Nurix Therapeutics, Inc. 10-Q

Item 1. Financial Statements NURIX THERAPEUTICS, INC. CONDENSED BALANCE SHEETS (in thousands, except share and per share amounts) (unaudited) May 31, 2025 November 30, 2024 Assets Current assets: Cash and cash equivalents $ 84,260 $ 109,997 Marketable securities, current 401,521 499,586 Accounts receivable 19,000 — Prepaid expenses and other current assets 10,549 9,804 Total current assets 515,330 619,387 Operating lease right-of-use assets 50,214 28,139 Property and equipment, net 18,773 17,757 Restricted cash 901 901 Other assets 6,337 3,159 Total assets $ 591,555 $ 669,343 Liabilities and stockholdersʼ equity Current liabilities: Accounts payable $ 5,954 $ 11,482 Accrued expenses and other current liabilities 37,005 37,994 Operating lease liabilities, current 5,235 8,014 Deferred revenue, current 27,420 38,364 Total current liabilities 75,614 95,854 Operating lease liabilities, net of current portion 46,696 20,289 Deferred revenue, net of current portion 21,642 26,207 Total liabilities 143,952 142,350 Commitments and contingencies (Note 6) Stockholdersʼ equity: Preferred stock, $ 0.001 par value— 10,000,000 shares authorized as of May 31, 2025 and November 30, 2024; no shares issued and outstanding as of May 31, 2025 and November 30, 2024 — — Common stock, $ 0.001 par value— 500,000,000 shares authorized as of May 31, 2025 and November 30, 2024; 76,433,664 and 75,870,718 shares issued and outstanding as of May 31, 2025 and November 30, 2024, respectively 76 76 Additional paid-in capital 1,286,131 1,265,536 Accumulated other comprehensive income (loss) ( 20 ) 150 Accumulated deficit ( 838,584 ) ( 738,769 ) Total stockholdersʼ equity 447,603 526,993 Total liabilities and stockholdersʼ equity $ 591,555 $ 669,343 The accompanying notes are an integral part of these unaudited condensed financial statements. 1 Table of Contents NURIX THERAPEUTICS, INC. CONDENSED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited) Three Months Ended May 31, Six Months Ended May 31, 2025 2024 2025 2024 Revenue: Collaboration revenue $ 14,056 $ 12,092 $ 32,509 $ 28,677 License revenue 30,000 — 30,000 — Total revenue 44,056 12,092 62,509 28,677 Operating expenses: Research and development 78,096 48,922 147,759 98,927 General and administrative 14,282 11,710 25,936 23,509 Total operating expenses 92,378 60,632 173,695 122,436 Loss from operations ( 48,322 ) ( 48,540 ) ( 111,186 ) ( 93,759 ) Interest and other income, net 5,618 4,084 12,131 7,875 Loss before income taxes ( 42,704 ) ( 44,456 ) ( 99,055 ) ( 85,884 ) Provision for income taxes 760 90 760 180 Net loss $ ( 43,464 ) $ ( 44,546 ) $ ( 99,815 ) $ ( 86,064 ) Net loss per share, basic and diluted $ ( 0.52 ) $ ( 0.71 ) $ ( 1.19 ) $ ( 1.47 ) Weighted-average number of shares outstanding, basic and diluted 83,882,477 62,377,551 83,723,403 58,660,900 The accompanying notes are an integral part of these unaudited condensed financial statements. 2 Table of Contents NURIX THERAPEUTICS, INC. CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) (unaudited) Three Months Ended May 31, Six Months Ended May 31, 2025 2024 2025 2024 Net loss $ ( 43,464 ) $ ( 44,546 ) $ ( 99,815 ) $ ( 86,064 ) Other comprehensive income (loss), net of tax: Unrealized gain (loss) on available-for-sale marketable securities ( 246 ) 215 ( 170 ) 520 Total comprehensive loss $ ( 43,710 ) $ ( 44,331 ) $ ( 99,985 ) $ ( 85,544 ) The accompanying notes are an integral part of these unaudited condensed financial statements. 3 Table of Contents NURIX THERAPEUTICS, INC. CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share amounts) (unaudited) Common stock Additional paid-in capital Accumulated other comprehensive income (loss) Accumulated deficit Total stockholders’ equity Shares Amount Balance as of November 30, 2023 48,718,552 $ 49 $ 746,299 $ ( 655 ) $ ( 545,200 ) $ 200,493 Exercise of stock options 75,362 — 355 — — 355 Vesting of restricted stock units 171,030 — — — — — Vesting of early exercised stock options — — 21 — — 21 Repurchase of unvested early exercised stock ( 1,548 ) — — — — — Issuance of common stock under employee stock purchase plan 173,558 — 1,269 — — 1,269 Stock-based compensation — — 7,823 — — 7,823 Unrealized gain on available-for-sale marketable securities — — — 305 — 305 Net loss — — — — ( 41,518 ) ( 41,518 ) Balance as of February 29, 2024 49,136,954 49 755,767 ( 350 ) ( 586,718 ) 168,748 Issuance of common stock and pre-funded warrants in connection with equity financing, net of issuance costs of $ 12,518 11,916,667 12 188,720 — — 188,732 Issuance of common stock in “ at the market ” financing, net of issuance costs of $ 1,684 3,194,809 3 48,466 — — 48,469 Exercise of stock options 24,108 — 216 — — 216 Vesting of restricted stock units 83,997 — — — — — Vesting of early exercised stock options — — 12 — — 12 Stock-based compensation — — 8,847 — — 8,847 Unrealized gain on available-for-sale marketable securities — — — 215 — 215 Net loss — — — — ( 44,546 ) ( 44,546 ) Balance as of May 31, 2024 64,356,535 $ 64 $ 1,002,028 $ ( 135 ) $ ( 631,264 ) $ 370,693 4 Table of Contents Common stock Additional paid-in capital Accumulated other comprehensive income (loss) Accumulated deficit Total stockholders’ equity Shares Amount Balance as of November 30, 2024 75,870,718 $ 76 $ 1,265,536 $ 150 $ ( 738,769 ) $ 526,993 Exercise of stock options 37,428 — 221 — — 221 Vesting of restricted stock units 242,923 — — — — — Issuance of common stock under employee stock purchase plan 83,730 — 1,252 — — 1,252 Stock-based compensation — — 8,726 — — 8,726 Unrealized gain on available-for-sale marketable securities — — — 76 — 76 Net loss — — — — ( 56,351 ) ( 56,351 ) Balance as of February 28, 2025 76,234,799 76 1,275,735 226 ( 795,120 ) 480,917 Exercise of stock options 1,233 $ — 6 — — 6 Vesting of restricted stock units 197,632 $ — — — — — Stock-based compensation — $ — 10,390 — — 10,390 Unrealized loss on available-for-sale marketable securities — $ — — ( 246 ) — ( 246 ) Net loss — $ — — — ( 43,464 ) ( 43,464 ) Balance as of May 31, 2025 76,433,664 $ 76 $ 1,286,131 $ ( 20 ) $ ( 838,584 ) $ 447,603 The accompanying notes are an integral part of these unaudited condensed financial statements. 5 Table of Contents NURIX THERAPEUTICS, INC. CONDENSED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six Months Ended May 31, 2025 2024 Cash flows from operating activities Net loss $ ( 99,815 ) $ ( 86,064 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 4,592 4,375 Stock-based compensation 19,107 16,667 Net accretion of discount on marketable securities ( 6,258 ) ( 4,089 ) Amortization of operating lease right-of-use assets 4,633 3,604 Changes in operating assets and liabilities: Accounts receivable ( 19,000 ) — Prepaid expenses and other assets ( 2,962 ) 1,337 Accounts payable ( 5,888 ) ( 3,471 ) Deferred revenue ( 15,509 ) ( 7,677 ) Operating lease liabilities ( 3,080 ) ( 3,092 ) Accrued expenses and other current liabilities ( 68 ) ( 3,246 ) Net cash used in operating activities ( 124,248 ) ( 81,656 ) Cash flows from investing activities Purchases of marketable securities ( 178,351 ) ( 279,921 ) Maturities of marketable securities 281,543 189,185 Purchases of property and equipment ( 6,160 ) ( 4,821 ) Net cash provided by (used in) investing activities 97,032 ( 95,557 ) Cash flows from financing activities Proceeds from exercise of stock options 227 571 Proceeds from issuance of common stock under employee stock purchase plan 1,252 1,269 Proceeds from issuances of common stock and pre-funded warrants in equity financing, net of issuance costs — 188,902 Proceeds from issuances of common stock in “at the market” financing, net of issuance costs — 48,649 Repurchase of unvested early exercised stock options — ( 15 ) Net cash provided by financing activities 1,479 239,376 Net (decrease) increase in cash, cash equivalents and restricted cash ( 25,737 ) 62,163 Cash, cash equivalents and restricted cash at beginning of period 110,898 55,528 Cash, cash equivalents and restricted cash at end of period $ 85,161 $ 117,691 Supplemental disclosures of non-cash investing and financing activities: Additions to property and equipment included in accounts payable and accrued expenses and other current liabilities $ 1,082 $ 1,932 Right-of-use assets recognized in exchange for lease obligations $ 26,708 $ 1,297 Deferred issuance costs included in accrued expenses and other current liabilities $ — $ 170 Deferred issuance costs recognized related to the “at the market” financing $ — $ 180 Vesting of early exercised stock options $ — $ 33 6 Table of Contents As of May 31, 2025 2024 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 84,260 $ 116,790 Restricted cash 901 901 Total cash, cash equivalents and restricted cash $ 85,161 $ 117,691 The accompanying notes are an integral part of these unaudited condensed financial statements. 7 Table of Contents NURIX THERAPEUTICS, INC. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS 1. Organization Description of Business Nurix Therapeutics, Inc. (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 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. The Company’s wholly owned, clinical stage pipeline includes targeted protein degraders of Bruton’s tyrosine kinase, a B-cell signaling protein, and inhibitors of Casitas B-lineage lymphoma proto-oncogene B, an E3 ligase that regulates activation of multiple immune cell types including T cells and NK cells. The Company’s partnered drug discovery pipeline consists of multiple programs under collaboration agreements with Gilead Sciences, Inc. (Gilead), Sanofi S.A. (Sanofi) and Seagen Inc. (now a part of Pfizer Inc. (Pfizer)), within which the Company retains certain options for co-development, co-commercialization and profit sharing in the United States for multiple drug candidates. Equity Distribution Agreement In August 2021, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC), which was amended in February 2023 (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 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 $ 10.00 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 3.0 % 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. 8 Table of Contents 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 3.0 % 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 May 31, 2025, 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 (the 2022 Pre-Funded Warrants). 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 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 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. Since inception, the Company has generally incurred significant losses and negative net cash flows from operations. The Company does not expect its existing cash, cash equivalents and marketable securities to be sufficient to fund the completion of its clinical trials through commercialization and will need substantial additional funding to support its continuing operations and pursue its long-term business plan. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its drug candidates currently in development. The accompanying condensed financial statements have been prepared assuming that the Company will continue as a going concern. As of May 31, 2025, the Company had cash, cash equivalents and marketable securities of $ 485.8 million and an accumulated deficit of $ 838.6 million. Management believes that its cash, cash equivalents and marketable securities are sufficient to continue operating activities for at least 12 months following the issuance date of these condensed financial statements. Future capital requirements will depend on many factors, including the timing and extent of spending on research and development and payments the Company may receive under its collaboration agreements with Sanofi, Gilead and Pfizer or future collaboration agreements, if any. There can be no assurance that, in the event the Company requires additional financing, such financing will be available at terms acceptable to the Company if at all. If additional capital is not available, failure to generate sufficient cash flows from operations, raise additional capital and reduce discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives. 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. Based on the Company’s current forecast of future operating results, the Company has concluded that its cash, cash equivalents and marketable securities are sufficient to continue operating activities for at least 12 months following the issuance date of these condensed financial statements. 9 Table of Contents 2. Summary of Significant Accounting Policies Basis of Presentation The Company’s condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and applicable rules and regulations of the SEC regarding interim financial reporting. The Company’s condensed financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair statement of the Company’s financial position as of and for the three and six months ended May 31, 2025. The condensed balance sheet as of November 30, 2024, was derived from the audited annual financial statements as of that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. These interim financial statements and related disclosures have been prepared with the presumption that users of the interim financial statements have read or have access to the audited annual financial statements for the preceding fiscal year. Accordingly, these financial statements should be read in conjunction with the audited annual financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended November 30, 2024, as filed with the SEC on January 28, 2025. These interim results are not necessarily indicative of results to be expected for the full fiscal year or any future interim period. Subsequent to November 30, 2023, amounts presented in the financial statements are unconsolidated as the Company had no subsidiaries. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to the useful lives of long-lived assets, the measurement of stock-based compensation, accruals for research and development activities, income taxes and revenue recognition. The Company also makes certain commencement date estimates for its leases, including the incremental borrowing rate, the expected lease term and the fair value of the leased asset. The Company bases its estimates on historical experience and on other relevant assumptions that are reasonable under the circumstances. Actual results could differ materially from those estimates. Refer to Note 3 for more information regarding the estimates related to revenue recognition. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents and marketable securities. The Company’s marketable securities consist of debt securities issued by highly rated corporate entities, the U.S. federal government or state and local governments. The Company’s exposure to any individual corporate entity is limited by policy. Deposits may, at times, exceed federally insured limits. The Company invests its cash equivalents in highly rated money market funds. During the periods presented, the Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities. Other Risks and Uncertainties The Company is subject to a number of risks similar to other clinical stage biopharmaceutical companies, including, but not limited to, changes in any of the following areas that the Company believes could have a material adverse effect on its future financial position or results of operations: 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, 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. 10 Table of Contents 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 condensed financial statements and accompanying notes. The extent to which the increasing financial market volatility and uncertainty may directly or indirectly impact the condensed 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. Disruption from these manufacturers or suppliers would have a negative impact on the Company’s business, financial position and results of operations. Leases 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. 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. ROU assets also include any initial direct costs incurred and any lease payments made on or before the lease commencement date, less any lease incentives received. The Company uses its incremental borrowing rate, if an implicit rate is not readily available, and the information available at the date of lease commencement in determining its lease liabilities. The Company’s incremental borrowing rate is based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment, and the determination of the rate requires the Company to make certain assumptions and judgements, including on its synthetic credit rating. Leases may include options to extend or early terminate the lease term. If the Company, using judgement, is reasonably certain that an option will be exercised, then the option will be included in the calculation of the lease term. The Company elected to combine lease and non-lease components for all underlying assets groups, and not recognize ROU assets or lease liabilities for short-term leases. A short-term lease is a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company does not have any finance leases. Revenue Recognition The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To recognize revenue from a contract with a customer, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. At contract inception, the Company assesses the goods or services promised within each contract, whether each promised good or service is distinct, and determines those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied. The Company enters into collaboration agreements under which it may obtain upfront payments, milestone payments, royalty payments and other fees. Promises under these arrangements may include research licenses, research services, including selection campaign research services for certain replacement targets, the obligation to share information during the research and the participation of alliance managers and in joint research committees, joint patent committees and joint steering committees. The Company assesses these promises within the context of the agreements to determine the performance obligations. Exclusive license rights: If a license to the Company’s intellectual property is determined to be distinct from the other promises identified in the arrangement, the Company recognizes revenue from nonrefundable, upfront payments allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license and the underlying intellectual property. If the license is the predominant promise, and it is determined that the license represents functional intellectual property, revenue is recognized at the point in time when control of the license is transferred. If it is determined that the license does not represent functional intellectual property, revenue is recognized over time using an appropriate method of measuring progress. 11 Table of Contents Research and collaboration licenses: Collaboration agreements may include research licenses and research and development services to be performed by the Company. For research licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring proportional performance for purposes of recognizing revenue from non-refundable, upfront payments. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone payments: At the inception of each arrangement that includes research, development or regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. The Company uses the most likely amount method for research, development and regulatory milestone payments. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. If it is probable that a significant revenue reversal would not occur, the associated milestone amount is included in the transaction price. Sales-based milestones and royalties: For arrangements that include sales-based milestone or royalty payments based on the level of sales, and in which the license is deemed to be the predominant item to which the sales-based milestone or royalties relate to, the Company recognizes revenue in the period in which the sales-based milestone is achieved and in the period in which the sales associated with the royalty occur. To date, the Company has not recognized any sales-based milestone or royalty revenue resulting from its collaboration arrangements. Customer options: Customer options, such as options granted to allow a licensee to extend a license or research term, to select additional research targets or to choose to research, develop and commercialize licensed compounds are evaluated at contract inception to determine whether those options provide a material right (i.e., an optional good or service offered for free or at a discount) to the customer. If the customer options represent a material right, the material right is treated as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the standalone selling price. As a practical alternative to estimating the standalone selling price of a material right when the underlying goods or services are both (i) similar to the original goods or services in the contract and (ii) provided in accordance with the terms of the original contract, the Company allocates the total amount of consideration expected to be received from the customer to the total goods or services expected to be provided to the customer. 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. The current portion of deferred revenue represents the amount to be recognized within one year from the balance sheet date based on the estimated performance period of the underlying performance obligation. The non-current portion of deferred revenue represents amounts to be recognized after one year through the end of the performance period of the performance obligation. Recent Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2023‑07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures (ASU 2023-07), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This amendment is effective for the Company in the fiscal year beginning December 1, 2024, and interim periods within the fiscal year beginning December 1, 2025, on a retrospective basis with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on the Company’s condensed financial statements. In December 2023, the FASB issued ASU 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which is intended to enhance the transparency and decision usefulness of income tax disclosures, primarily by amending disclosure requirements for the effective tax rate reconciliation and income taxes paid. ASU 2023-09 should be applied on a prospective basis, and retrospective application is permitted. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its disclosures. 12 Table of Contents 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. 3. Collaboration Agreements Gilead 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. The Company retains the option to co-develop and co-promote, under a profit share structure, up to two drug candidates in the United States, provided that the Company may only exercise such option once per licensed product and Gilead retains the right to veto the Company’s option selection for any one drug candidate of its choice. The collaboration excludes the Company’s current internal protein degradation programs for which the Company retains all rights, and also excludes the Company’s future internal programs, provided that the Company has distinguished future programs as excluded from the scope of the collaboration. In March 2023, Gilead exercised the option, which did not represent a material right at contract inception, since it was not offered for free or at a discount, to exclusively license one target (Gilead License Option Exercise), the first development candidate resulting from the Gilead Agreement. Pursuant to the Gilead Agreement, the Company received a license option exercise payment of $ 20.0 million in April 2023 for the Gilead License Option Exercise. The license to the functional intellectual property and all goods and services related to the Gilead License Option Exercise were transferred during the second quarter of fiscal year 2023. Over time, Gilead may elect to replace the initial drug targets with other drug targets. For drug targets that are subject to the collaboration, the Company is obligated to use commercially reasonable efforts to undertake a research program in accordance with a research plan agreed to by the parties and established on a target-by-target basis. The Company has primary responsibility under the Gilead Agreement for performing preclinical research activities (including target validation, drug discovery, identification or synthesis) pursuant to a research plan. Each party will bear its own costs in the conduct of research activities. Gilead will be responsible for any development, commercialization and manufacturing activities, unless the Company exercises its co-development and co-promotion option. For those programs that the Company exercises its option to co-develop and co-promote, the Company and Gilead will split U.S. development costs as well as U.S. profits and losses evenly, and the Company will be eligible to receive royalties on net ex-U.S. sales and reduced milestone payments. 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 May 31, 2025, the Company has received payments of $ 47.0 million for research milestones and additional payments, $ 20.0 million for a license option exercise payment, $ 15.0 million in research term extension fees and $ 5.0 million for a clinical milestone payment. As of May 31, 2025, the Company is eligible to receive up to approximately $ 1.8 billion in total additional payments, including payments of up to $ 508.5 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. 13 Table of Contents 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. The Company identified the following promises in the Gilead Agreement: (1) the research licenses, (2) the research services, including selection campaign research services for certain replacement targets, (3) the obligation to share information during the research term and (4) the participation in the joint research committee and joint steering committee. The Company determined that the research licenses, the obligation to share information and the participation in joint committees are not capable of being distinct from the research services due to the specialized nature of the research services to be provided by the Company, and, accordingly, the promises identified were combined as one single performance obligation. The Company also concluded that, at the inception of the Gilead Agreement, Gilead’s options to obtain an exclusive development, manufacturing and commercialization license for each collaboration target, to extend the five-year research term and to perform selection campaign research services for certain replacement targets do not represent material rights and are not considered performance obligations because they do not contain a significant and incremental discount. The Company concluded that Gilead’s target reservation right is not a performance obligation as it does not require any specific action from the Company and it is rather an exclusivity right and an attribute of other performance obligations in the Gilead Agreement, such as the research licenses. In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract. Certain milestone payments and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of May 31, 2025. 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 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 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 initial research term ended in the third quarter of fiscal year 2024. 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 May 31, 2025, 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. Costs consist primarily of internal full-time employee (FTE) and third-party contract costs related to the Gilead 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. For the three and six months ended May 31, 2025, the Company recognized collaboration revenue related to the Gilead Research Term Extension of $ 1.6 million and $ 3.3 million, respectively, 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 three and six months ended May 31, 2024, the Company recognized collaboration revenue related to the Gilead Agreement of $ 4.9 million and $ 9.5 million, respectively, all of which was included in deferred revenue as of the beginning of the period. As of May 31, 2025, deferred revenue related to the Gilead Agreement was $ 7.6 million, all of which was current. As of November 30, 2024, deferred revenue related to the Gilead Agreement was $ 11.0 million, of which $ 9.1 million was current. 14 Table of Contents Sanofi 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 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 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 increased overall forecasted costs and had 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 its future internal programs, provided that the Company distinguished future programs as excluded from the scope of the collaboration. In March 2025, Sanofi exercised its right to exclusively license one target (the First Sanofi License Extension), the first development candidate resulting from the Sanofi Agreement. This right did not represent a material right at contract inception, since it was not offered for free or at a discount. Pursuant to the Sanofi Agreement, the Company received a license extension fee payment of $ 15.0 million in March 2025 for the First Sanofi License Extension. In May 2025, Sanofi exercised its right to exclusively license a second target (the Second Sanofi License Extension, and together with the First Sanofi License Extension, the Sanofi License Extensions), the second development candidate resulting from the Sanofi Agreement. This right also did not represent a material right at contract inception, since it was not offered for free or at a discount. Pursuant to the Sanofi Agreement, the Company expected to receive a license extension fee payment of $ 15.0 million for the Second Sanofi License Extension. As of May 31, 2025, the license extension fee was included in accounts receivable and payment was received in June 2025. The license to the functional intellectual property and all goods and services related to both the First Sanofi License Extension and the Second Sanofi License Extension were transferred during the second quarter of fiscal year 2025. 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. The Company is obligated to use commercially reasonable efforts to identify relevant target binders and targeted protein degraders in order to identify development candidates. Subject to certain exceptions, each party will bear its own costs in the conduct of such research. Sanofi will be responsible for any development and commercialization activities unless the Company exercises its co-development and co-promotion option. For those programs that the Company exercises its option to co-develop, co-promote and co-commercialize, the Company will be responsible for a portion of the U.S. development costs, and the parties will split U.S. profits and losses evenly, and the Company will be eligible to receive royalties on ex-U.S. net sales and reduced milestone payments on such optioned products. 15 Table of Contents Upon signing the Sanofi Agreement, Sanofi paid the Company an upfront payment of $ 55.0 million. Subsequently, in January 2021, Sanofi paid the Company an additional $ 22.0 million to exercise its option to expand the number of targets beyond the initial targets included in the collaboration. In addition, from the signing of the Sanofi Agreement to May 31, 2025, the Company has received payments of $ 16.0 million for research milestones and $ 15.0 million for a license extension fee. As of May 31, 2025, the Company is eligible to receive up to approximately $ 949.0 million in total additional payments, including payments of up to $ 184.0 million upon the achievement of specified research and development milestones, up to $ 15.0 million in certain additional fees related to target licensing and reservation, up to $ 250.0 million upon the achievement of specified regulatory milestones and up to $ 500.0 million 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. The Company identified the following promises in the Sanofi Agreement: (1) the research licenses, (2) the research services, (3) the obligation to share information during the research term and (4) the participation of alliance managers in the joint research committee and joint patent committee. The Company determined that the research licenses, the obligation to share information and the participation in the joint committees are not capable of being distinct from the research services due to the specialized nature of the research services to be provided by the Company, and, accordingly, the promises identified were combined as one single performance obligation. The Company also determined that Sanofi’s exclusive right to add up to two additional targets constitutes a material right as it represents a significant and incremental discount that Sanofi would not have received without entering into the Sanofi Agreement. The option to extend the license term does not represent a material right because it does not contain a significant and incremental discount. In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract. Certain milestone payments and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of May 31, 2025. The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. At the inception of the Sanofi Agreement, the Company determined that the transaction price consisted of the upfront payment of $ 55.0 million for three initial drug targets and $ 22.0 million for two additional targets. Subsequently, upon the achievement of research milestones, $ 20.0 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. Costs consist primarily of internal FTE and third-party contract costs related to the Sanofi 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. For the three and six months ended May 31, 2025, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 3.4 million and $ 16.1 million, respectively, of which $ 3.1 million and $ 9.1 million, respectively, were included in deferred revenue as of the beginning of the period, and zero and $ 6.4 million, respectively, were related to activities satisfied in previous periods. During the three and six months ended May 31, 2025, the Company also recognized $ 30.0 million in license revenue pursuant to the Sanofi License Extensions. For the three and six months ended May 31, 2024, the Company recognized collaboration revenue related to the Sanofi Agreement of $ 2.0 million and $ 10.3 million, respectively, of which $ 2.0 million and $ 8.8 million, respectively, were included in deferred revenue as of the beginning of the period, and zero and $ 1.2 million, respectively, were related to activities satisfied in previous periods. As of May 31, 2025, accounts receivable related to the Sanofi Agreement was $ 19.0 million and deferred revenue was zero . As of November 30, 2024, deferred revenue related to the Sanofi Agreement was $ 9.1 million, all of which was current and accounts receivable was zero . 16 Table of Contents Pfizer In September 2023, the Company entered into a strategic collaboration with Seagen Inc. (now a part of Pfizer Inc.) (the Pfizer Agreement) to develop a suite of targeted protein degraders against multiple targets nominated by Pfizer that are suitable for antibody conjugation. Pfizer will be responsible for conjugating these degraders to antibodies to make degrader antibody conjugates (DACs), a new class of medicines for use in cancer treatment, and advancing these DAC drug candidates through preclinical and clinical development and commercialization. Under the Pfizer Agreement, Pfizer has the option to obtain exclusive licenses to develop and commercialize certain degraders, while the Company retains an option for U.S. profit sharing and co-promotion on two products arising from the collaboration. The collaboration excludes the Company’s current internal protein degradation programs for which the Company retains all rights, and also excludes the Company’s future internal programs, provided that the Company has distinguished future programs as excluded from the scope of the collaboration. For the targets nominated by Pfizer under the collaboration, the Company shall use commercially reasonable efforts to identify, synthesize, characterize and deliver targeted protein degraders that selectively bind to and degrade such targets. Development of licensed degraders, with the exception of licensed products for which the Company exercises its profit-share options, will be at Pfizer’s sole cost and expense. For the profit-share products, the parties will share net profits and net losses and global development costs, and the Company will be eligible to receive royalty and milestone payments on such optioned products. Under the terms of the Pfizer Agreement, the Company received an upfront payment of $ 60.0 million. In addition, from the signing of the Pfizer Agreement to May 31, 2025, the Company has received payments of $ 10.0 million for research milestones. As of May 31, 2025, 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. The Company identified the following promises in the Pfizer Agreement: (1) the research licenses, (2) the research services, (3) the participation of a gatekeeper and an alliance managers and the participation in various joint committees, and (4) the obligation to share information during the research term. The Company determined that the research licenses, the participation in the joint committees and the obligation to share information are not capable of being distinct from the research services, and, accordingly, the identified promises were combined as one single performance obligation. The Company also determined that, at the inception of the Pfizer Agreement, Pfizer’s options to obtain an exclusive development, manufacturing and commercialization license for each collaboration target and to extend the four-year research term do not represent material rights and are not considered performance obligations because they do not contain a significant and incremental discount. Additionally, Pfizer’s target reservation right is not a performance obligation as it is an exclusivity right and an attribute of other performance obligations in the Pfizer Agreement, such as the research licenses, and does not require any specific actions from the Company. In order to determine the transaction price, the Company evaluated all the payments to be received during the duration of the contract. Milestone payments and additional fees were considered variable consideration, which were not included in the transaction price based on the most likely amount method as of May 31, 2025. The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The Company determined that the transaction price at the inception of the Pfizer Agreement consisted of the upfront payment of $ 60.0 million. Subsequently, upon achievement of research milestones, $ 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 four years , not to extend beyond six 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. 17 Table of Contents Using the cost-based input method, which the Company determined most faithfully depicts the transfer of its performance obligation to Pfizer, 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. 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. For the three and six months ended May 31, 2025, the Company recognized collaboration revenue related to the Pfizer Agreement of $ 4.0 million and $ 8.0 million, respectively, all of which was included in deferred revenue as of the beginning of the period. For the three and six months ended May 31, 2024, the Company recognized collaboration revenue related to the Pfizer Agreement of $ 5.2 million and $ 8.9 million, respectively, of which $ 4.4 million and $ 8.1 million, respectively, were included in deferred revenue as of the beginning of the period, and $ 0.5 million and $ 0.1 million, respectively, were related to activities satisfied in previous periods. As of May 31, 2025, deferred revenue related to the Pfizer Agreement was $ 41.5 million, of which $ 19.9 million was current. 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. 4. Condensed Balance Sheet Components Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands): May 31, 2025 November 30, 2024 Laboratory equipment $ 43,006 $ 39,031 Leasehold improvements 6,230 5,140 Computer equipment 1,043 936 Furniture and fixtures 1,099 1,077 Software 5,543 5,578 Software in progress 556 497 Total property and equipment, gross 57,477 52,259 Less: Accumulated depreciation and amortization ( 38,704 ) ( 34,502 ) Total property and equipment, net $ 18,773 $ 17,757 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): May 31, 2025 November 30, 2024 Accrued compensation $ 12,521 $ 16,631 Accrued contract research and lab supplies 7,834 11,599 Accrued clinical 12,685 4,637 Accrued professional services 2,014 1,615 Accrued taxes 909 1,237 Other 1,042 2,275 Total accrued expenses and other current liabilities $ 37,005 $ 37,994 5. Fair Value Measurements In accordance with the authoritative guidance on fair value measurements and disclosures under U.S. GAAP, the Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows: 18 Table of Contents Level 1—Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and Level 3—Inputs that are unobservable. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability. The following tables present the Company’s investments, which consist of cash equivalents and available-for-sale marketable securities, that are measured at fair value on a recurring basis as of May 31, 2025 and November 30, 2024 (in thousands): May 31, 2025 Level Amortized cost Unrealized gain Unrealized loss Estimated fair value Money market funds Level 1 $ 74,199 $ — $ — $ 74,199 U.S. treasury securities Level 1 381,577 43 ( 55 ) 381,565 U.S. government agency securities Level 2 24,946 1 ( 9 ) 24,938 Total $ 480,722 $ 44 $ ( 64 ) $ 480,702 Included in cash and cash equivalents $ 79,180 $ 1 $ — $ 79,181 Included in marketable securities, current $ 401,542 $ 43 $ ( 64 ) $ 401,521 November 30, 2024 Level Amortized cost Unrealized gain Unrealized loss Estimated fair value Money market funds Level 1 $ 90,380 $ — $ — $ 90,380 U.S. treasury securities Level 1 470,607 271 ( 138 ) 470,740 U.S. government agency securities Level 2 28,829 32 ( 15 ) 28,846 Total $ 589,816 $ 303 $ ( 153 ) $ 589,966 Included in cash and cash equivalents $ 90,380 $ — $ — $ 90,380 Included in marketable securities, current $ 499,436 $ 303 $ ( 153 ) $ 499,586 The following tables summarize the available-for-sale marketable securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of May 31, 2025 and November 30, 2024, aggregated by investment category and length of time in a continuous unrealized loss position (in thousands): Less than 12 months Greater than 12 months Total May 31, 2025 Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss U.S. treasury securities $ 200,065 $ ( 55 ) $ — $ — $ 200,065 $ ( 55 ) U.S. government agency securities 15,954 ( 3 ) 3,992 ( 6 ) 19,946 ( 9 ) Total $ 216,019 $ ( 58 ) $ 3,992 $ ( 6 ) $ 220,011 $ ( 64 ) Less than 12 months Greater than 12 months Total November 30, 2024 Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss U.S. treasury securities $ 166,161 $ ( 138 ) $ — $ — $ 166,161 $ ( 138 ) U.S. government agency securities — — 3,981 ( 15 ) 3,981 ( 15 ) Total $ 166,161 $ ( 138 ) $ 3,981 $ ( 15 ) $ 170,142 $ ( 153 ) The accrued interest receivable related to the Company’s marketable securities was $ 1.7 million and $ 1.5 million as of May 31, 2025 and November 30, 2024, respectively, and was included in prepaid expenses and other current assets on the condensed balance sheet. 19 Table of Contents The Company classifies its money market funds and U.S. 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 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. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs. There were no transfers of financial instruments between valuation levels during the three and six months ended May 31, 2025 and 2024. As of May 31, 2025 and November 30, 2024, the unrealized losses for available-for-sale securities were non-credit related, and the Company does not intend to sell the securities that were in an unrealized loss position, nor will it be required to sell those securities before recovery of their amortized cost basis, which may be maturity. As of May 31, 2025, and November 30, 2024, no allowance for credit losses for the Company’s marketable securities was recorded. During the three and six months ended May 31, 2025 and 2024, the Company did not recognize any impairment losses related to marketable securities. 6. Commitments and Contingencies Legal Proceedings From time to time, the Company may be involved in legal proceedings in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. Legal fees and other costs associated with such actions are expensed as incurred. As of May 31, 2025, the Company was not a party to any material legal proceedings. Indemnifications In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with its partners, suppliers and vendors, among others. Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred in connection with its service, breach of representations or covenants, intellectual property infringement or other claims made against such parties. These provisions may limit the time within which an indemnification claim can be made. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. The Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in these condensed financial statements. 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 condensed 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. However, the Company currently has directors’ and officers’ insurance that reduces its exposure and may enable the Company to recover a portion of any future amounts paid. Operating Leases The Company leases office and laboratory facilities totaling approximately 57,902 square feet within the same building in San Francisco, California under several lease agreements. The terms of these lease agreements expired in April 2025. 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. The minimum rent payable by the Company pursuant to the lease amendment is approximately $ 0.4 million per month. The lease amendment did not have a material impact on the Company's condensed financial statements. 20 Table of Contents 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 condensed 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. In August 2023, the lease agreement was amended to increase the square footage of the leased premise to 50,094 square feet. 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 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. In February 2025, the Company entered into a lease agreement (the Brisbane Lease) with Janssen Research & Development, LLC (Janssen) and HCP LS Brisbane, LLC to sublease from Janssen approximately 159,959 square feet of office space located at 1600 Sierra Point Parkway, Brisbane, California for a research and development laboratory and office space. The lease commenced in March 2025 when the underlying assets became available for use and the Company recorded a $ 26.7 million ROU asset and lease liability on the condensed balance sheet. A security deposit of $ 2.4 million was also recorded in other assets, non-current on the condensed balance sheet. In addition, the sublandlord provided for a tenant improvement allowance of approximately $ 8.0 million, which is expected to be fully utilized. On May 31, 2025, the Company entered into an amendment to the Brisbane Lease to include an additional 35,929 square feet of office space located at 1400 Sierra Point Parkway, Brisbane, California. As of May 31, 2025, the Company has no t recognized an ROU asset or lease liability on the condensed balance sheet for the amended space as it has not been made available for use and the lease for the additional office space has not yet commenced. The Brisbane Lease, as amended, will expire on September 30, 2031, unless terminated earlier. Future minimum lease payments under the Brisbane Lease, as amended, total $ 52.3 million, which does not include the payment of additional rent to cover the Company’s share of annual operating and tax expenses and utilities costs for the building. The Company is required to pay base rent plus its proportionate share of operating expenses, as defined in the applicable lease agreement on all of its leases. Variable lease payments related to operating expenses, including utilities, maintenance costs and real estate taxes, were $ 1.3 million and $ 3.2 million for the three and six months ended May 31, 2025, respectively, and $ 1.8 million and $ 3.3 million for the three and six months ended May 31, 2024, respectively. Operating lease expenses, excluding variable lease payments, were $ 3.7 million and $ 5.9 million for the three and six months ended May 31, 2025, respectively, and $ 2.2 million and $ 4.5 million for the three and six months ended May 31, 2024, respectively. Short-term lease expense was not material for the periods presented. Other information related to leases were as follows (in thousands): Six Months Ended May 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Cash flows from operating leases $ 4,332 $ 4,037 7. Common Stock The Company’s Restated Certificate of Incorporation authorizes the Company to issue up to 500,000,000 shares of common stock, $ 0.001 par value per share, as of May 31, 2025 and November 30, 2024. Holders of common stock are entitled to dividends when and if declared by the Company’s board of directors, subject to the prior rights of the holders of shares of preferred stock. The holder of each share of common stock is entitled to one vote. As of May 31, 2025, no dividends have been declared. In July 2022, the Company issued the 2022 Pre-Funded Warrants to purchase an aggregate of 6,814,920 shares of the Company’s common stock at a price of $ 13.939 per pre-funded warrant. As of May 31, 2025, a total of 6,097,560 of the 2022 Pre-Funded Warrants remained available for exercise. In April 2024, the Company issued the 2024 Pre-Funded Warrants to purchase an aggregate of 1,500,100 shares of the Company’s common stock at a price of $ 14.999 per pre-funded warrant. As of May 31, 2025, a total of 1,480,349 of the 2024 Pre-Funded Warrants remained available for exercise. 21 Table of Contents 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. The pre-funded warrants were classified as a component of permanent equity in the Company’s condensed 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 consists of the following: May 31, 2025 November 30, 2024 Options to purchase common stock issued and outstanding 11,689,898 9,839,454 Restricted stock units issued and outstanding 2,976,746 1,956,015 Shares available for future equity grants 2,877,248 3,192,811 Shares available for issuance under employee stock purchase plan 2,415,965 1,740,988 Pre-funded warrants issued and outstanding 7,577,909 7,577,909 Total common stock reserved for future issuance 27,537,766 24,307,177 8. Stock-Based Compensation Equity Incentive Plans The Company’s 2020 Equity Incentive Plan (the 2020 Plan) serves as the successor to the Company’s 2012 Equity Incentive Plan (together with the 2020 Plan, the Stock Plans) and provides for the granting of stock options, stock appreciation rights, restricted stock awards, restricted stock units (RSUs), performance awards and stock bonus awards to employees, directors, consultants, independent contractors and advisors of the Company. As of May 31, 2025, the Company had 905,798 shares of common stock available for grant under the Stock Plans. 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 May 31, 2025, the Company had 1,971,450 shares of common stock available for grant under the 2024 Inducement Plan. Option activity under the Stock Plans and the 2024 Inducement Plan is set forth below: Number of options outstanding Weighted- average exercise price Balances as of November 30, 2024 9,839,454 $ 15.77 Options granted 1,986,500 15.50 Options exercised ( 38,661 ) 5.89 Options forfeited ( 97,395 ) 17.13 Balances as of May 31, 2025 11,689,898 $ 15.75 RSU activity under the Stock Plans and 2024 Inducement Plan is set forth below: 22 Table of Contents Number of RSUs Weighted-average grant date fair value Balances as of November 30, 2024 1,956,015 $ 11.83 RSUs granted 1,548,851 16.46 RSUs vested ( 440,555 ) 11.60 RSUs forfeited ( 87,565 ) 14.75 Balances as of May 31, 2025 2,976,746 $ 14.19 Employee Stock Purchase Plan Under the Company’s 2020 Employee Stock Purchase Plan (the ESPP), eligible employees are entitled to purchase shares of common stock with accumulated payroll deductions. During the six months ended May 31, 2025, the Company issued 83,730 shares of common stock pursuant to the ESPP at a weighted-average price of $ 14.95 per share. Stock-Based Compensation Stock-based compensation expense related to the Stock Plans, the 2024 Inducement Plan and the ESPP that is included in the Company’s condensed statements of operations is as follows (in thousands): Three Months Ended, May 31, Six Months Ended May 31, 2025 2024 2025 2024 Research and development $ 5,845 $ 4,285 $ 10,989 $ 8,112 General and administrative 4,540 4,560 8,118 8,555 Total stock-based compensation $ 10,385 $ 8,845 $ 19,107 $ 16,667 As of May 31, 2025, the total compensation cost related to stock-based awards not yet recognized was $ 78.1 million, which is expected to be amortized on a straight-line basis over the weighted-average remaining vesting period of approximately 2.5 years. 9. Defined Contribution Plan The Company sponsors a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the 401(k) Plan), which provides for the Company to make discretionary matching or discretionary annual contributions to the 401(k) Plan, for its employees. Substantially all of the Company’s employees are eligible to participate in the 401(k) Plan. Employees may contribute a percentage of their annual compensation to the plan, subject to statutory limitations. The Company has made contributions to the 401(k) Plan and recorded contribution expense of $ 0.5 million and $ 1.0 million during the three and six months ended May 31, 2025, respectively, and $ 0.4 million and $ 0.8 million during the three and six months ended May 31, 2024, respectively. 10. Income Taxes For the three and six months ended May 31, 2025, the Company recorded an income tax provision of $ 760,000 . For the three and six months ended May 31, 2024, the Company recorded an income tax provision of $ 90,000 and $ 180,000 , respectively. Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of the deferred tax assets is dependent upon future taxable income, the amount, if any, and timing of which are uncertain. The Company has generated losses since inception and has established a valuation allowance to offset deferred tax assets as of May 31, 2025 and 2024 due to the uncertainty of realizing future tax benefits from its net operating loss (NOL) carryforwards and other deferred tax assets. The Company files income tax returns in the United States and in various states. In January 2019, the California Franchise Tax Board (FTB) initiated an examination of the Company’s California tax return for tax years ending in 2015, 2016, 2017 and 2018. During the year ended November 30, 2021, the FTB issued proposed audit assessments related to revenue sourcing and R&D credits. The Company did not agree with the FTB’s assessments and challenged the assessments. In May 2025, the Company received new information from the FTB and remeasured the unrecognized tax benefit for California revenue sourcing, resulting in discrete tax expense. The Company intends to enter into Settlement procedures with the FTB in the next twelve months. 23 Table of Contents 11. Net Loss Per Share The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders, which excludes shares which are legally outstanding but subject to repurchase by the Company (in thousands, except share and per share data): Three Months Ended May 31, Six Months Ended May 31, 2025 2024 2025 2024 Numerator: Net loss $ ( 43,464 ) $ ( 44,546 ) $ ( 99,815 ) $ ( 86,064 ) Denominator: Weighted-average number of shares outstanding, basic and diluted (1) 83,882,477 62,377,551 83,723,403 58,660,900 Net loss per share, basic and diluted $ ( 0.52 ) $ ( 0.71 ) $ ( 1.19 ) $ ( 1.47 ) (1) The shares underlying the pre-funded warrants to purchase shares of the Company’s common stock have been included in the calculation of the weighted-average number of shares outstanding, basic and diluted, for the three and six months ended May 31, 2025 and 2024. The following potentially dilutive securities were excluded from the computation of the diluted net loss per share of common stock for the periods presented because their effect would have been anti-dilutive: May 31, 2025 2024 Options to purchase common stock issued and outstanding 11,689,898 9,972,005 Restricted stock units issued and outstanding 2,976,746 2,110,719 Shares expected to be purchased under employee stock purchase plan 81,597 110,065 Total 14,748,241 12,192,789 12. Related Party Transactions The Company’s Chief Financial Officer is a trustee for the multiple employer welfare association that facilitates the acquisition and administration of the Company’s healthcare plans. Expenses related to the healthcare plan premiums were $ 1.5 million and $ 2.8 million for the three and six months ended May 31, 2025, respectively, and $ 1.0 million and $ 2.1 million for the three and six months ended May 31, 2024, respectively. As of May 31, 2025 and November 30, 2024, the amount recorded in accounts payable and accrued expenses and other current liabilities in connection with this healthcare plan provider was not material. 24 Table of Contents