ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operating results for the year ended December 31, 2025, are not necessarily indicative of results that may occur in future fiscal years. Some of the statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to our management and involve significant elements of subjective judgment and analysis. Words such as “expects,” “will,” “anticipates,” “targets,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “potential,” “should,” “could,” variations of such words, and similar expressions are intended to identify forward-looking statements. Our actual results and the timing of events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a difference include those discussed under the caption “Special Note Regarding Forward Looking Statements” and in “Risk Factors” and elsewhere in this Annual Report on Form 10-K. These and many other factors could affect our future financial and operating results. We undertake no obligation to update any forward-looking statement to reflect events after the date of this Annual Report.
Overview
SCYNEXIS, Inc. is dedicated to advancing innovative solutions for severe rare diseases, with our lead program in the treatment and prevention of difficult-to-treat and drug-resistant fungal infections. We are developing our proprietary antifungal platform “fungerps”, a novel class of antifungal agents called triterpenoids, that are structurally distinct glucan synthase inhibitors and have generally shown in vitro and in vivo activity against a broad range of human fungal pathogens such as Candida and Aspergillus genera, including multidrug-resistant strains, as well as Pneumocystis , Coccidioides , Histoplasma and Blastomyces genera and most common mucorales species.
Ibrexafungerp is the first representative of this novel class of antifungals and was approved by the U.S. Food and Drug Administration (FDA) as BREXAFEMME (ibrexafungerp tablets) for treatment of patients with vulvovaginal candidiasis (VVC) and for the reduction in the incidence of recurrent vulvovaginal candidiasis (rVVC) in 2021 and 2022, respectively. Ibrexafungerp was licensed to GlaxoSmithKline Intellectual Property (No. 3) Limited (GSK) in May 2023.
A second generation fungerp SCY-247 is currently being evaluated in clinical trials and additional compounds from our proprietary fungerp platform, targeted to address significant unmet needs, are in earlier stages of development. The FDA has granted Qualified Infectious Disease Product status and Fast Track designations for the oral formulation of SCY-247 which would provide regulatory exclusivity of at least 10 years, if approved.
SCY-247 Development Update
We continue to progress the development activities for SCY-247 and recently completed the single and multiple ascending dose portions of our ongoing Phase 1 study of oral SCY-247 in 88 healthy subjects. The study evaluated the safety, tolerability and pharmacokinetics of orally administered SCY-247 in healthy participants receiving single ascending doses (SAD) ranging from 50mg to 900mg and multiple ascending doses (MAD) ranging from 50mg to 300mg, once a day for 7 days. Each dose level was evaluated in eight participants, with six participants receiving SCY-247 and two receiving a matching placebo. A total of 66 participants received SCY-247 and 22 received placebo in the SAD and MAD cohorts.
SCY-247 was well tolerated across all evaluated SAD and MAD cohorts. No serious or severe treatment emergent adverse events (TEAEs) were reported. The incidence of TEAEs was low and not dose-dependent, with all events being mild or moderate in severity. One participant discontinued the study due to an adverse event that was deemed not to be related to the study drug.
SCY-247 showed generally dose-proportional pharmacokinetics following single and multiple oral doses. The drug was rapidly absorbed (Tmax ranging from three to seven hours), and systemic exposure (Cmax and AUC) increased proportionally for doses up to 400mg QD and less than proportional for doses higher than 400mg QD. The MAD cohorts of 200mg and 300mg once-daily achieved or exceeded the preliminary target for efficacious exposure, based on preclinical models of invasive candidiasis (IC) available to date, including models with strains such as Candida auris and echinocandin-resistant Candida glabrata that are resistant to current antifungal treatment options. Overall, the safety, tolerability, and pharmacokinetic profile observed in this study support the continued clinical development of SCY-247. Oral SCY-247 also achieved target exposures for invasive fungal disease at doses lower than first generation fungerps, which may confer distinct tolerability advantages.
We intend to progress the development of SCY-247 towards addressing significant unmet needs in the antifungal space that also represent attractive commercial opportunities. We have initiated a Phase 1 study with the intravenous formulation of SCY-247 in the first quarter of 2026. The clinical proof-of-concept Phase 2 study of SCY-247 is currently planned for 2026 in patients with IC. Subsequent stages of development for SCY-247 are anticipated to include studies adequate to support an IC treatment indication, as well as evaluating SCY-247 for the prevention of invasive fungal diseases in patients at high risk.
MARIO Study Update
As previously disclosed, we and GSK entered into an exclusive license agreement dated March 30, 2023, which was subsequently amended by the binding memorandums of understanding dated December 26, 2023 and October 14, 2025 (collectively, the GSK License Agreement).
Pursuant to the GSK License Agreement, we were responsible for conducting the MARIO study which resumed in April 2025 after the FDA notified us that the clinical hold of ibrexafungerp had been lifted, triggering us to bill a $10.0 million development milestone to GSK in the three months ended June 30, 2025. Subsequently, GSK notified us of their intention to immediately terminate the MARIO study based on GSK's purported rights under the GSK License Agreement. We did not believe that GSK had the right to unilaterally terminate the MARIO study under the GSK License Agreement.
In October 2025, we entered into a binding memorandum of understanding (the Binding 2025 MOU) with GSK and we agreed to promptly wind-down and terminate the MARIO study and we received one-time, non-refundable payments totaling $24.8 million from GSK in November 2025. We will not receive any additional development milestone payments from GSK specifically associated with the MARIO study. Except as described above with respect to the MARIO study, the Binding 2025 MOU does not alter the potential milestones and royalties payable to us under the GSK License Agreement, including with regard to sales of BREXAFEMME for VVC and rVVC.
The Binding 2025 MOU was considered to represent a contract modification pursuant to ASC 606. The Binding 2025 MOU does not include any additional distinct goods and services and the we therefore recognized a cumulative catchup of license agreement revenue of $17.2 million for the year ended December 31, 2025 for the updated progress of completing the performance obligation associated with the research and development activities for the Phase 3 MARIO Study. The cumulative catchup includes $2.2 million previously recorded as deferred revenue. The one-time, non-refundable payments totaling $24.8 million collected from GSK as part of the Binding 2025 MOU include $10.0 million to satisfy the license agreement receivable previously recognized as of June 30, 2025.
GSK has reiterated its commitment to continued collaboration with us regarding other aspects of the GSK License Agreement, including with respect to the commercialization of BREXAFEMME for VVC and rVVC indications. We completed the transfer of the BREXAFEMME NDA (as defined in the Binding 2025 MOU) to GSK in November 2025. GSK anticipates being able to initiate regulatory interactions with the FDA in 2026 to discuss the relaunch of BREXAFEMME for VVC and rVVC in the U.S. market.
We remain committed to developing novel antifungal solutions to the rising threat of deadly fungal infections including IC for which there are limited treatment options and significant concerns for emergence of resistances, as highlighted by the World Health Organization in their call to industry and other parties for research, development and public health action in this area of unmet need.
Nasdaq Minimum Bid Price Notification
On June 20, 2025, we received a letter from the Listing Qualifications Department staff (the Staff) of the Nasdaq notifying us that, for the last 30 consecutive business days, the closing bid price for our common stock was below the $1.00 per share minimum required for continued listing on the Nasdaq Global Market as set forth in Nasdaq Listing Rule 5450(a)(1). The letter from Nasdaq had no immediate effect on the listing of our common stock on the Nasdaq Global Market.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had 180 calendar days from June 20, 2025, or until December 17, 2025 (the Compliance Date), to regain compliance with the minimum bid price rule. In December 2025, we announced that we had received an additional 180-calendar-day extension from the Nasdaq to regain compliance with the minimum bid price requirement, as outlined in Nasdaq Listing Rule 5550(a)(2).
We now have until June 15, 2026, to meet the requirement for our shares of common stock to maintain a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days. Nasdaq granted the extension after determining that we continue to meet all other continued listing criteria for the Nasdaq Capital Market, including the market value of publicly held shares, and we have provided written notice of our intention to cure the deficiency within the extension period, if necessary, through a reverse stock split.
Components of Operating Results
Revenue
Revenue consists of license agreement revenue associated with the GSK License Agreement and product revenue, net.
Research and Development Expense
Research and development expense consists of expenses incurred while performing research and development activities to discover, develop, or improve potential product candidates we seek to develop. This includes conducting preclinical studies and clinical trials, manufacturing and other development efforts, and activities related to regulatory filings for product candidates.
We recognize research and development expenses as they are incurred. Our research and development expense primarily consists of:
costs related to executing preclinical studies and clinical trials, including development milestones, drug formulation, manufacturing and other development;
salaries and personnel-related costs, including benefits and any stock-based compensation for personnel performing research and development functions;
fees paid to clinical research organizations (CROs), vendors, consultants and other third parties who support our product candidate development;
medical affairs related expense and salary that is incurred to discover, develop, or improve potential product candidates;
other costs in seeking regulatory approval of our products; and
allocated overhead.
SCY-247 and ibrexafungerp as part of the MARIO Phase 3 study were the key research and development projects during the periods presented. We expect to continue to incur significant research and development expense for the foreseeable future as we continue our effort to develop SCY-247, and to potentially develop our other product candidates, subject to the availability of additional funding.
The successful development of product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs required to complete the remaining development of any product candidates. This is due to the numerous risks and uncertainties associated with the development of product candidates.
Selling, General and Administrative Expense
Selling, general and administrative expense consists primarily of salaries and personnel-related costs, including employee benefits and any stock-based compensation. This includes personnel in executive, accounting and finance, commercial, human resources, business development, and administrative support functions. Other expenses include facility-related costs not otherwise allocated to research and development expense, professional fees for accounting, auditing, tax and legal services, consulting costs for general and administrative purposes, patent application and legal fees, information systems maintenance and marketing efforts.
Other Expense (Income)
Substantially all of our other expense (income) during the periods reported consists of costs associated with:
fair value adjustments to our warrant and derivative liabilities;
interest expense;
amortization of debt issuance costs and discount;
other income associated with research and development credits; and
interest income associated with our held-to-maturity investments and money market accounts.
Income Tax Expense
For the year ended December 31, 2024, our income tax expense recognized consists primarily of income tax expense for U.S. federal and state income taxes.
Results of Operations for the Years Ended December 31, 2025 and 2024
The following table summarizes our results of operations for the years ended December 31, 2025 and 2024, and period-to-period percentage change (dollars in thousands):
Years Ended December 31,
Period-to-Period Change
Revenue:
Product revenue, net
License agreement revenue
Total revenue
Operating expenses:
Research and development
Selling, general and administrative
Total operating expenses
Loss from operations
Other expense (income):
Amortization of debt issuance costs and discount
Interest income
Interest expense
Other income
Warrant liability fair value adjustment
Derivative liability fair value adjustment
Total other income
Loss before taxes
Income tax expense
Net loss
Revenue. For the years ended December 31, 2025 and 2024, revenue consists of $20.6 million and $3.7 million primarily associated with the license agreement revenue recognized for the GSK License Agreement, respectively. For the year ended December 31, 2025, we recognized a cumulative catchup of license agreement revenue of $17.2 million associated with the Binding 2025 MOU. For the year ended December 31, 2025, we recognized $1.4 million in product revenue, net for a change in estimate related to prior period revenue associated with the product recall of BREXAFEMME.
Research and Development. For the year ended December 31, 2025, research and development expenses decreased to $22.3 million from $26.4 million for the year ended December 31, 2024. The decrease of $4.1 million, or 15.6%, was primarily driven by a decrease of $3.8 million in chemistry, manufacturing, and controls (CMC) expense, a decrease of $1.0 million in salary expense, a $0.5 million decrease in stock-based compensation and a net decrease in other research and development expense of $0.5 million, offset in part by an increase of $1.2 million in preclinical expense and a $0.5 million increase in clinical expense.
The $3.8 million decrease in CMC expense is primarily associated with a $3.8 million decrease in expense associated with the manufacturing of drug product for SCY-247 and ibrexafungerp. The decreases of $1.0 million in salary expense and $0.5 million in stock-based compensation expense are due to the decrease in the number of employees in the year ended December 31, 2025. The $1.2 million increase in preclinical expense was primarily associated with certain preclinical costs associated with the continued development of SCY-247 in the current period.
Selling, General and Administrative . For the year ended December 31, 2025, selling, general and administrative expenses decreased to $14.4 million from $14.5 million for the year ended December 31, 2024. The decrease of $0.1 million, or 0.4%, was primarily driven by a decrease of $0.6 million in professional fees, offset in part by an increase of $0.5 million in business development expense.
Amortization of Debt Issuance Costs and Discount. For the years ended December 31, 2025 and 2024, we recognized $0.3 million and $1.7 million in amortization of debt issuance costs and discount, respectively. The debt issuance costs and discount for our March 2019 convertible notes, which were fully paid at maturity in March 2025, primarily consisted of an allocated portion of advisory fees and other issuance costs and the initial fair value of the derivative liability.
Interest Income. For the years ended December 31, 2025 and 2024, we recognized $2.2 million and $4.3 million, respectively, in interest income associated with our money market accounts and investments.
Interest Expense. For the years ended December 31, 2025 and 2024, we recognized $0.2 million and $0.8 million, respectively, in interest expense on our March 2019 convertible notes which were fully paid at maturity in March 2025.
Other Income. For the year ended December 31, 2024, we recognized $0.2 million in other income associated with certain research and development tax credits.
Warrant Liabilities Fair Value Adjustment . For the years ended December 31, 2025 and 2024, we recognized gains of $5.8 million and $13.8 million, respectively, for the fair value adjustment for warrant liabilities primarily due to the decrease in our stock price during the periods, respectively.
Derivative Liabilities Fair Value Adjustment. For the year ended December 31, 2024, we recognized a gain of $0.2 million in the fair value adjustment related to the derivative liability primarily due to the decrease in our stock price during the period.
Income Tax Expense. For the year ended December 31, 2024, we recognized $0.2 million in income tax expense primarily for U.S. federal income tax.
Liquidity and Capital Resources
Sources of Liquidity
As of December 31, 2025, we had cash, cash equivalents, and investments of approximately $56.3 million, compared to cash, cash equivalents, and investments of $75.1 million as of December 31, 2024. We believe our capital resources are sufficient to fund our on-going operations for a period of at least 12 months subsequent to the issuance of the accompanying consolidated financial statements.
As of December 31, 2025, our accumulated deficit was $385.1 million. We anticipate that we will continue to incur losses for at least the next several years. Consistent with our operating plan, we expect to incur significant research and development expenses and selling, general and administrative expenses. As a result of our continued significant expenses, we may need additional capital to fund our operations, which we may obtain through one or more of equity offerings, debt financings, or other non-dilutive third-party funding, strategic alliances and licensing or collaboration arrangements.
Cash Flows
The following table sets forth the significant sources and uses of cash for the years ended December 31, 2025 and 2024 (dollars in thousands):
Years Ended December 31,
Cash, cash equivalents, and restricted cash, January 1
Net cash used in operating activities
Net cash provided by investing activities
Net cash used in financing activities
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash, December 31
Operating Activities
The $18.7 million decrease in net cash used in operating activities for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to the $24.8 million we received under the Binding 2025 MOU in the year ended December 31, 2025, offset by the continued development costs associated with SCY-247 and ibrexafungerp,
Net cash used in operating activities of $5.3 million for the year ended December 31, 2025, primarily consisted of the $8.6 million net loss adjusted for non-cash charges that included the gain on change in fair value of the warrant liabilities of $5.8 million, stock-based compensation expense of $2.9 million, plus a net favorable change in operating assets and liabilities of $6.1 million. The net favorable change in operating assets and liabilities of $6.1 million is due to a net favorable change of $12.4 million due to the decrease in operating assets offset by a net unfavorable change of $6.3 million due to the decrease in operating liabilities. The net $12.4 million decrease in operating assets is primarily due to a $9.5 million decrease in the license agreement contract asset due to the collection of the $10.0 million as part of the Binding 2025 MOU in the year ended December 31, 2025. The net unfavorable change of $6.3 million in operating liabilities is primarily due to the $2.7 million decrease in deferred revenue given the satisfaction of the performance obligation associated with Phase 3 MARIO study in 2025 as part of the Binding 2025 MOU, a $2.2 million decrease in accounts payable, and a $1.0 million decrease in accrued expenses primarily due to the $0.6 million decrease in accrued product recall.
Net cash used in operating activities of $24.0 million for the year ended December 31, 2024, primarily consisted of the $21.3 million net loss adjusted for non-cash charges that included the gain on change in fair value of the warrant liabilities of $13.8 million, stock-based compensation expense of $3.3 million, accretion of investment discount of $1.3 million, and the amortization of debt issuance costs and discount of $1.7 million, plus a net favorable change in operating assets and liabilities of $7.3 million. The net favorable change in operating assets and liabilities of $7.3 million is due to a favorable change of $15.0 million due to the decrease in operating assets, offset by an unfavorable change of $7.7 million due to the decrease in
operating liabilities The net $15.0 million decrease in operating assets is primarily due to a decrease of $9.9 million in the license agreement contract asset given the receipt of the $10.0 million development milestone associated with the GSK License Agreement in the year ended December 31, 2024, a $1.7 million decrease in the license agreement receivable associated with the GSK License Agreement which was collected in the year ended December 31, 2024, and a $3.4 million decrease in prepaid expenses, other assets, deferred costs, and other. The $3.4 million decrease in prepaid expenses, other assets, deferred costs, and other was primarily due to the collection of a $4.4 million unbilled receivable in the year ended December 31, 2024 from GSK. The net unfavorable change of $7.7 million in operating liabilities is primarily due to the $2.7 million decrease in accounts payable and a $3.7 million decrease in accrued expenses primarily due to the $2.1 million decrease in accrued research and development expenses and a $1.4 million decrease in accrued product recall.
Investing Activities
Net cash provided by investing activities of $24.3 million for the year ended December 31, 2025, consisted of purchases of $18.9 million and maturities of $43.2 million in investments.
Net cash provided by investing activities of $6.2 million for the year ended December 31, 2024, consisted of purchases of $36.4 million and maturities of $42.6 million in investments.
Financing Activities
Net cash used in financing activities of $14.2 million for the year ended December 31, 2025, consisted primarily of the $14.0 million repayment of the convertible debt in March 2025.
Net cash used in financing activities of $0.1 million for the year ended December 31, 2024, consisted primarily of the $0.2 million in payments of offering costs in the year ended December 31, 2024.
Future Cash Needs and Funding Requirements
We expect to incur expenses in connection with our efforts to further development activities, particularly as we continue the research, development and clinical trials of, and seek regulatory approval for, product candidates. We anticipate that we will need substantial additional funding in connection with our continuing future operations.
We are continually evaluating our operating plan and assessing the optimal cash utilization for our SCY-247 development strategy. We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development and commercialization of product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenses necessary to complete the development of product candidates.
Our future capital requirements will depend on many factors, including:
the progress, costs, and the clinical and preclinical research and development of SCY-247;
the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals;
the ability of our product candidates to progress through clinical development successfully;
our need to expand our research and development activities;
the costs associated with securing, establishing and maintaining manufacturing capabilities;
our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
our need and ability to hire additional management and scientific and medical personnel;
our need to implement additional, as well as to enhance existing, internal systems and infrastructure, including financial and reporting processes and systems; and
the economic and other terms, timing and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future.
Until such time, if ever, as we can generate substantial revenue from product sales, we expect to finance our cash needs through a combination of net proceeds from equity offerings, debt financings, or other non-dilutive third-party funding (e.g., grants), strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through sales
of assets, other third-party funding, strategic alliances and licensing or collaboration arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.
Critical Accounting Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of our consolidated financial statements requires us to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our consolidated financial statements, as well as the reported revenues and expenses during the reported periods. We evaluate these estimates and judgments on an ongoing basis. We base our assumptions and estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements for the year ended December 31, 2025, included in this Annual Report, we believe that the following accounting policies are critical to the process of making significant judgments and estimates in the preparation of our consolidated financial statements and understanding and evaluating our reported financial results.
License Agreement Revenue
We have entered into arrangements involving the sale or license of intellectual property and the provision of other services. When entering into any arrangement involving the sale or license of intellectual property rights and other services, we determine whether the arrangement is subject to accounting guidance in Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (ASC 606), as well as ASC 808, Collaborative Arrangements . If we determine that an arrangement includes goods or services that are central to our business operations for consideration, we will then identify the performance obligations in the contract using the unit-of-account guidance in ASC 606. For a distinct unit-of-account that is within the scope of ASC 606, we will apply all of the accounting requirements in ASC 606 to that unit-of-account, including the recognition, measurement, presentation and disclosure requirements. For a distinct unit-of-account that is not within the scope of ASC 606, we will recognize and measure the distinct unit-of-account based on other authoritative ASC topics or on a reasonable, rational, and consistently applied policy election.
Analyzing the arrangement to identify performance obligations requires the use of judgment. In arrangements that include the sale or license of intellectual property and other promised services, we first identify if the licenses are distinct from the other promises in the arrangement. If the license is not distinct, the license is combined with other services into a single performance obligation. Factors that are considered in evaluating whether a license is distinct from other promised services include, for example, whether the counterparty can benefit from the license without the promised service on its own or with other readily available resources and whether the promised service is expected to significantly modify or customize the intellectual property.
We assessed the terms of the GSK License Agreement and identified the following performance obligations which included: (1) the license for the development, manufacture, and commercialization of ibrexafungerp, including the approved product BREXAFEMME, in the GSK Territory, (2) the research and development activities for the MARIO study, and (3) performance obligations for the remaining research and development activities for the ongoing clinical and preclinical studies of ibrexafungerp.
For the Binding 2025 MOU, we reviewed for additional distinct goods and services included in the contract modification which requires significant judgment. Our review of the Binding 2025 MOU for additional distinct goods and services included a thorough analysis of the terms of the contract modification and we did not identify any distinct goods or services being added under the Binding 2025 MOU. As a result, we recognized a cumulative catchup of license agreement revenue of $17.2 million for the year ended December 31, 2025 for the updated progress of completing the performance obligation associated with the research and development activities for the Phase 3 MARIO study.
Research and Development Accruals
We are required to estimate our expenses resulting from our obligations under contracts with CROs, clinical site agreements, vendors, and consultants in connection with conducting SCY-247 and ibrexafungerp clinical trials and preclinical studies and other development activities. The financial terms of these contracts are subject to negotiations which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to us under such contracts. Our objective is to reflect the appropriate development and trial expenses in our consolidated financial statements by matching those expenses with the period in which the services and efforts are expended by our service providers.
For clinical trials, we account for these expenses according to the progress of the trial as measured by actual hours expended by CRO personnel, investigator performance or completion of specific tasks, patient progression, or timing of various aspects of the trial. For preclinical development services performed by outside service providers, we determine accrual estimates through financial models, taking into account development progress data received from outside service providers and discussions with our knowledgeable internal personnel and service provider personnel. During the course of a clinical trial or preclinical study or development project, we adjust our rate of trial or project expense recognition if actual results differ from our estimates. We make estimates of our accrued expenses as of each balance sheet date within our consolidated financial statements based on the facts and circumstances known to us at that time. Our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in our reporting changes in estimates in any particular period. We have not experienced any significant adjustments to our estimates to date.
Determination of the Fair Value of Stock-based Compensation Grants
We calculate the fair value of stock-based compensation arrangements using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the use of subjective assumptions, including volatility of our common stock, the expected term of our stock options, the risk free interest rate for a period that approximates the expected term of our stock options, and the fair value of the underlying common stock on the date of grant. In applying these assumptions, we considered the following factors:
we estimate expected volatility based on the volatility of our own common stock trading history and implied volatility;
the assumed dividend yield is based on our expectation of not paying dividends on our underlying common stock for the foreseeable future;
we determine the average expected life of stock options based on the simplified method in accordance with SEC Staff Accounting Bulletin Nos. 107 and 110. We expect to use the simplified method until we have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term;
we determine the risk-free interest rate by reference to implied yields available from U.S. Treasury securities with a remaining term equal to the expected life assumed at the date of grant; and
we recognize forfeitures as they are incurred.
The assumptions used in the Black-Scholes option-pricing model for the years ended December 31, 2025 and 2024 are set forth below:
Employee Stock Options
Years Ended December 31,
Weighted average risk-free interest rate
Weighted average expected term (in years)
Weighted average expected volatility
Non-Employee Stock Options
Years Ended December 31,
Weighted average risk-free interest rate
Weighted average expected term (in years)
Weighted average expected volatility
We record the fair value of stock options issued as of the grant date as compensation expense. We recognize compensation expense over the requisite service period, which is equal to the vesting period.
Stock-based compensation expense has been reported in our statements of operations as follows (dollars in thousands):
Years Ended December 31,
Research and development
Selling, general and administrative
Total
On December 31, 2025, the aggregate intrinsic value of outstanding options to purchase shares of our common stock was zero, based upon the $0.63 closing sales price per share of our common stock as reported on the Nasdaq Capital Market on that date.
Warrant Liability
We account for the outstanding warrants associated with the April 2022 public offering as a liability measured at fair value. The fair value of these warrants has been determined using the Black-Scholes valuation model. We determine the risk-free interest rate by reference to implied yields available from U.S. Treasury securities and utilize the remaining term of the warrant as the expected term. We estimate expected volatility using the historical volatility of our common stock given we have sufficient history to support the expected terms of the warrants and implied volatility. At December 31, 2025, the Level 3 volatility utilized in the Black-Scholes model to fair value the April 2022 public offering warrants was 86.1%. See Note 2 to our consolidated financial statements on this Annual Report for further details.
ITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURE ABOUT MARKET RISK
This item is not applicable to smaller reporting companies.
ITEM 8. CONSOLIDATED FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID 34 )
Consolidated Balance Sheets as of December 31, 2025 and 2024
Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024
Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2025 and 2024
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024
Notes to the Consolidated Financial Statements
REPORT OF INDEPENDENT RE GISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of SCYNEXIS, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of SCYNEXIS, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
License Agreement Revenue- GSK License Agreement — Refer to Notes 1, 2, and 8 to the financial statements
Critical Audit Matter Description
As described in Note 8 to the financial statements, the Company executed in 2025 a binding memorandum of understanding (the "Binding 2025 MOU") with GSK to wind down and terminate the MARIO study.
The Company determined that the Binding 2025 MOU represents a contract modification within the scope of ASC 606, Revenue from contracts with customers, further concluding it does not include any additional distinct goods and services. The Company received one-time, non-refundable payments totaling $24.8 million collected from GSK, of which $17.2 million was recognized as a cumulative catchup of license agreement revenue for the year ended December 31, 2025.
Auditing the Company’s accounting for the Binding 2025 MOU required increased audit effort due to the complex and judgmental nature of evaluating the terms and the appropriate accounting for the modification under the guidance.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the accounting for license revenue recorded for the Binding 2025 MOU included the following, among others; inspection of the executed Binding 2025 MOU and evaluating whether management’s accounting position considered all relevant facts and terms included in the agreement. We further evaluated management’s technical analysis and assessed management’s conclusions to determine whether they had appropriately considered and applied the guidance and associated interpretations.
/s/ Deloitte & Touche LLP
Morristown, New Jersey
March 4, 2026
We have served as the Company's auditor since 2000.
SCYNEXIS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
December 31, 2025
December 31, 2024
Assets
Current assets:
Cash and cash equivalents
Short-term investments (Note 3)
Prepaid expenses and other current assets (Note 4)
License agreement receivable
License agreement contract asset
Restricted cash
Total current assets
Investments (Note 3)
Deferred offering costs
Restricted cash
Operating lease right-of-use asset (Note 6)
Total assets
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
Accrued expenses (Note 5)
Deferred revenue, current portion
Operating lease liability, current portion (Note 6)
Convertible debt and derivative liability (Note 6)
Total current liabilities
Deferred revenue
Warrant liability
Operating lease liability (Note 6)
Total liabilities
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $ 0.001 par value, authorized 5,000,000 shares as of December 31, 2025 and 2024; 0 shares issued and outstanding as of December 31, 2025 and 2024
Common stock, $ 0.001 par value, 150,000,000 shares authorized as of December 31, 2025 and 2024; 43,541,510 and 37,973,991 shares issued and outstanding as of December 31, 2025 and 2024, respectively
Additional paid-in capital
Accumulated deficit
Total stockholders’ equity
Total liabilities and stockholders’ equity
The accompanying notes are an integral part of the financial statements.
SCYNEXIS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Years Ended December 31,
Revenue:
Product revenue, net
License agreement revenue
Total revenue
Operating expenses:
Research and development
Selling, general and administrative
Total operating expenses
Loss from operations
Other expense (income):
Amortization of debt issuance costs and discount
Interest income
Interest expense
Other income
Warrant liability fair value adjustment
Derivative liability fair value adjustment
Total other income
Loss before taxes
Income tax expense
Net loss
Net loss per share – basic and diluted
Weighted average common shares outstanding – basic and diluted
The accompanying notes are an integral part of the financial statements.
SCYNEXIS, INC.
CONSOLIDATED STATEMENTS OF CHANGES I N STOCKHOLDERS' EQUITY
(in thousands, except share data)
Shares of
Common
Stock
Common
Stock
Additional
Paid-in
Capital
Accumulated
Deficit
Total Stockholders’ Equity
Balances as of December 31, 2023
Net loss
Stock-based compensation expense
Common stock issued through employee stock purchase plan
Common stock issued for vested restricted stock units
Balances as of December 31, 2024
Net loss
Stock-based compensation expense
Common stock issued through employee stock purchase plan
Common stock issued for vested restricted stock units
Common stock issued, net of expenses
Balances as of December 31, 2025
The accompanying notes are an integral part of the financial statements.
SCYNEXIS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
Cash flows from operating activities:
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense
Accretion of investment discount
Amortization of debt issuance costs and discount
Change in fair value of warrant liabilities
Change in fair value of derivative liability
Noncash operating lease expense for right-of-use asset
Changes in operating assets and liabilities:
Prepaid expenses and other current assets, deferred costs, and other
License agreement contract asset
License agreement receivable
Accounts payable
Accrued expenses
Deferred revenue
Other liabilities and other
Net cash used in operating activities
Cash flows from investing activities:
Purchase of investments
Maturity of investments
Net cash provided by investing activities
Cash flows from financing activities:
Proceeds from common stock issued
Payment of convertible debt
Payments of deferred offering costs
Proceeds from employee stock purchase plan issuances
Net cash used in financing activities
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of period
Cash, cash equivalents, and restricted cash at end of period
Supplemental cash flow information:
Cash paid for interest
Cash received for interest
Noncash financing and investing activities:
Deferred offering and issuance costs included in accounts payable
The accompanying notes are an integral part of the financial statements.
SCYNEXIS, INC.
NOTES TO THE CONSOLIDATED FINA NCIAL STATEMENTS
Description of Business and Basis of Preparation
Organization
SCYNEXIS, Inc. ("SCYNEXIS" or the “Company”) is a Delaware corporation formed on November 4, 1999. SCYNEXIS is a biotechnology company, headquartered in Jersey City, New Jersey, is dedicated to advancing innovative solutions for severe rare diseases, with our lead program in the treatment and prevention of difficult-to-treat and drug-resistant fungal infections. The Company is developing its proprietary class of triterpenoid antifungal compounds (“fungerps") as broad-spectrum, systemic antifungal agents for multiple fungal indications. Ibrexafungerp is the first representative of this novel class of antifungals and was approved by the U.S. Food and Drug Administration (“FDA”) as BREXAFEMME (ibrexafungerp tablets) for treatment of patients with vulvovaginal candidiasis ("VVC") and for the reduction in the incidence of recurrent vulvovaginal candidiasis ("rVVC") in 2021 and 2022, respectively.
The Company licensed the rights for ibrexafungerp to GlaxoSmithKline Intellectual Property (No. 3) Limited (“GSK”) via an exclusive license agreement dated March 30, 2023, which was subsequently amended by the binding memorandums of understanding dated December 26, 2023 and October 14, 2025 (collectively, the “GSK License Agreement”). See Note 8 for further details.
A second generation fungerp SCY-247 is currently being evaluated in clinical trials and additional compounds from the Company's proprietary fungerp platform, targeted to address significant unmet needs, are in earlier stages of development. The Company recently completed the single and multiple ascending dose portions of the ongoing Phase 1 study of oral SCY-247. Following the positive results of the oral formulation, the Company initiated a Phase 1 study of the intravenous formulation in the first quarter of 2026. A clinical proof-of-concept Phase 2 study of SCY-247 in patients with invasive candidiasis ("IC") is also anticipated in 2026. Subsequent stages of development are anticipated to include studies adequate to support an IC treatment indication, as well as evaluating SCY-247 for the prevention of invasive fungal diseases in patients at high risk. The Company owns 100% of the rights to SCY-247 as well as the additional fungerp compounds. The FDA has granted Qualified Infectious Disease Product status and Fast Track designations for SCY-247 which would provide regulatory exclusivity of at least 10 years , if approved.
The Company had an accumulated deficit of $ 385.1 million at December 31, 2025. The Company's capital resources primarily comprised cash and cash equivalents and investments of $ 56.3 million at December 31, 2025. While the Company believes its capital resources are sufficient to fund the Company’s on-going operations for a period of at least 12 months subsequent to the issuance of the accompanying consolidated financial statements, the Company's liquidity could be materially affected over this period by: (1) its ability to raise additional capital through equity offerings, debt financings, or other non-dilutive third-party funding; (2) costs associated with new strategic alliances, or new and existing licensing and collaboration arrangements; (3) negative regulatory events or unanticipated costs related to its development of SCY-247; and (4) any other unanticipated material negative events or costs. One or more of these events or costs could materially affect the Company’s liquidity. If the Company is unable to meet its obligations when they become due, the Company may have to delay expenditures, reduce the scope of its research and development programs, or make significant changes to its operating plan. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Intercompany balances and transactions are eliminated in consolidation.
Nasdaq Minimum Bid Price Notification
On June 20, 2025, the Company received a letter from the Listing Qualifications Department staff (the "Staff") of the Nasdaq notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company's common stock was below the $ 1.00 per share minimum required for continued listing on the Nasdaq Global Market as set forth in Nasdaq Listing Rule 5450(a)(1). The letter from Nasdaq had no immediate effect on the listing of the Company's common stock on the Nasdaq Global Market.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company had 180 calendar days from June 20, 2025, or until December 17, 2025, to regain compliance with the minimum bid price rule. In December 2025, the Company announced that it had received an additional 180-calendar-day extension from the Nasdaq to regain compliance with the minimum bid price requirement, as outlined in Nasdaq Listing Rule 5550(a)(2).
The Company now has until June 15, 2026, to meet the requirement for the Company's shares of common stock to maintain a closing bid price of at least $ 1.00 per share for a minimum of ten consecutive business days. Nasdaq granted the extension after determining that the Company continues to meet all other continued listing criteria for the Nasdaq Capital
Market, including the market value of publicly held shares, and the Company has provided written notice of its intention to cure the deficiency within the extension period, if necessary, through a reverse stock split.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and judgments include: revenue recognition including the identification of performance obligations in licensing arrangements; the estimate of services and effort expended by third-party research and development service providers used to recognize research and development expense; determination of the fair value of stock-based compensation grants; and the estimates and assumptions utilized in measuring the fair value of the warrant liability each reporting period.
Summary of Significant Accounting Policies
Concentration of Credit Risk
Financial instruments, which potentially expose the Company to concentrations of credit risk, consist principally of cash on deposit, cash equivalents, investments, license agreement receivable, and the license agreement contract asset. The Company's money market accounts (recognized as cash and cash equivalents) and investments are with what the Company believes to be high quality issuers. The Company has not experienced any significant losses in such accounts.
Cash and Cash Equivalents
The Company considers any highly liquid investments with a remaining maturity of three months or less when purchased to be cash and cash equivalents. The Company reported cash, cash equivalents, and restricted cash of $ 21.4 million and $ 16.6 million as of December 31, 2025 and 2024, respectively.
Investments
The Company's held-to-maturity investments in corporate and agency bonds are carried at amortized cost and any premiums or discounts are amortized or accreted through the maturity date of the investment. Any impairment that is not deemed to be temporary is recognized in the period identified.
Allowance for Credit Losses
The Company reviews its held-to-maturity investments quarterly for credit losses on a collective basis by major security type and in line with the Company's investment policy. The Company monitors the credit quality of its held-to-maturity investments through the use of credit ratings. As of December 31, 2025 and 2024, the Company's held-to-maturity investments were in corporate bonds and agency bonds, are highly rated, and the Company does not have a history of credit losses in these investments. The Company reviews the credit quality of its license agreement receivable and license agreement contract asset by monitoring the aging of its accounts receivable, the history of write offs for uncollectible accounts, and the credit quality of its significant customers, the current economic environment/macroeconomic trends, supportable forecasts, and other relevant factors. The Company's license agreement receivable and license agreement contract asset are with a customer that does not have a history of uncollectability nor a history of significantly aged accounts receivables. As of December 31, 2025 and 2024, the Company did no t recognize a credit loss allowance for its investments, license agreement receivable, or license agreement contract asset.
Revenue Recognition and License Agreement Revenue
The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, an entity recognizes revenue when its customer obtains control of goods and services, in an amount that reflects the consideration that the entity expects to be entitled in exchange for those goods and services. The Company performs the following five steps to recognize revenue under ASC 606: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only recognizes revenue when it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services that will be transferred to the customer.
The Company has entered into arrangements involving the sale or license of intellectual property and the provision of other services. When entering into any arrangement involving the sale or license of intellectual property rights and other services, the Company determines whether the arrangement is subject to accounting guidance in ASC 606 as well as ASC 808, Collaborative Arrangements . If the Company determines that an arrangement includes goods or services that are central to the Company’s business operations for consideration, the Company will then identify the performance obligations in the contract using the unit of account guidance in ASC 606. For a distinct unit of account that is within the scope of ASC 606, the
Company applies all of the accounting requirements in ASC 606 to that unit of account, including the recognition, measurement, presentation and disclosure requirements. For a distinct unit of account that is not within the scope of ASC 606, the Company will recognize and measure the distinct unit of account based on other authoritative ASC topics or on a reasonable, rational, and consistently applied policy election.
Analyzing the license arrangements to identify performance obligations requires the use of judgment. In arrangements that include the sale or license of intellectual property and other promised services, the Company first identifies if the licenses are distinct from the other promises in the arrangement. For the license of intellectual property that is distinct, the Company recognizes revenue from consideration allocated to the license when the license is transferred and the customer is able to benefit from the license. If the license is not distinct, the license is combined with other services into a single performance obligation. Factors that are considered in evaluating whether a license is distinct from other promised services include, for example, whether the counterparty can benefit from the license without the promised service on its own or with other readily available resources and whether the promised service is expected to significantly modify or customize the intellectual property.
At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being reached. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. At the end of each reporting period, the Company re-evaluates the probability of achievement of milestones and any related constraint, and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which will affect revenue in the period of adjustment.
In an arrangement with multiple performance obligations, the Company develops estimates and assumptions that require judgment to determine the underlying standalone selling price for each performance obligation, which determines how the transaction price is allocated among the performance obligations. The estimation of the standalone selling price(s) include estimates regarding forecasted cash flows, discount rates, and estimates of costs to be incurred to fulfill its obligations associated with the performance of the research and development activities. The Company evaluates each performance obligation to determine if it can be satisfied at a point in time or over time. Any change made to estimated progress towards completion of a performance obligation is recorded as a change in estimate to license agreement revenue. In addition, variable consideration must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price. The Company constrains variable consideration to the extent that it is probable that it will not result in a significant revenue reversal when the uncertainty associated with the variable consideration is subsequently resolved. The Company will recognize consideration related to sales-based milestone and royalties when the subsequent sales occur pursuant to the royalty exception under ASC 606 because the license is the predominant item to which the royalties or sales-based milestone relate.
For contract modifications under ASC 606, depending on whether the goods and services are distinct or sold at their stand-alone selling prices, a contract modification is accounted for either as a separate contract or a termination of the old contract, a cumulative catchup of the original contract, or a combination of the termination of the old contract and cumulative catchup that faithfully reflects the economics of the transaction.
Warrant Liability
The Company accounts for the warrants associated with the April 2022 Public Offering as a liability measured at fair value. The fair value of these warrants have been determined using the Black-Scholes valuation model ("Black-Scholes"). The warrants are subject to remeasurement at each balance sheet date, using Black-Scholes, with any changes in the fair value of the outstanding warrants recognized in the accompanying consolidated statements of operations.
Research and Development
Major components of research and development costs include clinical trial activities and services, including related drug formulation, manufacturing, and other development, preclinical studies, cash compensation, stock-based compensation, fees paid to consultants and other entities that conduct certain research and development activities on the Company’s behalf, materials and supplies, certain legal services, and regulatory compliance.
The Company is required to estimate its expenses resulting from its obligations under contracts with clinical research organizations, clinical site agreements, vendors, and consultants in connection with conducting SCY-247 and ibrexafungerp clinical trials and preclinical development. The financial terms of these contracts are subject to negotiations which vary from contract to contract, and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company’s objective is to reflect the appropriate development and trial expenses in its consolidated financial statements by matching those expenses with the period in which the services and efforts are expended. For clinical trials, the Company accounts for these expenses according to the progress of the trial as measured by actual hours expended by CRO personnel, investigator performance or completion of specific tasks, patient progression, or timing of various aspects of the trial. For preclinical development services performed by outside service providers, the
Company determines accrual estimates through financial models, taking into account development progress data received from outside service providers and discussions with applicable Company and service provider personnel.
Patent Expenses
Costs related to filing and pursuing patent applications, as well as costs related to maintaining and defending the Company's existing patent portfolio, are recorded as selling, general, and administrative expense as incurred since recoverability of such expenditures is uncertain.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in absence of a principal, most advantageous market for the specific asset or liability.
The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows:
Level 1 — Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;
Level 2 — Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and
Level 3 — Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances.
Income Taxes
The Company provides for deferred income taxes under the asset and liability method, whereby deferred income taxes result from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that the Company believes is more likely than not to be realized. The Company recognizes uncertain tax positions when the positions will be more likely than not sustained based solely upon the technical merits of the positions.
Stock-Based Compensation
The Company measures and recognizes compensation expense for all stock-based payment awards made to employees, officers, directors, and non-employees based on the estimated fair values of the awards as of grant date. The Company values equity instruments and stock options granted to employees and non-employees using the Black-Scholes valuation model. The value of the portion of the award that is ultimately expected to vest is recorded as expense over the requisite service periods. The Company recognize forfeitures as they are incurred.
Basic and Diluted Net Loss per Share of Common Stock
The Company calculates net loss per common share in accordance with ASC 260, Earnings Per Share . Basic net loss per common share for the years ended December 31, 2025 and 2024 was determined by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Per ASC 260, Earnings Per Share , the weighted average number of common shares outstanding utilized for determining the basic net loss per common share for the years ended December 31, 2025 and 2024 includes the outstanding prefunded warrants to purchase 3,189,815 and 3,200,000 shares of common stock issued in the April 2022 Public Offering and December 2020 public offering, respectively.
The following potentially dilutive shares of common stock have not been included in the computation of diluted net loss per share for the years ended December 31, 2025 and 2024, as the result would be anti-dilutive:
Years Ended December 31,
Outstanding stock options
Outstanding restricted stock units
Warrants to purchase common stock associated with April 2022 Public Offering
Common stock associated with the March 2019 Notes
Warrants to purchase common stock associated with loan agreement
Warrants to purchase common stock associated with Danforth
Total
Segment and Geographic Information
Operating segments are defined as components of an enterprise (business activity from which it earns revenue and incurs expenses) about which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM reviews consolidated net loss to make decisions about allocating resources and assessing performance for the entire Company. The Company views its operations and manages its business as one operating segment, drug development. See Note 13 for further details.
Reclassification of Prior Year Amounts
Certain prior year amounts within the income tax footnote disclosures have been reclassified for consistency with the current year presentation.
Recently Adopted Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures , which introduced new guidance on disclosures for income taxes, including enhancements to the rate reconciliation and income taxes paid disclosures. This guidance is effective for the Company for annual reporting periods beginning January 1, 2025. The Company adopted ASU No. 2023-09 in 2025.
Recently Issued Accounting Pronouncements
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements , which introduced new guidance on improvements to several topics within the codification. This guidance is effective for the Company for annual reporting periods beginning after December 15, 2026. The Company is currently evaluating the impact ASU 2025-12 will have on its consolidated financial statements.
In November 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements , which introduced new guidance on disclosures to provide clarity about the current requirements for interim reporting. This guidance is effective for the Company for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact ASU 2025-11 will have on its consolidated financial statements.
In October 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities , which introduced authoritative guidance on the accounting for government grants received by business entities. This guidance is effective for the Company for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact ASU 2025-10 will have on its consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) , Disaggregation of Income Statement Expenses , which introduced new guidance on disclosures for specified costs and expenses. This guidance is effective for the Company for annual reporting periods beginning January 1, 2027. The Company is currently evaluating the impact ASU 2024-03 will have on its consolidated financial statements.
Investments
I nvestments consisted of the following (in thousands):
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
As of December 31, 2025
Maturities < 1 Year
Corporate bonds
Total short-term investments
Maturities > 1 Year
Corporate bonds
Total investments
As of December 31, 2024
Maturities < 1 Year
Corporate bonds
Agency bonds
Total short-term investments
Maturities > 1 Year
Corporate bonds
Total investments
The Company carries investments at amortized cost. The fair value of the corporate and agency bonds is determined based on “Level 2” inputs, which consist of quoted prices for similar assets in active markets. The Company has evaluated the unrealized loss position in the corporate bonds as of the balance sheet dates and did not consider it to be indicative of an other-than-temporary impairment as the securities are highly-rated and the Company expects to realize the full principal amount at maturity. As of December 31, 2025, the corporate bonds maintain credit ratings of A- and higher.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
December 31,
Prepaid research and development services
Prepaid insurance
Other prepaid expenses
Other current assets
Total prepaid expenses and other current assets
Accrued Expenses
Accrued expenses consisted of the following (in thousands):
December 31,
Accrued research and development expenses
Accrued employee bonus compensation
Other accrued expenses
Accrued product recall
Total accrued expenses
Commitments, Contingencies, and Borrowings
Leases
On March 1, 2018, the Company entered into a long-term lease agreement for approximately 19,275 square feet of office space in Jersey City, New Jersey, that the Company identified as an operating lease under ASC 842 (the “Lease”). The lease term is eleven years from August 1, 2018, the commencement date, with total lease payments of $ 7.3 million over the lease
term. The Company has the option to renew for two consecutive five-year periods from the end of the first term and the Company is not reasonably certain that the option to renew the Lease will be exercised. Under the Lease, the Company furnished a security deposit in the form of a standby letter of credit in the amount of $ 0.3 million, which will be reduced by fifty-five thousand dollars every two years for ten years after the commencement of the lease . The security deposit is classified as restricted cash in the accompanying consolidated balance sheets.
The consideration in the Lease allocated to the single lease component includes the fixed payments for the right to use the office space as well as common area maintenance. The Lease also contains costs associated with certain expense escalation, property taxes, insurance, parking, and utilities which are all considered variable payments and are excluded from the operating lease liability. The incremental borrowing rate utilized approximated the prevailing market interest rate the Company would incur to borrow a similar amount equal to the total Lease payments on a collateralized basis over the term of the Lease. The following table summarizes certain quantitative information associated with the amounts recognized in the accompanying consolidated financial statements for the Lease (dollars in thousands):
Years Ended December 31,
Operating lease cost
Variable lease cost
Total operating lease expense
Cash paid for amounts included in the measurement of operating lease liability
December 31, 2025
December 31, 2024
Remaining Lease term (years)
Discount rate
Future minimum lease payments for all operating leases as of December 31, 2025 are as follows (in thousands):
December 31, 2025
Total
The presentation of the operating lease liability as of December 31, 2025 is as follows (in thousands):
December 31, 2025
Present value of future minimum lease payments
Operating lease liability, current portion
Operating lease liability, long-term portion
Total operating lease liability
Difference between future minimum lease payments and discounted cash flows
License Arrangements with Potential Future Expenditures
As of December 31, 2025, the Company had a license arrangement with Merck Sharp & Dohme Corp., or Merck, as amended, that involves potential future expenditures. Under the license arrangement, executed in May 2013, the Company exclusively licensed from Merck its rights to ibrexafungerp in the field of human health. In January 2014, Merck assigned the patents related to ibrexafungerp that it had exclusively licensed to the Company. Pursuant to the terms of the license agreement, Merck was originally eligible to receive milestone payments from the Company that could total $ 19.0 million upon occurrence of specific events, including initiation of a Phase 2 clinical study, new drug application, and marketing approvals in each of the U.S., major European markets, and Japan. In addition, Merck is eligible to receive tiered royalties from the Company based on a percentage of worldwide net sales of ibrexafungerp. The aggregate royalties are mid- to high-single digits.
In December 2014, the Company and Merck entered into an amendment to the license agreement that deferred the remittance of a milestone payment due to Merck, such that no amount would be due upon initiation of the first Phase 2 clinical trial of a product containing the ibrexafungerp compound (the “Deferred Milestone”). The amendment also increased, in an
amount equal to the Deferred Milestone, the milestone payment that would be due upon initiation of the first Phase 3 clinical trial of a product containing the ibrexafungerp compound. In December 2016 and January 2018, the Company entered into second and third amendments to the license agreement with Merck which clarified what would constitute the initiation of a Phase 3 clinical trial for the purpose of milestone payment. In January 2019, a milestone payment became due to Merck as a result of the initiation of the VANISH Phase 3 VVC program and was paid in March 2019. On December 2, 2020, the Company entered into a fourth amendment to the license agreement with Merck. The amendment eliminates two cash milestone payments that the Company would have paid to Merck upon the first filing of a NDA, triggered by the FDA acceptance for filing of its NDA for ibrexafungerp for the treatment of VVC, and first marketing approval in the U.S., in June 2021 for the Company’s NDA for ibrexafungerp for the treatment of VVC. Such cash milestone payments would have been creditable against future royalties owed to Merck on net sales of ibrexafungerp. With the amendment, these milestones will not be paid in cash and, accordingly, credits will not accrue. Pursuant to the amendment, the Company will also forfeit the credits against future royalties that it had accrued from a prior milestone payment already paid to Merck. All other key terms of the license agreement are unchanged.
Clinical Development Arrangements
The Company has entered into, and expects to continue to enter into, contracts in the normal course of business with various third parties who support its clinical trials, preclinical research studies, and other services related to its development activities. The scope of the services under these agreements can generally be modified at any time, and the agreement can be terminated by either party after a period of notice and receipt of written notice.
Legal Proceedings
On November 7, 2023, a securities class action was filed by Brian Feldman against the Company and certain of the Company's executives in the United States District Court, District of New Jersey, alleging misstatements from March 31, 2023 to September 22, 2023 regarding manufacturing controls and related risks. The court granted the Company’s motion to dismiss with leave to amend on July 30, 2025, and on August 29, 2025, the parties stipulated to dismissal and the court dismissed the case with prejudice. On May 1, 2024 and on June 4, 2024, purported shareholder derivative complaints asserting related claims were filed in the same court and later consolidated. On October 15, 2025, the court dismissed without prejudice the related consolidated shareholder derivative action.
March 2019 Note Purchase Agreement
On March 7, 2019 , the Company entered into a Senior Convertible Note Purchase Agreement (the “March 2019 Note Purchase Agreement”) with Puissance Life Science Opportunities Fund VI ("Puissance"). Pursuant to the March 2019 Note Purchase Agreement, on March 7, 2019, the Company issued and sold to Puissance $ 16.0 million aggregate principal amount of its 6.0% Senior Convertible Notes due 2025 (“March 2019 Notes”), resulting in $ 14.7 million in net proceeds after deducting $ 1.3 million for an advisory fee and other issuance costs. In April 2019, Puissance converted $ 2.0 million of the March 2019 Notes for 162,600 shares of common stock. The March 2019 Notes matured on March 15, 2025 and the Company repaid the $ 14.0 million due to Puissance.
Stockholders’ Equity
Authorized, Issued, and Outstanding Common Shares
The Company’s authorized common stock has a par value of $ 0.001 per share and consists of 150,000,000 shares as of December 31, 2025 and 2024; 43,541,510 and 37,973,991 shares were issued and outstanding at December 31, 2025 and 2024, respectively.
Shares Reserved for Future Issuance
The Company had reserved shares of common stock for future issuance as follows:
December 31,
Outstanding stock options
Outstanding restricted stock units
Prefunded warrants to purchase common stock associated with December 2020 public offering
Warrants to purchase common stock associated with April 2022 Public Offering
Prefunded warrants to purchase common stock associated with April 2022 Public Offering
Warrants to purchase common stock associated with loan agreement
Warrants to purchase common stock associated with Danforth
For possible future issuance for the conversion of the March 2019 Notes
For possible future issuance under 2024 Plan (Note 10)
For possible future issuance under employee stock purchase plan
For possible future issuance under 2015 Plan (Note 10)
Total common shares reserved for future issuance
Liquidation Rights
In the event of any liquidation or dissolution of the Company, the holders of the common stock are entitled to the remaining assets of the Company legally available for distribution.
Dividends and Voting Rights
The holders of the common stock are entitled to receive dividends if and when declared by the Company.
Preferred Stock
On May 7, 2014, the Company amended and restated its articles of incorporation relating to its approved capital structure. The Company’s board of directors has authorized the Company, subject to limitations prescribed by Delaware law, to issue up to 5,000,000 shares of preferred stock with a par value of $ 0.001 per share in one or more series, to establish from time to time the number of shares to be included in each series and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions. The Company’s board of directors can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series then outstanding, without any further vote or action by the stockholders. The Company’s board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. There were no shares of preferred stock issued and outstanding as of December 31, 2025 and 2024.
Common Stock Sales Agreement
On November 6, 2024, the Company entered into a Controlled Equity Offering SM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”), pursuant to which the Company may sell from time to time, at its option, up to an aggregate of $ 50.0 million of shares of its common stock, par value $ 0.001 , through Cantor, as sales agent. Sale of the common stock, if any, pursuant to the Sales Agreement, may be made in sales deemed to be an “at-the-market” offering as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on The Nasdaq Global Market and any other trading market for the common stock, and sales to or through a market maker other than on an exchange. The Company is not obligated to make any sales of common stock under the Sales Agreement. The offering of common stock pursuant to the Sales Agreement will terminate upon (a) the sale of all of the shares of common stock subject to the Sales Agreement or (b) the termination of the Sales Agreement by the Company or by Cantor. During the years ended December 31, 2025 and 2024, the Company sold zero shares of its common stock under the Sales Agreement.
April 2022 Public Offering
On April 22, 2022, the Company entered into an Equity Underwriting Agreement (the “Underwriting Agreement”) with Guggenheim Securities, LLC, as representative of the several underwriters (the “Underwriters”), relating to the offering, issuance and sale (the “April 2022 Public Offering”) of (a) 3,333,333 shares of the Company’s common stock, par value $ 0.001 per share, (b) prefunded warrants, in lieu of common stock, to purchase 11,666,667 shares of the Company’s common stock, par value $ 0.001 per share, and (c) warrants, which will accompany the common stock or prefunded warrants, to purchase up to an aggregate of 15,000,000 shares of the Company’s common stock. The prefunded warrants entitle the holders to purchase up to 11,666,667 shares of common stock and have an unlimited term and an exercise price of $ 0.001 per share. The warrants entitle the holders to purchase up to an aggregate of 15,000,000 shares of common stock and have a seven-year term and an exercise price of $ 3.45 per share. The warrants that accompany the prefunded warrants have an additional provision entitling the holder thereof to purchase a prefunded warrant rather than a share of common stock at the warrant exercise price less the exercise price of the prefunded warrant purchased. Each warrant is exercisable immediately upon issuance, subject to certain limitations on beneficial ownership. The price to the public in the April 2022 Public Offering was $ 3.00 per share of common stock and accompanying warrants, or in the case of prefunded warrants, $ 2.999 per prefunded warrant and accompanying warrants.
The prefunded warrants are classified as equity in accordance with ASC 815, Derivatives and Hedging , given the prefunded warrants are indexed to the Company’s own shares of common stock and meet the requirements to be classified in equity. The prefunded warrants were recorded at their relative fair value at issuance in the stockholders’ equity section of the balance sheet and the prefunded warrants are considered outstanding shares in the basic earnings per share calculation for the years ended December 31, 2025 and 2024 given their nominal exercise price. During the year ended December 31, 2025 , a 5 % beneficial owner of the Company exercised 4,326,452 prefunded warrants from the April 2022 Public Offering, resulting in the issuance of 4,326,452 shares of the Company's common stock for proceeds of $ 4,326 .
The outstanding warrants associated with the April 2022 Public Offering meet the definition of a derivative pursuant to ASC 815, Derivatives and Hedging , and do not meet the derivative scope exception given the warrants do not qualify under the indexation guidance. As a result, the April 2022 Public Offering warrants were initially recognized as liabilities and measured at fair value using the Black-Scholes valuation model. During the year ended December 31, 2025 and 2024, the Company recognized gains of $ 5.8 million and $ 13.8 million , respectively, due to the change in fair value of the warrant liability. As of December 31, 2025 and 2024, the fair value of the warrant liability was $ 2.2 million and $ 8.0 million, respectively.
Warrant Associated with Danforth Advisors
Pursuant to a consulting agreement with Danforth Advisors (“Danforth”) entered into in November 2021, the Company issued to Danforth a warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $ 5.50 per share. The warrant will expire five years from the date of the grant.
Revenue
GSK License Agreement
On March 30, 2023 and as amended in December 2023 and October 2025, the Company entered into the GSK License Agreement. Pursuant to the terms of the GSK License Agreement, the Company granted GSK an exclusive (even as to the Company and its affiliates), royalty-bearing, sublicensable license for the development, manufacture, and commercialization of ibrexafungerp, including the approved product BREXAFEMME, for all indications, in all countries other than Greater China and certain other countries already licensed to third parties (the “GSK Territory”). If the existing licenses granted to or agreements with third parties are terminated with respect to any country, GSK will have an exclusive first right to negotiate with the Company to add those additional countries to the GSK Territory. The parties closed the transactions contemplated by the GSK License Agreement in May 2023.
On December 26, 2023, the Company and GSK entered into a binding memorandum of understanding (the "Binding 2023 MOU") for amendment to the GSK License Agreement. The GSK License Agreement was amended in connection with the delay in the commercialization of BREXAFEMME and further clinical development of ibrexafungerp. Under the terms of the updated GSK License Agreement, as amended by the Binding 2023 MOU, the Company is now eligible to receive potential:
regulatory approval milestone payments of up to $ 49 million (revised from up to $ 70 million as provided in the GSK License Agreement);
commercial milestone payments of up to $ 57.5 million based on first commercial sale in invasive candidiasis (U.S./EU) (revised from up to $ 115 million as provided in the GSK License Agreement); and
and sales milestone payments of up to $ 179.5 / $ 169.75 / $ 145.5 million (depending on the date of GSK’s relaunch of BREXAFEMME in the U.S.) (revised from up to $ 242.5 million as provided in the GSK License Agreement).
These milestones are based on annual net sales in the GSK Territory, with a total of $ 64 / $ 54.25 / $ 46.5 million to be paid upon achievement of multiple sales thresholds up through $200 million; a total of $ 45.5 / $ 45.5 / $ 39 million to be paid upon achievement of multiple sales thresholds between $300 million and $500 million; and $ 35 / $ 35 / $ 30 million to be paid at each sales threshold of $750 million and $1 billion.
In the case of each of the above milestones, such milestone events are defined in the GSK License Agreement, as amended by the Binding 2023 MOU. GSK will also pay royalties based on cumulative annual sales to us in the mid-single digit to mid-teen range. The royalty terms are not amended by the Binding 2023 MOU.
These royalty rates are subject to reduction, including in the event of third-party licenses, entry of a generic product, or the expiration of licensed patents. A joint development committee was established between GSK and the Company to coordinate and review ongoing development activities of ibrexafungerp. Unless earlier terminated, the GSK License Agreement will expire on a product-by-product and country-by-country basis at the end of the royalty term for such product in such country. The Company has the right to terminate the GSK License Agreement upon an uncured material breach by, or bankruptcy of, GSK. GSK has the right to terminate the GSK License Agreement at any time for convenience in its entirety or on a product-by-product and country-by-country basis, upon an uncured material breach by, or bankruptcy of, the Company, or for safety reasons.
The Company evaluated the GSK License Agreement in accordance with ASC 606 as it includes a customer-vendor relationship as defined under ASC 606 and meets the criteria to be considered a contract. The Company assessed the terms of the GSK License Agreement and identified the following performance obligations which include: (1) the license for the development, manufacture, and commercialization of ibrexafungerp, including the approved product BREXAFEMME, in the GSK Territory, which was satisfied in 2023 (2) the research and development activities for the Phase 3 MARIO study, and (3) performance obligations for the remaining research and development activities for the clinical and preclinical studies of ibrexafungerp which was satisfied in 2024.
The Company considers the future potential regulatory and commercial milestone payments as well as sales-based milestone and royalties to be variable consideration. The Company constrains variable consideration to the extent that it is probable that it will not result in a significant revenue reversal when the uncertainty associated with the variable consideration is subsequently resolved. The Company will recognize consideration related to sales-based milestone and royalties when the subsequent sales occur pursuant to the royalty exception under ASC 606 because the license is the predominant item to which the royalties or sales-based milestone relate.
Pursuant to the GSK License Agreement, the Company was responsible for conducting the Phase 3 MARIO study which resumed in April 2025 after the FDA notified the Company the clinical hold of ibrexafungerp had been lifted, triggering the Company to bill a $10.0 million development milestone to GSK in the three months ended June 30, 2025. Subsequently, GSK notified the Company of their intention to immediately terminate the study based on its purported rights under the GSK License Agreement.
In October 2025, the Company and GSK entered into a binding memorandum of understanding (the "Binding 2025 MOU") and the Company agreed to promptly wind-down and terminate the Phase 3 MARIO study and received one-time, non-refundable payments totaling $ 24.8 million from GSK in November 2025. The Company will not receive any additional development milestone payments from GSK specifically associated with the Phase 3 MARIO study. Except as described above with respect to the MARIO study, the Binding 2025 MOU does not alter the potential milestones and royalties payable to the Company under the GSK License Agreement, including with regard to sales of BREXAFEMME for VVC and rVVC.
The Binding 2025 MOU was considered to represent a contract modification pursuant to ASC 606. The Binding 2025 MOU does not include any additional distinct goods and services and the Company therefore recognized a cumulative catchup of license agreement revenue of $ 17.2 million for the year ended December 31, 2025 for the updated progress of completing the performance obligation associated with the research and development activities for the Phase 3 MARIO study. The cumulative catchup includes $ 2.2 million previously recorded as deferred revenue. The one-time, non-refundable payments totaling $ 24.8 million collected from GSK as part of the Binding 2025 MOU include $ 10.0 million to satisfy the license agreement receivable previously recognized as of June 30, 2025.
The Company recognizes the revenue associated with the MARIO study over time using an input method. The input method is based on the actual costs incurred as a percentage of total budgeted costs towards satisfying the performance obligation as this method provides the most faithful depiction of the Company’s performance in transferring control of the services promised to GSK and represents the Company’s best estimate of the period of the obligation. As a result of the Binding 2025 MOU, the performance obligation for the research and development activities for the Phase 3 MARIO study was substantially satisfied as of December 31, 2025. For the year ended December 31, 2025 and 2024, the Company recognized $ 19.2 million and $ 2.8 million in license agreement revenue, respectively. As of December 31, 2025, there was $ 0.2 million of current deferred revenue which is expected to be recognized in 2026. As of December 31, 2024, there was $ 1.6 million and $ 1.3 million of current and long-term deferred revenue, respectively.
Product Revenue, Net
Until the product recall in 2023, the Company sold BREXAFEMME in the GSK Territory. The Company was the principal for these transactions under ASC 606 as the Company maintained control of the BREXAFEMME inventory that was then sold to its customers. The Company sold product as principal given it maintained control of BREXAFEMME product until delivery to its wholesalers at which point control was transferred. For the year ended December 31, 2025, the Company recognized $ 1.4 million in product revenue, net for a change in estimate related to prior period revenue associated with the product recall of BREXAFEMME.
Hansoh License Agreement
In February 2021, the Company entered into an Exclusive License and Collaboration Agreement (the “Hansoh License Agreement”) with Hansoh (Shanghai) Health Technology Co., Ltd., and Jiangsu Hansoh Pharmaceutical Group Company Limited (collectively, “Hansoh”), pursuant to which the Company granted to Hansoh an exclusive license to research, develop and commercialize ibrexafungerp in the Greater China region, including mainland China, Hong Kong, Macau, and Taiwan (the “Territory”). The Company also granted to Hansoh a non-exclusive license to manufacture ibrexafungerp solely for development and commercialization in the Territory. Under the terms of the Hansoh License Agreement, Hansoh shall be responsible for the development, regulatory approval and commercialization of ibrexafungerp in the Territory.
Pursuant to the terms of the Hansoh License Agreement, the Company received as consideration for the licenses a nonrefundable upfront cash payment of $ 10.0 million and is entitled to an additional payment that was payable upon the transfer of certain data related to the manufacturing license. In addition, the Company will also be eligible to receive up to $ 110.0 million in potential development and commercial milestones. In addition, during the term of the licensing agreement, the Company is entitled to low double-digit royalties on net product sales. The obligation to pay royalties with respect to sales in a specified region will continue until the later of the date of expiration of all intellectual property and regulatory exclusivity for the product in the region and ten years from the first commercial sale, unless earlier terminated by Hansoh with advanced notice for convenience or under other specified circumstances. The Company is also eligible to receive a milestone related to the successful completion of a manufacturing batch by Hansoh.
The Company evaluated the Hansoh License Agreement and concluded that it was subject to ASC 606 as the Company viewed the Hansoh License Agreement as a contract with a customer as the activities were central to its business operations. The remaining amounts related to the successful completion of a manufacturing batch by Hansoh and potential development milestones represent variable consideration and were constrained as it was concluded that it was not probable that a significant reversal in cumulative revenue recognized will not occur and therefore not included in the transaction price as of December 31, 2025 and 2024. Potential commercial milestones and royalties on net product sales will be recognized in the same period that the underlying net product sales occur as they were determined to relate to the license.
Cypralis and Waterstone License Agreements
In July 2016, the Company entered into an asset purchase agreement with UK-based Cypralis Limited (or "Cypralis"), a life sciences company, for the sale of its cyclophilin inhibitor assets. Cypralis also acquired all patents, patent applications and know-how related to the acquired portfolio. In connection with the asset purchase agreement, the Company is eligible to receive milestone payments upon the successful progression of Cypralis clinical candidates into later stage clinical studies and royalties payable upon product commercialization. The Company retains the right to repurchase the portfolio assets from Cypralis if abandoned or deprioritized. For the years ended December 31, 2025 and 2024, there was no revenue recognized associated with this agreement given the variable consideration associated with the sale of intellectual property to Cypralis was fully constrained as of December 31, 2025 and 2024. Additionally, in October 2014 the Company entered into a license agreement with Waterstone Pharmaceutical HK Limited (or “Waterstone”) and granted Waterstone an exclusive, worldwide license to develop and commercialize certain non-strategic compounds. The Company is entitled to receive potential
milestones and royalties from Waterstone; however, there was no revenue recognized by the Company in 2025 and 2024 associated with this agreement given the variable consideration was fully constrained as of December 31, 2025 and 2024.
Income Taxes
The Company’s consolidated financial statements include a tax expense of zero and $ 0.2 million on domestic loss before taxes of $ 4.7 million and $ 20.5 million for the years ended December 31, 2025 and 2024, respectively, and on foreign loss before taxes of $ 3.9 million and $ 0.6 million for the years ended December 31, 2025 and 2024, respectively. The income tax expense consisted of the following (dollars in thousands):
Years Ended December 31,
Current expense:
Federal
State
Foreign
Total current expense
The reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate for income from continuing operations reflecting the requirements of ASU 2023-09, as adopted retrospectively, is as follows:
Amount
Percent of Pretax Income
Amount
Percent of Pretax Income
U.S. federal statutory tax rate
State and local income taxes, net of federal income tax effect (a)
Foreign tax effects:
Australia
Statutory rate difference between Australia and U.S.
Changes in valuation allowance
Other
Effects of changes in tax laws or rates enacted in current period
Tax credits:
Research and development tax credit
Expiring credits
Other
Changes in valuation allowance
Nontaxable or nondeductible items:
Warrant issuance
Stock compensation
Convertible debt interest
Other
Other adjustments
Deferred stock-based compensation true-up
Convertible debt interest
Milestone deferral true-up
Expiring NOLs
Other
Effective tax rate
(a) For the year ended December 31, 2025, state taxes in the following states listed below made up the majority (greater than 50% of the tax effect): New Jersey and Florida.
The components of deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows (in thousands):
December 31,
Noncurrent deferred tax assets (liabilities)
Accrued expenses
Stock-based compensation
Lease liability
Other
Capitalized Sec. 174 R&E
Net operating loss carryforwards
Research and development credits
Total deferred tax assets
Valuation allowances
Net deferred tax assets
As of December 31, 2025 and 2024, the Company had available federal net operating loss (“NOL”) carryforwards of approximately $ 226.4 million and $ 215.7 million, respectively, and state and net operating loss carryforwards of approximately $ 130.8 million and $ 122.0 million, respectively. The Company’s state and net operating loss carryforwards began to expire in 2019 . As of December 31, 2025, the Company had available federal research and development credit carryforwards of $ 6.2 million which began to expire in 2026 . For the year ended December 31, 2025, the Company did no t pay income tax. For the year ended December 31, 2024, the Company paid $ 0.6 million for federal income tax and $ 0.1 million for state income tax.
We completed a Section 382 study of transactions in our stock through December 31, 2023 and concluded that we have experienced ownership changes since inception that we believe under Section 382 and 383 of the Code will result in limitations on our ability to use certain pre-ownership change NOLs and credits. In addition, we may experience subsequent ownership changes as a result of future equity offerings or other changes in the ownership of our stock, some of which are beyond our control. As a result, the amount of the NOLs and tax credit carryforwards presented in our consolidated financial statements are limited and the related amounts have been updated. Similar provisions of state tax law may also apply to limit the use of accumulated state tax attributes.
On July 4, 2025, the One Big Beautiful Bill was enacted (“OBBBA”), introducing significant and wide-ranging changes to the U.S. federal tax system. Significant components include restoration of 100 % accelerated tax depreciation on qualifying property including expansion to cover qualified production property. Another major aspect includes the return to immediate expensing of domestic research and experimental expenditures (“R&E”) which in some cases may include retroactive application back to 2021 for businesses with gross receipts of less than $ 31.0 million or accelerated tax deductions of R&E that was previously capitalized for larger businesses. The legislation also reinstates EBITDA-based interest deductions for tax purposes and makes several business tax incentives permanent. Less favorable business provisions include limitations on tax deductions for charitable contributions.
The OBBBA modified the U.S. International Tax provisions for Global Intangible Low-Taxed Income (“GILTI”), Foreign-Derived Intangible Income (“FDII”), and the Base-erosion Anti-abuse Tax (“BEAT”) effective for tax years starting after December 31, 2025. The tax rate on GILTI, now renamed to Net CFC Tested Income (“NCTI”), is now 12.6 %. The FDII rules, now renamed to Foreign Derived Deduction Eligible Income (“FDDEI”), now carry a 14 % tax rate on FDDEI eligible income. The OBBB Act increases the BEAT rate from 10 % to 10.5 %.
On December 22, 2017, the “Tax Cuts and Jobs Act” was signed into law. The tax reform has the following effects on the Company: (1) permanently reduces the maximum corporate income tax rate from 35 % to 21 % effective for tax years beginning after December 31, 2017, (2) allows temporary 100 % expensing for certain business assets and property placed in service after September 27, 2018 and before January 1, 2023, (3) disallows NOL carrybacks but allows for the indefinite carryforward of those NOLs which applies to losses arising in tax years beginning after December 31, 2018 and, (4) limits NOL deductions for each year equal to the lesser of the available carryover or 80 % of a taxpayer’s pre-NOL deduction taxable income. This applies to losses arising in tax years ending on or after December 31, 2017. As of December 31, 2025 and 2024, the Company has concluded that it is more likely than not that the Company will not realize the benefit of its deferred tax assets due to its history of losses since inception. Accordingly, the net deferred tax assets have been fully reserved.
All tax years remain open to examination by U.S. federal and state income tax authorities because the Company has incurred cumulative net operating losses since inception.
The Company applies ASC 740-10-25-5, Income Taxes , formerly FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes , as amended, on January 1, 2009. The difference between the tax benefit recognized in the financial statements and the tax benefit claimed in the tax return is referred to as an unrecognized tax benefit.
The following is a tabular reconciliation of the total amounts of unrecognized tax benefits as of December 31, 2025 and 2024 (in thousands):
December 31,
Unrecognized tax benefit—January 1
Reductions for tax positions of prior years
Deferred rate change
Unrecognized tax benefit—December 31
The Company has no tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the coming year. The Company has zero provided for interest and penalties associated with uncertain tax positions.
Stock-based Compensation
2024 Equity Incentive Plan
In April 2024, the Company’s board of directors adopted the 2024 Equity Incentive Plan (“2024 Plan”), which was subsequently approved by the Company’s stockholders and became effective on June 19, 2024. The 2024 Plan is the successor to the 2014 Equity Incentive Plan ("2014 Plan"). The 2014 Plan terminated on February 11, 2024 and no new grants may be made under the 2014 Plan after that date, although all outstanding awards granted under the 2014 Plan will continue to be subject to the terms and conditions as set forth in the agreements evidencing such awards and the terms of the 2014 Plan. The purpose of the 2024 Plan is to allow the Company to utilize equity incentives in order to secure and retain the services of the Company's employees, directors, and consultants, and to provide long-term incentives that align the interests of the Company's employees, directors, and consultants with the interests of the Company's stockholders.
The aggregate number of shares of the Company's common stock that may be issued under the 2024 Plan will not exceed the sum of (i) 6,150,000 new shares, plus (ii) certain shares subject to outstanding awards granted under the 2014 Plan that may become available for grant under the 2024 Plan as such shares become available from time to time. As of December 31, 2025, there were 4,469,906 shares of common stock available for future issuance under the 2024 Plan.
2015 Inducement Plan
On March 26, 2015, the Company's board of directors adopted the 2015 Inducement Plan (“2015 Plan”). The 2015 Plan provides for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other forms of equity compensation (collectively, stock awards), all of which may be granted to persons not previously employees or directors of the Company, or following a bona fide period of non-employment, as an inducement material to the individuals’ entering into employment with the Company within the meaning of NASDAQ Listing Rule 5635I(4). The 2015 Plan had an initial share reserve covering 45,000 shares of common stock. On June 9, 2019, April 30, 2021, and October 18, 2022, the Company’s board of directors amended the 2015 Plan, and the initial share reserve for the 2015 Plan was increased from 45,000 to 90,000 , from 90,000 to 500,000 , and from 500,000 to 900,000 shares of common stock, respectively. During both the years ended December 31, 2025 and 2024, there were zero granted options of the Company’s common stock under the 2015 Plan. As of December 31, 2025, there were 665,634 shares of common stock available for future issuance under the 2015 Plan.
Option Valuation Method
The fair value of a stock option is estimated using an option-pricing model that takes into account as of the grant date the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock, and the risk-free interest rate for the expected term of the option. The Company has used the simplified method in calculating the expected term of all option grants based on the vesting period. Compensation costs related to share-based payment transactions are recognized in the financial statements upon satisfaction of the requisite service or vesting requirements and forfeitures are recorded as incurred.
The Company has elected to use the Black-Scholes option-pricing model. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable rather than for use in estimating the fair value of stock options subject to vesting and transferability restrictions. Using the Black-Scholes option-pricing model, the weighted-average fair value of options granted during 2025 and 2024 was $ 0.73 and $ 1.31
per option, respectively. The aggregate fair value of options granted during 2025 and 2024 was $ 0.6 million and $ 1.4 million, respectively. The assumptions used to estimate fair value and the resulting grant date fair values are as follows:
Employee
Non-employee
Years Ended December 31,
Years Ended December 31,
Weighted average expected volatility
Weighted average risk-free interest rate
Weighted average expected term (in years)
The activity for the 2014 Plan, 2024 Plan and 2015 Plan for the years ended December 31, 2025 is summarized as follows:
Number
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life (in years)
Aggregate
Intrinsic
Value ($000)
Outstanding — December 31, 2024
Granted
Forfeited/expired
Outstanding — December 31, 2025
Exercisable — December 31, 2025
Vested or expected to vest —December 31, 2025
The intrinsic values in the table above represent the total intrinsic value (the difference between the Company’s closing stock price as of December 31, 2025, and the exercise price multiplied by the number of options).
The total fair value of shares vested for both the years ended December 31, 2025 and 2024 was $ 0.9 million.
As of December 31, 2025, there was approximately $ 1.2 million of total unrecognized compensation cost related to unvested options granted under the plans. That cost is expected to be recognized over a weighted-average period of 2.16 years.
Restricted stock unit ("RSU") activity under the 2024 Plan and 2015 Plan for the years ended December 31, 2025, is summarized as follows:
Number of
Shares
Weighted
Average
Grant Date
Fair Value
Per Share
Non-vested at December 31, 2024
Granted
Vested
Forfeited
Non-vested at December 31, 2025
The fair value of RSUs is based on the market price of the Company’s common stock on the date of grant. RSUs generally vest 33 % annually over a three-year period from the date of grant. Upon vesting, the RSUs generally are net share settled to cover the required withholding tax with the remaining shares issued to the holder. The Company recognizes compensation expense for such awards ratably over the corresponding vesting period. As of December 31, 2025, there was approximately $ 2.2 million of total unrecognized compensation cost related to unvested RSU share-based compensation. That cost is expected to be recognized over a weighted-average period of 1.35 years.
2014 Employee Stock Purchase Plan
In February 2014, the Company’s board of directors adopted the 2014 Employee Stock Purchase Plan (“2014 ESPP”), which was subsequently ratified by the Company’s stockholders and became effective on May 2, 2014. The purpose of the 2014 ESPP is to provide means by which eligible employees of the Company and of certain designated related corporations may be given an opportunity to purchase shares of the Company’s common stock, and to seek and retain services of new and existing employees and to provide incentives for such persons to exert maximum efforts for the success of the Company.
In April 2023, the Company’s board of directors amended the 2014 ESPP, which was subsequently ratified by the Company’s stockholders and became effective on June 14, 2023. Common stock that may be issued under the ESPP Plan will not exceed 1,531,248 shares of common stock, which is the sum of: (i) the 4,779 shares of common stock originally approved; (ii) 26,469 shares of common stock that were added pursuant to the annual increase provision of the ESPP Plan between 2015 and 2023; and (iii) an additional 1,500,000 shares of common stock that were approved by our stockholders at the 2023 annual meeting of stockholders. The 2014 ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code.
During the years ended December 31, 2025 and 2024, the Company issued 63,493 and 45,593 shares of common stock under the 2014 ESPP, respectively. As of December 31, 2025, there were 1,367,900 shares of common stock available for future issuance under the 2014 ESPP.
Compensation Cost
The compensation cost that has been charged against income for stock awards under the 2014 Plan, 2024 Plan, 2015 Plan, and the 2014 ESPP was $ 2.9 million and $ 3.3 million for the years ended December 31, 2025 and 2024, respectively. The total income tax benefit recognized in the consolidated statements of operations for share-based compensation arrangements was zero for both the years ended December 31, 2025 and 2024. Cash received from options exercised was zero for both the years ended December 31, 2025 and 2024.
Stock-based compensation expense related to stock options and stock awards is included in the following line items in the accompanying statements of operations (in thousands):
Years Ended December 31,
Research and development
Selling, general and administrative
Total stock-based compensation expense
Fair Value Measurements
The carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their respective fair values due to the short-term nature of such instruments.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period, pursuant to the policy described in Note 2.
This determination requires significant judgments to be made. The following table summarizes the conclusions reached as of December 31, 2025 and 2024 for financial instruments measured at fair value on a recurring basis (in thousands):
Fair Value Hierarchy Classification
Balance
Quoted Prices in Active
Markets for Identical Assets (Level 1)
Significant Other
Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
December 31, 2025
Cash
Restricted cash
Money market funds
Total assets
Warrant liability
Total liabilities
December 31, 2024
Cash
Restricted cash
Money market funds
Total assets
Warrant liability
Total liabilities
The Company measures cash equivalents at fair value on a recurring basis. The fair value of cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. As of December 31, 2025, the cash and cash equivalents of $ 21.3 million and the restricted cash balances of $ 0.1 million within both short and long term on the balance sheet, respectively, sum to the total of $ 21.4 million as shown in the statement of cash flows. As of December 31, 2024, the cash and cash equivalents of $ 16.1 million and the restricted cash balances of $ 0.4 million and $ 0.1 million within short and long term on the balance sheet, respectively, sum to the total of $ 16.6 million as shown in the statement of cash flows.
Level 3 financial liabilities consist of the warrant liabilities for which there is no current market such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. The Company uses the Black-Scholes option valuation model to value the Level 3 warrant liabilities at inception and on subsequent valuation dates. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as volatility. The unobservable input for all of the Level 3 warrant liabilities includes volatility. The historical and implied volatility of the Company, using its closing common stock prices and market data, is utilized to reflect future volatility over the expected term of the warrants. At December 31, 2025 and 2024, the Level 3 volatilities utilized in the Black-Scholes model to fair value the warrant liabilities were 86.1 % and 83.4 %, respectively.
A reconciliation of the beginning and ending balances for liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows (in thousands):
Warrant Liability
Balance – January 1, 2025
Gain adjustment to fair value
Balance – December 31, 2025
Employee Benefit Plan
The Company has a 401(k) retirement plan, which covers all U.S. employees scheduled for and working more than 20 hours per week. The Company may provide a discretionary match with a maximum amount of 50 % of the first 6 % of eligible
participant’s compensation, which vests ratably over four years . Contributions under the plan were approximately $ 0.1 million and $ 0.2 million for the years ended December 31, 2025 and 2024, respectively.
Segments
The Company has one reportable segment which is drug development. The Company primarily derives revenue from its licensing of developed drugs in difficult-to-treat and drug-resistant infections and manages the business activities on a consolidated basis. The Company’s CODM is the Chief Executive Officer . The CODM assesses performance for the drug development segment and decides how to allocate resources based on consolidated net loss that also is reported on the consolidated statement of operations. The CODM uses budget, forecast, and actual results of the consolidated net loss in deciding what drug development programs to further progress with its existing and planned capital resources. The measure of segment assets is reported on the balance sheet as consolidated assets. The accounting policies of the drug development segment are the same as those described in the summary of significant accounting policies in Note 2.
The drug development segment primarily derives revenues from customers by the out licensing of developed drugs which typically include development and other milestones and royalties. Although all operations are primarily based in the United States, the Company generated the majority of its revenue from the license agreement with GSK located outside of the United States for the years ended December 31, 2025 and 2024. All sales, including sales outside of the United States, are denominated in United States dollars. In July 2019, the Company incorporated SCYNEXIS Pacific Pty Ltd, a wholly-owned subsidiary, in Sydney, Australia, for the initial purpose of conducting certain clinical trials and other research and development activities. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Intercompany balances and transactions are eliminated in consolidation.
The table below provides information about the Company's drug development segment and includes the reconciliation to consolidated net loss for the years ended December 31, 2025 and 2024, respectively (in thousands).
Revenue
Less:
Clinical expense
Preclinical expense
Chemistry, manufacturing, and controls
Selling, general, and administrative
Income tax expense
Interest expense
Plus:
Interest income
Other segment expense (income) (1)
Segment net loss
Reconciliation of segment net loss
Adjustments and reconciling items
Consolidated net loss
Other segment expense includes other research and development expense, amortization of debt issuance costs and discount, other income, warrant liability fair value adjustment and derivative liability fair value adjustment.
