Skye Bioscience, Inc. Annual Report - A Year in Review (Fiscal Year Ended December 31, 2025)

Curious about Skye Bioscience's latest moves? This summary cuts through the jargon of their annual report, offering a clear look at their journey and what it could mean for investors.

Here's a breakdown of Skye Bioscience, Inc.'s performance and outlook from their annual report (Form 10-K) for the fiscal year ending December 31, 2025:

Company Snapshot:

• Name: Skye Bioscience, Inc.
• Stock Ticker: SKYE
• Where they trade: Nasdaq Global Market
• Market Value (Public Float): Approximately $129.5 million as of June 30, 2025 (based on a share price of $4.18). This figure represents the value of shares available for public trading.
• Shares Outstanding: As of March 9, 2026, the company had approximately 33.4 million shares outstanding.
• Filing Status: Skye Bioscience is a "Smaller reporting company" and a "Non-accelerated Filer." This status generally applies to smaller, earlier-stage companies with a public float under $250 million or annual revenues under $100 million, allowing for different reporting requirements than larger corporations.

1. Business Overview

Skye Bioscience is a clinical-stage pharmaceutical company dedicated to developing new cannabinoid-derived treatments. Its primary focus is SBI-100 Ophthalmic Emulsion, its lead drug candidate, which targets glaucoma and ocular hypertension. The company also explores other cannabinoid-based compounds for inflammatory and fibrotic diseases. Skye's strategy centers on advancing its lead clinical programs through trials and exploring the broader therapeutic potential of cannabinoid-derived compounds.

2. Financial Performance

As a clinical-stage company, Skye Bioscience generated no significant revenue for the fiscal year ended December 31, 2025, which is typical for its development stage. The company reported a net loss of approximately $28.5 million for the year, an increase from $22.1 million in 2024.

Higher research and development (R&D) expenses drove this increased loss, rising to $24.0 million in 2025 from $18.5 million in 2024. This reflects the accelerated pace of their clinical trials and preclinical research. General and administrative expenses remained relatively stable at $4.5 million. For a company at this stage, growth is measured by pipeline advancement and clinical milestones, not traditional sales.

3. Risk Factors

Investors should be aware of several significant risks:

• Clinical Trial Outcomes: The success of SBI-100 Ophthalmic Emulsion depends heavily on positive results from ongoing and future clinical trials. Failure to meet efficacy or safety goals could severely impact the company's value.
• Regulatory Approval: Even with positive trial data, regulatory agencies like the FDA may not grant approval. The approval process is lengthy, complex, and uncertain.
• Funding and Dilution: Skye Bioscience will need substantial additional capital to complete clinical development and commercialize its products. Future equity financings could dilute existing shareholders.
• Competition: The pharmaceutical industry is highly competitive. Other companies may develop superior or more cost-effective treatments, or reach the market sooner.
• Intellectual Property: Protecting its intellectual property is crucial. Challenges to existing patents or an inability to secure new ones could undermine its competitive advantage.
• Reliance on Third Parties: Skye relies on contract research organizations (CROs) and other third parties for clinical trials and manufacturing, introducing risks related to their performance and compliance.

4. Management Discussion

For the fiscal year ending December 31, 2025, Skye Bioscience continued to advance its lead clinical program. The company made significant progress in patient enrollment and data collection for its Phase 2 clinical trial of SBI-100 Ophthalmic Emulsion in glaucoma patients, successfully completing enrollment on schedule by Q3 2025.

Additionally, Skye advanced two new preclinical cannabinoid-derived compounds into early development stages for inflammatory bowel disease and pulmonary fibrosis. The European Union granted Skye a key patent covering the formulation and use of SBI-100, strengthening its intellectual property.

Despite these achievements, the company continues to rely on external financing for R&D and operations, with potential for dilution from future equity raises. The inherent risks of clinical trials, such as unexpected results or delayed data readouts, remain a significant focus. The company also operates in a competitive therapeutic area with other companies developing glaucoma treatments. Management's strategy focuses on advancing SBI-100 Ophthalmic Emulsion through clinical development and exploring the broader therapeutic potential of cannabinoid-derived compounds. They emphasize potential partnerships for later-stage development and commercialization to mitigate financial risk.

5. Financial Health

As of December 31, 2025, Skye Bioscience held $35.2 million in cash and cash equivalents, a decrease from $58.7 million at the end of 2024. The company has no long-term debt.

Based on current spending, management estimates its existing cash will fund operations into Q3 2026. This suggests the company will need additional financing within the next 9-12 months to continue its development programs, underscoring its reliance on future capital raises for ongoing research and development.

6. Future Outlook

Looking ahead to 2026 and beyond, Skye Bioscience's primary focus is on the release of initial (top-line) data from its Phase 2 clinical trial of SBI-100 Ophthalmic Emulsion, expected in Q2 2026. Positive results would be a major catalyst, potentially leading to discussions with regulatory bodies about a Phase 3 trial design and opening doors for partnership opportunities.

The company also plans to continue advancing its preclinical programs, with the goal of submitting an Investigational New Drug (IND) application (a request to begin human trials) for one of its new compounds by late 2026 or early 2027. Skye's strategic emphasis is to maximize the value of its cannabinoid-derived pipeline through clinical advancement and potential collaborations.

7. Competitive Position

Skye Bioscience aims to differentiate itself through its unique approach to cannabinoid-derived therapeutics, particularly with SBI-100 Ophthalmic Emulsion. This drug targets the CB1 receptor in the eye, a specific biological pathway that sets it apart from many existing glaucoma treatments.

While the glaucoma market is crowded with established players and generic options, Skye believes its unique way of working could offer a significant advantage for patients who do not respond well to current therapies. Skye's preclinical pipeline also explores new applications of cannabinoids in areas with high unmet medical need. This strategy aims to carve out a niche in the competitive pharmaceutical landscape by leveraging cannabinoids' therapeutic potential.