Note 6—Debt

Convertible senior notes, net, balances are comprised of the following:

2029 Notes

Exchange of 2026 Notes for 2029 Notes

On May 14, 2025, we completed the exchange (the “Convertible Note Exchange”) of $70.8 million in aggregate principal amount of our 2026 Notes on a one-for-one basis for newly-issued 2029 Notes. The Convertible Note Exchange was conducted with a limited number of holders of the 2026 Notes pursuant to exchange agreements dated as of May 12, 2025. The 2029 Notes are convertible at the option of the holders into shares of common stock, cash or a combination thereof, as elected by the Company, at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.

The 2029 Notes were issued pursuant to an Indenture, dated as of August 14, 2020 (the “Base Indenture”), between the Company and Computershare Trust Company, National Association, as successor to Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented by a Second Supplemental Indenture, dated as of May 14, 2025 (the “Second Supplemental Indenture”), between the Company and the Trustee (the Base Indenture, as amended and supplemented by the Second Supplemental Indenture, the “Indenture”). The 2029 Notes will mature on June 15, 2029 unless earlier converted, redeemed or repurchased in accordance with their terms prior to such date.

Repurchase of 2029 Notes

On June 17, 2026, the Company entered into privately negotiated agreements with certain holders of the 2029 Notes under which the Company agreed to repurchase $16.0 million aggregate principal amount of 2029 Notes for a total purchase price of $31.3 million, plus accrued and unpaid interest of $0.1 million. Upon execution of the agreements, the conversion feature associated with the repurchased notes was eliminated, resulting in the accounting extinguishment of that portion of the debt. This repurchase was completed on July 6, 2026.

For the three months ended June 30, 2026, the Company recognized a loss on extinguishment of debt of approximately $1.9 million, reflecting the difference between the fair value of the payment obligation of $30.6 million established on June 17, 2026, the carrying amount of the repurchased notes (the $16.0 million aggregate principal amount net of any unamortized discount and issuance costs), and the de-recognition of the associated embedded derivative liability of $16.7 million. In addition, the Company elected the fair value option and recognized a $0.7 million increase in the fair value of the 2029 Notes repurchase obligation from June 17, 2026 through June 30, 2026 to more properly reflect the contractual settlement amount. For the three months ended June 30, 2026, the Company determined that none of the recognized change in the fair value related to the repurchase of the 2029 Notes was attributable to changes in instrument-specific credit risk. The repurchase was completed on July 6, 2026 for cash consideration of $31.3 million, plus accrued and unpaid interest of $0.1 million. As of June 30, 2026, the initial repurchase was classified as a $31.3 million current 2029 Notes repurchase obligation in the Company’s condensed consolidated balance sheet. 

On July 2, 2026, the Company entered into additional privately negotiated agreements with the same holders under which the Company agreed to repurchase $14.5 million aggregate principal amount of 2029 Notes for a total purchase price of $28.9 million, plus accrued and unpaid interest of $0.1 million. This repurchase was completed on July 20, 2026. Following these transactions, approximately $40.3 million aggregate principal amount of the 2029 Notes remains outstanding. Because the repurchase agreements for the second tranche, comprising $14.5 million aggregate principal amount, were entered into in July 2026, the related accounting will be reflected in our third quarter filing.

From time to time, we may seek to repurchase, redeem, retire, refinance, exchange or otherwise restructure portions of our outstanding indebtedness through open-market purchases, privately negotiated transactions, tender offers or other means. Any such transactions will depend on prevailing market conditions, our liquidity and capital requirements, contractual restrictions and other factors. 

Embedded Derivative

The embedded derivative on the 2029 Notes includes both a derivative for the interest make-whole feature and a derivative for the conversion feature available to holders allowing them to convert their notes to common stock, cash or a combination thereof. At each reporting date, we remeasure the embedded derivative instruments to fair market value. At June 30, 2026 and December 31, 2025, the fair market value of our embedded derivative was $55.2 million and $157.2 million, respectively. We recorded $11.4 million and $84.6 million, respectively, of non-cash gain on the remeasurement of the embedded derivative in our condensed consolidated statement of operations and comprehensive income for the three and six months ended June 30, 2026. Increases or decreases in our stock price may materially affect the value of the derivative, and are shown as gains or losses in our condensed consolidated statement of operations and comprehensive income (loss). The embedded derivative liability associated with the repurchased portion of the 2029 Notes was remeasured to fair value immediately before debt extinguishment and derecognized as part of the partial extinguishment accounting. Accordingly, as of June 30, 2026, the embedded derivative liability reflected only the conversion feature associated with the 2029 Notes that remained outstanding.

Interest Make Whole Feature

Holders who convert their 2029 Notes prior to June 1, 2029 (except for any conversion in connection with a make-whole fundamental change) are entitled to an interest make-whole payment equal to the sum of the remaining scheduled payments of interest that would have been made had the 2029 Notes remained outstanding from their conversion date through the earlier of (i) the date that is 18 months following their conversion date, and (ii) the June 15, 2029maturity date.

Conversion Feature

The 2029 Notes are convertible at the option of the holder into shares of common stock, cash or a combination thereof at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. The Company elects whether the conversion occurs in common stock, cash or a combination thereof. The conversion rate is 161.81 shares of our common stock per $1,000 of note principal (equivalent to an initial conversion price of approximately $6.18 per share of common stock), which originally equaled approximately 11.5 million shares issuable upon conversion. Following the completion of the two repurchase transactions described above, approximately 6.5 million shares remain issuable upon conversion of outstanding 2029 Notes. The conversion rate is subject to adjustment in certain circumstances as described in the Indenture.

The amount outstanding on the 2029 Notes is as follows:

As of June 30, 2026, our only debt commitment relates to the 2029 Notes, which mature on June 15, 2029.

Interest on the 2029 Notes is payable semi-annually in arrears at a rate of 9.50% per annum on each June 15 and December 15. The carrying value of the 2029 Notes includes a discount and issuance costs which we amortize over the duration of the term as non-cash interest expense in the consolidated statement of operations and comprehensive loss. Due to the discount amortization on the 2029 Notes, interest expense is currently being recognized at an implied effective interest rate of 1.86%. 

The following table sets forth interest expense recognized related to the 2029 Notes:

The 2029 Notes are redeemable, in whole or in part, at our option at any time, and from time to time, on or after June 20, 2027 and on or before the 50th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, but only if the last reported sale price per share of our common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice and (ii) the trading day immediately before the date we send such notice. In addition, calling any 2029 Note for redemption would constitute a “make-whole fundamental change” (as defined in the Indenture) with respect to that 2029 Note, in which case the conversion rate applicable to the conversion of that 2029 Note would be increased in certain circumstances if it is converted after it is called for redemption.

The 2029 Notes are structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries. 

Term Loan 

On June 3, 2024, we entered into a Credit and Guarantee Agreement with funds managed by Athyrium Capital Management LP and funds managed by Highbridge Capital Management, LLC, as lenders (the “Term Loan”), pursuant to which we had an outstanding balance of $67.1 million.

The Transaction with Novo Nordisk, which closed on November 25, 2025, provided us with $240.0 million in upfront cash of which we used a portion at the time of closing to repay the entire $67.1 million outstanding principal amount of the Term Loan, along with a related prepayment premium, certain expenses and accrued and unpaid interest.

The following table sets forth interest expense recognized related to the Term Loan:

2026 Notes 

We had outstanding convertible senior notes that accrued interest at an annual rate of 5.25% per annum, payable semi-annually in arrears on February 15 and August 15 of each year. The 2026 Notes matured on February 15, 2026 and were paid in full at that time. 

Amounts outstanding on our 2026 Notes as of June 30, 2026 and December 31, 2025 are as follows:

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The following table sets forth interest expense recognized related to the 2026 Notes: