Since the first quarter of 2020, Innoviva and its wholly owned subsidiary, Innoviva Strategic Opportunities, LLC (“ISO”), have invested in the common stock, warrants, convertible note, and term loans of Armata Pharmaceuticals, Inc. (“Armata”), a clinical stage biotechnology company focused on development of precisely targeted bacteriophage therapeutics for antibiotic-resistant infections.

During the first quarter of 2021, Armata entered into a voting agreement with the Company and ISO, pursuant to which the Company and ISO agreed not to vote or take any action by written consent with respect to any common shares held by the Company and ISO that represent, in the aggregate, more than 49.5% of the total number of shares of Armata’s common stock for voting on the matters related to election or removal of Armata’s board members. The voting agreement will expire on the earlier of the second anniversary of the agreement effective date and approval by the FDA of any of Armata’s product candidates for marketing and commercial distribution.

On February 9, 2022, Armata entered a second amended and restated voting agreement with the Company and ISO, pursuant to which the Company and ISO agreed not to vote or take any action by written consent with respect to any common shares held by the Company and ISO that represent, in the aggregate, more than 49.5% of the total number of shares of Armata’s common stock for voting on the matters related to election or removal of Armata’s board members or amend the bylaws of Armata to reduce the maximum number of directors or set the number of directors who may serve on the board of Armata. The voting agreement will expire the earlier of the second anniversary of the agreement effective date and approval by the FDA of any of Armata’s product candidates for marketing and commercial distribution. In addition, as of February 9, 2022, Armata entered into an amended and restated investor rights agreement with the Company and ISO, pursuant to which for as long as the Company and ISO hold at least 12.5% of the outstanding shares of Armata’s common stock on a fully-diluted, the Company and ISO shall have the right to designate two directors to Armata’s board of directors, and for so long as the Company and ISO hold at least 8%, but less than 12.5%, of the outstanding shares of Armata’s common stock on a fully-diluted basis, the Company and ISO shall have the right to designate one director to Armata’s board of directors, subject to certain conditions and qualifications set forth in the amended and restated investor rights agreement.

On July 10, 2023, Armata entered into an amendment to the amended and restated investor rights agreement with the Company and ISO, pursuant to which the Company and ISO agreed that the voting agreement will expire on the earlier of the fifth anniversary of the original agreement’s effective date, January 26, 2021, or the approval by the FDA of any of Armata’s product candidates for marketing and commercial distribution.

On January 10, 2023, we entered into a Secured Convertible Credit Agreement (the “Credit Agreement”) with Armata, under which we invested in a one-year convertible note (the “Armata Convertible Note”) in an aggregate amount of $30.0 million at an interest rate of 8.0% per annum. Pursuant to the Credit Agreement, the balance on the Armata Convertible Note, including all accrued and unpaid interest thereon, will convert into shares of Armata’s common stock upon the occurrence of a qualified financing, as defined in the Credit Agreement. Any portion of the balance on the Armata Convertible Note, including all accrued and unpaid interest thereon, may also be converted into shares of Armata’s common stock at our option once a registration statement covering the resale of such securities has been declared effective by the SEC. The Armata Convertible Note is secured by substantially all of the assets of Armata and its domestic and foreign material subsidiaries. On July 10, 2023, ISO and Armata executed an amendment to the Armata Convertible Note extending the maturity date from January 10, 2024 to January 10, 2025. On November 12, 2024, ISO and Armata executed an amendment to the Armata Convertible Note extending the maturity date from January 10, 2025 to January 10, 2026.

On July 10, 2023, ISO and Armata entered into a Credit and Security Agreement (the “July 2023 Credit and Security Agreement"), under which we extended a term loan to Armata (the “Armata July 2023 Term Loan”) in an aggregate amount of $25.0 million. The Armata July 2023 Term Loan is subject to an interest rate of 14% per annum and is due to mature on January 10, 2025. The July 2023 Credit and Security Agreement is secured by substantially all of the assets of Armata and its domestic and foreign material subsidiaries. On November 12, 2024, ISO and Armata executed an amendment to the Armata July 2023 Term Loan extending the maturity date from January 10, 2025 to January 10, 2026.

On March 4, 2024, ISO and Armata entered into a Credit and Security Agreement (the “March 2024 Credit and Security Agreement”), under which we extended a term loan to Armata (the “Armata March 2024 Term Loan”) in an aggregate amount of $35.0 million. The Armata March 2024 Term Loan is subject to an interest rate of 14% per annum and is originally set to mature on June 4, 2025. The March 2024 Credit and Security Agreement is secured by substantially all of the assets of Armata and its domestic and foreign material subsidiaries.

On March 12, 2025, ISO and Armata entered into a Credit and Security Agreement, under which ISO extended a term loan to Armata (the “Armata March 2025 Term Loan”) in a principal amount of $10.0 million. The Armata March 2025 Term Loan bears interest at a rate of 14% per annum and matures on March 12, 2026. The Credit and Security Agreement is secured by substantially all assets of Armata and its domestic and foreign material subsidiaries. Concurrently, ISO extended the maturity date of the Armata Convertible Note and the Armata July 2023 Term Loan and the Armata March 2024 Term Loan to March 12, 2026.

On August 11, 2025, ISO and Armata entered into a Credit and Security Agreement, under which ISO extended a term loan to Armata (the “Armata August 2025 Term Loan”) in a principal amount of $15.0 million. The Armata August 2025 Term Loan bears an interest rate of 14% per annum and matures on January 11, 2029. The Credit and Security Agreement is secured by substantially all of the assets of Armata and its domestic and foreign material subsidiaries.

As of December 31, 2025, two of the seven members of Armata’s board of directors are also members of the board of directors of Innoviva. As of December 31, 2025 and 2024, we collectively owned 25,076,769 shares of Armata's common stock, representing equity interest of approximately 68.8% and 69.3%, respectively. As of December 31, 2025 and 2024, we collectively hold warrants of 10,653,847 and 19,364,647, respectively, with exercise prices ranging from $3.25 to $5.00 per share. Innoviva also held $30.1 million in principal amount of the Armata Convertible Note and a total of $85.1 million in term loans.

The investments in Armata’s common stock and warrants provide Innoviva and ISO the ability to have significant influence but not control over Armata’s operations. Armata’s business and affairs are managed under the direction of its board of directors, which Innoviva and ISO do not control. Based on our evaluation, we determined that Armata is a VIE, but Innoviva and ISO are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity.

We account for Armata’s common stock and warrants under the equity method using the fair value option. The fair value of Armata’s common stock is measured based on its closing market price. The warrants purchased in 2020, 2021 and 2022 have an exercise price of $2.87, $3.25 and $5.00 per share, respectively. All warrants are exercisable immediately within five years from the issuance date of the warrants and include a cashless exercise option. The warrants purchased in 2020 expired during the first quarter of 2025. We use the Black-Scholes-Merton pricing model to estimate the fair value of these warrants with the following input assumptions: Armata’s closing market price on the valuation date, the risk-free interest rate computed based on the U.S. Treasury yield, the remaining contractual term as the expected term, and the expected stock price volatility calculated based on the historical volatility of the common stock of Armata and its peer companies. We account for the Armata Convertible Note as a trading security, measured at fair value using a Monte Carlo simulation model with the probability of certain qualified events and the assumptions of risk-free rate, volatility of stock price and timing of certain qualified events. We account for the Armata term loans as trading securities, measured at fair value using income approach based on the discounted value of expected future cash flows.

As of December 31, 2025, the fair values of our holdings of Armata common stock, warrants, the Armata Convertible Note, the Armata July 2023 Term Loan, the Armata March 2024 Term Loan, the Armata March 2025 Term Loan and the Armata August 2025 Term Loan were estimated at $157.5 million, $36.2 million, $101.4 million, $32.9 million, $43.3 million, $11.1 million and $15.5 million, respectively. As of December 31, 2024 the fair values of our holdings of Armata common stock, warrants, the Armata Convertible Note, the Armata July 2023 Term Loan and the Armata March 2024 Term Loan were estimated at $46.4 million, $5.9 million, $42.1 million, $30.2 million and $39.3 million, respectively.

For the Armata common stock and warrants, we recorded $141.4 million in unrealized gains, $64.3 million in unrealized losses and $77.4 million in unrealized gains as changes in fair values of equity method investments, net, in the consolidated statements of income and comprehensive income for the years ended December 31, 2025, 2024 and 2023, respectively.

For the Armata Convertible Note, we recorded $59.3 million in unrealized gains, $9.8 million in unrealized losses and $21.8 million in unrealized gains as changes in fair values of equity and long-term investments, net, in the consolidated statements of income and comprehensive income for the years ended December 31, 2025, 2024 and 2023, respectively.

For the Armata July 2023 Term Loan, we recorded $2.7 million, $3.2 million and $2.0 million in unrealized gains as changes in fair values of equity and long-term investments, net, in the consolidated statements of income and comprehensive income for the years ended December 31, 2025, 2024 and 2023, respectively.

For the Armata March 2024 Term Loan, we recorded $4.0 million and $4.3 million in unrealized gains as changes in fair values of equity and long-term investments, net, in the consolidated statements of income and comprehensive income for the years ended December 31, 2025 and 2024, respectively.

For the Armata March 2025 Term Loan, we recorded $1.1 million in unrealized gain for the year ended December 31, 2025 as changes in fair values of equity and long-term investments, net, in the consolidated statements of income and comprehensive income.

For the Armata August 2025 Term Loan, we recorded $0.5 million in unrealized gain for the year ended December 31, 2025 as changes in fair values of equity and long-term investments, net, in the consolidated statements of income and comprehensive income.

On January 23, 2026, we entered into various amendments to existing agreements with Armata, extending the maturities of the Armata Note, the July 2023 Term Loan, the March 2024 Term Loan and the March 2025 Term Loan to June 1, 2027. The expiration dates of all outstanding Armata warrants held by us were likewise extended to January 26, 2031. In addition, we entered into an amendment to the amended and restated investor rights agreement, pursuant to which the Company and ISO agreed that the voting agreement will expire on the earlier of January 26, 2031 or the approval by the FDA of any of Armata’s product candidates for marketing and commercial distribution.

The summarized financial information, including the portion we do not own, is presented for Armata on a one quarter lag as follows:

Balance Sheet Information


	September 30,
(In thousands)	2025		2024
Current assets	$	16,930	$	22,389
Noncurrent assets	$	72,586	$	75,848
Current liabilities	$	139,950	$	118,204
Noncurrent liabilities	$	45,154	$	31,006

Income Statement Information


	Twelve Months Ended September 30,
(In thousands)	2025			2024			2023
Revenue	$	5,054		$	5,467		$	4,052
Loss from operations	$	(33,350	)	$	(38,476	)	$	(41,639	)
Net loss	$	(46,901	)	$	(41,363	)	$	(59,512	)

Since the third quarter of 2020, Innoviva TRC Holdings, LLC (“ITH”), a wholly owned subsidiary of Innoviva, has invested in the common stock, preferred stock, warrants and convertible notes of InCarda Therapeutics, Inc. (“InCarda”), a privately held biopharmaceutical company focused on developing intravenous and inhaled therapies for cardiovascular diseases.

ITH has the right to designate one member to InCarda’s board of directors. As of December 31, 2025, no ITH designee is serving on InCarda’s six-member board.

As of December 31, 2025 and 2024, ITH owns 36,742,250 shares of InCarda’s common and preferred stock and 2,490,033 preferred stock warrants. These represent a 9.5% and 9.1% equity interest as of December 31, 2025 and 2024, respectively. Our investment in InCarda does not provide us with the ability to control or have significant influence over InCarda’s operations. Based on our evaluation, we determined that InCarda is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity.

ITH also invested $0.4 million, $0.5 million and $1.2 million in InCarda's convertible notes issued in January 2024 (the “InCarda 2024 Convertible Note”), February 2025 (the “InCarda February 2025 Convertible Note”) and October 2025 (the “InCarda October 2025 Convertible Note”), respectively (collectively, the (the “InCarda Convertible Notes”). We account for the InCarda Convertible Notes as trading securities, measured at fair value.

With the exception of the InCarda Convertible Notes and Series D Warrants, which are measured at fair value, we account for the aforementioned investments in InCarda under the measurement alternative. Under the measurement alternative, the equity investment is initially recorded at its allocated cost, but the carrying value may be adjusted through earnings upon an impairment or when there is an observable price change involving the same or a similar investment with the same issuer.

Certain InCarda warrants held by us expired in March 2023 and we wrote off their carrying value of $0.1 million during 2023.

Due to certain changes in InCarda’s business operations during the second quarter of 2023, ITH reassessed the value of its then investments in common stock, preferred stock and preferred stock warrants in InCarda using the Option Pricing Model methodology. Key assumptions used in the valuation model included an expected holding period of two years, a risk-free interest rate of 4.9%, a dividend yield of 0.0% and an estimated volatility of 114.2%. The estimated volatility was calculated based on the historical volatility of a selected peer group of public companies comparable to InCarda. We recognized an impairment charge of $2.9 million during the second quarter of 2023.

As of December 31, 2025 and 2024, we recorded as equity and long-term investments in the consolidated balance sheets $4.8 million in carrying amount of InCarda’s Series C preferred stock and approximately $0.1 million in fair value of the InCarda Series D Warrants. As of December 31, 2025 and 2024, we recognized as equity and long-term investments in the consolidated balance sheets $2.7 million, for InCarda’s Series D-1 preferred stock, Series D-2 preferred stock, and common stock using the measurement alternative. As of December 31, 2025 and 2024, we recorded $2.1 million and $0.4 million, respectively, in fair value of the InCarda Convertible Notes as equity and long-term investments in the consolidated balance sheet. During the years ended December 31, 2025 and 2024, there were immaterial changes in the carrying amount of our investments. We recorded $3.1 million in unrealized loss as changes in fair values of equity and long-term investments, net, in the consolidated statements of income and comprehensive income for the year ended December 31, 2023.

Since March of 2021, ITH has invested $7.6 million in 8,825,301 shares of common and preferred stock, and $4.8 million in a convertible note of ImaginAb, Inc. (“ImaginAb”), a privately held biotechnology company focused on clinically managing cancer and autoimmune diseases via molecular imaging.

As of December 31, 2025, one of ImaginAb’s six board members was designated by ITH. As of December 31, 2025 and 2024, we held 11.8% of ImaginAb equity ownership.

Our investment in ImaginAb does not provide us with the ability to control or have significant influence over ImaginAb’s operations. Based on our evaluation, we determined that ImaginAb is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity.

On March 14, 2023, ITH entered into a securities purchase agreement with ImaginAb to purchase 270,568 shares of ImaginAb Series C-2 preferred stock for $0.6 million. On September 14, 2023, ITH entered into a securities purchase agreement with ImaginAb to purchase another 405,852 shares of ImaginAb Series C-2 preferred stock for $0.6 million.

On February 23, 2024, ITH purchased a subordinated convertible promissory note (the “ImaginAb Convertible Note”) from ImaginAb for a total purchase price of $2.7 million. The ImaginAb Convertible Note carried an annual interest rate of 10% and would be due and payable upon the earlier to occur of January 31, 2025 and certain events defined in the ImaginAb Convertible Note. Under certain circumstances, the ImaginAb Convertible Note is convertible at the option of ITH into ImaginAb’s equity securities at defined conversion prices. The ImaginAb Convertible Note is subordinate to certain existing indebtedness of ImaginAb as defined in the ImaginAb Convertible Note. On October 31, 2024, ITH entered into an agreement with ImaginAb to amend the ImaginAb Convertible Note. Pursuant to the agreement, the principal amount of the ImaginAb Convertible Note was increased from $2.7 million to $4.8 million, which represented the principal as of February 23, 2024, accrued interest as of amendment date, commitment fees and an additional cash investment of $1.5 million. On January 13, 2025, ITH and ImaginAb executed an amendment to the ImaginAb Convertible Note extending the maturity date from January 31, 2025 to May 30, 2025. All other material terms of the ImaginAb Convertible Note were unchanged during the aforementioned amendments to the ImaginAb Convertible Note.

Because ImaginAb’s equity securities are not publicly traded and do not have a readily determinable fair value, we account for our investment in ImaginAb’s Series C preferred stock, Series C-2 preferred stock and common stock using the measurement alternative. As of December 31, 2025 and 2024, our investment in ImaginAb’s Series C preferred stock, Series C-2 preferred stock and common stock amounted to $7.6 million and recorded as equity and long-term investments in the consolidated balance sheets. There was no change in the carrying amount of our equity investments in ImaginAb.

In May 2025, ImaginAb fully settled the convertible note of $4.8 million for $5.1 million, including $0.3 million in accrued interest and commitment fees. Before the repayment, the ImaginAb Convertible Note was accounted for as a trading security and measured at fair value using a Monte Carlo simulation model with the probability of certain qualified events and the assumptions of risk-free rate, volatility of stock price and timing of certain qualified events. As of December 31, 2024, we recorded $5.0 million in fair value of the ImaginAb convertible note as equity and long-term investments in the consolidated balance sheet. Changes to the fair value of the ImaginAb convertible note in 2025 through its settlement date were immaterial. During the year ended December 31, 2024, we recorded $0.1 million in net unrealized gain on the ImaginAb convertible note as changes in fair values of equity and long-term investments, net, in the consolidated statements of income and comprehensive income.

Syndeio Biosciences, Inc. (formerly known as Gate Neurosciences, Inc.) (“Syndeio”) is a privately held biopharmaceutical company focused on developing the next generation of targeted nervous system therapies, leveraging precision medicine approaches to develop breakthrough drugs for psychiatric and neurologic diseases. In May 2025, Gate Neurosciences, Inc. rebranded as Syndeio.

From 2021 to 2022, ITH invested in Syndeio a total of $15.0 million in convertible notes (the “Syndeio 2021 Convertible Note”). The Syndeio 2021 Convertible Note bears an annual interest rate of 8% and will convert into shares of common stock of Syndeio upon a qualified event or into shares of shadow preferred stock of Syndeio (“Shadow Preferred”) upon a qualified financing. A qualifying event can be a qualified initial price offering, a qualified merger, or a merger with a special-purpose acquisition company (“SPAC”). Shadow Preferred means preferred stock having identical rights, preferences and restrictions as the preferred stock that would be issued in a qualified financing.

The number of common stock shares to be issued in a qualified event shall be equal to the amount due on the conversion date divided by the lesser of a capped conversion price (the “Capped Conversion Price”) and the qualified event price (the “Qualified Event Price”). The Capped Conversion Price is calculated as $50.0 million divided by the number of shares of common stock outstanding at such time on a fully diluted basis. The Qualified Event Price is the price per share determined by the qualified event. A qualified financing is a sale or series of sales of preferred stock where (i) at least 50 percent of counterparties are not existing shareholders, (ii) net proceeds to Syndeio are at least $35.0 million, and (iii) the stated or implied equity valuation of Syndeio is at least $80.0 million.

On February 2, 2023, ITH entered into a Note Amendment Agreement with Syndeio to amend the Syndeio 2021 Convertible Note. Pursuant to the Note Amendment Agreement, the principal amount of the Syndeio 2021 Convertible Note was increased from $15.0 million to $21.5 million, which represents the original principal, accrued interest as of the amendment date and an additional cash investment of $5.0 million.

On October 6, 2023, ITH entered into a Second Note Amendment Agreement with Syndeio to amend the Note Amendment Agreement. Pursuant to the Second Note Amendment Agreement, the principal amount of the Syndeio 2021 Convertible Note was increased from $21.5 million to $27.7 million, which represents the amended principal as of February 2, 2023, accrued interest as of the second amendment date and an additional cash investment of $5.0 million.

On February 13, 2024, ITH entered into a Third Note Amendment Agreement with Syndeio to amend the Syndeio 2021 Convertible Note. Pursuant to the Third Note Amendment Agreement, the principal amount of the Syndeio 2021 Convertible Note was increased from $27.7 million to $33.5 million, which represents the principal and accrued interest as of the third amendment date and an additional cash investment of $5.0 million.

On August 5, 2024, ITH entered into a Fourth Note Amendment Agreement with Syndeio to amend the Syndeio 2021 Convertible Note. Pursuant to the Fourth Note Amendment Agreement, the principal amount of the Syndeio 2021 Convertible Note was increased from $33.5 million to $39.8 million, which represents the principal and accrued interest as of the fourth amendment date and an additional cash investment of $5.0 million.

On November 13, 2024, ITH entered into a Fifth Note Amendment Agreement with Syndeio to amend the Syndeio 2021 Convertible Note. Pursuant to the Fifth Note Amendment Agreement, the principal amount of the Syndeio 2021 Convertible Note was increased from $39.8 million to $50.6 million, which represents the principal and accrued interest as of the fifth amendment date and an additional cash investment of $10.0 million.

On March 3, 2025, ITH entered into a Convertible Promissory Note Purchase Agreement with Syndeio to acquire a convertible promissory note (the “Syndeio 2025 Convertible Note”) with a principal amount of $15.0 million. The Syndeio 2025 Convertible Note bears an annual interest rate of 8% and will mature on November 24, 2026. The Syndeio 2025 Convertible Note will convert into shares of series seed preferred stock of Syndeio upon a qualified initial public offering (“IPO”), or into shares of shadow preferred stock of Syndeio (“Shadow Preferred”) upon a qualified financing. Shadow Preferred means preferred stock having identical rights, preferences and restrictions as the preferred stock that would be issued in a qualified financing.

On November 11, 2025, ITH entered into a Note Amendment Agreement with Syndeio to amend the Syndeio 2025 Convertible Note. Pursuant to the Note Amendment Agreement, the principal amount of the Syndeio 2025 Convertible Note was increased from $15.0 million to $25.8 million, which represents the principal and accrued interest as of the amendment date and an additional cash investment of $10.0 million.

All other material terms of the Syndeio 2021 Convertible Note and the Syndeio 2025 Convertible Note remained unchanged during the aforementioned amendments.

Our investments in Syndeio do not provide us with the ability to control or have significant influence over Syndeio’s operations. Based on our evaluation, we determined that Syndeio is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity.

We account for both the Syndeio 2021 Convertible Note and the Syndeio 2025 Convertible Note as trading securities, measured at fair value using a Monte Carlo simulation model with the probability of certain qualified events and the assumptions of equity value of Syndeio, risk-free rate, expected stock price, volatility of its peer companies, and the time until a financing is raised.

As of December 31, 2025 and 2024, the fair value of the Syndeio 2021 Convertible Note was estimated at $62.9 million and $50.9 million, respectively, and recorded as equity and long-term investments in the consolidated balance sheets. We recorded $12.1 million in unrealized gain for the year ended December 31, 2025, as change in fair values of equity and long-term investments, net in the consolidated statements of income and comprehensive income. The change in fair value is not material for the year ended December 31, 2024. We recorded $0.4 million in unrealized loss as change in fair values of equity and long-term investments, net, in the consolidated statements of income and comprehensive income for the year ended December 31, 2023.

As of December 31, 2025, the fair value of the Syndeio 2025 Convertible Note was estimated at $24.5 million and recorded as equity and long-term investments in the consolidated balance sheet. We recorded $1.3 million in unrealized loss for the year ended December 31, 2025, as change in fair values of equity and long-term investments, net in the consolidated statements of income and comprehensive income.

On February 10, 2026, ITH entered into a Note Amendment Agreement with Syndeio to amend the Syndeio 2021 Convertible Note. Pursuant to the Note Amendment Agreement, the principal amount of the Syndeio 2021 Convertible Note was increased from $50.6 million to 60.8 million, which represents the principal and accrued interest as of the amendment date and an additional cash investment of $5.0 million. Certain thresholds associated with the definition of qualified financing were likewise amended. All other material terms of the Syndeio 2021 Convertible Note remained unchanged

In 2022, ITC invested $9.8 million in 18,750,000 shares of preferred stock of Nanolive SA (“Nanolive”), a Swiss privately held life sciences company focused on developing breakthrough imaging solutions that accelerate research in growth industries such as drug discovery and cell therapy. ITH has the right to designate one member to Nanolive’s board. ITH also has the right to designate another member, who will be mutually acceptable to ITH and another stockholder, to Nanolive’s board. As of December 31, 2025, no Innoviva designee is serving on Nanolive’s six-member board. As of December 31, 2025 and 2024, we held 13.0% of Nanolive equity ownership.

Our investment in Nanolive does not provide us with the ability to control or have significant influence over Nanolive’s operations. Based on our evaluation, we determined that Nanolive is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity.

Because Nanolive’s equity securities are not publicly traded and do not have a readily determinable fair value, we account for our investment in Nanolive’s Series C preferred stock using the measurement alternative. As of December 31, 2025 and 2024, $10.6 million of investment in Nanolive was recorded as equity and long-term investments in the consolidated balance sheets, and there was no change to the carrying amount of our investment.

On February 27, 2025, Strategic Partners entered into a note purchase agreement with Lyndra Therapeutics, Inc. (“Lyndra”) to acquire a convertible promissory note (the “Lyndra Convertible Note”) with a principal amount of $9.2 million. Lyndra is a clinical-stage company with a novel drug delivery platform that enables the administration of ultra-long-acting oral drugs. The Lyndra Convertible Note bears an annual interest rate of 8% and will mature on November 27, 2025. The Lyndra Convertible Note would convert into shares of preferred stock of Lyndra upon a qualified financing as defined in the agreement. Upon maturity or certain events and if no qualified financing has occurred, the principal and unpaid accrued interest may either be repaid in full in cash plus a certain premium or convert into shares of preferred stock of Lyndra as defined in the agreement.

Our investment in Lyndra does not provide us with the ability to control or have significant influence over Lyndra’s operations. Based on our evaluation, we determined that Lyndra is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity. We account for the Lyndra Convertible Note as a trading security, measured at fair value using an income approach based on the discounted value of expected future cash flows.

In late March of 2025, Lyndra began winding down its operations due to a lack of financing. In September 2025, Lyndra sold the majority of its assets, resulting in a change of control as defined in the Lyndra Convertible Note (Refer to Note 14, “Asset Acquisition”). Upon the consummation of the change of control, the maturity date of the Lyndra Convertible Note was accelerated, and its principal and accrued interest became due. Due to Lyndra’s inability to repay the full amount, the note went into default and became subject to a 20% premium on the principal balance. Interest will continue to accrue until full repayment.

In October 2025, we received a $3.3 million partial repayment on the Lyndra Convertible Note, reducing the outstanding principal to $5.9 million.

As of December 31, 2025, the fair value of the Lyndra Convertible Note was estimated at $3.5 million and recorded as equity and long-term investments in the consolidated balance sheet. We recorded $2.4 million in unrealized loss for the year ended December 31, 2025 as changes in fair values of equity and long-term investments, net, in the consolidated statements of income and comprehensive income.

Beacon Biosignals, Inc. (“Beacon”) is an AI-driven neurotechnology company developing treatments for neurological, psychiatric, and sleep disorders. On October 7 2025, ITH entered into a Preferred Stock Purchase Agreement with Beacon, pursuant to which ITH acquired 1,448,303 shares of Beacon’s Series B Preferred Stock for $17.5 million. As of December 31, 2025, we held 5.6% of Beacon equity ownership.

Our investment in Beacon does not provide us with the ability to control or have significant influence over Beacon’s operations. Based on our evaluation, we determined that Beacon is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity.

Because Beacon’s equity securities are not publicly traded and do not have a readily determinable fair value, we account for our investment in Beacon’s Series B preferred stock using the measurement alternative. As of December 31, 2025, $17.5 million of investment in Beacon was recorded as equity and long-term investments in the consolidated balance sheet, and there was no change to the carrying amount of our investment.

The following table reconciles the change in balances in “Equity and Long-Term Investments” as of each balance sheet date:


(In thousands)
Equity and long-term investments as of December 31, 2023	$	444,432
Purchases of trading securities		63,201
Changes in fair value, net		(59,161	)
Reclassification of current portion		(107,532	)
Other		724
Equity and long-term investments as of December 31, 2024	$	341,664
Purchases of trading securities		61,729
Proceeds from trading securities		(8,427	)
Purchases of equity and other long-term investments		17,533
Net sales and purchases of investments managed by ISP Fund		(120,955	)
Changes in fair value, net		20,160
Reclassification of current portion		91,805
Other		988
Equity and long-term investments as of December 31, 2025	$	404,497

The estimated fair value of available-for-sale securities is based on quoted market prices for these or similar investments that were based on prices obtained from a commercial pricing service. Available-for-sale securities are summarized below:


	December 31, 2025
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Money market funds(1)	$	530,278	$	—	$	—	$	530,278
Total	$	530,278	$	—	$	—	$	530,278

(1)

Money market funds are included in cash and cash equivalents in the consolidated balance sheets.


	December 31, 2024
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Money market funds(1)	$	289,441	$	—	$	—	$	289,441
Total	$	289,441	$	—	$	—	$	289,441

(1)

Money market funds are included in cash and cash equivalents in the consolidated balance sheets.

As of December 31, 2025 and 2024, all available-for-sale securities were money market funds, and there was no credit loss recognized.

Our available-for-sale securities and equity and long-term investments are measured at fair value on a recurring basis and our debt is carried at amortized cost basis.


	Estimated Fair Value Measurements as of December 31, 2025 Using:
	Quoted Price in Active Markets for		Significant Other		Significant
	Identical		Observable		Unobservable
Types of Instruments	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	530,278	$	—	$	—	$	530,278
Investments held by ISP Fund LP		76,993		—		2,748		79,741
Equity investment - Armata Common Stock		157,482		—		—		157,482
Equity investment - Armata Warrants		—		36,244		—		36,244
Equity investment - InCarda Warrants		—		—		43		43
Term loan investment - Armata July 2023 Term Loan		—		—		32,899		32,899
Term loan investment - Armata March 2024 Term Loan		—		—		43,290		43,290
Term loan investment - Armata March 2025 Term Loan		—		—		11,125		11,125
Term loan investment - Armata August 2025 Term Loan		—		—		15,534		15,534
Convertible debt investment - Armata Note		—		—		101,358		101,358
Convertible debt investment - InCarda 2024 Convertible Note		—		—		436		436
Convertible debt investment - InCarda February 2025 Convertible Note		—		—		475		475
Convertible debt investment - InCarda October 2025 Convertible Note		—		—		1,225		1,225
Convertible debt investment - Syndeio 2021 Convertible Note		—		—		62,937		62,937
Convertible debt investment - Syndeio 2025 Convertible Note		—		—		24,490		24,490
Convertible debt investment - Lyndra Convertible Note		—		—		3,492		3,492
Total assets measured at estimated fair value	$	764,753	$	36,244	$	300,052	$	1,101,049
Liability
2028 Notes	$	—	$	267,013	$	—	$	267,013


	Estimated Fair Value Measurements as of December 31, 2024 Using:
	Quoted Price
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
Types of Instruments	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	289,441	$	—	$	—	$	289,441
Investments held by ISP Fund LP		193,560		—		62,098		255,658
Equity investment - Armata Common Stock		46,392		—		—		46,392
Equity investment - Armata Warrants		—		5,901		—		5,901
Equity investment - InCarda Warrants		—		—		59		59
Convertible debt investment - Armata Note		—		—		42,095		42,095
Term loan investment - Armata July 2023 Term Loan		—		—		30,197		30,197
Term loan investment - Armata March 2024 Term Loan		—		—		39,275		39,275
Convertible debt investment - InCarda 2024 Convertible Note		—		—		436		436
Convertible debt investment - ImaginAb Note		—		—		4,950		4,950
Convertible debt investment - Syndeio 2021 Convertible Note		—		—		50,881		50,881
Total assets measured at estimated fair value	$	529,393	$	5,901	$	229,991	$	765,285
Liabilities
Debt
2025 Notes	$	—	$	222,353	$	—	$	222,353
2028 Notes		—		251,213		—		251,213
Total fair value of debt	$	—	$	473,566	$	—	$	473,566

There were no transfers between Level 1, Level 2 or Level 3 during the periods presented.

The fair values of our equity investments in Armata’s common stock and publicly traded investments held by ISP Fund LP are based on the quoted prices in active markets and are classified as Level 1 financial instruments. The fair values in the warrants in Armata classified within Level 2 are based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications.

The investments classified as Level 3 financial instruments are securities that are not publicly traded and the assumptions used in the valuation model of these securities are based on significant unobservable and observable inputs including those of publicly traded peer companies. There are uncertainties on the fair value measurement of the instruments classified under Level 3 due to the use of unobservable inputs and interrelationships between these unobservable inputs, which could result in higher or lower fair value measurements.