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Item 8. Financial Statements and Supplementary Data

2025-01-28 compared with 2024-02-15 · 232 added, 147 removed, 716 unchanged (35% of the section changed)

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To the Board of Directors and Stockholders of Nurix Therapeutics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Nurix Therapeutics, Inc.

and its subsidiaries (the “Company”) as of November 30, 2023 and 2022, and the related consolidated statements of operations, of comprehensive loss, of stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of November 30, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying 2024 financial statements of Nurix Therapeutics, Inc.

and the 2023 consolidated financial statements of Nurix Therapeutics, Inc.

and its subsidiary (collectively referred to as the “Company”), which comprise the balance sheets as of November 30, 2024 and 2023, and the related statements of operations, of comprehensive loss, of stockholders’ equity and of cash flows for each of the three years in the period ended November 30, 2024, including the related notes (collectively referred to as the "financial statements").

We also have audited the Company's internal control over financial reporting as of November 30, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of November 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended November 30, 2024 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 30, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s financial statements and on the Company's internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, the Company will need substantial additional funding to support its continuing operations and pursue its long-term business plan.

Management’s plans in regard to this matter are described in Note 1.

As discussed in Note 1 to the financial statements, the Company will need substantial additional funding to support its continuing operations and pursue its long-term business plan.

Management's evaluation of the events and conditions related to this matter are also described in Note 1.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition - Estimated Costs of Internal Full-Time Employees (FTEs) - Sanofi

As described in Note 3 to the consolidated financial statements, the Company’s consolidated revenue was $76.9 million for the year ended November 30, 2023 of which there was revenue of $25.4 million generated from the Company’s collaboration agreement with Sanofi.

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

Costs consist primarily of internal FTE and third-party contract costs related to the Sanofi agreement.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition - Estimated Costs of Internal Full-Time Employees (FTEs) - Pfizer Collaboration Agreement

As described in Notes 2 and 3 to the financial statements, the Company’s collaboration revenue was $54.5 million for the year ended November 30, 2024, of which revenue of $18.8 million was recognized related to the Company’s collaboration agreement with Pfizer.

The Company enters into collaboration agreements and assesses those agreements to determine the performance obligations.

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

Costs consist primarily of internal FTE and third-party contract costs related to the Pfizer agreement.

The cumulative effect of revisions to estimated costs to complete the Company’s performance obligation is recorded in the period in which changes are identified and amounts can be reasonably estimated.

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

The principal considerations for our determination that performing procedures relating to revenue recognition - estimated costs of internal FTEs is a critical audit matter are (i) the high degree of auditor judgment and subjectivity in performing procedures relating to the estimated costs of internal FTEs due to the significant judgment by management when determining the estimate and (ii) the significant audit effort in evaluating the significant assumption related to the number of estimated FTEs.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others, evaluating and testing management’s process for determining the estimated costs of internal FTEs, which included evaluating the reasonableness of the significant assumption related to the number of estimated FTEs, by (i) performing a comparison of management’s estimated costs of internal FTEs to the actual internal FTE costs driven by the number of estimated FTEs;

The principal considerations for our determination that performing procedures relating to revenue recognition - estimated costs of internal FTEs relating to the Pfizer collaboration agreement is a critical audit matter are (i) the significant judgment by management when developing the estimated costs of internal FTEs and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumption related to the number of estimated FTEs.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the development of the estimated costs of internal FTEs.

These procedures also included, among others, evaluating and testing management’s process for developing the estimated costs of internal FTEs, which included evaluating the reasonableness of the significant assumption related to the number of estimated FTEs.

Evaluating management’s estimated costs of internal FTEs involved (i) performing a comparison of management’s estimated costs of internal FTEs to the actual internal FTE costs;

(ii) testing the completeness and accuracy of the data used by management in the estimate;

(iii) evaluating management’s timely identification of changes in estimated costs of internal FTEs driven by the number of estimated FTEs;

(iii) evaluating management’s timely identification of changes in estimated costs of internal FTEs;

and (iv) evaluating whether the estimate and assumption were consistent with evidence obtained in other areas of the audit.

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San Jose, California

February 15, 2024

January 28, 2025

We have served as the Company’s auditor since 2014.

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Additional paid-in capital 1,265,536 746,299

Accumulated other comprehensive loss ( 655 ) ( 4,319 )

Accumulated other comprehensive income (loss) 150 ( 655 )

Accumulated deficit ( 738,769 ) ( 545,200 )

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Year Ended November 30,

2024 2023 2022

Collaboration revenue $ 54,549 $ 56,987 $ 38,627

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Interest and other income, net 19,728 11,115 3,507

Loss before income taxes ( 193,299 ) ( 143,948 ) $ ( 180,360 )

Provision for income taxes 270 — —

Net loss $ ( 193,569 ) $ ( 143,948 ) $ ( 180,360 )

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Year Ended November 30,

2024 2023 2022

Net loss $ ( 193,569 ) $ ( 143,948 ) $ ( 180,360 )

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Balance as of November 30, 2023 48,718,552 $ 49 $ 746,299 $ ( 655 ) $ ( 545,200 ) $ 200,493

Issuance of common stock and pre-funded warrants, 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 $ 6,186

13,777,775 14 289,355 — — 289,369

Exercise of pre-funded warrants 19,750 — — — — —

Exercise of stock options 508,648 1 5,054 — — 5,055

Vesting of restricted stock units 654,396 — — — — —

Vesting of early exercised stock options — — 33 — — 33

Repurchase of unvested early exercised stock ( 1,548 ) — — — — —

Issuance under employee stock purchase plan 276,478 — 2,132 — — 2,132

Stock-based compensation — — 33,943 — — 33,943

Unrealized gain on available-for-sale marketable securities — — — 805 — 805

Net loss — — — — ( 193,569 ) ( 193,569 )

Balance as of November 30, 2024 75,870,718 $ 76 $ 1,265,536 $ 150 $ ( 738,769 ) $ 526,993

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

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Year Ended November 30,

2024 2023 2022

Cash flows from operating activities

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Amortization of operating lease right-of-use assets 7,110 6,121 5,459

Other 286 — 201

Changes in operating assets and liabilities:

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Operating lease liabilities ( 6,418 ) ( 6,268 ) ( 4,871 )

Accrued expenses and other liabilities 3,123 7,485

Accrued expenses and other current liabilities 11,816 3,123 7,485

Net cash used in operating activities ( 172,584 ) ( 81,365 ) ( 159,807 )

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Purchases of property and equipment ( 9,273 ) ( 8,401 ) ( 12,244 )

Net cash provided by investing activities 68,301 27,198

Net cash (used in) provided by investing activities ( 257,713 ) 68,301 27,198

Cash flows from financing activities

Proceeds from issuances of pre-funded warrants, net of issuance costs — 94,759

Proceeds from issuances of common stock in equity financing, net of issuance costs — 19,400

Proceeds from issuances of common stock and pre-funded warrants in equity financing, net of issuance costs 188,732 — 94,759

Proceeds from issuances of common stock in "at the market" financing, net of issuance costs 289,763 — 19,400

Proceeds from exercise of stock options and pre-funded warrants 5,055 988 1,078

Proceeds from issuance under employee stock purchase plan 2,132 2,229 1,955

Repurchase of unvested early exercised stock options ( 15 ) — —

Net cash provided by financing activities 485,667 3,217 117,192

Net decrease in cash, cash equivalents and restricted cash ( 9,847 ) ( 15,417 )

Net increase (decrease) in cash, cash equivalents and restricted cash 55,370 ( 9,847 ) ( 15,417 )

Cash, cash equivalents and restricted cash at beginning of period 55,528 65,375 80,792

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Supplemental disclosures of non-cash investing and financing activities:

Additions to property and equipment included in accounts payable and accrued expenses and other liabilities $ 632 $ 1,373

Capitalized stock-based compensation related to internal-use software development

Additions to property and equipment included in accounts payable and accrued expenses and other current liabilities $ 1,643 $ 632 $ 1,373

Right-of-use assets recognized in exchange for lease obligations $ 4,107 $ 23,995 $ 5,068

Capitalized stock-based compensation related to internal-use software development

$ 14 $ 74 $ 69

Deferred issuance costs included in accounts payable and accrued expenses and other current liabilities $ 117 $ — $ —

Deferred issuance costs recognized related to the "at the market" financing $ 394 $ — $ 72

Vesting of early exercised stock options $ 33 $ 117 $ 145

Deferred issuance costs recognized related to equity financing $ — $ 72

As of November 30,

2024 2023 2022

Reconciliation of cash, cash equivalents and restricted cash:

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Restricted cash 901 901 901

Cash, cash equivalents and restricted cash $ 55,528 $ 65,375

Total cash, cash equivalents and restricted cash $ 110,898 $ 55,528 $ 65,375

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

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(the Company) was incorporated in the state of Delaware on August 27, 2009, and is headquartered in San Francisco, California.

The Company is a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of innovative small molecules and antibody therapies based on the modulation of cellular protein levels as a novel treatment approach for cancer, inflammatory conditions and other challenging diseases.

Leveraging the Company’s expertise in E3 ligases together with its proprietary DNA-encoded libraries, the Company has built DELigase, an integrated discovery platform to identify and advance novel drug candidates targeting E3 ligases, a broad class of enzymes that can modulate proteins within the cell.

The Company is a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of innovative small molecules and antibody therapies based on the degradation of cellular protein levels as a novel treatment approach for cancer, inflammatory conditions and other challenging diseases.

Leveraging the Company’s expertise in E3 ligases together with its proprietary DNA-encoded libraries, the Company has built DEL-AI, a fully AI-integrated discovery platform to identify and advance novel drug candidates targeting E3 ligases, a broad class of enzymes that can degrade proteins within the cell.

The Company’s drug discovery approach is to either harness or inhibit the natural function of E3 ligases within the ubiquitin-proteasome system to selectively decrease or increase cellular protein levels.

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Equity Distribution Agreement

In August 2021, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission, 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) and which expired in August 2024 with respect to additional sales of securities.

The Shelf Registration Statement, which included a base prospectus, allowed the Company 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.

(Piper Sandler) pursuant to which, from time to time, the Company may offer and sell through Piper Sandler up to $ 150.0 million of the common stock registered under the shelf registration statement pursuant to one or more “at the market” offerings.

The Company is not required to sell any shares at any time during the term of the Equity Distribution Agreement.

(Piper Sandler) pursuant to which, from time to time, the Company could offer and sell through Piper Sandler up to $ 150.0 million of the common stock registered under the Shelf Registration Statement pursuant to one or more “at the market” offerings.

The Company was not required to sell any shares at any time during the term of the Equity Distribution Agreement.

The Company agreed to pay Piper Sandler a commission of 3.0 % of the gross sales price of any shares sold pursuant to the Equity Distribution Agreement.

In June 2022, the Company issued and sold 2,000,000 shares of common stock under the Equity Distribution Agreement at a price of $ 10.0001 per share of common stock for net proceeds of $ 19.3 million, after deducting offering commissions and expenses paid by the Company.

As of November 30, 2023, the Company had $ 130.0 million of common stock remaining available for sale under the Equity Distribution Agreement.

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 for net proceeds of $ 19.3 million after deducting offering commissions and expenses paid by the Company.

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 per share for total net proceeds of $ 48.5 million, after deducting offering commissions and expenses paid by the Company.

In June 2024, the Company filed an automatic shelf registration statement on Form S-3 (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 Amendment No.

1 to the Equity Distribution Agreement (as amended, the Amended 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.

The Company was not required to sell any shares at any time during the term of the Amended Equity Distribution Agreement.

The Company agreed to pay Piper Sandler a commission of up to 3 % of the gross sales price of any shares sold pursuant to the Amended Equity Distribution Agreement.

In August 2024, the Company issued and sold 2,145,000 shares of common stock under the Amended Equity Distribution Agreement at a price of $ 20.00 per share for total net proceeds of $ 42.0 million, after deducting offering commissions and expenses paid by the Company.

In October 2024, the Company issued and sold 4,803,573 shares of common stock under the Amended Equity Distribution Agreement at various prices ranging from $ 21.50 to $ 25.00 per share for total net proceeds of $ 105.3 million, after deducting offering commissions and expenses paid by the Company.

On October 31, 2024, the Company entered into Amendment No.

2 to the Equity Distribution Agreement (as amended, the Second Amended Equity Distribution Agreement), pursuant to which, from time to time, the Company may offer and sell through Piper Sandler up to $ 300.0 million of common stock registered under the Automatic Shelf Registration Statement pursuant to one or more “at the market” offerings.

The Company is not required to sell any shares at any time during the term of the Second Amended Equity Distribution Agreement.

The Company agreed to pay Piper Sandler a commission of up to 3 % of the gross sales price of any shares sold pursuant to the Second Amended Equity Distribution Agreement.

In November 2024, the Company issued and sold 3,634,393 shares of common stock under the Second Amended Equity Distribution Agreement at a price of $ 26.25 per share for total net proceeds of $ 93.6 million, after deducting offering commissions and expenses paid by the Company.

As of November 30, 2024, the Company had $ 204.6 million of common stock remaining available for sale under the Second Amended Equity Distribution Agreement.

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.

Public Offering

In April 2024, the Company completed a public offering (2024 Public Offering) 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.

Liquidity and Management Plans

As of November 30, 2023, the Company had cash, cash equivalents and short-term marketable securities of $ 287.9 million, working capital of $ 208.5 million and an accumulated deficit of $ 545.2 million.

The Company’s operations have historically been financed through the issuance of common stock, redeemable convertible preferred stock and pre-funded warrants and proceeds received under the Company’s collaboration and license agreements.

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

As of November 30, 2024, the Company had cash, cash equivalents and short-term marketable securities of $ 609.6 million, working capital of $ 523.5 million and an accumulated deficit of $ 738.8 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 consolidated financial statements.

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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 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 consolidated financial statements.

Summary of Significant Accounting Policies

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All intercompany balances and transactions have been eliminated in consolidation.

As of November 30, 2024, the Company has no remaining subsidiaries.

Use of Estimates

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risks related to the successful discovery and development of its drug candidates, ability to raise additional capital, development of new technological innovations by its competitors and delay or inability to obtain drug substance and finished drug product from the Company’s third-party contract manufacturers necessary for the Company’s drug candidates, protection of intellectual property rights, litigation or claims against the Company based on intellectual property rights and regulatory clearance and market acceptance for any of the Company’s products candidates for which the Company receives marketing approval.

Moreover, the Company is subject to risks and uncertainties as a result of global business, political and macroeconomic events and conditions, including increasing financial market volatility and uncertainty, inflation, increasing interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, potential instability in the global banking system, cybersecurity events, the impact of war or military conflict, including regional conflicts around the world, and public health pandemics.

Moreover, the Company is subject to risks and uncertainties as a result of global business, political and macroeconomic events and conditions, including increasing financial market volatility and uncertainty, inflation, interest rate fluctuations, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, potential instability in the global banking system, cybersecurity events, the impact of war or military conflict, including regional conflicts around the world, and public health pandemics.

The extent to which business, political and macroeconomic factors, including increasing financial market volatility and uncertainty, will impact the Company’s business will depend on future developments that are highly uncertain and cannot be predicted at this time.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

The extent to which the increasing financial market volatility and uncertainty may directly or indirectly impact the Company’s financial statements is highly uncertain and subject to change.

The extent to which the increasing financial market volatility and uncertainty may directly or indirectly impact the consolidated financial statements is highly uncertain and subject to change.

The Company relies on single source manufacturers and suppliers for the supply of its drug candidates.

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Restricted cash as of each of November 30, 2024 and 2023 consisted of $ 0.1 million that serves as collateral for a business credit card account and $ 0.8 million for letters of credit required under operating leases.

These balances are included within the cash, cash equivalents and restricted cash balance in the accompanying consolidated statements of cash flows.

These balances are included within the cash, cash equivalents and restricted cash balance in the accompanying consolidated statements of cash flows and separately presented as such in the consolidated balance sheets.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, including cash equivalents, accounts payable and accrued liabilities included in the Company’s consolidated financial statements approximate their fair value due to the nature of the financial instruments.

The carrying amounts of the Company’s financial instruments, including cash equivalents, accounts payable and accrued liabilities included in the consolidated financial statements approximate their fair value due to the nature of the financial instruments.

Refer to Note 5 for more information regarding the fair value of the Company’s marketable securities.

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Marketable securities consist of money market funds, U.S.

Treasuries, corporate debt securities, U.S.

government agency securities, corporate commercial paper and foreign government securities.

Treasuries, corporate debt securities and U.S.

government agency securities.

The Company’s marketable securities are classified as available-for-sale and carried at estimated fair values and reported in cash equivalents, short-term marketable securities or long-term marketable securities.

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Tenant improvements are depreciated over the shorter of the lease term or the estimated useful life of the improvements.

When assets are retired or disposed of, the cost together with related accumulated depreciation is removed from the Company’s accounts and the resulting gain or loss is reflected in the Company’s consolidated statements of operations.

The Company determines if an arrangement contains a lease and the classification of the lease at inception.

An arrangement contains a lease if there is an identified asset and if the Company controls the use of the identified asset throughout the period of use.The evaluation of whether the lease is an operating or a finance lease requires judgments in determining the fair value of the leased asset.

An arrangement contains a lease if there is an identified asset and if the Company controls the use of the identified asset throughout the period of use.

The evaluation of whether the lease is an operating or a finance lease requires judgments in determining the fair value of the leased asset.

Lease right-of-use (ROU) assets and lease liabilities are recognized at the lease commencement date based on the present value of the future minimum lease payments over the lease term at the commencement date.

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The Company expenses costs incurred related to the planning and post-implementation phases of development as incurred.

Long-Lived Assets

Impairment of Long-Lived Assets

Long-lived assets, such as property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable.

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The Company capitalizes within other assets certain legal, accounting and other third-party fees that are directly related to the Company’s in-process equity financings until such financings are consummated.

After consummation of an equity financing, these costs are recorded in stockholder’s equity as a reduction of additional paid-in capital generated as a result of the offering.

After consummation of an equity financing, these costs are recorded in stockholders’ equity as a reduction of additional paid-in capital generated as a result of the offering.

Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are immediately written off to operating expenses.

As of both November 30, 2023 and 2022, there was $ 0.5 million of deferred offering costs included in other assets on the consolidated balance sheet.

As of November 30, 2024 and 2023, there was $ 0.1 million and $ 0.5 million, respectively, of deferred offering costs included in other assets on the consolidated balance sheet.

Revenue Recognition

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Amounts allocated to any material right are recognized as revenue when or as the related future goods or services are transferred or when the option expires.

If the option does not provide a material right, then the option is considered a marketing offer, which would be accounted for as a separate contract upon exercise.

Deferred revenue, which is a contract liability, represents net amounts received by the Company for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met.

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It is the Company’s policy to include penalties and interest expense related to income taxes as a component of the provision for income taxes.

Non-income-based taxes are expensed as incurred within operating expenses on the Company’s consolidated statements of operations.

Non-income-based taxes are expensed as incurred within operating expenses on the consolidated statements of operations.

Comprehensive loss

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Net loss per share

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock (including non-voting common stock and pre-funded warrants) outstanding during the period, without consideration for all other common stock equivalents.

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock (including pre-funded warrants) outstanding during the period, without consideration for all other common stock equivalents.

Shares of common stock into which the pre-funded warrants may be exercised are considered outstanding for the purposes of computing net loss per share because the shares may be issued for little or no consideration, are fully vested and are exercisable after the original issuance date.

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Early adoption is permitted.

The Company is in the process of evaluating the impact of this new guidance on its disclosures.

The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09—Income Taxes (Topic 740):

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The Company is in the process of evaluating the impact of this new guidance on its disclosures.

In November 2024, the FASB issued ASU 2024-03—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (ASU 2024-03), which is intended to enhance transparency into the nature and function of expenses, primarily through additional disclosures on certain cost and expenses.

ASU 2024-03 should be applied on a prospective basis, and retrospective application is permitted.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is in the process of evaluating the impact of this new guidance on its disclosures.

Collaboration Agreements

In June 2019, the Company entered into a global strategic collaboration agreement with Gilead (as subsequently amended, the Gilead Agreement) to discover, develop and commercialize a pipeline of targeted protein degradation drugs for patients with cancer and other challenging diseases using the Company’s DELigase platform to identify novel agents that utilize E3 ligases to induce degradation of five specified drug targets.

In August 2019 and September 2022, the Company entered into the First Amendment and the Second Amendment, respectively, to the Gilead Agreement to clarify certain language of the Gilead Agreement.

In June 2019, the Company entered into a global strategic collaboration agreement with Gilead (as subsequently amended, the Gilead Agreement) to discover, develop and commercialize a pipeline of targeted protein degradation drugs for patients with cancer and other challenging diseases using the Company’s DEL-AI platform to identify novel agents that utilize E3 ligases to induce degradation of five specified drug targets.

In August 2019 and September 2022, the Company and Gilead entered into the First Amendment and the Second Amendment, respectively, to the Gilead Agreement to clarify certain language of the Gilead Agreement.

These amendments had no impact on revenue recognition.

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 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 November 30, 2023, 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 November 30, 2023, the Company is eligible to receive up to approximately $ 2.3 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 November 30, 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 November 30, 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.

Subject to earlier expiration in certain circumstances, the Gilead Agreement expires on a licensed product-by-licensed product and country-by-country basis upon 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 Gilead Agreement, provided that the term for any profit-shared licensed product in the United States will expire upon the expiration or termination of the applicable profit-share term as set forth in an applicable profit-share agreement to be negotiated upon the Company’s exercise of its option to co-develop and co-promote such licensed product.

If Gilead does not exercise an option to license a drug candidate, then the Gilead Agreement will terminate at the end of the last to expire option period.

The Company identified the following promises in the Gilead Agreement:

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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, is accounted for as a separate contract commencing in June 2024.

The research term extension fee of $ 15.0 million is recognized as collaboration revenue using the cost-based input method over the estimated extended research term of two years , which represents the estimated timing of completion of the identified deliverables.

As of November 30, 2024, no milestones have been achieved related to the extended research term.

Using the cost-based input method, which the Company determined most faithfully depicts the transfer of its performance obligation to Gilead, 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.

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

For the year ended November 30, 2023, the Company recognized collaboration revenue related to the Gilead Agreement of $ 29.9 million, of which $ 20.3 million was included in deferred revenue as of November 30, 2022, and $ 7.9 million was related to performance obligations satisfied in previous periods.

For the year ended November 30, 2022, the Company recognized collaboration revenue related to the Gilead Agreement of $ 23.7 million, of which $ 18.4 million was included in deferred revenue as of November 30, 2021, and $ 4.0 million was related to performance obligations satisfied in previous periods.

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

For the year ended November 30, 2024, the Company recognized collaboration revenue related to the initial research term under the Gilead Agreement of $ 10.0 million, all of which was included in deferred revenue as of the beginning of the period.

The Company also recognized collaboration revenue related to the Gilead Research Term Extension of $ 4.0 million, all of which was related to the $ 15.0 million research term extension fee received in the second quarter of fiscal year 2024.

For the year ended November 30, 2023, the Company recognized collaboration revenue related to the Gilead Agreement of $ 29.9 million, of which $ 20.3 million was included in deferred revenue as of the beginning of the period, and $ 7.9 million 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 year ended November 30, 2023.

For the year ended November 30, 2022, the Company recognized collaboration revenue related to the Gilead Agreement of $ 23.7 million, of which $ 18.4 million was included in deferred revenue as of the beginning of the period, and $ 4.0 million was related to activities satisfied in previous periods.

As of November 30, 2024, deferred revenue related to the Gilead Agreement was $ 11.0 million, of which $ 9.1 million was current.

In December 2019, the Company entered into a strategic collaboration with Genzyme Corporation, a subsidiary of Sanofi, which became effective in January 2020 (as subsequently expanded and amended, the Sanofi Agreement), to discover, develop and commercialize a pipeline of targeted protein degradation drugs for patients with challenging diseases in multiple therapeutic areas using the Company’s DELigase platform to identify small molecules designed to induce degradation of three specified initial drug targets.

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

In December 2019, the Company entered into a strategic collaboration with Genzyme Corporation, a subsidiary of Sanofi, which became effective in January 2020 (as subsequently expanded and amended, the Sanofi Agreement), to discover, develop and commercialize a pipeline of targeted protein degradation drugs for patients with challenging diseases in multiple therapeutic areas using the Company’s DEL-AI platform to identify small molecules designed to induce degradation of three specified initial drug targets.

In January 2021, as part of the existing Sanofi Agreement, Sanofi paid the Company $ 22.0 million to exercise its option to expand the number of targets in the Sanofi Agreement from three to a total of five targets.

In January 2021, the Company entered into the First Amendment to the Sanofi Agreement to modify the research term on all targets (the First Sanofi Amendment).

In December 2021, the Company entered into the Second Amendment to the Sanofi Agreement to extend the substitution deadline on certain targets.

In July 2022, the Company entered into the Third Amendment to the Sanofi Agreement to further extend the substitution deadline on certain targets.

In January 2021, the Company and Sanofi entered into the First Amendment to the Sanofi Agreement to modify the research term on all targets (the First Sanofi Amendment).

In December 2021, the Company and Sanofi entered into the Second Amendment to the Sanofi Agreement to extend the substitution deadline on certain targets.

In July 2022, the Company and Sanofi entered into the Third Amendment to the Sanofi Agreement to further extend the substitution deadline on certain targets.

The extensions of the substitution deadline had no impact on revenue recognition.

Also in July 2022, Sanofi elected to replace certain drug targets, and the substitution extended the research term of those targets by one year to 5.25 years and increased overall forecasted costs, which had an immaterial impact on revenue recognition.

In August 2022 and November 2023, the Company entered into the Fourth Amendment and Fifth Amendment, respectively, to the Sanofi Agreement to modify the research plan for certain targets, which had no impact on revenue recognition.

In August 2022 and November 2023, the Company and Sanofi entered into the Fourth Amendment and Fifth Amendment, respectively, to the Sanofi Agreement to modify the research plan for certain targets, which had no impact on revenue recognition.

In March 2024, the Company and Sanofi entered into the Sixth Amendment to the Sanofi Agreement to extend the research term for the collaboration target STAT6, a key drug target in type 2 inflammation, by two years (the Sixth Sanofi Amendment), which has increased overall forecasted costs and has an impact on revenue recognition.

Under the Sanofi Agreement, Sanofi has exclusive rights and is responsible for the clinical development, commercialization and manufacture of drug candidates resulting from the collaboration while the Company retains the option to co-develop, co-promote and co-commercialize all drug candidates in the United States directed to up to two targets, one of which must be selected from a list of targets designated at the execution of the Sanofi Agreement or any replacement of such targets, and one of which must be selected from targets identified by Sanofi as part of their January 2021 expansion.

The Company’s right to exercise its option to co-develop, co-promote and co-commercialize a given target is dependent on its ability to demonstrate, within a given timeframe, that it has sufficient cash resources and personnel to commercialize the product.

The collaboration excludes the Company’s current internal protein degradation programs for which it retains all rights, and also excludes future internal programs, provided that the Company distinguished future programs as excluded from the scope of the collaboration.

The collaboration excludes the Company’s current internal protein degradation programs for which it retains all rights, and also excludes its future internal programs, provided that the Company distinguished future programs as excluded from the scope of the collaboration.

For drug targets that are subject to the collaboration, the Company has primary responsibility for conducting preclinical research activities (including target validation, drug discovery, identification or synthesis) in accordance with the applicable research plan agreed to by the parties and established on a target-by-target basis.

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In addition, from the signing of the Sanofi Agreement to November 30, 2024, the Company has received payments of $ 13.0 million for research milestones.

Additionally, the Company achieved two research milestones in November 2023 and received payments totaling $ 4.0 million in January 2024 as a result.

As of November 30, 2023, the Company is eligible to receive up to approximately $ 2.5 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.

As of November 30, 2024, the Company is eligible to receive up to approximately $ 1.9 billion in total additional payments, including payments of up to $ 389.0 million upon the achievement of specified research and development milestones, up to $ 61.8 million in certain additional fees related to target licensing and reservation, up to $ 500.0 million upon the achievement of specified regulatory milestones and up to $ 1.0 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.

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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, $ 11.0 million in variable consideration was added to the transaction price, which includes $ 4.0 million added during the three months ended November 30, 2023, 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 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.

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

For the year ended November 30, 2023, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 25.4 million, of which $ 21.0 million was included in deferred revenue as of November 30, 2022, and $ 2.6 million was related to performance obligations satisfied in previous periods.

For the year ended November 30, 2022, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 15.0 million, of which $ 14.0 million was included in deferred revenue as of November 30, 2021, and $ 0.6 million was related to performance obligations satisfied in previous periods.

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

As of November 30, 2022, deferred revenue related to the Sanofi Agreement was $ 46.2 million, of which $ 19.4 million was current and includes $ 1.0 million in contract assets representing the unbilled amount related to the research milestone recognized in November 2022.

For the year ended November 30, 2024, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 21.7 million, of which $ 20.2 million was included in deferred revenue as of the beginning of the period, and $ 1.1 million was related to activities satisfied in previous periods.

For the year ended November 30, 2023, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 25.4 million, of which $ 21.0 million was included in deferred revenue as of the beginning of the period, and $ 2.6 million was related to activities satisfied in previous periods.

For the year ended November 30, 2022, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 15.0 million, of which $ 14.0 million was included in deferred revenue as of the beginning of the period, and $ 0.6 million was related to activities satisfied in previous periods.

As of November 30, 2024, deferred revenue related to the Sanofi Agreement was $ 9.1 million, all of which 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, from the signing of the Pfizer Agreement to November 30, 2024, the Company has received a payment of $ 5.0 million in connection with the achievement of a research milestone in May 2024.

Additionally, the Company achieved another research milestones in November 2024 and received a payment of $ 5.0 million in January 2025 as a result.

The Company is eligible to receive up to approximately $ 3.4 billion in contingent payments across multiple programs, including payments of up to $ 626.0 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.

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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.

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.

Subsequently, upon the achievement of research milestones in May 2024 and November 2024, $ 10.0 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 4 years, not to extend beyond 6 years , which represents the estimated period to complete the identified deliverables.

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

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

For the year ended November 30, 2024, the Company recognized collaboration revenue related to the Pfizer Agreement of $ 18.8 million, of which $ 16.6 million was included in deferred revenue as of the beginning of the period and $ 0.3 million was related to activities satisfied in previous periods.

For the year ended November 30, 2023, the Company recognized collaboration revenue related to the Pfizer Agreement of $ 1.7 million.

As of November 30, 2024, deferred revenue related to the Pfizer Agreement was $ 44.5 million, of which $ 20.0 million was current, and included $ 5.0 million in contract assets representing the unbilled amount related to the research milestone achieved in November 2024.

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

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Total property and equipment, net $ 17,757 $ 16,808

For the years ended November 30, 2023 and 2022, depreciation and amortization expense was $ 7.5 million and $ 5.3 million, respectively, which includes amortization expense related to capitalized software of $ 1.4 million and $ 1.2 million, respectively.

For the years ended November 30, 2024, 2023 and 2022, depreciation and amortization expense was $ 9.3 million, $ 7.5 million and $ 5.3 million, respectively, which includes amortization expense related to capitalized software of $ 1.3 million, $ 1.4 million and $ 1.2 million, respectively.

All long-lived assets are maintained in the United States.

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Accrued contract research and lab supplies 11,599 3,767

Accrued clinical 4,637 3,364

Accrued professional services 1,615 1,755

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treasury securities Level 1 470,607 271 ( 138 ) 470,740

Corporate debt securities Level 2 3,487 — ( 56 ) 3,431

government agency securities Level 2 28,829 32 ( 15 ) 28,846

Long-term marketable securities:

government agency securities Level 2 7,490 — ( 69 ) 7,421

Total $ 589,816 $ 303 $ ( 153 ) $ 589,966

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Included in marketable securities, current $ 499,436 $ 303 $ ( 153 ) $ 499,586

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

November 30, 2023 Level Amortized

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government agency securities Level 2 69,389 5 ( 567 ) 68,827

Corporate commercial paper Level 2 74,896 — — 74,896

Foreign government securities Level 2 7,051 — ( 92 ) 6,959

Long-term marketable securities:

treasury securities Level 1 5,779 — ( 98 ) 5,681

Corporate debt securities Level 2 3,492 — ( 217 ) 3,275

government agency securities Level 2 7,490 — ( 69 ) 7,421

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treasury securities $ 166,161 $ ( 138 ) $ — $ — $ 166,161 $ ( 138 )

Corporate debt securities — — 3,431 ( 56 ) 3,431 ( 56 )

government agency securities — — 3,981 ( 15 ) 3,981 ( 15 )

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government agency securities 23,599 ( 108 ) 48,805 ( 528 ) 72,404 ( 636 )

Foreign government securities — — 6,959 ( 92 ) 6,959 ( 92 )

Total $ 70,293 $ ( 112 ) $ 58,172 $ ( 609 ) $ 128,465 $ ( 721 )

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treasury securities, which are valued based on quoted market prices in active markets with no valuation adjustment, as Level 1 assets within the fair value hierarchy.

The Company classifies its marketable securities in corporate debt securities, U.S.

government agency securities, corporate commercial paper and foreign government securities as Level 2 assets within the fair value hierarchy.

The Company classifies its marketable securities in corporate debt securities and U.S.

government agency securities, as Level 2 assets within the fair value hierarchy.

The fair values of these marketable securities are estimated by taking into consideration valuations obtained from third-party pricing services.

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In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees.

No demands have been made upon the Company to provide indemnification under such agreements, and thus, there are no claims that the Company is aware of that could have a material effect on the Company’s consolidated financial statements.

The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not specified in the agreements.

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The terms of these lease agreements expire in April 2025.

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 right-of-use 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.

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

The Company had an option to renew these leases for an additional two years , and the option expired.

In September 2024, an amendment was signed to extend the lease term for these leases through October 2025, and the minimum rent payable by the Company pursuant to this amendment is approximately $ 0.4 million per month.

The lease amendment did not have a material impact on the Company’s consolidated financial statements.

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 was scheduled to expire in June 2024.

In March 2024, the Company entered into a second amendment (the Second Amendment) to the Mission Bay Lease, pursuant to which the lease term was extended through April 2025.

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

In September 2024, the Mission Bay Lease was further amended (the Third Amendment) to extend the lease term through October 2025, and the minimum rent payable by the Company under the Third Amendment is approximately $ 0.1 million per month.

The lease amendments did not have a material impact on the Company’s consolidated financial statements.

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 amendment had no impact on the accounting for the lease.

The Company has an option to renew for two additional terms of five years each, and the renewal terms have not been included in the lease term used to calculate the right-of-use asset and lease liability as it is not reasonably certain that the Company will exercise the option.

The Company has an option to renew for two additional terms of five years each, and the renewal terms have 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.

The lease commenced in September 2023 when the underlying assets became available for use and will expire in March 2035.

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 $ 6.2 million and $ 4.4 million for the years ended November 30, 2023 and 2022, respectively.

Additionally, for the year ended November 30, 2022, certain leased premises were subject to additional variable lease payments related to landlord-owned improvements which were not estimable at lease inception.

The right-of-use asset recognized in exchange for lease obligations for these additional variable lease payments was $ 1.2 million for the year ended November 30, 2022.

Operating lease expenses, excluding variable lease payments, were $ 6.8 million and $ 5.9 million for the years ended November 30, 2023 and 2022, respectively.

Variable lease payments related to operating expenses including utilities, maintenance costs and real estate taxes were $ 7.0 million, $ 6.2 million and $ 4.4 million for the years ended November 30, 2024, 2023 and 2022, respectively.

Operating lease expenses, excluding variable lease payments, were $ 9.0 million, $ 6.8 million and $ 5.9 million for the years ended November 30, 2024, 2023 and 2022, respectively.

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

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Year Ended November 30,

2024 2023 2022

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

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As of November 30, 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.

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 November 30, 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 November 30, 2024, a total of 1,480,349 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 November 30, 2023, 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 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.

The pre-funded warrants were classified as a component of permanent equity on the 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, 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 November 30, 2024 and 2023, consists of the following:

Options to purchase common stock issued and outstanding 9,839,454 8,340,968

Restricted stock units issued and outstanding 1,956,015 1,246,031

Shares available for future equity grants 3,192,811 1,614,035

Shares available for issuance under employee stock purchase plan 1,740,988 1,530,281

Restricted stock units issued and outstanding 1,246,031 784,824

Pre-funded warrants issued and outstanding 7,577,909 6,097,560

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Shares of common stock subject to awards granted under the 2012 Plan that cease to be subject to such awards by forfeiture or otherwise will be available for issuance under the 2020 Plan.

As of November 30, 2023, there were 1,614,035 shares of common stock reserved for future issuance pursuant to the 2020 Plan.

As of November 30, 2024, there were 3,192,811 shares of common stock reserved for future issuance pursuant to the 2020 Plan and the 2024 Inducement Plan (defined below).

Equity Inducement Plan

In October 2024, the Board adopted and approved the Company’s 2024 Equity Inducement Plan (the 2024 Inducement Plan), which became effective on October 23, 2024.

In accordance with Rule 5635(c)(4) of the Nasdaq listing rules, equity awards under the 2024 Inducement Plan may only be made to an employee if he or she is granted such awards in connection with the commencement of his or her employment with the Company and such grant is a material inducement to his or her entering into employment with the Company.

The Company has reserved 3,000,000 shares of common stock for issuance pursuant to non-qualified stock options and RSUs under the 2024 Inducement Plan.

As of November 30, 2024, no shares had been issued under the 2024 Inducement Plan.

Stock options

12 unchanged sentences

Options exercisable as of November 30, 2024 6,085,527 $ 17.05 6.66 $ 47,556

____________________________

The aggregate intrinsic values were calculated as the pre-tax difference between the exercise price of stock options and the quoted market price of the Company’s common stock on November 30, 2024 for all in‑the‑money stock options.

The total intrinsic value of stock options exercised during the years ended November 30, 2023 and 2022 was $ 0.2 million and $ 4.5 million, respectively.

As of November 30, 2023, a total of 4,909 shares of common stock were early exercised and subject to repurchase by the Company at the lower of (i) the fair value of such shares on the date of repurchase, or (ii) the original exercise price of such shares.

The corresponding exercise value was immaterial and recorded as a stock-based compensation liability.

The total intrinsic value of stock options exercised during the years ended November 30, 2024, 2023 and 2022 was $ 5.6 million, $ 0.2 million and $ 4.5 million, respectively.

The fair value of options granted during the years ended November 30, 2024, 2023 and 2022 was estimated using the Black-Scholes option pricing model on the grant date using the following assumptions:

2024 2023 2022

Expected term (years) 5.50 - 6.13

2 unchanged sentences

3.27 % - 4.59 %

1.31 % - 4.22 %

Dividend yield 0 % 0 % 0 %

1 unchanged sentence

The expected term assumption for stock options was determined using the simplified method for “plain-vanilla” options.

The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company does not have sufficient trading history for its common stock.

The expected stock price volatility assumption was determined using a blended volatility by examining the historical volatilities for industry peers and the volatility of the Company’s stock following the IPO.

The risk-free rate assumption is based on the U.S.

Treasury instruments.

Treasury yield curve whose term is consistent with the expected term of the stock options.

The expected dividend assumption is based on the Company’s history and expectation of dividend payouts.

9 unchanged sentences

Balances as of November 30, 2024 1,956,015 $ 11.83

During the years ended November 30, 2023 and 2022, the weighted-average grant date fair value of RSUs granted was $ 10.53 and $ 19.11 per share, respectively, and the total fair value of RSUs vested was $ 7.9 million and $ 0.9 million, respectively.

During the years ended November 30, 2024, 2023 and 2022, the weighted-average grant date fair value of RSUs granted was $ 11.18 , $ 10.53 and $ 19.11 per share, respectively, and the total fair value of RSUs vested was $ 7.6 million, $ 7.9 million and $ 0.9 million, respectively.

Employee Stock Purchase Plan

1 unchanged sentence

The purchase price for shares of common stock purchased under the ESPP will be 85 % of the lesser of the fair market value of the Company’s common stock on (i) the first trading day of the applicable offering period or (ii) the last trading day of each purchase period in the applicable offering period.

During the year ended November 30, 2023, the Company issued 266,964 shares pursuant to the ESPP at a weighted-average price of $ 8.35 per share.

During the year ended November 30, 2024, the Company issued 276,478 shares of common stock pursuant to the ESPP at a weighted-average price of $ 7.71 per share.

As of November 30, 2024, there were 1,740,988 shares of common stock reserved for issuance pursuant to the ESPP.

The fair value of ESPP granted during the years ended November 30, 2023 and 2022 was estimated using the Black-Scholes option pricing model on the grant date using the following assumptions:

The fair value of shares granted under the ESPP during the years ended November 30, 2024, 2023 and 2022 was estimated using the Black-Scholes option pricing model on the grant date using the following assumptions:

2024 2023 2022

Expected term (years) 0.5

2 unchanged sentences

4.98 % - 5.54 %

0.67 % - 3.12 %

Dividend yield 0 % 0 % 0 %

Stock-Based Compensation

Stock-based compensation expense related to the Stock Plans and the ESPP that is included in the Company’s consolidated statements of operations is as follows (in thousands):

Stock-based compensation expense related to the Stock Plans and the ESPP that is included in the consolidated statements of operations is as follows (in thousands):

Year Ended November 30,

2024 2023 2022

Research and development $ 17,763 $ 18,707 $ 16,808

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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 $ 1.0 million and $ 0.9 million during the years ended November 30, 2023 and 2022, respectively.

For the years ended November 30, 2023 and 2022, the Company did not record any current income tax benefit or provision.

The Company has made contributions to the 401(k) Plan and recorded contribution expense of $ 0.9 million, $ 1.0 million and $ 0.9 million during the years ended November 30, 2024, 2023 and 2022, respectively.

For the year ended November 30, 2024, the Company recorded an income tax provision of $ 270,000 .

For the years ended November 30, 2023 and 2022, the Company did no t record any current income tax expense or provision.

The Company has generated net operating losses (NOLs) since inception and has established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets.

Loss before provision for income taxes includes the following component (in thousands):

2024 2023 2022

Domestic $ ( 193,299 ) $ ( 143,948 ) $ ( 180,360 )

$ ( 193,299 ) $ ( 143,948 ) $ ( 180,360 )

The provision for income taxes consists of the following (in thousands):

2024 2023 2022

Federal $ 270 $ — $ —

Total provision for income taxes $ 270 $ — $ —

The effective tax rate differs from the federal statutory rate as follows:

2024 2023 2022

Federal statutory income tax rate 21.0 % 21.0 % 21.0 %

27 unchanged sentences

The valuation allowance increased by $ 33.3 million to $ 227.1 million during the year ended November 30, 2024, primarily related to an increase on the deferred tax asset for research and development (R&D) credits, NOL carryforwards and Section 174 research and development capitalization.

The valuation allowance increased by $ 54.8 million to $ 138.4 million during the year ended November 30, 2022, primarily related to an increase on the deferred tax asset for R&D credits and NOL carryforwards.

The valuation allowance increased by $ 55.4 million to $ 193.7 million during the year ended November 30, 2023, primarily related to an increase on the deferred tax asset for R&D credits, NOL carryforwards and Section 174 research and development capitalization.

As of November 30, 2024, the Company had NOL carryforwards available to reduce future taxable income, if any, for federal and state income tax purposes of $ 263.9 million and $ 418.7 million, respectively.

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Section 382 of the Internal Revenue Code of 1986, as amended (IRC) places a limitation on the utilization of NOL and tax credit carryforwards in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50 percentage points.

The Company has identified two ownership changes that have triggered a limitation on pre-change NOLs under Section 382.

The Company has identified ownership changes that have triggered a limitation on pre-change NOLs under Section 382.

A majority of the Company’s pre-change NOLs remain available within the carryforward period provided by the IRC, subject to availability of taxable income.

As a result of the ownership changes, the Company has determined that approximately $ 0.4 million of NOLs will expire unutilized, and as such, these NOLs are not reflected in the Company’s deferred tax asset balance.

Unrecognized Tax Benefits

The Company has recorded a liability related to uncertain tax positions in the financial statements.

The Company has recorded a liability related to uncertain tax positions in the consolidated financial statements.

The Company has unrecognized tax benefits of $ 21.9 million as of November 30, 2024, all of which are offset by a full valuation allowance.

3 unchanged sentences

Years ended November 30,

2024 2023 2022

Balance at beginning of period $ 15,508 $ 10,261 $ 6,331

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All of the Company’s tax years will remain open for examination by the federal and state authorities for three and four years , respectively, from the date of the utilization of any NOLs.

In August 2022, the U.S.

Inflation Reduction Act (the Act) was enacted into law.

The Act includes various tax provisions, including an excise tax on stock repurchases, expanded tax credits for clean energy incentives and a corporate alternative minimum tax that generally applies to U.S.

corporations with adjusted financial statement income in excess of $1.0 billion.

The Company does not expect the Act to have a material impact on its financial statements.

In December 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law, significantly reforming the IRC.

2 unchanged sentences

This rule became effective for the Company during the year ended November 30, 2023.

For the year ended November 30, 2023, the Company recorded a deferred tax asset of $ 44.3 million pursuant to the provisions of Section 174 of the IRC.

For the years ended November 30, 2024 and 2023, the Company recorded a deferred tax asset of $ 65.7 million and $ 44.3 million, respectively, pursuant to the provisions of Section 174 of the IRC.

Net Loss Per Share

1 unchanged sentence

Year Ended November 30,

2024 2023 2022

Net loss $ ( 193,569 ) $ ( 143,948 ) $ ( 180,360 )

5 unchanged sentences

Years ended November 30,

2024 2023 2022

Options to purchase common stock issued and outstanding 9,839,454 8,340,968 8,256,957

5 unchanged sentences

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 $ 4.4 million and $ 4.0 million for the years ended November 30, 2023 and 2022, respectively.

Expenses related to the healthcare plan premiums were $ 4.3 million, $ 4.4 million and $ 4.0 million for the years ended November 30, 2024, 2023 and 2022, respectively.

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

1 unchanged sentence

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-K

Item 8. Financial Statements and Supplementary Data