Denali Therapeutics Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS Denali Therapeutics Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share amounts) June 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 201,530 $ 205,326 Short-term marketable securities 508,941 662,553 Accounts receivable, net 3,927 — Inventory 4,139 — Prepaid expenses and other current assets 35,390 32,779 Total current assets 753,927 900,658 Long-term marketable securities 229,534 98,322 Property and equipment, net 49,926 52,402 Finance lease right-of-use asset 46,700 48,531 Operating lease right-of-use asset 16,793 19,002 Intangible asset, net 35,250 — Other non-current assets 25,825 25,939 Total assets $ 1,157,955 $ 1,144,854 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 11,807 $ 505 Other accrued costs and current liabilities 78,276 97,846 Total current liabilities 90,083 98,351 Operating lease liability, less current portion 22,026 27,210 Finance lease liability, less current portion 5,479 5,532 Liability related to the revenue participation right agreement 205,189 — Total liabilities 322,777 131,093 Commitments and contingencies (Note 10) Stockholders' equity: Convertible preferred stock, $ 0.01 par value; 40,000,000 shares authorized as of June 30, 2026 and December 31, 2025; 0 shares issued and outstanding as of June 30, 2026 and December 31, 2025 — — Common stock, $ 0.01 par value; 400,000,000 shares authorized as of June 30, 2026 and December 31, 2025; 159,755,526 shares and 156,182,177 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 1,924 1,888 Additional paid-in capital 3,142,747 3,062,715 Accumulated other comprehensive income (loss) ( 1,969 ) 682 Accumulated deficit ( 2,307,524 ) ( 2,051,524 ) Total stockholders' equity 835,178 1,013,761 Total liabilities and stockholders’ equity $ 1,157,955 $ 1,144,854 See accompanying notes to unaudited condensed consolidated financial statements. 3 Table of Contents Denali Therapeutics Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (In thousands, except share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: Product revenue, net $ 3,604 $ — $ 3,604 $ — Total revenue 3,604 — 3,604 — Operating expenses: Cost of goods sold 93 — 93 — Research and development 97,019 102,696 200,865 218,923 Selling, general and administrative 36,283 32,267 69,794 61,620 Intangible asset amortization 750 — 750 — Total operating expenses 134,145 134,963 271,502 280,543 Loss from operations ( 130,541 ) ( 134,963 ) ( 267,898 ) ( 280,543 ) Interest and other income, net 2,988 10,844 11,898 23,454 Net loss $ ( 127,553 ) $ ( 124,119 ) $ ( 256,000 ) $ ( 257,089 ) Other comprehensive loss: Net unrealized loss on marketable securities, net of tax ( 1,287 ) ( 1,098 ) ( 2,651 ) ( 1,081 ) Comprehensive loss $ ( 128,840 ) $ ( 125,217 ) $ ( 258,651 ) $ ( 258,170 ) Net loss per share, basic and diluted $ ( 0.68 ) $ ( 0.72 ) $ ( 1.37 ) $ ( 1.50 ) Weighted average number of shares outstanding, basic and diluted 187,314,501 171,449,847 186,977,612 171,336,568 See accompanying notes to unaudited condensed consolidated financial statements. 4 Table of Contents Denali Therapeutics Inc. Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) (In thousands, except share amounts) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders' Equity Shares Amount Balance at December 31, 2025 156,182,177 $ 1,888 $ 3,062,715 $ 682 $ ( 2,051,524 ) $ 1,013,761 Issuance of common stock, net of issuance cost of $ 45 746,468 8 12,358 — — 12,366 Issuances under equity incentive plans 1,484,925 14 21,686 — — 21,700 Vesting of restricted stock units 1,341,956 14 ( 14 ) — — — Stock-based compensation — — 46,002 — — 46,002 Net loss — — — — ( 256,000 ) ( 256,000 ) Other comprehensive loss — — — ( 2,651 ) — ( 2,651 ) June 30, 2026 159,755,526 $ 1,924 $ 3,142,747 $ ( 1,969 ) $ ( 2,307,524 ) $ 835,178 Balance at March 31, 2026 158,656,318 $ 1,913 $ 3,104,838 $ ( 682 ) $ ( 2,179,971 ) $ 926,098 Issuances under equity incentive plans 948,205 9 14,996 — — 15,005 Vesting of restricted stock units 151,003 2 ( 2 ) — — — Stock-based compensation — — 22,915 — — 22,915 Net loss — — — — ( 127,553 ) ( 127,553 ) Other comprehensive loss — — — ( 1,287 ) — ( 1,287 ) June 30, 2026 159,755,526 $ 1,924 $ 3,142,747 $ ( 1,969 ) $ ( 2,307,524 ) $ 835,178 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 455,335 5 4,647 — — 4,652 Vesting of restricted stock units 1,009,121 10 ( 10 ) — — — Stock-based compensation — — 50,887 — — 50,887 Net loss — — — — ( 257,089 ) ( 257,089 ) Other comprehensive loss — — — ( 1,081 ) — ( 1,081 ) Balance at June 30, 2025 145,685,442 $ 1,783 $ 2,820,404 $ 939 $ ( 1,796,073 ) $ 1,027,053 Balance at March 31, 2025 145,251,258 $ 1,778 $ 2,790,825 $ 2,037 $ ( 1,671,954 ) $ 1,122,686 Issuances under equity incentive plans 341,543 4 4,053 — — 4,057 Vesting of restricted stock units 92,641 1 ( 1 ) — — — Stock-based compensation — — 25,527 — — 25,527 Net loss — — — — ( 124,119 ) ( 124,119 ) Other comprehensive loss — — — ( 1,098 ) — ( 1,098 ) Balance at June 30, 2025 145,685,442 $ 1,783 $ 2,820,404 $ 939 $ ( 1,796,073 ) $ 1,027,053 See accompanying notes to unaudited condensed consolidated financial statements. 5 Table of Contents Denali Therapeutics Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Six Months Ended June 30, 2026 2025 Operating activities Net loss $ ( 256,000 ) $ ( 257,089 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 6,414 5,370 Stock–based compensation expense 46,002 50,547 Net accretion of discounts on marketable securities ( 2,704 ) ( 6,585 ) Non-cash adjustment to operating lease expense ( 2,353 ) ( 2,161 ) Right-of-use asset amortization for finance lease 1,831 1,798 Non-cash interest expense related to revenue participation right liability 5,941 — Other non-cash items ( 223 ) — Changes in operating assets and liabilities: Accounts receivable, net ( 3,927 ) — Inventory ( 4,139 ) — Prepaid expenses and other current assets ( 2,613 ) ( 3,650 ) Other non-current assets ( 304 ) 3,022 Accounts payable 4,102 ( 43 ) Accruals and other current liabilities ( 19,107 ) ( 14,151 ) Deferred research and development funding liability ( 1,126 ) 16,176 Net cash used in operating activities ( 228,206 ) ( 206,766 ) Investing activities Purchases of marketable securities ( 394,579 ) ( 137,926 ) Maturities and sales of marketable securities 417,032 323,965 Purchases of property and equipment ( 3,271 ) ( 9,356 ) Cash paid to acquire finite-lived intangible asset ( 28,800 ) — Net cash provided by (used in) investing activities ( 9,618 ) 176,683 Financing activities Proceeds from underwriter exercising option to purchase common stock, net of issuance costs 12,366 — Proceeds from sale of revenue participation right 200,000 — Proceeds from exercise of awards under equity incentive plans 21,700 4,652 Payments for finance lease right-of-use asset ( 38 ) ( 6,791 ) Net cash provided by (used in) financing activities 234,028 ( 2,139 ) Net decrease in cash, cash equivalents and restricted cash ( 3,796 ) ( 32,222 ) Cash, cash equivalents and restricted cash at beginning of period 208,432 176,535 Cash, cash equivalents and restricted cash at end of period $ 204,636 $ 144,313 Supplemental disclosures of cash flow information Payment due on intangible asset acquired $ 7,200 $ — See accompanying notes to unaudited condensed consolidated financial statements. 6 Table of Contents Denali Therapeutics Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Significant Accounting Policies Organization and Description of Business Denali Therapeutics Inc. ("Denali" or the “Company”) is a biopharmaceutical company, incorporated in Delaware, that discovers and develops therapeutics to defeat neurodegenerative diseases and lysosomal storage diseases. The Company is headquartered in South San Francisco, California. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of the Securities and Exchange Commission ("SEC") Regulation S-X for interim financial information. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 26, 2026 (the "2025 Annual Report on Form 10-K"). The Condensed Consolidated Balance Sheet as of December 31, 2025 was derived from the audited annual consolidated financial statements as of and for the period then ended. Certain information and footnote disclosures typically included in the Company's annual consolidated financial statements have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. All such adjustments are of a normal recurring nature except for the impacts of adopting new accounting standards, if any, discussed below. These interim financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period. During the six months ended June 30, 2026 the Company added significant accounting policies related to product revenue, accounts receivable, inventory, cost of goods sold, intangible assets and the liability related to the revenue participation right. Aside from these new accounting policies, there were no material changes to the Company's significant accounting and financial reporting policies from those reflected in the 2025 Annual Report on Form 10-K. For further information with regard to the Company’s Significant Accounting Policies, please refer to Note 1, "Significant Accounting Policies," to the Company’s Consolidated Financial Statements included in the 2025 Annual Report on Form 10-K. Principles of Consolidation These unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. For the Company and its subsidiaries, the functional currency has been determined to be U.S. dollars. Monetary assets and liabilities denominated in foreign currency are remeasured at period-end exchange rates, non-monetary assets and liabilities denominated in foreign currencies are remeasured at historical rates, and transactions in foreign currencies are remeasured at average exchange rates. Foreign currency gains and losses resulting from remeasurement are recognized in interest and other income, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss. 7 Table of Contents Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported amounts of expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations and Comprehensive Loss. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities, and accounts receivable. Substantially all of the Company’s cash and cash equivalents are deposited in accounts with financial institutions that management believes are of high credit quality. Such deposits have and will continue to exceed federally insured limits. The Company maintains its cash with accredited financial institutions and accordingly, such funds are subject to minimal credit risk. The Company’s investment policy limits investments to certain types of securities issued by the U.S. government and its agencies, as well as institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. 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 June 30, 2026 and December 31, 2025, the Company had no off-balance sheet concentrations of credit risk. The Company’s accounts receivable are primarily related to product sales. For the three and six months ended June 30, 2026, one customer accounted for all product revenues. As of June 30, 2026, one customer accounted for all accounts receivable related to product sales. The Company monitors the creditworthiness of its customers and collaboration partners and has not experienced significant credit losses to date. The Company is subject to a number of risks similar to other early commercial-stage biopharmaceutical companies, including, but not limited to, the risk that its approved product, AVLAYAH TM (tividenofusp alfa-eknm), may not achieve expected levels of market acceptance or commercial success; the need to obtain adequate additional funding to continue as a going concern; its history of significant losses and expectation of continued losses; possible failure or delay of current or future preclinical testing or clinical trials; its reliance on third parties to conduct its clinical trials, manufacture product, and support commercialization; the need to successfully develop, commercialize, and gain market acceptance of its product candidates; competitors developing new technological innovations; its rights to develop and commercialize its product candidates pursuant to the terms and conditions of licenses granted to the Company; protection of proprietary technology; the ability to make milestone, royalty or other payments due under license or collaboration agreements; the need to enforce its intellectual property rights; 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 AVLAYAH or its other product candidates, it may be unable to generate sufficient product revenue or achieve profitability. Further, the Company is also subject to broad market risks and uncertainties, 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. 8 Table of Contents Investments The Company holds an equity investment in a venture-backed privately held company. 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 the six months ended June 30, 2026 and 2025. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of 90 days or less at the date of purchase to be cash and cash equivalents. 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 restricted cash of $ 3.1 million as of June 30, 2026 and December 31, 2025, which is included within other non-current assets in the Condensed Consolidated Balance Sheets. Restricted cash relates to letters of credit supporting the Company’s headquarters building lease and 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, short-term marketable securities or long-term marketable securities on the Condensed 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. The Company classifies investments in securities with remaining maturities of over one year as long-term investments, unless intended to fund current operations. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest and other income, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Realized gains and losses and declines in value determined to be due to credit losses on marketable securities, if any, are included in interest and other income, net. The Company periodically evaluates the need for an allowance for credit losses. This evaluation includes consideration of several qualitative and quantitative factors, including whether it has plans to sell the security, whether it is more likely than not it will be required to sell any marketable securities before recovery of its amortized cost basis, and if the entity has the ability and intent to hold the security to maturity, and the portion of any unrealized loss that is the result of a credit loss. Factors considered in making these evaluations include quoted market prices, recent financial results and operating trends, implied values from any recent transactions or offers of investee securities, credit quality of debt instrument issuers, expected cash flows from securities, other publicly available information that may affect the value of the marketable security, duration and severity of the decline in value, and the Company's strategy and intentions for holding the marketable security. 9 Table of Contents Accounts Receivable Accounts receivable represents amounts arising from product sales and is recorded net of allowances for credit losses, if required. The Company estimates an allowance for credit losses by considering factors such as credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The Company's payment terms are generally less than 90 days from the invoice date. The Company evaluates the creditworthiness of each counterparty on a regular basis. As of June 30, 2026, the credit profile of the customer was deemed to be in good standing and, as such, an allowance for credit losses was not recorded. Revenue Recognition The Company recognizes product revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), Topic 606, Revenue from Contracts with Customers (“ASC 606”). In March 2026, the U.S. Food and Drug Administration granted accelerated approval of AVLAYAH™ (tividenofusp alfa-eknm), and the Company commenced commercial sales in the United States during the three months ended June 30, 2026. AVLAYAH is the Company’s only commercial product, and all product revenue to date has been generated in the United States. Under ASC 606, the Company is required to complete the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company sells AVLAYAH to a single specialty distributor ("Distributor”) in the US, which is the Company's sole customer, who delivers to (i) hospitals where patients are administered the medication in a healthcare setting and (ii) to a specialty pharmacy (“SP”) provider where patients are administered by a healthcare professional in either a healthcare professional or home setting. The Company’s distribution agreements with the Distributor, together with each accepted purchase order, is accounted for as a contract with a single performance obligation — the delivery of AVLAYAH to the Distributor. Revenue is recognized when the Company satisfies a performance obligation by transferring control of the promised goods to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring AVLAYAH. The Company sells AVLAYAH at a Wholesale Acquisition Cost (“WAC”) and records product revenue at the net selling price (the transaction price) — WAC reduced by variable consideration and by consideration payable to the Distributor and to other parties in the distribution channel that does not represent payment for a distinct good or service. The Company estimates variable consideration using the most-likely-amount method and includes it in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the related uncertainty is resolved. Estimates are reassessed each reporting period, with any change recognized in net product revenue in the period of change. The components of variable consideration are: • Distributor service fees — fees payable to the Distributor for distribution. These services are not distinct from the sale of AVLAYAH and the related fees, calculated as a contractual percentage of the WAC of product sold, are recorded as a reduction of product revenue when the related sales are recognized. • Government rebates — amounts owed under the Medicaid Drug Rebate Program and supplemental state Medicaid agreements, refunds under the Medicare Part B discarded-drug provisions, and rebates to the U.S. Department of Veterans Affairs and the Department of Defense (including under the TRICARE program). The Company estimates these amounts using statutory and contractual rebate 10 Table of Contents rates and probability-weighted assumptions for the expected payer and channel mix, recorded as a reduction of product revenue with a corresponding current liability. • Product returns — the product may be returned only in the limited circumstances specified in the distribution agreement, principally product that is damaged or within a defined period of its expiration date. The Company records a reserve for estimated returns as a reduction of product revenue with a corresponding refund liability. • Other fees and incentives — amounts payable to a specialty pharmacy that dispenses AVLAYAH purchased through the Distributor and co-pay assistance program for eligible patients with commercial insurance in the U.S. The co-pay assistance programs assist commercially insured patients and are intended to reduce each participating patient’s portion of the financial responsibility of the purchase price up to a specified dollar amount of assistance. The Company records funds paid under co-pay assistance program for each patient as a reduction of revenue. Variable consideration payable to the Distributor, and to parties against which the Distributor has a contractual right of off-set — Distributor service fees, third-party-logistics fees, and government chargebacks processed through the Distributor is presented as a reduction of accounts receivable. Variable consideration payable to parties other than the Distributor is presented within other accrued costs and current liabilities. Inventory Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out ("FIFO") basis. Inventory costs consist primarily of raw materials, third-party contract manufacturing organization ("CMO") costs, and other direct production costs, including allocable overhead, related to our commercial product AVLAYAH. Inventory is valued using standard costing methodology, which approximates actual cost. Prior to FDA approval, all costs incurred in connection with the manufacture of AVLAYAH were recorded as research and development expenses in the consolidated statements of operations in the period incurred. As of June 30, 2026, we had $ 12.6 million of expensed pre-launch inventory, which we expect to be sold through by January 2027. The Company expenses costs associated with the manufacture of product candidates prior to regulatory approval. Inventory consists of the Company’s currently approved product, including raw materials and work-in-process. The Company began capitalizing inventory costs associated with AVLAYAH upon receiving U.S. Food and Drug Administration ("FDA") accelerated approval in March 2026, at which time the inventory was determined to have probable future economic benefit. Additionally, inventory used in research and development activities is expensed to research and development at the time of such designation. The Company evaluates its inventory on a periodic basis for obsolescence, slow-moving, excess, or otherwise unsalable items, and records a write-down to net realizable value when the carrying value is in excess of net realizable value and there are no alternative future uses for the inventory, or if inventory quantities exceed expected future demand prior to expiration. If the Company determines an adjustment is required to the carrying value of inventory, those adjustments are recognized as Cost of Goods Sold in the Consolidated Statements of Operations and Comprehensive Loss. Inventory that is not expected to be consumed beyond our normal operating cycle is classified as non-current inventory and included within other non-current assets in the balance sheet. 11 Table of Contents Cost of Goods Sold Cost of Goods Sold consists primarily of direct and indirect costs related to the manufacture of AVLAYAH for commercial sale, including third-party manufacturing costs, raw material and component costs, packaging services, freight, and storage costs. Prior to the FDA approval of AVLAYAH in March 2026, costs incurred for the manufacture of AVLAYAH were recorded as research and development expenses and therefore will not be included in cost of sales. As a result, the cost of goods sold related to AVLAYAH will initially reflect a lower average per unit cost of materials, as previously expensed inventory is utilized and sold to customers. Intangible Assets Milestone payments made to acquire or maintain rights to intellectual property associated with an approved product are capitalized when the related contingency is resolved and the payment becomes probable and payable. Amounts capitalized are recorded as intangible assets and generally amortized on a straight-line basis over the estimated useful life of the underlying intellectual property. The Company evaluates such intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Leases The Company leases real estate and certain equipment for use in its operations. A determination is made as to whether an arrangement is a lease at inception. The Company recognizes finance and operating lease right-of-use ("ROU") assets, and finance and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. The Company adjusts ROU assets as needed for any lease incentives it receives and for assets it purchases that are regarded as landlord-owned. When determining the present value of lease payments, the Company uses its incremental borrowing rate on the date of lease commencement, or the rate implicit in the lease, if known. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed by management to be reasonably certain at lease inception. The Company recognizes amortization of the ROU assets and interest on the lease liabilities for its finance lease. Finance lease ROU assets are amortized on a straight-line basis from the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term. Operating lease expense is recognized on a straight-line basis over the lease term. 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 has leases with lease and non-lease components, which the Company has elected to account for as a single lease component. Liability Related to the Revenue Participation Right The Company accounts for the synthetic royalty funding agreement with Royalty Pharma Investments 2023 ICAV ("Royalty Pharma") pursuant to which 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 AVLAYAH as a debt financing under ASC Topic 470, Debt (ASC 470). The $ 200.0 million of proceeds received in March 2026 are recorded as a liability on the Company's Condensed Consolidated Balance Sheets, net of transaction costs. The liability will be amortized under the effective interest method based on the Company's estimates of future royalty payments to Royalty Pharma over the life of the agreement. The resulting non-cash interest expense is recognized in Interest and other income, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The liability related to the revenue participation right and related interest expense are based on current estimates of the amount and timing of projected royalty payments, which are based on estimates 12 Table of Contents of future AVLAYAH net sales. The Company periodically assesses the forecasted net sales and to the extent the amount or timing of estimated royalty payments are materially different than previous estimates, the Company will account for any such change by adjusting the liability related to the sale of future revenues and prospectively recognizing the related non-cash interest expense. The Company classifies the portion of the liability related to the revenue participation right that is expected to be amortized or settled within twelve months of the reporting date as current, with the remainder classified as non-current. Classification is based on forecasted royalty payments and the related recognition of interest and principal under the effective interest method. Comprehensive Loss Comprehensive loss is composed of net loss and certain changes in stockholders’ equity that are excluded from net loss, primarily unrealized gains or losses on the Company’s marketable securities. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. 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 June 30, 2026 include the pre-funded warrants to purchase shares of common stock that were issued in connection with the February 2024 private placement and December 2025 public offering, as discussed further in Note 11. Recently Issued Accounting Pronouncements In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): D isaggregation of Income Statement Expenses , which is intended to improve the disclosures of expenses by providing more detailed information about the types of expenses in commonly presented expense captions. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments can be applied either prospectively or retrospectively. The Company has not early adopted this update, and is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures. 13 Table of Contents 2. Fair Value Measurements Assets and liabilities measured at fair value at each balance sheet date are as follows (in thousands): June 30, 2026 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 148,024 $ — $ — $ 148,024 Short-term marketable securities: U.S. government treasuries 408,829 — — 408,829 Corporate debt securities — 100,112 — 100,112 Long-term marketable securities: U.S. government treasuries 163,401 — — 163,401 Corporate debt securities — 66,133 — 66,133 Total $ 720,254 $ 166,245 $ — $ 886,499 December 31, 2025 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 149,874 $ — $ — $ 149,874 Commercial paper — 24,899 — 24,899 Short-term marketable securities: U.S. government treasuries 600,084 — — 600,084 Corporate debt securities — 62,469 — 62,469 Long-term marketable securities: U.S. government treasuries 58,545 — — 58,545 Corporate debt securities — 39,777 — 39,777 Total $ 808,503 $ 127,145 $ — $ 935,648 The Company’s Level 2 securities are valued using third-party pricing sources. 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 six months ended June 30, 2026 or for the year ended December 31, 2025. 14 Table of Contents 3. Marketable Securities All marketable securities were considered available-for-sale at June 30, 2026 and December 31, 2025. 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): June 30, 2026 Amortized Cost Unrealized Holding Gains Unrealized Holding Losses Aggregate Fair Value Short-term marketable securities: U.S. government treasuries $ 409,364 $ 20 $ ( 555 ) $ 408,829 Corporate debt securities 100,342 16 ( 246 ) 100,112 Total short-term marketable securities 509,706 36 ( 801 ) 508,941 Long-term marketable securities: U.S. government treasuries 164,059 — ( 658 ) 163,401 Corporate debt securities 66,328 — ( 195 ) 66,133 Total long-term marketable securities 230,387 — ( 853 ) 229,534 Total $ 740,093 $ 36 $ ( 1,654 ) $ 738,475 December 31, 2025 Amortized Cost Unrealized Holding Gains Unrealized Holding Losses Aggregate Fair Value Short-term marketable securities: U.S. government treasuries $ 599,200 $ 893 $ ( 9 ) $ 600,084 Corporate debt securities 62,407 71 ( 9 ) 62,469 Total short-term marketable securities 661,607 964 ( 18 ) 662,553 Long-term marketable securities: U.S. government treasuries 58,524 21 — 58,545 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 As of June 30, 2026 and December 31, 2025, 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 June 30, 2026 or December 31, 2025. 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. Further, a majority of these marketable securities are held in U.S. government securities, and the remainder were initially, and continue to be, held with investment grade, high credit quality institutions. 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 June 30, 2026, all of the Company’s marketable securities have an effective maturity of less than two years . 15 Table of Contents 4. Inventory Inventory consisted of the following (in thousands): June 30, 2026 December 31, 2025 Raw materials $ — $ — Work in process 4,139 — Finished goods — — Total inventory $ 4,139 $ — No adjustments to the carrying value of inventory were recorded during the three and six months ended June 30, 2026 and 2025, respectively. All inventory as of June 30, 2026 is classified as current. 5. Intangible Asset In connection with the May 2018 acquisition of F-star Gamma Limited ("F-star Gamma") and related license arrangements, the Company is obligated to make contingent payments upon the achievement of specified preclinical, clinical, regulatory and commercial milestones. Additional information regarding these arrangements is included in Note 4, “Acquisition, License Agreement and Research and Development Funding Collaboration Agreement,” to the consolidated financial statements included in the Company’s 2025 Annual Report on Form 10-K. In March 2026, following the U.S. Food and Drug Administration’s accelerated approval of AVLAYAH, a $ 36.0 million milestone payment became due under this arrangement. The amount was capitalized as an intangible asset and is amortized on a straight-line basis over its estimated useful life. The Company paid $ 28.8 million of the milestone payment during the three months ended June 30, 2026, and the remaining $ 7.2 million is included in accounts payable in the Condensed Consolidated Balance Sheet as of June 30, 2026. The Company recognized amortization expense of $ 0.7 million for the three and six months ended June 30, 2026. As of June 30, 2026, the accumulated amortization expense was $ 0.7 million, and the carrying value of the intangible asset was $ 35.3 million. Future annual amortization expense for the unamortized intangible assets is as follows (in thousands): Years Ending December 31: Amount 2026 (six months) $ 1,500 2027 3,000 2028 3,000 2029 3,000 2030 3,000 Thereafter 21,750 Total $ 35,250 In addition to the U.S. regulatory milestone described above, the Company may be required to make additional contingent consideration payments of up to $ 174.0 million, composed of $ 24.0 million due upon regulatory approval of AVLAYAH in the European Union, and up to $ 150.0 million in commercial contingent payments. 16 Table of Contents 6. Research and Development Funding Collaboration Agreement In January 2024, the Company entered into a Collaboration and Development Funding Agreement with an unrelated third party, which obligates the third party to provide up to $ 75.0 million of funding and collaborate with the Company to conduct a global Phase 2a study of DNL151 in patients with Parkinson’s disease and confirmed pathogenic variants of LRRK2. This arrangement is further described in Note 4, " Acquisition, License Agreement and Research and Development Funding Collaboration Agreement", to the consolidated financial statements in the 2025 Annual Report on Form 10-K. Under this arrangement, the Company received $ 12.5 million during the three months ended June 30, 2026, resulting in cumulative payments received of $ 62.5 million as of June 30, 2026. Payments received are recorded as a deferred research and development funding liability and recognized as an offset to research and development expenses as the underlying research and development costs are incurred. The Company recognized an offset to research and development expenses of $ 7.6 million and $ 3.8 million for the three months ended June 30, 2026 and 2025, respectively, and $ 13.6 million and $ 8.8 million for the six months ended June 30, 2026 and 2025, respectively, in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company recorded current deferred research and development funding liabilities of $ 20.0 million and $ 21.1 million on the Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, respectively. 7. Collaboration Agreements Biogen 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 and July 2024 side letter 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 2025 Annual Report on Form 10-K. In May 2026, the Company and Biogen announced topline results from the Phase 2b LUMA study of BIIB122/DNL151 in individuals with early-stage Parkinson’s disease. The LUMA study did not meet its primary or secondary endpoints. Based on these results, the Company and Biogen discontinued further development of BIIB122 in idiopathic Parkinson's disease. The Company continues to independently conduct the Phase 2a BEACON study evaluating the small molecule inhibitor in carriers of a pathogenic LRRK2 variant. 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 June 30, 2026 or December 31, 2025 . As of June 30, 2026, the Company had no t recorded milestone revenue or product sales under the Biogen Collaboration Agreement. 17 Table of Contents Sanofi 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. ("Sanofi"). The details of the Sanofi Collaboration Agreement, the February 2025 side letter, 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 2025 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 June 30, 2026 or December 31, 2025 . 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 June 30, 2026, the Company had earned milestone payments of $ 100.0 million and had no t recorded any product sales under the Sanofi Collaboration Agreement. Takeda 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 2025 Annual Report on Form 10-K. 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 February 2025 ATV:TREM2 discontinuation and the PTV:PGRN Collaboration Agreement are further described in Note 5, "Collaboration Agreements", to the consolidated financial statements in the Company's 2025 Annual Report on Form 10-K. In April 2026, Takeda notified the Company of its decision to terminate the PTV:PGRN collaboration agreement in its entirety. As a result, the Company regained full rights to DNL593 and the related intellectual property portfolio. Subsequent to the effective date of the termination, there are no future milestones, cost, or profit sharing obligations related to this agreement. The Company did not recognize any revenue, gain, asset or other material accounting impact in connection with the termination, other than the final cost-sharing settlement. The final cost-sharing settlement related to the PTV:PGRN Collaboration Agreement is reflected in the cost sharing table below. As of June 30, 2026, 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. 18 Table of Contents 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Takeda Collaboration Agreement: PTV:PGRN cost sharing (reimbursements) $ ( 1,513 ) $ ( 1,439 ) $ ( 3,130 ) $ ( 2,935 ) ATV:TREM2 cost sharing (reimbursements) — ( 10 ) — ( 147 ) Total Takeda cost sharing (reimbursements) (1) ( 1,513 ) ( 1,449 ) ( 3,130 ) ( 3,082 ) Biogen Collaboration Agreement: LRRK2 cost sharing payments (2) 2,024 4,229 5,887 8,880 Net cost sharing payments (reimbursements) $ 511 $ 2,780 $ 2,757 $ 5,798 _________________________________ (1) Cost sharing reimbursements of $ 1.5 million and $ 1.6 million were recorded as a receivable within prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, respectively. (2) Cost sharing payments due to Biogen of $ 2.0 million and $ 2.8 million were recorded within other accrued costs and current liabilities on the Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, respectively. 8. Balance Sheet Components Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consists of the following (in thousands): As of June 30, 2026 December 31, 2025 Accrued compensation $ 13,424 $ 32,179 Accrued clinical and other research & development costs 19,871 22,283 Accrued manufacturing costs 10,659 5,336 Operating lease liability, current 10,084 9,463 Finance lease liability, current 97 83 Deferred research and development funding liability, current 19,975 21,101 Other accrued costs and current liabilities 4,166 7,401 Total accrued expenses and other current liabilities $ 78,276 $ 97,846 9. Liability Related to the Revenue Participation Right In December 2025, the Company entered into a synthetic royalty funding agreement (the “Royalty Agreement”) with 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 AVLAYAH ("Revenue Participation Right"). The Company received $ 200.0 million in gross proceeds in March 2026 triggered by the U.S. Food and Drug Administration’s accelerated approval of AVLAYAH. The Company is entitled to receive an additional $ 75.0 million upon approval of AVLAYAH by the European Medicines Agency ("EMA") on or before December 31, 2029. The Company retains all worldwide development and commercialization rights to AVLAYAH. 19 Table of Contents The royalty obligation to Royalty Pharma will cease upon cumulative royalty payments reaching a cap of 3.0 times the total funding received, or 2.5 times the funding received if such cap is reached in respect of sales that occur on or before the end of the first quarter of 2039. The $ 200.0 million, net of transaction costs of approximately $ 0.4 million, is recorded as a non-current liability on the Company's Condensed Consolidated Balance Sheet as of June 30, 2026 based on the estimated timing of future royalty payments. The royalty payments to Royalty Pharma will be recorded as a reduction of the liability. The additional $ 75.0 million contingent upon EMA approval of AVLAYAH has not been recognized as a liability as of June 30, 2026, as the receipt is contingent upon a future regulatory event. Upon receipt, the additional proceeds will be recorded as an increase to the liability, net of any incremental transaction costs, and the effective interest rate will be adjusted prospectively. As of June 30, 2026, the Company's estimate of total future royalty payments resulted in an effective annual interest rate of approximately 12 % and recorded $ 5.9 million of non-cash interest expense during the three months ended June 30, 2026. No payments were made during the three and six months ended June 30, 2026. As of June 30, 2026, the carrying value of the liability approximates its estimated fair value. The Company’s projections of future royalty payments are subject to estimation uncertainty and are based on various assumptions underlying projected net product sales over the term of the agreement. These inputs are considered to be Level 3 inputs in the fair value hierarchy, as they involve unobservable inputs and judgment. Changes in these assumptions could have a material impact on the effective interest rate. 10. 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"), and 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 2025 Annual Report on Form 10-K. There were no changes to the terms of the leases recognized under ASC 842 during the three and six months ended June 30, 2026 or 2025. The following table summarizes lease costs recognized for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Operating lease cost $ 1,821 $ 1,893 $ 3,674 $ 3,786 Finance lease cost: Amortization of ROU assets 915 911 1,831 1,798 Interest 178 180 357 361 Variable lease cost 1,792 1,338 2,832 2,691 Total lease costs $ 4,706 $ 4,322 $ 8,694 $ 8,636 Operating cash flows for operating leases were $ 3.0 million and $ 2.9 million for the three months ended June 30, 2026 and 2025, respectively, and $ 6.0 million and $ 5.8 million for the six months ended June 30, 2026 and 2025, respectively. Indemnification 20 Table of Contents In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, lessors, business partners, board members, officers, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company, negligence or willful misconduct of the Company, violations of law by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. 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 . Commitments In the normal course of business, the Company enters into firm purchase commitments primarily related to supply of commercial product, certain research and development services, and clinical manufacturing activities. The Company had contractual obligations of $ 104.7 million as of June 30, 2026, of which $ 91.9 million related to supply of commercial product, and $ 44.3 million as of December 31, 2025. Contingencies From time to time, the Company may be involved in lawsuits, arbitration, claims, investigations and proceedings consisting of intellectual property, employment and other matters which arise in the ordinary course of business. 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. 11. Common Stock In December 2025, the Company entered into a public offering of 9,142,857 shares of the Company’s common stock and Pre-Funded Warrants to purchase 2,285,714 shares of Common Stock. This public offering and the Pre-Funded Warrants are both further described in Note 8, "Common Stock," to the consolidated financial statements in the Company's 2025 Annual Report on Form 10-K. In January 2026, the underwriters of the Company’s December 2025 public offering exercised their option to purchase an additional 746,468 shares of common stock, resulting in aggregate net proceeds to the Company of approximately $ 12.4 million. As of June 30, 2026, 28,331,779 shares of pre-funded warrants remained outstanding, and no pre-funded warrants were exercised during the six months ended June 30, 2026. These warrants are classified as permanent equity because 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. 12. Stock-Based Awards The Company has issued stock-based awards from various equity incentive and stock purchase plans, as more fully described in Note 9, "Stock-Based Awards" to the consolidated financial statements in the Company's 2025 Annual Report on Form 10-K. 21 Table of Contents Stock Option Activity The following table summarizes stock option activity for the six months ended June 30, 2026: Number of Options Weighted-Average Exercise Price Balance at December 31, 2025 21,326,333 $ 26.39 Granted 2,601,349 16.84 Exercised ( 992,867 ) 15.81 Forfeited ( 698,185 ) 21.15 Expired ( 893,471 ) 34.89 Balance at June 30, 2026 21,343,159 $ 25.53 Vested and expected to vest at June 30, 2026 21,343,159 $ 25.53 Exercisable at June 30, 2026 14,065,727 $ 28.80 The estimated fair value of stock options granted to employees were calculated using the Black-Scholes option-pricing model using the following assumptions: Six Months Ended June 30, 2026 2025 Expected term (in years) 5.50 - 6.08 5.50 - 6.08 Volatility 61.7 % - 66.7 % 64.8 % - 68.7 % Risk-free interest rate 3.7 % - 4.3 % 3.7 % - 4.5 % Dividend yield — — Restricted Stock Activity The following table summarizes restricted stock unit ("RSU") activity for the six months ended June 30, 2026: Number of RSU shares Weighted-Average Fair Value at Date of Grant per Share Unvested at December 31, 2025 5,124,629 $ 21.74 Granted 3,385,121 16.52 Vested and released ( 1,341,956 ) 23.92 Forfeited ( 563,254 ) 19.84 Unvested and expected to vest at June 30, 2026 6,604,540 $ 18.78 Stock-Based Compensation Expense The Company’s results of operations include expenses relating to stock-based compensation as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Research and development $ 13,453 $ 15,188 $ 27,047 $ 30,325 General and administrative 9,462 10,199 18,955 20,222 Total $ 22,915 $ 25,387 $ 46,002 $ 50,547 22 Table of Contents 13. Net Loss Per Share 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Numerator: Net loss $ ( 127,553 ) $ ( 124,119 ) $ ( 256,000 ) $ ( 257,089 ) Denominator: Weighted average number of: Common stock shares outstanding 158,982,722 145,403,782 158,645,833 145,290,503 Pre-funded warrants 28,331,779 26,046,065 28,331,779 26,046,065 Total 187,314,501 171,449,847 186,977,612 171,336,568 Net loss per share $ ( 0.68 ) $ ( 0.72 ) $ ( 1.37 ) $ ( 1.50 ) 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 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 28.5 million and 28.5 million shares as of June 30, 2026 and 2025, respectively. 14. Non-Marketable Equity Investment 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. ("Tenvie"). This arrangement is further described in Note 13, "Divestiture of Preclinical Small Molecule Programs", to the consolidated financial statements in the 2025 Annual Report on Form 10-K. 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 Sheets as of both June 30, 2026 and December 31, 2025. 15. 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 2025 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 and six months ended June 30, 2026 and 2025 (in thousands): 23 Table of Contents Therapeutics Segment Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Product revenue, net $ 3,604 $ — $ 3,604 $ — Less: Cost of goods sold 93 — 93 — External research and development expenses - TV programs, including cost sharing 40,419 37,594 78,883 84,052 Other research and development expenses, including small molecule programs 16,494 24,847 40,048 54,347 Personnel related research and development expenses 40,106 40,255 81,934 80,524 Total research and development expenses 97,019 102,696 200,865 218,923 Personnel related selling, general and administrative expenses 22,921 20,115 45,485 38,853 Other selling, general and administrative expenses 13,362 12,152 24,309 22,767 Total selling, general and administrative expenses 36,283 32,267 69,794 61,620 Intangible asset amortization $ 750 $ — $ 750 $ — Segment operating expenses 134,145 134,963 271,502 280,543 Segment loss from operations ( 130,541 ) ( 134,963 ) ( 267,898 ) ( 280,543 ) Segment interest and other income, net 2,988 10,844 11,898 23,454 Segment net loss $ ( 127,553 ) $ ( 124,119 ) $ ( 256,000 ) $ ( 257,089 ) There is no difference between the segment net loss and total consolidated net loss for the three and six months ended June 30, 2026 and 2025. 16. Subsequent Event On June 12, 2026, the Company entered into an asset purchase agreement (the "PRV Transfer Agreement") pursuant to which the Company agreed to sell its Rare Pediatric Disease Priority Review Voucher ("PRV") for gross proceeds of $ 195.0 million in cash. The Company received the PRV in connection with the FDA accelerated approval of AVLAYAH in March 2026. On July 27, 2026, the Company completed the sale and received gross proceeds of $ 195.0 million pursuant to the terms of the PRV Transfer Agreement. No proceeds or gain from the sale were recognized in the condensed consolidated financial statements as of and for the three and six months ended June 30, 2026. 24 Table of Contents