LYCA Lycia Therapeutics, Inc. 424B4 final IPO prospectus section summaries

Lycia Therapeutics, Inc. — Cover

Lycia is conducting an initial public offering of 17.64 million common shares at $18.00 per share, representing $317.52 million in gross proceeds. Underwriting discounts and commissions are $22.2264 million ($1.26 per share), leaving $295.2936 million in proceeds before expenses.

The underwriters have a 30-day option to purchase up to an additional 2.646 million shares. If exercised in full, total gross proceeds would be $339.6 million, underwriting discounts and commissions would be $25.6 million, and proceeds before expenses would be $314.0 million.

No public market existed for Lycia’s shares before the offering. The shares have been approved for listing on the Nasdaq Global Select Market under the ticker LYCA. Lycia qualifies as both an emerging growth company and a smaller reporting company and has elected reduced disclosure requirements, which it may continue to use in future reports. The prospectus describes investment in the shares as high risk and directs investors to its Risk Factors section.

Lycia Therapeutics — Prospectus Summary

Business and clinical programs

Lycia Therapeutics is a clinical-stage biotechnology company developing LYTAC therapeutics to direct disease-causing extracellular proteins to lysosomes for degradation. Its approach is intended to address targets that conventional inhibitors may not suppress effectively or durably, and that intracellular protein-degradation approaches generally cannot reach. Its cataLYTAC format can cycle to degrade multiple target molecules per degrader; classic LYTACs are degraded along with their targets.

Lycia’s three lead programs are:

• LCA-0061 (IgE): In a Phase 1 trial, one cohort of healthy atopic participants receiving a single 70 mg subcutaneous dose had a mean maximum 96% reduction in IgE from baseline. Most remained more than 95% below baseline 28 days after dosing; no safety signals or dose-limiting toxicities were reported in that cohort. Further data in healthy participants with elevated IgE and food-allergy patients are expected in 2027.
• LCA-0062 (IgE): In IND-enabling studies; subject to regulatory clearance, Lycia plans to begin Phase 1 and expects initial data in the second half of 2027.
• LCA-0321 (Graves’ disease): A Phase 1 trial is underway in patients with Graves’ disease, with initial data expected in 2027. It is designed to selectively degrade pathogenic thyroid-stimulating hormone receptor autoantibodies (TRAbs).

Lycia also has preclinical programs. Its strategy is to use early pharmacodynamic and biomarker evidence for proof of concept, advance the lead candidates, expand IgE applications to other allergic diseases, apply the platform to additional targets, and selectively pursue collaborations. The proposed clinical advantages remain hypotheses: preliminary results from one LCA-0061 cohort do not establish efficacy or approval prospects.

Market opportunity

The prospectus estimates more than 33 million people in the United States have food allergies. It describes omalizumab (Xolair) as beneficial for some patients, but notes weight-based, often cumbersome dosing and potential limitations for patients with high IgE. More than 100,000 U.S. food-allergy patients had been prescribed Xolair by 2025, and its U.S. annual sales exceeded $4 billion. Worldwide food-allergy treatment sales are projected to exceed $15 billion in the coming decade. Lycia’s proposed differentiation is deeper, more durable IgE depletion, potentially including in patients with high baseline IgE.

The prospectus estimates approximately 3 million U.S. adults have Graves’ disease. Antithyroid drugs achieve remission in approximately 45% of patients, with relapse rates up to 52% in one meta-analysis. Worldwide sales for treatments of Graves’ disease and its extrathyroidal manifestations are projected to reach approximately $7 billion by 2032. Lycia aims to selectively degrade TRAbs rather than reduce IgG broadly; clinical benefit has not yet been demonstrated.

Financial performance and funding

Lycia has no product-sales revenue and reported no collaboration revenue in H1 2026. Collaboration revenue was $6.741 million in FY2025, from $14.936 million in FY2024; H1 2026 revenue was $0, from $2.306 million in H1 2025.

H1 2026 net loss narrowed 25.1% year over year, alongside lower R&D expense and no restructuring charge, but the company continues to incur substantial losses and expects them to continue. Weighted-average shares were 3,213,514 in H1 2026 versus 3,096,317 in H1 2025, and 3,126,360 in FY2025 versus 2,971,216 in FY2024. Pro forma net loss per share after preferred-stock conversion was $0.64 for H1 2026 and $1.25 for FY2025.

Since inception through June 30, 2026, Lycia had raised approximately $266.6 million from investors. At June 30, 2026, cash, cash equivalents and marketable securities were $148.091 million, working capital $117.581 million, total assets $156.760 million, total liabilities $11.845 million, and stockholders’ deficit $132.141 million. Preferred-stock conversion produces pro forma equity of $144.915 million. Pro forma as adjusted for the offering, cash, cash equivalents and marketable securities are $439.359 million, working capital $408.275 million, total assets $446.172 million, liabilities $10.563 million, and equity $435.609 million. Goodwill and other intangible assets are not separately presented in the summary data. Preliminary, unaudited cash, cash equivalents and marketable securities were approximately $138.2 million at September 30, 2026, subject to quarter-end close and not reviewed or audited by KPMG.

The IPO comprises 17.640 million new shares at $18.00 per share, with estimated net proceeds of $290.7 million, or $335.0 million if the underwriters exercise their full 2.646 million-share option. Post-offering shares outstanding are 55,034,559, or 57,680,559 with full option exercise. Preferred shares convert into 34,141,408 common shares. These counts exclude substantial equity-plan awards and reserves, including 6,024,792 shares reserved under the 2026 Plan and 550,000 under the ESPP; both plans provide for automatic annual increases. A 1-for-4.5087 reverse split was effected October 19, 2026.

Outlook and risks

Lycia expects to use IPO proceeds and existing funds to advance its three lead programs, conduct other R&D, and fund working capital and general corporate purposes. It will require substantial additional capital, including after the offering; insufficient funding could force it to delay, reduce, or discontinue programs. Its prospects depend heavily on the LYTAC platform and lead candidates, while clinical development is costly and uncertain and early findings may not predict later results. Other risks include competition, regulatory uncertainty, reliance on third parties for research, trials and manufacturing, supply availability and cost, intellectual-property protection, and retaining qualified personnel. The summary risk factors state that Lycia has not completed clinical trials, despite descriptions of ongoing Phase 1 studies; reported clinical findings are preliminary.

Lycia qualifies as both an emerging growth company and a smaller reporting company. It has elected reduced disclosure and the extended transition period for new accounting standards, which may limit comparability with companies adopting standards on public-company timelines. While eligible, it is exempt from auditor attestation of internal controls under Section 404(b).

Business, development and financing risks

Lycia is an early-stage biotechnology company founded in 2019. It has never generated revenue from therapeutic-product sales, has no approved products, and has not demonstrated successful completion of clinical trials, regulatory approval, commercial-scale manufacturing or commercialization. LCA-0061 and LCA-0321 are in Phase 1; LCA-0062 and other candidates remain earlier-stage. No LYTAC-based therapy has been approved, and the company’s approach—degrading extracellular proteins—has not yet produced an approved therapy.

Lycia reported net losses of $36.5 million for FY 2025 and $19.2 million for H1 2026, with an accumulated deficit of $136.8 million as of June 30, 2026. It expects losses and R&D spending to rise as it advances its clinical programs and prepares earlier candidates for trials; profitability may be many years away or may never be achieved. From inception through June 30, 2026, it received $266.6 million in gross proceeds from preferred-stock sales and $1.2 million in net proceeds from common-stock sales and option exercises. It held $148.1 million in cash, cash equivalents and marketable securities at that date. Lycia believes existing resources together with net offering proceeds will fund operations into the second half of 2029, but that estimate depends on assumptions, and it has no committed external funding source. Further capital may be needed; unavailable or unfavorable financing could force delays, reductions or termination of programs. Equity financing could dilute holders, debt could impose restrictive covenants, and collaborations could require surrendering valuable rights.

The pipeline is concentrated in the LYTAC platform, including IgE programs LCA-0061 and LCA-0062 and Graves’ disease candidate LCA-0321. A platform-wide setback could affect multiple programs. Clinical success depends on showing efficacy and acceptable safety, recruiting and retaining participants, completing trials on time, obtaining regulatory clearance, and securing funding, IP protection, manufacturing, reimbursement and market acceptance. Early, interim or open-label results may not predict later outcomes; small or short trials may miss serious or rare adverse events, and results may change as data are reviewed. Delays, inconclusive results or safety issues could prompt additional studies, restrictive labeling, trial holds, denied approvals or abandonment, while raising costs and weakening financing prospects. LCA-0061 and LCA-0062 could also compete for patients and, if both approved for the same indication, for commercial returns.

Even successful trials would not assure approval or commercial success. Regulators may disagree with trial designs, data or endpoints, require additional work, or impose post-approval studies, REMS, labeling restrictions or withdrawal. Novel LYTAC degraders may face a more complex approval path, and foreign trial data may be rejected or require further studies. Estimates of disease populations may be wrong, while adoption depends on demonstrated clinical and economic value, physician and patient acceptance, competition, pricing and adequate payer coverage. Lycia lacks sales, marketing and distribution infrastructure and would need to build it or partner, with substantial cost and execution risks.

Competition, people and operating dependencies

Competitors—including larger biopharmaceutical companies—may have greater resources, established treatments, manufacturing capacity and commercial reach, and may bring superior products to market first. Lycia must show its candidates offer meaningful advantages, such as efficacy, safety, durability, convenience or cost. It had 31 full-time employees as of June 30, 2026 and expects to expand; hiring, retention and scaling the organization could strain resources and management.

Lycia has no manufacturing facilities and relies on third parties, including WuXi AppTec, WuXi Biologics and affiliates, for preclinical work and drug substance and product supply. It has no redundant source for bulk drug substance, and existing arrangements do not cover Phase 3 or commercial supply. Replacement suppliers may be difficult to qualify, costly or slow to implement, particularly for complex biologics and proprietary processes. Quality failures or cGMP noncompliance could delay trials or prevent approval. China-related policy, trade or geopolitical changes could disrupt supply. WuXi AppTec was placed on the U.S. Defense Department’s 1260H List on June 8, 2026, under litigation; the BIOSECURE Act’s implementation and application to providers remained uncertain. Required replacement CDMOs may lack capacity or be available only on unfavorable terms.

Trials and other work also depend on CROs, investigators, CDMOs and vendors. Lycia remains responsible for regulatory compliance despite limited control over their performance. Vendor delays, inadequate data or compliance failures could require repeated studies or disrupt development. Collaborations may be difficult to secure, and partners could underfund, delay, deprioritize or terminate programs.

Intellectual property, privacy and regulatory exposure

Lycia depends on patents, trade secrets and third-party licenses to protect its platform and candidates. Applications may not issue, patents may be narrow, challenged, invalidated, designed around or expire after development consumes much of their term. Patent protection varies by jurisdiction, while enforcement can be costly and uncertain. The company also lacks full control over prosecution and maintenance of some licensed patents. License obligations, field limits, non-exclusive rights, fees and milestones can constrain development; breach or termination could eliminate rights. Infringement or trade-secret litigation could bring substantial costs, damages or injunctions that delay or block development. No employee-related IP claims were pending, but former-employer claims remain a risk.

Operations and vendors handle sensitive clinical, health and proprietary data. Cyberattacks, vendor incidents, human error or AI-related disclosure could disrupt trials, expose information or lead to investigations, litigation, fines and reputational harm. Privacy rules are changing and cross-border data transfers face legal uncertainty; GDPR penalties can reach €20 million or 4% of annual global revenue, whichever is greater. Laboratory hazardous-materials exposure and product-liability claims also could lead to costs or restrictions; Lycia has no environmental-liability or toxic-tort insurance, and product-liability coverage may prove inadequate.

Commercialization would increase exposure to healthcare fraud-and-abuse, privacy, pricing, marketing and transparency laws. Drug-pricing measures, including Medicare negotiation, inflation rebates, state restrictions and proposed or evolving Most-Favored-Nation initiatives, could constrain prices. Coverage and reimbursement are not assured and may require discounts, economic evidence or restricted formularies. International operations add anti-corruption, sanctions, export-control and local regulatory risks.

Offering, stock and public-company risks

At June 30, 2026, 37.394559 million shares were outstanding; after the offering, 55.034559 million shares were expected outstanding. The offering covers 17.640 million shares, or 20.286 million with full underwriters’ option exercise. Approximately 37.394559 million additional shares were expected to become eligible for public sale after lock-ups, and holders of 34.174677 million shares had registration rights. At the $18.00 IPO price, purchasers faced immediate dilution of $10.08 per share versus pro forma as-adjusted net tangible book value. IPO investors would contribute 53.3% of total stockholder investment since inception but own 32.1% of post-offering shares. Insiders and affiliates owned 71.7% of voting stock as of September 30, 2026, and were expected to retain approximately 50.1% after the offering, potentially limiting other holders’ influence. Share sales, future financings and clinical or regulatory developments could increase volatility; Lycia has never paid dividends and expects to retain funds for operations.

Lycia expects higher public-company compliance costs and management demands. It qualifies as an emerging growth company and smaller reporting company, with certain disclosure and auditor-attestation exemptions; its extended transition election for accounting standards may reduce comparability. Building effective internal controls and reporting processes will require resources, and deficiencies could lead to misstatements, missed filings, loss of investor confidence or Nasdaq-listing risk. Public-company status also raises exposure to securities litigation, while charter, bylaw and Delaware-law provisions may limit stockholder actions or changes in control.

LYCA’s forward-looking statements focus on clinical development of LCA-0061 and LCA-0321, IND-enabling work and a planned trial for LCA-0062, and continued advancement of other pipeline candidates. The company’s prospects depend on trial timing, outcomes and costs; regulatory approval; and its ability to fund clinical development, commercialization and earlier-stage research. If candidates are approved, commercial success will also depend on market size, demand, acceptance, competition and LYCA’s ability to commercialize them.

Other material uncertainties include protecting and enforcing intellectual property, avoiding infringement of third-party rights, navigating extensive regulation, expanding the pipeline, retaining key personnel, and meeting milestones under collaboration or licensing arrangements. LYCA also identifies financing needs, expenses, future revenue and capital requirements, and its anticipated use of offering proceeds and existing cash, cash equivalents and marketable securities; this section provides no amounts for these items.

External risks include banking-sector instability; debt-ceiling and government-shutdown uncertainty; labor shortages and supply-chain disruptions; recession, inflation and changing interest rates; pandemics; and geopolitical or military events. The company cautions that actual results may differ materially from its expectations and generally undertakes no obligation to update forward-looking statements. No financial results or quantified operating metrics are reported in this section.

The prospectus presents industry and market estimates, projections, and statistical data from independent sources and the company’s own analysis. The information addresses the company’s market position and opportunity, the incidence and prevalence of medical conditions, and other industry matters. Some sources are not expressly identified.

Company estimates draw on publicly available analyst and third-party information, internal research, and industry experience, and depend on assumptions the company considers reasonable. The estimates have inherent limitations and are subject to industry risks and uncertainties; actual results may differ materially from the estimates and projections. This section provides no specific market-size figures or financial metrics.

Use of Proceeds

LYCA expects net proceeds from the IPO of approximately $290.7 million, or $335.0 million if underwriters fully exercise their option, based on an IPO price of $18.00 per share and after underwriting discounts, commissions, and estimated offering expenses.

Together with existing cash, cash equivalents, and marketable securities, the proceeds are intended to support clinical development, including approximately:

• $80 million for LCA-0061, through substantially its planned Phase 2 trial;
• $70 million for LCA-0062, through substantially its planned Phase 2 trial; and
• $90 million for LCA-0321, through substantially its planned Phase 2 trial.

The remainder is intended for pipeline research and development, working capital, and general corporate purposes. Pending these uses, LYCA plans to invest the proceeds in short-term, investment-grade, interest-bearing securities.

Management believes existing liquid resources, together with IPO proceeds, will fund projected operating expenses and capital expenditures into the second half of 2029. This runway estimate depends on assumptions that may prove incorrect, and funds could be used sooner than expected. Actual spending and timing may vary with clinical-trial progress, regulatory feedback, R&D results, collaborations or licenses, operating costs, and other factors; the company cannot precisely estimate its working-capital needs given the risks and uncertainties of drug development.

The planned resources are not expected to fund any of the three named candidates—or other candidates—through regulatory approval. LYCA will require substantial additional capital to complete development and potentially commercialize its product candidates. Management also has broad discretion over the proceeds, including potential investment in or in-licensing or acquisition of complementary businesses, products, or technologies; LYCA reports no current commitments or active negotiations for such transactions.

Dividend Policy

LYCA has never declared or paid cash dividends on its common stock and does not anticipate paying them in the foreseeable future. It expects to retain available funds and any future earnings to support its business. Any future dividend would be at the board’s discretion, considering the company’s financial condition, operating results, capital needs, business conditions, and other relevant factors. Future financing instruments, preferred securities, or debt agreements may also restrict dividend payments.

Capitalization as of June 30, 2026

• Cash, cash equivalents and marketable securities were $148.091 million on both an actual and pro forma basis. After the IPO, pro forma as adjusted cash and marketable securities would be $439.359 million, reflecting the sale of 17.640 million shares at $18.00 per share, net of underwriting discounts and estimated offering expenses.
• Actual capitalization included $277.056 million of convertible preferred stock and a $132.141 million stockholders’ deficit, resulting in $144.915 million of total capitalization. Upon conversion of preferred stock into 34,141,408 common shares, pro forma stockholders’ equity and total capitalization would each be $144.915 million. Pro forma as adjusted stockholders’ equity and total capitalization would each increase to $435.609 million.
• Pro forma as adjusted equity includes $572.456 million of additional paid-in capital, $97,000 of accumulated other comprehensive loss, and an accumulated deficit of $136.756 million. The offering materially strengthens capitalization, although the accumulated deficit remains.
• Common shares outstanding would rise from 3,249,221 actual to 37,390,629 pro forma after preferred-stock conversion and 55,030,629 pro forma as adjusted after the offering. Actual shares issued were 3,253,151, including 3,930 unvested restricted shares subject to repurchase.
• If the underwriters exercise their option in full, estimated pro forma as adjusted cash and marketable securities would be $483.7 million, additional paid-in capital $616.8 million, stockholders’ equity and total capitalization $479.9 million each, and common shares outstanding 57,680,559.

Potential dilution

The stated post-offering share counts exclude 2,904,378 options outstanding at June 30, 2026, with a $2.15 weighted-average exercise price, and 1,632,786 options granted afterward, with a $3.70 weighted-average exercise price. Also excluded are 6,024,792 shares reserved under the 2026 Plan and 550,000 shares reserved under the ESPP. The 2026 Plan reserve includes 2,524,792 shares transferred from the 2020 Plan and 172,670 options granted after registration effectiveness at the IPO price.

IPO dilution and share ownership

LYCA plans to issue 17.64 million shares at $18.00 per share, for $317.520 million of gross proceeds before underwriting discounts and offering expenses. After the offering, estimated pro forma as-adjusted net tangible book value (NTBV) is $435.6 million, or $7.92 per share, based on 55,034,559 shares. At the $18.00 offering price, new investors would experience immediate dilution of $10.08 per share. If the underwriters exercise their option in full, estimated dilution would be $9.68 per share. Existing stockholders’ NTBV would increase by $4.09 per share as a result of the offering.

NTBV bridge as of June 30, 2026

• Historical: NTBV was a $134.0 million deficit, or negative $41.24 per share, based on 3,249,221 shares.
• After preferred-stock conversion: Automatic conversion of preferred stock into 34,141,408 common shares, together with reclassification of preferred stock to permanent equity, would result in pro forma NTBV of $143.1 million, or $3.83 per share.
• After the offering: Pro forma as-adjusted NTBV would rise to $435.6 million, or $7.92 per share.

Ownership and investment consideration

Before the offering, existing stockholders are shown with 37,394,559 shares (67.9%) and $277.789 million of total consideration (46.7%), representing a weighted-average price of $7.43 per share. New investors would receive 17.64 million shares (32.1%) for $317.520 million (53.3%), at $18.00 per share. With full exercise of the underwriters’ option, existing stockholders would own 64.8% and new investors 35.2%.

Share-count basis and potential further dilution

The filing uses 3,249,221 shares to calculate historical NTBV per share. Its offering calculations separately use 3,253,151 common shares as of June 30, 2026, including 3,930 unvested restricted shares subject to repurchase, and assume conversion of preferred stock.

The dilution calculations exclude 2,904,378 options outstanding at June 30, 2026, with a weighted-average exercise price of $2.15, and 1,632,786 options granted after that date, with a weighted-average exercise price of $3.70. They also exclude 6,024,792 shares reserved under the 2026 Plan, including 172,670 shares issuable under options granted around registration-statement effectiveness at the $18.00 IPO price, and 550,000 shares reserved under the ESPP. Option exercises, future equity awards, or additional equity or convertible-debt financing could further dilute investors. LYCA notes it may seek additional capital even if it believes its existing funds are sufficient for its plans.

Business, pipeline and collaboration revenue

LYCA is a pre-commercial, clinical-stage biotechnology company developing extracellular-protein degraders using its LYTAC platform, initially for autoimmune, inflammatory and allergic diseases. It has no approved products or product-sales revenue and depends on collaboration revenue and external financing. Its development strategy is to seek early proof of concept through Phase 1 pharmacodynamic and biomarker data.

• LCA-0061, a Phase 1 IgE degrader, showed rapid, deep and sustained reductions in total and free IgE in preliminary results from the first cohort of healthy atopic participants following a single 70 mg subcutaneous dose. LYCA views this as initial human proof of mechanism and potentially differentiated from IgE blockers. Additional data in healthy participants with elevated IgE and food-allergy patients are expected in 2027.
• LCA-0062, a fast-follower IgE program, is in IND-enabling work; subject to regulatory clearance, Phase 1 initiation and initial data are expected in H2 2027.
• LCA-0321, designed to degrade TSHR autoantibodies that drive Graves’ disease, is in Phase 1, with initial data expected in 2027.

All reported collaboration revenue came from the Lilly Agreement. Revenue was $6.741M in FY2025, down from $14.936M in FY2024, and $0 in H1 2026, versus $2.306M in H1 2025. Lilly’s August 2021 agreement included a non-refundable, non-creditable $35.0M upfront payment and potential milestones and royalties. Lilly paid a $2.0M extension fee in August 2025, then elected to terminate without cause; termination became effective February 12, 2026, after performance obligations were completed by December 2025. FY2025 revenue included accelerated recognition of remaining deferred revenue, including the extension fee. No milestones had been achieved as of June 30, 2026, and LYCA had not entered a replacement collaboration.

Operating results and costs

LYCA has sustained losses and negative operating cash flow since inception. Net loss was $36.460M in FY2025, versus $26.503M in FY2024; operating loss was $41.406M versus $32.533M. Total operating expenses were $48.147M versus $47.469M. Lower collaboration revenue and $1.528M of restructuring and impairment charges outweighed modestly lower R&D and G&A. Total other income, net, was $4.697M versus $6.037M, including interest income of $4.830M versus $6.193M as average cash and investment balances and interest rates declined.

For H1 2026, net loss improved to $19.196M from $25.624M and operating loss narrowed to $20.870M from $28.346M, mainly due to lower R&D and no repeat of prior-year restructuring charges. Total other income, net, was $1.674M versus $2.722M; interest income was $1.698M versus $2.803M.

R&D expense was $40.507M in FY2025 versus $41.069M in FY2024. Direct program costs fell $2.206M, chiefly after $9.7M of LCA-0061 and LCA-0321 contract-manufacturing activity was completed; this was partly offset by $7.5M more preclinical and clinical outside services and IND-enabling work. Indirect R&D increased $1.644M. H1 2026 R&D fell to $17.312M from $25.804M. Program costs were $2.045M for LCA-0061 versus $8.578M, $2.413M for LCA-0321 versus $4.432M, and $4.108M for LCA-0062 versus $0.302M. Lower manufacturing, IND-enabling, staffing and lab costs drove the decline, partly offset by increased LCA-0062 work and clinical-study costs as Phase 1 studies commenced.

G&A was $6.112M in FY2025 versus $6.400M in FY2024, and $3.558M in H1 2026 versus $3.441M in H1 2025. The June 2025 reorganization reduced workforce, deprioritized research and outsourced some development. Restructuring and impairment charges were $1.528M in FY2025 (including $0.7M severance, $0.5M equipment impairment and $0.3M other exit costs); H1 2025 charges were $1.407M, with none in H1 2026. LYCA expects R&D to rise as clinical trials and pipeline work advance, and G&A to increase with public-company compliance, insurance and related costs.

Liquidity and funding

Cash, cash equivalents and marketable securities were $148.1M at June 30, 2026, up from $91.2M at December 31, 2025. The accumulated deficit was $136.8M at June 30, 2026, versus $117.6M at year-end 2025. A June 2026 Series D financing of 36,734,094 preferred shares at $2.0417 per share generated approximately $74.7M net proceeds. Management estimates available cash, investments and offering proceeds will fund operations into the second half of 2029, but emphasizes that estimate depends on uncertain operating assumptions.

Net cash used in operating activities was $51.362M in FY2025 versus $29.502M in FY2024, and $18.125M in H1 2026 versus $35.734M in H1 2025. The FY2025 increase included a $17.7M adverse working-capital change, mainly lower accrued liabilities and accounts payable associated with contract manufacturing. Net cash from financing was $106.424M in FY2024, $0.077M in FY2025 and $74.671M in H1 2026. Capital expenditures were $0.2M in FY2025 versus $1.3M in FY2024 and $0.2M in H1 2025; no H1 2026 purchases were specified, though LYCA reported $0.1M of proceeds from a property-and-equipment sale.

LYCA expects substantial additional capital to advance its programs and platform. Financing may dilute shareholders or impose restrictive terms; partnerships may require surrendering valuable rights. Inadequate funding could force delays, cuts or termination of development. Management also cites clinical safety or efficacy, enrollment, regulatory, contractor, manufacturing and product-quality risks.

Other financial and reporting matters

LYCA’s July 2025 non-exclusive RSR license supports preclinical development of its Graves’ disease program. It paid a $0.3M upfront fee; up to $12.0M of aggregate milestone payments may be due, including an initial $0.3M upon the earlier of the first product IND filing or January 31, 2027. Annual maintenance fees rise from $50,000 to $0.3M by the fifth anniversary. LYCA may terminate before milestone events on 90 days’ notice and avoid milestone payments.

Revenue recognition and R&D accruals involve judgment, including cost-to-complete estimates, progress under the Lilly cost-based input method, and third-party services performed but not yet invoiced; revisions can create material revenue adjustments or accrual changes. Contingent milestones are generally expensed when probable and estimable. LYCA reports no off-balance-sheet arrangements.

Stock-based compensation was $1.1M in FY2025 versus $0.8M in FY2024, and $0.5M in H1 2026 versus $0.6M in H1 2025. At June 30, 2026, $2.1M remained unrecognized, expected to be recognized over a weighted-average 2.4 years. Options had approximately $46.0M intrinsic value using the $18.00 IPO price ($27.0M vested and $19.0M unvested). LYCA has never paid dividends and does not intend to do so.

As an emerging growth company, LYCA elected the JOBS Act extended transition period for new accounting standards and expects to use eligible reporting exemptions, including exemption from auditor attestation of internal controls under Section 404(b). It is also a smaller reporting company.

Company and platform

Lycia is a clinical-stage biotechnology company developing lysosomal targeting chimeras (LYTACs) to direct disease-associated extracellular proteins to lysosomes for degradation. Its modular platform combines a target binder with a binder to an internalizing receptor, which the company aims to reuse across targets and indications. Classic LYTACs generally degrade the target and degrader together, while cataLYTACs are designed to release the target inside the cell and recycle the degrader and receptor. In preclinical models, cataLYTACs degraded up to approximately 50 molar equivalents of target per degrader. These designs are intended to address targets that conventional inhibition or intracellular degradation approaches may not reach.

Lycia prioritizes programs with validated disease biology and measurable Phase 1 pharmacodynamic markers. It reports raising approximately $266.6 million from inception through June 30, 2026; the section provides no revenue, earnings, cash-flow, debt, or balance-sheet metrics.

Pipeline and evidence

• LCA-0061 (IgE cataLYTAC): This antibody–small-molecule conjugate is designed to route IgE to liver cells for lysosomal degradation, potentially reducing both free and total IgE. In the first cohort of its Phase 1 trial, a single 70 mg subcutaneous dose produced a mean 92% total-IgE reduction at 24 hours and a mean maximum reduction of 96%; free IgE also fell by a mean maximum of 96%. Most treated participants remained more than 95% below baseline at Day 28, and FcεR1 suppression persisted through Day 35 in most. No dose-limiting toxicities or safety signals were reported; two treatment-related mild events resolved without treatment. The cohort was small and results preliminary, so they do not establish clinical benefit or broader safety. Further data, including in food-allergy patients, are expected in 2027.

  Preclinical studies reported deeper and more durable IgE suppression than omalizumab in animal models. In non-human primates, a single 5 mg/kg dose reduced free and total IgE to the limit of detection within four hours, with depletion maintained for 14 days and IgE below vehicle levels for at least 21 days. These findings remain preclinical.

• LCA-0062 (IgE cataLYTAC): This fully biologic bispecific antibody is in IND-enabling work. In non-human primates, single 0.5 or 5 mg/kg doses suppressed free and total IgE for more than 28 days and basophil FcεR1 through 42 days. Lycia believes its format may support longer suppression and streamlined manufacturing, but this has not been established clinically. Phase 1 initiation depends on regulatory clearance; initial data are expected in H2 2027.

• LCA-0321 (Graves’ disease classic LYTAC): Designed to selectively remove pathogenic thyroid-stimulating hormone receptor autoantibodies (TRAbs), this program aims to preserve normal IgG rather than broadly suppress antibodies. In preclinical work, LCA-0321 depleted patient-derived TRAbs; in a mouse disease model it reduced TRAbs and serum T4, with T4 reported to normalize by study completion. A Phase 1 trial is underway, with initial data expected in 2027. Its proposed selectivity and potential to avoid effects on normal TSH signaling are unproven in patients.

Market context and unmet need

Lycia estimates that IgE-mediated food allergy affects more than 33 million people in the U.S.; severe reactions are reported in more than 40% of children and 50% of adults with food allergy. The company cites more than 100,000 U.S. food-allergy patients prescribed Xolair by 2025 and annual U.S. sales above $4 billion; worldwide food-allergy product sales are projected to exceed $15 billion in the coming decade. Xolair validates demand, but weight- and IgE-dependent dosing may limit eligibility for an estimated 20%–30% of patients and can require up to 600 mg every two weeks across multiple injections. Lycia’s proposed alternative—degrading IgE and reducing total as well as free IgE—could offer a measurable pharmacodynamic marker and different dosing options, but clinical advantages are not yet demonstrated. The company is also evaluating potential IgE-related indications beyond food allergy.

Graves’ disease is estimated to affect approximately 3 million U.S. adults, with worldwide sales for the disease and extrathyroidal manifestations projected at about $7 billion by 2032. Existing treatments often manage hormone production or destroy thyroid tissue without addressing the autoimmune driver. Antithyroid drugs achieve remission in approximately 45% of patients, with relapse rates up to 52%. Broad IgG-reduction approaches may also reduce protective antibodies; selective TRAb degradation is Lycia’s proposed differentiation.

Intellectual property and execution risks

As of June 30, 2026, Lycia reported 15 owned LYTAC patent families and one exclusively licensed Stanford family. It also reported four owned patent families covering its IgE programs and one owned LCA-0321 family. Potential patent expirations are projected across 2039–2047, depending on the technology. Patent applications and projected terms do not assure issuance or effective commercial protection.

For LCA-0321, Lycia’s worldwide, non-exclusive RSR license involved a $0.3 million upfront fee, annual maintenance fees of $50,000–$0.3 million, and up to $12.0 million in aggregate clinical and regulatory milestones. Certain milestones may be due on specified dates even if the relevant patent is not in force in that country; sublicensing can also trigger mid-single-digit payments or applicable milestone amounts.

Lycia relies on third-party CDMOs for clinical drug substance and product. Later-stage development may require larger suppliers, manufacturing transfers, and commercial-supply agreements, creating execution and supply dependencies. As of June 30, 2026, it had 31 full-time employees, including 23 in R&D; 58% held advanced degrees. It leases 13,558 square feet of South San Francisco office and laboratory space through October 31, 2028.

Regulatory, reimbursement, and competitive risks

All programs remain early-stage and face the cost and uncertainty of clinical development, regulatory review, biologics manufacturing, and potential trial holds or non-approval. Expedited FDA pathways and orphan incentives are conditional and do not guarantee approval or faster development. International markets require separate approvals; evolving EU and UK rules, clinical-data privacy requirements, and local pricing and reimbursement decisions add complexity.

Commercial prospects would depend on demonstrating meaningful differentiation from established and emerging therapies, securing coverage and adequate reimbursement, and overcoming physician and patient reluctance to switch. U.S. and international price-control measures—including Medicare negotiation and inflation-rebate provisions, as well as proposed or implemented pricing initiatives—could pressure future product economics. Lycia reports no current or known legal proceeding expected to have a material adverse effect.

Management, board and governance

CFO Amy Bachrodt joined in June 2026, and Jane Pritchett Henderson joined the board on July 6, 2026. The four-member board comprises CEO Aetna Wun Trombley and three non-employee directors. Board Chair William Rieflin and Trombley hold separate roles; the board considers this structure appropriate for independent oversight but may change it. Following the offering, all directors other than Trombley are expected to qualify as independent under Nasdaq and SEC rules. The existing voting agreement and related director-designation rights terminate immediately before the offering closes.

After the offering, directors will serve staggered three-year terms across three classes: one director each in Classes I and II and two in Class III. With only one class standing for election each year, this arrangement could delay or prevent a change in control. Under the post-offering governing documents, the board—not stockholders—will fill vacancies.

The board oversees risk without a dedicated risk committee. The audit committee oversees financial exposures, reporting, compliance, risk management and cybersecurity; the compensation committee considers whether incentive programs could encourage excessive risk-taking; and the nominating and governance committee oversees governance policies. Cybersecurity practices include physical, technical and administrative safeguards, incident-response procedures, regular IT updates to the audit committee, third-party assessments, industry frameworks and information-security insurance. The filing describes oversight processes but reports no specific cybersecurity incidents or quantified cyber exposure.

The audit committee consists of Henderson, Rieflin and Fischer; all are considered independent, and Henderson is an SEC-defined audit committee financial expert. Members are considered financially literate. The committee oversees auditor selection and independence, financial reporting and audits, legal and regulatory compliance, risk management—including cybersecurity—and related-person transactions. The independent compensation committee, chaired by Fischer with Henderson, oversees executive and director compensation and administers cash and equity plans. The independent nominating and governance committee, chaired by Henderson with Rieflin, recommends board candidates, oversees board evaluations and advises on ESG and governance. There are no compensation-committee interlocks or insider participation; before that committee was formed, the full board determined officer compensation. The company has adopted a code of business conduct and ethics.

Management and directors bring biotechnology and biopharmaceutical experience in operations, finance and clinical development, as well as board experience, including at companies later acquired by larger pharmaceutical or biotechnology firms.

Director compensation and offering-related changes

For FY2025, listed non-employee directors received no cash fees or option-award compensation; Trombley received no director compensation or expense reimbursement. At December 31, 2025, Rieflin held 34,377 options and Fischer held 13,307; other non-employee directors held none. Anderson, Fang and Ozawa resigned immediately before the registration statement became effective. Before the offering, there was no formal non-employee director compensation policy.

A policy approved in October 2026 takes effect upon completion of the offering. It provides a $40,000 annual board-service cash retainer, plus annual committee and leadership fees ranging from $5,000 to $30,000: $30,000 for the non-executive chair; audit chair/member fees of $20,000/$10,000; compensation chair/member fees of $15,000/$7,500; and nominating and governance chair/member fees of $10,000/$5,000. Fees are paid quarterly in arrears and prorated for partial quarters.

Under the 2026 Plan, new directors may receive an initial option award capped at the lesser of 40,000 shares or $700,000 in grant-date fair value, vesting monthly over three years. Directors appointed between annual meetings may also receive a prorated award capped at the lesser of 20,000 shares or $350,000 in fair value, vesting at the next annual meeting. Continuing directors and directors elected at an annual meeting may receive annual option awards capped at the lesser of 20,000 shares or $350,000 in fair value, vesting on the earlier of the grant anniversary or the next annual meeting. Director options accelerate fully immediately before a defined Corporate Transaction if the director remains in service.

Separately, in October 2026, the board approved 20,000-share options for each of Rieflin, Fischer and Henderson, effective when the registration statement becomes effective. The exercise price will equal the IPO price, and the options will have one-year cliff vesting. Reasonable, documented board and committee travel expenses will be reimbursed. The 2026 Plan limits annual non-employee director compensation to $750,000, or $1 million in a director’s initial year of service.

Executive compensation

In 2025, CEO Aetna Wun Trombley received $728,500 total compensation: $535,000 salary, $190,500 non-equity incentive compensation, and a $3,000 401(k) match; no bonus or option award was reported. Chief Medical Officer Chin Lee, who joined in February 2025, received $1.255 million: $435,417 salary, a $50,000 signing bonus, $124,400 incentive compensation, $642,191 grant-date fair value of option awards, and a $3,000 401(k) match. The option value is the ASC 718 accounting cost, not necessarily its realized economic value. Chief Scientific Officer Steve Staben received $566,600: $426,600 salary, $137,000 incentive compensation, and a $3,000 401(k) match; no bonus or option award was reported.

2025 annual incentive targets were 40% of base salary for Trombley and 35% each for Lee and Staben. Incentives reflected corporate research, development, financial, and other objectives, were approved by the board, and were paid in Q1 2026. Equity awards are intended to support retention and stockholder alignment; options generally vest over four years, subject to continued service.

At December 31, 2025, Trombley held 471,252 exercisable options at $1.63, fully vested September 2, 2025 and expiring October 19, 2031, and 665,380 exercisable options at $2.44, expiring June 27, 2034. Lee held 366,402 exercisable options at $2.44, expiring February 12, 2035. Staben held 166,345 exercisable options at $1.63, fully vested October 18, 2025 and expiring October 19, 2031, and 155,255 exercisable options at $2.44, expiring June 27, 2034. Some awards allow early exercise into restricted shares subject to company repurchase rights that lapse with vesting. Lee’s award has a one-year cliff followed by monthly vesting over three years; Trombley’s and Staben’s 2024 awards vest monthly over four years.

Prospective compensation and severance

Employment-agreement amendments approved in October 2026 and effective upon offering close increase annual base salaries from $555,000 to $670,000 for Trombley, $488,000 to $520,000 for Lee, and $445,800 to $500,000 for Staben. Target bonuses rise from 40% to 55% for Trombley and from 35% to 40% for Lee and Staben. The board cited a peer-group compensation assessment; these prospective increases are not part of 2025 compensation and will raise expected compensation costs.

A new severance and change-in-control plan provides, for qualifying termination without cause or resignation for good reason, nine months of base salary and COBRA premiums for up to nine months (12 months for the CEO); the CEO also receives 50% accelerated vesting of eligible unvested equity. If termination occurs within three months before or 12 months after a change in control, benefits increase to 12 months’ salary and COBRA (18 months for the CEO), a target bonus equal to 100% of target (150% for the CEO), and full acceleration of eligible unvested equity. Benefits require a release, and performance-based awards remain subject to their terms. A 280G/4999 provision applies whichever yields the greater after-tax benefit: a cutback or full payment.

Equity plans and potential dilution

The 2026 Equity Incentive Plan replaced the 2020 Plan, which terminated for new grants although existing awards remain governed by its terms. As of June 30, 2026, 9,192,671 shares had been reserved under the 2020 Plan; 4,117,195 remained available but could not be newly granted; 2,259,664 options had been exercised since inception; and 2,904,378 options remained outstanding at a $2.15 weighted-average exercise price.

The 2026 Plan initially reserves 3.5 million shares, plus eligible unused 2020 Plan shares. From 2027 through 2036, its reserve increases annually by the lesser of 5% of specified outstanding shares or a lower amount set by the board. Returned or otherwise unissued shares may replenish the reserve, creating ongoing potential dilution. Permitted awards include options, restricted stock, SARs, RSUs, performance awards, and stock bonuses; incentive stock options are capped at 30 million shares. The Committee generally determines vesting and settlement terms. In corporate transactions, awards may be assumed, replaced, accelerated, settled, or canceled; if a successor does not continue, assume, substitute, settle, or replace awards, they generally vest immediately before closing. The Committee may reprice options or SARs without prior stockholder approval or participant consent. Annual non-employee director compensation is capped at $750,000 in grant-date award value plus cash, or $1.0 million in the initial-service year. The plan includes clawback provisions and is subject to board amendment or termination, subject to applicable protections and approval requirements.

The 2026 Employee Stock Purchase Plan initially reserves 550,000 shares, with annual increases from 2027 through 2036 of the lesser of 1% of specified outstanding securities or a lower board/committee amount; total issuance is capped at 5.5 million shares. Eligible employees may contribute 1%–15% of compensation and purchase shares at 85% of the lower fair market value at the offering start or purchase-period end. Offerings may last up to 27 months; purchases are generally limited to 2,500 shares per period and $25,000 of offering-start-date fair value per calendar year. These plans support retention but create potential future share issuance and dilution; no compensation-expense or realized-dilution figure is provided.

Other compensation and governance provisions

The company sponsors a tax-qualified 401(k) plan with matching contributions and pre-tax and Roth options, including statutory catch-up contributions. A compensation recovery policy effective with the offering requires recovery of excess incentive compensation from current or former executive officers following a qualifying accounting restatement, generally covering the three completed fiscal years preceding the restatement requirement, subject to SEC-rule exceptions. The company says it does not time equity awards around material nonpublic information or disclosures to affect award value; directors, officers, and key employees may use Rule 10b5-1 plans, subject to the offering-related 180-day lock-up unless early termination applies.

The restated charter and bylaws provide director and officer liability limitations and indemnification, including expense advancement, supplemented by individual agreements and D&O insurance. These protections may reduce stockholder litigation but could expose the company to settlement and damage costs. No current or threatened indemnification-related litigation was reported; Securities Act indemnification may be unenforceable as contrary to public policy.

Related-Party Transactions

Preferred-stock financings and participation

LYCA raised approximately $106.6 million gross in April–May 2024 by issuing 52,211,394 Series C preferred shares at $2.0417 per share, and approximately $75.0 million gross in June 2026 by issuing 36,734,094 Series D preferred shares at $2.0417 per share. Combined gross proceeds were approximately $181.6 million.

Both series automatically convert upon completion of the offering at one common share for every 4.5087 preferred shares (equivalent to 1-for-1 before the 1-for-4.5087 reverse split). Both series also carry registration rights under the Investors’ Rights Agreement (IRA).

Disclosed purchases by significant holders and related parties included:

• Series C: Venrock affiliates purchased 17,142,578 shares for $35.0 million; RTW affiliates, 9,795,759 shares for $20.0 million; Redmile, 4,897,879 shares for $10.0 million; and Blue Owl affiliates, 3,820,346 shares for $7.8 million. Former director Ming Fang was affiliated with Redmile, and former director Tim Anderson was affiliated with Blue Owl; both resigned immediately before the registration statement became effective.
• Series D: Venrock affiliates purchased 4,408,091 shares for $9.0 million; RTW affiliates, 2,448,940 shares for $5.0 million; and Janus Henderson Biotech Innovation Master Fund, 10,775,334 shares for $22.0 million.

Governance, continuing rights, and policy

In connection with the Series D financing, LYCA entered into the IRA with certain preferred holders, including entities affiliated with directors and holders of more than 5% of common stock. Their registration rights continue after the offering. The filing also describes indemnification and expense-advancement arrangements for directors and executive officers.

LYCA adopted a related-person transaction policy for the offering. Transactions exceeding $120,000 involving directors, executive officers, nominees, holders of more than 5% of common stock, or their family members or affiliates require review and approval by the audit committee or an independent-director committee. The policy calls for consideration of whether the terms are no less favorable than those available from unaffiliated third parties.

The financings provided substantial capital, while automatic preferred-stock conversion and continuing registration rights are material ownership and governance considerations.

Principal stockholders

As of September 30, 2026, Lycia had 3,276,323 common shares outstanding, including 5,457 unvested restricted shares subject to repurchase. Assuming conversion of preferred stock, the pre-offering ownership basis was 37,417,731 shares. The post-offering basis assumes issuance of 17,640,000 shares, no exercise of the underwriters’ option, and 55,057,731 shares outstanding. Beneficial ownership includes options exercisable within 60 days, so reported holdings can include shares not yet issued.

Directors and executive officers

The 11-person director and executive officer group beneficially owned 4,204,333 shares—10.3% before and 7.2% after the offering—including 798,911 common shares and 3,405,422 shares underlying options.

• Aetna Wun Trombley: 2,050,921 shares (5.3% before; 3.6% after).
• Chin Lee: 439,593 (1.2%; less than 1%).
• Steve Staben: 510,123 (1.3%; less than 1%).
• William J. Rieflin: 148,998 (less than 1% both before and after).
• Laurent Fischer: 59,883; Jane Pritchett Henderson: 57,666; and Clare Ozawa: 205,158 (each less than 1% both before and after).
• Tim Anderson and Ming Fang reported no direct holdings.

Largest beneficial owners

• Versant-affiliated entities: 7,058,576 shares (18.9% before; 12.8% after).
• Venrock Healthcare Capital Partners-affiliated entities: 4,779,793 (12.8%; 8.7%).
• Redmile Biopharma Investments III: 4,164,899 (11.1%; 7.6%).
• RTW-affiliated entities: 3,639,364 (9.7%; 6.6%).
• Janus Henderson Biotech Innovation Master Fund: 3,476,215 (9.3%; 6.3%).
• Blue Owl-affiliated entities: 1,955,616 (5.2%; 3.6%).

The five largest listed holders collectively represent 42.0% of post-offering shares, indicating substantial institutional ownership and concentration. The offering reduces reported ownership percentages—including the director and executive group’s stake from 10.3% to 7.2%—while the listed beneficial share counts remain unchanged. Several holdings are attributed through investment managers, general partners, and affiliated funds; affiliated individuals generally disclaim beneficial ownership except to the extent of their pecuniary interests.

Tim Anderson, Ming Fang, and Clare Ozawa resigned from the board immediately before the registration statement became effective.

Capital stock and post-offering ownership

Following the offering, the company will be authorized to issue 500,000,000 common shares and 10,000,000 undesignated preferred shares, each with $0.0001 par value. All convertible preferred stock will automatically convert into common stock at a ratio of one common share for every 4.5087 preferred shares, reflecting the 1-for-4.5087 reverse split. Assuming conversion had occurred on June 30, 2026, the company would have had 37,394,559 common shares outstanding, approximately 112 holders of record, and no convertible preferred shares outstanding. The board may issue additional authorized shares without stockholder approval.

As of June 30, 2026, options under the 2020 Plan covered 2,904,378 common shares at a weighted-average exercise price of $2.15—about 7.8% of the assumed post-conversion common shares. Holders of 34,174,677 shares, about 91% of assumed shares outstanding, have registration rights, creating potential future resale supply subject to registration terms and offering restrictions.

Registration rights

Eligible holders may demand up to two effective Form S-1 registrations for offerings of at least $5.0 million. They also have Form S-3 registration rights, subject to the company’s eligibility and the same $5.0 million minimum, with no more than two Form S-3 registrations in any 12-month period. Piggyback rights generally apply to cash public offerings but exclude the company’s initial underwritten public offering. Underwriting limits may restrict selling-holder participation, although holders generally have priority over other non-company selling stockholders. These rights generally expire at the earlier of the third anniversary of the offering or satisfaction of specified Rule 144 resale and ownership conditions.

Stockholder rights and potential dilution

Common shareholders have one vote per share, no cumulative voting rights, and are entitled to dividends only if declared by the board and legally available. Common stock has no preemptive, conversion, redemption, or sinking-fund rights. Upon liquidation, common holders share assets ratably after payment of liabilities and any preferred-stock liquidation preferences.

No preferred shares are expected to be outstanding immediately after the offering. However, the board may issue up to 10,000,000 preferred shares in series without further stockholder approval and set their rights, including voting or conversion rights. The company says it has no current plan to issue preferred stock, but future issuance could dilute or impair common stockholders’ voting and other rights, affect the share price, or deter a change in control.

Governance and takeover provisions

The charter and bylaws provide for a three-class, staggered board with three-year terms. Stockholders cannot act by written consent, call special meetings, or remove directors except for cause and with approval from at least two-thirds of outstanding common stock. The board fills vacancies, and director nominations and stockholder proposals are subject to advance-notice requirements. Specified charter amendments generally require two-thirds stockholder approval, although a simple stockholder majority may suffice when approved by two-thirds of the full board.

These provisions, together with Delaware General Corporation Law Section 203—which generally restricts business combinations with a 15%-or-more interested stockholder for three years absent specified approvals—may delay or discourage unsolicited acquisitions, including offers that might otherwise provide a premium.

Exclusive forums and listing

The bylaws designate the Delaware Court of Chancery as the exclusive forum for specified derivative, fiduciary-duty, corporate-law, and internal-affairs claims. Securities Act claims must be brought in federal district court under the company’s Federal Forum Provision, although enforceability is not assured in every court. Exchange Act claims are also subject to federal court jurisdiction, which is exclusive by statute. Security holders are deemed to have notice of and consented to the forum provisions. The provisions do not waive the company’s federal securities-law compliance and may limit stockholders’ choice of forum or discourage litigation against the company and its directors, officers, employees, or agents.

Computershare Trust Company, N.A. is the common stock transfer agent and registrar. The common stock has been approved for listing on the Nasdaq Global Select Market under ticker LYCA.

Shares Eligible for Future Sale

Before the IPO, there was no public market for LYCA common stock. The company cautions that future sales—or the prospect of shares becoming available for sale—could pressure the stock price and impair its ability to raise equity.

Assuming the underwriters do not exercise their option, preferred stock converts automatically, and LYCA issues 17,640,000 IPO shares, 55,034,559 common shares will be outstanding after the offering. This includes 37,394,559 pre-offering shares, based on shares outstanding at June 30, 2026, including 3,930 unvested restricted shares subject to repurchase. IPO shares are generally freely tradable; the pre-offering shares are restricted securities.

Substantially all existing security holders, officers, directors, and LYCA are subject to 180-day lock-up or market-standoff restrictions, subject to exceptions. When these restrictions expire, substantially all locked-up shares may become eligible for sale, creating a potential supply overhang. Jefferies and TD Securities may release shares early at their discretion, in certain cases without public notice; LYCA says it has no existing agreements with stockholders permitting early sales. Some holders also have demand, piggyback, and Form S-3 registration rights that could enable resale after registration becomes effective, subject to restrictions on affiliates.

After the lock-up period, Rule 144 generally limits affiliate sales in any three-month period to the greater of 1% of shares outstanding—approximately 550,346 shares immediately after the offering—or the average weekly trading volume during the preceding four weeks. Affiliate sales are also subject to manner-of-sale, notice, and public-information requirements. Qualifying non-affiliates may generally resell after six months of beneficial ownership, subject to public-information requirements, or after one year without Rule 144 requirements, once LYCA has been an Exchange Act reporting company for at least 90 days.

LYCA intends to file a Form S-8 covering shares underlying outstanding options, restricted stock, and equity-plan reserves. As of June 30, 2026, options covered 2,904,378 shares, of which 1,688,741 were vested. Option shares remain subject to lock-up or market-standoff restrictions before resale.

Material U.S. Federal Income Tax Consequences

The company does not expect to pay distributions on its common stock in the foreseeable future. If it does make distributions, they generally constitute dividends to the extent of current or accumulated earnings and profits. Any excess generally reduces a holder’s tax basis first, and is then treated as gain from a disposition of the stock.

Non-U.S. Holders

• Dividends: Dividends paid to Non-U.S. Holders are generally subject to 30% U.S. withholding tax on the gross amount, unless a lower treaty rate applies and the holder provides the required documentation. Dividends effectively connected with a U.S. trade or business are generally taxed on a net basis at applicable U.S. rates. A corporate holder may also be subject to a 30% branch-profits tax, potentially reduced by treaty.
• Sale of shares: Non-U.S. Holders generally are not subject to U.S. federal income tax on gains from selling the company’s stock, except when the gain is effectively connected with a U.S. trade or business; an individual holder meets the 183-day U.S. presence test; or the company is or becomes a U.S. real property holding corporation (USRPHC).
• USRPHC status: The company believes it is not, and does not anticipate becoming, a USRPHC, but gives no assurance. USRPHC status generally depends on whether U.S. real property interests equal at least half the fair-market-value sum of the company’s worldwide real property interests and other business assets. Even if the company were a USRPHC, a holder owning no more than 5% may avoid tax if the stock is regularly traded on an established securities market; the company gives no assurance that this trading condition will be met. Effectively connected gains are taxed at applicable U.S. rates and may also incur the corporate branch-profits tax. Qualifying individuals present in the United States for at least 183 days may face a 30% tax on gains.

Other Tax and Compliance Considerations

Shares held by a nonresident alien at death may be subject to U.S. estate tax, subject to treaty relief. 24% backup withholding may apply if a holder does not establish an exemption or provide required documentation. 30% FATCA withholding may apply to dividends paid to noncompliant foreign financial institutions or certain nonfinancial foreign entities. Although regulations describe FATCA withholding on gross sale proceeds, proposed regulations suspend it pending finalization.

Tax rules and their interpretation may change, potentially with retroactive effect; the company has not sought an IRS ruling. Special rules may apply to certain investors, including holders owning more than 5%, pass-through entities and their investors, and holders using hedging or other nonstandard investment arrangements.

IPO underwriting and proceeds

On October 22, 2026, LYCA agreed to sell 17.64 million common shares at $18.00 per share. The underwriters’ commitments are several, not joint: Jefferies 6.2622 million shares, TD Securities 4.851 million, Evercore 3.528 million, Guggenheim 2.1168 million and LifeSci Capital 0.882 million.

Without exercise of the underwriters’ 30-day option, the offering represents $317.52 million in gross proceeds, less $22.2264 million in underwriting discounts and commissions ($1.26 per share), for $295.2936 million payable to LYCA before expenses. The underwriters may purchase up to an additional 2.646 million shares, but only if they sell more than the base offering. Full exercise would bring gross proceeds to $365.148 million, commissions to $25.56036 million and proceeds before expenses to $339.58764 million. Estimated offering expenses are approximately $4.6 million, plus reimbursement of up to $40,000 of underwriters’ FINRA counsel fees; that reimbursement is treated as underwriting compensation. After the estimated expenses—but before the FINRA reimbursement and other adjustments—proceeds would be approximately $290.7 million without the option or $335.0 million with full exercise.

Trading, market activity and resale restrictions

There was no prior public market for LYCA shares. The $18.00 IPO price was negotiated based on market conditions, LYCA’s financial information and business potential, comparable-company valuations, its development stage and other factors; it may not correspond to the shares’ subsequent trading price, and an active market may not develop. Nasdaq Global Select Market listing was approved under ticker LYCA. The underwriters currently intend, but are not obligated, to make a market and may stop without notice, creating liquidity and resale-price risk.

The underwriters may engage in short sales, stabilization, syndicate-covering transactions, penalty bids and passive market making. These activities may support or maintain the share price above the level that would otherwise prevail, but their effect is uncertain and they may cease at any time. Underwriters and affiliates may also trade or hold LYCA securities, hedge lending exposure through short positions or credit default swaps, and publish independent research or trading views or take long or short positions. Such activity could adversely affect future trading prices.

LYCA, its officers and directors, and substantially all existing holders are generally subject to a 180-day lock-up, subject to exceptions. Company exceptions include equity-plan issuances, qualifying Rule 10b5-1 plans, and issuances for acquisitions, licenses or strategic or collaborative transactions capped at 5% of post-offering shares in aggregate, with recipients subject to lock-ups. Holder exceptions include certain gifts, family or affiliate transfers, equity-award exercises and settlements, and change-of-control transactions. Jefferies and TD Securities may release lock-ups at their discretion; no existing agreements permit stockholders to sell early.

The offering is restricted outside the United States and generally limited to eligible institutional, professional, accredited, qualified or otherwise exempt investors. Certain Australian purchasers face a 12-month resale restriction, and certain Singapore entities or trusts face a six-month transfer restriction, subject to exceptions. Canadian resales are subject to provincial securities laws. The prospectus is not registered or approved for public distribution in several jurisdictions, including Hong Kong, Israel, Japan, Singapore and Switzerland. Canadian investors may also face practical difficulty serving process on or enforcing judgments against LYCA and its directors, officers or experts because they or their assets may be outside Canada.

Other underwriting terms

LYCA indemnifies the underwriters against specified liabilities, including Securities Act liabilities, and may contribute to related payments. The underwriters’ obligations are conditional; if an underwriter defaults, the nondefaulting underwriters’ commitments may increase or the underwriting agreement may terminate.

LYCA’s common shares offered under the prospectus will have their validity passed upon by Fenwick & West LLP. Cooley LLP is counsel to the underwriters. The section discloses no financial metrics, material legal risks, or other business developments.

Lycia Therapeutics’ financial statements as of December 31, 2024 and 2025, and for each year in the two-year period ended December 31, 2025, are included in the registration statement in reliance on the audit report of KPMG LLP, its independent registered public accounting firm. This section provides no financial metrics, business developments, or specific risks.

Where to Find Additional Information

Lycia Therapeutics does not currently file periodic reports with the SEC. After completing the offering, it will be required to file periodic reports, proxy statements, and other information under the Securities Exchange Act of 1934.

The prospectus forms part of the company’s Form S-1 registration statement but does not include all information in that filing. Statements describing contracts or other documents are qualified by the exhibits filed with the registration statement; investors should consult those exhibits for complete terms.

After the offering, Lycia expects to make its SEC filings available free of charge on its website as soon as reasonably practicable after filing or furnishing them. Website content is not incorporated into the prospectus and should not be considered part of an investment decision. This section contains no financial results, operating metrics, or business-risk disclosures.

Lycia Therapeutics — FY2025 financial statements

Business and operating results

Lycia is a pre-commercial, single-segment biotechnology company developing lysosomal targeting chimeras (LYTACs) to degrade disease-causing extracellular proteins, initially for autoimmune, inflammatory and allergic diseases. It had no product sales; all collaboration revenue to date came from its Eli Lilly agreement.

FY2025 collaboration revenue fell 54.9% to $6.741M from $14.936M. Operating expenses were relatively stable at $48.147M from $47.469M, but that cost base against declining revenue widened operating loss to $41.406M from $32.533M. Other income, net, declined to $4.697M from $6.037M; loss before tax was $36.709M from $26.496M. A $0.249M income tax benefit, versus a $0.007M provision in FY2024, resulted in net loss of $36.460M from $26.503M. Comprehensive loss was $36.616M from $26.296M; basic and diluted net loss per share was $11.66 from $8.92.

R&D expense was $40.507M from $41.069M and G&A was $6.112M from $6.400M. The segment expense presentation showed direct program expenses of $19.302M from $21.508M; personnel-related expenses of $11.845M from $11.574M; other R&D expenses of $7.653M from $6.952M; facilities and other operating costs of $3.672M from $3.321M; other G&A expenses of $1.897M from $2.147M; stock-based compensation of $1.098M from $0.791M; and depreciation of $1.190M from $1.176M. Segment restructuring and impairment charges were $1.490M, versus none in FY2024; the total restructuring and impairment charge in the financial statements was $1.528M, including stock-option modification costs.

In June 2025, Lycia reduced its workforce by approximately 42% and deprioritized certain research activities. The actions were intended to reduce costs and align staffing and research with business priorities. Restructuring costs included employee termination benefits, equipment impairment, prepaid expense write-offs and other costs; no restructuring liability remained at year-end, and the company expected no further material costs.

Lilly collaboration and pipeline commitments

Lilly exercised a one-year extension in August 2025 and paid a $2.0M non-refundable fee, but notified Lycia in November that it would terminate the collaboration without cause, effective February 12, 2026. The agreement covered research on up to five targets, with Lilly responsible for subsequent development and commercialization and holding an exclusive worldwide license to resulting products. After remaining activities were completed, Lycia recognized the remaining deferred revenue by December 2025; revenue recognized from the opening deferred-revenue balance was $4.7M in FY2025 versus $14.9M in FY2024. No milestones had been achieved. Termination ends a collaboration and potential milestone and royalty opportunity.

In July 2025, Lycia obtained a worldwide, non-exclusive license to RSR thermostable TSHR patents for preclinical research on a LYTAC degrader. It paid and expensed a $0.3M upfront fee. The agreement includes up to $12.0M of clinical and regulatory milestones, with the first $0.3M due upon the earlier of filing the first product’s IND or January 31, 2027. Other license arrangements also carry potential milestones and royalties; no TSHR milestone expense had been recognized at year-end.

Financial position, liquidity and cash flow

At December 31, 2025, total assets were $97.215M, down from $150.911M a year earlier, and stockholders’ deficit was $113.339M, compared with $77.929M. Convertible preferred stock of $202.341M was presented separately from stockholders’ deficit. Goodwill and intangible assets were not separately reported. Cash and cash equivalents were $19.268M, and marketable securities were $71.923M—$59.854M current and $12.069M non-current—for total cash, cash equivalents and marketable securities of $91.191M, down from $141.025M. Separately, the investment portfolio’s estimated fair value was $90.559M (amortized cost $90.462M), versus fair value $138.442M (amortized cost $138.189M) at December 31, 2024. No securities were in a continuous unrealized-loss position for more than 12 months.

Net cash used in operating activities increased to $51.362M from $29.502M. Capital expenditures (property-and-equipment purchases) were $0.194M from $1.271M. Investing activities provided $39.964M, chiefly reflecting $122.397M of marketable-security maturities and $82.274M of purchases. Financing provided $0.077M, versus $106.424M in FY2024, when Lycia raised $106.600M gross from Series C preferred stock before issuance costs. Cash, cash equivalents and restricted cash ended FY2025 at $19.419M, versus $30.740M. Common shares outstanding increased from 3,066,389 at the start of FY2025 to 3,181,403 at year-end.

Management expects continued losses and says additional capital will be required. It considered cash, cash equivalents and marketable securities together with subsequent Series D proceeds sufficient for planned expenses and capital needs for at least one year from issuance of the financial statements; future financing availability and terms remain uncertain. Accrued liabilities fell to $4.405M from $14.385M, mainly as accrued manufacturing expenses declined to $0.676M from $11.364M.

Capital, leases and subsequent events

Series A, B and C preferred stock had an aggregate liquidation value of $203.310M and net carrying amount of $202.341M at year-end. The shares carry an 8% noncumulative dividend preference if declared, liquidation priority and conversion rights; no dividends had been declared. Anti-dilutive securities excluded from FY2025 diluted loss per share totaled 28.857M shares. Lycia also had 2.853M outstanding options, with a weighted-average exercise price of $2.11.

Operating lease liabilities were $2.749M at year-end, including $1.022M current and $1.727M non-current. Lease expense rose to $2.386M from $2.203M. A headquarters expansion adds $0.1M monthly rent from January 2026 through October 2028.

In June 2026, Lycia issued 36,734,094 Series D convertible preferred shares at $2.0417 per share, raising $75.0M gross. Charter amendments increased authorized common shares to 210,270,000, authorized preferred shares to 153,933,467, and the minimum proceeds required for automatic preferred-stock conversion in an underwritten public offering to $75.0M. On October 19, 2026, Lycia effected a 1-for-4.5087 reverse split of common stock; common-share and per-share data were retrospectively adjusted, and preferred conversion ratios were adjusted.

Other matters

Gross deferred tax assets rose to $39.239M from $28.205M, but a $38.500M valuation allowance left net deferred tax assets at zero, reflecting historical losses and uncertainty about future taxable income. KPMG issued an unqualified opinion on the FY2024–FY2025 financial statements under U.S. GAAP.

Lycia: financial position, operating performance, and financing

Lycia is a clinical-stage biotechnology company developing LYTAC therapeutics to degrade disease-causing extracellular proteins, initially for autoimmune, inflammatory, and allergic diseases. It has incurred significant losses since inception and expects continued losses as it advances its pipeline.

H1 2026 operating results

For the six months ended June 30, 2026, collaboration revenue was $0, compared with $2.306M in H1 2025. Total operating expenses fell to $20.870M from $30.652M, narrowing operating loss to $20.870M from $28.346M. Net loss improved to $19.196M from $25.624M; basic and diluted loss per share was $5.97 versus $8.28. Other income, net, was $1.674M versus $2.722M (including interest income of $1.698M versus $2.803M). There was no income tax provision or benefit in either period.

Research and development expense declined to $17.312M from $25.804M, while general and administrative expense rose to $3.558M from $3.441M. R&D reductions included direct program expenses of $9.370M from $13.612M, personnel costs of $5.362M from $6.977M, and other R&D expenses of $2.479M from $4.402M. H1 2026 stock-based compensation was $0.476M ($0.218M R&D and $0.258M G&A), down from $0.619M.

The lower cost base followed a June 2025 workforce reduction of approximately 42% and the deprioritization of certain research programs. H1 2025 included $1.407M of restructuring and impairment charges; none were recorded in H1 2026, and no additional material costs were expected.

Cash, financing, and balance sheet

Net cash used in operating activities was $18.125M, improved from $35.734M in H1 2025. Capital expenditures were $0 versus $0.160M of property and equipment purchases in H1 2025; Lycia received $0.071M from equipment sales in H1 2026. Investing cash flow was negative $14.873M, including $43.323M of marketable-security purchases and $28.379M of maturities. Financing activities provided $74.671M, primarily from the June Series D financing. Cash, cash equivalents, and restricted cash ended H1 at $61.092M, versus $19.419M at the beginning of the period.

Lycia issued 36,734,094 Series D preferred shares at $2.0417 per share, generating $75.000M gross proceeds and $74.7M net proceeds. At June 30, 2026, cash and cash equivalents were $60.940M and marketable securities were $87.151M ($63.381M current and $23.770M non-current), totaling $148.1M of cash, cash equivalents, and marketable securities. Management believes this can fund planned operating and capital expenditure needs for at least one year from issuance of the financial statements, though additional financing may ultimately be needed and its availability and terms are uncertain.

From December 31, 2025 to June 30, 2026, total assets increased to $156.760M from $97.215M, principally reflecting the financing and accumulated cash and investments. Total liabilities were $11.845M; total stockholders’ deficit was $132.141M, versus $113.339M. Accumulated deficit was $136.756M. Goodwill and other intangible assets were not separately reported.

Preferred stock, classified as temporary equity because certain liquidation events are outside Lycia’s control, had a June 30 net carrying amount of $277.056M and liquidation value of $278.310M, compared with $202.341M and $203.310M, respectively, at year-end 2025. The preferred shares have an 8% noncumulative dividend when declared and liquidation priority over common shares; no dividends had been declared. The financing increased the automatic IPO conversion threshold from $50.0M to $75.0M of net proceeds.

Collaboration, pipeline obligations, and dilution

Lilly’s collaboration covered research on up to five targets, after which Lilly assumed responsibility for further development and commercialization. Lilly exercised a one-year extension in August 2025, paying a non-refundable $2.0M fee in addition to its $35.0M upfront payment, then gave notice of termination without cause in November 2025, effective February 12, 2026. Lycia completed remaining activities and recognized all remaining deferred revenue by December 2025; no Lilly revenue was recognized in H1 2026, versus $2.306M in H1 2025. No milestones were achieved, making possible future milestone and royalty receipts dependent on subsequent development and commercialization.

Under its July 2025 RSR license, Lycia is developing LCA-0321, a LYTAC degrader targeting TSHR autoantibodies. The $0.3M milestone associated with filing an IND was deemed probable and accrued in H1 2026. The agreement provides for up to $12.0M of aggregate milestones, annual maintenance fees rising from $50,000 to $0.3M, and potential sublicense payments. Other arrangements include up to $1.9M and $8.3M of milestones, respectively, plus potential royalties. A separate discovery/preclinical arrangement could require up to $4.0M in milestones; none had been achieved. These obligations precede product revenue.

Common shares outstanding rose from 3,181,403 at the start of H1 2026 to 3,249,221 at June 30 (H1 2025: 3,066,389 to 3,121,511). At June 30, 34,141,408 common shares were reserved for preferred conversion and 2,904,378 options were outstanding; 4,117,195 shares remained available for option grants. Total shares reserved for future issuance were 41,162,981, versus 30,115,534 at year-end 2025. Anti-dilutive securities excluded from diluted loss per share totaled 37,049,716 shares in H1 2026 versus 28,961,608 in H1 2025. Unrecognized stock compensation was $2.1M, expected to be recognized over a weighted-average 2.4 years.

Leases and subsequent events

H1 lease expense was $1.036M, down from $1.234M; operating lease liabilities were $3.162M at June 30 ($1.455M current, $1.707M noncurrent) against $3.484M of undiscounted payments. An expanded headquarters lease increased monthly payments by $0.1M through October 2028; a lab extension through March 2027 entails approximately $0.5M of payments.

After period-end, Lycia granted 1,632,786 options in August 2026 at $3.70 per share and approved another 172,670 options in October, exercisable at the IPO price upon registration-statement effectiveness. A 1-for-4.5087 reverse stock split was effected October 19, 2026; common-share and per-share data were retrospectively adjusted, while preferred-share counts were unchanged and conversion ratios adjusted.