Mineralys Therapeutics, Inc. 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis and the unaudited interim financial statements included in this Quarterly Report on Form 10-Q (Quarterly Report) should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the Annual Report on Form 10-K for the year ended December 31, 2024. Special Note Regarding Forward-Looking Statements This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, research and development plans, the anticipated timing, costs, design, and conduct of our ongoing and planned preclinical studies and planned clinical trials for lorundrostat and any future product candidates, the timing and likelihood of regulatory filings and approvals for lorundrostat and any future product candidates, our ability to commercialize our product candidates, if approved, the potential to develop future product candidates, the potential benefits of strategic collaborations and our intent to enter into any strategic arrangements, the timing and likelihood of success, and plans and objectives of management for future operations and future results of anticipated product development efforts, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements, including macroeconomic trends and uncertainty with regard to high interest rates, elevated inflation, tariffs, and the potential for a local and/or global economic recession. This Quarterly Report also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions, and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “continue” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties, and assumptions, including, without limitation, the risk factors described in Part II, Item 1A, “ Risk Factors ,” in Part I, Item 1A, “ Risk Factors ” in our Annual Report on Form 10-K for the year ended December 31, 2024, and under a similar heading in any other periodic or current report we may file with the U.S. Securities and Exchange Commission (the SEC) in the future. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances, or otherwise. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This Quarterly Report includes trademarks, tradenames, and service marks that are the property of other organizations. Solely for convenience, trademarks and tradenames referred to in this Quarterly Report appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will 17 Table of Contents not assert, to the fullest extent under applicable law, our rights, or that the applicable owner will not assert its rights, to these trademarks and tradenames. Overview We are a clinical-stage biopharmaceutical company focused on developing medicines to target diseases driven by dysregulated aldosterone. Our clinical-stage product candidate, lorundrostat, is a proprietary, orally administered, highly selective aldosterone synthase inhibitor (ASI) that we are developing for the treatment of cardiorenal conditions affected by dysregulated aldosterone, including hypertension and related comorbidities such as chronic kidney disease (CKD) and obstructive sleep apnea (OSA). In the United States, there are approximately 120 million patients with sustained elevated blood pressure (BP), or hypertension, and more than half of this population fails to achieve their BP goals, defined as BP below 130/80 mmHg, with currently available medications. There are over 30 million treated patients who do not achieve their BP goal, of whom approximately 20 million have systolic BP levels greater than 140 mmHg. Patients with hypertension that persists despite taking two or more medications have 1.8 and 2.5 times greater mortality risk due to either cardiovascular disease or stroke, respectively. Dysregulated aldosterone levels are a key factor in driving hypertension in approximately 30% of hypertensive patients. Our research and development has been committed to clinical trials researching the benefits of lorundrostat for the treatment of uncontrolled hypertension (uHTN) or resistant hypertension (rHTN) and hypertensive patients with CKD and OSA. In the first half of 2025, we announced the positive results of our pivotal program for lorundrostat (Advance-HTN and Launch-HTN) and our Phase 2 Explore-CKD trial, which are described further below. Research to date has demonstrated the opportunities for lorundrostat as a solution for patients in the treatment of hypertension, including hypertensive patients with CKD and OSA. We also believe, based on available clinical data, that our product candidate holds promise to be an innovative solution for the rapidly growing unmet need in multiple cardiorenal metabolic disorders. Clinical Program Highlights In March 2025, we announced that our pivotal trials, Launch-HTN and Advance-HTN, both of which evaluated the efficacy and safety of lorundrostat for the treatment of uHTN or rHTN, successfully achieved statistical significance and were clinically meaningful in their primary efficacy endpoints and demonstrated a favorable safety and tolerability profile. Based on the outcome of Launch-HTN and Advance-HTN, we are planning to conduct a pre-new drug application (NDA) meeting with the U.S. Food and Drug Administration (FDA) in the fourth quarter of 2025 as we prepare the NDA for lorundrostat for the treatment of uHTN and rHTN. We also believe the Launch-HTN and Advance-HTN results demonstrate the opportunity for lorundrostat in third-line or later treatment of patients with hypertension. Our ongoing Transform-HTN open-label extension trial allows participants to continue to receive lorundrostat and generate additional safety and efficacy data. The Launch-HTN trial results were presented in a late-breaking presentation at the 2025 European Society of Hypertension Meeting on Hypertension and Cardiovascular Protection in May 2025 and published in the June 30, 2025 issue of the Journal of the American Medical Association (JAMA, DOI:10.1001/jama.9413). The Advance-HTN trial results were presented in a late-breaking presentation at the American College of Cardiology’s Annual Scientific Session & Expo (ACC.25) held in March 2025 and published in the April 23, 2025 issue of the New England Journal of Medicine (NEJM, DOI: 10.1056/NEJMoa2501440). In June 2025, we announced positive topline data from our Phase 2 Explore-CKD trial evaluating the safety and efficacy of 25 mg of lorundrostat in addition to a sodium-glucose cotransporter 2 (SGLT2) inhibitor for the treatment of hypertension in participants with hypertension and comorbid CKD. The trial was highly statistically significant and was clinically meaningful in both endpoints and demonstrated a favorable safety and tolerability profile. Greater detail of the results of these trials is described below. Transform-HTN is an open-label extension trial allowing participants to continue to receive lorundrostat and to obtain long-term efficacy and safety data. All participants in the pivotal hypertension 18 Table of Contents program, including the Advance-HTN and Launch-HTN trials, as well as the Explore-CKD trial, were given the opportunity to participate in the extension trial. Lorundrostat has been developed to address dysregulated aldosterone, and we believe this mechanism may be applicable to other indications where dysregulated aldosterone biology plays a role. Most recently, we have begun to explore lorundrostat for patients with OSA and hypertension. In January 2025, we announced that the FDA cleared our investigational new drug application for Explore-OSA to evaluate the effect of lorundrostat in the treatment of overweight and obese participants with moderate-to-severe OSA and hypertension. Explore-OSA is a placebo-controlled, crossover trial that will evaluate the safety and efficacy of lorundrostat 50 mg once daily (QD) in the evening in approximately 40 participants with hypertension and moderate-to-severe OSA. Participants will be at least 18 years old, with a systolic BP ≥ 130 mmHg and ≤ 180 mmHg, with a body mass index (BMI) ≥27 kg/m 2 , and the trial will be conducted across approximately 35 sites. The key objective of this trial is to evaluate the hypothesis that lorundrostat both alleviates the severity of upper airway obstruction and reduces nocturnal hypertension. The primary outcome measure is absolute change in the frequency of apnea-hypopnea episodes compared to placebo. The key secondary objective is to quantify BP throughout the night using continuous BP monitoring during the performance of a standard sleep study without the use of CPAP. Standard patient-reported outcomes specific to OSA will also be assessed. We initiated Explore-OSA in the first quarter of 2025, and enrollment is ongoing. We anticipate reporting topline results from Explore-OSA in the first half of 2026. Pivotal Program Clinical Trial Results Efficacy Results Launch-HTN was a large, global, randomized, double-blinded, placebo-controlled Phase 3 clinical trial, which enrolled eligible adult participants who failed to achieve their BP goal despite being on two to five antihypertensive medications. Launch-HTN reflects the real-world setting for clinicians by utilizing automated office blood pressure measurement and allowing participants to stay on their existing medications. Participants were randomized into three cohorts for twelve weeks receiving one of the following treatments: lorundrostat 50 mg QD, lorundrostat 50 mg QD and an option to titrate to 100 mg QD at week six based on defined criteria or placebo. The primary endpoint of the trial was the assessment of automated office measured systolic BP from baseline for active cohorts versus placebo at six weeks, with the results pooled for all participants on 50 mg QD. The trial met its endpoints, demonstrating clinically meaningful, statistically significant mean reduction from baseline in placebo-adjusted systolic BP at week six, and the benefit was sustained with potential further reduction through week 12. Launch-HTN Phase 3 Trial (automated office systolic BP measure, n=1,083 randomized) Week 6 (50 mg pooled) Week 12 Absolute Reduction Placebo-Adjusted Reduction Absolute Reduction Placebo-Adjusted Reduction 50 mg -16.9 mmHg -9.1 mmHg (p<0.0001)* -19.0 mmHg -11.6 mmHg (p<0.0001) 50 to100 mg -15.7 mmHg -8.4 mmHg (p=0.0016) * Primary endpoint Key characteristics of participants enrolled in the Launch-HTN trial include: approximately 63% had a BMI greater than or equal to 30kg/m2, approximately 47% were women, and approximately 29% were Black or African American. The Advance-HTN trial was a randomized, double-blind, placebo-controlled Phase 2 pivotal trial that evaluated the efficacy and safety of lorundrostat for the treatment of confirmed uHTN or rHTN, when used as 19 Table of Contents add-on therapy to a standardized background treatment of two or three antihypertensive medications in adult participants. Participants who met screening criteria discontinued their existing hypertension medications and started on a standard regimen of an angiotensin II receptor blocker (ARB) and a diuretic, if previously on two medications, or a standard regimen of ARB, diuretic and calcium channel blocker if previously on three to five medications. Participants who remained hypertensive despite the standardized regimen were then randomized into three cohorts for twelve weeks receiving one of the following treatments: lorundrostat 50 mg QD, lorundrostat 50 mg QD and an option to titrate to 100 mg QD at week four based on defined criteria or placebo. The primary endpoint of Advance-HTN was change in 24-hour ambulatory systolic BP at week twelve from baseline for each active cohort versus placebo. The trial was designed to evaluate lorundrostat in a uHTN or rHTN population at the highest risk, and which would normally be treated by a specialist, given severity of their condition. The trial met its primary endpoint as well as additional prespecified outcome measures, including measures of efficacy in the dose-escalation cohort, safety, and tolerability, and were consistent with those observed in the Launch-HTN trial. Advance-HTN Phase 2 Trial (24-hour ambulatory systolic BP, n=285 randomized) Week 4 (50 mg pooled) Week 12 Absolute Reduction Placebo-Adjusted Reduction Absolute Reduction Placebo-Adjusted Reduction* 50 mg -11.5 mmHg -5.3 mmHg (p=0.0006) -15.4 mmHg -7.9 mmHg (p=0.001) 50 to100 mg -13.9 mmHg -6.5 mmHg (p=0.006) * Primary endpoint Key characteristics of participants enrolled in the Advance-HTN trial include: approximately 66% had a BMI greater than or equal to 30kg/m2, approximately 40% were women, and approximately 53% were Black or African American. Safety and Tolerability Results We believe clinical safety findings in the two pivotal trials, including adrenocorticotropic hormone-stimulated and serum cortisol, change in serum potassium, serum sodium, and estimated glomerular filtration rate (eGFR), as well as incidence of hypotension, support a favorable benefit-risk profile. In the two active treatment arms of the Launch-HTN trial, 50 mg and 50 mg with optional dose escalation to 100 mg, the incidence of treatment-emergent serious adverse events (SAEs) was twelve participants (2.2%) and two participants (0.7%), respectively, compared with eight participants (3.0%) in the placebo arm. There was only one participant (0.1%) in the trial with a treatment-related SAE that occurred in the 50 mg arm. The incidence of hyperkalemia (serum potassium >6.0 mmol/L) at the scheduled study visit was 1.1% and 1.5% in the 50 mg and 50 to 100 mg arms, respectively. The per-protocol procedure for validation of suspected factitious hyperkalemia (most often due to phlebotomy-related hemolysis and release of potassium from red blood cells) specified a repeat potassium measurement within 72 hours while still taking study medication to confirm validity and provide an accurate determination of the true incidence of hyperkalemia. After exclusion of the spurious results, the incidence of confirmed hyperkalemia was 0.6% and 1.1% in the 50 mg and 50 to 100 mg arms, respectively. In the Advance-HTN trial, there were six participants (6.4%) and eight participants (8.4%) with treatment-emergent SAEs in the lorundrostat 50 mg and lorundrostat 50 to 100 mg arms, respectively, compared to two participants (2.1%) in the placebo arm. Treatment-related SAEs occurred in 2%, 1%, and 0% of participants in the lorundrostat 50 mg, lorundrostat 50 to 100 mg, and placebo arms, respectively. The incidence of hyperkalemia (serum potassium >6.0 mmol/L) at the scheduled study visit was 5.3% and 7.4% in the 50 mg 20 Table of Contents and 50 to 100 mg arms, respectively. The per-protocol procedure for validation of suspected factitious hyperkalemia (most often due to phlebotomy-related hemolysis and release of potassium from red blood cells) specified a repeat potassium measurement within 72 hours while still taking study medication to confirm validity and provide an accurate determination of the true incidence of hyperkalemia. After exclusion of the spurious results, the incidence of confirmed hyperkalemia was 2.1% and 3.2% in the 50 mg and 50 to 100 mg arms, respectively. Explore-CKD Clinical Trial Results Efficacy, Safety, and Tolerability Results The Explore-CKD trial was a randomized, double-blind, placebo controlled, two-period, two-sequence (2x2) crossover trial. This phase 2 trial was designed to evaluate efficacy in terms of systolic BP and urine albumin-to-creatinine ratio (UACR) reduction, and safety of four-week 25 mg QD lorundrostat added to a background treatment that included an SGLT2 inhibitor and an angiotensin-converting enzyme inhibitor (ACEi) or an ARB in CKD participants with an eGFR ≥ 30 mL/min/1.73m 2 and albuminuria (UACR of 200-5,000 mg/g). The primary endpoint was placebo-adjusted change from baseline in systolic BP at week four, and an exploratory endpoint was placebo-adjusted percent change from baseline in UACR at week four. The trial was highly statistically significant and was clinically meaningful in both of these endpoints and demonstrated a favorable safety and tolerability profile. Explore-CKD Phase 2 Trial (N=59) Placebo Lorundrostat 25 mg Placebo-Adjusted Change in systolic BP (mmHg)* -1.76 -9.25 -7.5 (p=0.0024) Change in spot UACR (mg/g) -6.60% -30.51% -25.60% (p=0.0015) Change in eGFR** (mL/min/1.73m 2 ) -2.20% -6.78% -4.58% (p=0.0362) Treatment Emergent Adverse Events (TEAEs) leading to discontinuation of study drug 1/57 (2%) 2/58 (3%) Confirmed hyperkalemia*** (K + >6.0 mmol/L) 0/59 (0%) 3/58 (5%) BP, blood pressure; UACR, Urine albumin-to-creatinine ratio; TEAE, Treatment-emergent adverse event * Primary endpoint. ** Cystatin-C formula, a surrogate biomarker of renal function not subject to MATE1 transport and elimination in the glomeruli of the kidney. *** Per protocol Systolic BP, UACR, and eGFR estimates and p values from Mixed Effects Model for a crossover trial with multiple baselines. SAEs were reported in two participants (3%) during the lorundrostat treatment period and none during the placebo treatment period. TEAEs leading to discontinuation occurred in one participant (2%) during the placebo treatment period and in two participants (3%) during the lorundrostat treatment period. During lorundrostat treatment, one participant discontinued treatment due to elevation of potassium associated with reduced eGFR, and one participant discontinued treatment due to reduction in eGFR alone. During the lorundrostat treatment period, an anticipated, modest decrease in mean eGFR was observed (-6.8% lorundrostat, -4.6% mL/min/1.73m 2 placebo-adjusted). Reduction in eGFR is also seen with other renin-angiotensin-aldosterone pathway inhibitors, including ACE inhibitors, ARBs and mineralocorticoid receptor antagonists. This is the result of a reduction in the deleterious over-perfusion of glomeruli due, in part, to reduced BP. These findings add to a growing body of evidence supporting the efficacy and safety of aldosterone synthase inhibitors in addressing the underlying mechanisms of hypertension, including in individuals with 21 Table of Contents reduced kidney function and albuminuria. The reduction in UACR observed in this trial is consistent with the potential of lorundrostat to have renal protective effects. The Explore-CKD trial was designed to provide data that augments the antihypertensive profile of lorundrostat by evaluating the efficacy and safety of lorundrostat in participants with compromised renal function. We had already completed three trials of lorundrostat for the treatment of participants with uHTN, including rHTN, the pivotal Phase 3 Launch-HTN and Phase 2 Advance-HTN trials, and the Phase 2, dose-ranging, Target-HTN trial, which demonstrated clinically meaningful reductions in systolic BP and a favorable safety and tolerability profile. We continue to study lorundrostat in the ongoing, open-label Transform-HTN extension trial, which is evaluating long-term efficacy, safety, and tolerability. Additionally, the Explore-OSA trial, initiated in the first quarter of 2025, continues to enroll participants with OSA and uHTN, and we anticipate topline results in the first half of 2026. Financial Overview We commenced our operations in May 2019 and have devoted substantially all of our resources to date to organizing and staffing our company, business planning, raising capital, in-licensing our product candidate, lorundrostat, establishing our intellectual property portfolio, conducting research, preclinical studies, and clinical trials, and providing other general and administrative support for our operations. As of June 30, 2025, we had cash, cash equivalents, and investments of $324.9 million. Since inception, we have raised aggregate gross proceeds of approximately $717.4 million from the sale of common stock, convertible preferred stock, convertible notes, and pre-funded warrants. Beginning in April 2025 and through August 12, 2025, we have sold an aggregate of 1,237,944 ATM Shares for aggregate net proceeds of approximately $17.4 million after deducting commission to the Agents and other related costs. In March 2025, we sold 14,907,406 shares of common stock for net proceeds of approximately $188.7 million after deducting an underwriting discount of 6% and other offering expenses. In February 2024, we sold 8,339,169 shares of common stock and, to certain purchasers, 549,755 pre-funded warrants to purchase common stock for aggregate net proceeds of approximately $116.1 million, net of offering expenses, in a private placement offering (the Private Placement). We do not have any products approved for sale, have not generated any revenue, and have incurred net losses since our inception. Our operations to date have been limited to business planning, raising capital, in-licensing and developing lorundrostat, conducting clinical trials, and other research and development and other activities. Our net losses for the six months ended June 30, 2025 and 2024 were $85.5 million and $72.5 million, respectively. As of June 30, 2025 and December 31, 2024, we had an accumulated deficit of $388.0 million and $302.5 million, respectively. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical development activities and other research and development activities. We expect our expenses and operating losses will increase substantially as we conduct our ongoing and planned clinical trials for lorundrostat, seek regulatory approval for lorundrostat and potentially any future product candidates we may develop, expand our clinical, regulatory, quality, manufacturing, and commercialization capabilities, obtain, maintain, protect and enforce our intellectual property, expand our general and administrative support functions, including hiring additional personnel, and incur additional costs associated with operating as a public company. Based on our current operating plan, we believe that our cash, cash equivalents, and investments will be sufficient to allow us to fund our operations for at least twelve months. We have never generated any revenue and do not expect to generate any revenue from product sales unless and until we successfully complete the development of, and obtain regulatory approval for, lorundrostat, if ever. Accordingly, until such time as we can generate significant revenue from sales of lorundrostat, if ever, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to 22 Table of Contents develop and market product candidates that we would otherwise prefer to develop and market ourselves. For more information, see “ Liquidity and Capital Resources .” License Agreement with Mitsubishi Tanabe In July 2020, we entered into a license agreement (the Mitsubishi License) with Mitsubishi Tanabe Pharmaceutical Company (Mitsubishi Tanabe), pursuant to which Mitsubishi Tanabe granted us 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, we paid Mitsubishi Tanabe a $1.0 million upfront fee and development milestone payments of $9.0 million in the aggregate. We have 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, we are 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. We have 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 six months ended June 30, 2025 and 2024. We are 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 we elect to sublicense our rights under the Mitsubishi License to a third party with respect to exploitation of lorundrostat or any Lorundrostat Product in certain countries in Asia, we have agreed to negotiate such a sublicense first, for a specified period of time, with Mitsubishi Tanabe, if Mitsubishi Tanabe notifies us that it would like to obtain such a sublicense. We 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. Public Offering In March 2025, we 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 our 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. We are using the net proceeds from this offering to fund the clinical development of lorundrostat, including research and development, 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, we entered into an ATM Equity Offering Sales Agreement (the ATM Agreement) with BofA Securities, Inc. and Evercore Group L.L.C. as our sales agents (the Agents) and/or principals. Pursuant to the terms of the ATM Agreement, we may sell from time to time through the Agents shares of our common stock having an aggregate offering price of up to $100.0 million (the ATM Shares). The ATM Shares will be issued pursuant to the Registration Statement. Sales of the ATM Shares will be made by means of 23 Table of Contents ordinary brokers’ transactions on the Nasdaq Global Select Market or as otherwise agreed by us and the Agents. Under the terms of the ATM Agreement, we 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 us and such Agent. Beginning in April 2025 and through June 30, 2025, we sold an aggregate of 674,518 ATM Shares at a weighted-average price of $14.15 per share for aggregate net proceeds of approximately $9.5 million after deducting commissions to the Agents and other related costs. As of June 30, 2025, we had approximately $90.5 million of ATM Shares remaining available for sale pursuant to the ATM Agreement. Subsequent to June 30, 2025 and through August 12, 2025, we sold an additional 563,426 ATM Shares at a weighted-average price of $14.03 per share for aggregate net proceeds of approximately $7.9 million after deducting commissions to the Agents. Private Placement Offering On February 7, 2024, we entered into a securities purchase agreement (the Purchase Agreement) with the purchasers named therein (the Purchasers), for the Private Placement of (i) 8,339,169 shares (the Shares) of our 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. We are 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, we 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 us. We registered the resale of the Shares and the Warrant Shares on the Registration Statement. Pursuant to the Purchase Agreement, we agreed to use our 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 or any other rule of similar effect. Key Components of Results of Operations Operating Expenses Research and Development Research and development expenses consist primarily of external and internal costs related to the development of lorundrostat. Research and development expenses are recognized as incurred, and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods are received or when the services are performed. 24 Table of Contents Research and development expenses include: • salaries, bonuses, employee benefits, and stock-based compensation charges for those individuals involved in research and development efforts; • external research and development expenses incurred under agreements with contract research organizations (CROs) and consultants to conduct and support our clinical trials of lorundrostat; • costs related to manufacturing lorundrostat for our clinical trials; and • costs related to advancing our commercial readiness activities in preparation for a potential launch of lorundrostat for patients with uHTN or rHTN, if approved by the FDA. We have increased and plan to continue to substantially increase our research and development expenses for the foreseeable future as we continue the development of lorundrostat. We cannot determine with certainty the timing of initiation, the duration, or the completion costs of current or future clinical trials and preclinical studies of lorundrostat or any future product candidates due to the inherently unpredictable nature of clinical and preclinical development. Clinical and preclinical development timelines, the probability of success, and development costs can differ materially from expectations. In addition, we cannot forecast whether lorundrostat or any future product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements. Our future development costs may vary significantly based on factors such as: • the initiation, type, number, scope, progress, expansions, results, costs, and timing of clinical trials and preclinical studies of lorundrostat and any future product candidates we may choose to pursue, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; • our ability and strategic decision to develop future product candidates other than lorundrostat, and the timing of such development, if any; • our ability to receive timely regulatory approvals for lorundrostat, any future product candidates, and additional indications of lorundrostat and any future product candidates, in the jurisdictions in which we or any future partners apply for such approvals; • the costs and timing of manufacturing lorundrostat or any future product candidates for use in our trials, including as a result of inflation, changes in international trade policies and tariffs, any supply chain issues, or component shortages; • any additional jurisdictions in which we may seek approval for lorundrostat and any future product candidates and the timing of seeking approval in such jurisdictions; • the drop-out or discontinuation rates of clinical trial participants; • potential additional safety monitoring requested by regulatory agencies; • the duration of participant participation in the trials and follow-up; • the phase of development of the product candidate; • the efficacy and safety profile of the relevant product candidate; and • the extent to which we establish strategic collaborations or other arrangements. 25 Table of Contents General and Administrative Expenses General and administrative expenses consist primarily of personnel-related expenses, including employee salaries, bonuses, benefits, and stock-based compensation charges, for personnel in executive and administrative functions. Other significant general and administrative expenses include legal fees relating to intellectual property and corporate matters, professional fees for accounting, tax and consulting services, and insurance costs. We expect our general and administrative expenses will increase for the foreseeable future to support our increased research and development activities, manufacturing activities, and the increased costs associated with operating as a public company. These increased costs will likely include increased expenses related to the hiring of additional personnel, audit, legal, regulatory, and tax-related services associated with maintaining compliance with the exchange listing and the SEC requirements and requirements of the Sarbanes-Oxley Act of 2002, director and officer insurance costs, investor and public relations costs, business development, and medical affairs. Other Income, Net Interest Income, Net Interest income reported in each period is associated with our investments in money market funds and U.S. treasuries, net of fees, or other related expenses. Results of Operations Comparison of the Three Months Ended June 30, 2025 and 2024 Three Months Ended, June 30, 2025 2024 Change (in thousands) Research and development expenses $ (38,278) $ (39,273) $ 995 General and administrative expenses (8,468) (5,895) (2,573) Total other income, net 3,472 4,154 (682) Net loss $ (43,274) $ (41,014) $ (2,260) Research and Development Expenses Research and development expenses decreased by $1.0 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, which was primarily due to a decrease of $4.5 million in preclinical and clinical costs driven by the conclusion of the lorundrostat pivotal program in the second quarter of 2025, partially offset by increases of $2.7 million in higher compensation expense resulting from additions to headcount, increases in salaries and accrued bonuses and increased stock-based compensation, and $0.8 million in higher clinical supply, manufacturing, regulatory, and other costs. General and Administrative Expenses General and administrative expenses increased by $2.6 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The increase was primarily due to $1.9 million in higher compensation expense resulting from additions to headcount, increases in salaries and accrued bonuses, and increased stock-based compensation, $0.6 million in higher professional fees, and $0.1 million in other administrative expenses. Total Other Income, Net Total other income, net decreased by $0.7 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, which was primarily attributable to decreased interest earned on our 26 Table of Contents investments in money market funds and U.S. treasuries as a result of lower average cash balances invested during the three months ended June 30, 2025. Results of Operations Comparison of the Six Months Ended June 30, 2025 and 2024 Six Months Ended, June 30, 2025 2024 Change (in thousands) Research and development expenses $ (76,157) $ (70,027) $ (6,130) General and administrative expenses (15,036) (10,503) (4,533) Total other income, net 5,708 8,008 (2,300) Net loss $ (85,485) $ (72,522) $ (12,963) Research and Development Expenses Research and development expenses increased by $6.1 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, which was primarily due to an increase of $5.6 million in compensation expense resulting from additions to headcount, increases in salaries and accrued bonuses, and increased stock-based compensation, $0.3 million in higher preclinical and clinical costs, and $0.2 million in clinical supply, manufacturing, and regulatory costs. General and Administrative Expenses General and administrative expenses increased by $4.5 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The increase was primarily due to $3.1 million in higher compensation expense resulting from additions to headcount, increases in salaries and accrued bonuses, and increased stock-based compensation, $1.3 million in higher professional fees, and $0.1 million in other administrative expenses. Total Other Income, Net Total other income, net decreased by $2.3 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, which was primarily attributable to decreased interest earned on our investments in money market funds and U.S. treasuries as a result of lower average cash balances invested during the six months ended June 30, 2025. Liquidity and Capital Resources We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses and have negative cash flows from operations for the foreseeable future as we continue the development of, seek regulatory approval for, and potentially commercialize lorundrostat, seek to identify, assess, acquire, and in-license intellectual property related to or develop additional product candidates and operate as a public company. Since inception, we have raised aggregate gross proceeds of approximately $717.4 million from the sale of common stock, convertible preferred stock, convertible notes, and pre-funded warrants. As of June 30, 2025, we had cash, cash equivalents, and investments of $324.9 million. Beginning in April 2025 and through August 12, 2025, we have sold an aggregate of 1,237,944 ATM Shares for aggregate net proceeds of approximately $17.4 million after deducting commission to the Agents and other related costs. In March 2025, we sold 14,907,406 shares of common stock for net proceeds of approximately $188.7 million after deducting an underwriting discount of 6% and other offering expenses. In February 2024, we sold 8,339,169 Shares and, to certain Purchasers, 549,755 Pre-Funded Warrants for aggregate net proceeds of approximately $116.1 million in the Private Placement. 27 Table of Contents Our primary uses of cash to date have been to fund our research and development and other activities, including with respect to lorundrostat, business planning, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations. Funding Requirements Based on our current operating plan, we believe that our cash, cash equivalents, and investments as of June 30, 2025 will be sufficient to allow us to fund our operations for at least twelve months. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain. Our future capital requirements will depend on many factors, including, but not limited to: • the initiation, type, number, scope, progress, expansions, results, costs, and timing of clinical trials and preclinical studies of lorundrostat and any future product candidates we may choose to pursue, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; • our ability and strategic decision to develop future product candidates other than lorundrostat, and the timing of such development, if any; • our ability to receive timely regulatory approvals for lorundrostat, any future product candidates, and additional indications of lorundrostat and any future product candidates, in the jurisdictions in which we or any future partners apply for such approvals; • the costs and timing of manufacturing for lorundrostat, or any future product candidate, including commercial manufacture at sufficient scale, if any product candidate is approved, including as a result of inflation, any supply chain issues, or component shortages; • any additional jurisdictions in which we may seek approval for lorundrostat and any future product candidates and timing of seeking approval in such jurisdictions; • the costs, timing, and outcome of regulatory meetings and reviews of lorundrostat or any future product candidates; • the costs of obtaining, maintaining, enforcing, and protecting our patents and other intellectual property and proprietary rights; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal control over financial reporting; • the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, manufacturing, quality, and commercial personnel; • the timing and amount of the milestone, royalty, or other payments we must make to Mitsubishi Tanabe, from whom we have in-licensed lorundrostat, or any future licensors; • the costs and timing of establishing or securing sales and marketing capabilities if lorundrostat or any future product candidate is approved; 28 Table of Contents • our ability to achieve sufficient market acceptance, coverage, and adequate reimbursement from third-party payors, and adequate market share and revenue for any approved products; • patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors; • the terms and timing of establishing and maintaining collaborations, licenses, and other similar arrangements; • costs associated with any products or technologies that we may in-license or acquire; • any delays and cost increases that may result from any pandemic or other healthcare emergency; and • the other risks and uncertainties described under the heading “ Risk Factor s ,” “ Special Note Regarding Forward-Looking Statements , ” and elsewhere in this Quarterly Report. Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from factors that include but are not limited to, geopolitical conflict in and around Ukraine, Israel, Iran and other areas of the world, inflation, changes in international trade policies and tariffs, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive. If we raise additional funds through future collaborations, licenses, or other similar arrangements with third parties, we may have to relinquish valuable rights to our future revenue streams, product candidates, research programs, intellectual property or proprietary technology, or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed or on terms acceptable to us, we may be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves, or on less favorable terms than we would otherwise choose. 29 Table of Contents Cash Flows Comparison of the Six Months Ended June 30, 2025 and 2024 Since our inception, we have primarily used our available cash to fund expenditures related to the in-license and development of lorundrostat. The following table sets forth a summary of cash flows for the periods presented (in thousands): Six Months Ended June 30, 2025 2024 Change Net cash provided by (used in): Operating activities $ (75,656) $ (49,285) $ (26,371) Investing activities (135,757) (48,216) (87,541) Financing activities 199,110 116,053 83,057 Net $ (12,303) $ 18,552 $ (30,855) Operating Activities Net cash used in operating activities was $75.7 million during the six months ended June 30, 2025, compared to $49.3 million during the six months ended June 30, 2024, resulting in an increase that was primarily attributable to an increase in cash used to support our operating activities, including but not limited to, the development of lorundrostat and related clinical trial expenses, personnel and compensation expense, legal and professional fees to support our operations, and general working capital requirements. The $26.4 million increase in cash used consisted of the net effect of changes in working capital of $18.6 million and an increase in net loss, adjusted for non-cash expenses, of approximately $7.7 million. Investing Activities Net cash used in investing activities was $135.8 million for the six months ended June 30, 2025, compared to $48.2 million for the six months ended June 30, 2024. The increase in cash used was primarily driven by the timing and volume of purchases and maturities of marketable securities in each period. There was a $92.5 million decrease in maturities of previously purchased marketable securities, partially offset by a $4.9 million decrease in purchases of marketable securities during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Financing Activities Net cash provided by financing activities of $199.1 million during the six months ended June 30, 2025, increased compared to $116.1 million during the six months ended June 30, 2024. During the six months ended June 30, 2025, we received net proceeds of $188.9 million from the sale of common stock in a public offering and $8.9 million from the sale of ATM Shares, and during the six months ended June 30, 2024, we received net proceeds of $116.1 million from the sale of Shares and Pre-Funded Warrants in the Private Placement. Additionally, during the six months ended June 30, 2025, we received increased proceeds of $1.0 million from stock option exercises as compared to the six months ended June 30, 2024. Contractual Obligations and Commitments Under the Mitsubishi License, we have milestone payment obligations that are contingent upon the achievement of specified levels of product sales and are required to make certain royalty payments in connection with the sale of products developed under the agreement. We are currently unable to estimate the timing or likelihood of achieving other future milestones or making future product sales. See above and Note 4. “ Commitments and Contingencies ” to our condensed financial statements included elsewhere in this Quarterly Report for additional information regarding the Mitsubishi License. 30 Table of Contents We enter into contracts in the normal course of business for contract research services, contract manufacturing services, professional services, and other services and products for operating purposes. These contracts generally provide for termination after a notice period, and, therefore, are cancelable contracts. Critical Accounting Estimates We have prepared the condensed financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosures at the date of the condensed financial statements, and the reported amounts of expenses during the reporting period. On an ongoing basis, management evaluates its critical estimates, including those related to prepaid and accrued research and development expenses. We base our estimates on our historical experience and on assumptions that we believe are reasonable; however, actual results may differ materially from these estimates under different assumptions or conditions. There were no changes during the six months ended June 30, 2025 to our critical accounting estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024. For information on our significant accounting policies, please refer to Note 2. “ Summary of Significant Accounting Policies ” within our Annual Report on Form 10-K for the year ended December 31, 2024. JOBS Act and Smaller Reporting Company Status As an emerging growth company under the Jumpstart Our Business Startups Act of 2012, as amended (the JOBS Act), we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. We intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of our initial public offering in February 2023, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if, among other factors, the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year (subject to certain conditions), or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. We are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter. 31 Table of Contents Recently Issued Accounting Pronouncements We have reviewed all recently issued accounting pronouncements and have determined that, other than as disclosed elsewhere in this Quarterly Report, such standards do not have a material impact on our condensed financial statements or do not otherwise apply to our operations.