4.       Inventory and Prepaid Manufacturing

Inventory of $14.5 million as of March 31, 2026 consisted of $7.9 million in finished goods and $6.6 million in work in process inventory, and inventory of $3.2 million as of December 31, 2025 consisted entirely of finished goods. Inventory expected to be sold more than twelve months from the balance sheet date is classified as inventory, non-current on the condensed consolidated balance sheets. As of March 31, 2026, the Company had $9.7 million of non-current inventory, compared to none as of December 31, 2025.

Prior to the regulatory approval of product candidates, the Company incurred expenses for the manufacture of drug product that could potentially be available to support the commercial launch of the products. Inventory costs are capitalized when future commercialization is considered probable and the future economic benefit is expected to be realized, based on management’s judgment.  A number of factors are considered, including the current status in the regulatory approval process, potential impediments to the approval process such as safety or efficacy, viability of commercialization and marketplace trends. During the three months ended March 31, 2026, the Company commenced the capitalization of inventory costs associated with LOQTORZI produced in the United States, as the manufacturing of the drug substance received regulatory approval and the attainment of remaining approvals is considered probable.

Prepaid manufacturing of $2.3 million as of March 31, 2026 included prepayments to contract manufacturing organizations (“CMOs”) for research and development. Prepaid manufacturing of $6.8 million as of December 31, 2025 included $4.3 million for manufacturing services of the Company’s product and $2.4 million for research and development.