Atea Pharmaceuticals, Inc. (AVIR)

CIK: 0001593899. SIC: 2834 Pharmaceutical Preparations. Latest 10-K as of: 2026-03-05.

SIC breadcrumb: Manufacturing > Chemicals And Allied Products > SIC 2834 Pharmaceutical Preparations

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1593899. Latest filing source: 0001193125-26-094159.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001593899.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001593899.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001193125-26-219678.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-12. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on March 5, 2026. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A, “Risk Factors” and other factors set forth in other parts of this Quarterly Report on Form 10-Q.

Overview

We are a late-stage clinical biopharmaceutical company leveraging our deep understanding of antiviral drug development, medicinal chemistry, biochemistry and virology to discover, develop and commercialize novel, orally administered antivirals to treat serious viral diseases. Our current product candidate pipeline includes the regimen of bemnifosbuvir and ruzasvir which we believe has the potential to improve the current standard of care (“SOC”) for the treatment of patients with hepatitis C virus (“HCV”) infection and AT-587 which we believe has the potential to be the first direct-acting antiviral (“DAA”) for the treatment of patients, particularly immunocompromised patients, with chronic hepatitis E virus (“HEV”) infection.

HCV - Our Goal and our Program

The objective of our HCV development program is to improve upon the current SOC by offering bemnifosbuvir and ruzasvir as a differentiated pan-genotypic protease inhibitor-free, short-duration regimen for patients infected with HCV, if successfully developed and approved. We believe that a novel treatment regimen that can be easily prescribed will benefit today’s HCV population, which is predominately young (20-49 years old) and non-cirrhotic, and it would be a significant improvement to the current SOC.

Presently, there are no short-course (i.e., eight week) nucleotide inhibitor-based, pan-genotypic HCV treatment regimens. Clinical and nonclinical results from studies conducted to date, including a global Phase 2 clinical trial which enrolled 275 HCV infected patients, have shown that the regimen of bemnifosbuvir and ruzasvir has high potency and has been well tolerated. These studies have also shown that the regimen has a low risk for drug-drug interactions with many commonly prescribed medications including proton pump inhibitors and offers the convenience of being able to be taken with or without food. This is a profile that we believe will offer a significant improvement to the current SOC, if approved.

The global HCV Phase 3 program we are conducting consists of two randomized, open label studies: C-BEYOND which has clinical trial sites in the United States (“US”) and Canada, and C-FORWARD which has clinical trial sites in countries outside of North America. In these Phase 3 trials we are comparing our regimen of bemnifosbuvir and ruzasvir to an active comparator, the regimen of sofosbuvir and velpatasvir, in patients with chronic HCV infection. We are conducting the Phase 3 program in geographically diverse regions in order to enroll patients with a broad array of HCV genotypes.

C-BEYOND is fully enrolled with over 880 patients, and we expect to report topline results mid-2026. We anticipate completing enrollment of an additional 880 patients in C-FORWARD in mid-2026 and reporting topline C-FORWARD results at year-end 2026. Pending successful results from these Phase 3 clinical trials, we are targeting submission to the US Food and Drug Administration (“FDA”) of a New Drug Application (“NDA”) for marketing approval in March 2027.

We are executing a focused chemistry, manufacturing and controls (“CMC”) strategy to provide fixed dose combination (“FDC”) tablets for the completion of the Phase 3 program, to fulfill NDA requirements and to prepare us for potential launch with sufficient commercial supply for projected initial sales if the regimen of bemnifosbuvir and ruzasvir is approved for marketing.

Given the large number of patients currently infected with HCV, which is reported by the US Center for Disease Control and Prevention to be as many as four million persons in the US, and the incidence of newly reported chronic infections continuing to outpace rates of treatment, we expect that a substantial global market will exist for the foreseeable future. In 2025, global net sales of branded HCV therapeutics known in the US as Epclusa® (including the authorized generic copy of Epclusa) and Mavyret® exceeded $2.5 billion with the US accounting for approximately 50% of these sales.

15

HEV – Our Goal and Our Program

We are developing AT-587 for the treatment of chronic HEV infection in immunocompromised patients. In this high-risk patient population, infection with HEV can rapidly progress to cirrhosis and other serious complications.

There are no DAAs currently available for the treatment of HEV. The most frequent interventions include reduction of immunosuppressive agents which, in solid organ transplant recipients, increases risk of transplant rejection, or off-label treatment with ribavirin which is indicated for treatment of other viruses but hindered by serious adverse events and limited HEV efficacy. The severity of disease in high-risk patients combined with the lack of approved HEV therapies is a substantial unmet medical need which we believe can be addressed if AT-587 is successfully developed.

AT-587 has demonstrated potent nanomolar antiviral activity against HEV in vitro. In single-dose in vivo nonclinical pharmacokinetic studies, high plasma concentrations of the surrogate to the active intracellular triphosphate metabolite were observed in all animal species tested. Results from in vitro toxicology, pharmacology and drug metabolism and pharmacokinetic studies indicate the potential for a favorable clinical profile for AT-587. Currently, we anticipate initiating clinical development of AT-587 with a first-in-human Phase 1 study in mid-2026.

Developing a treatment for HEV, particularly a product candidate derived from our proprietary platform, is a potentially important and advantageous strategic expansion of our antiviral pipeline. If both product candidates are successfully developed and approved, we will have a hepatology portfolio that we anticipate will improve upon the current SOC for HCV and introduce the first DAA for HEV.

Discovery efforts for other RNA virus infections

We have an extensive library of compounds that have been designed and generated by our medicinal chemists. Currently, we are evaluating select compounds derived from this library in in vitro and in vivo studies to assess the antiviral activity and other properties of such compounds against other RNA viral infections.

In all our discovery and preclinical efforts, we assess where there is a compelling market opportunity and then we aim to identify and advance only those candidates that we believe may have first- or best-in-class profiles with the potential to either become the SOC, or disrupt the existing SOC, and in each case, dramatically improve patient outcomes.

Financial Resources

We believe we are well capitalized to advance our current programs. We had $256.0 million in cash, cash equivalents and marketable securities at March 31, 2026.

We do not have any products approved for sale and have not generated any product revenue since inception. We do not anticipate generating any revenue from product sales for the foreseeable future. Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of our product candidates. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through private or public equity or debt financings, collaborative or other arrangements with third parties, or through other sources of financing. Our failure to meet the primary efficacy endpoint of our COVID-19 SUNRISE-3 Phase 3 clinical trial may make such financing more difficult. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates.

We remain focused on identifying initiatives, investments and opportunities to maximize stockholder value.

In an effort to enhance efficiency in the management of infrastructure expenses, in the first quarter of 2025, we reduced our workforce by approximately 25%. This workforce reduction is expected to result in aggregate cost savings of approximately $15.0 million through 2027.

Additionally, in April 2025, our Board authorized a program to repurchase shares of our common stock (“Common Stock”). Under this authorization, we returned capital to our stockholders while maintaining the capacity to complete the Phase 3 clinical development of the regimen of bemnifosbuvir and ruzasvir and execute on our other strategic business plans. Under the share repurchase program, which was fully completed in 2025, we expended $25.5 million (including transaction costs and excise taxes) in connection with the repurchase of 7,673,792 shares of our Common Stock.

16

Expecting that the results of our HCV Phase 3 clinical development program, if successful, will drive stockholder value and catalyze business development discussions, in November 2025, we concluded the formal engagement to explore strategic partnerships which we previously entered into with Evercore LLC, a global independent investment bank. Currently, we expect to report topline results from our Phase 3 C-Beyond trial in mid-2026 and topline results from our Phase 3 C-Forward trial at year-end 2026. We remain open to consideration of strategic transactions and all other opportunities to drive stockholder value.

Merck License Agreement

In December 2021, we entered into a license agreement (“Merck License Agreement”) with MSD International GmbH, an affiliate of Merck & Co., Inc. (“Merck”) for the development, manufacture and commercialization of ruzasvir. Ruzasvir is the investigational NS5A inhibitor we are developing in combination with bemnifosbuvir for the treatment of HCV.

Pursuant to the terms of the Merck License Agreement, we obtained from Merck an exclusive (subject to certain reserved rights to conduct internal research), sublicensable, and worldwide license under certain Merck patents and know-how to research, develop, manufacture, have manufactured, use, import, export, sell, offer for sale, and otherwise commercialize ruzasvir or products containing ruzasvir (each a “Product”) for all therapeutic or prophylactic uses in humans.

In addition to a non-refundable upfront payment that we made in February 2022, we agreed to pay Merck milestone payments upon our achievement of certain development, regulatory and sales-based milestones. Additionally, we will pay Merck tiered royalties based on annual net sales of Products ranging from high single digits to mid-teens percentages. Our royalty payment obligations will continue until the later of (i) the expiration of the last to expire valid claim of a licensed Merck patent claiming such Product and (ii) a period of years after the first commercial sale of such Product in such country. We may terminate the Merck License Agreement for convenience upon prior written notice. The first milestone in the amount of $5.0 million became due and

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-03-05. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes to those statements included elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed in Part I, Item 1A, “Risk Factors” and elsewhere in this Annual Report on Form 10-K. See “Special Note Regarding Forward-Looking Statements.”

Overview

We are a late-stage clinical biopharmaceutical company leveraging our deep understanding of antiviral drug development, medicinal chemistry, biochemistry and virology to discover, develop and commercialize novel, orally administered antivirals to treat serious viral diseases. Our current product candidate pipeline includes the regimen of bemnifosbuvir and ruzasvir which we believe has the potential to improve the current standard of care (“SOC”) for the treatment of patients with hepatitis C virus (“HCV”) infection and AT-587 which we believe has the potential to be the first direct-acting antiviral (“DAA”) for the treatment of patients, particularly immunocompromised patients, with chronic hepatitis E virus (“HEV”) infection.

HCV - Our Goal and our Program

The objective of our HCV development program is to improve upon the current SOC by offering bemnifosbuvir and ruzasvir as a differentiated pan-genotypic protease inhibitor-free, short-duration regimen for patients infected with HCV, if successfully developed and approved. We believe that a novel treatment regimen that can be easily prescribed will benefit today’s HCV population, which is predominately young (20-49 years old) and non-cirrhotic, and it would be a significant improvement to the current SOC.

Presently, there are no short-course (i.e., eight week) nucleotide inhibitor-based, pan-genotypic HCV treatment regimens. Clinical and nonclinical results from studies conducted to date, including a global Phase 2 clinical trial which enrolled 275 HCV infected patients, have shown that the regimen of bemnifosbuvir and ruzasvir has high potency and has been well tolerated. These studies have also shown that the regimen has a low risk for drug-drug interactions with many commonly prescribed medications including proton pump inhibitors and offers the convenience of being able to be taken with or without food. This is a profile that we believe will offer a significant improvement to the current SOC, if approved.

The global HCV Phase 3 program we are conducting consists of two randomized, open label studies: C-BEYOND which has clinical trial sites in the US and Canada, and C-FORWARD which has clinical trial sites in countries outside of North America. In these Phase 3 trials we are comparing our regimen of bemnifosbuvir and ruzasvir to an active comparator, the regimen of sofosbuvir and velpatasvir, in patients with chronic HCV infection. We are conducting the Phase 3 program in geographically diverse regions in order to enroll patients with a broad array of HCV genotypes.

C-BEYOND is fully enrolled with over 880 patients, and we expect to report topline results mid-2026. We are actively progressing enrollment of an additional 880 patients in C-FORWARD and expect to report topline results from C-FORWARD at year-end 2026. Pending successful results from these Phase 3 clinical trials, we are targeting submission to US Food and Drug Administration (“FDA”) of a New Drug Application (“NDA”) for marketing approval in March 2027.

We are executing a focused chemistry, manufacturing and controls (“CMC”) strategy to provide fixed dose combination (“FDC”) tablets for the completion of the Phase 3 program and to prepare us for potential launch with sufficient commercial supply for projected initial sales if the regimen of bemnifosbuvir and ruzasvir is approved for marketing.

Given the large number of patients currently infected with HCV, which is reported by the US Center for Disease Control and Prevention to be as many as four million persons in the US, and the incidence of

115

newly reported chronic infections continuing to outpace rates of treatment, we expect that a substantial global market will exist for the foreseeable future. In 2025, global net sales of branded HCV therapeutics known in the US as Epclusa® (including the authorized generic copy of Epclusa) and Mavyret® exceeded $2.5 billion with the US accounting for approximately 50% of these sales.

HEV – Our Goal and Our Program

We are developing AT-587 for the treatment of chronic HEV infection in immunocompromised patients. In this high-risk patient population, infection with HEV can rapidly progress to cirrhosis and other serious complications.

There are no DAAs currently available for the treatment of HEV. The most frequent interventions include reduction of immunosuppressive agents which, in solid organ transplant recipients, increases risk of transplant rejection, or off-label treatment with ribavirin which is indicated for treatment of other viruses but hindered by serious adverse events and limited HEV efficacy. The severity of disease in high-risk patients combined with the lack of approved HEV therapies is a substantial unmet medical need which we believe can be addressed if AT-587 is successfully developed.

AT-587 has demonstrated potent nanomolar antiviral activity against HEV in vitro. In single-dose in vivo nonclinical pharmacokinetic studies, high plasma concentrations of the surrogate to the active intracellular triphosphate metabolite were observed in all animal species tested. Results from in vitro toxicology, pharmacology and drug metabolism and pharmacokinetic (“DMPK”) studies indicate the potential for a favorable clinical profile for AT-587. Additional Investigational New Drug Application/Clinical Trial Application (“IND/CTA”) enabling studies are ongoing. Currently, we anticipate initiating clinical development of AT-587 with a first-in-human Phase 1 study in mid-2026.

Developing a treatment for HEV, particularly a product candidate derived from our proprietary platform, is a potentially important and advantageous strategic expansion of our antiviral pipeline. If both product candidates are successfully developed and approved, we will have a hepatology portfolio that we anticipate will improve upon the current SOC for HCV and introduce the first DAA for HEV.

Discovery efforts for other RNA virus infections

We have an extensive library of compounds that have been designed and generated by our medicinal chemists. Currently, we are evaluating select compounds derived from this library in in vitro and in vivo studies to assess the antiviral activity and other properties of such compounds against other RNA viral infections.

In all our discovery and preclinical efforts, we assess where there is a compelling market opportunity and then we aim to identify and advance only those candidates that we believe may have first- or best-in-class profiles with the potential to either become the SOC, or disrupt the existing SOC, and in each case, dramatically improve patient outcomes.

Financial Resources

We believe we are well capitalized to advance our current programs. We had $301.8 million in cash, cash equivalents and marketable securities at December 31, 2025.

We do not have any products approved for sale and have not generated any product revenue since inception. We do not anticipate generating any revenue from product sales for the foreseeable future. Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of our product candidates. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through private or public equity or debt financings, collaborative or other arrangements with third parties, or through other sources of financing. Our failure to meet the primary efficacy endpoint of our COVID-19 SUNRISE-3 Phase 3 clinical trial may make such financing more difficult. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates.

116

We continue to focus on options to maximize stockholder value.

In an effort to enhance efficiency in the management of infrastructure expenses, in the first quarter of 2025, we reduced our workforce by approximately 25%. This workforce reduction is expected to result in aggregate cost savings of approximately $15.0 million through 2027.

In April 2025, our Board of Directors (“Board”) authorized the repurchase of up to $25.0 million of our common stock (“Share Repurchase Program). The repurchase of shares under the Share Repurchase Program has been completed. Under the Share Repurchase Program, we repurchased an aggregate of 7,673,793 shares of common stock through open market and privately negotiated transactions. The aggregate price of the shares repurchased during the year ended December 31, 2025 was $25.5 million (including transaction costs and excise taxes). All repurchased shares were retired immediately upon receipt and returned to authorized and unissued status.

Expecting that the results of the HCV Phase 3 clinical development program will drive stockholder value and catalyze business development discussions, in November 2025, we concluded the formal engagement to explore strategic partnerships which we previously entered into with Evercore LLC, a global independent investment bank. We remain open to consideration of all opportunities to drive stockholder value including strategic transactions.

Merck License Agreement

In December 2021, we entered into a license agreement (“Merck License Agreement”) with MSD International GmbH, an affiliate of Merck & Co., Inc. (“Merck”) for the development, manufacture and commercialization of ruzasvir. Ruzasvir is the investigational NS5A inhibitor we are developing in combination with bemnifosbuvir for the treatment of HCV.

Pursuant to the terms of the Merck License Agreement, we obtained from Merck an exclusive (subject to certain reserved rights to conduct internal research), sublicensable, and worldwide license under certain Merck patents and know-how to research, develop, manufacture, have manufactured, use, import, export, sell, offer for sale, and otherwise commercialize ruzasvir or products containing ruzasvir (each a “Product”) for all therapeutic or prophylactic uses in humans.

In addition to a non-refundable upfront payment that we made in February 2022, we agreed to pay Merck milestone payments upon our achievement of certain development, regulatory and sales-based milestones. Additionally, we will pay Merck tiered royalties based on annual net sales of Products ranging from high single digits to mid-teens percentages. Our royalty payment obligations will continue until the later of (i) the expiration of the last to expire valid claim of a licensed Merck patent claiming such Product and (ii) a period of years after the first commercial sale of such Product in such country. We may terminate the Merck License Agreement for convenience upon prior written notice. The first milestone in the amount of $5.0 million became due and payable in April 2025 when we enrolled our first patient in C-BEYOND, the Phase 3 clinical trial that we are currently conducting in the US and Canada evaluating the regimen of bemnifosbuvir and ruzasvir. The Company recognized this milestone payment as research and development expense in the three months ended June 30, 2025. The next potential milestone, in the amount of $10.0 million, is payable upon acceptance by the FDA of a new drug application covering a product candidate including ruzasvir. If we successfully complete the ongoing HCV Phase 3 clinical trials evaluating the regimen of bemnifosbuvir and ruzasvir and are able to complete and submit the NDA to the FDA on our current projected timeline, we anticipate that this next potential milestone may become due and payable during the three months ended June 30, 2027.

Financial Operations Overview

As of December 31, 2025, we had cash and investments of $301.8 million. Net cash used in operating activities was $132.0 million for the year ended December 31, 2025. In an effort to enhance efficiency in the management of infrastructure expenses, in the first quarter of 2025, we reduced our workforce by approximately 25%. This workforce reduction is expected to result in aggregate cost savings of approximately $15.0 million through 2027. As noted above, in April 2025, our Board authorized the Share Repurchase Program. This authorization, which constituted a part of our continuing efforts to maximize value for our stockholders, allowed us to return capital to our stockholders while maintaining the capacity

117

to complete our Phase 3 clinical development of the regimen of bemnifosbuvir and ruzasvir and execute on our strategic business plans. Based on our current plans, we anticipate our existing financial resources, will allow us to advance our current and planned clinical programs to and through key inflection points, prepare and submit an application for marketing approval of the regimen of bemnifosbuvir and ruzasvir, engage in a pre-launch activities including the manufacture of the regimen of bemnifosbuvir and ruzasvir in commercial quantities sufficient to meet our initial sales projections and advance to late-stage clinical development of AT-587 for the treatment of HEV.

We expect that our net cash used in operating activities will remain significant as we complete the clinical development of the regimen of bemnifosbuvir and ruzasvir for the treatment of HCV, seek regulatory approval, manufacture such product at commercial scale and prepare for and, if approved, pursue commercialization activities; advance AT-587, our HEV product candidate through preclinical and clinical development; acquire, discover, validate and develop additional product candidates; obtain, maintain, protect and enforce our intellectual property portfolio; and, if necessary, hire additional personnel. In addition, we may incur additional costs as we continue to operate as a public company. We believe that our available cash, cash equivalents and marketable securities will be sufficient to fund our planned operations through 2027. We have based this estimate on assumptions that may prove to be wrong and we could exhaust our available capital resources sooner than we expect.

We do not have any products approved for sale and have not generated any product revenue since inception. We do not anticipate generating any revenue from product sales for the foreseeable future. Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of our product candidates. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through private or public equity or debt financings, collaborative or other arrangements with third parties, or through other sources of financing. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates.

We plan to continue to use third-party service providers, including clinical research organizations (“CROs”) to carry out our preclinical and clinical development, and contract manufacturing organizations (“CMOs”) to manufacture and supply the materials used during the development of our product candidates. Additionally, we expect to rely on CMOs for the manufacture of commercial supply of any product candidate we may successfully develop.

As we continue to advance our programs, we expect to incur significant expenses over the next several years, as we:

•
complete the Phase 3 clinical development of the regimen of bemnifosbuvir and ruzasvir for the treatment of HCV;

•
complete non-clinical NDA enabling activities, including those associated with the manufacture of the regimen of bemnifosbuvir and ruzasvir at commercial scale;

•
seek market approval and prepare for potential commercialization of the regimen of bemnifosbuvir and ruzasvir for the treatment of HCV;

•
complete IND/CTA enabling studies and initiate clinical development of AT-587 for the treatment of chronic HEV;

•
continue discovery and preclinical activities to identify other potential product candidates for the treatment of diseases caused by other single stranded RNA viruses;

•
acquire or in-license clinical stage drug candidates, form strategic alliances or establish collaborations with third parties;

•
maintain, expand, protect and enforce our intellectual property portfolio;

•
hire additional personnel, if necessary, to support our activities; and

•
establish commercialization capabilities if we are successful in developing our product candidates.

118

Components of Results of Operations

Revenue

We do not have any products approved for sale and we have not generated any revenue in the periods presented.

If our product candidate development efforts are successful and result in commercialization, we may generate revenue in the future from product sales. Additionally, we may generate revenue from collaboration or license agreements that we may enter into with third parties.

Operating Expenses

Research and Development Expenses

Substantially all of our research and development expenses consist of expenses incurred in connection with the discovery and development of our product candidates. These expenses include external costs consisting of fees paid to third parties, including CROs and CMOs, to conduct certain research and development activities on our behalf and consulting costs, as well as internal costs consisting of payroll and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for our research and development employees and allocated overhead, including rent, equipment, depreciation, information technology costs and utilities attributable to our research and development personnel. We expense both internal and external research and development expenses as they are incurred. In circumstances where amounts have been paid in advance or in excess of costs incurred, we record a prepaid expense, which is expensed as services are performed or goods are delivered.

A significant portion of our research and development costs have been external costs, which we track by therapeutic area. We have not historically tracked our internal research and development expenses by therapeutic area as they are deployed across multiple programs.

The following table summarizes our external research and development expenses by indication and internal research and development expenses:

Years Ended December 31,

2025

2024

(in thousands)

HCV external costs

$

109,574

$

34,106

COVID-19 external costs

1,490

60,734

Early stage discovery external costs

3,800

943

Internal research and development costs

33,160

48,318

Total research and development expenses

$

148,024

$

144,101

Substantially all of our resources are focused on the development of our product candidates. We expect our research and development expenses to vary quarter over quarter particularly as we complete our Phase 3 HCV clinical program, manufacture commercial launch supply for the possible commercialization of the regimen of bemnifosbuvir and ruzasvir and advance AT-587 for the treatment of HEV. Predicting the timing or cost to complete our clinical programs, validate our commercial manufacturing and supply processes and manufacture of product at commercial scale is difficult and delays may occur because of many factors, including factors outside of our control. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate or the time to complete planned clinical trials is extended due to delays in enrollment or otherwise, we could be required to expend significant additional financial resources and time on the completion of clinical development. Furthermore, we are unable to predict with any certainty when our HCV and HEV product candidates or any other product candidate we may develop will, if ever, receive regulatory approval.

Early stage discovery activities include assessing the antiviral activity, pharmacokinetics, toxicity and other properties of select compounds derived from our nucleos(t)ide library in an effort to identify

119

promising potential product candidates for the treatment of RNA viral infections for which there is no currently approved DAA or for which we believe the current SOC can be improved to address unmet medical needs.

General and Administrative Expenses

General and administrative expenses consist principally of payroll and personnel expenses, including salaries and bonuses, benefits and stock-based compensation expenses, professional fees for legal, consulting, accounting and tax services, business insurance, allocated overhead, including rent, equipment, depreciation, information technology costs and utilities, and other general operating expenses not otherwise classified as research and development expenses.

We anticipate that our general and administrative expenses may increase, including in connection with any future expansion of our organization for potential commercialization of our product candidates, as a result of increased personnel costs, expanded infrastructure, increased consulting, legal and accounting services, costs associated with complying with Nasdaq and SEC requirements and increased investor relations costs.

Interest Income and Other, Net

Interest income and other, net, consists primarily of interest income earned on our cash and investments.

Income Taxes

Income taxes consists primarily of federal and state current income taxes.

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

The following table summarizes our results of operations for the periods indicated:

Years Ended December 31,

2025

2024

Change

(in thousands)

Operating expenses:

Research and development

$148,024

$144,101

$3,923

General and administrative

32,863

48,849

(15,986)

Total operating expenses

180,887

192,950

(12,063)

Loss from operations

(180,887)

(192,950)

12,063

Interest income and other, net

16,376

25,490

(9,114)

Loss before income taxes

(164,511)

(167,460)

2,949

Income tax benefit (expense)

6,162

(925)

7,087

Net loss

$(158,349)

$(168,385)

$10,036

Research and Development Expenses

Research and development expenses increased by $3.9 million from $144.1 million for the year ended December 31, 2024 to $148.0 million for the year ended December 31, 2025. The net increase was partially driven by an increase in external spend for our HCV Phase 3 clinical development including the purchase of comparator drug and expense related to the achievement of a milestone under the Merck License Agreement. The increase was partially offset by lower external spend related to the COVID-19 program which was concluded in 2024 and lower internal research and development expenses primarily related to a decrease in stock-based compensation and payroll related expense in the year ended December 31, 2025.

120

General and Administrative Expenses

General and administrative expenses decreased by $16.0 million from $48.8 million for the year ended December 31, 2024 to $32.9 million for the year ended December 31, 2025. The net decrease was primarily related to lower stock-based compensation expense, partially offset by increased professional fees.

Interest Income and Other, Net

Interest income and other, net, decreased by $9.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to lower investment balances.

Income Taxes

We recorded an income tax benefit of $6.2 million for the year ended December 31, 2025 as compared to an income tax expense of $0.9 million for the year ended December 31, 2024. The net benefit was primarily the result of recognition of previously unrecognized tax benefits following a lapse in the statute of limitations.

Liquidity and Capital Resources

Sources of Liquidity

As of December 31, 2025, we had cash, cash equivalents and marketable securities of $301.8 million. We believe that our available cash and investments will be sufficient to fund our planned operations through 2027 including the completion of the Phase 3 program evaluating the regimen of bemnifosbuvir and ruzasvir for the treatment of HCV. We have based this estimate on assumptions that may prove to be wrong and we could exhaust our available capital resources sooner than we expect.

We are party to an amended and restated open market sales agreement ("Sales Agreement") with Jefferies LLC ("Jefferies"), pursuant to which we may from time to time offer and sell shares of our common stock for an aggregate offering price of up to $200.0 million, through or to Jefferies, acting as sales agent or principal. We have agreed to pay Jefferies a commission of up to 3.0% of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide Jefferies with customary indemnification and contribution rights. As of December 31, 2025, no shares have been issued under the Sales Agreement. The shares will be offered and sold under the Company's shelf registration statement on Form S-3 declared effective by the SEC on November 19, 2024.

Future Funding Requirements

To date, we have not generated any product revenue. We do not expect to generate any product revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates and we do not know when, or if, this will occur. We expect to continue to incur significant expenditures for the foreseeable future as we continue the development of, and seek regulatory approvals for, our product candidates, and prepare for and begin to commercialize any approved products. We are subject to all of the risks typically related to the development of new product candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. Moreover, we expect to incur additional general and administrative costs, including selling costs, as we continue to operate as a public company and potentially expand our organization to support and otherwise initiate additional activities in preparation for potential commercialization of the regimen of bemnifosbuvir and ruzasvir.

We will continue to invest significant capital to develop our product candidates and fund operations for the foreseeable future. To fund such investment, we may seek to raise capital through public or private equity or debt financings, collaborative arrangements with third parties, or through other sources of financing. We anticipate that we may need to raise substantial additional capital, the requirements for which will depend on many factors, including:

121

•
the scope, timing, rate of progress and costs of our Phase 3 program evaluating the combination of bemnifosbuvir and ruzasvir for the treatment of HCV and our other drug discovery efforts, preclinical development activities, laboratory testing and clinical trials for other product candidates including AT-587 for the treatment of HEV;

•
the outcome of our search for strategic collaborations to strengthen our capabilities to commercialize the regimen of bemnifosbuvir and ruzasvir, if approved;

•
the number and scope of additional clinical programs we decide to pursue;

•
the cost, timing and outcome of preparing for and undergoing regulatory review of our regimen of bemnifosbuvir and ruzasvir for the treatment of HCV and any other product candidates;

•
the scope and costs of development and commercial manufacturing activities;

•
the cost and timing associated with commercializing regimen of bemnifosbuvir and ruzasvir for the treatment of HCV and any other product candidates, if they receive marketing approval;

•
the extent to which we acquire or in-license other product candidates and technologies;

•
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

•
our ability to establish and maintain collaborations on favorable terms, if at all;

•
our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates and, if approved, the commercialization of our products;

•
our maintenance and enhancement of operational, financial and management systems; and

•
the costs associated with being a public company.

A change in the outcome of any of these or other variables with respect to any of our product candidates could significantly change the costs and timing associated with the development or potential commercialization of one or more of our product candidates. Furthermore, our operating plans may change in the future, and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing that we enter into may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.

Adequate funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs, clinical trials and commercialization activities or we may also be required to sell or license to others rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves. If we are required to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that limit our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders, which could materially affect our business and financial condition.

Market volatility, inflation, interest rate fluctuations and other macroeconomic trends and geopolitical events, including civil or political unrest and terrorism, may have a significant impact on the availability of funding sources and the terms on which any funding may be available.

See Part I, Item 1A,“Risk Factors” for additional risks associated with our substantial capital requirements.

122

Summary Statement of Cash Flows

The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods presented below:

Years Ended December 31,

2025

2024

(in thousands)

Net cash used in operating activities

$

(132,031

)

$

(135,499

)

Net cash provided by investing activities

188,793

56,105

Net cash provided by (used in) financing activities

(25,745

)

267

Net increase (decrease) in cash and cash equivalents

$

31,017

$

(79,127

)

Cash Flows from Operating Activities

Net cash used in operating activities for the year ended December 31, 2025 was $132.0 million. Cash used in operating activities was primarily due to a net loss of $158.3 million, accretion of premium and discounts on marketable securities of $4.9 million, income tax benefit of $6.4 million, and an increase in prepaid expenses and other assets of $4.5 million partially offset by stock-based compensation of $20.7 million and an increase in accounts payable and accrued expenses and other liabilities of $21.1 million.

Net cash used in operating activities for the year ended December 31, 2024 was $135.5 million. Cash used in operating activities was primarily due to a net loss of $168.4 million, accretion of premium and discounts on marketable securities of $11.8 million, and a decrease in accrued expenses of $13.4 million, partially offset by stock-based compensation of $51.8 million and a decrease in prepaid expenses and other assets of $5.9 million.

Cash Flows from Investing Activities

Net cash provided by investing activities for the year ended December 31, 2025 was $188.8 million and consisted of sales and maturities of marketable securities of $470.7 million partially offset by purchases of marketable securities of $281.9 million.

Net cash provided by investing activities for the year ended December 31, 2024 was $56.1 million and consisted of sales and maturities of marketable securities of $517.3 million offset by purchases of marketable securities of $461.2 million.

Cash Flows from Financing Activities

Net cash used in financing activities for the year ended December 31, 2025 was $25.7 million and consisted of stock repurchases of $25.5 million (including transaction costs and excise taxes) under the Share Repurchase Program and payment of $0.5 million in connection with the satisfaction of certain tax withholding obligations arising in connection with the vesting of restricted stock units, partially offset by $0.3 million in proceeds from the issuance of our common stock under our 2020 Employee Stock Purchase Plan (“ESPP”) and upon exercises of stock options granted under our 2020 Incentive Award Plan.

Net cash provided by financing activities for the year ended December 31, 2024 was $0.3 million and consisted of proceeds from the issuance of our common stock under the ESPP.

Contractual Obligations and Commitments

We lease our office space in Boston, Massachusetts under a non-cancelable operating sublease. The term of the sublease commenced on January 1, 2022 and will expire on December 31, 2026.

123

The following table summarizes our contractual obligations as of December 31, 2025:

Payments Due by Period

Less than

1 year

1 to

3 years

3 to

5 years

More than

5 years

Total

(in thousands)

Operating lease obligations

$

855

$

—

$

—

$

—

$

855

We enter into contracts in the normal course of business with CROs for preclinical and clinical studies and testing, CMOs for manufacture and supply of our product candidates and other third parties for other services and products used for operating purposes. These contracts do not contain any minimum purchase commitments and generally provide for termination following a certain period after notice, and therefore we believe that our non-cancelable obligations under these agreements are not material. Payments due upon cancelation principally consist only of payments for services provided and expenses incurred up to the date of cancelation.

In December 2021, we entered into Merck License Agreement with Merck for the development, manufacture and commercialization of ruzasvir. Ruzasvir is the investigational NS5A inhibitor we are developing in combination with bemnifosbuvir for the treatment of HCV.

Pursuant to the terms of the Merck License Agreement, we obtained from Merck an exclusive (subject to certain reserved rights to conduct internal research), sublicensable, and worldwide license under certain Merck patents and know-how to research, develop, manufacture, have manufactured, use, import, export, sell, offer for sale, and otherwise commercialize a Product for all therapeutic or prophylactic uses in humans.

In addition to a non-refundable upfront payment that we made in February 2022, we agreed to pay Merck milestone payments upon our achievement of certain development, regulatory and sales-based milestones. Additionally, we will pay Merck tiered royalties based on annual net sales of Products ranging from high single digits to mid-teens percentages. Our royalty payment obligations will continue until the later of (i) the expiration of the last to expire valid claim of a licensed Merck patent claiming such Product and (ii) a period of years after the first commercial sale of such Product in such country. We may terminate the Merck License Agreement for convenience upon prior written notice. The first milestone in the amount of $5.0 million became due and payable in April 2025 when we enrolled our first patient in C-BEYOND, the Phase 3 clinical trial that we are currently conducting in the US and Canada evaluating the regimen of bemnifosbuvir and ruzasvir. The Company recognized this milestone payment as research and development expense in the three months ended June 30, 2025. The next potential milestone, in the amount of $10.0 million, is payable upon acceptance by the FDA of a new drug application covering a product candidate including ruzasvir. If we successfully complete the ongoing Phase 3 clinical trials evaluating the bemnifosbuvir and ruzasvir regimen and are able to complete and submit a new drug application to the FDA on our current projected timeline, we anticipate that this next potential milestone may become due and payable during the three months ended June 30, 2027.

We have an agreement with a consultant that requires payment of a success fee calculated as a percentage of certain product sales, subject to a cumulative maximum payout of $5.0 million.

The table above does not contain any potential amounts we may be obligated to pay under the Merck License Agreement as they will be recorded when the contingency is resolved and the milestone becomes payable. Additionally, the table above does not include any potential amounts due under the consulting agreement as none are probable and estimable at December 31, 2025.

124

Critical Accounting Policies and Estimates

Our financial statements have been prepared in accordance with US generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The effects of material revisions in estimates, if any, will be reflected in the consolidated financial statements prospectively from the date of change in estimates.

Our critical accounting policies are those policies that require the most significant judgments and estimates in the preparation of the financial statements. Management has determined that our most critical accounting policies are those relating to revenue recognition, accrued research and development expenses and stock based compensation.

Accrued Research and Development

We have entered into various agreements with CMOs and CROs. Our research and development accruals are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development services performed, but not yet invoiced, are included in accrued liabilities on the balance sheet. If the actual timing of the performance of services or the level of effort varies from the original estimates, we will adjust the accrual accordingly. Payments made to CMOs and CROs under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

Stock-Based Compensation

We use a fair value-based method to account for all stock-based compensation arrangements with employees and non-employees, including stock options and stock awards. The fair value of granted stock options is recognized on a straight-line basis over the period during which an optionee is required to provide services in exchange for the option award, known as the requisite service period, which usually is the vesting period. In determining fair value of the stock options granted, we use the Black–Scholes model, which requires the input of subjective assumptions. These assumptions include: estimating the fair market value of our common stock, estimating the length of time employees will retain their vested stock options before exercising them (expected term), the estimated volatility of our common stock price over the expected term (expected volatility), risk-free interest rate and expected dividends. See Note 10 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted during the years ended December 31, 2025 and 2024, respectively.

Cash and Cash Equivalents

We consider all highly-liquid investments with an original maturity, or a remaining maturity at the time of purchase, of three months or less to be cash equivalents. Our cash equivalents include money market funds and commercial paper, which are highly liquid and have strong credit ratings. These investments are subject to minimal credit and market risks. Cash and cash equivalents are stated at cost, which approximates market value.

125

Marketable Securities

Our investment strategy is focused on capital preservation. We invest in instruments that meet the credit quality standards outlined in our investment policy. Marketable securities consist of investments with maturities greater than three months. Marketable securities include US treasury obligations, US agency obligations, corporate debt, commercial paper and asset-backed securities. We classify all of our marketable securities as available-for-sale. Accordingly, these investments are recorded at fair value. Unrealized gains and losses are recorded as a component of other comprehensive income within stockholders’ equity. Amortization and accretion of discounts and premiums are recorded as interest income.

Fair Value Measurements

Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability between market participants at measurement dates. Accounting standards codification ("ASC") 820, Fair Value Measurement, establishes a three-level valuation hierarchy for instruments measured at fair value. The hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Concentration of Credit Risk and Off-balance Sheet Risk

Financial instruments that potentially subject us to concentrations of credit risk primarily consist of cash equivalents and marketable securities. Under our investment policy, we limit amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the US government. We do not believe that we are subject to any significant concentrations of credit risk from these financial instruments. We have no financial instruments with off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements.

Indemnification Agreements

We enter into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, we indemnify, hold harmless and agree to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, including in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments we could be required to make under these arrangements is not determinable. We have never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, we believe the fair value of these agreements is minimal.

We have also agreed to indemnify our directors and officers for certain events or occurrences while the director or officer is, or was serving, at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the director’s or officer’s service. The maximum potential amount of future payments we could be required to make under these indemnification agreements is not specified in the agreements; however, we have director and officer insurance coverage that reduces our exposure and enables us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.

126