What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-13 · 76 added, 43 removed, 255 unchanged (32% of the section changed)

19 unchanged sentences

Our modality-agnostic approach aims to allow us to selectively and potently target critical signaling nodes with the most appropriate modality, including small and large molecule therapeutics.

Our purpose-built pipeline includes two clinical-stage programs (naporafenib, a pan-RAF inhibitor, and ERAS-0015, a pan-RAS molecular glue), ERAS-4001 (a pan-KRAS inhibitor) for which we filed an investigational new drug application (IND) with the US Food and Drug Administration (FDA) in May 2025, with FDA clearance of the IND anticipated in June 2025, and ERAS-12, a discovery-stage program (an EGFR D2/D3 biparatopic antibody).

Our purpose-built pipeline includes three clinical-stage programs (naporafenib, a pan-RAF inhibitor;

ERAS-0015, a pan-RAS molecular glue;

and ERAS-4001, a pan-KRAS inhibitor), and ERAS-12, a discovery-stage program (an EGFR D2/D3 biparatopic antibody).

We believe our world-class team’s capabilities and experience, further guided by our scientific advisory board, which includes the world’s leading experts in the RAS/MAPK pathway, uniquely position us to achieve our bold mission of erasing cancer.

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The combination of ERAS-0015 plus the anti-EGFR antibody cetuximab induced significant tumor growth inhibition and demonstrated the combination benefit of blocking both oncogenic drivers.

The initial clinical trial for ERAS-0015 will be AURORAS-1.

The IND for AURORAS-1 was cleared by the FDA in May 2025.

The initial clinical trial for ERAS-0015 is AURORAS-1.

The investigational new drug application (IND) for AURORAS-1 was cleared by the US Food and Drug Administration (FDA) in May 2025.

We anticipate a Phase 1 monotherapy data readout from the AURORAS-1 trial in 2026.

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The combination of ERAS-4001 plus the anti-EGFR antibody cetuximab induced significant tumor growth inhibition and demonstrated the combination benefit of blocking both oncogenic drivers.

The initial clinical trial for ERAS-4001 will be BOREALIS-1.

We filed an IND for BOREALIS-1 in May 2025 and anticipate receiving FDA clearance of the IND in June 2025.

The initial clinical trial for ERAS-4001 is BOREALIS-1.

The IND for BOREALIS-1 was cleared by the FDA in May 2025.

We anticipate a Phase 1 monotherapy data readout from the BOREALIS-1 trial in 2026.

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Safety data cutoff date was September 3, 2024.

In May 2025, following the IND clearance of ERAS-0015 and the IND filing for ERAS-4001, we conducted a strategic pipeline review.

Following this review, in order to prioritize organizational focus and resources to rapidly advance our differentiated RAS-targeting franchise, we have decided to evaluate strategic alternatives for the Stage 2 portion of the naporafenib Phase 3 trial, including pursuing potential partnership opportunities.

In May 2025, in connection with our expectation that ERAS-0015 and ERAS-4001 would both become clinical stage programs, we conducted a strategic pipeline review.

Following this review, in order to prioritize organizational focus and resources to rapidly advance our differentiated RAS-targeting franchise, we decided to evaluate strategic alternatives for the Stage 2 portion of the naporafenib Phase 3 trial, including pursuing potential partnership opportunities.

As a result of this decision, we will not read out data from Stage 1 of the SEACRAFT-2 trial in the second half of 2025.

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Proceeds from the ATM Offering during the year ended December 31, 2024 were $21.0 million, net of commissions and expenses of $0.8 million.

No shares of our common stock were sold under the Sale Agreement during the three months ended March 31, 2025.

As of March 31, 2025, we had $178.1 million of shares available for sale under the ATM program.

No shares of our common stock were sold under the Sale Agreement during the three and six months ended June 30, 2025 and 2024.

As of June 30, 2025, we had $178.1 million of shares available for sale under the ATM program.

Since our inception in 2018, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, identifying, acquiring, and in-licensing our product candidates, establishing our intellectual property portfolio, conducting research, preclinical studies and clinical trials, establishing arrangements with third parties for the manufacture of our product candidates and related raw materials, and providing general and administrative support for these operations.

We do not have any products approved for sale and have not generated any revenue.

As of March 31, 2025, we have raised a total of $1.0 billion to fund our operations, comprised primarily of gross proceeds from our IPO, underwritten offerings, a private placement of our common stock and the sale and issuance of convertible preferred stock.

As of March 31, 2025, we had cash, cash equivalents and marketable securities of $411.1 million.

As of June 30, 2025, we have raised a total of $1.0 billion to fund our operations, comprised primarily of gross proceeds from our IPO, underwritten offerings, a private placement of our common stock and the sale and issuance of convertible preferred stock.

As of June 30, 2025, we had cash, cash equivalents and marketable securities of $386.7 million.

We have incurred significant operating losses since inception.

Our net losses were $31.0 million and $35.0 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, we had an accumulated deficit of $798.6 million.

Our net losses were $33.9 million and $63.2 million for the three months ended June 30, 2025 and 2024, respectively, and $64.8 million and $98.2 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had an accumulated deficit of $832.5 million.

We expect our expenses and operating losses will increase substantially for the foreseeable future, particularly if and as we conduct our ongoing and planned clinical trials and preclinical studies;

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Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and preclinical studies and our expenditures on other research and development activities.

Based upon our current operating plans, we believe that our cash, cash equivalents and marketable securities as of March 31, 2025 will be sufficient to fund our operations into the second half of 2028.

Based upon our current operating plans, we believe that our cash, cash equivalents and marketable securities as of June 30, 2025 will be sufficient to fund our operations into the second half of 2028.

We do not expect to generate any revenues from product sales until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years and may never occur.

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Our financial condition and results of operations may also be impacted by other factors we may not be able to control, such as geopolitical and economic events.

We do not believe that such factors had a material adverse impact on our results of operations during the three months ended March 31, 2025.

We do not believe that such factors had a material adverse impact on our results of operations during the three months ended June 30, 2025.

Our acquisition and license agreements

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Pursuant to the Katmai Termination Agreement, the Katmai License Agreement was terminated as of April 1, 2025.

Under the Katmai Termination Agreement, we have agreed to assign to Katmai certain know-how, intellectual property rights, third-party vendor agreements, regulatory filings, and materials that we developed in connection with the development of ERAS-801 under the Katmai License Agreement, and Katmai has agreed to make payments to us upon the occurrence of specific events related to Katmai’s future development and commercialization of ERAS-801.

In addition, we have agreed to provide certain transition services to Katmai for a 90-day period, for which Katmai shall reimburse us for our internal costs related to such services.

Under the Katmai Termination Agreement, we assigned to Katmai certain know-how, intellectual property rights, third-party vendor agreements, regulatory filings, and materials that we developed in connection with the development of ERAS-801 under the Katmai License Agreement, and Katmai is obligated to make payments to us upon the occurrence of specific events related to Katmai’s future development and commercialization of ERAS-801.

In addition, we provided certain transition services to Katmai for a 90-day period, for which Katmai is obligated to reimburse us for our internal costs related to such services.

For additional information regarding our other in-license and acquisition agreements, see the section titled “Business—Our acquisition and license agreements” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 20, 2025.

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The following table summarizes our research and development expenses incurred for the following periods (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

ERAS-0015 (1)

ERAS-4001 (1)

Other clinical programs

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Total research and development expenses

(1) We in-licensed ERAS-0015 in May 2024.

(1) We in-licensed ERAS-0015 and ERAS-4001 in May 2024.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue to conduct our ongoing research and development activities, conduct clinical trials and advance our preclinical research programs toward clinical development, particularly as more of our product candidates move into later stages of development, which typically cost more.

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Results of operations

Comparison of the three months ended March 31, 2025 and 2024

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

Comparison of the three months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,

Operating expenses:

Research and development

In-process research and development

General and administrative

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Research and development expenses

Research and development expenses were $26.0 million for the three months ended March 31, 2025 compared to $28.6 million for the three months ended March 31, 2024.

The decrease of $2.6 million was primarily driven by decreases of $1.3 million in personnel costs, including stock-based compensation expense, $0.7 million in expenses incurred in connection with clinical trials, preclinical studies and discovery activities, and $0.5 million in facilities-related expenses and depreciation.

Research and development expenses were $21.2 million for the three months ended June 30, 2025 compared to $33.0 million for the three months ended June 30, 2024.

The decrease of $11.9 million was primarily driven by an impairment charge of $3.0 million on operating lease assets, leasehold improvements, and furniture related to the sublease plan of the first floor of our San Diego facility during the three months ended June 30, 2024, and decreases of $2.5 million in personnel costs, including stock-based compensation expense, $2.4 million in outsourced services and consulting fees, $2.3 million in expenses incurred in connection with clinical trials, preclinical studies and discovery activities, and $1.2 million in facilities-related expenses and depreciation.

In-process research and development expenses

In-process research and development expenses were $7.5 million for the three months ended June 30, 2025 compared to $22.5 million for the three months ended June 30, 2024.

In-process research and development expenses for the three months ended June 30, 2025 were related to the achievement of milestones in connection with our license agreement with Joyo.

In-process research and development expenses for the three months ended June 30, 2024 were related to upfront payments in connection with our license agreements with Joyo and Medshine.

General and administrative expenses

General and administrative expenses were $9.7 million for the three months ended March 31, 2025 compared to $10.3 million for the three months ended March 31, 2024.

The decrease of $0.6 million was primarily driven by decreases of $0.4 million in legal fees and $0.2 million in insurance costs.

General and administrative expenses were $9.5 million for the three months ended June 30, 2025 compared to $12.3 million for the three months ended June 30, 2024.

The decrease of $2.8 million was primarily driven by an impairment charge of $1.7 million on operating lease assets, leasehold improvements, and furniture related to the sublease plan of the first floor of our San Diego facility during the three months ended June 30, 2024, and decreases of $0.5 million in legal fees, $0.2 million in insurance costs, and $0.2 million in facilities and office-related expenses.

Other income (expense), net

Other income (expense), net was $4.7 million for the three months ended March 31, 2025 compared to $3.8 million for the three months ended March 31, 2024.

The increase of $0.8 million was primarily related to an increase in interest earned on our cash, cash equivalents and marketable securities during the three months ended March 31, 2025.

Other income (expense), net was $4.2 million for the three months ended June 30, 2025 compared to $4.6 million for the three months ended June 30, 2024.

The decrease of $0.3 million was primarily related to a decrease in interest earned on our cash, cash equivalents and marketable securities of $0.7 million, partially offset by a $0.4 million impairment charge on our investment in equity securities during the three months ended June 30, 2024.

Comparison of the six months ended June 30, 2025 and 2024

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024 (in thousands):

Six Months Ended June 30,

Operating expenses:

Research and development

In-process research and development

General and administrative

Total operating expenses

Loss from operations

Total other income (expense), net

Research and development expenses

Research and development expenses were $47.1 million for the six months ended June 30, 2025 compared to $61.6 million for the six months ended June 30, 2024.

The decrease of $14.5 million was primarily driven by decreases of $3.8 million in personnel costs, including stock-based compensation expense, $3.0 million in expenses incurred in connection with clinical trials, preclinical studies and discovery activities, $2.5 million in outsourced services and consulting fees, and $1.7 million in facilities-related expenses and depreciation, and an impairment charge of $3.0 million on operating lease assets, leasehold improvements, and furniture related to the sublease plan of the first floor of our San Diego facility during the six months ended June 30, 2024.

In-process research and development expenses

In-process research and development expenses were $7.5 million for the six months ended June 30, 2025 compared to $22.5 million for the six months ended June 30, 2024.

In-process research and development expenses for the six months ended June 30, 2025 were related to the achievement of milestones in connection with our license agreement with Joyo.

In-process research and development expenses for the six months ended June 30, 2024 were related to upfront payments in connection with our license agreements with Joyo and Medshine.

General and administrative expenses

General and administrative expenses were $19.1 million for the six months ended June 30, 2025 compared to $22.5 million for the six months ended June 30, 2024.

The decrease of $3.4 million was primarily driven by an impairment charge of $1.7 million on operating lease assets, leasehold improvements, and furniture related to the sublease plan of the first floor of our San Diego facility during the six months ended June 30, 2024, and decreases of $1.0 million in legal fees, $0.4 million in facilities and office-related expenses, and $0.3 million in insurance costs.

Other income (expense), net

Other income (expense), net was $8.9 million for the six months ended June 30, 2025 compared to $8.4 million for the six months ended June 30, 2024.

The increase of $0.5 million was primarily related to a $0.4 million impairment charge on our investment in equity securities during the six months ended June 30, 2024 and an increase in interest earned on our cash, cash equivalents and marketable securities of $0.1 million during the six months ended June 30, 2025.

Liquidity and capital resources

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Proceeds from the ATM Offering during the year ended December 31, 2024 were $21.0 million, net of commissions and expenses of $0.8 million.

No shares of our common stock were sold under the Sale Agreement during the three months ended March 31, 2025.

As of March 31, 2025, we had $178.1 million of shares available for sale under the ATM program.

No shares of our common stock were sold under the Sale Agreement during the three and six months ended June 30, 2025 and 2024.

As of June 30, 2025, we had $178.1 million of shares available for sale under the ATM program.

In December 2022, we completed the 2022 Offering and issued 15,384,616 shares of our common stock at a price to the public of $6.50 per share.

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Future capital requirements

As of March 31, 2025, we had cash, cash equivalents and marketable securities of $411.1 million.

As of June 30, 2025, we had cash, cash equivalents and marketable securities of $386.7 million.

Based upon our current operating plans, we believe that our cash, cash equivalents and marketable securities will be sufficient to fund our operations into the second half of 2028.

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The following table shows a summary of our cash flows for the periods presented (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash (used in) provided by:

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Financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Operating activities

Cash used in operating activities was $31.6 million during the three months ended March 31, 2025, primarily resulting from a net loss of $31.0 million, changes in operating assets and liabilities of $6.1 million and accretion on marketable securities of $2.0 million, partially reduced by stock-based compensation expense of $6.7 million and depreciation and amortization expense of $0.8 million.

Net cash used by changes in operating assets and liabilities consisted primarily of a decrease in accrued expenses and other current and long-term liabilities of $8.0 million, partially offset by an increase in accounts payable of $1.8 million.

Cash used in operating activities was $33.3 million during the three months ended March 31, 2024, primarily resulting from a net loss of $35.0 million, changes in operating assets and liabilities of $3.7 million and accretion on marketable securities of $2.3 million, partially reduced by stock-based compensation expense of $6.8 million and depreciation and amortization expense of $1.0 million.

Net cash used by changes in operating assets and liabilities consisted primarily of a decrease in accrued expenses and other current liabilities of $3.6 million, an increase in prepaid expenses and other current and long-term assets of $0.5 million, and a decrease in operating lease assets and liabilities, net of $0.2 million, partially offset by an increase in accounts payable of $0.6 million.

Cash used in operating activities was $52.1 million during the six months ended June 30, 2025, primarily resulting from a net loss of $64.8 million, changes in operating assets and liabilities of $6.0 million and accretion on marketable securities of $3.5 million, partially reduced by stock-based compensation expense of $13.1 million, in-process research and development expenses of $7.5 million, which are reflected in noncash and investing activities, and depreciation and amortization expense of $1.6 million.

Net cash used from changes in operating assets and liabilities consisted primarily of decreases in accrued expenses and other current and long-term liabilities of $6.6 million and operating lease assets and liabilities, net of $1.1 million, partially offset by an increase in accounts payable of $1.2 million and a decrease in prepaid expenses and other current and long-term assets of $0.5 million.

Cash used in operating activities was $62.4 million during the six months ended June 30, 2024, primarily resulting from a net loss of $98.2 million, accretion on marketable securities of $4.7 million and changes in operating assets and liabilities of $3.2 million, partially reduced by in-process research and development expenses of $22.5 million, which are reflected in investing activities, stock-based compensation expense of $14.0 million, an impairment charge of $4.7 million on operating lease assets, leasehold improvements and furniture and depreciation and amortization expense of $2.1 million.

Net cash used from changes in operating assets and liabilities consisted primarily of a decrease in accounts payable, accrued expenses and other current and long-term liabilities of $2.4 million and an increase in prepaid expenses and other current and long-term assets of $0.8 million.

Investing activities

Net cash provided by investing activities was $34.3 million during the three months ended March 31, 2025 as compared to $10.0 million during the three months ended March 31, 2024.

The increase in cash provided by investing activities of $24.3 million was primarily the result of a decrease in purchases of marketable securities of $33.3 million, partially offset by a decrease in maturities of marketable securities of $9.0 million.

Net cash provided by investing activities was $50.0 million during the six months ended June 30, 2025 as compared to net cash used in investing activities of $76.6 million during the six months ended June 30, 2024.

The increase in cash provided by investing activities of $126.6 million was primarily the result of a decrease in purchases of marketable securities of $77.1 million, an increase in maturities of marketable securities of $32.6 million and a decrease in in-process research and development of $17.0 million.

Financing activities

Net cash provided by financing activities was less than $0.1 million during the three months ended March 31, 2025 as compared to $6.9 million during the three months ended March 31, 2024.

During the three months ended March 31, 2024, we received $6.9 million of proceeds for the prepayment of the 2024 Private Placement, which closed in April 2024.

Net cash provided by financing activities was $0.5 million during the six months ended June 30, 2025 as compared to $218.8 million during the six months ended June 30, 2024.

During the six months ended June 30, 2025, we received $0.4 million from the issuance of common stock under our ESPP and $0.1 million from the exercise of stock options.

During the six months ended June 30, 2024, we received $174.6 million of net proceeds for the issuance of common stock from the 2024 Offering, $43.6 million in net proceeds for the issuance of common stock from the 2024 Private Placement, $0.4 million from the issuance of common stock under our ESPP and $0.1 million from the exercise of stock options.

Contractual obligations and commitments

As of March 31, 2025, there have been no material changes outside the ordinary course of our business to the contractual obligations we reported in “Management’s discussion and analysis of financial condition and results of operations – Cash requirements due to contractual obligations and other commitments,” included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 20, 2025.

As of June 30, 2025, there have been no material changes outside the ordinary course of our business to the contractual obligations we reported in “Management’s discussion and analysis of financial condition and results of operations – Cash requirements due to contractual obligations and other commitments,” included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 20, 2025.

Critical accounting policies and estimates

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Actual results may differ materially from these estimates.

As of March 31, 2025, there have been no material changes to our critical accounting policies and estimates from those disclosed in “Management’s discussion and analysis of financial condition and results of operations – Critical accounting policies and estimates,” included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 20, 2025.

As of June 30, 2025, there have been no material changes to our critical accounting policies and estimates from those disclosed in “Management’s discussion and analysis of financial condition and results of operations – Critical accounting policies and estimates,” included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 20, 2025.

Recently issued and adopted accounting pronouncements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis