Inhibikase Therapeutics, Inc. (IKT)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and our audited financial statements and related notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2026 (the “Annual Report”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks, uncertainties, and assumptions. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those set forth in the Annual Report and in other filings with the SEC.

Overview

We are a clinical-stage pharmaceutical company developing IKT-001 for Pulmonary Arterial Hypertension (“PAH”). Our lead product candidate, known as IKT-001, a prodrug of imatinib mesylate (“imatinib”), for PAH which is an orphan indication. Imatinib was first approved in the United States in 2001 for various cancers and blood disorders and, following more than 20 years of clinical use, has a well-characterized safety profile with the first reported use of imatinib in PAH occurring in 2005. PAH is a progressive, life-threatening disease characterized by pulmonary vascular remodeling and elevated pulmonary vascular resistance that affects approximately 50,000 Americans. We have completed a non-human primate safety study and a bioequivalence clinical study in healthy volunteers to determine the doses of IKT-001 that are equivalent to imatinib. Our Phase 3 clinical study, named IMPROVE-PAH (IKT-001 for Measuring Pulmonary Vascular Resistance and Outcome Variables in a Phase 3 Evaluation of PAH), which is a single pivotal global study, is presently enrolling patients with 26 country regulatory approvals and 43 clinical sites activated to date, and 3 additional pending country regulatory approvals and 4 planned country regulatory submissions.

Recent Developments

In May 2026, pre-clinical and Phase 1 data for IKT-001 were presented at the American Thoracic Society International Conference in Orlando, Florida. These presentations demonstrated the potential for IKT-001 to have an improved gastro-intestinal (“GI”) side-effect profile, including gastric emptying benefits and reduced impairment of intestinal motility compared to imatinib mesylate. IKT-001 remains intact in the stomach and the intestine and is not converted to imatinib until it reaches the blood, with in vitro pharmacology studies demonstrating an 18-fold decrease, relative to imatinib, in c-Kit inhibition which has been implicated in the GI side-effects of imatinib. Additionally, single doses of IKT-001 resulted in rapid and dose proportional exposure to circulating imatinib, which were well tolerated over a 300-800 mg range with no indication of dose-dependent GI toxicities.

In July 2026, we sold 25,000,000 shares of our common stock to RA Capital Management through our at-the-market (“ATM”) facility for gross proceeds of $50.0 million. Subsequently, in July 2026, 18,030,000 of these shares of common stock were exchanged for pre-funded warrants to purchase shares of common stock.

Following on from our submission of an Orphan Drug Designation (“ODD”) application to the U.S. Food and Drug Administration (the “FDA”) for IKT-001 for PAH in April 2026, FDA's Office of Orphan Products Development granted ODD for IKT-001 in July 2026. The grant of ODD applies to the active moiety of IKT-001, imatinib mesylate, rather than a specific formulation. ODD also provides potential development incentives, including eligibility for tax credits on qualified clinical trial costs, exemption from certain FDA user fees, and the potential for seven years of market exclusivity upon regulatory approval.

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Components of Operating Results

Operating Expenses

Research and Development

Research and development activities account for a significant portion of our operating expenses. We record research and development expenses as incurred. Research and development expenses incurred by us for the discovery and development of our product candidates and prodrug technologies include:

•
external research and development expenses, including expenses incurred under arrangements with third parties, such as contract research organizations (“CROs”), preclinical testing organizations, clinical testing organizations, contract manufacturing organizations (“CMOs”), academic and non-profit institutions and consultants;

•
fees related to our license and collaboration agreements;

•
personnel-related expenses, including salaries, benefits and non-cash stock-based compensation expense; and

•
other expenses, which include direct and allocated expenses for laboratory, facilities and other costs.

A portion of our research and development expenses are direct external expenses, which we track on a program-specific basis from inception of the program.

Program expenses include expenses associated with our most advanced product candidates and the discovery and development of compounds that are potential future candidates. We also track external expenses associated with our third-party research and development efforts. All external costs are tracked by therapeutic indication. We do not track certain other operating expenses incurred for our research and development programs on a program-specific basis. These expenses primarily relate to stock-based compensation and office consumables.

At this time, we can only estimate the nature, timing and costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from sales or licensing of our product candidates. This is due to the numerous risks and uncertainties associated with drug development, including the uncertainty of:

•
our ability to add and retain key research and development personnel and other key employees;

•
our ability to successfully file Investigational New Drug (“IND”) applications with the FDA;

•
our ability to commence and conduct trials, including recruiting sufficient patients, on a timely basis or at all;

•
our ability to establish an appropriate safety or tolerability profile with IND-enabling toxicology studies;

•
our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize, our product candidates;

•
our successful enrollment in and completion of our current and future clinical trials;

•
our ability to produce sufficient clinical product in a timely or cost-effective manner to support our clinical trials;

•
the ability of our products to adequately exhibit product features (safety, efficacy, convenience) that are attractive to physicians and patients relative to offerings of our competitors;

•
the costs associated with the development of any additional product candidates we identify in-house or acquire through collaborations;

•
our ability to discover, develop and utilize biomarkers to demonstrate target engagement, pathway engagement and the impact on disease progression of our molecules;

•
our ability to establish agreements with third party manufacturers for clinical supply for any future clinical trials and commercial manufacturing, if our product candidates are approved;

•
the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone payments thereunder;

•
our ability to obtain and maintain patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates if and when approved;

•
our receipt of marketing approvals from applicable regulatory authorities;

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•
our ability to commercialize products, if and when approved, whether alone or in collaboration with others; and

•
the continued acceptable safety profiles of the product candidates following approval.

A change in any of these variables with respect to the development of any of our product candidates would significantly change the costs, timing and viability associated with the development of that product candidate. We expect our research and development expenses to increase for the next several years as we continue to implement our business strategy, advance our current programs, expand our research and development efforts, seek regulatory approvals for any product candidates that successfully complete clinical trials, access and develop additional product candidates and incur expenses associated with hiring additional personnel to support our research and development efforts. In addition, product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

Our direct research and development expenses consist principally of external costs, such as fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical studies, and costs related to acquiring and manufacturing clinical study materials. We allocate salary and benefit costs directly related to specific programs. We do not allocate stock-based compensation costs, depreciation or other indirect costs that are deployed across multiple projects under development and, as such, the costs are separately classified as other research and development expenses in the table below:

(1) The six months ended June 30, 2025 amount includes a one-time (non-cash) charge of $7.4 million for the acquired IPR&D related to the acquisition of CorHepta Pharmaceuticals, Inc. (“CorHepta”).

(2) Other research and development expenses include stock-based compensation expense of $1.5 million and $1.7 million for the three months ended June 30, 2026 and 2025, respectively, and $3.3 million and $2.1 million for the six months ended June 30, 2026 and 2025, respectively.

Selling, General and Administrative

Selling, general and administrative expenses include personnel-related expenses, such as salaries, benefits, travel and non-cash stock-based compensation expense and expenses for outside professional services. Outside professional services consist of legal, accounting and audit services and other consulting fees. Allocated expenses consist of rent expenses related to our former office in Lexington, Massachusetts not otherwise included in

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes to those statements included elsewhere in this Annual Report. This discussion and analysis and other parts of this Annual Report contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives, expectations, forecasts and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under the section titled “Risk Factors” and elsewhere in this Annual Report. You should carefully read the “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Overview

We are a clinical-stage pharmaceutical company developing therapeutics to modify the course of cardiopulmonary diseases, namely, Pulmonary Arterial Hypertension (“PAH”), in which aberrant signaling through type III receptor tyrosine kinases, including platelet derived growth factor receptors and a stem cell factor receptor, known as “c-Kit”, has been implicated. Our lead product candidate is IKT-001, a prodrug of imatinib mesylate (“imatinib”), for PAH which is an orphan indication. Imatinib was first approved in the United States in 2001 for various cancers and blood disorders and, following more than 20 years of clinical use, has a well-characterized safety profile with the first reported use of imatinib in PAH occurring in 2005. PAH is a progressive, life-threatening disease characterized by pulmonary vascular remodeling and elevated pulmonary vascular resistance that affects approximately 50,000 Americans. We have completed a non-human primate safety study and a bioequivalence clinical study in healthy volunteers to determine the doses of IKT-001 that are equivalent to imatinib. Our Phase 3 clinical study, named IMPROVE-PAH (IKT-001 for Measuring Pulmonary Vascular Resistance and Outcome Variables in a Phase 3 Evaluation of PAH), has been initiated with the activation of a small number of sites and the recent commencement of patient pre-screening activities at those sites.

Components of Operating Results

Operating Expenses

Research and Development

Research and development activities account for a significant portion of our operating expenses. Research and development expenses accounted for 57% and 60% of our operating expenses for the years ended December 31, 2025 and 2024, respectively. We record research and development expenses as incurred. Research and development expenses incurred by us for the discovery and development of our product candidates and prodrug technologies include:

•
external research and development expenses, including expenses incurred under arrangements with third parties, such as contract research organizations (“CROs”), preclinical testing organizations, clinical testing organizations, contract manufacturing organizations (“CMOs”), academic and non-profit institutions and consultants;

•
fees related to our license and collaboration agreements;

•
personnel related expenses, including salaries, benefits and non-cash stock-based compensation expense; and

•
other expenses, which include direct and allocated expenses for laboratory, facilities and other costs.

A portion of our research and development expenses are direct external expenses, which we track on a program-specific basis from inception of the program.

Program expenses include expenses associated with our most advanced product candidates and the discovery and development of compounds that are potential future candidates. We also track external expenses associated with our third-party research and development efforts. All external costs are tracked by therapeutic indication. We do not track other operating expenses incurred for our research and development programs on a program-specific basis. These expenses primarily relate to stock-based compensation and office consumables.

At this time, we can only estimate the nature, timing and costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from sales or licensing of our product candidates. This is due to the numerous risks and uncertainties associated with drug development, including the uncertainty of:

•
our ability to add and retain key research and development personnel and other key employees;

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•
our ability to successfully file IND and NDA applications with the FDA;

•
our ability to commence and conduct trials;

•
our ability to establish an appropriate safety or tolerability profile with IND-enabling toxicology studies;

•
our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize, our product candidates;

•
our successful enrollment in and completion of our current and future clinical trials;

•
our ability to produce sufficient clinical product in a timely or cost effective manner to support our clinical trials;

•
the ability of our products to adequately exhibit product features (safety, efficacy, convenience) that are attractive to physicians and patients relative to offerings of our competitors;

•
the costs associated with the development of any additional product candidates we identify in-house or acquire through collaborations;

•
our ability to discover, develop and utilize biomarkers to demonstrate target engagement, pathway engagement and the impact on disease progression of our molecules;

•
our ability to establish agreements with third party manufacturers for clinical supply for any future clinical trials and commercial manufacturing, if our product candidates are approved;

•
the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone payments thereunder;

•
our ability to obtain and maintain patent, trade secret and other intellectual property protection and regulatory exclusivity for our product candidates if and when approved;

•
our receipt of marketing approvals from applicable regulatory authorities;

•
our ability to commercialize products, if and when approved, whether alone or in collaboration with others; and

•
the continued acceptable safety profiles of the product candidates following approval.

A change in any of these variables with respect to the development of any of our product candidates would significantly change the costs, timing and viability associated with the development of that product candidate. We expect our research and development expenses to increase for the next several years as we continue to implement our business strategy, advance our current programs, expand our research and development efforts, seek regulatory approvals for any product candidates that successfully complete clinical trials, access and develop additional product candidates and incur expenses associated with hiring additional personnel to support our research and development efforts. In addition, product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

Our direct research and development expenses consist principally of external costs, such as fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical studies, and costs related to acquiring and manufacturing clinical study materials. We allocate salary and benefit costs directly related to specific programs. We do not allocate stock-based compensation costs, depreciation or other indirect costs that are deployed across multiple projects under development and, as such, the costs are separately classified as other research and development expenses in the table below:

(1) This amount includes a one-time (non-cash) charge of $7.4 million for the acquired In-Process Research and Development (“IPR&D”) related to the CorHepta acquisition during the year ended December 31, 2025.

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Selling, General and Administrative

Selling, general and administrative expenses include personnel related expenses, such as salaries, benefits, travel and non-cash stock-based compensation expense, expenses for outside professional services and allocated expenses. Outside professional services consist of legal, accounting and audit services and other consulting fees. Allocated expenses consist of rent expenses related to our former offices in Lexington, Massachusetts and Atlanta, Georgia not otherwise included in research and development expenses.

As a public company, we incur expenses related to compliance with the rules and regulations of the SEC and those of Nasdaq, additional insurance expenses, investor relations activities and other administrative and professional services. We also are increasing our headcount as we advance our product candidates through clinical development, which will also require us to increase our selling, general and administrative expenses.

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

The following table sets forth the significant components of our results of operations:

Research and Development

Research and development expenses increased by $12,582,598 or 73.1% to $29,793,146 from $17,210,548 in the prior year. The $12.6 million increase was primarily due to an increase of $11.4 million in the PAH program and other research and development expenses, together with a $9.9 million research and development expense related to the CorHepta transaction comprising a one-time (non-cash) expense charge for acquired IPR&D related to the CorHepta acquisition cost of $7.4 million and $2.5 million of stock-based compensation expense. These increases were offset by a decrease of $8.7 million in the discontinued (outlicensed) risvodetinib (IkT-148009) program.

Selling, General and Administrative

Selling, general and administrative expenses increased by $12,176,559 or 107% to $23,555,079 from $11,3

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