What changed in this filing

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Item 1. Financial Statements

2025-05-06 compared with 2024-11-06 · 135 added, 223 removed, 358 unchanged (50% of the section changed)

3 unchanged sentences

(In thousands, except share amounts)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Current assets:

5 unchanged sentences

Property and equipment, net 57,765 55,236

Operating lease right-of-use asset 23,717 26,048

Finance lease right-of-use asset 50,199 47,533

Operating lease right-of-use asset 21,963 22,861

Other non-current assets 26,934 24,741

3 unchanged sentences

Accounts payable $ 8,458 $ 11,137

Accrued compensation 7,655 24,728

Accrued clinical and other research and development costs 27,908 22,822

Accrued manufacturing costs 14,579 12,779

Accrued compensation 14,874 21,590

Operating lease liability, current 8,585 8,308

9 unchanged sentences

Convertible preferred stock, $ 0.01 par value;

40,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

0 shares issued and outstanding as of September 30, 2024 and December 31, 2023

40,000,000 shares authorized as of March 31, 2025 and December 31, 2024;

0 shares issued and outstanding as of March 31, 2025 and December 31, 2024

Common stock, $ 0.01 par value;

400,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

143,840,029 shares and 138,385,498 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

400,000,000 shares authorized as of March 31, 2025 and December 31, 2024;

145,251,258 shares and 144,220,986 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 2,790,825 2,764,880

7 unchanged sentences

(In thousands, except share and per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Collaboration revenue:

Collaboration revenue from customers (1)

$ — $ 1,267 $ — $ 330,531

Total collaboration revenue — 1,267 — 330,531

Three Months Ended March 31,

Operating expenses:

8 unchanged sentences

Other comprehensive income (loss):

Net unrealized gain on marketable securities, net of tax

8,188 790 4,886 6,235

Net unrealized gain (loss) on marketable securities, net of tax

Comprehensive loss $ ( 132,953 ) $ ( 103,741 )

1 unchanged sentence

Weighted average number of shares outstanding, basic and diluted 171,222,030 149,404,188

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(1) Includes related-party collaboration revenue from customers of $ 1.3 million and $ 295.5 million for the three and nine months ended September 30, 2023, respectively.

(2) Includes expenses for cost sharing payments due to a related party of $ 3.4 million and $ 14.5 million for the three and nine months ended September 30, 2023, respectively.

See accompanying notes to unaudited condensed consolidated financial statements.

6 unchanged sentences

Balance at December 31, 2023 138,385,498 $ 1,711 $ 2,144,811 $ 643 $ ( 1,116,211 ) $ 1,030,954

Issuance of common stock and pre-funded warrants, net of issuance costs of $ 480 K

3,244,689 32 499,221 — — 499,253

Issuances under equity incentive plans 948,705 10 13,224 — — 13,234

Vesting of restricted stock units 1,261,137 11 ( 11 ) — — —

Stock-based compensation — — 78,188 — — 78,188

Net loss — — — — ( 308,020 ) ( 308,020 )

Other comprehensive income

Issuance of common stock and pre-funded warrants, net of issuance costs of $ 480

3,244,689 32 499,221 — — 499,253

Balance at September 30, 2024 143,840,029 $ 1,764 $ 2,735,433 $ 5,529 $ ( 1,424,231 ) $ 1,318,495

Balance at June 30, 2024 143,123,582 $ 1,757 $ 2,704,992 $ ( 2,659 ) $ ( 1,317,039 ) $ 1,387,051

Issuances under equity incentive plans 130,214 1 1,021 — — 1,022

2 unchanged sentences

Net loss — — — — ( 101,802 ) ( 101,802 )

Other comprehensive income

Other comprehensive loss

— — — ( 1,939 ) — ( 1,939 )

Balance at September 30, 2024 143,840,029 $ 1,764 $ 2,735,433 $ 5,529 $ ( 1,424,231 ) $ 1,318,495

Balance at March 31, 2024 142,512,856 $ 1,751 $ 2,673,033 $ ( 1,296 ) $ ( 1,218,013 ) $ 1,455,475

Balance at December 31, 2024 144,220,986 $ 1,768 $ 2,764,880 $ 2,020 $ ( 1,538,984 ) $ 1,229,684

Issuances under equity incentive plans

Vesting of restricted stock units 1,132,305 12 ( 12 ) — — —

Stock-based compensation — — 82,302 — — 82,302

Net loss — — — — ( 25,751 ) ( 25,751 )

Other comprehensive income

113,792 1 594 — — 595

Balance at September 30, 2023 138,051,798 $ 1,707 $ 2,114,013 $ ( 651 ) $ ( 996,738 ) $ 1,118,331

Balance at June 30, 2023 137,362,688 $ 1,700 $ 2,083,951 $ ( 1,441 ) $ ( 897,385 ) $ 1,186,825

Issuances under equity incentive plans

222,688 2 2,490 — — 2,492

Vesting of restricted stock units 916,480 9 ( 9 ) — — —

3 unchanged sentences

Other comprehensive income — — — 17 — 17

Balance at September 30, 2023 138,051,798 $ 1,707 $ 2,114,013 $ ( 651 ) $ ( 996,738 ) $ 1,118,331

Balance at March 31, 2025 145,251,258 $ 1,778 $ 2,790,825 $ 2,037 $ ( 1,671,954 ) $ 1,122,686

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

Operating activities

13 unchanged sentences

Accruals and other current liabilities ( 6,477 ) 2,321

Related-party contract liability — ( 290,532 )

Deferred research and development funding liability, less current portion 16,733 —

4 unchanged sentences

Purchases of property and equipment ( 5,078 ) ( 2,150 )

Net cash (used in) provided by investing activities ( 260,963 ) 176,261

Net cash provided by (used in) investing activities 18,748 ( 453,187 )

Financing activities

Proceeds from issuance of common stock and pre-funded warrants, net of issuance costs of $ 480 K

Proceeds from issuance of common stock and pre-funded warrants, net of issuance costs of $ 480

Proceeds from exercise of awards under equity incentive plans 595 1,022

Payments for finance lease right-of-use asset ( 4,357 ) —

Net cash provided by financing activities 488,472 13,115

Net cash (used in) provided by financing activities ( 3,762 ) 500,275

Net decrease in cash, cash equivalents and restricted cash ( 116,482 ) ( 66,532 )

2 unchanged sentences

Supplemental disclosures of cash flow information

Increase in right-of-use asset due to lessor assets $ 7,051 $ —

Non-cash recognition of new finance lease $ 5,689 $ —

Right-of-use asset obtained in exchange for new finance lease liabilities $ 2,876 $ —

Cash paid for finance lease interest $ 181 $ —

Cash paid during the period for income taxes $ — $ 4

Equity consideration received in the divestiture of small molecule programs (Note 10) $ — $ 15,000

Property and equipment purchases accrued but not yet paid $ 488 $ 1,947

Issuance costs incurred but not yet paid $ — $ 394

See accompanying notes to unaudited condensed consolidated financial statements.

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These interim financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period.

During the nine months ended September 30, 2024 the only material change to the Company's significant accounting and financial reporting policies from those reflected in the 2023 Annual Report on Form 10-K was the addition of accounting policies related to the finance lease included herein.

During the three months ended March 31, 2025 there were no material changes to the Company's significant accounting and financial reporting policies from those reflected in the 2024 Annual Report on Form 10-K.

For further information with regard to the remainder of the Company’s Significant Accounting Policies, please refer to Note 1, "Significant Accounting Policies," to the Company’s Consolidated Financial Statements included in the 2024 Annual Report on Form 10-K.

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The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and marketable securities and issuers of marketable securities to the extent recorded on the Condensed Consolidated Balance Sheets.

As of September 30, 2024 and December 31, 2023, the Company had no off-balance sheet concentrations of credit risk.

As of March 31, 2025 and December 31, 2024, the Company had no off-balance sheet concentrations of credit risk.

The Company is subject to a number of risks similar to other clinical-stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of current or future preclinical testing or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain regulatory and marketing approvals for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, protection of proprietary technology, the ability to make milestone, royalty or other payments due under any license or collaboration agreements, and the need to secure and maintain adequate manufacturing arrangements with third parties.

1 unchanged sentence

Further, the company is also subject to broad market risks and uncertainties resulting from recent events, such as bank failures or instability in the financial services sector, global pandemics, war and armed conflicts, inflation, rising interest rates, and recession risks as well as supply chain and labor shortages.

The Company has one operating segment.

The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources.

Investments in equity securities may be accounted for using (i) the fair value option, if elected, (ii) fair value through earnings if fair value is readily determinable or (iii) for equity investments without readily determinable fair values, the measurement alternative to measure at cost adjusted for any impairment and observable price changes, as applicable.

The election to use the measurement alternative is made for each eligible investment.

The Company holds an equity investment in a venture-backed privately held company, Tenvie Therapeutics, Inc.

The privately held company is a Variable Interest Entity ("VIE"), but the Company is not the primary beneficiary.

The Company does not have the power to direct the activities that most significantly impact the economic performance of the investee.

The Company’s maximum exposure to loss from this VIE is limited to the value of the equity investment.

The equity investment held by the Company lacks a readily determinable fair value and therefore the securities are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar equity securities of the same issuer.

The Company reviews the carrying value of its equity investment for impairment whenever events or changes in business circumstances indicate the carrying amount of such asset may not be fully recoverable.

Impairments, if any, are based on the excess of the carrying amount over the recoverable amount of the asset.

There were no impairments during three months ended March 31, 2025 and 2024.

Cash, Cash Equivalents and Restricted Cash

1 unchanged sentence

Cash equivalents are reported at fair value.

Cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Statements of Cash Flows is composed of cash and cash equivalents reported in the Condensed Consolidated Balance Sheets and $ 1.6 million of restricted cash for the letter of credit for the Company’s headquarters building lease which is included within other non-current assets in the Condensed Consolidated Balance Sheets.

Cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Statements of Cash Flows is composed of cash and cash equivalents reported in the Condensed Consolidated Balance Sheets and restricted cash of $ 3.1 million and $ 1.6 million as of March 31, 2025 and December 31, 2024, respectively, which is included within other non-current assets in the Condensed Consolidated Balance Sheets.

Marketable Securities

21 unchanged sentences

Leases with an initial term of twelve months or less are not recorded on the balance sheet, unless they include an option to purchase the underlying asset that the Company is reasonably certain to exercise.

The Company recognizes lease expenses on a straight-line basis over the lease term.

The Company has leases with lease and non-lease components, which the Company has elected to account for as a single lease component.

Revenue Recognition

License, Option and Collaboration Revenue

The Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities.

This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement.

For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of Topic 606.

For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to Topic 606.

The accounting treatment pursuant to Topic 606 is outlined below.

The terms of license, option and collaboration agreements entered into typically include payment of one or more of the following:

non-refundable, up-front license fees;

option exercise fees;

development, regulatory and commercial milestone payments;

payments for manufacturing supply and research and development services and royalties on net sales of licensed products.

Each of these payments results in license, collaboration and other revenue, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenue.

The core principle of Topic 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services.

The Company may also receive reimbursement or make payments to a collaboration partner to satisfy cost sharing requirements.

These payments are accounted for pursuant to ASC 808 and are recorded as an offset or increase to research and development expenses, respectively.

In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, the Company performs the following steps:

(i) identification of the promised goods or services in the contract;

(ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations based on estimated selling prices;

and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

Amounts received prior to satisfying the revenue recognition criteria are recorded as contract liabilities in the Company’s Condensed Consolidated Balance Sheets.

If the related performance obligation is expected to be satisfied within the next twelve months this will be classified in current liabilities.

Amounts recognized as revenue prior to the Company having an unconditional right (other than a right that is conditioned only on the passage of time) to receipt are recorded as contract assets in the Company's Condensed Consolidated Balance Sheets.

If the Company expects to have an unconditional right to receive the consideration in the next twelve months, this will be classified in current assets.

A net contract asset or liability is presented for each contract with a customer.

At contract inception, the Company assesses the goods or services promised in a contract with a customer and identifies those distinct goods and services that represent a performance obligation.

A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the promised good or service does not provide the customer with a material right.

The Company considers the terms of the contract to determine the transaction price.

The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer.

The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.

Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling prices ("SSP").

The relative SSP for each deliverable is estimated using external sourced evidence if it is available.

If external sourced evidence is not available, the Company uses its best estimate of the SSP for the deliverable.

Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring a promised good or service to a customer.

An asset is transferred when, or as, the customer obtains control of that asset, which for a service is considered to be as the services are received and used.

The Company recognizes revenue over time by measuring the progress toward complete satisfaction of the relevant performance obligation using an appropriate input or output method based on the nature of the service promised to the customer.

After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events.

Any change in the transaction price is allocated to the performance obligations on the same basis as at contract inception, or to a single performance obligation as applicable.

The Company accounts for the exercise of a material right as either a contract modification or as a continuation of the existing contract, as is most appropriate based on the facts and circumstances.

Management may be required to exercise considerable judgment in estimating revenue to be recognized.

Judgment is required in identifying performance obligations, estimating the transaction price, estimating the SSP of identified performance obligations, which may include forecasted revenue, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations.

Comprehensive Loss

3 unchanged sentences

Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are antidilutive given the net loss for each period presented.

The weighted-average common shares outstanding as of September 30, 2024 includes pre-funded warrants to purchase shares of common stock that were issued in connection with the February 2024 private placement, as discussed further in Note 7 - " Common Stock ".

The weighted-average common shares outstanding as of March 31, 2025 includes pre-funded warrants to purchase shares of common stock that were issued in connection with the February 2024 private placement, as discussed further in Note 7 - " Common Stock ".

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The amendments in this Update are effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The guidance is to be applied retrospectively to all prior periods presented in the financial statements.

The Company has not early adopted this update, and is currently evaluating the impact of the new standard on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standards Update No.

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Assets and liabilities measured at fair value at each balance sheet date are as follows (in thousands):

September 30, 2024

March 31, 2025

Level 1 Level 2 Level 3 Total

4 unchanged sentences

Corporate debt securities — 39,914 — 39,914

Commercial paper — 26,278 — 26,278

Long-term marketable securities:

8 unchanged sentences

government treasuries 629,400 — — 629,400

government agency securities — 7,086 — 7,086

Corporate debt securities — 21,399 — 21,399

Commercial paper — 6,572 — 6,572

Long-term marketable securities:

government treasuries 334,892 — — 334,892

Corporate debt securities — 24,481 — 24,481

Total $ 1,091,020 $ 52,452 $ — $ 1,143,472

1 unchanged sentence

The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly.

The Company has not transferred any assets or liabilities between the fair value measurement levels for the nine months ended September 30, 2024 or for the year ended December 31, 2023.

The Company has not transferred any assets or liabilities between the fair value measurement levels for the three months ended March 31, 2025 or for the year ended December 31, 2024.

Marketable Securities

All marketable securities were considered available-for-sale at September 30, 2024 and December 31, 2023.

All marketable securities were considered available-for-sale at March 31, 2025 and December 31, 2024.

On a recurring basis, the Company records its marketable securities at fair value using Level 1 or Level 2 inputs as discussed in Note 2, "Fair Value Measurements".

The amortized cost, gross unrealized holding gains or losses, and fair value of the Company’s marketable securities by major security type at each balance sheet date are summarized in the tables below (in thousands):

September 30, 2024

March 31, 2025

Amortized Cost Unrealized Holding Gains Unrealized Holding Losses Aggregate Fair Value

4 unchanged sentences

39,766 148 — 39,914

Commercial paper

26,278 — — 26,278

Total short-term marketable securities

8 unchanged sentences

$ 994,434 $ 2,424 $ ( 35 ) $ 996,823

__________________________________________________

(1) Unrealized holding losses on 1 security with an aggregate fair value of $ 59.9 million.

(2) Unrealized holding losses on 1 security with an aggregate fair value of $ 5.0 million.

December 31, 2024

3 unchanged sentences

$ 627,809 $ 1,618 $ ( 27 ) $ 629,400

government agency securities (1)

Corporate debt securities

21,337 62 — 21,399

1 unchanged sentence

6,572 — — 6,572

Total short-term marketable securities

655,718 1680 ( 27 ) 657,371

Long-term marketable securities:

government treasuries

334,300 788 ( 196 ) 334,892

(1) Unrealized holding losses on 2 securities with an aggregate fair value of $ 7.1 million.

As of September 30, 2024 and December 31, 2023, some of the Company's marketable securities were in an unrealized loss position.

The Company has no t recognized an allowance for credit losses as of September 30, 2024 or December 31, 2023.

Corporate debt securities

24,354 127 0 24,481

Total long-term marketable securities

358,654 915 ( 196 ) 359,373

$ 1,014,372 $ 2,595 $ ( 223 ) $ 1,016,744

As of March 31, 2025 and December 31, 2024, some of the Company's marketable securities were in an unrealized loss position.

The Company has no t recognized an allowance for credit losses as of March 31, 2025 or December 31, 2024.

The Company determined that it had the ability and intent to hold all marketable securities that have been in a continuous loss position until maturity or recovery.

2 unchanged sentences

All marketable securities with unrealized losses as of each balance sheet date have been in a loss position for less than twelve months or the loss is not material.

As of September 30, 2024, all of the Company’s marketable securities have an effective maturity of less than two years .

Acquisition and Research and Development Funding Collaboration Agreement

Acquisition of F-star Gamma

In August 2016, the Company entered into a License and Collaboration Agreement (“F-star Collaboration Agreement”) with F-star Gamma Limited (“F-star Gamma”), F-star Biotechnologische Forschungs-und Entwicklungsges M.B.H ("F-star GmbH") and F-star Biotechnology Limited ("F-star Ltd") (collectively, “F-star”) to leverage F-star’s modular antibody technology and the Company’s expertise in the development of therapies for neurodegenerative diseases.

In May 2018, the Company exercised the pre-negotiated option agreement (the "Option Agreement") under the F-star Collaboration Agreement and entered into a Share Purchase Agreement (the “Purchase Agreement”) with the shareholders of F-star Gamma and Shareholder Representative Services LLC, pursuant to which the Company acquired all of the outstanding shares of F-star Gamma (the “Acquisition”).

The details of the Acquisition are further described in Note 4, "Acquisition", to the consolidated financial statements in the Company's 2023 Annual Report on Form 10-K.

As of September 30, 2024, the Company had paid consideration of $ 49.8 million in the aggregate consisting of up-front, preclinical, and clinical contingent consideration, all of which was recorded as research and development expense as incurred.

This amount includes a $ 30.0 million contingent consideration payment which was triggered and recorded as research and development expense in March 2023 upon the achievement of a specified clinical milestone in the ETV:IDS program.

This contingent consideration payment fully satisfies the Company's clinical contingent consideration obligations under the Purchase Agreement.

There was no contingent consideration expense recognized for the three and nine months ended September 30, 2024 or the three months ended September 30, 2023.

As of March 31, 2025, all of the Company’s marketable securities have an effective maturity of less than two years .

Research and Development Funding Collaboration Agreement

Collaboration and Development Funding Agreement

On January 29, 2024, the Company entered into a Collaboration and Development Funding Agreement with an unrelated third party, pursuant to which this third party will provide up to $ 75.0 million of funding and collaborate with the Company to conduct a global Phase 2a study of BIIB122/DNL151 in patients with Parkinson’s disease and confirmed pathogenic variants of LRRK2.

Pursuant to this agreement, an upfront payment of $ 12.5 million was received in January 2024, and a further payment of $ 12.5 million was received in July 2024, with the remainder to be paid upon achievement of operational milestones in the study.

Pursuant to this agreement, the Company received payments totaling $ 25.0 million in 2024, with a further $ 25.0 million triggered and received in March and April 2025, respectively.

The remaining $ 25.0 million will trigger upon achievement of operational milestones in the study.

After the full $ 75.0 million in consideration has been paid, the third party will be eligible to receive low single-digit royalties from the Company on annual worldwide net sales of LRRK2 inhibitors for the treatment of Parkinson’s disease.

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Accordingly, payments received will be recorded as a liability, and recognized by the Company as a reduction to research and development expenses over the estimated Phase 2a study period as the underlying research and development costs are incurred.

R&D funding under this arrangement of $ 2.5 million and $ 4.8 million offset research and development expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2024, respectively.

As of September 30, 2024, $ 16.3 million and $ 3.9 million of current and non-current deferred research and development funding liability were recorded on the Condensed Consolidated Balance Sheet, respectively.

Under this arrangement, the Company recognized a $ 5.1 million offset to research and development expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2025.

The Company recorded current and non-current deferred research and development funding liabilities of $ 17.3 million and $ 16.7 million, respectively, and a receivable of $ 25.0 million on the Condensed Consolidated Balance Sheet as of March 31, 2025.

There was no offset to research and development expenses recognized the three months ended March 31, 2024.

As of March 31, 2024, a liability of $ 12.5 million was recorded within deferred research funding liability, current on the Condensed Consolidated Balance Sheet.

Collaboration Agreements

In October 2020, the Company entered into a Definitive Collaboration and License Agreement (“LRRK2 Agreement”), pursuant to which it granted Biogen a license to co-develop and co-commercialize its small molecule LRRK2 inhibitor program (the “LRRK2 Program”), and a Right of First Negotiation, Option and License Agreement (the “ROFN and Option Agreement”), pursuant to which it granted an option and right of first negotiation to certain of the Company's programs utilizing our TV technology platform, including its amyloid beta program (collectively the "Biogen Collaboration Agreement"), with Biogen Inc.’s subsidiaries, Biogen MA Inc.

In October 2020, the Company entered into a Definitive Collaboration and License Agreement (“LRRK2 Agreement”), pursuant to which it granted Biogen a license to co-develop and co-commercialize its small molecule LRRK2 inhibitor program (the “LRRK2 Program”), and a Right of First Negotiation, Option and License Agreement (the “ROFN and Option Agreement”), pursuant to which it granted an option and right of first negotiation to certain of the Company's programs utilizing our TransportVehicle TM ("TV") platform, including its amyloid beta program (collectively the "Biogen Collaboration Agreement"), with Biogen Inc.’s subsidiaries, Biogen MA Inc.

(“BIMA”) and Biogen International GmbH (“BIG”) (BIMA and BIG, collectively, “Biogen”).

The details of the Biogen Collaboration Agreement, the August 2023 amendment to the ROFN and Option Agreement, and the payments the Company has received, and is entitled to receive, are further described in Note 5, "Collaboration Agreements", to the consolidated financial statements in the 2024 Annual Report on Form 10-K.

In April 2023, Biogen exercised its option to license Denali’s ATV:Abeta program which was previously concluded to be a material right, triggering payment of a $ 5.0 million option fee which was received in May 2023 and allocated to the material right in its entirety.

On July 26, 2024, Denali and Biogen executed a Side Letter to the ROFN and Option Agreement, pursuant to which, effective as of the date of the Side Letter, Biogen terminated its license to the ATV:Abeta program enabled by Denali’s TfR-targeting technology against amyloid beta for the potential treatment of Alzheimer's disease, and granted Denali rights to data generated during the collaboration.

1 unchanged sentence

as such, the Company expects to receive no future milestone or royalty payments from Biogen related to the ATV:Abeta program.

There were no changes to the terms of the LRRK2 Agreement during the three and nine months ended September 30, 2024 or 2023.

The Company has no remaining performance obligations under the Biogen Collaboration Agreement, and therefore no contract liability remained on the Condensed Consolidated Balance Sheets as of September 30, 2024 or December 31, 2023 .

As of December 31, 2023, Biogen was no longer considered a related party as defined in ASC 850.

As of September 30, 2024, the Company has no t recorded milestone revenue or product sales under the Biogen Collaboration Agreement.

There were no changes to the terms of the LRRK2 Agreement during the three months ended March 31, 2025 or 2024.

As of March 31, 2025, the Company has no t recorded milestone revenue or product sales under the Biogen Collaboration Agreement.

In October 2018, the Company entered into a Collaboration and License Agreement ("Sanofi Collaboration Agreement") with Genzyme Corporation, a wholly owned subsidiary of Sanofi S.A.

The details of the Sanofi Collaboration Agreement and the payments the Company has received, and is entitled to receive, are further described in Note 5, "Collaboration Agreements", to the consolidated financial statements in the Company's 2024 Annual Report on Form 10-K.

The Company has no remaining performance obligations under the Sanofi Collaboration Agreement, and therefore no contract liability remains on the Condensed Consolidated Balance Sheets as of September 30, 2024 or December 31, 2023 .

As of September 30, 2024, the Company had earned milestone payments of $ 100.0 million and had no t recorded any product sales under the Sanofi Collaboration Agreement.

On February 24, 2025, Denali and Sanofi executed a side letter terminating Sanofi's license to the central nervous system ("CNS") Products program including SAR443820/DNL788.

Subsequent to this side letter, the Company expects to receive no future milestone or royalty payments from Sanofi related to the CNS Products program.

Under the Sanofi Collaboration Agreement, the Company is eligible to receive milestone payments totaling up to approximately $ 495.0 million upon achievement of certain clinical, regulatory and sales milestone events for Peripheral Products, and variable royalties on worldwide net sales.

As of March 31, 2025, the Company had earned milestone payments of $ 100.0 million and had no t recorded any product sales under the Sanofi Collaboration Agreement.

In January 2018, the Company entered into a Collaboration and Option Agreement ("Takeda Collaboration Agreement") with Takeda Pharmaceutical Company Limited ("Takeda").

The details of the Takeda Collaboration Agreement are further described in Note 5, "Collaboration Agreements", to the consolidated financial statements in the Company's 2024 Annual Report on Form 10-K.

There are no remaining performance obligations or potential payments remaining under the initial Takeda Collaboration Agreement.

There are no remaining performance obligations or potential payments remaining under the initial Takeda Option and Collaboration Agreement.

The opt-in by Takeda on the PTV:PGRN and ATV:TREM2 programs represented two new contracts with a customer for accounting purposes (the "PTV:PGRN Collaboration Agreement" and the "ATV:TREM2 Collaboration Agreement"), both of which became effective in December 2021.

The details of the PTV:PGRN Collaboration Agreement and the ATV:TREM2 Collaboration Agreement are further described in Note 5, "Collaboration Agreements", to the consolidated financial statements in the Company's 2023 Annual Report on Form 10-K.

As of September 30, 2024, the Company had earned an aggregate of $ 10.0 million in option fee payments and $ 10.0 million in milestone payments from Takeda under the PTV:PGRN and ATV:TREM2 Collaboration Agreements, and had no t recorded any product sales under either agreement.

Collaboration Revenue

Revenue disaggregated by collaboration agreement and performance obligation is as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Takeda Collaboration Agreement:

PTV:PGRN Collaboration Agreement (1)

$ — $ — — 10,000

Total Takeda Collaboration Revenue — — — 10,000

Sanofi Collaboration Agreement

CNS Program License (2)

Total Sanofi Collaboration Revenue — — — 25,000

Biogen Collaboration Agreement

ATV:Abeta Program License (3)

— — — 293,912

Option Research Services (4)

— 1,267 — 1,619

Total Biogen Collaboration Revenue — 1,267 — 295,531

Total Collaboration Revenue $ — $ 1,267 $ — $ 330,531

_________________________________________________

(1) Revenue for the nine months ended September 30, 2023 from a specified clinical milestone in the Phase 1/2 study of DNL593 in patients with frontotemporal dementia-granulin (FTD-GRN).

(2) Revenue for the nine months ended September 30, 2023 from a milestone payment triggered and received in January 2023 upon the commencement of dosing in a Phase 2 study of SAR443820/DNL788 in individuals with multiple sclerosis.

(3) Revenue for the nine months ended September 30, 2023 was associated with Biogen exercising its option to license Denali’s ATV:Abeta program which was previously concluded to be a material right, $ 288.9 million of which was included in the contract liability balance at the beginning of the period and $ 5.0 million of which was an option exercise fee received in April 2023.

(4) Revenue for the three and nine months ended September 30, 2023 was included in the contract liability balance at the beginning of the period.

The details of the PTV:PGRN Collaboration Agreement are further described in Note 5, "Collaboration Agreements", to the consolidated financial statements in the Company's 2024 Annual Report on Form 10-K.

In February 2025, after mutual agreement to discontinue preclinical activities on ATV:TREM2, Takeda delivered notice of its election to terminate the ATV:TREM2 collaboration program on February 26, 2025, as per the terms of the Takeda Option and Collaboration Agreement.

The ATV:TREM2 program termination became effective 60 days following the notice date, and subsequently, there are no future milestones, cost, or profit sharing related to this agreement.

As of March 31, 2025, the Company had earned an aggregate of $ 10.0 million in option fee payments and $ 10.0 million in milestone payments from Takeda under the PTV:PGRN and ATV:TREM2 Collaboration Agreements, and had no t recorded any product sales under either agreement.

Cost Sharing Payments and Reimbursements

Cost sharing payments to collaboration partners recorded as expenses in research and development expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss, and cost sharing reimbursements from collaboration partners recorded as an offset to expense in research and development expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss are as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Takeda Collaboration Agreement:

2 unchanged sentences

ATV:TREM2 cost sharing (reimbursements) ( 152 ) ( 513 )

( 208 ) ( 1,018 ) ( 936 ) ( 4,279 )

Total Takeda cost sharing (reimbursements) (1)

2 unchanged sentences

LRRK2 cost sharing payments (2)

4,965 3,378 14,194 14,504

Net cost sharing payments (reimbursements) $ 2,988 $ 3,076

_________________________________

(1) Cost sharing reimbursements of $ 1.4 million and $ 2.7 million were recorded as a receivable within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023, respectively.

(2) Cost sharing payments due to Biogen of $ 5.0 million and $ 3.2 million were recorded within accounts payable on the Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023, respectively.

(1) Cost sharing reimbursements of $ 1.7 million and $ 1.5 million were recorded as a receivable within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, respectively.

(2) Cost sharing payments due to Biogen of $ 4.7 million and $ 2.5 million were recorded within accounts payable on the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, respectively.

Commitments and Contingencies

Lease Obligations

In May 2018, the Company entered into an operating lease for its corporate headquarters in South San Francisco (the "Headquarters Lease"), as further described in Note 8, "Commitments and Contingencies," to the consolidated financial statements in the Company's 2023 Annual Report on Form 10-K.

In August 2021, the Company entered into a lease for laboratory, office and warehouse premises in Salt Lake City, Utah .

In March 2023, the Company terminated this lease, which resulted in the recognition of $ 7.9 million of accelerated depreciation on leasehold improvements in the nine months ended September 30, 2023 .

In April 2023, the Company entered into a lease in Salt Lake City (the “SLC Lease”) for a 59,336 square foot laboratory, office and warehouse premises with a contractual term of approximately 15 years upon commencement, and undiscounted lease payments of approximately $ 13.4 million, which was subsequently amended in October 2023.

The accounting lease commencement date was determined to be August 1, 2024, the date the Company was deemed to have obtained control over the property, at which time the lease was determined to be a finance lease and the lease liability and ROU asset were recorded on the Condensed Consolidated Balance Sheet.

Included in the ROU asset as of September 30, 2024 are $ 33.1 million of assets purchased by the Company, which are considered to be owned by the landlord.

Management exercised judgment in applying the requirements of ASC 842, including the determination as to whether certain contracts contain a lease, lease classification, the lease consideration, the commencement date of the leases, and for leases identified under the standard, the discount rate used to determine the measurement of the lease liability.

The discount rates of the Company's operating and finance leases are an approximation of the Company's incremental borrowing rate and are dependent upon the term and economics of the agreement.

To estimate the incremental borrowing rate, management considers observable debt yields of comparable market instruments, as well as benchmarks within the lease agreement that may be indicative of the rate implicit in the lease.

There were no changes to the terms of the leases recognized under ASC 842 during the three and nine months ended September 30, 2024.

Operating lease costs were $ 1.9 million and $ 5.8 million for the three and nine months ended September 30, 2024, respectively, and $ 1.9 million and $ 6.1 million for the three and nine months ended September 30, 2023, respectively.

Variable lease costs were $ 1.6 million and $ 3.9 million for the three and nine months ended September 30, 2024, respectively, and $ 1.3 million and $ 3.3 million for the three and nine months ended September 30, 2023, respectively.

Finance lease costs representing amortization of ROU assets and interest on lease liability were $ 0.4 million and $ 0.1 million, respectively, for both the three and nine months ended September 30, 2024.

There was no finance lease cost for the three and nine months ended September 30, 2023.

In May 2018, the Company entered into an operating lease for its corporate headquarters in South San Francisco (the "Headquarters Lease").

In April 2023, the Company entered into a finance lease for its clinical manufacturing site in Salt Lake City (the "SLC Lease").

Both leases are further described in Note 7, "Commitments and Contingencies," to the consolidated financial statements in the Company's 2024 Annual Report on Form 10-K.

Within the total ROU assets for the SLC Lease, the Company recorded assets of $ 44.3 million and $ 41.6 million as of March 31, 2025 and December 31, 2024, respectively , which were purchased by the Company but are considered to be owned by the landlord.

The current finance lease liability is included in other accrued costs and current liabilities in the Condensed Consolidated Balance Sheet as of March 31, 2025 .

There were no changes to the terms of the leases recognized under ASC 842 during the three months ended March 31, 2025 or 2024.

Operating lease costs, excluding variable lease costs, were $ 1.9 million and $ 2.0 million for the three months ended March 31, 2025 and 2024, respectively.

Variable lease costs related to the operating lease were $ 1.4 million and $ 0.9 million for the three months ended March 31, 2025 and 2024, respectively.

Finance lease costs representing amortization of ROU assets and interest on lease liability were $ 0.9 million and $ 0.2 million, respectively, for the three months ended March 31, 2025.

There was no finance lease costs for the three months ended March 31, 2024.

The following tables contain a summary of other information pertaining to the Company’s leases for the periods presented (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Operating cash flows from operating lease $ 2,885 $ 2,793

As of September 30,

As of March 31,

Weighted-average remaining lease term (in years):

5 unchanged sentences

Finance lease 13.7 % — %

The following table reconciles the undiscounted cash flows for the next five years and total of the remaining years to the operating and finance lease liabilities recorded in the Condensed Consolidated Balance Sheet as of September 30, 2024 (in thousands):

Year Ended December 31:

1 unchanged sentence

Finance Lease

2024 (three months) $ 2,885 $ 191

2025 (nine months) $ 8,908 $ 3,462

2026 12,182 794

11 unchanged sentences

No demands have been made upon the Company to provide indemnification under such agreements, and thus, there are no claims that the Company is aware of that could have a material effect on the Company’s Condensed Consolidated Balance Sheets , Condensed Consolidated Statements of Operations and Comprehensive Loss , or Condensed Consolidated Statements of Cash Flows .

In September 2017, the Company entered into a Development and Manufacturing Services Agreement as amended (“DMSA”) with Lonza Sales AG (“Lonza”) for the development and manufacture of biologic products.

Effective September 2017, the Company entered into a Development and Manufacturing Services Agreement as amended (“DMSA”) with Lonza Sales AG (“Lonza”) for the development and manufacture of biologic products.

Under the DMSA, the Company will execute purchase orders based on project plans authorizing Lonza to provide development and manufacturing services with respect to certain of the Company's antibody and enzyme products, and will pay for the services provided and batches delivered in accordance with the DMSA and project plan.

Unless earlier terminated, the DMSA will expire when all development and manufacturing services are completed, which is not expected to be before January 2028.

As of September 30, 2024 and December 31, 2023, the Company had total non-cancellable purchase commitments under the DMSA of $ 23.4 million and $ 37.6 million, respectively.

During the three months ended September 30, 2024 and 2023, the Company incurred costs of $ 6.0 million and $ 10.4 million, respectively, and made payments of $ 1.9 million and $ 12.8 million, respectively, for the development and manufacturing services rendered under the DMSA.

During the nine months ended September 30, 2024 and 2023, the Company incurred costs of $ 28.6 million and $ 26.5 million, respectively, and made payments of $ 32.2 million and $ 24.9 million, respectively, for the development and manufacturing services rendered under the DMSA.

As of March 31, 2025 and December 31, 2024, the Company had total non-cancellable purchase commitments under the DMSA of $ 21.9 million and $ 36.7 million, respectively.

During the three months ended March 31, 2025 and 2024, the Company incurred costs of $ 2.6 million and $ 16.4 million, respectively, and made payments of $ 6.0 million and $ 13.5 million, respectively, for the development and manufacturing services rendered under the DMSA.

In the normal course of business, the Company enters into other firm purchase commitments primarily related to research and development activities.

The Company had contractual obligations under certain clinical and manufacturing agreements other than the DMSA of $ 25.6 million and $ 34.8 million, as of September 30, 2024 and December 31, 2023, respectively, with certain amounts subject to cost sharing with Takeda.

The Company had contractual obligations under certain clinical and manufacturing agreements other than the DMSA of $ 46.8 million and $ 24.1 million, as of March 31, 2025 and December 31, 2024, respectively, with certain amounts subject to cost sharing with Takeda.

Contingencies

4 unchanged sentences

The Pre-Funded Warrants were classified as a component of permanent equity in the Company’s consolidated balance sheet as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its shares and permit the holders to receive a fixed number of shares of common stock upon exercise.

All of the Pre-Funded Warrants issued in the private placement were outstanding as of September 30, 2024.

All of the Pre-Funded Warrants issued in the private placement were outstanding as of March 31, 2025.

Stock-Based Awards

1 unchanged sentence

Stock Option Activity

The following table summarizes stock option activity for the nine months ended September 30, 2024:

The following table summarizes stock option activity for the three months ended March 31, 2025:

Number of Options

5 unchanged sentences

( 131,732 ) 26.38

Balance at September 30, 2024 18,581,012 $ 25.84

Vested and expected to vest at September 30, 2024 17,771,141 $ 26.98

Exercisable at September 30, 2024 11,543,850 $ 27.89

Balance at March 31, 2025 22,194,733 $ 25.26

Vested and expected to vest at March 31, 2025 21,384,862 $ 26.19

Exercisable at March 31, 2025 12,853,171 $ 28.35

The estimated fair value of stock options granted to employees were calculated using the Black-Scholes option-pricing model using the following assumptions:

Nine Months Ended September 30,

Three Months Ended March 31,

Expected term (in years)

6 unchanged sentences

Restricted Stock Activity

The following table summarizes restricted stock unit ("RSU") activity for the nine months ended September 30, 2024:

The following table summarizes restricted stock unit ("RSU") activity for the three months ended March 31, 2025:

Number of RSU shares Weighted-Average Fair Value at Date of Grant per Share

3 unchanged sentences

Forfeited ( 65,369 ) 23.43

Unvested and expected to vest at September 30, 2024 3,994,341 $ 27.48

Unvested and expected to vest at March 31, 2025 4,849,115 $ 24.00

Stock-Based Compensation Expense

The Company’s results of operations include expenses relating to stock-based compensation as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Research and development

6 unchanged sentences

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net loss $ ( 132,970 ) $ ( 101,802 )

6 unchanged sentences

Net loss per share $ ( 0.78 ) $ ( 0.68 )

Potentially dilutive securities, including options issued and outstanding, Employee Stock Purchase Plan (“ESPP”) shares issuable, and restricted shares subject to future vesting that were not included in the diluted per share calculations for the periods presented because they would be anti-dilutive totaled approximately 22.7 million and 20.7 million shares as of September 30, 2024 and September 30, 2023, respectively.

Potentially dilutive securities, including options issued and outstanding, Employee Stock Purchase Plan (“ESPP”) shares issuable, and restricted shares subject to future vesting that were not included in the diluted per share calculations for the periods presented because they would be anti-dilutive totaled approximately 27.4 million and 24.4 million shares as of March 31, 2025 and March 31, 2024, respectively.

Divestiture of Preclinical Small Molecule Programs

On March 1, 2024, the Company divested certain assets, including specified intellectual property, tangible assets, and equipment used to conduct early stage small molecule drug discovery ("Divested Assets") through an Asset Purchase and License Agreement (the "Asset Purchase Agreement") executed with a venture-backed private company ("VBPC").

Additionally, certain of the Company’s employees terminated their employment with the Company and became employees of VBPC.

In exchange for the Divested Assets, the Company received equity consideration in the form of a simple agreement for future equity (“SAFE”), equal to $ 15.0 million of equity in VBPC’s next financing round or, if VBPC’s next equity financing does not occur prior to December 31, 2024, a number of shares of preferred stock issued in VBPC’s previous round of equity financing prior to this agreement equal to $ 15.0 million divided by the price per share paid by investors in that previous equity financing.

The Company may also be eligible to receive certain market valuation, development and sales based milestone payments up to approximately $ 1.2 billion in the form of either cash or equity at the election of VBPC.

The Company will also be entitled to receive future royalties on aggregate net sales of any products that bind to certain identified targets, on a product-by-product and country-by-country basis during the periods of time commencing at the time of the first commercial sale of such product in such country, until the later of (i) the expiration of certain related patents, (ii) the expiration of Regulatory Exclusivity, or (iii) ten years after such first commercial sale.

Concurrently, VBPC and the Company also entered into a sublease for 12,985 square feet of office and lab space within the Company's corporate headquarters, and transition and research services agreement ("Service Agreements").

The sublease commenced in May 2024 and continues for a period of approximately ten months , with two optional six month extension periods.

The Service Agreements allow Denali to provide access to equipment and provision of certain specified administrative and research services to VBPC for a period up to the end of the sublease term.

Additionally, certain of the Company’s employees terminated their employment with the Company and became employees of Tenvie.

In exchange for the Divested Assets, the Company received equity consideration of $ 15.0 million in the form of a simple agreement for future equity (“SAFE”).

In December 2024, the SAFE converted into 15.0 million shares of Tenvie's Series A Preferred Stock, par value $ 0.0001 per share, with a fair value of $ 15.0 million.

Under the terms of the Asset Purchase Agreement, the Company is eligible to receive certain market valuation, development and sales based milestone payments up to approximately $ 1.2 billion in the form of either cash or equity at the election of Tenvie.

The Company will also be entitled to receive future royalties on aggregate net sales of certain products, on a product-by-product and country-by-country basis during the periods of time commencing at the time of the first commercial sale of such product in such country, until the later of (i) the expiration of certain related patents, (ii) the expiration of Regulatory Exclusivity, or (iii) ten years after such first commercial sale.

This divestiture did not meet the criteria for reporting discontinued operations as the sale does not represent a strategic shift in the Company’s business.

The Company recognized a gain on divestiture of approximately $ 14.5 million in the Condensed Consolidated Statements of Operations and Comprehensive Loss during the nine months ended September 30, 2024, representing the difference between the fair value of the consideration received and the carrying amount of the Divested Assets.

The Company recorded the SAFE at $ 15.0 million based on the expected value of the equity to be received within other non-current assets in the Condensed Consolidated Balance Sheet.

The SAFE remains outstanding as of September 30, 2024.

The Company recognized a gain on divestiture of approximately $ 14.5 million in the Condensed Consolidated Statements of Operations and Comprehensive Loss during the three months ended March 31, 2024, representing the difference between the fair value of the consideration received and the carrying amount of the Divested Assets.

The Company recorded the investment in the shares of Series A Preferred Stock at $ 15.0 million which represents the fair value of the shares on the date of issuance.

There have been no subsequent observable price changes in orderly transactions for the identical or similar equity securities of Tenvie, and as such, the measurement of this investment remains unchanged, with the $ 15.0 million included within other non-current assets in the Condensed Consolidated Balance Sheet as of March 31, 2025.

Segment Information

The Company has one operating segment with the goal to discover, develop and commercialize therapeutics (“Therapeutics”).

There have been no material changes to the Company's segment structure, the basis of segmentation, or the measurement basis for segment profit or loss or segment assets, compared to those disclosed in Note 14, "Segment Information", to the consolidated financial statements in the Company's 2024 Annual Report on Form 10-K.

The following table presents selected financial information with respect to the Company’s single operating segment for the three months ended March 31, 2025 and 2024 (in thousands):

Therapeutics Segment

Three Months Ended March 31,

External research and development expenses - TV programs, including cost sharing $ 41,987 $ 35,684

External research and development expenses - small molecule programs, including cost sharing 8,854 13,121

Other research and development expenses 25,117 15,881

Personnel related research and development expenses

40,269 42,330

Total research and development expenses 116,227 107,016

Personnel related general and administrative expenses

18,738 19,085

Other general and administrative expenses

Total general and administrative expenses 29,353 25,236

Segment operating expenses 145,580 132,252

Segment gain from divestiture of small molecule programs — ( 14,537 )

Segment loss from operations ( 145,580 ) ( 117,715 )

Segment interest and other income, net 12,610 15,913

Segment loss before income taxes $ ( 132,970 ) $ ( 101,802 )

There is no difference between the segment loss before income taxes and total consolidated loss before income taxes for the three months ended March 31, 2025 and 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements