Mineralys Therapeutics, Inc. 10-Q

Item 1. Financial Statements Mineralys Therapeutics, Inc. Condensed Balance Sheets (in thousands, except share and per share amounts) March 31, December 31, 2025 2024 (unaudited) Assets Current assets: Cash and cash equivalents $ 165,007 $ 114,091 Investments 178,019 84,096 Prepaid and other current assets 11,480 7,164 Total current assets 354,506 205,351 Property and equipment, net 38 53 Other assets 397 499 Total assets $ 354,941 $ 205,903 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 373 $ 479 Accrued liabilities 13,013 14,167 Total current liabilities 13,386 14,646 Commitments and contingencies (Note 4) Stockholders’ equity: Common stock, $ 0.0001 par value; 500,000,000 shares authorized as of March 31, 2025 and December 31, 2024; 64,876,228 and 49,821,915 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively 6 5 Additional paid-in capital 686,278 493,770 Accumulated deficit ( 344,729 ) ( 302,518 ) Total stockholders’ equity 341,555 191,257 Total liabilities and stockholders’ equity $ 354,941 $ 205,903 The accompanying notes are an integral part of these condensed financial statements. 1 Table of Contents Mineralys Therapeutics, Inc. Condensed Statements of Operations (in thousands, except share and per share data) (unaudited) Three Months Ended March 31, 2025 2024 Operating expenses: Research and development $ 37,879 $ 30,754 General and administrative 6,568 4,608 Total operating expenses 44,447 35,362 Loss from operations ( 44,447 ) ( 35,362 ) Interest income, net 2,239 3,853 Other income (expense) ( 3 ) 1 Total other income, net 2,236 3,854 Net loss $ ( 42,211 ) $ ( 31,508 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 0.79 ) $ ( 0.70 ) Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted 53,163,551 44,900,755 The accompanying notes are an integral part of these condensed financial statements. 2 Table of Contents Mineralys Therapeutics, Inc. Condensed Statements of Stockholders’ Equity (in thousands, except share data) (unaudited) Common Stock Additional Paid-In-Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance as of December 31, 2023 41,133,916 $ 4 $ 365,858 $ ( 124,708 ) $ 241,154 Issuance of common stock and pre-funded warrants in private placement offering, net of offering costs of $ 3,941 8,339,169 1 116,058 — 116,059 Issuance of common stock from stock option exercises 159,904 — 149 — 149 Stock-based compensation — — 2,191 — 2,191 Net loss — — — ( 31,508 ) ( 31,508 ) Balance as of March 31, 2024 49,632,989 $ 5 $ 484,256 $ ( 156,216 ) $ 328,045 Common Stock Additional Paid-In-Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance as of December 31, 2024 49,821,915 $ 5 $ 493,770 $ ( 302,518 ) $ 191,257 Issuance of common stock in public offering, net of offering costs of $ 12,509 14,907,406 1 188,740 — 188,741 Issuance of common stock from stock option exercises 146,907 — 123 — 123 Stock-based compensation — — 3,645 — 3,645 Net loss — — — ( 42,211 ) ( 42,211 ) Balance as of March 31, 2025 64,876,228 $ 6 $ 686,278 $ ( 344,729 ) $ 341,555 The accompanying notes are an integral part of these condensed financial statements. 3 Table of Contents Mineralys Therapeutics, Inc. Condensed Statements of Cash Flows (in thousands) (unaudited) Three Months Ended March 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 42,211 ) $ ( 31,508 ) Adjustments to reconcile net loss to net cash used in operating activities: Accretion of discount on held-to-maturity securities ( 1,046 ) ( 2,509 ) Stock-based compensation 3,645 2,191 Depreciation and amortization 15 8 Changes in operating assets and liabilities: Accrued interest receivable 52 119 Prepaid, other current assets, and other assets ( 4,396 ) 4,159 Accounts payable and accrued liabilities ( 1,546 ) 8,401 Net cash used in operating activities ( 45,487 ) ( 19,139 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of marketable securities ( 127,876 ) ( 123,393 ) Maturities of marketable securities 35,000 67,500 Purchases of property and equipment — ( 59 ) Net cash used in investing activities ( 92,876 ) ( 55,952 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock in public offering, net of offering costs 189,166 — Proceeds from stock option exercises 123 149 Payment of shelf offering costs ( 10 ) ( 63 ) Proceeds from issuance of common stock and pre-funded warrants in a private placement offering, net of offering costs — 116,119 Net cash provided by financing activities 189,279 116,205 Net increase in cash and cash equivalents 50,916 41,114 Cash and cash equivalents - beginning 114,091 49,304 Cash and cash equivalents - ending (1) $ 165,007 $ 90,418 Supplement Disclosure of Non-Cash Financing Activities: Public offering and shelf offering costs included in accounts payable and accrued liabilities $ 289 $ 321 (1) Cash and cash equivalents as of March 31, 2025 exclude investments of $ 178.0 million. Cash, cash equivalents, and investments amounted to $ 343.0 million as of March 31, 2025. The accompanying notes are an integral part of these condensed financial statements. 4 Table of Contents Mineralys Therapeutics, Inc. Notes to Condensed Financial Statements (unaudited) Note 1. Nature of Business Mineralys Therapeutics, Inc. (the Company) is a clinical-stage biopharmaceutical company focused on developing medicines to target diseases driven by dysregulated aldosterone. The Company’s clinical-stage product candidate, lorundrostat, is a proprietary, orally administered, aldosterone synthase inhibitor that the Company is developing for the treatment of cardiorenal conditions affected by dysregulated aldosterone, including hypertension, chronic kidney disease, and obstructive sleep apnea. The Company has completed two pivotal clinical trials of lorundrostat for the treatment of uncontrolled or resistant hypertension. The Company is also conducting a Phase 2 trial of lorundrostat in hypertensive patients with Stage 2 to 3b chronic kidney disease and a Phase 2 trial of lorundrostat in hypertensive patients with obstructive sleep apnea. The Company was incorporated as a Delaware corporation in May 2019, and it is headquartered in Radnor, Pennsylvania. The Company’s operations to date have been limited to business planning, raising capital, in-licensing, conducting preclinical and clinical trials, and other research and development. Liquidity and Capital Resources Since its inception, the Company has not generated any revenue from product sales or other sources and has incurred significant operating losses and negative cash flows from operations. The Company’s primary uses of cash to date have been to fund research and development activities, business planning, establishing and maintaining the Company’s intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations. As of March 31, 2025, the Company had an accumulated deficit of $ 344.7 million and cash, cash equivalents, and investments of $ 343.0 million. For the three months ended March 31, 2025, the Company had a net loss of $ 42.2 million and net cash used in operating activities of $ 45.5 million. From inception to March 31, 2025, the Company has funded its operations by raising aggregate gross proceeds of approximately $ 700.0 million from the sale of the Company’s common stock, convertible preferred stock, convertible notes, and pre-funded warrants. The Company has a limited operating history, and the sales and income potential of its business is unproven. The Company expects to continue to incur substantial losses in the foreseeable future as a result of the Company’s research and development and other activities. Additional funding will be required in the future to continue with the Company’s planned research and development and other activities. The Company expects to finance its operations through equity offerings, debt financings, and other capital sources, including potential strategic collaborations, licensing, and other similar arrangements. The Company believes that its cash, cash equivalents, and investments as of March 31, 2025 will be sufficient to allow the Company to fund operations for at least twelve months from the issuance date of these condensed financial statements. Note 2. Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and applicable rules and regulations of the U.S. Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the Company’s financial information. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and related notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. 5 Table of Contents Mineralys Therapeutics, Inc. Notes to Condensed Financial Statements (unaudited) Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates of the Financial Accounting Standards Board (FASB). Segment Information The Company operates in one operating segment for the purposes of assessing performance, making operating decisions, and allocating Company resources. The Company’s chief operating decision maker (CODM) is its chief executive officer, who considers net loss to evaluate overall expenses associated with conducting research and development activities, which includes evaluating the progress of ongoing clinical trials and the planning and execution of current and future research and development and other activities. Further, the CODM reviews and utilizes functional expenses (research and development and general and administrative) as reported in the statements of operations to manage the Company’s operations. Other segment items included in net loss are interest income, net and other income (expense). The measure of performance, significant expenses, and other items are each reflected in the statements of operations. The accounting policies of the segment are the same as those described below. The measure of segment assets is reported on the balance sheets as total assets. All assets are held in the United States. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Estimates have been used in the following areas, among others: research and development accruals and income taxes. Cash and Cash Equivalents All highly liquid investments that have maturities of 90 days or less at the date of purchase are classified as cash equivalents. The Company’s cash and cash equivalents balances as of March 31, 2025 and December 31, 2024 include cash balances and amounts held primarily in interest-bearing money market accounts and U.S. Treasury bills. As of March 31, 2025 and December 31, 2024, the Company did not have any restricted cash balances. The following table provides a reconciliation of cash and cash equivalents as reported in the condensed statements of cash flows to the condensed balance sheets (in thousands): March 31, December 31, 2025 2024 Cash $ 1,347 $ 664 Cash equivalents 163,660 113,427 Total cash and cash equivalents $ 165,007 $ 114,091 Concentration of Credit Risk The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements. Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash balances in several accounts with three financial institutions which, from time to time, are in excess of federally insured limits. Fair Value Measurements The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC Topic 820, Fair Value Measurement, establishes a hierarchy of inputs used in measuring fair value that maximizes the use of 6 Table of Contents Mineralys Therapeutics, Inc. Notes to Condensed Financial Statements (unaudited) observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1 – quoted prices in active markets for identical assets and liabilities • Level 2 – other significant observable inputs (including quoted prices for similar assets and liabilities, interest rates, credit risk, etc.) • Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities) For certain financial instruments, including cash and cash equivalents, prepaid expenses, accounts payable, and certain accrued liabilities, the recorded amount approximates estimated fair value due to their relatively short maturity period. Refer to Note 3. “ Fair Value of Financial Instruments ” for additional details of the Company’s financial instruments. Investments The Company generally invests its excess cash in money market funds and investment-grade short- and long-term fixed-income debt securities, such as U.S. Treasury bills. Such investments are included in cash and cash equivalents and investments in the condensed balance sheets. The Company determines the appropriate classification of short-term and long-term securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are carried at amortized cost, adjusted for the accretion of discounts using the interest method. The Company invested in marketable securities during the three months ended March 31, 2025 and 2024, and no impairment charges were recorded. For held-to-maturity investments, the Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other-than-temporary. If the Company believes an impairment of a security position is other than temporary, based on available quantitative and qualitative information as of the report date, the loss will be recognized within total other income, net in the Company’s condensed statements of operations and a new cost basis in the investment will be established. Deferred Offering Costs The Company capitalizes certain legal, professional, accounting, and other third-party fees that are directly associated with in-process equity issuances as deferred offering costs until such equity issuances are consummated. After consummation of the equity issuance, these costs are recorded as a reduction in the capitalized amount associated with the equity issuance. Should the equity issuance be abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the condensed statements of operations. Deferred offering costs as of March 31, 2025 and December 31, 2024 were $ 0.3 million and $ 0.4 million, respectively. Such costs are classified in other assets on the condensed balance sheets. 7 Table of Contents Mineralys Therapeutics, Inc. Notes to Condensed Financial Statements (unaudited) Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation – Stock Compensation (ASC 718). ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the condensed statements of operations based on their fair values. The Company’s stock-based awards are subject only to service-based vesting conditions. The Company measures restricted common stock awards using the difference, if any, between the purchase price per share of the award and the fair value of the Company’s common stock at the date of the grant or modification. The Company estimates the fair value of its stock option awards using the Black-Scholes option pricing model, which requires the input of assumptions, including (i) the expected stock price volatility, (ii) the calculation of expected term of the award, (iii) the risk-free interest rate, and (iv) expected dividends. Volatility — Due to the Company’s limited operating history and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar publicly-traded companies. The Company believes that the companies in the group were most representative of the Company and had characteristics similar to its own, including stage of product development, a focus on the life sciences industry, and other economic and industry characteristics. Expected Term — The Company uses the simplified method to calculate the expected term, as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for options granted, and utilizes the contractual term for options granted. Risk-Free Interest Rate — The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. Expected Dividends — To date, the Company has not issued any dividends and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero. Subsequent to the closing of the Company’s initial public offering of its common stock in February 2023 (IPO), the Company determines the fair market value of its common stock using the closing price of its common stock as reported on the Nasdaq Global Select Market. The assumptions underlying these valuations represented management’s best estimate, with the assistance of a third-party valuation specialist, which involved inherent uncertainties and the application of management’s judgment. As a result, if the Company had used different assumptions or estimates, the fair value of the Company’s common stock and its stock-based compensation expense could have been materially different. Compensation expense related to awards is recognized on a straight-line basis by recognizing the grant date fair value over the associated service period of the award, which is generally the vesting term. Management evaluates its award grants and modifications and will adjust the fair value if any are determined to be spring-loaded. The Company accounts for forfeitures as they occur. Net Loss Per Share The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, unvested restricted stock awards and stock options to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive. The weighted-average number of common shares used in the basic and diluted net loss per share attributable to common stockholders calculations includes the weighted-average pre-funded warrants outstanding during the period, as they are exercisable at any time for nominal cash consideration. The following table sets forth the potential 8 Table of Contents Mineralys Therapeutics, Inc. Notes to Condensed Financial Statements (unaudited) common shares excluded from the calculation of net loss per share attributable to common stockholders because their inclusion would be anti-dilutive: Three Months Ended March 31, 2025 2024 Outstanding options 6,778,317 4,251,075 Unvested restricted stock awards 309,028 968,211 Total 7,087,345 5,219,286 Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, including public entities with a single reportable segment, primarily through enhanced disclosures about significant segment expenses. The Company adopted this standard for the Company’s fiscal year 2024 annual reporting period, and it is applicable to interim periods thereafter. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03) and in January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 will require the Company to disclose additional information about specific expense categories in the notes to the financial statements on an annual and interim basis. ASU 2024-03 is effective for the Company's fiscal year 2027 and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company is evaluating the impact of ASU 2024-03 on its financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid. The standard is effective for the Company beginning in fiscal year 2026, with early adoption permitted. The Company does not expect to early adopt the new standard. The new standard is expected to be applied prospectively, but retrospective application is permitted. The Company is currently evaluating the impact of ASU 2023-09 on its financial statements and related disclosures. Note 3. Fair Value of Financial Instruments The following table presents financial instruments measured at fair value on a recurring basis based on the fair value hierarchy as of March 31, 2025 and December 31, 2024 (in thousands): March 31, December 31, 2025 2024 Level 1 Assets Cash equivalents Money market funds $ 123,910 $ 83,602 9 Table of Contents Mineralys Therapeutics, Inc. Notes to Condensed Financial Statements (unaudited) There were no transfers within the fair value hierarchy during the periods presented. The following methods and assumptions were used by the Company in estimating the fair values of each class of financial instrument disclosed herein: Money Market Funds —The carrying amounts of money market funds reported as cash and cash equivalents in the condensed balance sheets approximate their fair values due to their short-term nature. The fair values of money market funds are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets. U.S. Treasury Bills—As of March 31, 2025 and December 31, 2024, the Company had short-term U.S. Treasury bills. Fair values of these securities are determined by Level 2 inputs utilizing quoted prices (unadjusted) in active markets for similar assets . The following table presents information about the Company’s investments in held-to-maturity U.S. Treasury bills as of each reported date (in thousands): As of March 31, 2025 Balance Sheet Location Original Maturities Amortized Cost Estimated Fair Value Cash and cash equivalents less than 3 months $ 39,750 $ 39,748 Investments between 3 and 12 months 178,019 177,999 Total $ 217,769 $ 217,747 As of December 31, 2024 Balance Sheet Location Original Maturities Amortized Cost Estimated Fair Value Cash and cash equivalents less than 3 months $ 29,825 $ 29,829 Investments between 3 and 12 months 84,096 84,123 Total $ 113,921 $ 113,952 Note 4. Commitments and Contingencies License Agreement with Mitsubishi Tanabe In July 2020, the Company entered into a license agreement (the Mitsubishi License) with Mitsubishi Tanabe Pharmaceutical Company (Mitsubishi Tanabe), pursuant to which Mitsubishi Tanabe granted the Company an exclusive, worldwide, royalty-bearing, sublicensable license under Mitsubishi Tanabe’s patent and other intellectual property rights to exploit products incorporating lorundrostat (formerly MT-4129) (Lorundrostat Products) for the prevention, treatment, diagnosis, detection, monitoring, or predisposition testing with respect to indications, diseases, and conditions in humans. Pursuant to the Mitsubishi License, the Company paid Mitsubishi Tanabe a $ 1.0 million upfront fee and development milestone payments of $ 9.0 million in the aggregate. The Company has remaining obligations to pay Mitsubishi Tanabe commercial milestone payments of up to $ 155.0 million in the aggregate upon first commercial sale and upon meeting certain annual sales targets, as well as additional commercial milestone payments of up to $ 10.0 million for a second indication. Additionally, the Company is obligated to pay Mitsubishi Tanabe tiered royalties at percentages ranging from the mid-single-digits to ten percent ( 10 %) of aggregate net sales of each Lorundrostat Product on a Lorundrostat Product-by-Lorundrostat Product and country-by-country basis, until the later of (i) the expiration of the last-to-expire valid Mitsubishi Tanabe patent claim covering a Lorundrostat Product, (ii) ten years from the first commercial sale of a Lorundrostat Product, or (iii) the expiration of regulatory exclusivity in such country. Such royalties are subject to reduction under specified conditions, including lack of patent coverage and generic competition. 10 Table of Contents Mineralys Therapeutics, Inc. Notes to Condensed Financial Statements (unaudited) The Company has no remaining development milestone obligations under the Mitsubishi License and did not incur any development or commercial expenses pursuant to the Mitsubishi License during the three months ended March 31, 2025 and 2024. The Company is obligated to use commercially reasonable efforts to conduct and complete the development activities and to file for regulatory approval for at least one Lorundrostat Product in a major market country and consider in good faith developing at least one Lorundrostat Product in a non-major market country. If the Company elects to sublicense its rights under the Mitsubishi License to a third party with respect to exploitation of lorundrostat or any Lorundrostat Product in certain countries in Asia, the Company has agreed to negotiate such a sublicense first, for a specified period of time, with Mitsubishi Tanabe, if Mitsubishi Tanabe notifies the Company that it would like to obtain such a sublicense. The Company also agreed not to commercialize any competing product prior to three years following the first commercial sale of the first Lorundrostat Product in any country without Mitsubishi Tanabe’s prior consent. Unless terminated earlier, the Mitsubishi License will continue until the expiration of all of the Company’s royalty obligations to Mitsubishi Tanabe. The Company may terminate the Mitsubishi License for any or no reason upon 90 or 180 days’ prior written notice to Mitsubishi Tanabe depending on whether the Lorundrostat Product has received regulatory approval. Mitsubishi Tanabe may terminate the Mitsubishi License if the Company has not initiated regulatory consultation for the first global clinical trials of lorundrostat in at least one major market country within a specified amount of time or if the Company or its affiliates or sublicensees initiate a challenge to the patent rights licensed to the Company by Mitsubishi Tanabe. In addition, either party may terminate the Mitsubishi License in the event of an uncured material breach by or bankruptcy of the other party, subject to certain notice and cure periods, or upon the other party’s bankruptcy or insolvency. Litigation Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the three months ended March 31, 2025 and 2024, and no material legal proceedings are currently pending or threatened. Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising from breach of such agreements or intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with officers of the Company and members of its board of directors 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. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its condensed financial statements as of March 31, 2025 and December 31, 2024. 11 Table of Contents Mineralys Therapeutics, Inc. Notes to Condensed Financial Statements (unaudited) Note 5. Accrued Liabilities Accrued liabilities consisted of the following (in thousands): March 31, December 31, 2025 2024 Research and development expenses $ 9,660 $ 8,614 Compensation and benefits 1,150 3,582 Professional fees and other 2,203 1,971 Total $ 13,013 $ 14,167 Note 6. Capital Stock As of March 31, 2025, the Company had reserved authorized shares of common stock for future issuance as follows: Common stock options outstanding 6,778,317 Shares available for grant under the 2023 Plan 2,137,973 Shares available for grant under the ESPP 1,273,941 Shares available for grant under the 2025 Inducement Plan 1,000,000 Pre-funded warrants issued and outstanding 549,755 Total 11,739,986 In connection with the closing of the IPO in February 2023, the Company’s board of directors approved an amendment to the Company’s amended and restated certificate of incorporation (the Restated Certificate). The Restated Certificate amended and restated the Company’s amended and restated certificate of incorporation, in its entirety to, among other things, increase the authorized number of shares of common stock to 500,000,000 shares and authorize 50,000,000 shares of undesignated preferred stock that may be issued from time to time by the Company’s board of directors in one or more series. Public Offering In March 2025, the Company entered into an underwriting agreement (the Underwriting Agreement) with BofA Securities, Inc., Evercore Group L.L.C. and Goldman Sachs & Co. LLC as representatives of the several underwriters named therein (collectively, the Underwriters), relating to the issuance and sale of 14,907,406 shares of the Company’s common stock at a price of $ 13.50 per share for net proceeds of approximately $ 188.7 million after deducting an underwriting discount of 6 % and other offering expenses. The offering was made pursuant to the Company’s shelf registration statement on Form S-3 (Registration Statement No. 333-278122) previously filed with and declared effective by the SEC (the Registration Statement), and a prospectus supplement and accompanying prospectus filed with the SEC. The Company is using the net proceeds from this offering to fund clinical development of lorundrostat, including research and development and manufacturing, and pre-commercialization activities, as well as for working capital and general corporate purposes. At Market Equity Offering Sales Agreement On March 21, 2024, the Company entered into an ATM Equity Offering Sales Agreement (the ATM Agreement) with BofA Securities, Inc. and Evercore Group L.L.C. as the Company’s sales agents (the Agents) and/or principals. Pursuant to the terms of the ATM Agreement, the Company may sell from time to time through the Agents shares of the Company’s common stock having an aggregate offering price of up to $ 100,000,000 (the ATM Shares). Any ATM Shares will be issued pursuant to the Registration Statement. Sales of the ATM Shares will be made by means of ordinary brokers’ transactions on the Nasdaq Global Select 12 Table of Contents Mineralys Therapeutics, Inc. Notes to Condensed Financial Statements (unaudited) Market or as otherwise agreed by the Company and the Agents. Under the terms of the ATM Agreement, the Company may also sell the ATM Shares from time to time to an Agent as principal for its own account at a price to be agreed upon at the time of sale. Any sale of the ATM Shares to an Agent as principal would be pursuant to the terms of a separate terms agreement between the Company and such Agent. As of March 31, 2025, the Company had not yet sold any ATM Shares. Private Placement Offering On February 7, 2024, the Company entered into a securities purchase agreement (the Purchase Agreement) with the purchasers named therein (the Purchasers), for the private placement (the Private Placement) of (i) 8,339,169 shares (the Shares) of the Company’s common stock at a price of $ 13.50 per Share, and (ii) with respect to certain Purchasers, pre-funded warrants to purchase an aggregate of 549,755 shares of common stock (the Pre-Funded Warrants) in lieu of shares of common stock, at a purchase price of $ 13.499 per Pre-Funded Warrant (the shares of common stock issuable upon exercise of the Pre-Funded Warrants, the Warrant Shares) for aggregate net proceeds of approximately $ 116.1 million. The Company is using the net proceeds from the Private Placement to fund the research and development of lorundrostat and for working capital and general corporate purposes. Each Pre-Funded Warrant has an exercise price of $ 0.001 per share of common stock, is immediately exercisable on the date of issuance, and will not expire. Under the terms of the Pre-Funded Warrants, the Company may not effect the exercise of any portion of any Pre-Funded Warrant, and a holder will not have the right to exercise any portion of any Pre-Funded Warrant, which, upon giving effect to such exercise, would cause a holder (together with its affiliates) to own more than a specified beneficial ownership limitation of either 4.99 %, 9.99 %, or 19.99 % (as selected by such holder prior to the issuance of the Pre-Funded Warrant) of the number of shares of common stock outstanding immediately after giving effect to such exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 19.99 %, provided that any increase in such percentage shall not be effective until 61 days after such notice is delivered to the Company. The Company registered the resale of the Shares and the Warrant Shares on the Registration Statement. Pursuant to the Purchase Agreement, the Company agreed to use its reasonable best efforts to keep the Registration Statement effective until the earliest of (i) the time as all of the Shares and Warrant Shares purchased by the Purchasers pursuant to the terms of the Purchase Agreement have been sold pursuant to the Registration Statement, or (ii) such time as the Shares and Warrant Shares become eligible for resale by non-affiliates without any volume limitations or other restrictions pursuant to Rule 144 under the Securities Act of 1933, as amended, or any other rule of similar effect. Note 7 . Stock-Based Compensation 2023 Incentive Award Plan In February 2023, the Company’s board of directors adopted and stockholders approved the 2023 Incentive Award Plan that became effective upon the closing of the IPO (2023 Plan), under which the Company may grant stock options, restricted stock awards (RSAs), dividend equivalents, restricted stock units, stock appreciation rights, and other stock or cash-based awards to its employees, consultants, and directors. The number of shares of the Company’s common stock initially available for issuance under awards granted pursuant to the 2023 Plan was the sum of (i) 4,650,000 shares of the Company’s common stock, plus (ii) any shares subject to outstanding awards under the 2020 Plan described below as of the effective date of the 2023 Plan that become available for issuance under the 2023 Plan thereafter in accordance with its terms. The number of shares initially available for issuance will be increased on January 1 of each calendar year beginning in 2024 and ending in 2033, by an amount equal to the lesser of (i) 4 % of the shares of the Company’s common stock outstanding on the final day of the immediately preceding calendar year and (ii) such 13 Table of Contents Mineralys Therapeutics, Inc. Notes to Condensed Financial Statements (unaudited) smaller number of shares as determined by the Company’s board of directors. No more than 100,000,000 shares of the Company’s common stock may be issued upon the exercise of incentive stock options under the 2023 Plan. Shares issued under the 2023 Plan may be authorized but unissued shares, shares purchased on the open market, or treasury shares. 2025 Employment Inducement Incentive Award Plan On February 10, 2025, the Company’s board of directors adopted and approved the 2025 Employment Inducement Incentive Award Plan (the 2025 Inducement Plan), which became effective on February 10, 2025. In accordance with Rule 5635(c)(4) of the Nasdaq Stock Market listing rules, equity awards under the 2025 Inducement Plan may only be made to an employee if he or she is granted such awards in connection with the commencement of his or her employment with the Company and such grant is a material inducement to his or her entering into employment with the Company. The Company has reserved 1,000,000 shares of common stock for issuance pursuant to non-qualified stock options and restricted stock units under the 2025 Inducement Plan. As of May 12, 2025, no shares had been issued under the 2025 Inducement Plan. 2020 Equity Incentive Plan On July 7, 2020, the board of directors adopted, and the Company’s stockholders approved, the 2020 Equity Incentive Plan. The 2020 Equity Incentive Plan, as amended and restated (the 2020 Plan), provided for the grant of incentive stock options to employees of the Company, and for the grant of non-statutory stock options, RSAs, restricted stock unit awards, and other forms of stock awards to employees, directors, and consultants of the Company. Subsequent to the closing of the IPO, no additional awards will be granted under the 2020 Plan. However, the 2020 Plan will continue to govern the terms and conditions of the outstanding awards granted under it. Shares of the Company’s common stock subject to awards granted under the 2020 Plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased, or forfeited following the effective date of the 2020 Plan will be available for issuance under the 2023 Plan in accordance with its terms. As of March 31, 2025, the Company had the following balances by plan: Options Outstanding Unvested RSAs Shares Available for Grant 2023 Plan 6,158,872 — 2,137,973 2020 Plan 619,445 309,028 — 2025 Inducement Plan — — 1,000,000 Total 6,778,317 309,028 3,137,973 2023 Employee Stock Purchase Plan In February 2023, the Company’s board of directors and stockholders approved the 2023 Employee Stock Purchase Plan (ESPP), which became effective in February 2023. The ESPP permits eligible employees who elect to participate in an offering under the ESPP to have up to a specified percentage of their eligible compensation withheld, subject to certain limitations, to purchase shares of common stock pursuant to the ESPP. A total of 400,000 shares of the Company’s common stock was initially reserved for issuance under the ESPP. The first ESPP offering period commenced on July 1, 2023, with each new six-month offering period beginning each January 1 and July 1. ESPP purchases of common stock occur at a price equal to 85 % of the lower of (i) the closing price on the first trading day of the offering period or (ii) the closing price on the last trading day of the offering period. As of March 31, 2025, the Company had 1,273,941 shares available for issuance and 35,617 cumulative shares had been issued under the ESPP. In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2024 and ending in and including 2033, by an amount equal to the 14 Table of Contents Mineralys Therapeutics, Inc. Notes to Condensed Financial Statements (unaudited) lesser of (i) 1 % of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Company’s board of directors, provided that no more than 15,000,000 shares of the Company’s common stock may be issued under the ESPP. Total stock-based compensation expense reported in the condensed statements of operations was allocated as follows (in thousands): Three Months Ended March 31, 2025 2024 Research and development $ 1,628 $ 965 General and administrative 2,017 1,226 Total $ 3,645 $ 2,191 15 Table of Contents