What changed in this filing

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Item 1. Financial Statements

2024-07-11 compared with 2024-04-10 · 129 added, 94 removed, 528 unchanged (30% of the section changed)

27 unchanged sentences

Stockholdersʼ equity:

Preferred stock, $ 0.001 par value— 10,000,000 shares authorized as of February 29, 2024 and November 30, 2023;

no shares issued and outstanding as of February 29, 2024 and November 30, 2023

Common stock, $ 0.001 par value— 500,000,000 shares authorized as of February 29, 2024 and November 30, 2023;

49,136,954 and 48,718,552 shares issued and outstanding as of February 29, 2024 and November 30, 2023, respectively

Preferred stock, $ 0.001 par value— 10,000,000 shares authorized as of May 31, 2024 and November 30, 2023;

no shares issued and outstanding as of May 31, 2024 and November 30, 2023

Common stock, $ 0.001 par value— 500,000,000 shares authorized as of May 31, 2024 and November 30, 2023;

64,356,535 and 48,718,552 shares issued and outstanding as of May 31, 2024 and November 30, 2023, respectively

Additional paid-in capital 1,002,028 746,299

8 unchanged sentences

Three Months Ended

February 29, 2024 February 28, 2023

May 31, Six Months Ended

2024 2023 2024 2023

Collaboration revenue $ 12,092 $ 10,676 $ 28,677 $ 23,361

License revenue — 20,000 — 20,000

Total revenue 12,092 30,676 28,677 43,361

15 unchanged sentences

Three Months Ended

February 29, 2024 February 28, 2023

May 31, Six Months Ended

2024 2023 2024 2023

Net loss $ ( 44,546 ) $ ( 24,277 ) $ ( 86,064 ) $ ( 65,010 )

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on available-for-sale marketable securities 305 1,072

Other comprehensive income, net of tax:

Unrealized gain on available-for-sale marketable securities 215 1,344 520 2,416

Total comprehensive loss $ ( 44,331 ) $ ( 22,933 ) $ ( 85,544 ) $ ( 62,594 )

19 unchanged sentences

Balance as of February 28, 2023 47,444,853 47 719,237 ( 3,247 ) ( 441,985 ) 274,052

Exercise of pre-funded warrants 148,497 1 — — — 1

Exercise of stock options 5,597 — 24 — — 24

Vesting of restricted stock units 32,261 — — — — —

Vesting of early exercised stock options — — 31 — — 31

Stock-based compensation — — 8,746 — — 8,746

Unrealized gain on available-for-sale marketable securities — — — 1,344 — 1,344

Net loss — — — — ( 24,277 ) ( 24,277 )

Balance as of May 31, 2023 47,631,208 $ 48 $ 728,038 $ ( 1,903 ) $ ( 466,262 ) $ 259,921

Common stock Additional

15 unchanged sentences

Balance as of February 29, 2024 49,136,954 49 755,767 ( 350 ) ( 586,718 ) 168,748

Issuance of common stock and pre-funded warrants in connection with equity financing, net of issuance costs of $ 12,518

11,916,667 12 188,720 — — 188,732

Issuance of common stock in "at the market" financing, net of issuance costs of $ 1,684

3,194,809 3 48,466 — — 48,469

Exercise of stock options 24,108 — 216 — — 216

Vesting of restricted stock units 83,997 — — — — —

Vesting of early exercised stock options — — 12 — — 12

Stock-based compensation — — 8,847 — — 8,847

Unrealized gain on available-for-sale marketable securities — — — 215 — 215

Net loss — — — — ( 44,546 ) ( 44,546 )

Balance as of May 31, 2024 64,356,535 $ 64 $ 1,002,028 $ ( 135 ) $ ( 631,264 ) $ 370,693

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended

February 29, 2024 February 28, 2023

Six Months Ended May 31,

Cash flows from operating activities

3 unchanged sentences

Stock-based compensation 16,667 17,204

Net amortization (accretion) of premium (discount) on marketable securities ( 1,930 ) ( 818 )

Net accretion of discount on marketable securities ( 4,089 ) ( 1,808 )

Loss on disposal of property and equipment — 96

11 unchanged sentences

Purchases of property and equipment ( 4,821 ) ( 3,357 )

Net cash provided by investing activities 35,513 16,068

Net cash (used in) provided by investing activities ( 95,557 ) 59,899

Cash flows from financing activities

Proceeds from issuances of common stock and pre-funded warrants in equity financing, net of issuance costs 188,902 —

Proceeds from issuances of common stock in "at the market" financing, net of issuance costs 48,649 —

Proceeds from exercise of stock options 571 53

Proceeds from issuance under employee stock purchase plan 1,269 1,453

Repurchase of unvested early exercised stock options ( 15 ) —

Net cash provided by financing activities 239,376 1,506

Net decrease in cash, cash equivalents and restricted cash ( 4,814 ) ( 30,903 )

Net increase (decrease) in cash, cash equivalents and restricted cash 62,163 ( 5,516 )

Cash, cash equivalents and restricted cash at beginning of period 55,528 65,375

2 unchanged sentences

Additions to property and equipment included in accounts payable and accrued expenses and other current liabilities $ 1,932 $ 3,045

Right-of-use assets recognized in exchange for lease obligations $ 1,297 $ —

Capitalized stock-based compensation related to internal-use software development $ 3 $ 47

Issuance costs related to equity financing included in accrued expenses and other current liabilities $ 170 $ —

Deferred issuance costs recognized related to the "at the market" financing $ 180 $ —

Vesting of early exercised stock options $ 33 $ 62

Repurchase of unvested early exercised stock options included in accrued expenses and other current liabilities $ 15 $ —

Three Months Ended

February 29, 2024 February 28, 2023

As of May 31,

Reconciliation of cash, cash equivalents and restricted cash:

18 unchanged sentences

Equity Distribution Agreement

In August 2021, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC), which was amended in February 2023.

This shelf registration statement, which includes a base prospectus, allows the Company at any time to offer and sell up to $ 450.0 million of the Company’s registered common stock, preferred stock, debt securities, warrants, subscriptions rights and or units or any combination of securities described in the prospectus in one or more offerings.

In August 2021, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC), which was amended in February 2023 (the Shelf Registration Statement).

The Shelf Registration Statement, which includes a base prospectus, allows the Company at any time to offer and sell up to $ 450.0 million of the Company’s registered common stock, preferred stock, debt securities, warrants, subscriptions rights and/or units or any combination of securities described in the prospectus in one or more offerings.

In addition, in August 2021, the Company entered into an Equity Distribution Agreement with Piper Sandler & Co.

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In June 2022, the Company issued and sold 2,000,000 shares of common stock under the Equity Distribution Agreement at a price of $ 10.00 per share of common stock for net proceeds of $ 19.3 million after deducting offering commissions and expenses paid by the Company.

As of February 29, 2024, the Company had $ 130.0 million of common stock remaining available for sale under the Equity Distribution Agreement.

In May 2024, the Company issued and sold 3,194,809 shares of common stock under the Equity Distribution Agreement at various prices ranging from $ 15.50 to $ 16.00 for total net proceeds of $ 48.5 million, after deducting offering commissions and expenses paid by the Company.

As of May 31, 2024, the Company had $ 79.8 million of common stock remaining available for sale under the Equity Distribution Agreement.

In June 2024, the Company filed an automatic shelf registration statement on Form S-3ASR (the Automatic Shelf Registration Statement).

The Automatic Shelf Registration Statement, which includes a base prospectus, allows the Company at any time to offer and sell the Company’s registered common stock, preferred stock, debt securities, warrants, subscriptions rights and/or units or any combination of securities described in the prospectus in one or more offerings.

On July 11, 2024, the Company entered into an amendment to the Equity Distribution Agreement, pursuant to which, from time to time, the Company may offer and sell through Piper Sandler up to $ 150.0 million of common stock registered under the Automatic Shelf Registration Statement pursuant to one or more “at the market” offerings.

As of July 11, 2024, the Company had $ 150.0 million of common stock remaining available for sale under the Equity Distribution Agreement.

Public Offering

In April 2024, the Company completed a public offering (2024 Public Offering) made pursuant to the Shelf Registration Statement and issued 11,916,667 shares of common stock (including the exercise by the underwriters of their option to purchase an additional 1,750,000 shares of common stock) at a price to the public of $ 15.00 per share, and pre-funded warrants to purchase an aggregate of 1,500,100 shares of the Company’s common stock at a price of $ 14.999 per pre-funded warrant (the 2024 Pre-Funded Warrants).

Net proceeds from the 2024 Public Offering were approximately $ 188.7 million, after deducting offering commissions and expenses of $ 12.5 million.

Refer to Note 7 for more information regarding the 2024 Pre-Funded Warrants.

Registered Direct Offerings

In July 2022, the Company entered into separate securities purchase agreements with certain purchasers to issue and sell pre‑funded warrants to purchase an aggregate of 6,814,920 shares of the Company’s common stock in registered direct offerings (RDOs) at a price of $ 13.939 per pre-funded warrant.

Net proceeds from the RDOs were $ 94.8 million, after deducting offering expenses of $ 0.2 million.

Refer to Note 7 for more information regarding the pre-funded warrants issued in the RDOs.

Refer to Note 7 for more information regarding the 2022 Pre-Funded Warrants.

Liquidity and Management Plans

4 unchanged sentences

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As of February 29, 2024, the Company had cash, cash equivalents and short-term marketable securities of $ 244.0 million and an accumulated deficit of $ 586.7 million.

As of May 31, 2024, the Company had cash, cash equivalents and short-term marketable securities of $ 443.1 million and an accumulated deficit of $ 631.3 million.

Management believes that its cash, cash equivalents and short-term marketable securities are sufficient to continue operating activities for at least 12 months following the issuance date of these condensed consolidated financial statements.

3 unchanged sentences

Management considered whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern and evaluated the funds necessary to maintain operations.

If the Company is unable to obtain additional funding, management will be required to implement plans that are within the Company’s control, which may include the delay or scaling back of certain research and development programs, to maintain liquidity and operations.

Based on the Company’s current forecast of future operating results and management’s plans to improve liquidity, the Company has concluded that its cash, cash equivalents and short-term marketable securities are sufficient to continue operating activities for at least 12 months following the issuance date of these condensed consolidated financial statements.

Based on the Company’s current forecast of future operating results, the Company has concluded that its cash, cash equivalents and short-term marketable securities are sufficient to continue operating activities for at least 12 months following the issuance date of these condensed consolidated financial statements.

Summary of Significant Accounting Policies

3 unchanged sentences

GAAP) and applicable rules and regulations of the SEC regarding interim financial reporting.

The Company’s condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair statement of the Company’s financial position as of and for the three months ended February 29, 2024.

The condensed consolidated balance sheet as of November 30, 2023, was derived from the audited annual financial statements as of that date.

17 unchanged sentences

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents and marketable securities.

The Company’s marketable securities consist of debt securities issued by highly rated corporate entities, the U.S.

The Company’s marketable securities consist of debt securities issued by the U.S.

federal government or state and local governments.

82 unchanged sentences

In February and March 2024, as part of the existing collaboration agreement, Gilead elected to extend the five-year initial research term by two years for certain drug targets (Gilead Research Term Extension).

The Gilead Research Term Extension triggered a $ 15.0 million payment that the Company expects to receive in the second quarter of fiscal year 2024.

The Gilead Research Term Extension triggered a $ 15.0 million payment that the Company received in the second quarter of fiscal year 2024.

Under the Gilead Agreement, Gilead has the option to license drug candidates directed to up to five targets resulting from the collaboration and is responsible for the clinical development and commercialization of drug candidates resulting from the collaboration.

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Upon signing the Gilead Agreement, Gilead paid the Company an upfront payment of $ 45.0 million plus $ 3.0 million in additional fees.

In addition, from the signing of the Gilead Agreement to February 29, 2024, the Company has received payments of $ 47.0 million for research milestones and additional payments and $ 20.0 million for a license option exercise payment.

As of February 29, 2024, the Company is eligible to receive up to approximately $ 1.8 billion in total additional payments based on certain additional fees, payments and the successful completion of certain preclinical, clinical, development and sales milestones.

In addition, from the signing of the Gilead Agreement to May 31, 2024, the Company has received payments of $ 47.0 million for research milestones and additional payments, $ 20.0 million for a license option exercise payment and $ 15.0 million in research term extension fees.

As of May 31, 2024, the Company is eligible to receive up to approximately $ 1.8 billion in total additional payments, including payments of up to $ 513.5 million upon the achievement of specified research and development milestones, up to $ 60.0 million in certain additional fees related to target licensing and reservation and up to $ 1.2 billion upon the achievement of certain sales milestones.

The Company also is eligible to receive mid-single digit to low tens percentage tiered royalties on annual net sales from any commercial products directed to the optioned collaboration targets, subject to certain reductions and excluding sales in the United States of any products for which the Company exercises its option to co-develop and co-promote, for which the parties share profits and losses evenly.

7 unchanged sentences

In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract.

Certain milestone payments and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of February 29, 2024.

Certain milestone payments and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of May 31, 2024.

The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

The Company determined that the transaction price at the inception of the Gilead Agreement consisted of the upfront payment of $ 45.0 million and $ 3.0 million in additional fees.

The Company determined that the transaction price at the inception of the initial research term consisted of the upfront payment of $ 45.0 million and $ 3.0 million in additional fees.

Upon the achievement of research milestones and additional fees related to target reservations, $ 47.0 million in variable consideration was added to the transaction price, and a cumulative effect was recorded as revenue in the period the transaction price increased.

The transaction price is recognized as collaboration revenue using the cost-based input method over the estimated research term of five years .

The contract term was determined to be the five-year initial research term which represents the estimated timing of completion of the identified deliverables.

Additionally, the Company considered the impact of Gilead terminating the Gilead Agreement prior to the completion of the research services during the initial five-year research term and determined that there were significant economic costs to Gilead for doing so, and as such, did not adjust the contract term.

The transaction price is recognized as collaboration revenue using the cost-based input method over the estimated initial research term of five years , which represents the estimated timing of completion of the identified deliverables.

Additionally, the Company considered the impact of Gilead terminating the Gilead Agreement prior to the completion of the research services during the five-year initial research term and determined that there were significant economic costs to Gilead for doing so, and as such, did not adjust the contract term.

The Gilead Research Term Extension, which has a term of two years and did not represent a material right at the inception of the Gilead Agreement, because it does not contain a significant and incremental discount, will be accounted for as a separate contract commencing in June 2024.

3 unchanged sentences

Total estimated costs are primarily driven by the number of estimated FTEs, which requires significant management judgment.

For the three months ended February 29, 2024, the Company recognized collaboration revenue related to the Gilead Agreement of $ 4.6 million, all of which was included in deferred revenue as of November 30, 2023.

For the three months ended February 28, 2023, the Company recognized collaboration revenue related to the Gilead Agreement of $ 7.4 million, of which $ 2.8 million was included in deferred revenue as of November 30, 2022, and $ 4.1 million was related to activities satisfied in previous periods.

As of February 29, 2024, deferred revenue related to the Gilead Agreement was $ 5.3 million, all of which was current.

For the three and six months ended May 31, 2024, the Company recognized collaboration revenue related to the Gilead Agreement of $ 4.9 million and $ 9.5 million, respectively, all of which was included in deferred revenue as of November 30, 2023.

For the three and six months ended May 31, 2023, the Company recognized collaboration revenue related to the Gilead Agreement of $ 5.7 million and $ 13.1 million, respectively, of which $ 5.7 million and $ 8.5 million, respectively, was included in deferred revenue as of November 30, 2022, and zero and $ 4.1 million, respectively, was related to activities satisfied in previous periods.

The Company also recognized $ 20.0 million in license revenue received pursuant to the Gilead License Option Exercise during the three and six months ended May 31, 2023.

As of May 31, 2024, deferred revenue related to the Gilead Agreement was $ 15.5 million, of which $ 9.0 million was current.

As of November 30, 2023, deferred revenue related to the Gilead Agreement was $ 10.0 million, all of which was current.

21 unchanged sentences

Subsequently, in January 2021, Sanofi paid the Company an additional $ 22.0 million to exercise its option to expand the number of targets beyond the initial targets included in the collaboration.

In addition, from the signing of the Sanofi Agreement to February 29, 2024, the Company has received payments of $ 11.0 million for research milestones.

Additionally, the Company achieved a research milestone in February 2024 and received a payment of $ 2.0 million in the second quarter of fiscal year 2024.

As of February 29, 2024, the Company is eligible to receive up to approximately $ 2.4 billion in total additional payments based on certain additional fees, payments and the successful completion of certain research development, regulatory and sales milestones, as well as mid-single digit to low teen percentage tiered royalties on annual net sales of any commercial products that may result from the collaboration, subject to certain reductions and excluding sales in the United States of any products for which the Company exercises its option to co-develop and co-promote, for which the parties share profits and losses evenly.

In addition, from the signing of the Sanofi Agreement to May 31, 2024, the Company has received payments of $ 13.0 million for research milestones.

As of May 31, 2024, the Company is eligible to receive up to approximately $ 2.4 billion in total additional payments, including payments of up to $ 487.0 million upon the achievement of specified research and development milestones, up to $ 78.5 million in certain additional fees related to target licensing and reservation, up to $ 625.0 million upon the achievement of specified regulatory milestones and up to $ 1.3 billion upon the achievement of certain sales milestones.

The Company is also eligible to receive mid-single digit to low teen percentage tiered royalties on annual net sales of any commercial products that may result from the collaboration, subject to certain reductions and excluding sales in the United States of any products for which the Company exercises its option to co-develop and co-promote, for which the parties share profits and losses evenly.

Subject to earlier expiration in certain circumstances, the Sanofi Agreement expires on a licensed product-by-licensed product or profit-shared licensed product-by-profit-shared licensed product basis and country-by-country basis upon on the later of (1) the expiration of the last-to-expire patent with a valid claim covering the applicable licensed product in the applicable country, (2) the expiration of any regulatory exclusivity for the applicable licensed product in the applicable country or (3) ten years after the first commercial sale of the applicable licensed product in the applicable country covered by the Sanofi Agreement.

5 unchanged sentences

In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract.

Certain milestone payments and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of February 29, 2024.

Certain milestone payments and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of May 31, 2024.

The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

At the inception of the Sanofi Agreement, the Company determined that the transaction price consisted of the upfront payment of $ 55.0 million for three initial drug targets and $ 22.0 million for two additional targets.

Subsequently, upon the achievement of research milestones, $ 13.0 million in variable consideration was added to the transaction price, which includes $ 2.0 million added during the three months ended February 29, 2024, and a cumulative effect was recorded as revenue in the period the transaction price increased.

Subsequently, upon the achievement of research milestones, $ 13.0 million in variable consideration was added to the transaction price, and a cumulative effect was recorded as revenue in the period the transaction price increased.

Revenue is recognized using the cost-based input method over the research term of 4.25 years, the revised research period that was agreed to in January 2021 in the First Sanofi Amendment for certain targets, and 5.25 years, the revised research period due to the target substitutions in July 2022, for certain other targets.

The research period for STAT6 will be extended as part of the Sixth Sanofi Amendment in the second quarter of fiscal year 2024 and a cumulative effect is expected to be recorded.

The research period for STAT6 was extended as part of the Sixth Sanofi Amendment and a cumulative effect was recorded in the second quarter of fiscal year 2024.

Using the cost-based input method, which the Company determined most faithfully depicts the transfer of its performance obligation to Sanofi, the Company recognizes revenue based on actual costs incurred as a percentage of total estimated costs as the Company completes its performance obligation under the contract.

2 unchanged sentences

Total estimated costs are primarily driven by the number of estimated FTEs, which requires significant management judgment.

For the three months ended February 29, 2024, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 8.3 million, of which $ 6.8 million was included in deferred revenue as of November 30, 2023, and $ 1.3 million was related to activities satisfied in previous periods.

For the three months ended February 28, 2023, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 5.3 million, of which $ 4.9 million was included in deferred revenue as of November 30, 2022 and $ 0.4 million was related to activities satisfied in previous periods.

As of February 29, 2024, deferred revenue related to the Sanofi Agreement was $ 22.5 million, of which $ 21.5 million was included as deferred revenue, current, and included $ 2.0 million in contract assets representing the unbilled amount related to the research milestone achieved in February 2024.

As of November 30, 2023, deferred revenue related to the Sanofi Agreement was $ 24.9 million, of which $ 20.3 million was included as deferred revenue, current, and included $ 4.0 million in contract assets representing the unbilled amount related to the research milestone achieved in November 2023.

For the three and six months ended May 31, 2024, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 2.0 million and $ 10.3 million, respectively, of which $ 2.0 million and $ 8.8 million, respectively, was included in deferred revenue as of November 30, 2023, and zero and $ 1.2 million, respectively, was related to activities satisfied in previous periods.

For the three and six months ended May 31, 2023, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 5.0 million and $ 10.3 million, respectively, of which $ 5.0 million and $ 9.8 million, respectively, was included in deferred revenue as of November 30, 2022, and zero and $ 0.4 million, respectively, was related to activities satisfied in previous periods.

As of May 31, 2024, deferred revenue related to the Sanofi Agreement was $ 20.5 million, of which $ 20.4 million was current.

As of November 30, 2023, deferred revenue related to the Sanofi Agreement was $ 24.9 million, of which $ 20.3 million was current, and included $ 4.0 million in contract assets representing the unbilled amount related to the research milestone achieved in November 2023.

In September 2023, the Company entered into a strategic collaboration with Seagen Inc.

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Under the terms of the Pfizer Agreement, the Company received an upfront payment of $ 60.0 million.

The Company is eligible to receive up to approximately $ 3.4 billion in contingent payments based on specified research, development, regulatory and commercial milestones across multiple programs, and is eligible for mid-single to low double digit percentage tiered royalties on future sales.

In addition, the Company achieved a research milestone in May 2024 and expects to receive a payment of $ 5.0 million in the third quarter of fiscal year 2024.

The Company is eligible to receive up to approximately $ 3.4 billion in contingent payments across multiple programs, including payments of up to $ 631.0 million upon the achievement of specified research and development milestones, up to $ 19.5 million in certain additional fees related to target licensing and reservation, up to $ 873.0 million upon the achievement of specified regulatory milestones and up to $ 1.8 billion upon the achievement of certain sales milestones.

The Company is also eligible for mid-single to low double digit percentage tiered royalties on future sales.

Subject to the exceptions described in the Pfizer Agreement, the Pfizer Agreement expires upon the first to occur of (1) the expiration of the last-to-expire option exercise period under the Pfizer Agreement if no such option has been exercised prior to such expiration and (2) the expiration of the last-to-expire royalty term under the Pfizer Agreement.

5 unchanged sentences

In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract.

Milestone payments and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of February 29, 2024.

Milestone payments and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of May 31, 2024.

The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

The Company determined that the transaction price at the inception of the Pfizer Agreement consisted of the upfront payment of $ 60.0 million.

The Company has not yet achieved any research milestones and no variable consideration has been added to the transaction price.

Subsequently, upon the achievement of a research milestone, $ 5.0 million in variable consideration was added to the transaction price and a cumulative effect was recorded as revenue in the period the transaction price increased.

The transaction price is recognized as collaboration revenue using the cost-based input method over the estimated research term of four years , which represents the estimated period to complete the identified deliverables.

4 unchanged sentences

Total estimated costs are primarily driven by the number of estimated FTEs, which requires significant management judgment.

For the three months ended February 29, 2024, the Company recognized collaboration revenue related to the Pfizer Agreement of $ 3.7 million, all of which was included in deferred revenue as of November 30, 2023.

As of February 29, 2024, deferred revenue related to the Pfizer Agreement was $ 54.7 million, of which $ 21.2 million was included as deferred revenue, current.

As of November 30, 2023, deferred revenue related to the Pfizer Agreement was $ 58.3 million, of which $ 17.9 million was included as deferred revenue, current.

For the three and six months ended May 31, 2024, the Company recognized collaboration revenue related to the Pfizer Agreement of $ 5.2 million and $ 8.9 million, respectively, of which $ 4.4 million and $ 8.1 million, respectively, was included in deferred revenue as of November 30, 2023 and $ 0.5 million and $ 0.1 million, respectively, was related to activities satisfied in previous periods.

As of May 31, 2024, deferred revenue related to the Pfizer Agreement was $ 54.4 million, of which $ 22.3 million was current.

As of November 30, 2023, deferred revenue related to the Pfizer Agreement was $ 58.3 million, of which $ 17.9 million was current.

Condensed Consolidated Balance Sheet Components

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The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability.

The following tables present the Company’s investments, which consist of cash equivalents and available-for-sale marketable securities, that are measured at fair value on a recurring basis as of February 29, 2024 and November 30, 2023 (in thousands):

February 29, 2024 Level Amortized

May 31, 2024 Level Amortized

cost Unrealized

3 unchanged sentences

treasury securities Level 1 316,454 56 ( 49 ) 316,461

Corporate debt securities Level 2 3,485 — ( 12 ) 3,473

government agency securities Level 2 36,824 1 ( 77 ) 36,748

Long-term marketable securities:

treasury securities Level 1 1,954 — — 1,954

government agency securities Level 2 7,493 — ( 67 ) 7,426

17 unchanged sentences

Included in marketable securities, non-current $ 7,490 $ — $ ( 69 ) $ 7,421

The accrued interest receivable related to the Company’s marketable securities was $ 0.8 million as of both February 29, 2024 and November 30, 2023 and was included in prepaid expenses and other current assets on the condensed consolidated balance sheet.

The accrued interest receivable related to the Company’s marketable securities was $ 0.6 million and $ 0.8 million as of May 31, 2024 and November 30, 2023, respectively, and was included in prepaid expenses and other current assets on the condensed consolidated balance sheet.

Long-term marketable securities held by the Company generally mature within two years from the balance sheet date.

6 unchanged sentences

These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs.

There were no transfers of financial instruments between valuation levels during the three months ended February 29, 2024 and February 28, 2023.

As of February 29, 2024 and November 30, 2023, the unrealized losses for available-for-sale securities were non-credit related, and the Company does not intend to sell the securities that were in an unrealized loss position, nor will it be required to sell those securities before recovery of their amortized cost basis, which may be maturity.

As of February 29, 2024 and November 30, 2023, no allowance for credit losses for the Company’s marketable securities was recorded.

During the three months ended February 29, 2024 and February 28, 2023, the Company did not recognize any impairment losses related to marketable securities.

There were no transfers of financial instruments between valuation levels during the three and six months ended May 31, 2024 and 2023.

As of May 31, 2024 and November 30, 2023, the unrealized losses for available-for-sale securities were non-credit related, and the Company does not intend to sell the securities that were in an unrealized loss position, nor will it be required to sell those securities before recovery of their amortized cost basis, which may be maturity.

As of May 31, 2024 and November 30, 2023, no allowance for credit losses for the Company’s marketable securities was recorded.

During the three and six months ended May 31, 2024 and 2023, the Company did not recognize any impairment losses related to marketable securities.

Commitments and Contingencies

4 unchanged sentences

Legal fees and other costs associated with such actions are expensed as incurred.

As of February 29, 2024, the Company was not a party to any material legal proceedings.

As of May 31, 2024, the Company was not a party to any material legal proceedings.

Indemnifications

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The Company has an option to renew these leases for an additional two years , and the renewal term has not been included in the lease term used to calculate the ROU asset and lease liability as it is not reasonably certain that the Company will exercise the option.

In July 2021, the Company entered into a lease agreement for the lease of approximately 19,320 square feet of office space in a different building in San Francisco, California.

In July 2021, the Company entered into a lease agreement for the lease of approximately 19,320 square feet of office space in a different building in San Francisco, California (the Mission Bay Lease).

The lease commenced in December 2021 and will expire in June 2024, unless terminated earlier.

In March 2024, the Company entered into a second amendment (the Second Amendment) to the Mission Bay Lease.

The Second Amendment extends the lease term by approximately ten months .

The minimum rent payable by the Company under the Second Amendment is approximately $ 0.1 million per month.

In March 2022, the Company entered into a lease agreement for the lease of approximately 46,434 square feet of office space in The Woodlands, Texas.

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The Company is required to pay base rent plus its proportionate share of operating expenses, as defined in the applicable lease agreement on all of its leases.

Variable lease payments related to operating expenses including utilities, maintenance costs and real estate taxes were $ 1.5 million and $ 1.2 million for the three months ended February 29, 2024 and February 28, 2023, respectively.

Operating lease expenses, excluding variable lease payments, were $ 2.3 million and $ 1.5 million for the three months ended February 29, 2024 and February 28, 2023, respectively.

Variable lease payments related to operating expenses, including utilities, maintenance costs and real estate taxes, were $ 1.8 million and $ 3.3 million for the three and six months ended May 31, 2024, respectively, and $ 1.8 million and $ 3.1 million for the three and six months ended May 31, 2023, respectively.

Operating lease expenses, excluding variable lease payments, were $ 2.2 million and $ 4.5 million for the three and six months ended May 31, 2024, respectively, and $ 1.5 million and $ 3.0 million for the three and six months ended May 31, 2023, respectively.

Short-term lease expense was not material for the periods presented.

Other information related to leases were as follows (in thousands):

Three Months Ended

February 29, 2024 February 28, 2023

Six Months Ended May 31,

Cash paid for amounts included in the measurement of lease liabilities:

Cash flows from operating leases $ 4,037 $ 2,778

The Company’s Restated Certificate of Incorporation authorizes the Company to issue up to 500,000,000 shares of common stock, $ 0.001 par value per share, as of February 29, 2024 and November 30, 2023.

The Company’s Restated Certificate of Incorporation authorizes the Company to issue up to 500,000,000 shares of common stock, $ 0.001 par value per share, as of May 31, 2024 and November 30, 2023.

Holders of common stock are entitled to dividends when and if declared by the Company’s board of directors, subject to the prior rights of the holders of shares of preferred stock.

The holder of each share of common stock is entitled to one vote.

As of February 29, 2024, no dividends have been declared.

In July 2022, the Company issued pre-funded warrants to purchase an aggregate of 6,814,920 shares of the Company’s common stock in RDOs at a price of $ 13.939 per pre-funded warrant.

The pre-funded warrants were immediately exercisable, have an exercise price of $ 0.001 and may be exercised at any time after the date of issuance.

As of May 31, 2024, no dividends have been declared.

In July 2022, the Company issued the 2022 Pre-Funded Warrants to purchase an aggregate of 6,814,920 shares of the Company’s common stock at a price of $ 13.939 per pre-funded warrant.

As of May 31, 2024, a total of 6,097,560 of the 2022 Pre-Funded Warrants remained available for exercise.

In April 2024, the Company issued the 2024 Pre-Funded Warrants to purchase an aggregate of 1,500,100 shares of the Company’s common stock at a price of $ 14.999 per pre-funded warrant.

As of May 31, 2024, all of the 2024 Pre-Funded Warrants remained available for exercise.

All pre-funded warrants were immediately exercisable at issuance, have an exercise price of $ 0.001 and may be exercised at any time after the date of issuance.

A holder of pre-funded warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise.

A holder of the pre-funded warrants may increase or decrease this percentage not in excess of 19.99 % by providing at least 61 days’ prior notice to the Company.

As of February 29, 2024, there were pre-funded warrants to purchase an aggregate of 6,097,560 shares of the Company's common stock that remained available for exercise.

The pre-funded warrants were classified as a component of permanent equity in the Company's condensed consolidated balance sheet as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its own shares and permit the holders to receive a fixed number of shares of common stock upon exercise.

All of the shares underlying the pre-funded warrants have been included in the weighted-average number of shares of common stock used to calculate net loss per share attributable to common stockholders because the shares may be issued for little or no consideration, are fully vested and are exercisable after the original issuance date of the pre-funded warrants.

Common stock reserved for future issuance, on an as-if converted basis, as of February 29, 2024 and November 30, 2023, consists of the following:

All of the shares underlying the pre-funded warrants have been included in the weighted-average number of shares of common stock used to calculate net loss per share, basic and diluted, attributable to common stockholders because the shares may be issued for little or no consideration, are fully vested and are exercisable after the original issuance date of the pre-funded warrants.

Common stock reserved for future issuance, on an as-if converted basis, as of May 31, 2024 and November 30, 2023, consists of the following:

2024 November 30,

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Options forfeited ( 590,734 ) 18.90

Balances as of February 29, 2024 9,931,118 $ 15.59

Balances as of May 31, 2024 9,972,005 $ 15.43

RSU activity under the Stock Plans is set forth below:

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RSUs forfeited ( 230,190 ) 11.92

Balances as of February 29, 2024 2,268,207 $ 10.17

Balances as of May 31, 2024 2,110,719 $ 10.06

Employee Stock Purchase Plan

Under the Company’s 2020 Employee Stock Purchase Plan (the ESPP), eligible employees are entitled to purchase shares of common stock with accumulated payroll deductions.

During the three months ended February 29, 2024, the Company issued 173,558 shares of common stock pursuant to the ESPP at a weighted-average price of $ 7.31 per share.

During the six months ended May 31, 2024, the Company issued 173,558 shares of common stock pursuant to the ESPP at a weighted-average price of $ 7.31 per share.

Stock-Based Compensation

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Three Months Ended,

February 29, 2024 February 28, 2023

May 31, Six Months Ended

2024 2023 2024 2023

Research and development $ 4,285 $ 4,859 $ 8,112 $ 10,013

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Total stock-based compensation $ 8,845 $ 8,723 $ 16,667 $ 17,204

As of February 29, 2024, the total compensation cost related to stock-based awards not yet recognized was $ 65.3 million, which is expected to be amortized on a straight-line basis over the weighted-average remaining vesting period of approximately 2.3 years.

As of May 31, 2024, the total compensation cost related to stock-based awards not yet recognized was $ 57.2 million, which is expected to be amortized on a straight-line basis over the weighted-average remaining vesting period of approximately 2.1 years.

Defined Contribution Plan

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Employees may contribute a percentage of their annual compensation to the plan, subject to statutory limitations.

The Company has made contributions to the 401(k) Plan and recorded contribution expense of $ 0.4 million and $ 0.6 million during the three months ended February 29, 2024 and February 28, 2023, respectively.

For the three months ended February 29, 2024, the Company recorded an income tax provision of $ 90,000 .

For the three months ended February 28, 2023, the Company did not record any current income tax expense or provision.

The Company has made contributions to the 401(k) Plan and recorded contribution expense of $ 0.4 million and $ 0.8 million during the three and six months ended May 31, 2024, respectively, $ 0.2 million and $ 0.8 million during the three and six months ended May 31, 2023, respectively.

For the three and six months ended May 31, 2024, the Company recorded an income tax provision of $ 90,000 and $ 180,000 , respectively.

For the three and six months ended May 31, 2023, the Company did not record any current income tax expense or provision.

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Realization of the deferred tax assets is dependent upon future taxable income, the amount, if any, and timing of which are uncertain.

The Company has generated losses since inception and has established a valuation allowance to offset deferred tax assets as of February 29, 2024 and February 28, 2023 due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets.

The Company has generated losses since inception and has established a valuation allowance to offset deferred tax assets as of May 31, 2024 and 2023 due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets.

The Company files income tax returns in the United States and in various states.

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Three Months Ended

February 29, 2024 February 28, 2023

May 31, Six Months Ended

2024 2023 2024 2023

Net loss $ ( 44,546 ) $ ( 24,277 ) $ ( 86,064 ) $ ( 65,010 )

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Net loss per share, basic and diluted $ ( 0.71 ) $ ( 0.45 ) $ ( 1.47 ) $ ( 1.20 )

(1) The shares underlying the pre-funded warrants to purchase shares of the Company’s common stock have been included in the calculation of the weighted-average number of shares outstanding, basic and diluted, for the three months ended February 29, 2024 and February 28, 2023.

The following potentially dilutive securities were excluded from the computation of the diluted net loss per share of common stock for the periods presented because their effect would have been anti-dilutive:

February 29, February 28,

Options to purchase common stock issued and outstanding 9,972,005 8,949,950

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The Company’s Chief Financial Officer is a trustee for the multiple employer welfare association that facilitates the acquisition and administration of the Company’s healthcare plans.

Expenses related to the healthcare plan premiums were $ 1.1 million for both the three months ended February 29, 2024 and February 28, 2023.

As of February 29, 2024 and November 30, 2023, the amount recorded in accounts payable and accrued expenses and other current liabilities in connection with this healthcare plan provider was not material.

Expenses related to the healthcare plan premiums were $ 1.0 million and $ 2.1 million for the three and six months ended May 31, 2024, respectively, and $ 1.1 million and $ 2.3 million for the three and six months ended May 31, 2023, respectively.

As of May 31, 2024 and November 30, 2023, the amount recorded in accounts payable and accrued expenses and other current liabilities in connection with this healthcare plan provider was not material.

Subsequent Events

Refer to Note 3 for more information on the Company's collaborations with Gilead and Sanofi under the Gilead Agreement and the Sanofi Agreement, respectively.

In March 2024, the Company entered into a second amendment (the "Second Amendment") to the Lease Agreement (the “Lease Agreement”), dated as of June 21, 2021, by and between the Company and ARE-San Francisco No.

19 LLC (the “Lessor”), as amended by the First Amendment to Lease Agreement, dated June 28, 2023, by and between the Company and Lessor.

The Second Amendment extends the lease of approximately 19,320 square feet of office space in San Francisco, California by approximately ten months .

The minimum rent payable by the Company under the Second Amendment will be approximately $ 0.1 million per month.

The Company will also be required to pay its proportionate share of operating expenses, as defined in the Lease Agreement.

Refer to Note 1 for more information on the Company's Automatic Shelf Registration Statement filed in June 2024 and Equity Distribution Agreement entered into in July 2024.

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

What changed 10-Q

Item 1. Financial Statements