What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-02-27 · 175 added, 177 removed, 757 unchanged (32% of the section changed)

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accrued and prepaid research and development costs

Description of the Matter As more fully described in Note 1 to the consolidated financial statements, the Company records accrued liabilities for estimated costs of research and development (R&D) activities and prepaid research and development costs based upon the estimated cost of services provided and the timing associated with those payments.

As of December 31, 2024, accrued clinical and other R&D costs were $18.1 million and prepaid clinical R&D costs were $6.5 million.

The accrued and prepaid R&D costs (“Accrued and Prepaid R&D Costs”) are based on an estimate of the clinical trial and related R&D costs incurred under service agreements with organizations that conduct R&D activities on behalf of the Company.

The Company expenses costs incurred based on several factors, such as information obtained from vendors and estimates of the work completed by the vendors.

Auditing the Company's accounting for Accrued and Prepaid R&D Costs was complex because the Company’s analyses are dependent upon data obtained from external third-party service providers who directly perform services but also often act as intermediaries to those performing the underlying services.

The determination of the balances when the Company has either not been invoiced or has not received information regarding actual costs incurred requires estimation of the stage of completion of certain services.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s process for accounting for Accrued and Prepaid R&D Costs, including management’s controls over completeness and accuracy of data used in determining these costs as well as management’s process for estimating work completed under the service agreements.

To test the Accrued and Prepaid R&D Costs, our audit procedures included, among others, i) confirming the completeness of the terms and conditions of significant R&D service agreements directly with the vendors;

ii) testing the completeness and accuracy of the underlying inputs used in the Company’s analyses through verification of significant inputs, such as costs incurred and invoices paid, to the terms and conditions of the underlying agreements and information from the Company’s internal personnel and vendors;

iii) testing significant assumptions used in estimating costs of services provided including meeting with personnel outside of the accounting department to discuss the basis for such assumptions;

and iv) performing a hindsight analysis of invoices received subsequent to the balance sheet date.

Accrued and prepaid clinical research and development costs

Description of the Matter As more fully described in Note 1 to the consolidated financial statements, the Company records accrued and prepaid clinical research and development (R&D) costs based on information obtained from vendors including contract research organizations.

Each reporting period, estimation is required to determine the costs for certain services when the Company has either not been invoiced or has not received information from vendors regarding actual costs incurred to determine the clinical research and development expenses incurred during the period, and the accrued and prepaid amounts in relation to payments for those services.

As of December 31, 2025, accrued and prepaid clinical research and development costs were $13.7 million and $7.3 million, respectively.

The accrued and prepaid clinical research and development costs (“Accrued and Prepaid Clinical R&D Costs”) are based in part on estimates for certain clinical research and developments costs incurred under the Company’s service agreements with vendors including contract research organizations.

The Company expenses clinical research and development costs incurred based on several factors, such as information obtained from vendors and estimates of certain costs and services completed by certain vendors.

Auditing the Company's accounting for Accrued and Prepaid Clinical R&D Costs was complex due to the estimation of costs for certain services when the Company has either not been invoiced or has not received information regarding actual costs incurred.

How We Addressed the Matter in Our Audit

We evaluated and tested the design and operating effectiveness of the Company’s internal controls over management’s process to account for Accrued and Prepaid Clinical R&D Costs, including management’s controls over the completeness and accuracy of the data and the process used in determining these costs.

To test the Accrued and Prepaid Clinical R&D Costs, our audit procedures included, among others, confirmation directly with vendors of the completeness of the terms and conditions of significant clinical R&D service agreements and the data used by management in the determination of the Company’s clinical costs incurred.

Additionally, we tested the completeness and accuracy of the underlying inputs used in the Company’s analyses through verification of significant inputs, such as costs incurred, invoices received prior to and after the balance sheet, and the terms and conditions of the underlying agreements.

We evaluated the completeness of services rendered by the vendors, including examination of meeting materials and performing inquiries of R&D personnel outside the accounting department, to evaluate the completeness of clinical R&D service agreements and the costs incurred by the Company.

/s/ Ernst & Young LLP

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$ — $ — $ 330,531

Other collaboration revenue — — 3,398

Total collaboration revenue — — 330,531

2 unchanged sentences

418,778 396,440 423,876

General and administrative 105,438 103,354 90,475

General and administration 136,564 105,438 103,354

Total operating expenses 555,342 501,878 527,230

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__________________________________________________

(1) Includes related-party collaboration revenue from customers of $ 295.5 million, and $ 3.2 million for the years ended December 31, 2023 and 2022, respectively.

(2) Includes expense for cost sharing payments to a related party of $ 17.7 million and $ 8.2 million for the years ended December 31, 2023 and 2022, respectively.

(1) Includes related-party collaboration revenue from customers of $ 295.5 million for the year ended December 31, 2023.

(2) Includes expense for cost sharing payments to a related party of $ 17.7 million for the year ended December 31, 2023.

See accompanying notes to consolidated financial statements.

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Balance at December 31, 2022 135,965,918 $ 1,686 $ 2,018,617 $ ( 6,886 ) $ ( 970,987 ) $ 1,042,430

Issuance of common stock in follow-on offering, net of issuance costs of $ 1,060

11,933,962 120 296,095 — — 296,215

Issuances under equity incentive plans 1,232,526 12 17,808 — — 17,820

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Net loss — — — — ( 145,224 ) ( 145,224 )

Other comprehensive loss — — — ( 4,387 ) — ( 4,387 )

Other comprehensive income — — — 7,529 — 7,529

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

3,244,689 32 499,221 — — 499,253

Issuances under equity incentive plans 1,288,609 13 17,376 — — 17,389

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Net loss — — — — ( 512,540 ) ( 512,540 )

Other comprehensive income — — — 1,377 — 1,377

Other comprehensive loss

— — — ( 1,338 ) — ( 1,338 )

Balance at December 31, 2025 156,182,177 $ 1,888 $ 3,062,715 $ 682 $ ( 2,051,524 ) $ 1,013,761

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Changes in operating assets and liabilities:

Prepaid expenses and other assets ( 2,480 ) ( 4,094 ) ( 2,760 )

Prepaid expenses and other current assets

( 540 ) ( 2,480 ) ( 4,094 )

Other non-current assets

1 unchanged sentence

Accruals and other current liabilities 465 3,248 2,648

Contract liabilities — — ( 31,313 )

Related party contract liability

— — ( 290,532 )

Deferred research and development funding liability

6,972 14,129 —

Other non-current liabilities — — ( 379 )

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Net cash provided by (used in) investing activities 255,281 ( 88,756 ) 249,308

( 88,756 ) 249,308 ( 141,387 )

Financing activities

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

Proceeds from public offering of common stock, net of issuance costs — — 296,215

Proceeds from public offering of common stock and pre-funded warrants, net of issuance costs of $ 728

Proceeds from exercise of awards under equity incentive plans 8,459 17,389 17,820

Payments for finance lease right-of-use asset ( 8,168 ) ( 32,338 ) —

Issuance costs related to the royalty financing

Net cash provided by financing activities 189,216 484,304 17,820

Net increase (decrease) in cash, cash equivalents and restricted cash 31,897 47,854 ( 90,863 )

47,854 ( 90,863 ) ( 75,433 )

Cash, cash equivalents and restricted cash at beginning of year 176,535 128,681 219,544

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Right-of-use asset obtained in exchange for new finance lease liabilities $ — $ 9,358 $ —

$ 9,358 $ — $ —

Property and equipment purchases accrued but not yet paid $ — $ 1,192 $ 553

Cash paid for finance lease interest $ 720 $ 302 $ —

$ 302 $ — $ —

Issuance costs incurred but not yet paid $ 482 $ — $ —

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Foreign currency gains and losses resulting from remeasurement are recognized in interest and other income, net in the Consolidated Statements of Operations and Comprehensive Loss.

Reclassification

Certain prior period amounts in the Company’s Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation.

Specifically, amounts related to the research and development funding liability that were previously included within changes in operating assets and liabilities - accruals and other current liabilities have been reclassified to changes in operating assets and liabilities - deferred research and development funding liability.

Use of Estimates

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As of December 31, 2025 and 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.

The Company is subject to a number of risks similar to other biopharmaceutical companies at our stage, 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 scale internal manufacturing and/or secure and maintain adequate manufacturing arrangements with third parties.

If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability.

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.

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, geopolitical instability, war and armed conflicts, inflation, rising interest rates, and recession risks as well as supply chain and labor shortages.

Convertible Preferred Stock

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

There were no impairments during the year ended December 31, 2024.

There were no impairments during the years ended December 31, 2025 and 2024 .

Fair Value of Financial Instruments

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Cash equivalents are reported at fair value.

Cash, cash equivalents and restricted cash reported within the Consolidated Statements of Cash Flows is composed of cash and cash equivalents reported in the 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 Consolidated Balance Sheets as of December 31, 2024 and 2023.

Cash, cash equivalents and restricted cash reported within the Consolidated Statements of Cash Flows is composed of cash and cash equivalents reported in the Consolidated Balance Sheets and restricted cash of $ 3.1 million, $ 1.6 million and $ 1.6 million as of December 31, 2025, 2024 and 2023, respectively, which is included within other non-current assets in the Consolidated Balance Sheets.

Restricted cash relates to letters of credit supporting the Company’s headquarters building lease and, as of December 31, 2025, also includes a letter of credit supporting the Company’s credit card program.

Marketable Securities

The Company generally invests its excess cash in money market funds and investment grade short to intermediate-term fixed income securities.

Such investments are included in cash and cash equivalents, or short-term marketable securities or long-term marketable securities on the Consolidated Balance Sheets, are considered available-for-sale, and are reported at fair value with net unrealized gains and losses included as a component of stockholders’ equity.

Such investments are included in cash and cash equivalents, short-term marketable securities or long-term marketable securities on the Consolidated Balance Sheets, are considered available-for-sale, and are reported at fair value with net unrealized gains and losses included as a component of stockholders’ equity.

The Company classifies investments in securities with remaining maturities of less than one year, or where its intent is to use the investments to fund current operations or to make them available for current operations, as short-term investments.

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Leasehold improvements shorter of life of asset or lease term

Computer equipment and purchased software

Laboratory equipment

Furniture and fixtures

Manufacturing equipment

Computer equipment and purchased software three years

Laboratory equipment five years

Furniture and fixtures five years

Manufacturing equipment eight years

Impairment of Long-Lived Assets

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Research and Development Expenses

Research and development costs are expensed as incurred.

Research and development costs consist of salaries and other personnel related expenses, including associated stock–based compensation, consulting fees, lab supplies, and facility costs, as well as fees paid to other entities that conduct certain research, development and manufacturing activities on behalf of the Company.

Research and development expenses represent costs incurred to conduct research and development activities, including the discovery and development of product candidates.

The Company recognizes all research and development costs as they are incurred.

The Company’s research and development expenses consist primarily of:

• expenses incurred under agreements with collaborators, consultants, third-party contract research organizations (“CROs”), and investigative sites, which conduct a substantial portion of the Company’s preclinical studies and clinical trials;

• costs of acquiring laboratory supplies and originator comparator materials, and costs related to the internal and third-party manufacturing of preclinical and clinical trial supplies;

• costs associated with internal and third-party manufacturing process development activities, analytical activities and pre-launch inventory manufactured prior to regulatory approval being obtained or deemed to be probable;

• salaries and other personnel-related expenses, including stock–based compensation;

• facility costs and other allocated expense, including direct and allocated costs for rent and maintenance of facilities, depreciation and amortization of leasehold improvements, and manufacturing and laboratory equipment.

Where the Company shares costs with collaboration partners, such as in the Biogen Collaboration Agreement and the Takeda Collaboration Agreement, research and development expenses may include cost sharing reimbursements from or payments to the collaboration partner, respectively.

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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 December 31, 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 8 - "Common Stock".

The weighted-average common shares outstanding as of December 31, 2025 and 2024 include the pre-funded warrants to purchase shares of common stock.

Refer to discussion in Note 8 - "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 Company adopted this accounting standard update retrospectively on December 31, 2024.

Newly required disclosures has been included in Note 14 - "Segment Information" .

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

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Improvements to Income Tax Disclosures , which requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid.

The amendments in this Update are effective to be applied prospectively for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company has not early adopted this update, and is currently evaluating the impact of the new standard on its income tax disclosures.

The Company has adopted this accounting standard update retrospectively on December 31, 2025.

Newly required disclosures has been included in Note 11- " Income Taxes".

In November 2024, the FASB issued Accounting Standards Update No.

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Money market funds $ 149,874 $ — $ — $ 149,874

Commercial paper — 24,899 — 24,899

Short-term marketable securities:

1 unchanged sentence

Corporate debt securities — 62,469 — 62,469

Commercial paper — 6,572 — 6,572

Long-term marketable securities:

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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

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Corporate debt securities

Commercial paper 6,572 — — 6,572

62,407 71 ( 9 ) 62,469

Total short-term marketable securities 661,607 964 ( 18 ) 662,553

3 unchanged sentences

Corporate debt securities

39,710 69 ( 2 ) 39,777

Total long-term marketable securities 98,234 90 ( 2 ) 98,322

Total $ 759,841 $ 1,054 $ ( 20 ) $ 760,875

______________________________________________

(1) Unrealized holding losses on 3 securities with an aggregate fair value of 64.0 million.

(2) Unrealized holding losses on 4 securities with an aggregate fair value of 114.0 million

December 31, 2024

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

government agency securities 7,089 — ( 3 ) 7,086

Corporate debt securities

21,337 62 — 21,399

Commercial paper 6,572 — — 6,572

Total $ 906,410 $ 998 $ ( 3 ) $ 907,405

Total short-term marketable securities 655,718 1,680 ( 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.

Corporate debt securities

24,354 127 — 24,481

Total long-term marketable securities 358,654 915 ( 196 ) 359,373

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

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

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The Acquisition obligates the Company to make certain contingent payments to former shareholders and under the F-star Gamma license.

In 2023, the Company incurred $ 30.0 million in R&D expenses associated with the achievement of a clinical milestone.

In 2023, the Company incurred $ 30.0 million in R&D expenses upon the achievement of a clinical milestone.

There was no contingent consideration expense recognized for the years ended December 31, 2025 or 2024.

Under this arrangement, the Company may be required to make additional contingent consideration payments of up to $ 210.0 million, consisting of up to $ 60.0 million in regulatory contingent payments and up to $ 150.0 million in commercial contingent payments.

Under this arrangement, the Company may be required to make additional contingent consideration payments of up to $ 210.0 million, consisting of up to $ 60.0 million in regulatory contingent payments, including $ 36.0 million due upon regulatory approval of tividenofusp alfa in the United States, and up to $ 150.0 million in commercial contingent payments.

Genentech License Agreement

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In addition, the Company may owe royalties on net sales of licensed products ranging from low to high single-digit percentages.

The Company has made a total of $ 25.0 million in consideration payments under the Genentech agreement, including $ 12.5 million in the year ended December 31, 2022 related to two clinical milestones.

The Company has recognized $ 18.8 million of research and development expense, net of cost sharing reimbursements from Biogen, including $ 6.3 million in the year ended December 31, 2022.

The Company did not recognize expenses under this agreement in the years ended December 31, 2024 and 2023.

The Company has made a total of $ 25.0 million in consideration payments under the Genentech agreement.

The Company did not recognize expenses under this agreement in the years ended December 31, 2025, 2024 or 2023.

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, the Company received payments totaling $ 25.0 million during the year ended December 31, 2024, with the remainder to be paid upon achievement of operational milestones in the study.

In January 2024, the Company entered into a Collaboration and Development Funding Agreement with an unrelated third party, which obligates this third party to 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, the Company has received payments totaling $ 50.0 million as of December 31, 2025, with the remainder to be paid 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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As the third party is sharing in the risk associated with research and development activities with the Company, the development funding is recognized as an obligation to perform contractual services.

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.

Under this arrangement, the Company recognized a $ 10.9 million offset to research and development expenses in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2024.

The Company recorded a current deferred research and development funding liability of $ 14.1 million on the Consolidated Balance Sheet as of December 31, 2024.

Accordingly, payments received are 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.

Under this arrangement, the Company recognized an offset to research and development expenses of $ 18.0 million and $ 10.9 million in the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024, respectively.

The Company recorded current deferred research and development funding liabilities of $ 21.1 million and $ 14.1 million on the Consolidated Balance Sheets as of December 31, 2025, and 2024, respectively .

Collaboration Agreements

In August 2020, the Company entered into a binding Provisional Collaboration and License Agreement (“Provisional Biogen Collaboration Agreement”) with Biogen Inc.’s subsidiaries, Biogen MA Inc.

(“BIMA”) and Biogen International GmbH (“BIG”) (BIMA and BIG, collectively, “Biogen”) pursuant to which the Company granted Biogen a license to co-develop and co-commercialize Denali’s small molecule LRRK2 inhibitor program (the “LRRK2 Program”), an option in respect of each of (i) the Company’s amyloid beta program utilizing the Company's TransportVehicle TM ("TV") technology to cross the blood-brain barrier ("BBB") and (ii) one other unnamed program also utilizing the Company's TV technology platform (the “Option Programs”), and a right of first negotiation with respect to two additional unnamed programs for indications within Alzheimer’s disease, Parkinson’s disease, amyotrophic lateral sclerosis ("ALS") and multiple sclerosis ("MS") utilizing the Company's TV technology platform (the “ROFN Programs”), should the Company decide to seek a collaboration with a third party for such programs.

The Provisional Biogen Collaboration Agreement was a binding agreement, which became effective on the closing of the Common Stock Purchase Agreement ("SPA"), as described further below.

(“BIMA”) and Biogen International GmbH (“BIG”) (BIMA and BIG, collectively, “Biogen”) pursuant to which the Company granted Biogen a license to co-develop and co-commercialize Denali’s small molecule LRRK2 inhibitor program (the “LRRK2 Program”), an option in respect of each of (i) the Company’s amyloid beta program utilizing the Company's TransportVehicle TM ("TV") technology to cross the blood-brain barrier ("BBB") and (ii) one other unnamed program also utilizing the Company's TV technology platform (the “Option Programs”), and a right of first negotiation with respect to two additional unnamed programs utilizing the Company's TV technology platform (the “ROFN Programs”), should the Company decide to seek a collaboration with a third party for such programs.

The Provisional Biogen Collaboration Agreement was a binding agreement, which became effective on the closing of the Common Stock Purchase Agreement in September 2020, pursuant to which the Company sold 13,310,243 shares of common stock (the “Shares”) to BIMA for an aggregate purchase price of $ 465.0 million.

The Provisional Biogen Collaboration Agreement expired in October 2020 upon the execution of a Definitive LRRK2 Collaboration and License Agreement (“LRRK2 Agreement”) with Biogen on October 4, 2020 and a Right of First Negotiation, Option and License Agreement (the “ROFN and Option Agreement”) on October 6, 2020 (collectively, the "Biogen Collaboration Agreement").

Biogen made an upfront payment of $ 560.0 million upon execution of the Biogen Collaboration Agreement in October 2020, which was included in the transaction price at inception.

Biogen made an upfront payment of $ 560.0 million upon execution of the Biogen Collaboration Agreement in October 2020.

In August 2023, the Company and Biogen executed an Amendment (the “Biogen Amendment”) to the LRRK2 Agreement and ROFN and Option Agreement, pursuant to which Biogen waived its option to the second option program and its ROFN rights.

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The royalty rates for the applicable LRRK2 Program will be a percentage in the high teens to low twenties, but may increase to the mid-twenties if the Company has met certain co-funding thresholds or there has been a first commercial sale at the time of the Company's election.

Stock Purchase Agreement

In connection with the Provisional Biogen Collaboration Agreement, the Company entered into a common stock purchase agreement (the "Stock Purchase Agreement") with BIMA on August 5, 2020, pursuant to which the Company sold 13,310,243 shares of common stock (the “Shares”) to BIMA for an aggregate purchase price of $ 465.0 million.

Management determined that it was appropriate to account for the Provisional Biogen Collaboration Agreement and the SPA as one arrangement because they were entered into at the same time with interrelated financial terms.

This stock issuance resulted in a $ 44.9 million premium paid to the Company above the estimated fair value of the Company's common stock, which forms part of the transaction price at inception for the Biogen Collaboration Agreement.

The shares of common stock owned by Biogen as of December 31, 2022 and through September 30, 2023, represented approximately 10 % of the voting interest of the Company, and as such, Biogen was considered a related party as defined in ASC 850.

In the quarter ended December, 2023, the percentage voting interest had declined such that Biogen was no longer considered a related party as defined in ASC 850.

Biogen Collaboration Agreement

In April 2023, Biogen exercised its option to license the Company's ATV:Abeta program and made a $ 5.0 million option exercise fee payment.

The Biogen Collaboration Agreement was considered to be a contract modification to the Provisional Biogen Collaboration Agreement and was accounted for as a termination of the provisional agreement and commencement of a new contract.

The Biogen Amendment was considered to be a continuation of the Biogen Collaboration Agreement.

The Company identified the following distinct performance obligations associated with the Biogen Collaboration Agreement that had not yet been delivered under the original contract:

the LRRK2 Program license, the research services for the ATV:Abeta and TV programs (“Option Research Services”) which include option joint steering committee ("JSC") participation, and a material right for an option under the ROFN and Option Agreement.

Further, the LRRK2 Development Activities which includes LRRK2 JSC and joint development committee (“JDC”) participation was identified as a unit of account under ASC 808.

The LRRK2 Development Activities, JSC and JDC participation are considered to be a single unit of account since the development activities are highly interrelated with the JSC and JDC involvement and these are not distinct in the context of the contract.

Further, the same was considered to be true for the option research services and option JSC participation performance obligation.

The Company believes that the Biogen Collaboration Agreement is a collaboration arrangement as defined in ASC 808, Collaborative Arrangements.

The Company also believes that Biogen meets the definition of a customer as defined in ASC 606, Revenue From Contracts With Customers for all of the performance obligations identified at inception except for the LRRK2 Development Activities.

The Company believes that the Biogen Collaboration Agreement is a collaboration arrangement as defined in ASC 808, Collaborative Arrangements, and that Biogen meets the definition of a customer as defined in ASC 606, Revenue From Contracts With Customers for all of the performance obligations identified at inception except for the LRRK2 Development Activities.

Since ASC 808 does not address recognition and measurement, the Company looked to other accounting literature for guidance where the performance obligation does not fall under ASC 606, and determined that for the interim LRRK2 development activities subject to cost sharing provisions, the guidance in ASC 730, Research and Development should be applied.

The Company identified the LRRK2 Program license, the research services for the ATV:Abeta and TV programs (“Option Research Services”) and a material right for an option under the ROFN and Option Agreement as distinct performance obligations associated with the Biogen Collaboration Agreement.

Further, the LRRK2 Development Activities was identified as a unit of account under ASC 808.

The respective standalone value for each of the performance obligations was determined at inception by applying the SSP method and the transaction price of $ 604.9 million at inception was allocated based on the relative SSP method with revenue recognition timing to be determined either by delivery, resolution of an option, or the provision of services.

The LRRK2 Program license was delivered on or around the effective date of the Biogen Collaboration Agreement and the revenue allocated to this performance obligation was recognized during the year ended December 31, 2020 .

The Option Research Services were delivered over time as the services are performed, with revenue being recognized over time based on costs incurred to perform the services.

As of December 31, 2023 , all revenue allocated to the Option Research Services had been recognized.

The $ 288.9 million of revenue allocated to the material right for an option under the ROFN and Option Agreement was initially deferred as a contract liability, and was recognized in full during the year ended December 31, 2023, upon Biogen's ATV:Abeta option exercise, along with the $ 5.0 million option exercise fee paid upon opt in, which was fully allocated to the material right.

The LRRK2 Development Activities cost sharing reimbursements or expenses are being recognized over time as earned or incurred, since this is believed to directly correlate to the value of the services performed.

In assessing the Biogen Collaboration Agreement, management exercised considerable judgment in estimating revenue to be recognized, specifically related to estimating the discount for lack of marketability associated with the stock issuance, determining the separate performance obligations under the Biogen Collaboration Agreement, and estimating the standalone selling price of those performance obligations.

As of December 31, 2025 , the Company had earned $ 5.0 million in option fee payments, but had no t recorded milestone revenue or product sales under the Biogen Collaboration Agreement.

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The Company believes that the Sanofi Collaboration Agreement is a collaboration arrangement as defined in ASC 808, Collaborative Arrangements.

The Company also believes that Sanofi meets the definition of a customer as defined in ASC 606, Revenue From Contracts With Customers for all of the performance obligations identified at inception except for the Alzheimer's Disease Services.

Since ASC 808 does not address recognition and measurement, the Company looked to other accounting literature for guidance where the performance obligation does not fall under ASC 606, and determined that for any future cost sharing, the guidance in ASC 730, Research and Development should be applied.

The Company identified the CNS program license, the Peripheral program license, the Phase 1 and Phase 2 trials for CNS Products for Alzheimer’s disease ("Alzheimer's Disease Services"), and the Phase 1b trial for DNL747 for ALS and associated activities ("Retained Activities") as distinct performance obligations associated with the Sanofi Collaboration Agreement.

The respective standalone value for each of the performance obligations was determined at inception by applying the SSP method and the transaction price at inception was allocated based on the relative SSP method with revenue recognition timing to be determined either by delivery or the provision of services.

The program licenses and existing know-how were delivered on the effective date of the Sanofi Collaboration Agreement, and as such upfront revenue allocated to these performance obligations were recognized at this time.

Further, clinical milestones are recognized as earned since these relate to the underlying program licenses previously delivered.

The Alzheimer’s Disease Services and the Retained Activities were expected to be delivered over time as the services are performed.

For the Alzheimer's Disease Services, revenue was recognized over time using the input method, based on costs incurred to perform the services, since the level of costs incurred over time was thought to best reflect the transfer of services to Sanofi.

For the Retained Activities, revenue was recognized over time using the output method, based on amounts invoiced to Sanofi, since this is believed to directly correlate to the value of the services performed.

During the years ended December 31, 2023 and 2022, the Company earned clinical milestones of $ 25.0 million and $ 50.0 million, respectively.

These milestones were recognized in collaboration revenue from customers in the Consolidated Statement of Operations and Comprehensive Loss during for the years ended December 31, 2023 and 2022, respectively, s ince the associated performance obligation has been satisfied .

There were no milestones recognized in collaboration revenue from customers in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2024 .

During the year ended December 31, 2023 , the Company earned a clinical milestone of $ 25.0 million when the associated performance obligation was satisfied , which was recognized in collaboration revenue from customers in the Consolidated Statement of Operations and Comprehensive Loss.

There were no milestones recognized in collaboration revenue from customers in the Consolidated Statement of Operations and Comprehensive Loss for the years ended December 31, 2025 or 2024 .

The Company has no remaining performance obligations under the Sanofi Collaboration Agreement, and no contract liability remains on the Consolidated Balance Sheets as of December 31, 2025 or 2024 .

The Company did no t record any receivable associated with the Sanofi Collaboration Agreement on the Consolidated Balance Sheets as of December 31, 2024 or 2023.

In assessing the Sanofi Collaboration Agreement, management exercised considerable judgment in estimating revenue to be recognized.

Management applied judgment in determining the separate performance obligations, in estimating the selling price, in determining when control was transferred to Sanofi for the licenses, and in estimating total future costs when using the input method.

As of December 31, 2024, the Company had earned milestone payments of $ 100.0 million and had no t recorded any product sales under the Sanofi Collaboration Agreement.

As of December 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.

Takeda Collaboration Agreement

In January 2018, the Company entered into a Collaboration and Option Agreement ("Takeda Collaboration Agreement") with Takeda Pharmaceutical Company Limited ("Takeda"), pursuant to which the Company granted Takeda an option to develop and commercialize, jointly with the Company, certain biologic products that are enabled by the Company's BBB delivery technology and intended for the treatment of neurodegenerative disorders.

The programs subject to the Takeda Collaboration Agreement were the Company ’s ATV:BACE1/Tau, ATV:TREM2 and PTV:PGRN programs.

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Subsequent to the ATV:Tau termination, total preclinical milestone payments that Takeda owed under the Takeda Collaboration Agreement was $ 55.0 million for all three programs, all of which had been earned and received as of December 31, 2022 .

Pursuant to the terms of the Takeda Collaboration Agreement, the Company entered into a common stock purchase agreement with Takeda on January 3, 2018, pursuant to which Takeda purchased 4,214,559 shares of the Company’s common stock on February 23, 2018 for an aggregate purchase price of $ 110.0 million, which included a $ 15.6 million stock premium.

Subsequent to Takeda exercising its option with respect to a particular target and collaboration program (i.e., the biologic products directed to the target for which Takeda has exercised its option), Takeda has the right to develop and commercialize, jointly with the Company, a specified number of biologic products enabled by its BBB delivery technology that were developed during the research period and which are directed to the relevant target, and the Company grants to Takeda a co-exclusive license under the intellectual property the Company controls related to those biologic products.

The Company did not record any product sales and there are no remaining performance obligations under the initial Takeda Collaboration Agreement.

The Takeda Collaboration Agreement was superseded by the PTV:PGRN and ATV:TREM2 Collaboration Agreements subsequent to opt-in for the two programs, recognition of all preclinical milestones, and termination of the ATV:Tau program.

PTV:PGRN and ATV:TREM2 Collaboration Agreements

In November and December 2021, Takeda exercised its options to jointly develop and commercialize the PTV:PGRN and ATV:TREM2 programs, respectively, triggering the option fee of $ 5.0 million for each program, which formed the transaction price at contract inception for each contract, all of which was allocated to the underlying Technology License in each Collaboration Agreement which was delivered on or around the effective date of the respective Collaboration Agreement.

Management determined that the opt-in by Takeda on the PTV:PGRN and ATV:TREM2 programs represent two new contracts with a customer for accounting purposes (the "PTV:PGRN Collaboration Agreement" and the "ATV:TREM2 Collaboration Agreement"), both effective in December 2021 upon payment of the respective option fees.

From inception of the PTV:PGRN Collaboration Agreement and the ATV:TREM2 Collaboration Agreement through December 31, 2024, there was no change to the terms of either agreement;

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

The ATV:TREM2 program termination will become effective 60 days following the notice date.

For each contract, upon option exercise, the Company identified a single performance obligation under ASC 606, and initially one unit of account under ASC 808 associated with each of the PTV:PGRN and ATV:TREM2 Collaboration Agreements.

The performance obligation was the delivery of a co-exclusive license under the intellectual property the Company controls related to the PTV:PGRN or ATV:TREM2 program ("PTV:PGRN Technology License" or "ATV;TREM2 Technology License"), and the unit of account is the obligation to share in responsibility and costs for global development of PTV:PGRN or ATV:TREM2 Products pursuant to a mutually agreed upon development plan and budget ("PTV:PGRN Development Activities" or "ATV:TREM2 Development Activities"), which both include JSC involvement.

The PTV:PGRN Development Activities and JSC participation, and the ATV:TREM2 Development Activities and JSC participation are each considered to be single units of account since the activities are highly interrelated with the JSC involvement and these are not distinct in the context of the contract.

The Company believes that the PTV:PGRN and ATV:TREM2 Collaboration Agreements are both collaboration arrangements as defined in ASC 808, Collaborative Arrangements.

The Company also believes that Takeda meets the definition of a customer as defined in ASC 606, Revenue From Contracts With Customers for the PTV:PGRN Technology License and the ATV:TREM2 Technology License performance obligations delivered in these collaboration agreements, respectively.

Since ASC 808 does not address recognition and measurement, the Company looked to other accounting literature for the PTV:PGRN Development Activities and ATV:TREM2 Development Activities units of account, and determined that the guidance in ASC 730, Research and Development should be applied.

The Takeda Collaboration Agreement was superseded by the PTV:PGRN and ATV:TREM2 Collaboration Agreements subsequent to opt-in for the two programs in November and December 2021, respectively, recognition of all preclinical milestones, and termination of the ATV:Tau program.

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

Subsequent to the effective date of the termination of the ATV:TREM2 Collaboration Agreement, there are no future milestones, cost, or profit sharing related to this agreement.

Prior to its termination, the ATV:TREM2 Collaboration Agreement was accounted for consistent with the treatment of the PTV:PGRN Collaboration Agreement, which is discussed in the subsequent section.

PTV:PGRN Collaboration Agreement

In November 2021, Takeda exercised its options to jointly develop and commercialize the PTV:PGRN program, triggering the option fee of $ 5.0 million, which formed the transaction price at contract inception, all of which was allocated to the underlying Technology License which was delivered on or around the effective date of the Collaboration Agreement.

Management determined that the opt-in by Takeda on the PTV:PGRN program represents a new contract with a customer for accounting purposes (the "PTV:PGRN Collaboration Agreement"), effective in December 2021 upon payment of the option fee.

From inception of the PTV:PGRN Collaboration Agreement through December 31, 2025, there was no change to the terms of the agreement.

The Company believes that the PTV:PGRN Collaboration Agreement is a collaboration arrangement as defined in ASC 808, Collaborative Arrangements.

The Company also believes that Takeda meets the definition of a customer as defined in ASC 606, Revenue From Contracts With Customers for the PTV:PGRN Technology License performance obligation delivered in the collaboration agreement.

Since ASC 808 does not address recognition and measurement, the Company looked to other accounting literature for the PTV:PGRN Development Activities unit of account, and determined that the guidance in ASC 730, Research and Development should be applied.

Under the PTV:PGRN Collaboration Agreement, Takeda may be obligated to pay the Company up to $ 140.0 million upon achievement of certain clinical milestone events and up to $ 100.0 million in regulatory milestone events relating to receipt of regulatory approval in the United States, certain European countries and Japan.

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Further, the Company and Takeda share equally the development and commercialization costs, and, if applicable, the profits, for the PTV:PGRN program.

Subsequent to the effective date of the termination of the ATV:TREM2 Collaboration Agreement, there will be no future milestones, cost, or profit sharing related to this agreement.

A $ 10.0 million milestone was triggered under the PTV:PGRN Collaboration Agreement upon achievement of a specified clinical milestone and recognized in collaboration revenue from customers in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2023.

No product sales have been recorded under either agreement.

In assessing the Takeda Collaboration Agreement and the PTV:PGRN and the ATV:TREM2 Collaboration Agreements, management was required to exercise considerable judgment in estimating revenue to be recognized.

Management applied judgment in determining whether opt-in resulted in a modification to an existing contract or a new contract, in determining the separate performance obligations in the research period, and estimating variable consideration.

No product sales have been recorded under the agreement.

Collaboration Revenue

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2025 2024 2023

Takeda Collaboration Agreement:

Takeda Collaboration Agreement Services (1)

$ — $ — $ 51,916

PTV:PGRN Collaboration Agreement — 10,000 —

Total Takeda Collaboration Revenue — 10,000 51,916

Sanofi Collaboration Agreement:

CNS Program License — 25,000 40,000

Peripheral Program License — — 10,000

Alzheimer's Disease Services (2)

Total Sanofi Collaboration Revenue — 25,000 53,398

Takeda Collaboration Revenue - PTV:PGRN Program

Sanofi Collaboration Revenue - CNS Program

Biogen Collaboration Agreement:

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Option Research Services (2)

— 1,619 3,149

Total Biogen Collaboration Revenue — — 295,531

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_________________________________________________

(1) Revenue of $ 27.9 million for the year ended December 31, 2022 was included in the contract liability balance at the beginning of the year.

(2) Revenue was included in the contract liability balance at the beginning of the year.

(1) Revenue of $ 288.9 million for the year ended December 31, 2023 was included in the related-party contract liability balance at the beginning of the period.

(2) Revenue was included in the contract liability balance at the beginning of the year.

Cost Sharing Payments and Reimbursements

Cost sharing payments to collaboration partners recorded as expenses in research and development expenses in the 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 Consolidated Statements of Operations and Comprehensive Loss are as follows (in thousands):

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

Year Ended December 31,

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Manufacturing equipment

17,493 15,998

Computer equipment and purchased software

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The lease had not commenced for accounting purposes.

In April 2023, the Company entered into a new 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, and undiscounted lease payments of approximately $ 13.4 million, which was subsequently amended in October 2023.

In April 2023, the Company entered into a finance lease for its clinical manufacturing site 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, and undiscounted lease payments of approximately $ 13.4 million, which was subsequently amended in October 2023.

The Company has the option to extend the lease term for a period of ten years at the end of the lease term.

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 Consolidated Balance Sheets.

Included in the ROU asset as of December 31, 2024 are $ 41.6 million of assets purchased by the Company, which are considered to be owned by the landlord.

The Finance lease ROU asset includes approximately $ 47.4 million of lessor owned improvements funded by the Company.

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, and 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.

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There were no changes to the terms of the leases recognized under ASC 842 during the year ended December 31, 2025.

Operating lease costs, including variable lease costs recognized under ASC 842, were $ 7.2 million for the year ended December 31, 2024 and $ 8.0 million for each of the years ended December 31, 2023 and 2022.

Variable lease costs were $ 5.1 million, $ 4.4 million and $ 4.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Finance lease costs representing amortization of ROU assets and interest on lease liability were $ 1.2 million and $ 0.3 million, respectively, for the year ended December 31, 2024.

There were no finance lease costs for the years ended December 31, 2023 and 2022 .

The following table summarizes lease costs recognized for the periods presented (in thousands):

Year Ended December 31,

2025 2024 2023

Operating lease cost

$ 7,595 $ 7,189 $ 7,983

Finance lease cost:

Amortization of ROU assets

3,629 1,197 —

Variable lease cost

5,806 5,065 4,458

Total lease costs

$ 17,750 $ 13,753 $ 12,441

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

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Finance lease

14.3 years — —

13.3 years 14.3 years —

Weighted-average discount rate applied (%):

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2029 4,381 848

Thereafter — 7,947

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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 Consolidated Balance Sheets , Consolidated Statements of Operations and Comprehensive Loss, or Consolidated Statements of Cash Flows .

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 November 2029.

As of December 31, 2024 and 2023, the Company had total non-cancellable purchase commitments under the DMSA of $ 36.7 million and $ 37.6 million, respectively.

During the years ended December 31, 2024, 2023 and 2022, the Company incurred costs of $ 34.1 million, $ 39.5 million, and $ 28.6 million, respectively, and made payments of $ 36.6 million, $ 37.1 million, and $ 23.9 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 $ 24.1 million and $ 34.8 million, as of December 31, 2024 and 2023, respectively, with certain amounts subject to cost sharing with Takeda.

In the normal course of business, the Company enters into firm purchase commitments primarily related to supply of pre-launch commercial product, research, development and manufacturing activities.

The Company had contractual obligations under certain commercial product, clinical and manufacturing agreements of $ 44.3 million and $ 60.8 million, as of December 31, 2025 and 2024, respectively.

Further, the Company had other commitments of $ 1.5 million and $ 2.2 million as of both December 31, 2025 and 2024, respectively.

Royalty Pharma Funding Agreement

On December 4, 2025, the Company entered into a royalty funding arrangement (the “Royalty Agreement”) with Royalty Pharma plc (“Royalty Pharma”).

Pursuant to the Royalty Agreement, Royalty Pharma agreed to provide up to $ 275.0 million in funding to the Company in exchange for a 9.25 % royalty on worldwide net sales of tividenofusp alfa.

The transaction is subject to various closing conditions, including the Company achieving FDA approval of tividenofusp alfa on or before June 30, 2026.

At closing, Royalty Pharma will make an initial payment of $ 200.0 million and Royalty Pharma will be obligated to make an additional payment of $ 75.0 million upon European Medicines Agency (the "EMA") approval of tividenofusp alfa on or before December 31, 2029.

Royalty payments will cease upon Royalty Pharma receiving a multiple of 3.0 x of the initial investment proceeds, or 2.5 x if achieved by the first quarter of 2039.

As of December 31, 2025, the transaction had not closed and no liability related to the Royalty Agreement was recorded in the consolidated financial statements.

Contingencies

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The Company records accruals for loss contingencies to the extent that the Company concludes that it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated.

On February 27, 2024, the Company entered into a securities purchase agreement (the "Purchase Agreement") with certain investors for the private placement of (i) 3,244,689 shares of Denali's common stock at a price of $ 17.07 per share and (ii) pre-funded warrants to purchase an aggregate of 26,046,065 shares of Denali's common stock (the "Pre-Funded Warrants") at a purchase price of $ 17.06 per Pre-Funded Warrant, which represents the per share price for the common stock less the $ 0.01 exercise price.

In February 2024, the Company entered into a securities purchase agreement (the "Purchase Agreement") with certain investors for the private placement of (i) 3,244,689 shares of the Company's common stock at a price of $ 17.07 per share and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 26,046,065 shares of the Company's common stock at a purchase price of $ 17.06 per pre-funded warrant, which represents the per share price for the common stock less the $ 0.01 exercise price.

The private placement closed on February 29, 2024, at which time the Company received aggregate net proceeds of approximately $ 499.3 million, after deducting issuance costs of approximately $ 0.5 million.

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 December 31, 2024.

On December 9, 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Goldman Sachs & Co.

Morgan Securities LLC and Morgan Stanley & Co.

LLC as representatives of the several underwriters named therein (collectively, the “Underwriters”), relating to the public offering of (i) 9,142,857 shares of the Company’s common stock, at a public offering price of $ 17.50 per share, and (ii) additional Pre-Funded Warrants to purchase 2,285,714 shares of Common Stock at a public offering price of $ 17.49 per pre-funded warrant, which represents the per share price for the common stock less the $ 0.01 exercise price.

The public offering closed on December 11, 2025, at which time the Company received aggregate net proceeds of approximately $ 189.2 million, after deducting issuance costs of approximately $ 0.7 million.

In January 2026 , the underwriters exercised their option to purchase an additional 746,468 shares of the Company’s Common Stock, on which date the Company received aggregate net proceeds of approximately $ 12.4 million.

All of the Pre-Funded Warrants issued in the aforementioned private placement and the public offering were outstanding as of December 31, 2025, and 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.

Stock-Based Awards

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Balance at December 31, 2024

18,660,150 $ 25.99 5.94 $ 48,266

Granted 5,019,276 19.57

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Forfeited ( 734,841 ) 25.16

Expired ( 844,371 ) 0.68

Balance at December 31, 2025

21,326,333 $ 26.39 6.21 $ 10,658

Vested and expected to vest at December 31, 2025

21,326,333 $ 26.39 6.21 $ 10,658

Exercisable at December 31, 2025

13,674,635 $ 29.46 4.84 $ 8,497

Aggregate intrinsic value represents the difference between the fair value of the Company's common stock and the exercise price of outstanding options.

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The fair value of the Company’s common stock is based on the current market price, unless an adjustment is determined to be required, through discussion with senior management, due to material non-public information known by the Company at the time of grant.

The expected volatility of the Company’s stock options is estimated using a combination of average historical stock price volatility of the Company's stock and that of comparable public companies within the biotechnology and pharmaceutical industry that are deemed to be representative of future stock price trends, since the Company does not have sufficient trading history to rely solely on the volatility of its common stock.

The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

The expected volatility used in valuing stock options granted in 2024 and 2025 is based solely on the historical volatility of the Company’s common stock.

For 2023, because the Company did not have sufficient trading history to rely exclusively on its own stock price volatility, expected volatility was determined using a combination of the Company’s historical volatility and the historical volatility of comparable publicly traded biotechnology and pharmaceutical companies over a period consistent with the expected term of the awards.

Management considers whether the Company is in possession of material non-public information at the time of grants when making certain estimates, including volatility and the fair value of the Company's common stock.

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Unvested at December 31, 2024

4,128,514 $ 27.33

Granted 2,726,354 18.76

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Unvested and expected to vest at December 31, 2025

5,124,629 $ 21.74

The aggregate intrinsic value of RSUs is calculated as the closing price per share of the Company's common stock on the last trading day of the fiscal period, multiplied by outstanding RSUs as of December 31, 2025 .

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2025 2024 2023

(In thousands, except percentages)

Amount Rate Amount Rate Amount Rate

Taxes at the U.S.

statutory tax rate

statutory tax rate of 21%

$ ( 107,612 ) 21.0 % $ ( 88,531 ) 21.0 % $ ( 30,490 ) 21.0 %

State income taxes, net of federal tax benefit

1,516 ( 0.3 ) — — — —

Foreign tax effects

51 — 15 — 27 —

Effective of cross-border tax laws

80 — 70 — 908 ( 0.6 )

Change in valuation allowance

124,243 ( 24.2 ) 106,498 ( 25.3 ) 37,886 ( 26.1 )

Research tax credits

Research Tax Credit

( 21,990 ) 4.3 ( 24,660 ) 5.9 ( 23,011 ) 15.9

Effect of changes in tax laws or rates enacted in the current period

Nontaxable or Nondeductible items

Stock-based compensation

1 unchanged sentence

Nondeductible acquisition - related costs

Impact of IRC 162m ( 0.2 ) ( 0.7 ) —

— — — — 5,040 ( 3.5 )

261 ( 0.1 ) ( 2,930 ) 0.7 220 ( 0.2 )

Changes in UTB

( 1,573 ) 0.3 173 — 401 ( 0.3 )

( 1,160 ) 0.2 ( 146 ) — 3,273 ( 2.3 )

Total provision for income taxes

$ 102 — % $ 68 — % $ 30 — %

On July 4, 2025, the U.S.

enacted tax reform legislation through the One Big Beautiful Bill Act (“OBBBA”).

Included in this legislation are provisions that allow for the immediate expensing of domestic research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S.

taxation of profits derived from foreign operations.

The legislation has multiple effective dates, with certain provisions effective in the current fiscal period and others in the fiscal year ending December 31, 2026.

OBBBA did not have a material impact to the Company’s consolidated financial statements for the year ended December 31, 2025 .

Deferred Income Taxes

5 unchanged sentences

Lease liabilities

11,760 12,663

Stock-based compensation 67,511 57,766

4 unchanged sentences

Deferred tax liabilities:

Property and equipment — ( 5,663 )

Lease right-of-use assets

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Reductions for tax positions taken in the prior year

( 2,100 ) — —

Audit settlements

( 53 ) $ — $ —

Unrecognized tax benefits at December 31

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The Company does no t expect the unrecognized tax benefits to change significantly over the next 12 months.

Since the Company is in a loss carryforward position, the Company is generally subject to examination by the U.S.

federal, state and local income tax authorities for all tax years in which a loss carryforward is available.

The Company’s 2015 to 2025 tax years remain subject to examination in the United States and California due to tax attributes and statutes of limitations.

The Company remains subject to possible examination in various other jurisdictions that are not expected to result in material tax adjustments.

Net Loss and Net Loss Per Share

6 unchanged sentences

146,471,525 142,626,390 137,370,897

Private placement pre-funded warrants

Pre-funded warrants

26,177,572 21,847,382 —

3 unchanged sentences

Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive.

Potentially dilutive securities, including all options issued and outstanding, ESPP shares issuable, and restricted shares subject to future vesting, that were not included in the diluted per share calculations for all periods presented because they would be anti-dilutive totaled approximately 23.2 million, 20.5 million, and 18.2 million shares as of December 31, 2024, 2023, and 2022, respectively.

Potentially dilutive securities, including all options issued and outstanding, ESPP shares issuable, restricted shares subject to future vesting, and shares potentially issuable to the underwriters upon exercise of their option associated with the December 2025 public offering, that were not included in the diluted per share calculations for all periods presented because they would be anti-dilutive totaled approximately 28.8 million, 23.2 million and 20.5 million shares as of December 31, 2025, 2024, and 2023, 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 Tenvie.

In March 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 Tenvie Therapeutics, Inc.

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

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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.

In March 2024, Tenvie and the Company also entered into a sublease for approximately 12,000 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 through September 2025, with one optional six month extension period.

The Service Agreements provides access to the Company's equipment and the provision of certain specified administrative and research services to Tenvie for a period concurrent with the sublease term.

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.

1 unchanged sentence

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 Consolidated Balance Sheet as of December 31, 2024 .

Segment Information

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The CODM, in alignment with the Company's overall corporate strategy and goals, analyses a variety of data to guide segment resource allocation, including program and portfolio scientific data, product market information and projections, probability of regulatory and commercial success, and the competitive environment.

The CODM also reviews certain financial results included in the segment Loss from Operations which is reported on the Consolidated Statements of Operations and Comprehensive Loss as total Loss from Operations.

The measure of segment assets is reported on the Consolidated Balance Sheets as Total Assets.

24 unchanged sentences

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-K

Item 8. Financial Statements and Supplementary Data