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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to ___________________

Commission File Number: 001-39401

iTeos Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware		84-3365066
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
321 Arsenal St Watertown, MA		02472
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (339) 217 0162

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common stock, $0.001 par value per share

     ITOS

     Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 1, 2025 the registrant had 44,205,398 shares of common stock, $0.001 par value per share, outstanding.

Special note regarding forward-looking statements

This Quarterly Report on Form 10-Q, including the section entitled "Risk factors" and "Management’s discussion and analysis" of financial condition and results of operations” contains express or implied forward-looking statements. These statements relate to future events or future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•

the timing and the consummation of the proposed acquisition of the Company by Concentra (as defined below);

•

potential contingent cash payments pursuant to the CVRs (as defined below);

•

the timing of employee terminations;

•

our expectations regarding the realization of potential strategic alternatives; and

•

our estimates of our expenses, near-term cash requirements, ongoing losses, future revenue, tax position, cash runway, capital requirements and our need for or ability to obtain additional financing;

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” "will," "would," "if," or the negatives of these terms or other comparable terminology, although not all forward-looking statements contain such identifying terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect our results and financial condition. Factors that may cause actual results to differ from current expectations include, among other things, those listed under the section titled “Risk factors” in this Quarterly Report on Form 10-Q, the Q1 2025 Quarterly Report, and in any subsequent filings with the SEC. If one of these risks or uncertainties occur, or if underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the SEC as exhibits to this Quarterly Report on Form 10-Q, completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. Statements regarding our cash runway do not indicate when or if we may access the capital markets.

While we may elect to update these forward-looking statements at some point in the future, we undertake no obligation to do so except to the extent required by applicable law. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38
PART II.	OTHER INFORMATION	40
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
	Signatures	46

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

iTeos Therapeutics, Inc. and subsidiaries

Condensed consolidated balance sheets

(unaudited)


(in thousands, except share amounts)	June 30, 2025			December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	207,820		$	142,131
Short-term investments (amortized cost of $307,394)		307,610			352,517
Grants receivable		475			805
Research and development tax credits receivable		280			963
Refundable income taxes		1,793			1,923
Prepaid expenses and other current assets		11,015			11,200
Total current assets		528,993			509,539
Property and equipment, net		5,175			4,895
Long-term investments (amortized cost of $74,475)		74,614			160,354
Research and development tax credits receivable, net of current portion		7,955			5,906
Restricted cash		319			299
Right of use assets		5,129			5,089
Other assets		898			894
Total assets	$	623,083		$	686,976
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	6,249		$	8,503
Other accrued expenses		796			1,096
Accrued clinical trial costs		36,462			17,896
Accrued personnel expenses		23,774			10,132
Deferred income		1,477			1,397
Lease liabilities		1,516			1,336
Total current liabilities		70,274			40,360
Grants repayable, net of current portion		6,606			5,842
Lease liabilities, net of current portion		3,612			3,760
Unrecognized tax benefits		48,790			46,720
Total liabilities		129,282			96,682
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock, $0.001 par value: 150,000,000 shares authorized at March 31, 2025 and December 31, 2024; 38,271,682 and 36,568,043 shares issued and outstanding, respectively		44			37
Additional paid-in capital		633,070			616,037
Accumulated other comprehensive loss		(16,190	)		(15,999	)
Accumulated deficit		(123,123	)		(9,781	)
Total stockholders’ equity		493,801			590,294
Total liabilities and stockholders’ equity	$	623,083		$	686,976

The accompanying notes are an integral part of these condensed consolidated financial statements.

iTeos Therapeutics, Inc. and subsidiaries

Condensed consolidated statements of operations and comprehensive loss

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except share and per share amounts)	2025			2024			2025			2024
Revenue:
License and collaboration revenue	$	—		$	35,000		$	—		$	35,000
Total revenue		—			35,000			—			35,000
Operating expenses:
Research and development expenses		57,275			36,709			86,314			71,238
General and administrative expenses		10,181			12,457			21,162			25,160
Restructuring costs		16,335			—			16,335			—
Total operating expenses		83,791			49,166			123,811			96,398
Loss from operations		(83,791	)		(14,166	)		(123,811	)		(61,398	)
Other income and expenses:
Grant income		183			522			591			1,472
Research and development tax credits		752			893			1,245			1,696
Interest income		6,382			7,817			13,333			15,203
Other (expense) income, net		(585	)		67			(1,927	)		2,158
Loss before income taxes		(77,059	)		(4,867	)		(110,569	)		(40,869	)
Income tax expense		(1,670	)		(2,261	)		(2,772	)		(4,475	)
Net loss	$	(78,729	)	$	(7,128	)	$	(113,341	)	$	(45,344	)
Basic net loss per common share	$	(1.81	)	$	(0.18	)	$	(2.61	)	$	(1.20	)
Diluted net loss per common share	$	(1.81	)	$	(0.18	)	$	(2.61	)	$	(1.20	)
Weighted-average common shares outstanding - basic		43,564,573			39,699,053			43,403,850			37,771,084
Weighted-average common shares outstanding - diluted		43,564,573			39,699,053			43,403,850			37,771,084

Net loss	$	(78,729	)	$	(7,128	)	$	(113,341	)	$	(45,344	)
Foreign currency translation adjustments		(1,217	)		(151	)		(370	)		(2,416	)
Unrealized gain (loss) on available-for-sale securities		(50	)		(72	)		180			(906	)
Comprehensive loss	$	(79,996	)	$	(7,351	)	$	(113,531	)	$	(48,666	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

iTeos Therapeutics, Inc. and subsidiaries

Condensed consolidated statements of stockholders’ equity

(unaudited)


								Accumulated
						Additional		other						Total
In thousands except share amounts	Common stock					paid-in		comprehensive			Retained			stockholders’
	Shares			Amount		capital		loss			earnings (accumulated deficit)			equity
Balance at December 31, 2023		35,838,080		$	36	$	463,799	$	(13,240	)	$	124,633		$	575,228
Stock-based compensation	—				—		7,263	—				—			7,263
Common stock issued upon exercises of options		5,676			—		22	—				—			22
Currency translation adjustment	—				—	—			(2,265	)		—			(2,265	)
Unrealized loss on available-for-sale securities	—			—		—			(832	)	—				(832	)
Net loss	—				—	—		—				(38,216	)		(38,216	)
Balance at March 31, 2024		35,843,756		$	36	$	471,084	$	(16,337	)	$	86,417		$	541,200
Stock-based compensation		—			—		8,062		—			—			8,062
Common stock issued upon exercises of options, ESPP purchases, and release of restricted stock units		433,332			—		2,383		—			—			2,383
Issuance of common stock and pre-funded warrant, net of offering costs		1,142,857			1		119,573		—			—			119,574
Exchange of common stock for pre-funded warrant		(900,000	)		—		—		—			—
Currency translation adjustment		—			—		—		(151	)		—			(151	)
Unrealized loss on available-for-sale securities									(72	)					(72	)
Net income		—			—		—		—			(7,128	)		(7,128	)
Balance at June 30, 2024		36,519,945		$	37	$	601,102	$	(16,560	)	$	79,289		$	663,868


								Accumulated
					Additional			other						Total
In thousands except share amounts	Common stock				paid-in			comprehensive			Retained			stockholders’
	Shares		Amount		capital			loss			earnings (accumulated deficit)			equity
Balance at December 31, 2024		36,568,043		37	$	616,037		$	(15,999	)	$	(9,781	)	$	590,294
Stock-based compensation		—		—		6,635			—			—			6,635
Common stock issued upon exercises of options and restricted stock unit releases		146,841		—		32			—			—			32
Common stock issued upon exercise of pre-funded warrant		1,556,798		1		(1	)	—			—			—
Currency translation adjustment		—		—		—			846			—			846
Unrealized gain on available-for-sale securities		—		—		—			230			—			230
Net loss		—		—		—			—			(34,613	)		(34,613	)
Balance at March 31, 2025		38,271,682		38	$	622,703		$	(14,923	)	$	(44,394	)	$	563,424
Stock-based compensation		—		—		5,880			—			—			5,880
Common stock issued upon exercises of options, ESPP purchases, and release of restricted stock units		839,140		1		4,492			—			—			4,493
Common stock issued upon exercise of pre-funded warrant		5,056,644		5		(5	)		—			—			—
Currency translation adjustment		—		—		—			(1,217	)		—			(1,217	)
Unrealized loss on available-for-sale securities		—		—		—			(50	)		—			(50	)
Net loss		—		—		—			—			(78,729	)		(78,729	)
Balance at June 30, 2025		44,167,466		44	$	633,070		$	(16,190	)	$	(123,123	)	$	493,801

The accompanying notes are an integral part of these condensed consolidated financial statements.

iTeos Therapeutics, Inc. and subsidiaries

Condensed consolidated statements of cash flows

(unaudited)


	Six Months Ended June 30,
(in thousands)	2025			2024
Cash flows from operating activities
Net loss	$	(113,341	)	$	(45,344	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		664			614
Stock-based compensation		12,516			15,325
Net accretion of available-for-sale debt securities		(4,447	)		(5,527	)
Change in operating lease right-of-use assets		(12	)		(5	)
Unrealized foreign exchange loss		415			—
Changes in operating assets and liabilities:
Grants receivable		415			(397	)
Research and development tax credits receivable		(493	)		(1,705	)
Refundable income taxes		91			140
Unbilled milestone receivable	—				(35,000	)
Prepaid expenses and other current assets		833			(1,051	)
Accounts payable		(2,900	)		(218	)
Other accrued expenses		469			936
Accrued clinical trial costs		15,157			7,457
Accrued personnel expenses		12,478			(3,263	)
Deferred income		(125	)		(399	)
Unrecognized tax benefits		2,070			2,110
Net cash used in operating activities		(76,210	)		(66,327	)
Cash flows from investing activities
Purchases of investments		(89,991	)		(245,073	)
Proceeds from maturities of investments		225,047			193,182
Purchase of property and equipment		(384	)		(1,387	)
Purchase of other assets		(26	)		—
Net cash provided by (used in) investing activities		134,646			(53,278	)
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of options and ESPP purchases		4,525			2,404
Proceeds from issuance of common stock and pre-funded warrant					119,994
Net cash provided by financing activities		4,525			122,398
Effects of exchange rate changes on cash, cash equivalents and restricted cash		2,748			(2,843	)
Net increase (decrease) in cash, cash equivalents and restricted cash		65,709			(50	)
Cash, cash equivalents and restricted cash at beginning of period		142,430			251,451
Cash, cash equivalents and restricted cash at end of period	$	208,139		$	251,401
Non-cash investing and financing activities
Capital expenditure included in accounts payable	—			2
Operating lease liabilities arising from obtaining right-of-use assets		254			235
Unrealized gain (loss) on available-for-sale securities		(50	)		(906	)
Offering costs included within accounts payable		—			277
Supplemental disclosure of cash flows
Cash paid for taxes		760			2,384

The accompanying notes are an integral part of these condensed consolidated financial statements.

iTeos Therapeutics, Inc.

Notes to condensed consolidated financial statements

(unaudited)

Note 1. Nature of Business and Basis of Presentation

Description of business

iTeos Therapeutics, Inc. ("iTeos Inc." or the "Company"), a Delaware corporation headquartered in Watertown, Massachusetts (incorporated on October 4, 2019), is the successor to iTeos Belgium SA (iTeos Belgium) a company organized under the laws of Belgium in 2011 and headquartered in Charleroi, Belgium. The Company has historically focused on pioneering the discovery and development of a new generation of immuno-oncology therapeutics for people living with cancer. The Company historically designed novel product candidates with optimized pharmacologic properties to improve clinical outcomes by restoring the immune response against cancer. The Company previously focused on advancing its innovative pipeline which includes monoclonal antibodies (mAbs) and small molecules for the treatment of cancer, especially solid tumors. Its immuno-oncology programs target three different key cancer resistance mechanisms: the TIGIT/CD226 pathway, which the Company targets with an antibody to TIGIT (T cell immunoreceptor with lg and ITIM domains); the adenosine pathway, where the Company uses a small molecule to inhibit ENT1 (equilibrative nucleoside transporter 1); and the reprogramming of immunosuppressive macrophages, where the Company antagonizes Triggering Receptor Expressed on Myeloid Cells 2 ("TREM2"), a critical receptor key to driving the tumor promoting functions of tumor resident macrophages.

On December 2, 2020, iTeos Securities Corporation (iTeos SC) was incorporated as a Massachusetts Security Corporation. It is a wholly owned subsidiary of iTeos Inc. On July 27, 2021, iTeos BE, LLC (iTeos LLC) was incorporated as a Delaware Limited Liability Company. It is a wholly owned subsidiary of iTeos Inc.

The Company’s lead clinical-stage antibody product candidate, belrestotug, also known as EOS-448/GSK4428859A, was an antagonist of TIGIT, an immune checkpoint with multiple mechanisms of action.

On June 11, 2021, the Company's wholly owned subsidiary, iTeos Belgium, and GlaxoSmithKline Intellectual Property (No. 4) Limited ("GSK"), executed a Collaboration and License Agreement (the "GSK Collaboration Agreement"), which became effective on July 26, 2021. Pursuant to the GSK Collaboration Agreement, the Company granted GSK a license under certain of its intellectual property rights to develop, manufacture, and commercialize products comprised of or containing belrestotug, which license is exclusive in all countries outside of the United States and co-exclusive, with iTeos, in the United States. GSK and iTeos intended to develop belrestotug in combination, including with other oncology assets of GSK, and iTeos and GSK would jointly own the intellectual property created under the GSK Collaboration Agreement that covers such combinations.

In partnership with GSK, the Company had multiple clinical trials:

•

GALAXIES Lung-301: global randomized, double blind Phase 3 registrational study assessing the doublet of GSK's anti-PD-1 (Jemperli (dostarlimab-gxly)) with belrestotug versus placebo and pembrolizumab in patients with first-line PD-L1 high non-small cell lung cancer ("NSCLC").

•

GALAXIES Lung-201: global randomized, open label Phase 2 platform study assessing dostarlimab with belrestotug and in combination with GSK'608, GSK's investigational anti-CD96 antibody, nelistotug.

•

GALAXIES H&N-202: global randomized, open label Phase 2 study assessing dostarlimab with belrestotug and other novel immuno-oncology combinations, including nelistotug, in patients with first-line PD-L1 positive advanced metastatic head and neck squamous cell carcinoma ("HNSCC").

•

TIG-006 HNSCC: open label Phase 1/2 study assessing dostarlimab with belrestotug in first-line PD-L1 positive advanced metastatic HNSCC. In May 2024, the Company announced completion of enrollment in the first portion of the Phase 2 expansion part of the trial. The Company and GSK agreed to not continue beyond stage 1 recruitment in these open-label cohorts in order to focus on the randomized, controlled GALAXIES H&N-202 platform study.

On May 13, 2025, the Company reported topline results from an updated interim analysis of GALAXIES Lung-201. The Company reported that the GALAXIES Lung-201 data continued to demonstrate clinically meaningful improvements in the trial’s primary endpoint of objective response rate (“ORR”), but the analysis did not meet established criteria for clinically meaningful improvements in the secondary endpoint of progression free survival in the belrestotug + dostarlimab combination cohorts versus dostarlimab monotherapy. Additionally, an interim analysis of the GALAXIES H&N-202

Phase 2 trial showed a trend below the meaningful threshold for ORR in the belrestotug combination cohorts versus dostarlimab monotherapy in PD-L1 positive head and neck squamous cell carcinoma.

Based on the results described above, the Company and GSK made the decision to terminate the belrestotug development program and end the collaboration, ending all belrestotug-containing cohorts and any new enrollment in the GALAXIES Lung-201 trial. On May 13, 2025, iTeos Belgium received written notice from GSK electing to terminate the GSK Collaboration Agreement.

The Company's next most advanced program was EOS-984, a potentially first-in-class small molecule focused on a new mechanism in the adenosine pathway by targeting ENT1, a dominant transporter of extracellular adenosine, expressed on intratumoral T cells, which allows adenosine entry into the cell, disturbing T cell metabolism, expansion, effector function, and survival. The Company was evaluating EOS-984 in a Phase 1 Trial in advanced malignancies.

The Company's most recent program to initiate a clinical trial was EOS-215, a potential best-in-class monoclonal antibody which antagonizes TREM2. Macrophages expressing TREM2 in tumors promote tumor growth and survival. The antibody is designed to block ligand binding and alter tumor resident macrophage function resulting in anti-tumor effects. EOS-215 has been shown preclinically to have a meaningful impact on macrophage function, promoting multiple anti-tumor mechanisms including T cell activation. The therapeutic candidate's multiple mechanisms of action have been shown to translate to activity in highly immune resistant models. s.

On May 28, 2025, the Company announced its intention to wind down its clinical and operational activities. The action was taken as part of the Company’s review of strategic alternatives to maximize shareholder value following the Company’s decision to terminate its belrestotug development program and the termination of the Company’s collaboration with GSK (see Note 5). The Company is currently in the process of winding down its clinical activities.

Liquidity and capital resources

Since inception, the Company’s activities have consisted primarily of performing research and development to advance its product candidates. The Company had a net loss of $113.3 million and $45.3 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had an accumulated deficit of $123.1 million. On May 28, 2025, the Company announced, as part of a review of strategic alternatives aimed at maximizing shareholder value, its intention to wind down clinical and operational activities and that it expected such wind down to be substantially complete in the third quarter of 2025. Consequently, as of August 6, 2025, the issuance date of the condensed consolidated financial statements for the period ended June 30, 2025, the Company does not have an operational plan of business continuity. Therefore, there is substantial doubt about the Company's ability to continue as a going concern for at least 12 months from the issuance date of the condensed consolidated financial statements.

In the event that the Merger is not consummated and the Company is unable to realize a strategic alternative and until such time as the Company is fully wound down, the Company expects to incur additional losses. Failure to manage discretionary spending or execute on a strategic alternative, including the Merger, will adversely impact the Company’s ability to achieve its intended business objectives. If the Company does not successfully consummate the Merger or other strategic transaction, the Board of Directors may decide to pursue a dissolution and liquidation of the Company.

Basis of presentation

The accompanying condensed consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP").

The unaudited interim condensed consolidated financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the years ended December 31, 2024 and 2023, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K (File No. 001-39401). The results for any interim period are not necessarily indicative of results for any future period.

In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of

operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

These unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Note 2. Summary of significant accounting policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2024, and notes thereto, which are included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March 5, 2025. Since the date of those financial statements, there have been no material changes to significant accounting policies.

From time to time, new accounting pronouncements are issued that the Company adopts as of the specified effective date. The Company does not believe that the adoption of any recently issued standards have or may have a material impact on its condensed consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures, which establishes new income tax disclosure requirements. The new standard will require greater disaggregation of information within the effective tax rate reconciliation. Greater disaggregation of income taxes paid will also be required under adoption of this standard. This standard will become effective for the Company in the year ending December 31, 2025. While the Company is still evaluating the full impact that the adoption of this standard will have on its financial statements, the impact is not expected to be material as the resulting changes from this standard are expected to be disclosure-only.

In December 2023, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses, which will require disclosure of additional information about specific expense categories in the notes to financial statements. The new standard will require disclosure of a greater disaggregation of information pertaining to the main expense items presented on the income statement. This standard will become effective for the Company in the year ending December 31, 2027. While the Company is still evaluating the full impact that the adoption of this standard will have on its financial statements, the impact is not expected to be material as the resulting changes from this standard are expected to be disclosure-only.

Note 3. Investment securities and fair value measurements

The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy as of June 30, 2025 and December 31, 2024:


	June 30, 2025
(in thousands)	Level 1		Level 2		Level 3		Total
Money market funds	$	171,909	$	—	$	—	$	171,909
U.S. government agency bonds		—		52,940		—		52,940
U.S. treasury bonds		309,425		—		—		309,425
Corporate debt securities		—		19,859		—		19,859
Totals	$	481,334	$	72,799	$	—	$	554,133


	December 31, 2024
(in thousands)	Level 1		Level 2		Level 3		Total
Money market funds	$	116,694	$	—	$	—	$	116,694
U.S. government agency bonds	—			47,994		—		47,994
U.S. treasury bonds		375,138	—			—		375,138
Corporate debt securities	—			89,739		—		89,739
Totals	$	491,832	$	137,733	$	—	$	629,565

Money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in an active market. U.S. treasury securities are also classified as Level 1 because they are valued using quoted prices. U.S. government agency and corporate securities are classified within Level 2 of the fair value hierarchy

because they are valued using market-based models that consider inputs such as yield, prices of comparable securities, coupon rate, maturity, and credit quality.

During the periods presented, the Company has not changed the manner in which it values assets and liabilities that are measured at fair value. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the three and six months ended June 30, 2025 and 2024.

The Company's fixed income securities held as of June 30, 2025 and December 31, 2024 with original maturity dates beyond three months are classified as available-for-sale. The following table presents the amortized cost, fair value, and unrealized gains and losses by major security type, for the fixed income securities held by the Company:


	June 30, 2025
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
U.S. government agency bonds	$	52,912	$	57	$	(29	)	$	52,940
U.S. treasury bonds		309,125		450		(150	)		309,425
Corporate debt securities		19,832		27		-			19,859
Totals	$	381,869	$	534	$	(179	)	$	382,224


	December 31, 2024
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
U.S. government agency bonds	$	47,959	$	91	$	(56	)	$	47,994
U.S. treasury bonds		374,883		585		(330	)		375,138
Corporate debt securities		89,624		119		(4	)		89,739
Totals	$	512,466	$	795	$	(390	)	$	512,871

The following table presents the amortized cost and fair value of the Company's fixed income securities by maturity grouping as of June 30, 2025.


	June 30, 2025
(in thousands)	Amortized cost		Fair value
Due in one year or less	$	307,394	$	307,610
Due after one year through five years		74,475		74,614
Due after five years through ten years		—		—
Due after ten years		—		—
Total	$	381,869	$	382,224


	December 31, 2024
(in thousands)	Amortized cost		Fair value
Due in one year or less	$	352,070	$	352,517
Due after one year through five years		160,396		160,354
Due after five years through ten years		—		—
Due after ten years		—		—
Total	$	512,466	$	512,871

There were no securities with expected credit losses or non-credit related impairment as of June 30, 2025 or December 31, 2024. There were no sales of securities which resulted in a realized loss during the three and six months ended June 30, 2025. The Company recognized $4.4 million and $8.9 million of interest income earned from its available-for-sale debt securities and cash and cash equivalents during the three and six months ended June 30, 2025, respectively. The Company recognized $1.9 million and $4.4 million of accretion on its available-for-sale debt securities during the three and six months ended June 30, 2025, respectively. The accretion recognized was recorded to interest income during these periods. The Company recognized $5.3 million and $9.6 million of interest income earned from its available-for-sale debt securities and money market funds during the three and six months ended June 30, 2024, respectively. The Company also recognized $2.8 million and $5.6 million of accretion on its available-for-sale debt securities, which was recorded to interest income, during the three and six months ended June 30, 2024, respectively.

Note 4. Supplemental balance sheet information

Property and equipment

Property and equipment, net consisted of the following:


(in thousands)	June 30, 2025			December 31, 2024
Scientific equipment	$	5,278		$	4,552
Furniture & office equipment		1,325			1,204
Leasehold improvements & assets under construction		4,623			4,055
Total		11,225			9,811
Accumulated depreciation and amortization		(6,050	)		(4,916	)
Property & equipment, net	$	5,175		$	4,895

Depreciation and amortization expense was $0.3 million and $0.6 million for the three and six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had not recorded any impairment of property and equipment as it expects to recover the carrying value of these assets.

Note 5. License and collaboration agreements

Adimab

In January 2017, the Company entered into a collaboration agreement (as amended, the "Adimab Agreement") with Adimab, LLC ("Adimab"). Adimab has developed an antibody discovery and optimization technology platform. This collaboration enables the Company’s research and development efforts on discovery and optimization of new antibodies against immuno-oncology targets the Company may identify.

Under the terms of the Adimab Agreement, Adimab has granted the Company a worldwide, non-exclusive research license for a one-year research term period and evaluation period for up to 18 months per research program. The Company is required to use commercially reasonable efforts to perform its research activities under the Adimab Agreement and, if the Company exercises its right to obtain a development and commercialization license, the Company is required to use commercially reasonable efforts to pursue development and commercialization of a product directed to the applicable target. Under the terms of the Adimab Agreement, the Company granted Adimab a worldwide, non-exclusive license under all of its patents and know-how that are reasonably necessary or useful for Adimab to perform its research activities under the Adimab Agreement.

In February 2021, the Company entered into an amendment to the Adimab Agreement (the "Amended Adimab Agreement"). The Amended Adimab Agreement specifies different milestone payments for new products that are derived from research programs beginning after February 22, 2021 (the "New Products"). For New Products, on a per target basis, the Company may be required to pay development, regulatory and commercial milestone payments totaling up to an aggregate of $45.8 million for the first three products and additional milestone payments up to $14.5 million for each additional product.

The Company will pay Adimab low to mid single-digit percentage royalties on a country-by-country and product-by-product basis, on worldwide net product sales of licensed products. Royalties are payable on a licensed product-by-licensed product and country-by-country basis until the later of (i) expiration of the last valid claim of a licensed patent right that covers such licensed product in such country, and (ii) ten years following the first commercial sale of such licensed product in such country.

Through June 30, 2025, the Company has paid a total of $10.4 million to Adimab relating to milestones under the Adimab Agreement. The Company made a $1.0 million payment to Adimab in the first quarter of 2024 relating to a milestone that occurred during the fourth quarter of 2023. The Company also made a $3.0 million payment in the year ended December 31, 2024 in connection with a development milestone that occurred early in the third quarter of 2024. The Company also made a $1.0 million payment to Adimab in the three and six months ended June 30, 2025. As of the date of these condensed consolidated financial statements, the Company has not pursued any additional targets under the Adimab agreement that could potentially result in such milestone payments.

Adimab controls the filing, prosecution, maintenance and enforcement of the intellectual property that it licenses to the Company under the Adimab Agreement. The Company has the right to enforce such licensed intellectual property against infringement if the infringement is competitive with the Company’s licensed products and Adimab does not pursue enforcement. The Company controls the filing, prosecution, maintenance and enforcement of the intellectual property the Company licenses to Adimab under the Adimab Agreement and all program antibody patents.

The term of the Adimab Agreement will continue until the last to expire royalty term on a product-by-product and country-by-country basis if the Company exercises its option, or in the event no option is exercised, the conclusion of the last-to-expire evaluation term, unless terminated earlier by either party. Each party has the right to terminate the Adimab Agreement due to the other party’s uncured material breach or the Company’s abandonment of the product. The Adimab Agreement will survive the Merger.

GlaxoSmithKline

Summary of Agreement

On June 11, 2021, the Company’s wholly owned subsidiary, iTeos Belgium, and GSK executed a Collaboration and License Agreement, pursuant to which the Company agreed to grant GSK a license under certain of the Company’s intellectual property rights to develop, manufacture, and commercialize products comprised of or containing the Company’s antibody product, belrestotug. Under the GSK Collaboration Agreement, GSK agreed to make an upfront nonrefundable payment of $625.0 million to the Company within 10 business days of the date on which the GSK Collaboration Agreement became effective, which occurred on July 26, 2021. Additionally, the Company is eligible to receive up to $1.45 billion in milestone payments, contingent upon the belrestotug program achieving certain development and commercial milestones. Within the collaboration, GSK and the Company agreed to share responsibility and costs for the global development of belrestotug beyond the Phase 1 study (the "Global Development Plan") and would jointly commercialize and equally split profits in the United States. Outside of the United States, GSK received an exclusive license for commercialization, and the Company was eligible to receive tiered double digit royalty payments up to 20% during a customary royalty term.

Collaboration

The Company concluded that the GSK Collaboration Agreement was under the scope of ASC 808 as both parties actively participated in a joint operating activity and were exposed to significant risks and rewards that depended on the activity’s commercial success. ASC 808 provides that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all of the guidance in ASC 606 should be applied, including recognition, measurement, presentation, and disclosure requirements related to such unit of account. The unit-of-account guidance in ASC 808, which aligns with the guidance in ASC 606 (that is, a distinct good or service) is used when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of ASC 606.

The Company determined that the co-development in Phases 2 and 3 and the co-commercialization efforts of the GSK Collaboration Agreement represented joint operating activities in which both parties were active participants and of which both parties were exposed to significant risks and rewards that were dependent on the success of the activities. Accordingly, the Company accounted for these activities in accordance with ASC No. 808, Collaborative Arrangements (ASC 808). Additionally, the Company had determined that in the context of these activities, GSK did not represent a customer as contemplated by ASC 606-10-15, Revenue from Contracts with Customers – Scope and Scope Exceptions. As a result, these activities were accounted for as a component of the related expense in the period incurred in accordance with ASC 730, Research and Development. Additionally, reimbursements received from GSK in connection with the joint operating activities have been recognized as a reduction to research and development expense.

On May 13, 2025, iTeos Belgium received written notice from GSK that, in connection with the receipt of the topline interim results from GALAXIES Lung-201, GSK elected to terminate the GSK Collaboration Agreement for convenience (the “GSK Termination Notice”). In accordance with the terms of the GSK Collaboration Agreement, the termination will be effective six months from the date of such notice (the “Termination Effective Date”). As a result of the termination of the GSK Collaboration Agreement, as of the Termination Effective Date, the license rights granted to GSK will terminate and the parties will cease to accrue any financial obligations to each other. In connection with the Termination Notice, the Company and GSK made the decision to terminate the belrestotug development program, end all belrestotug-containing cohorts, and end any new enrollment in the Company’s ongoing GALAXIES Lung-301 Phase 3 trial. On July 18, 2025, iTeos Belgium and GSK entered into a Mutual Termination Agreement (the “GSK Termination Agreement”), pursuant to which iTeos Belgium will pay a settlement payment of $32.0 million no later than 20 business days after receipt of an invoice from GSK to close out the remaining costs for which it is responsible under the contract. Unless there is a material safety or efficacy issue requiring pause or cessation, both iTeos Belgium and GSK are required to complete within certain specified time periods certain ongoing activities related to the wind-down and completion of clinical trials. Pursuant to the

GSK Termination Agreement, GSK will revert to iTeos Belgium control of prosecution of certain patents and GSK and iTeos Belgium will complete data migration activities and publish certain scientific and medical publications related to activities performed under the GSK Agreement. During the three and six months ended June 30, 2025, the Company recorded to research and development expense $35.2 million and $43.2 million, respectively, related to the cost-sharing provisions of the GSK Collaboration Agreement. $32.0 million of these costs were payable to GSK and recorded in accrued clinical trial costs in the condensed consolidated balance sheet as of June 30, 2025.

Revenue Recognition

The Company also evaluated the elements of the GSK Collaboration Agreement in accordance with the provisions of ASC 606 and concluded that the contract counterparty, GSK, was a customer. The Company’s arrangement with GSK contained the following material promises under the contract at inception: (i) transfer of the license under certain of the Company’s intellectual property related to belrestotug, (ii) completion of the Phase 1 clinical study related to belrestotug, (iii) transfer of “Know How” under the belrestotug intellectual property, and (iv) manufacturing until the “Know How” transfer was complete. The Company evaluated the above material promises under ASC 606 and determined that it had one combined performance obligation. These promises were considered to be outputs of the Company's ordinary activities and ongoing major operations. As GSK provided the Company consideration in exchange for these promises, GSK met the definition of a customer under ASC 606-10-20 in the context of the combined performance obligation. These promises were distinct from the co-development and co-commercialization activities in which the Company and GSK jointly participate. Accordingly, the context in which GSK is a customer is limited to the material promises described above.

The transaction price totaling $625.0 million was comprised of the upfront license payment. As of June 30, 2025, no development or regulatory milestones had been assessed as probable of being reached and thus had been fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of the milestones was outside the control of the Company and contingent upon success in future clinical trials and the licensee’s efforts. Any consideration related to sales-based milestones would have been recognized when the related sales occurred as they were determined to relate predominantly to the license granted to GSK and therefore had also been excluded from the transaction price. The Company was applying the royalty exception for sales-based royalties and did not recognize any revenue related to sales.

The transaction price had been recognized as revenue over time as the costs to complete the Phase 1 study, perform interim clinical supply manufacturing, and perform the know-how transfer were incurred. The performance obligation was fully completed in the three months ended March 31, 2023. Revenue was recognized using a percent complete method based on costs incurred compared with the total expected costs to be incurred (cost to cost measure of progress). There were no outputs from the performance obligation. As a result, an input method was appropriate. A cost-to-cost measure of progress provides a faithful depiction of the transfer of services to the customer since the predominant inputs to the performance obligation were labor costs, research and development supplies and manufacturing supplies related to the Phase 1 Study, clinical manufacturing and know-how transfer.

The Company did not recognize any revenue during the three or six months ended June 30, 2025 with respect to the GSK Collaboration Agreement, and does not expect to recognize any additional revenue relating to the Agreement in the future. The Company recognized $35.0 million in the three and six months ended June 30, 2024 in connection with the dosing of a first patient in the GAL-301 clinical study. Revenue recognized under this agreement is classified as license and collaboration revenue in the accompanying condensed consolidated statements of operations. There was no deferred revenue remaining as of June 30, 2025 or December 31, 2024.

Contract Assets and Liabilities

There were no remaining contract assets or liabilities as of the period ended June 30, 2025.

Note 6. Government grant funding and potential repayment commitments under recoverable cash advance grants (RCAs)

The Company has been awarded grants from the Walloon Region, a federal region of Belgium (the "Walloon Region") and the European Union (the "Granting Agencies") to fund research and development activities. The grants reimburse a percentage (55-100%) of actual qualifying expenditures. The Company periodically submits proof of qualifying expenditures to the Granting Agencies for approval and reimbursement. To date, the Company has received funding under several grants which included no obligation to repay and two grants that include potential obligations to repay.

As the Granting Agencies do not meet the definition of a customer under Topic 606, qualifying grants receipts are recognized as grant income within other income in the condensed consolidated statement of operations and comprehensive loss.

Grants which do not include an obligation to repay

The total amount that the Granting Agencies have agreed to fund for qualifying research and development expenses is $11.5 million under these grants.

Grants which include an obligation to repay

On July 20, 2017, the Company entered into a recoverable cash advance arrangement whereby the Walloon Region will provide the Company with up to $20.5 million for a research and development program to perform clinical validation of an A2A receptor antagonist drug candidate for immune-oncology ("RCA-1").

On December 3, 2019, the Company entered into another recoverable cash advance arrangement with the Walloon Region ("RCA-2") for up to $4.7 million to be received to fund a research and development program conducted to develop a TIGIT blocking antibody with anti-tumor properties.

Under the terms of both agreements, the Company had to decide within six months after the end of the research period whether it would further pursue commercial development or out licensing of the drug candidate. The research period for RCA-1 ended in December 2021. The Company decided it would pursue commercialization or out licensing of RCA-1. The Company negotiated an extension on the research period for RCA-2 with the Walloon Region. The original research period for RCA-2 ended February 2021 and was extended to March 2022, after which the Company decided it would pursue commercialization or out licensing. The Company must repay 30% of the amount received under both grants by annual installments from 2023 to 2042 (the fixed annual repayments), unless the Company had decided not to pursue commercial development or out licensing of the drug candidate, applied for a waiver from the Walloon Region justifying its decision based upon the failure of the program, or returned the intellectual property to the Walloon Region. Because of the requirement to repay 30% of the amounts received under both grants, the Company records the present value of the fixed payments as grants repayable on the condensed consolidated balance sheets. The Company did not make any payments for these grants in the three and six months ended June 30, 2025.

In addition, in the event that the Company receives revenue from products or services related to the results of the research, it has to pay to the Walloon Region a 0.33% royalty on revenue resulting from RCA-1 and a 0.15% royalty on revenue resulting from RCA-2 (increased from 0.12% effective December 2021). The maximum amount payable to the Walloon Region under each grant, including the fixed annual repayments, the royalty on revenue, and the interest thereon, is twice the amount of funding received.

The Company assessed whether there is an obligation to make a royalty payment based on the probability of successful completion of the research and development and future sales and commercial success of the drug candidate. For the RCA-1 and RCA-2, there was no grant repayable related to royalties recorded as of June 30, 2025, or December 31, 2024.

The Company recorded grant income in the condensed consolidated statement of operations and comprehensive loss for the three and six months ended June 30, 2025 and 2024 for amounts of grants received from the Walloon Region in the period during which the related qualifying expenses were incurred, net of any grants repayable recorded in the condensed consolidated balance sheets.

The Company recorded receivables on the condensed consolidated balance sheets related to amounts the Walloon Region owes the Company based on qualifying expenses incurred by the Company. The Company recorded deferred income in the condensed consolidated balance sheets for amounts received from the Walloon Region in advance of incurring qualifying expenses.

The following table reflects activity for grant programs for the six months ended June 30, 2025 and 2024, and end of period balances as of June 30, 2025, and December 31, 2024:


	RCA -1				RCA-2				Other Grants				Total
(In thousands)	2025		2024		2025		2024		2025		2024		2025		2024
Cash received	$	—	$	—	$	—	$	—	$	900	$	777	$	900	$	777
Grant income	$	—	$	—	$	—	$	—	$	591	$	1,472	$	591	$	1,472
Grants receivable at the end of the period	$	—	$	—	$	—	$	—	$	475	$	805	$	475	$	805
Grants repayable at the end of the period	$	5,673	$	5,028	$	1,360	$	1,210	$	—	$	—	$	7,033	$	6,238

$0.4 million of the grants repayable was included in accrued expenses and other current liabilities as of June 30, 2025 and December 31, 2024, and the remaining balance was included in grants repayable, net of current portion in the condensed consolidated balance sheet.

In July 2025, the Company, after notice received from the Walloon Region regarding the cancellation of the RCA arrangements, became absolved from repaying the grant repayable balance except for a reimbursement of $0.2 million relating to the current liability portion.

Note 7. Stockholders’ equity

The Company's restated Certificate of Incorporation authorizes the Company to issue up to 160,000,000 shares, of which (i) 150,000,000 shares are designated as common stock, par value $0.001 per share, and (ii) 10,000,000 shares are designated as undesignated preferred stock, par value $0.001 per share. Each share of common stock entitles the holders to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are not entitled to receive dividends, unless declared by the Board of Directors.

On May 10, 2024, the Company entered into a Securities Purchase Agreement ("SPA") with RA Capital Healthcare Fund, L.P. ("RA Capital"), and Boxer Capital, LLC ("Boxer Capital"), pursuant to which the Company agreed to sell to RA Capital a pre-funded warrant to purchase up to an aggregate of 5,714,285 shares of the Company's common stock and to Boxer Capital 1,142,857 shares of common stock (together, the "Securities"). The aggregate consideration for the pre-funded warrant sold to RA Capital was $100.0 million, or $17.499 per share of common stock underlying the pre-funded warrant, which, together with the exercise price per share of underlying common stock, was equal to $17.50 per share of common stock, and the aggregate consideration for the shares of common stock sold to Boxer Capital was $20.0 million, or $17.50 per share. In aggregate, the total proceeds to the Company from the sale of the Securities to RA Capital and Boxer Capital was $120.0 million, partially offset by $0.4 million of costs incurred in connection with the offering. The Securities were issued in a registered direct offering pursuant to the Company's Registration Statement on Form S-3 (File No. 333-271793) (the "RDO").

The pre-funded warrant grants to RA Capital the right to purchase shares of common stock at any time. Such right does not expire. The pre-funded warrant is subject to adjustment upon certain corporate events, including certain stock dividends and splits, combinations, reclassifications, and certain other events.

The Company determined that the pre-funded warrant did not meet the classification of a liability under ASC 480, Distinguishing Liabilities from Equity. The Company concluded that the pre-funded warrant should be classified as equity based on an analysis performed under ASC 815-40, Contracts in an Entity's Own Equity. The issuance of the warrant was therefore reflected as an increase to Additional Paid-in Capital in the amount of $100.0 million. The amount of the $20.0 million in excess of the par value of the shares of common stock sold to Boxer Capital was also reflected as an increase to Additional Paid-in Capital.

On May 12, 2024, the Company entered into an Exchange Agreement (the "Exchange Agreement") with RA Capital, pursuant to which RA Capital agreed to exchange 900,000 shares of the Company’s common stock for a pre-funded warrant (the “Exchange Warrant”) to purchase up to 900,000 shares of common stock. The terms of the Exchange Warrant are substantially similar to the pre-funded warrant described above. The Exchange Agreement did not have any cash impact, and therefore did not impact the statement of cash flows.

In the six months ended June 30, 2025, RA Capital exercised its pre-funded warrants in full with respect to 6,613,442 shares in cashless exercises.

Note 8. Stock-based compensation

General

Stock options expire seven to 10 years from the date of grant. Generally, the exercise price of all stock options will be equal to the closing market price on The Nasdaq Global Market of one share of the Company’s common stock on the date of grant, or if no closing price is reported for such date, the closing price on the next immediately preceding date for which a closing price is reported. The stock options generally vest 25% upon the one-year anniversary of the service inception date and then ratably each month over the remaining 36 months. Upon termination of service, any unvested stock options are automatically returned to Company. Vested stock options that are not exercised within the specified period, according to the terms and conditions of the option plan, following the termination as an employee, consultant, or service provider to the Company are surrendered back to the Company. Those stock options are added back to the pool and made available for future grants.

2019 Stock Option and Grant Plan

The Company’s 2019 Stock Option and Grant Plan (the "2019 Plan") provided for the Company to grant stock options and other stock-based awards to employees and non-employees to purchase the Company’s common stock. Total authorized options under the 2019 Stock Option and Grant Plan is 3,464,316. The 2020 Plan (as defined below) replaced the 2019 Plan and no further issuances will be made under the 2019 Plan. However, the 2019 Plan continues to govern outstanding equity awards granted thereunder.

On July 15, 2020, the Company’s Board of Directors approved an amendment to stock options outstanding under the 2019 Stock Option and Grant Plan to provide for immediate 100% vesting for all outstanding options under the plan upon the consummation of a Sale Event, as defined by the amendment.

2020 Stock Option and Incentive Plan

The 2020 Stock Option and Incentive Plan (the "2020 Plan") was approved by the Company's Board of Directors on July 15, 2020, and the Company’s stockholders on July 20, 2020 and became effective on July 22, 2020. On April 21, 2022, the Board of Directors adopted an amendment to the 2020 Plan, the amended and restated 2020 Stock Option and Incentive Plan (the "Amended 2020 Plan") to increase the limit on total annual compensation (equity and cash) to non-employee directors. The Amended 2020 Plan was approved by the Company's stockholders and became effective on June 9, 2022. The Amended 2020 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards, cash-based awards and dividend equivalent rights to the Company’s officers, employees, directors and consultants. The number of shares of common stock reserved for issuance as of December 31, 2024 under the Amended 2020 Plan was 10,824,342 and will be increased each January 1 by 5% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or such lesser number of shares as determined by the compensation committee of the Board of Directors. Accordingly, on January 1, 2025, the number of shares of common stock reserved and available for issuance under the Amended 2020 Plan increased by 1,828,402. The number of shares of common stock reserved for issuance as of June 30, 2025 under the Amended 2020 Plan was 12,368,683, which includes the impact of exercises of stock options to purchase shares of common stock and releases of restricted stock awards into shares of common stock reducing this reserve to date.

Both the 2019 Plan and the 2020 Plan will terminate upon the consummation of the Merger.

Employee Stock Purchase Plan

The 2020 Employee Stock Purchase Plan (the "2020 ESPP") was approved by the Board of Directors on July 15, 2020, and the Company’s stockholders on July 20, 2020, and became effective on July 22, 2020. The number of shares of common stock reserved for issuance as of June 30, 2025 under the 2020 ESPP was 506,565. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1 thereafter by the lesser of 634,969 shares of common stock, 1% of the outstanding number of shares of common stock on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s compensation committee. There was no increase to the number of shares of common stock reserved and available for issuance under the 2020 ESPP on January 1, 2024. There were 40,378 issued under the 2020 ESPP during the three and six months ended June 30, 2025. The purchase price of the stock is equal to 85% of the lesser of the market value of such shares at either first date of the offering period or the last date of the offering period. The estimated fair value of the purchase options for the offering period that was open as of the end of the three and six months ended June 30, 2025 was $3.37 per share. The assumptions utilized to estimate the fair value are included in the assumption table included later in this footnote.

On July 18, 2025, in connection with the execution of the Merger Agreement (as defined below), the Company terminated the 2020 ESPP, and as a result, the Company will refund all amounts in the accounts of 2020 ESPP participants in accordance with the terms of the 2020 ESPP.

Stock-Based Compensation Expense

Stock-based compensation expense is classified in the condensed consolidated statements of operations and comprehensive loss as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2025		2024		2025		2024
Research and development	$	2,316	$	2,478	$	4,837	$	4,280
General and administrative		3,564		5,584		7,679		11,045
Total stock-based compensation expense	$	5,880	$	8,062	$	12,516	$	15,325

Of the $5.8 million and $12.5 million of stock-based compensation expense recognized during the three and six months ended June 30, 2025, respectively, $4.9 million and $10.5 million related to stock options, respectively, $0.9 million and $1.9 million related to restricted stock units, respectively, and $0.1 million related to ESPP awards in both periods. Of the $8.1 million and $15.3 million of stock-based compensation expense recognized during the three and six months ended June 30, 2024, respectively, $7.2 million and $13.6 million related to stock options, $0.8 million and $1.6 million related to restricted stock units, and $0.1 million related to ESPP awards in both periods.

Stock Options

The following table summarizes stock option activity for the six months ended June 30, 2025:


	Stock Options
	Shares			Weighted average exercise price		Weighted average remaining contractual life (in years)		Aggregate intrinsic value (in thousands)
Outstanding as of December 31, 2024		9,784,580		$	16.39		7.0
Granted		1,658,550			7.05
Forfeited		(276,390	)		15.23
Exercised		(805,542	)		5.25
Outstanding as of June 30, 2025		10,361,198		$	15.79		6.6	$	12,267
Exercisable at June 30, 2025		5,993,090		$	18.40		5.6	$	7,564

The weighted-average grant-date fair value of options awarded during the six months ended June 30, 2025 and 2024 was $5.16 per share and $8.70 per share, respectively. As of June 30, 2025, there was a total of $34.7 million of unrecognized employee compensation costs related to non-vested stock option awards expected to be recognized over a weighted average period of 2.4 years. Refer to Footnote 14 - Subsequent events, for a detailed description of conditions which would change the expected vesting for certain stock options outstanding under the terms of the Merger Agreement. The vesting of options for a certain level of employees will accelerate immediately prior to the closing of the Merger Agreement.

The Company estimates the fair value of stock-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables, such as expected term, volatility, risk-free interest rate, and expected dividends. Each of these inputs is subjective and generally requires significant judgment to determine.

The following table summarizes the range of key assumptions used to determine the fair value of stock options granted during:


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Stock Options:
Risk-free interest rate	3.92%			4.34% - 4.64%			3.92% - 4.40%			3.82% - 4.64%
Expected term (in years)		6		5.5-6				6		5.5 - 6
Expected volatility	76.0%			82%-84%			76% - 76.6%			82%-84%
Expected dividend yield		0	%	0%				0	%	0%
Estimated fair value of common stock	$7.50			$11.78 - $16.32			$6.99 - $7.50			$10.21 - $16.32
ESPP Awards:
Risk-free interest rate		4.31	%		5.39	%		4.31	%		5.39	%
Expected term (in years)		0.5			0.5			0.5			0.5
Expected volatility		64	%		80	%		64	%		80	%
Expected dividend yield		0	%		0	%		0	%		0	%
Estimated fair value of common stock	$10.01			$16.98			$10.01			$16.98

Restricted Stock Units

The Company issued restricted stock units during the six months ended June 30, 2025, which vest over a four-year period. The following table summarizes the Company’s restricted stock unit activity:


	Shares			Weighted average grant date fair value
Unvested as of December 31, 2024		862,305		$	11.19
Issued		585,884			7.05
Vested		(140,061	)		15.97
Cancelled		(62,598	)		9.09
Unvested as of June 30, 2025		1,245,530		$	8.81

As of June 30, 2025, there was $7.1 million of unrecognized stock-based compensation expense related to restricted stock units that are expected to vest. These costs are expected to be recognized over a weighted-average period of 2.8 years. Refer to Footnote 14 - Subsequent events, for a detailed description of conditions which would change the expected vesting for certain restricted stock units outstanding under the terms of the Merger Agreement.The vesting of restricted stock units for a certain level of employees will accelerate immediately prior to the closing of the Merger Agreement.

Note 9. Income taxes

The following table presents the loss before income taxes, income tax expense and effective income tax rates for all periods presented:


(Loss) income before income tax expense	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2025			2024			2025			2024
Domestic		(38,476	)		(22,729	)		(53,638	)		(42,808	)
Foreign		(38,583	)		17,862			(56,931	)		1,939
Loss before income tax expense		(77,059	)		(4,867	)		(110,569	)		(40,869	)
Income tax expense		(1,670	)		(2,261	)		(2,772	)		(4,475	)
Effective tax rate	(2.2)%			(46.4%)			(2.5)%			(10.9%)

Our effective tax rates were -(2.2)% and -(46.4)% for the three months ended June 30, 2025 and 2024, respectively, which differed from the federal and foreign statutory rates of 21% and 25%, respectively. The income tax expense for the three months ended June 30, 2025 resulted primarily from additional interest accrued on the unrecognized tax benefits liability. For the three months ended June 30, 2024, income tax expense resulted primarily from investment income generated by marketable investments held by iTeos LLC, which was not consolidated for U.S. income tax purposes during that period. The Company incurred income tax expense, despite a loss before income taxes, due to taxable interest income generated by a subsidiary of iTeos Belgium which could not be offset by the net operating losses of iTeos Inc. or iTeos Belgium. In addition, for the three months ended June 30, 2024, additional interest was recorded on the unrecognized tax benefits liability.

Our effective tax rates were -(2.5)% and -(10.9)% for the six months ended June 30, 2025 and 2024, respectively, which differed from the federal and foreign statutory rates of 21% and 25%, respectively. The income tax expense for the six months ended June 30, 2025 resulted primarily from additional interest accrued on the unrecognized tax benefits liability. For the six months ended June 30, 2024, income tax expense resulted primarily from investment income generated by marketable investments held by iTeos LLC, which was not consolidated for U.S. income tax purposes during that period. The Company incurred income tax expense, despite a loss before income taxes, due to taxable interest income generated by a subsidiary of iTeos Belgium which could not be offset by the net operating losses of iTeos Inc. or iTeos Belgium. In addition, for the six months ended June 30, 2024, additional interest was recorded on the unrecognized tax benefits liability.

The Company's uncertain tax position relates to the Company’s allocation of revenue between the U.S. and Belgium under the GSK Agreement. As the uncertain tax position relates to the Company’s allocation of that revenue

between the U.S. and Belgium under the GSK Agreement, the additional recognition of revenue under that agreement may increase the liability for the uncertain tax position. The unrecognized tax benefits liability increased by $1.1 million and $2.1 million during the three months ended June 30, 2025 and 2024, respectively, related to the accrual of interest expense on the liability. The unrecognized tax benefits liability increased by $2.1 million during the six months ended June 30, 2025 and 2024, related to the accrual of interest expense on the liability. As of June 30, 2025, the Company had accrued interest and penalties relating to uncertain tax positions of $10.3 million, all of which was included in unrecognized tax benefits liability in the condensed consolidated balance sheet as of June 30, 2025.

Note 10. Commitments and contingencies

Purchase commitments

The Company has contractual arrangements with research and development organizations and suppliers; however, these contracts are generally cancelable on 30

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

iTeos Therapeutics, Inc. 10-Q