TVRD

Business Context and Reporting Period

Tvardi Therapeutics, Inc. (TVRD) is a clinical-stage biopharmaceutical company focused on developing oral, small molecule STAT3 inhibitors for fibrosis-driven diseases. The reporting period covers the three and nine months ended September 30, 2025. In April 2025, the company completed a reverse merger with Cara Therapeutics, Inc., resulting in a change of corporate name and the conversion of legacy preferred stock and convertible notes into common stock. The company has no approved products and has not generated any revenue to date.

Key Financial Metrics

Note: Amounts in millions unless otherwise noted. The company reported a net gain of $7.2 million in "Other income, net" for the nine months ended September 30, 2025, primarily due to the fair value remeasurement of convertible notes prior to their conversion.

Material Changes vs. Prior Period

• Merger Impact: The April 2025 reverse merger with Cara Therapeutics resulted in the acquisition of approximately $23.9 million in net assets (primarily cash) and the conversion of all outstanding convertible notes and preferred stock into common stock. Consequently, the company had no convertible notes or preferred stock outstanding as of September 30, 2025, compared to $30.3 million in convertible notes and $85.5 million in preferred stock at December 31, 2024.
• Operating Expenses: General and administrative (G&A) expenses increased significantly to $2.3 million for the quarter (up 165% year-over-year) and $6.6 million for the nine-month period (up 194% year-over-year), driven by professional fees, personnel costs, and insurance costs associated with the merger and public company operations. Research and development (R&D) expenses decreased to $3.6 million for the quarter (down 25% year-over-year) due to the completion of the IPF trial and discontinuation of the mBC trial, partially offset by increased spending on the TTI-109 program.
• Liquidity: Cash and cash equivalents decreased from $31.6 million at year-end 2024 to $21.4 million at September 30, 2025, despite the merger proceeds, due to operating cash outflows of $17.8 million and investing activities of $15.1 million (purchases of short-term investments).

Guidance, Outlook, and Risks

• Clinical Developments: In October 2025 (subsequent to the period end), the company reported that its Phase 2 REVERT clinical trial of TTI-101 in idiopathic pulmonary fibrosis (IPF) did not meet its goals. The company is conducting additional analyses. The Phase 1 trial of TTI-109 in healthy volunteers is ongoing, with topline data expected in the first half of 2026. The Phase 1b/2 trial of TTI-101 in hepatocellular carcinoma (HCC) is ongoing.
• Going Concern: Management has concluded that there is substantial doubt about the company's ability to continue as a going concern. The company expects to incur significant operating losses for the foreseeable future and will require substantial additional funding to advance its clinical programs and operations.
• Capital Needs: The company plans to seek additional funding through equity offerings, debt financings, or strategic alliances. There is no assurance that such funding will be available on acceptable terms.
• Internal Controls: The company identified material weaknesses in its internal control over financial reporting related to Legacy Tvardi, including insufficient accounting personnel, inadequate segregation of duties, and inadequate review of financial statements. Remediation efforts are underway.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the current $36.4 million in liquid assets (cash + short-term investments) against the projected burn rate, given the "substantial doubt" going concern warning.
• IPF Trial Impact: Assess the strategic and financial implications of the failed Phase 2 IPF trial announced in October 2025 and the company's plan for the TTI-101 HCC program.
• Internal Control Remediation: Monitor the progress of remediation for the identified material weaknesses in internal controls over financial reporting.
• Dilution Risk: Evaluate the potential dilution to existing shareholders if the company raises additional capital through equity offerings, noting the restrictions on using Form S-3 for 12 months post-merger.
• Convertible Note Conversion: Confirm the final share count resulting from the conversion of the $28.3 million convertible notes and preferred stock during the merger.