based vesting requirements.
Accrued and Other Liabilities
Accrued and other liabilities consisted of the following (in thousands):
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March 31, |
|
December 31, |
|
|
2026 |
|
2025 |
Accrued legal and accounting fees |
|
$ |
1,435 |
|
$ |
1,765 |
Accrued incentive compensation |
|
|
503 |
|
|
1,645 |
Accrued severance |
|
|
378 |
|
|
— |
Accrued payroll and benefits |
|
|
148 |
|
|
394 |
Share-based liability |
|
|
— |
|
|
3,197 |
Accrued short-term interest payable |
|
|
— |
|
|
2,777 |
Other accrued liabilities |
|
|
747 |
|
|
107 |
Total |
|
$ |
3,211 |
|
$ |
9,885 |
Other Income (Expense), Net
Other income (expense), net for the three months ended March 31, 2026 and 2025 was as follows (in thousands):
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Three Months Ended |
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|
March 31, |
|
|
2026 |
|
2025 |
Other income (expense), net |
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|
|
|
|
Arranger fee from Repare transaction |
|
$ |
3,000 |
|
$ |
— |
Investment income |
|
|
933 |
|
|
927 |
Sublease income |
|
|
546 |
|
|
103 |
HilleVax CVR adjustment1 |
|
|
(360) |
|
|
— |
LAVA CVR adjustment2 |
|
|
230 |
|
|
— |
Unrealized gain (loss) from change in fair value of equity securities |
|
|
112 |
|
|
(1,147) |
Other miscellaneous income, net |
|
|
299 |
|
|
22 |
Total other income (expense), net |
|
$ |
4,760 |
|
$ |
(95) |
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1) |
This adjustment represented a $0.4 million addition to the estimated HilleVax CVR liability for interest earned on the related reserve account.
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2) |
This adjustment represented a $0.6 million difference between the LAVA CVR liability accrued as of December 31, 2025 and the actual amount paid in March 2026 for excess closing net cash, partially offset by a $0.4 million additional expense accrued for future LAVA CVR distributions. (see Note 6).
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