We and HCR have an agreement in which HCR paid $15.0 million in exchange for royalty and commercialization milestone payments that we may receive under our Kyowa Kirin Agreement. See Note 8. Deferred Royalty Obligation Related to the Sale of Future Royalties of our 2025 Form 10-K for further discussion on the nature, purpose, significant rights and obligations of the parties, as well as our accounting policies regarding the HCR Agreement.

Payments received from HCR are recorded as a deferred royalty obligation on our condensed balance sheets, which is being amortized as non-cash interest expense over the life of the HCR Agreement using the effective interest method. The deferred royalty obligation will be effectively repaid over the life of the HCR Agreement as we remit to HCR royalties and commercialization milestones paid to us by Kyowa Kirin. We periodically assess the estimated amounts and timing of future royalties and commercialization milestone payments from Kyowa Kirin and, to the extent that the amount or timing of such payments is materially different than our original estimates, we prospectively adjust the imputed interest rate and the related amortization of the deferred royalty obligation.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2026		2025		2026		2025
Non-cash interest expense related to the sale of future royalties	$	(1,267)	$	(2,219)	$	(2,584)	$	(4,290)


($ in thousands)	2026			2025
Deferred royalty obligation balance as of January 1,	$	25,876		$	25,527

Non-cash interest expense related to the sale of future royalties	2,584			4,290
Royalty and commercialization milestone payments remitted to HCR	(2,143)			(2,056)
Deferred royalty obligation balance as of June 30,	$	26,317		$	27,761
Effective interest rate as of June 30,	19.6		%	33.5		%