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Equity
 9 Months Ended
Sep. 30, 2025
Equity [Abstract]  
Equity

8. Equity

At-the-Market Offering

On March 11, 2025, the Company entered into an Open Market Sale Agreement (the “Sale Agreement”) with Jefferies LLC (“Jefferies”), pursuant to which the Company may offer and sell, from time to time at its sole discretion, ordinary shares having an aggregate offering price of up to $75.0 million in an “at-the-market” offering (the “ATM Offering”) through Jefferies as sales agent. The Company has no obligation to sell any shares under the Sale Agreement. The Company agreed to pay Jefferies aggregate compensation for its services of three percent of the gross sales price per share sold under the Sale Agreement. No shares have been issued or sold under the ATM Offering through September 30, 2025.

2023 Stock Option and Incentive Plan

The Company’s 2023 Stock Option and Incentive Plan (the “2023 Plan”), which became effective on October 30, 2023, provides for the grant of up to 5,854,768 of the Company’s ordinary shares. The 2023 Plan allows the Company to make equity-based and cash-based incentive awards such as stock options, share appreciation rights, Restricted Share Units (“RSUs”), restricted share awards, unrestricted share awards, cash-based awards, and dividend equivalent rights to officers, employees, non-employee directors, and consultants, subject to the provisions of the 2023 Plan.

The 2023 Plan provides that the number of shares reserved and available for issuance under the 2023 Plan will be automatically increased on January 1, 2025, and each January 1 thereafter, in an amount equal to (i) 5% of the outstanding number of the Company’s ordinary shares on the immediately preceding December 31, or (ii) such lesser number of shares as determined by the 2023 Plan Administrator. The ordinary shares underlying any awards under the 2023 Plan that are forfeited, cancelled or held back upon exercise of settlement of an award to satisfy the exercise price or any tax withholding obligation, or are otherwise terminated or forfeited (other than by exercise) will be added back to the ordinary shares available for issuance under the 2023 Plan. At September 30, 2025, 3,227,182 ordinary shares were reserved and available for issuance under the 2023 Plan.

 

2023 Employee Stock Purchase Plan

The Company’s 2023 Employee Stock Purchase Plan (the “ESPP”) became effective on October 30, 2023. The ESPP reserves and authorizes the issuance of up to a total of 200,000 of the Company’s ordinary shares to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1, 2025 and each January 1 thereafter through January 1, 2034, by the least of (i) 100,000 ordinary shares, (ii) 1% of the outstanding number of ordinary shares on the immediately preceding December 31, or (iii) such lesser number of ordinary shares as determined by the administrator of the ESPP.

2024 Inducement Stock Option and Incentive Plan

The Company’s 2024 Inducement Stock Option and Incentive Plan (the “2024 Plan”), which became effective on January 12, 2024, provides for the grant of up to 300,000 of the Company’s ordinary shares. The 2024 Plan allows the Company to make equity-based incentive awards such as non-qualified stock options, share appreciation rights, RSUs, restricted share awards, unrestricted share awards, and dividend equivalent rights to persons who (a) were not previously an employee or director of the Company or (b) are commencing employment with the Company following a bona fide period of non-employment with the Company, in either case as an inducement material to the individual’s entering into employment with the Company and in accordance with the requirements of Nasdaq Stock Market Rule 5635(c)(4), subject to the provisions of the 2024 Plan.

The ordinary shares underlying any awards under the 2024 Plan that are forfeited, cancelled or held back upon exercise of settlement of an award to satisfy the exercise price or any tax withholding obligation, or are otherwise terminated or forfeited (other than by exercise) will be added back to the ordinary shares available for issuance under the 2024 Plan. At September 30, 2025, 280,923 ordinary shares were reserved and available for issuance under the 2024 Plan.

Converted Awards

On November 13, 2023, the Company entered into the employee matters agreement with the Former Parent under which the Company agreed to convert all outstanding Former Parent stock options and RSUs held by the Company’s employees under the Former Parent’s share-based compensation plans into the Company stock options and RSUs under the 2023 Plan in accordance with the conversion ratio set forth in the agreement. On December 14, 2023, the Former Parent and the Company amended the employee matters agreement to adjust the conversion ratio used to calculate the number of the Company’s RSUs issuable to each employee in exchange for each RSU of Alkermes. All outstanding equity awards held by the Company’s employees were converted and issued under the 2023 Plan in December 2023 in accordance with the amended employee matters agreement. Except for the number of underlying shares and the exercise price of the stock options, the converted awards retain substantially the same terms and conditions of the original awards, including their term and vesting conditions.

Stock Plan Activity

The following average assumptions were used to estimate the fair value of stock options granted by the Company during the nine months ended September 30, 2025 and 2024, respectively, using the Black-Scholes option pricing model:

 

 

Nine Months Ended September 30, 2025

 

Nine Months Ended September 30, 2024

Risk-free interest rate

 

4.1% - 4.5%

 

3.5% - 4.6%

Dividend rate

 

0%

 

0%

Expected volatility

 

79% - 100%

 

82% - 87%

Expected life (years)

 

2.0 - 8.0

 

2.0 - 6.2

A summary of stock option activity under the 2023 Plan and the 2024 Plan for the nine months ended September 30, 2025 is as follows:

 

 

Number of Options

 

 

Weighted-Average Exercise Price

 

Options outstanding at December 31, 2024

 

 

2,861,654

 

 

$

4.54

 

     Granted

 

 

952,791

 

 

$

3.36

 

     Cancelled/forfeited

 

 

(2,294,691

)

 

$

4.26

 

     Exercised

 

 

(7,839

)

 

$

3.59

 

Options outstanding at September 30, 2025

 

 

1,511,915

 

 

$

4.22

 

Options exercisable at September 30, 2025

 

 

591,702

 

 

$

4.47

 

The weighted average grant date fair value of stock options granted during the nine months ended September 30, 2025 and 2024 was $2.60 and $3.26 respectively.

At September 30, 2025, there were 0.7 million stock options vested or expected to vest, with a weighted average exercise price of $4.39 per share, a weighted average contractual remaining life of 7.4 years and no aggregate intrinsic value. At September 30, 2025, there was also no aggregate intrinsic value of stock options exercisable with a weighted average remaining contractual term of 7.45 years. The number of stock options expected to vest was determined by applying the pre-vesting forfeiture rate to the total number of outstanding options. The intrinsic value of a stock option is the amount by which the market value of the underlying shares exceeds the exercise price of the stock option.

At September 30, 2025, there was less than $0.1 million remaining unrecognized share-based compensation expense related to unvested stock options.

A summary of RSU activity under the 2023 Plan and the 2024 Plan for the nine months ended September 30, 2025 is as follows:

 

 

Number of Shares

 

 

Weighted-Average Grant Date Fair Value Per Share

 

Unvested outstanding at December 31, 2024

 

 

835,453

 

 

$

4.54

 

     Granted

 

 

458,044

 

 

$

4.65

 

     Vested

 

 

(221,561

)

 

$

4.81

 

     Cancelled/forfeited

 

 

(572,219

)

 

$

3.94

 

Unvested outstanding at September 30, 2025

 

 

499,717

 

 

$

5.21

 

There were no grants of RSUs during the three months ended September 30, 2025. The weighted average grant date fair value of RSUs granted during the three months ended September 30, 2024 was $3.26. At September 30, 2025, there was less than $0.1 million unrecognized share-based compensation expense related to unvested RSUs.

The Company recorded a credit to share-based compensation expense, net of current period expense, of $0.5 million for the nine months ended September 30, 2025 as a result of current period pre-vesting forfeitures and expected pre-vesting forfeitures in future periods following a reduction-in-force. Refer to Footnote 11, Restructuring and Impairment, for further discussion of the Company’s restructuring.

The following table represents share-based compensation expense included in the Company’s unaudited condensed consolidated statements of operations and comprehensive loss:

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

(in thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Research and development

 

$

(19

)

 

$

368

 

 

$

(383

)

 

$

1,835

 

General and administrative

 

 

128

 

 

 

662

 

 

 

(116

)

 

 

2,584

 

Total share-based compensation expense

 

$

109

 

 

$

1,030

 

 

$

(499

)

 

$

4,419