Vaxcyte, Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk Our cash and cash equivalents as of December 31, 2025 and 2024 consisted of readily available checking and money market funds. As of December 31, 2025, we also invested in U.S. Treasury securities, U.S. government agency securities, corporate debt, commercial paper and asset-backed securities. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. We do not believe that our cash and cash equivalents have significant risk of default or illiquidity. As of December 31, 2025 and 2024, we had approximately $2,442.6 million and $3,134.7 million in cash, cash equivalents and investments, respectively. For the years ended December 31, 2025 and 2024, we had interest income of $119.7 million and $110.0 million, respectively. The following 120 Table of Contents table shows the impact of a hypothetical 10% increase or decrease in interest rates on our net assets as of December 31, 2025 and our net loss for the year then ended: Impact on Net Assets as of December 31, 2025 Impact on Net Loss for the year ended December 31, 2025 Hypothetical Change in Interest Rates (in thousands) 10% increase $ 8,476 $ 10,531 10% decrease (8,476) (10,531) Concentrations of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist primarily of cash, cash equivalents and investments. We invest in money market funds, U.S. Treasury securities, U.S. government agency securities, corporate debt, commercial paper and asset-backed securities. We maintain bank deposits in federally insured financial institutions and these deposits may exceed federally insured limits. We are exposed to credit risk in the event of a default by the financial institutions holding our cash and issuers of investments to the extent recorded on the consolidated balance sheets. Our investment policy limits investments to money market funds, certain types of debt securities issued by the U.S. Government and its agencies, corporate debt, commercial paper and asset-backed securities, and places restrictions on the credit ratings, maturities and concentration by type and issuer. We believe that our exposure to credit risks is not significant and that a hypothetical 10% change in credit rates would not have a significant impact on our portfolio. Foreign Currency Risk We are exposed to market risk related to changes in foreign currency exchange rates, mainly relating to our contracts with Lonza, our CMO in Switzerland. We have also entered into a limited number of contracts with other parties with payments denominated in foreign currencies. Payments under these contracts are made in foreign currencies and are subject to fluctuations in foreign currency rates. We do not currently have a formal program in place to hedge foreign currency risks. However, from time to time, we buy Swiss Francs (“CHF”), which is the majority of our foreign currency exposure, at market and hold CHF in our bank accounts. As of December 31, 2025, we had approximately $38.9 million of CHF cash and cash equivalents held at three financial institutions. As of December 31, 2024, we had approximately $25.8 million of CHF cash and cash equivalents held at two financial institutions. As of December 31, 2025 and December 31, 2024, we had foreign currency denominated accounts payable and accrued expenses of $129.0 million and $72.4 million, respectively. As of December 31, 2025 and December 31, 2024, we had foreign currency denominated property, plant and equipment of $223.7 million and $157.6 million, respectively. As of December 31, 2025 and December 31, 2024, we had foreign currency denominated other assets of $148.1 million and $62.5 million, respectively. To date, foreign currency transaction gains and losses have not been material to our consolidated financial statements. The following table shows the impact of a hypothetical 10% increase or decrease in current exchange rates on our net assets as of December 31, 2025 and our net loss for the 12 months ended December 31, 2025: Impact on Net Assets as of December 31, 2025 Impact on Net Loss for the year ended December 31, 2025 (in thousands) Hypothetical Change in Currency Exchange Rates 10% increase $ 28,129 $ 24,230 10% decrease (28,129) (24,230) As our foreign currency risk increases in the future, we will evaluate alternative strategies, including hedging, to mitigate our foreign currency exposure. Effects of Inflation The rate of inflation in the United States has risen to levels not experienced in decades. Inflation generally affects us by increasing our cost of labor and research and development contract costs. The extent of any future impacts from inflation on our business and our results of operations will be dependent upon how long the elevated inflation levels persist and if the rate of inflation were to accelerate, neither of which we are able to predict. If elevated levels of inflation were to persist 121 Table of Contents or if the rate of inflation were to further increase, the purchasing power of our cash and cash equivalents may be eroded, our expenses could increase faster than anticipated and we may utilize our capital resources sooner than expected. We do not believe inflation had a material effect on our consolidated results of operations during the periods presented. 122 Table of Contents Item 8. Consolidated Financial Statements and Supplementary Data. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm – PCAOB ID No. 34 124 Consolidated Balance Sheets 126 Consolidated Statements of Operations 127 Consolidated Statements of Comprehensive Loss 127 Consolidated Statements of Stockholders’ Equity 129 Consolidated Statements of Cash Flows 130 Notes to Consolidated Financial Statements 130 123 Table of Contents Report of Independent Registered Public Accounting Firm To the stockholders and the Board of Directors of Vaxcyte, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Vaxcyte, Inc. and subsidiary (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the 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 in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits 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. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter 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 (1) relates to accounts or disclosures that are material to the financial statements and (2) 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. Accrued Contract Manufacturing Expenses — Refer to Notes 2 and 7 to the financial statements Critical Audit Matter Description The Company incurs research and development expenses, including those performed by Lonza, a contract manufacturing organization, under development and manufacturing services agreements, to provide research and development services related to preclinical and clinical-stage vaccine development. At the end of each period, the Company accrues for costs related to manufacturing expenses based on their estimates of the services received for each phase and efforts expended pursuant to quotes and contracts with vendors that conduct research and development on their behalf. This estimation process involves reviewing open contracts and purchase orders, communicating with Company personnel and third parties to identify services that have been performed on their behalf, and estimating the level of service performed and the associated costs incurred for the services for each phase when the Company has not yet been invoiced or otherwise notified of the actual costs. We identified the Company’s accrued contract manufacturing expenses as a critical audit matter primarily due to judgments necessary for management to estimate the cost of services provided but not yet invoiced and the significant volume of 124 Table of Contents transactions. The amount of the accrual at period end is based on the terms and conditions per the agreements and is dependent on management’s gathering of information from various sources, including Lonza, regarding the progress of the uninvoiced services at the reporting date. Accordingly, this estimate is subjective as it involves management’s judgment to analyze the various sources of information. This required extensive audit effort due to the volume and nature of available information from various sources, including Lonza, and required a high degree of auditor judgment when performing audit procedures to audit management’s estimates of accrued contract manufacturing expenses and evaluating the results of those procedures. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the accrued contract manufacturing expenses included the following, among others: • We tested the effectiveness of controls over the Company’s accrued contract manufacturing expense process, including controls over the estimation of contract manufacturing activities completed to date. • We met with internal research and development personnel and inspected Board of Directors materials to understand the status of contract manufacturing activities. We then compared this information to the judgment applied in management’s estimate of the recorded expenses and corresponding accrual. • We evaluated the completeness of accrued contract manufacturing expenses through subsequent disbursement testing, and by tracing selected contract stages from the tracker obtained from Lonza, the Company’s most significant contract manufacturer, to the contract stages used by the Company. • For a sample of contract stages, we evaluated the accrued contract manufacturing expenses by: ◦ Sending written confirmations directly to the contract manufacturing organization to confirm the total budgeted amount and percentage of completion incurred as of year-end. ◦ Inspecting the development and manufacturing services agreement and related amendments, change orders, statements of work, and agreeing key provisions of the agreements including timeline, budget, and relevant rates, to the Company’s analysis of estimated expenses incurred to date. ◦ Obtaining invoices, if available, to substantiate when the transaction should have been recorded. ◦ Obtaining cash disbursements to test the accuracy of the accrual. ◦ Performing a lookback analysis by comparing the estimated accrual balance as of December 31, 2024, to the invoices received after year-end to evaluate the Company’s ability to estimate the accrual. /s/ Deloitte & Touche LLP San Francisco, California February 24, 2026 We have served as the Company’s auditor since 2017. 125 Table of Contents VAXCYTE, INC. Consolidated Balance Sheets (in thousands, except share and per share data) December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 173,959 $ 387,878 Short-term investments 1,387,000 1,359,330 Prepaid expenses and other current assets 66,402 40,777 Total current assets 1,627,361 1,787,985 Property and equipment, net 257,370 198,045 Operating lease right-of-use assets 116,009 72,102 Long-term investments 881,664 1,387,510 Restricted cash 1,466 1,317 Other assets 118,847 64,359 Total noncurrent assets 1,375,356 1,723,333 Total assets $ 3,002,717 $ 3,511,318 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 70,904 $ 48,452 Accrued compensation 23,000 20,555 Accrued contract manufacturing expenses 74,654 36,159 Accrued expenses 31,068 29,123 Operating lease liabilities — current 6,124 5,891 Total current liabilities 205,750 140,180 Operating lease liabilities — long-term 111,357 65,219 Other liabilities 100 100 Total liabilities 317,207 205,499 Commitments and contingencies (Note 7) Stockholders' Equity Preferred stock, $ 0.001 par value — 10,000,000 authorized at December 31, 2025 and December 31, 2024; no shares issued and outstanding at December 31, 2025 and December 31, 2024 — — Common stock, $ 0.001 par value — 500,000,000 shares authorized at December 31, 2025 and December 31, 2024; 131,058,858 and 124,893,034 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively 134 128 Additional paid-in capital 4,838,736 4,697,883 Accumulated other comprehensive income (loss) 1,587 ( 3,873 ) Accumulated deficit ( 2,154,947 ) ( 1,388,319 ) Total stockholders' equity 2,685,510 3,305,819 Total liabilities and stockholders' equity $ 3,002,717 $ 3,511,318 The accompanying notes are an integral part of these consolidated financial statements. 126 Table of Contents VAXCYTE, INC. Consolidated Statements of Operations (in thousands, except share and per share data) Year Ended December 31, 2025 2024 2023 Operating expenses: Research and development $ 794,306 $ 476,644 $ 332,341 Acquired manufacturing rights (Note 7) — — 75,000 General and administrative 129,369 92,902 60,700 Total operating expenses 923,675 569,546 468,041 Loss from operations ( 923,675 ) ( 569,546 ) ( 468,041 ) Other income, net: Interest income 119,718 109,994 62,907 Other income (expense) 37,329 ( 4,375 ) 2,868 Total other income, net 157,047 105,619 65,775 Net loss $ ( 766,628 ) $ ( 463,927 ) $ ( 402,266 ) Net loss per share, basic and diluted $ ( 5.63 ) $ ( 3.80 ) $ ( 4.14 ) Weighted-average shares outstanding, basic and diluted 136,089,506 121,997,348 97,157,690 The accompanying notes are an integral part of these consolidated financial statements. 127 Table of Contents VAXCYTE, INC. Consolidated Statements of Comprehensive Loss (in thousands) Year Ended December 31, 2025 2024 2023 Net Loss $ ( 766,628 ) $ ( 463,927 ) $ ( 402,266 ) Other comprehensive loss: Unrealized gains (losses) on investments 9,463 ( 4,398 ) 538 Foreign currency translation adjustments, net ( 4,003 ) 346 2 Comprehensive Loss $ ( 761,168 ) $ ( 467,979 ) $ ( 401,726 ) The accompanying notes are an integral part of these consolidated financial statements. 128 Table of Contents VAXCYTE, INC. Consolidated Statements of Stockholders’ Equity (in thousands, except share data) Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Shares Amount Balance — December 31, 2022 79,470,670 $ 82 $ 1,476,018 $ ( 522,126 ) $ — $ ( 361 ) $ 953,613 Issuance of common stock in connection with employee incentive plans 768,218 1 7,653 — — 7,654 Issuance of common stock and pre-funded warrants in connection with public follow-on offering, net of issuance costs of $ 29,952 13,030,000 13 545,289 — — 545,302 Issuance of common stock in connection with at-the market offering, net of issuance costs of $ 2,237 2,095,943 2 90,739 — — 90,741 Taxes paid related to the net share settlement of equity awards — — ( 3,876 ) — — ( 3,876 ) Stock-based compensation expense — — 48,760 — — 48,760 Other comprehensive income — — — — 540 540 Net loss — — — ( 402,266 ) — ( 402,266 ) Balance — December 31, 2023 95,364,831 98 2,164,583 ( 924,392 ) — 179 1,240,468 Issuance of common stock in connection with employee incentive plans 2,122,953 2 27,142 — — — 27,144 Issuance of common stock and pre-funded warrants in connection with follow-on public offerings, net of commissions and offering expenses of $ 117,785 24,782,690 25 2,239,688 — — — 2,239,713 Issuance of common stock in connection with at-the-market offering, net of commissions and offering expenses of $ 4,393 2,622,560 3 195,940 — — — 195,943 Taxes paid related to the net share settlement of equity awards — — ( 14,292 ) — — — ( 14,292 ) Stock-based compensation expense — — 84,822 — — — 84,822 Other comprehensive loss — — — — — ( 4,052 ) ( 4,052 ) Net loss — — — ( 463,927 ) — ( 463,927 ) Balance — December 31, 2024 124,893,034 128 4,697,883 ( 1,388,319 ) ( 3,873 ) 3,305,819 Issuance of common stock in connection with employee incentive plans 1,171,266 1 13,004 — — 13,005 Issuance of common stock from underlying pre-funded warrants in connection with follow-on public offerings 4,994,558 5 ( 5 ) — — — Taxes paid related to the net share settlement of equity awards — — ( 10,991 ) — — ( 10,991 ) Stock-based compensation expense — — 138,845 — — 138,845 Other comprehensive income — — — — 5,460 5,460 Net loss — — — ( 766,628 ) — ( 766,628 ) Balance — December 31, 2025 131,058,858 $ 134 $ 4,838,736 $ ( 2,154,947 ) $ 1,587 $ 2,685,510 The accompanying notes are an integral part of these consolidated financial statements. 129 Table of Contents VAXCYTE, INC. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net loss $ ( 766,628 ) $ ( 463,927 ) $ ( 402,266 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 16,396 7,003 3,156 Stock-based compensation expense 138,845 84,822 48,760 Amortization of operating lease right-of-use assets 8,464 8,842 7,015 Net accretion of discounts on investments ( 14,434 ) ( 38,704 ) ( 34,775 ) Unrealized foreign exchange loss (gain) ( 34,768 ) 4,232 — Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 16,800 ) ( 5,827 ) 17,870 Operating lease right-of-use assets ( 52,371 ) ( 49,948 ) ( 16,724 ) Other assets ( 39,886 ) ( 26,511 ) ( 33,007 ) Operating lease liabilities 46,371 41,886 11,284 Accounts payable 19,906 34,584 11,225 Accrued compensation 2,302 9,517 9,876 Accrued contract manufacturing expenses 31,059 ( 22,943 ) 44,501 Accrued expenses 5,967 ( 35,653 ) 36,295 Net cash used in operating activities ( 655,577 ) ( 452,627 ) ( 296,790 ) Cash flows from investing activities: Purchases of property and equipment ( 13,713 ) ( 22,427 ) ( 16,062 ) Purchases of manufacturing facility build-out and equipment construction-in-progress ( 43,260 ) ( 96,732 ) ( 51,815 ) Purchases of investments ( 1,211,499 ) ( 3,086,701 ) ( 1,329,896 ) Maturities of investments 1,531,136 1,133,235 611,876 Sales of investments 174,690 66,959 12,586 Net cash provided by (used in) investing activities 437,354 ( 2,005,666 ) ( 773,311 ) Cash flows from financing activities: Proceeds from issuance of common stock and pre-funded warrants from follow-on offerings, net of issuance costs — 2,239,713 545,302 Proceeds from issuance of common stock under at-the-market offering, net of issuance costs — 195,943 90,741 Proceeds from issuance of shares through employee equity incentive plans 13,005 27,144 7,646 Taxes paid related to the net share settlement of equity awards ( 10,991 ) ( 14,292 ) ( 3,876 ) Net cash provided by financing activities 2,014 2,448,508 639,813 Effect of exchange rate changes on cash and cash equivalents 2,439 426 ( 6,686 ) Net decrease in cash, cash equivalents and restricted cash ( 213,770 ) ( 9,359 ) ( 436,974 ) Cash, cash equivalents and restricted cash, beginning of period 389,195 398,554 835,528 Cash, cash equivalents and restricted cash, end of period $ 175,425 $ 389,195 $ 398,554 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 173,959 $ 387,878 $ 397,451 Restricted cash 1,466 1,317 1,103 Cash, cash equivalents and restricted cash $ 175,425 $ 389,195 $ 398,554 Supplemental disclosures of non-cash investing and financing activities: Purchases of property and equipment recorded in accounts payable and accrued expenses $ 7,538 $ 13,179 $ 8,510 The accompanying notes are an integral part of these consolidated financial statements. 130 Table of Contents VAXCYTE, INC. Notes to Consolidated Financial Statements 1. Company Organization and Nature of Business Vaxcyte, Inc. (“we,” “our,” “us,” “Vaxcyte” and the “Company”) refers to Vaxcyte, Inc., a Delaware corporation, and our wholly-owned consolidated subsidiary, or as the context may require, Vaxcyte, Inc. only. We are headquartered in San Carlos, California, and were incorporated in the state of Delaware on November 27, 2013 as SutroVax, Inc., and changed our name to Vaxcyte, Inc. on May 15, 2020. We are a clinical-stage vaccine innovation company engineering high-fidelity vaccines to protect humankind from the consequences of bacterial diseases. We are re-engineering the way highly complex vaccines are made through the XpressCF™ cell-free protein synthesis platform. Unlike conventional cell-based approaches, our system for producing difficult-to-make proteins and antigens is intended to develop and deliver high-fidelity vaccines with enhanced immunological benefits that are beyond the capabilities of conventional approaches. Our primary activities since incorporation have been to perform research and development, undertake preclinical and clinical studies and conduct manufacturing activities in support of our product development and commercial readiness efforts; organize and staff our Company; establish our intellectual property portfolio; and raise capital to support and expand such activities. 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding annual reporting. The consolidated financial statements include the Company and its wholly owned subsidiary. All intercompany transactions and balances have been eliminated upon consolidation. Certain prior period amounts in the consolidated financial statements have been reclassified to conform to current period presentation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements. On an ongoing basis, we evaluate our estimates and assumptions, including those related to stock-based compensation expense, accruals for certain research and development costs, the valuation of deferred tax assets and income taxes. Management bases our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those estimates. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject us to a concentration of credit risk consist primarily of cash, cash equivalents and investments. We invest in money market funds, U.S. Treasury securities, U.S. government agency securities, corporate debt, commercial paper and asset-backed securities. We maintain bank deposits in federally insured financial institutions and these deposits may exceed federally insured limits. We are exposed to credit risk in the event of a default by the financial institutions holding our cash and issuers of investments to the extent recorded on the consolidated balance sheets. Our investment policy limits investments to money market funds, certain types of debt securities issued by the U.S. Government and its agencies, corporate debt, commercial paper and asset-backed securities, and places restrictions on the credit ratings, maturities and concentration by type and issuer. We have not experienced any significant losses on our deposits of cash, cash equivalents or investments. We are subject to supplier concentration risk from certain vendors. Although we are working to establish secondary sources of supply, we currently source several of our critical raw materials from single-source suppliers. We currently use a contract manufacturing organization (“CMO”), Lonza Ltd. (“Lonza”), to handle most of our manufacturing activities for our VAX-31 and VAX-24 programs. As another CMO, Patheon Manufacturing Services LLC, part of Thermo Fisher 131 Table of Contents Scientific (collectively, “Thermo Fisher”) will formulate, fill, inspect, package, label, test, manufacture and supply drug product for our PCV programs. If we were to experience disruptions in raw materials supplied by our suppliers, or in manufacturing activities at Lonza and/or at Thermo Fisher, we may experience significant delays in our product development timelines and may incur substantial costs to secure alternative sources of raw materials or manufacturing. The “Risk Factors” section of this Annual Report on Form 10-K describes more details on these risks and other risks and uncertainties that could affect our business and our future. Cash, Cash Equivalents and Restricted Cash We consider all highly liquid investments purchased with original maturities of three months or less from the date of purchase to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds and commercial paper and are stated at their fair values. Restricted cash consists of three standby letters of credit that serve as collateral for the lease agreements for our current corporate headquarters. Investments Our investments have been classified and accounted for as available-for-sale securities. Fixed income securities consist of U.S. Treasury securities, U.S. government agency securities, corporate debt, commercial paper and asset-backed securities. These securities are recorded on the consolidated balance sheets at fair value. Unrealized gains and losses on these securities are included as a separate component of accumulated other comprehensive gain (loss). The cost of investment securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are included in other income (expense), net. Realized gains and losses are also included in other income (expense), net. When the fair value of a debt security declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in our consolidated statements of operations. When the fair value of a debt security declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in other comprehensive loss, and are recognized in our consolidated statements of operations only if we sell or intend to sell the security before recovery of its cost basis. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The carrying amounts of our financial instruments, including cash and cash equivalents, prepaid and other current assets, accounts payable, accrued expenses, and other liabilities, approximate fair value due to their short-term maturities. Assets and liabilities recorded at fair value on a recurring basis in the consolidated balance sheets, as well as assets and liabilities measured at fair value on a non-recurring basis or disclosed at fair value, are categorized based upon the level of judgment associated with inputs used to measure their fair values. The accounting guidance for fair value provides a framework for measuring fair value and requires certain disclosures about how fair value is determined. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance also establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows: Level 1— Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2— Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3 — Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. 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. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. 132 Table of Contents Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the fair value hierarchy. We recognize transfers into and out of levels within the fair value hierarchy in the period in which the actual event or change in circumstances that caused the transfer occurs. Level 1 securities consist of highly liquid money market funds for which the carrying amounts approximate their fair values due to their short maturities. U.S. Treasury securities are valued using Level 1 inputs based on unadjusted, quoted prices in active markets that are observable at the measurement date for identical assets or liabilities. Level 2 securities, consisting of corporate debt, commercial paper, U.S. government agency securities and asset-backed securities, are measured based on other observable inputs, including broker or dealer quotations or alternative pricing sources. When quoted prices in active markets for identical assets or liabilities are not available, we rely on non-binding quotes from our investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments or historical pricing trends of securities relative to our peers. To validate the fair value determinations provided by our investment managers, we review the pricing movement in the context of overall market trends and trading information from our investment managers. In addition, we assess the inputs and methods used in determining the fair value in order to determine the classification of securities in the fair value hierarchy. Property and Equipment, Net Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally three to five years . Leasehold improvements are amortized over the shorter of the expected life or lease term. Repairs and maintenance expenditures, which are not considered improvements and do not extend the useful life of property and equipment, are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the consolidated balance sheets and the resulting gain or loss is reflected in the consolidated statements of operations in the period realized. Leases We determine if an arrangement is a lease at inception. In addition, we determine whether a lease meets the classification criteria of a finance or operating lease at the lease commencement date considering whether: (i) the lease transfers ownership of the underlying asset to the lessee at the end of the lease term; (ii) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise; (iii) the lease term is for a major part of the remaining economic life of the underlying asset; (iv) the present value of the sum of the lease payments and residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset; and (v) the underlying asset is such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. As of December 31, 2025 and 2024, our lease population consisted of real estate operating leases and we did not have any finance leases. Operating leases are included in Operating lease right-of-use (“ROU”) assets, Operating lease liabilities — current and Operating lease liabilities — long term in our consolidated balance sheets. ROU assets represent our right to use the underlying assets for the lease term and lease liabilities represent our obligation to make lease payments arising from the leases. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, if the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at the lease commencement date. We determine the incremental borrowing rate based on an analysis of corporate bond yields with a credit rating similar to ours. The determination of our incremental borrowing rate requires management judgment, including development of a synthetic credit rating and cost of debt, as we currently do not carry any debt. We believe that the estimates used in determining the incremental borrowing rate are reasonable based upon current facts and circumstances. Applying different judgment to the same facts and circumstances could yield a different incremental borrowing rate. The operating lease ROU assets also include adjustments for prepayments and accrued lease payments and exclude lease incentives. ROU assets and lease liabilities may include options to extend or terminate leases if it is reasonably certain that we will exercise such options. Lease payments which are fixed and determinable are amortized as rent expense on a straight-line basis over the expected lease term. Variable lease costs, which are dependent on usage, a rate or index, including common area maintenance charges, are expensed as incurred. Lease agreements that include lease and non-lease components are accounted for as a single lease component. Lease agreements with non-cancelable terms of less than 12 months are not recorded on our consolidated balance sheets. 133 Table of Contents Impairment of Long-Lived Assets We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount to the future undiscounted net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows generated by the assets. There were no impairments of long-lived assets during the years ended December 31, 2025, 2024 or 2023. Research and Development Research and development costs are expensed as incurred. Research and development costs include salaries, stock-based compensation and benefits for employees performing research and development activities, an allocation of facility and overhead expenses, expenses incurred under agreements with consultants, CMOs, contract research organizations (“CROs”) and investigative sites that conduct preclinical studies, clinical trials other supplies and costs associated with product development efforts, preclinical activities, clinical trials and regulatory operations. Acquired Manufacturing Rights Acquired manufacturing rights are expensed as incurred on our consolidated statements of operations when it is determined there is no alternative future use. Total research and development costs including acquired manufacturing rights were $ 794.3 million, $ 476.6 million and $ 407.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. Accrued Research and Development We have entered into various agreements with CROs and CMOs. Our research and development accruals, which include accrued manufacturing expenses, are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development services provided, but not yet invoiced, are included in accrued expenses on the consolidated balance sheets. If the actual timing of the performance of services or the level of effort varies from the original estimates, we adjust the accrual accordingly. Payments made to CROs or CMOs under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered. To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred. Income Taxes We account for income taxes using the asset and liability method. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. In evaluating the ability to recover our deferred income tax assets, we consider all available positive and negative evidence, including our operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event we determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance that would reduce the provision for income taxes. Conversely, in the event that all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period when such determination is made. As of December 31, 2025 and 2024, we have recorded a full valuation allowance on our deferred tax assets. Tax benefits related to uncertain tax positions are recognized when it is more likely than not that a tax position will be sustained during an audit. Interest and penalties related to unrecognized tax benefits are included within the provision for income tax. 134 Table of Contents Stock-Based Compensation Expense For equity awards granted to employees, non-employees and directors, stock-based compensation is measured at grant date based on the fair value of the award. We determine the grant-date fair value of stock options with only service conditions using the Black-Scholes option-pricing model. The fair value of restricted stock and restricted stock unit (“RSU”) awards with only service conditions are determined based on the number of units granted and the closing price of our common stock as of the grant-date. The grant-date fair value of awards with only service conditions is recognized as share-based compensation expense on a straight-line basis over the employees’ requisite service period or the non-employees’ vesting period as the services are rendered. The estimated fair value of awards that contain market conditions are determined based on the Monte Carlo simulation model. We recognize share-based compensation expense for awards with market conditions on a straight-line basis over the requisite service period for each separately vesting portion of the award. Forfeitures are accounted for as they occur. Comprehensive Loss Comprehensive loss includes net loss and other comprehensive loss for the period. Other comprehensive loss consists of unrealized loss on investments and foreign currency translation adjustments, net. Foreign Currency Transactions For our international operations, the local currency has been determined to be the functional currency. We translate functional currency assets and liabilities to their U.S. dollar equivalents at exchange rates in effect as of the balance sheet date and income and expense amounts at average exchange rates for the period. Gains and losses from foreign currency translation are included in accumulated other comprehensive loss within stockholders’ equity in the consolidated balance sheets. Net Loss Per Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common stock outstanding, including pre-funded warrants, during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, common stock subject to repurchase, and stock options are considered to be potentially dilutive securities. 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 consideration, are fully vested and are exercisable after the original issuance date. Recently Adopted Accounting Standards In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09—Income Taxes: Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024. We adopted this ASU on a retrospective basis effective with our annual reporting period beginning January 1, 2025. See Note 12, Income Taxes for additional information. Recently Issued Accounting Standards Not Yet Adopted From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies and adopted by us as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial statements and disclosures. In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). The amendments in ASU 2024-03 intend to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization and depletion). This new guidance is effective for us for annual periods beginning after December 15, 2026. We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures. 135 Table of Contents In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The amendments in ASU 2025-06 intend to modernize the accounting for software costs that are accounted for under Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software (referred to as “internal-use software”). This new guidance is effective for us for annual periods beginning after December 15, 2027. We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The amendments in ASU 2025-10 intend to establish authoritative guidance on the accounting for government grants received by business entities. This guidance is effective for us beginning with our 2029 fiscal year annual reporting period, with early adoption permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU 2025-11 to amend the guidance in “Interim Reporting” (Topic 270). The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU 2025-12 “Codification Improvements” to address suggestions received from stakeholders on the Accounting Standards Codification ("the Codification") and to make other incremental improvements to U.S. GAAP. The update represents changes to the Codification that (i) clarify, (ii) correct errors, or (iii) make minor improvements. The amendments make the Codification easier to understand and apply. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures. 3. Fair Value Measurements and Fair Value of Financial Instruments The following tables set forth our financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy at December 31, 2025 and 2024: December 31, 2025 Fair Value Hierarchy Level Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Assets (in thousands) Cash and cash equivalents: Cash Level 1 $ 85,417 $ — $ — $ 85,417 Money market funds Level 1 52,302 — — 52,302 U.S. Treasury securities Level 1 — — — — Commercial paper Level 2 36,245 — ( 5 ) 36,240 Total cash and cash equivalents 173,964 — ( 5 ) 173,959 Investments: U.S. Treasury securities Level 1 945,072 1,969 ( 40 ) 947,001 Commercial paper Level 2 28,763 3 — 28,766 Corporate debt Level 2 897,564 2,862 ( 30 ) 900,396 Asset backed securities Level 2 152,164 249 ( 27 ) 152,386 U.S. government agency securities Level 2 219,854 289 ( 28 ) 220,115 Certificate of Deposit Level 2 20,000 — — 20,000 Total investments 2,263,417 5,372 ( 125 ) 2,268,664 Total assets measured at fair value $ 2,437,381 $ 5,372 $ ( 130 ) $ 2,442,623 136 Table of Contents December 31, 2024 Fair Value Hierarchy Level Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Assets (in thousands) Cash and cash equivalents: Cash Level 1 $ 60,531 $ — $ — $ 60,531 Money market funds Level 1 73,566 — — 73,566 U.S. Treasury securities Level 1 8,983 2 — — 8,985 Commercial paper Level 2 244,833 1 ( 38 ) 244,796 Total cash and cash equivalents 387,913 3 ( 38 ) 387,878 Investments: U.S. Treasury securities Level 1 1,463,329 1,533 ( 5,305 ) 1,459,557 Commercial paper Level 2 182,308 48 ( 18 ) 182,338 Corporate debt Level 2 691,972 888 ( 1,331 ) 691,529 Asset backed securities Level 2 195,801 309 ( 72 ) 196,038 U.S. government agency securities Level 2 217,617 243 ( 482 ) 217,378 Total investments 2,751,027 3,021 ( 7,208 ) 2,746,840 Total assets measured at fair value $ 3,138,940 $ 3,024 $ ( 7,246 ) $ 3,134,718 We had no Level 3 securities either as of December 31, 2025 or 2024. There were no transfers within the hierarchies during the years ended December 31, 2025 or 2024. As of December 31, 2025 and 2024, we had investments with a total fair market value of $ 0.3 billion and $ 1.5 billion in an unrealized loss position, of which $ 120.2 million and $ 10.5 million, respectively, were in a continuous unrealized loss position for more than 12 months. The gross unrealized losses of securities that have been in a continuous unrealized loss position were not material at December 31, 2025 or $ 7.2 million at December 31, 2024. Unrealized losses related to our investments are primarily due to interest rate fluctuations as opposed to credit quality. We do not intend to sell any of the securities in an unrealized loss position and it is not likely that we would be required to sell these securities before recovery of their amortized cost basis, which may be at maturity. We did not recognize any credit losses related to our investments during the years ended December 31, 2025 or 2024. The following table presents the contractual maturities of our investments as of December 31, 2025 (in thousands): December 31, 2025 Fair Value Due in less than one year $ 1,387,000 Due in one to five years 881,664 Total $ 2,268,664 4. Commercial Manufacturing and Supply Agreements Lonza Ltd. ("Lonza") On October 13, 2023, we entered into a pre-commercial services and commercial manufacturing supply agreement with Lonza (the “ Lonza Commercial Manufacturing and Supply Agreement”). Pursuant to the Lonza Commercial Manufacturing and Supply Agreement, Lonza will (i) construct and build out a dedicated suite (the “Suite”) at Lonza’s facilities in Visp, Switzerland to manufacture certain key components (including drug substance) for our proprietary PCV franchise and any other products or intermediates we may choose (collectively, the “Products”) and (ii) maintain and operate the Suite (utilizing Lonza’s employees) to manufacture the Products as a 137 Table of Contents service provided to us, including conducting related quality control and quality assurance operations. Lonza will be a preferred, non-exclusive, supplier of the Products to us, and we retain the right to procure the Products from one or more alternate and/or backup manufacturers of the Products (including at our own facilities). Under the Lonza Commercial Manufacturing and Supply Agreement, prior to completion of construction and certification of the Suite for commercial operation, we will contribute to the capital expenditure costs to construct the Suite (and will own certain equipment in the Suite to be purchased or otherwise acquired by us), and will pay Lonza a fixed-rate monthly service fee for Lonza’s pre-commercial services prior to commencement of commercial operations (which monthly service fee amount is subject to increases in subsequent years). Following commencement of commercial operations of the Suite to manufacture the Products, we will pay Lonza (i) Suite fees based on allocations of certain of Lonza’s costs to maintain the facility in which the Suite is located and to provide shared services to us and Lonza’s other customers in such facility, (ii) service fees based upon Lonza’s actual full-time equivalent employee (“FTE”) costs to operate the Suite to manufacture the Products, and (iii) certain other pass-through costs, including for raw materials. In addition, we may be obligated to pay or reimburse Lonza for certain other fees and expenses under the Lonza Commercial Manufacturing and Supply Agreement. Lonza will be eligible for certain financial bonuses, and subject to certain financial penalties, as incentives for the timely completion of certain scale-up activities, receipt of certain regulatory approvals for the Suite and manufacture of the Products in accordance with our commercial requirements. Unless earlier terminated, the Lonza Commercial Manufacturing and Supply Agreement will remain in effect until December 31, 2038, subject to automatic renewal for up to three additional renewal periods of five years each, unless we elect not to renew (with 24 months advanced notice to Lonza). We are permitted to terminate the Commercial Manufacturing and Supply Agreement for convenience or for Lonza’s uncured material breach, in each case subject to certain notice obligations. Lonza is permitted to terminate the Lonza Commercial Manufacturing and Supply Agreement in the event that we commit certain specified material breaches, including uncured failure to pay material and undisputed amounts of money due to Lonza, subject to certain notice obligations. Either party may terminate the Commercial Manufacturing and Supply Agreement in certain circumstances in the event of the other party’s bankruptcy. In the event that we terminate the agreement for convenience, or Lonza terminates the agreement in the event that we commit certain specified material breaches, then certain termination consequences may be triggered, including that (i) we would forfeit any outstanding entitlement to credit from Lonza of the Repurposing Fee (as defined below), and (ii) we would be obligated to pay Lonza a termination penalty equal to the greater of (a) CHF 70.0 million, or (b) a prespecified number of months’ FTE fees for the actual FTEs assigned to us as of the date of termination. Within 30 days of the Effective Date, we paid Lonza a repurposing fee (the “Repurposing Fee”) of CHF 27.0 million that will be credited back to us over a 10-year period starting upon commencement of commercial production. In the event of a termination under certain circumstances, Lonza shall be obligated to provide certain wind-down and transition services to us for up to 12 months and 24 months, respectively. As of December 31, 2025 and 2024, we have incurred $ 217.1 million and $ 151.8 million of capital expenditures related to the Vaxcyte owned facility buildout and equipment, respectively. In addition, as of December 31, 2025 and 2024, we have incurred $ 118.3 million and $ 62.5 million of facility buildout expenditures that are owned and controlled by Lonza, including the Repurposing Fee, which have been accounted for as prepaid lease payments and will be recorded as a ROU asset under Accounting Standards Codification ("ASC") 842 when control over the Suite is transferred to us, which we expect to occur when the buildout of the Suite is complete and manufacturing activities commence (see Note 5, “Balance Sheet Details”), respectively. Thermo Fisher Scientific On September 24, 2025, we entered into a master services agreement with Patheon Manufacturing Services LLC, part of Thermo Fisher Scientific (collectively, “Thermo Fisher”), pursuant to which Thermo Fisher will formulate, fill, inspect, package, label, test, manufacture and supply drug product for us at its facility in Greenville, North Carolina (the "Thermo Fisher Commercial Manufacturing and Supply Agreement"). Pursuant to the Thermo Fisher Commercial Manufacturing and Supply Agreement, we have agreed to order drug product from Thermo Fisher based on certain binding forecast periods and established prices. In addition, we will also pay Thermo Fisher for technology transfer activities and reimburse Thermo Fisher for certain out-of-pocket capital expenditures under the terms of the agreement. The Thermo Fisher Commercial Manufacturing and Supply Agreement has an initial term of 15 years and will automatically renew for additional three-year periods unless either party provides notice of non-renewal before the end of the then existing term, subject to completion of ongoing services. We are permitted to terminate the Thermo Fisher Commercial Manufacturing and Supply Agreement prior to expiration, subject to the payment of applicable termination fees, plus certain capital expenditure commitments. 138 Table of Contents 5. Balance Sheet Details Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets as of December 31, 2025 and 2024 consisted of the following: December 31, 2025 2024 (in thousands) VAT receivable $ 25,204 $ 2,421 Interest receivable 21,356 20,262 Prepaid expenses 17,040 15,732 Deposits for equipment purchases 1,208 327 Other current assets 1,594 2,035 Total $ 66,402 $ 40,777 Property and Equipment, Net Property and equipment, net as of December 31, 2025 and 2024 consisted of the following: December 31, 2025 2024 (in thousands) Manufacturing facility build-out and equipment construction-in-progress $ 217,077 $ 151,785 Lab and manufacturing equipment 62,546 55,541 Furniture and equipment 1,608 1,608 Computers, computer software and office equipment 1,670 1,001 Leasehold improvements 7,239 4,384 Total property and equipment 290,140 214,319 Less: accumulated depreciation and amortization ( 32,770 ) ( 16,274 ) Property and equipment, net $ 257,370 $ 198,045 Depreciation and amortization expense for the years ended December 31, 2025, 2024, and 2023 was $ 16.4 million, $ 7.0 million, and $ 3.2 million, respectively. Other Assets Other assets as of December 31, 2025 and 2024 consisted of the following: December 31, 2025 2024 (in thousands) Manufacturing facility construction buildout $ 118,339 $ 62,477 Other long-term assets 508 1,882 Total $ 118,847 $ 64,359 139 Table of Contents Accrued Expenses Accrued expenses as of December 31, 2025 and 2024 consisted of the following: December 31, 2025 2024 (in thousands) Clinical studies $ 11,811 $ 2,348 Other research and development 9,239 24,698 VAT payable 4,706 102 Other accrued expenses 5,312 1,975 Total $ 31,068 $ 29,123 6. Leases Operating Lease Obligations Office facility In January 2021, we entered into a lease agreement (the “Original Lease”) for our current corporate headquarters facility located in San Carlos, California (the “Headquarters Facility”). The lease term began on December 3, 2021, as amended on October 17, 2023, and was set to expire on December 31, 2025. In September 2023, we entered into an assignment and assumption of lease agreement (the “Assignment Agreement”) for an expanded lease space in the same building as our Headquarters Facility (the “Assumed Lease Premises”). The assumed lease had an original contractual term of 10 years, set to expire on November 30, 2031. Pursuant to the Assignment Agreement, the base rent was abated for three full calendar months following the October 1, 2023 effective date of the Assignment Agreement. Thereafter, we were obligated to pay an aggregate of approximately $ 1.9 million in rent payments for the remaining nine months of the first year, with a 3 % rent adjustment (not inclusive of rent abatement) every year thereafter. In November 2024, we amended and restated the Original Lease (the “Amended and Restated Lease”) as a single, unified lease for our Headquarters Facility which includes the existing space under the Original Lease and the Assumed Lease Premises (collectively, the “Existing Premises”) and expanded space covering additional floors (the “Additional Premises”), which resulted in a lease modification in accordance with ASC 842. The Amended and Restated Lease has an initial contractual term of 10 years, contains rent-free periods, scheduled rent increases, lease incentives and the option of two consecutive rights to extend the term for sixty months each. The effective date of the Amended and Restated Lease was November 15, 2024 which, for the purposes of lease accounting, is the commencement date of the lease of the Existing Premises. The commencement dates of the Additional Premises occur when certain leasehold improvements and specifications are substantially complete, the first, second and third of which occurred on February 10, 2025, November 24, 2025 and December 22, 2025, respectively, and the last of which is estimated to occur in 2026. Our Amended and Restated Lease expires on February 28, 2035. In November 2024, we entered into a sublease agreement, for which we are sublessor, for a portion of our Existing Premises. This sublease has a contractual term of two years , expiring on December 31, 2026, unless earlier terminated, with two conditional options to extend the term of the sublease for a period of 12 months each. The commencement date of this sublease was December 12, 2024. In July 2024, we entered into a sublease agreement, for which we are the sublessee for a new operating lease in the same campus as our corporate headquarters. This sublease has rent-free periods, scheduled rent increases, and a contractual term of two years , expiring on June 30, 2026, unless earlier terminated. Manufacturing facility In October 2023, we entered into the Commercial Manufacturing and Supply Agreement. We have concluded that this agreement contains an embedded lease and will be accounted for in accordance with ASC 842 upon the commencement date. As of December 31, 2025, the lease had not commenced and, as such, no lease liability or ROU asset was recorded on 140 Table of Contents the consolidated balance sheets and no operating lease expense was recorded on the consolidated statements of operations. See Note 4, “Commercial Manufacturing and Supply Agreement,” for further details. Information related to assumptions for our calculation of our ROU assets and lease liabilities, and cash paid for operating lease liabilities was as follows (dollar amounts in thousands): December 31, 2025 2024 Weighted-average remaining lease term (in years) 9.11 9.60 Weighted-average discount rate 7.2 % 7.2 % December 31, 2025 2024 Cash paid for operating lease liabilities $ 12,729 $ 11,511 Maturities of lease liabilities as of December 31, 2025 were as follows: Years ending December 31, (in thousands) 2026 $ 12,104 2027 15,788 2028 17,339 2029 17,859 2030 18,395 Thereafter 82,805 Total future undiscounted lease payments 164,290 Less: Imputed interest ( 46,709 ) Present value of lease liabilities $ 117,581 Rent expense recognized under the leases was $ 15.4 million, $ 11.5 million and $ 8.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. 7. Commitments and Contingencies Legal Contingencies From time to time, we may become involved in legal proceedings arising from the ordinary course of business. We record a liability for such matters when it is probable that future losses will be incurred and that such losses can be reasonably estimated. Significant judgment by us is required to determine both probability and the estimated amount. We do not believe that there is any litigation or asserted or unasserted claim pending that could, individually or in the aggregate, have a material adverse effect on our results of operations or financial condition. Guarantees and Indemnifications In the normal course of business, we enter into agreements that contain a variety of representations and provide for general indemnification. Our exposure under these agreements is unknown because it involves claims that may be made against us in the future. To date, we have not paid any claims or been required to defend any action related to our indemnification obligations. As of December 31, 2025 and 2024, we did not have any material indemnification claims that were probable or reasonably possible and consequently have not recorded related liabilities. To the extent permitted under Delaware law, we have agreed to indemnify our directors and officers for certain events or occurrences while the director or officer is, or was, serving at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the director’s or officer’s service. The maximum potential amount of future payments we could be required to make under these indemnification agreements is not specified in the agreements; however, we have directors and officers insurance coverage that reduces our exposure and enables us to recover a portion 141 Table of Contents of any future amounts paid. We have not incurred any material costs as a result of such indemnification and are not currently aware of any indemnification claims. Development and Manufacturing Services Agreements with Lonza In April 2022, we entered into a non-exclusive development and manufacturing services agreement with Lonza effective as of March 22, 2022, which was subsequently amended on May 12, 2022, November 21, 2022 and October 31, 2023 (as amended, the “2022 Lonza DMSA”). Pursuant to the 2022 Lonza DMSA, Lonza is obligated to perform services including manufacturing process development and clinical manufacture and supply of our proprietary PCV candidates. In February 2023, we entered into another non-exclusive development and manufacturing services agreement with Lonza effective as of March 1, 2023 (the “2023 Lonza DMSA”). Pursuant to the 2023 Lonza DMSA, Lonza will perform manufacturing process development and the manufacture of components for our PCV candidates, including the polysaccharide antigens, our proprietary eCRM protein carrier and conjugated drug substances. Under each of the 2022 Lonza DMSA and 2023 Lonza DMSA (collectively, the “Lonza Agreements”), we pay Lonza agreed-upon fees for their performance of development and manufacturing services and pass-through expenses incurred by Lonza for raw materials, as well as customary procurement and handling fees. Under each Lonza Agreement, we own all rights, title and interest in and to any and all New Customer Intellectual Property (as defined in each Lonza Agreement), and Lonza owns all rights, title and interest in New General Application Intellectual Property (as defined in each Lonza Agreement). For additional information about the Lonza Agreements, see “Manufacturing and Supply— Lonza Agreements — Development and Manufacturing Services Agreements ” included in Part I, Item 1. Business of this Annual Report on Form 10-K. Commercial Manufacturing and Supply Agreements For details of the Commercial Manufacturing and Supply Agreements with Lonza and Thermo Fisher, see Note 4. Sutro Option Agreement In December 2022, we entered into an option agreement with Sutro Biopharma (the "Option Agreement"). Pursuant to the Option Agreement, we acquired from Sutro Biopharma (i) authorization to enter into an agreement with an independent alternate CMO to directly source Sutro Biopharma’s cell-free extract, allowing us to have direct oversight over financial and operational aspects of the relationship with the CMO; and (ii) a right, but not an obligation, to obtain certain exclusive rights to internally manufacture and/or source extract from certain CMOs and the right to independently develop and make improvements to extract (including the right to make improvements to the extract manufacturing process as well as cell lines) for use in connection with the exploitation of certain vaccine compositions (the “Option”). We and Sutro Biopharma agreed to negotiate the terms and conditions of a form definitive agreement to be entered into in the event we exercised the Option, which would include the terms and conditions set forth in an executed term sheet between us (the “Term Sheet”) and such terms that were necessary to give effect to each of the terms and conditions set forth in the Term Sheet (the “Form Definitive Agreement”). As consideration for the Option and other rights and authorizations granted to us under the Option Agreement, we paid Sutro Biopharma upfront consideration of $ 22.5 million, consisting of (i) $ 10.0 million in cash and $ 7.5 million worth of shares of our common stock (the number of shares calculated based on the arithmetic average of the daily volume weighted average price of our common stock as traded on Nasdaq in the three consecutive trading days immediately prior to the issuance thereof) in December 2022, and (ii) $ 5.0 million in October 2023 within five business days after we and Sutro Biopharma mutually agreed in writing upon the Form Definitive Agreement on September 28, 2023. The 167,780 shares of common stock issued was recorded at fair value of $ 8.0 million on the date of settlement, December 22, 2022. On November 21, 2023 (the “Option Exercise Date”), we exercised the Option by submitting written notice thereof to Sutro Biopharma and concurrently paid Sutro Biopharma $ 50.0 million in cash as the first of two installment payments for the Option exercise price, followed by the second and final installment of $ 25.0 million in cash in May 2024. We determined there was no current alternative future use of the acquired manufacturing rights from the Option Agreement and, as a result, the amounts paid were expensed as incurred. Upon the occurrence of certain regulatory milestones, we agreed to pay Sutro Biopharma certain additional milestone payments totaling up to $ 60.0 million in cash. No milestone payments were made in the year ended December 31, 2025. In the event that we undergo a change of control, certain rights and payments may be accelerated. 142 Table of Contents Manufacturing Rights Agreement with Sutro Biopharma Concurrent with the payment of the first installment of the Option exercise price pursuant to the Option Agreement, on November 21, 2023, the manufacturing rights agreement (in the form of the Form Definitive Agreement) between us and Sutro Biopharma (the “Manufacturing Rights Agreement”) became effective. Pursuant to the Manufacturing Rights Agreement, we obtained exclusive rights to independently, or through certain third parties, develop, improve and manufacture cell-free extract for use in connection with our vaccine candidates. For additional information about the Manufacturing Rights Agreement, see “Manufacturing and Supply— Sutro Biopharma Agreements — Manufacturing Rights Agreement ” included in Part I, Item 1. Business of this Annual Report on Form 10-K. Purchase Commitments We enter into agreements in the normal course of business with CMOs and other vendors for manufacturing services and raw materials purchases. We rely on several third-party manufacturers for our manufacturing requirements. As of December 31, 2025, we had the following amounts of non-cancelable purchase commitments related to manufacturing services and raw materials purchased due to our key manufacturing partners. These amounts represent our minimum contractual obligations, including termination fees. If we terminate certain firm orders with key manufacturing partners, we will be required to pay for the manufacturing services scheduled or raw materials purchased under our arrangements. The actual amounts we pay in the future to our vendors under such agreements may differ from the purchase order amounts. Years ending December 31, (in thousands) 2026 $ 447,763 2027 116,422 2028 10,500 2029 10,500 Thereafter — Total non-cancelable purchase commitments due to key manufacturing partners $ 585,185 8. Stockholders' Equity Preferred Stock Our certificate of incorporation authorizes us to issue up to 10,000,000 shares of preferred stock with $ 0.001 par value per share. There were no shares of preferred stock issued or outstanding as of December 31, 2025 and 2024. Our board of directors (“Board”) are authorized to provide for the issue of all or any of the shares of preferred stock in one or more series, and to fix, determine or alter the voting powers, designation, preferences and rights of the preferred shares, and the qualifications, limitations or restrictions of any wholly unissued shares, to establish from time to time the number of shares constituting any such series, and to increase or decrease the number of shares, if any. Holders of outstanding shares of preferred stock shall be entitled to receive dividends, when, and as declared by the Board in preference and priority to any declaration or payment of any distribution on common stock. The right to receive dividends on preferred shares of preferred stock shall not be cumulative and no right to dividends shall accrue to holders of preferred stock. No dividends have been paid or declared as of December 31, 2025 and 2024. Common Stock Our certificate of incorporation authorizes us to issue up to 500,000,000 shares of common stock with $ 0.001 par value per share, of which 131,058,858 and 124,893,034 shares were issued and outstanding as of December 31, 2025 and 2024, respectively. The holders of our common stock are also entitled to receive dividends whenever funds are legally available, when and if declared by our Board. As of December 31, 2025 and 2024, no dividends have been declared. ATM Program In July 2021, we entered into an Open Market Sales Agreement℠ (the “Original ATM Sales Agreement”) with Jefferies LLC (“Jefferies”) to issue and sell, from time to time at our discretion, shares of our common stock at an aggregate offering price up to $ 150.0 million through Jefferies acting as our sales agent or principal, however, we are not obligated to make any sales of common stock. As of February 27, 2023, we had sold 4,995,709 shares of our common stock under the Original ATM Sales Agreement at a weighted average price of $ 27.57 per share for aggregate gross proceeds of $ 137.8 143 Table of Contents million. On February 27, 2023, we and Jefferies entered into an amendment to the Original ATM Sales Agreement (as amended, the “Amended ATM Sales Agreement”) to offer and sell additional shares of our common stock with an aggregate offering price up to another $ 400.0 million, which is in addition to the $ 150.0 million aggregate offering price under the Original ATM Sales Agreement. As of December 31, 2025, we have sold 4,211,367 shares of our common stock under the Amended ATM Sales Agreement at a weighted average price of $ 64.19 per share for aggregate gross proceeds of $ 270.3 million, or $ 264.2 million net of commissions and offering expenses, with $ 129.7 million remaining for future sales under the Amended ATM Sales Agreement. The gross proceeds of the shares sold net of commission and related offering expenses are reflected as an addition to common stock and additional paid-in capital on our consolidated balance sheets. The following table summarizes the share activity under the Original and Amended ATM Sales Agreements: Year Ended December 31, 2025 2024 2023 Number of shares sold under the ATM program — 2,622,560 2,095,943 Weighted average sales price per share $ — $ 76.39 $ 44.38 Aggregate gross proceeds, in thousands (1) $ — $ 200,333 $ 92,976 ______________________________________________________________ (1) Includes $ 4.4 million and $ 2.2 million of commissions and offering expenses during the years ended December 31, 2024 and 2023, respectively. Underwritten Follow-on Public Offerings On January 13, 2022, we completed an underwritten public offering in which we issued 2,500,000 shares of our common stock at a price of $ 20.00 per share and pre-funded warrants to purchase 2,500,000 shares of our common stock at a price of $ 19.999 per underlying share. Each pre-funded warrant has an exercise price of $ 0.001 per share. In February 2022, the underwriters exercised their option to purchase an additional 750,000 shares of common stock. In aggregate, we received $ 107.6 million in net proceeds after deducting issuance costs, and excluding the exercise of any pre-funded warrants. On October 28, 2022, we completed an underwritten public offering of 17,812,500 shares of our common stock, which included the full exercise of the underwriters’ option to purchase an additional 2,812,500 shares, at a price of $ 32.00 per share and pre-funded warrants to purchase 3,750,000 shares of our common stock at a price of $ 31.999 per underlying share. Each pre-funded warrant has an exercise price of $ 0.001 per share. In aggregate, we received $ 651.6 million in net proceeds after deducting issuance costs, and excluding the exercise of any pre-funded warrants. On April 21, 2023, we completed an underwritten public offering of 13,030,000 shares of our common stock, which included the full exercise of the underwriters’ option to purchase an additional 1,830,000 shares, at a price of $ 41.00 per share and pre-funded warrants to purchase 1,000,000 shares of our common stock at a price of $ 40.999 per underlying share. Each pre-funded warrant has an exercise price of $ 0.001 per share. In aggregate, we received $ 545.3 million in net proceeds after deducting issuance costs, and excluding the exercise of any pre-funded warrants. On February 2, 2024, we completed an underwritten public offering of 12,695,312 shares of our common stock, which included the full exercise of the underwriters’ option to purchase an additional 1,757,812 shares, at a price of $ 64.00 per share and pre-funded warrants to purchase 781,250 shares of our common stock at a price of $ 63.999 per underlying share. Each pre-funded warrant has an exercise price of $ 0.001 per share. In aggregate, we received $ 816.5 million in net proceeds after deducting issuance costs, and excluding the exercise of any pre-funded warrants. On September 6, 2024, we completed an underwritten public offering of 12,087,378 shares of our common stock, which included the full exercise of the underwriters’ option to purchase an additional 1,893,203 shares, at a price of $ 103.00 per share and pre-funded warrants to purchase 2,427,184 shares of our common stock at a price of $ 102.999 per underlying share. Each pre-funded warrant has an exercise price of $ 0.001 per share. In aggregate, we received $ 1.4 billion in net proceeds after deducting issuance costs, and excluding the exercise of any pre-funded warrants. The pre-funded warrants are exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and payment of the exercise price. No fractional shares of common stock will be issued in connection with the exercise of a pre-funded warrant. The holders of the pre-funded warrants may also satisfy their obligation to pay the exercise price through a “cashless exercise,” in which the holder receives the net value of the pre-funded warrant in shares of common stock determined according to the formula set forth in the pre-funded warrant. The pre-funded warrants will not expire until they are fully exercised. However, we may not effect the exercise of any pre-funded warrants, and a holder will not be entitled to exercise any portion of any pre-funded warrants that, upon giving 144 Table of Contents effect to such exercise, would cause: (i) the aggregate number of shares of our common stock beneficially owned by such holder (together with affiliates) to exceed 4.99 % or 9.99 % of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as applicable; or (ii) the combined voting power of our securities beneficially owned by such holder (together with its affiliates) to exceed 4.99 % or 9.99 % of the combined voting power of all of our securities outstanding immediately after giving effect to the exercise, as applicable, as such percentage ownership is determined in accordance with the terms of the pre-funded warrants. However, any holder of a pre-funded warrant may increase or decrease such percentage to any other percentage not in excess of 19.99 % upon at least 61 days' prior notice for the holder to us. In January 2025, 1,000,000 shares and 2,500,000 shares underlying the pre-funded warrants from the January 2022 and October 2022 offerings were exercised to receive 999,988 shares and 2,499,971 shares of common stock, net of exercise costs, respectively. In June 2025, 640,705 shares underlying pre-funded warrants from the February 2024 offering were exercised to receive 640,685 shares of common stock, net of exercise costs. In October 2025, 853,936 shares underlying pre-funded warrants from the February 2024 and September 2024 offerings were exercised to receive 853,914 shares of common stock, net of exercise costs. As of December 31, 2025, no other shares underlying the pre-funded warrants have been exercised. 9. Equity Incentive Plans Equity Incentive Plans Our 2020 Equity Incentive Plan (“2020 Plan”) became effective in June 2020 and replaced our 2014 Equity Incentive Plan (“2014 Plan”). Under the 2020 Plan, we may grant stock options, appreciation rights, restricted stock, RSUs, or any other award to employees, consultants and directors. Stock options granted under the 2020 Plan may be either incentive stock options or nonqualified stock options. Incentive stock options may be granted only to our employees, including officers and directors who are also employees. Nonqualified stock options may be granted to our employees, officers, directors, consultants and advisors. Awards granted under our 2020 Plan vest over the periods determined by our Board, generally three to four years from the date of grant, and our options expire no more than 10 years after the date of grant. We net-share settle equity awards held by certain employees by withholding shares upon vesting to satisfy tax withholding obligations. The shares withheld to satisfy employee tax withholding obligations are returned to our 2020 Plan and will be available for future issuance. Payments for employees’ tax obligations to the tax authorities are recognized as a reduction to additional paid-in capital and reflected as financing activities in our consolidated statements of cash flows. A total of 10,150,000 shares of common stock were approved to be initially reserved for issuance under the 2020 Plan. The number of shares that remained available for issuance under the 2014 Plan as of the effective date of the 2020 Plan, and shares subject to outstanding awards under the 2014 Plan as of the effective date of the 2020 Plan that are subsequently canceled, forfeited or repurchased by us, will be added to the shares reserved under the 2020 Plan. In addition, the number of shares of common stock available for issuance under the 2020 Plan is automatically increased on the first day of each calendar year during the 10 -year term of the 2020 Plan, beginning with January 1, 2021 and ending with January 1, 2030, by an amount equal to 5 % of the outstanding number of shares of our common stock on December 31 of the preceding calendar year or such lesser amount as determined by our Board. As of December 31, 2025, an aggregate of 8,821,691 shares of common stock were available for issuance under the 2020 Plan. Effective January 1, 2026, the number of shares of common stock available under the 2020 Plan increased by 6,552,942 shares pursuant to the evergreen provision of the 2020 Plan. As of December 31, 2025, 859,884 shares and 13,238,879 shares of common stock were subject to outstanding options and RSUs under the 2014 Plan and 2020 Plan, respectively. 145 Table of Contents Stock Option Activity Stock option activity under our 2020 Plan and 2014 Plan, which excludes options to purchase 29,638 shares granted outside of the 2020 Plan and 2014 Plan, for the year ended December 31, 2025 was as follows: Options Outstanding PCSOs Outstanding (in thousands, except share and per share data) Stock Option Activity Number of Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Number of Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balances — December 31, 2024 9,366,936 $ 39.40 7.48 $ 406,730 639,710 $ 102.70 9.85 $ — Granted 2,451,479 $ 53.39 — Exercised ( 634,401 ) $ 14.39 — Forfeited ( 223,213 ) $ 55.91 ( 17,850 ) 102.70 Balances — December 31, 2025 10,960,801 $ 43.64 7.16 $ 130,351 621,860 $ 102.70 8.85 $ — Vested and expected to vest — December 31, 2025 10,960,801 $ 43.64 7.16 $ 130,351 621,860 $ 102.70 8.85 $ — Exercisable at December 31, 2025 6,705,775 $ 35.16 6.25 $ 109,070 — During the years ended December 31, 2025, 2024 and 2023, options to purchase 634,401 , 1,813,828 and 538,888 shares of common stock, respectively, were exercised for cash at a weighted-average price per share of $ 14.39 , $ 13.97 and $ 10.50 , respectively. The intrinsic value of the stock options exercised was $ 35.0 million, $ 130.7 million and $ 21.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. The weighted-average grant date fair value of options granted for the years ended December 31, 2025, 2024 and 2023 was $ 32.09 , $ 49.36 and $ 28.74 , respectively. The total fair value of stock options vested was $ 73.7 million, $ 51.3 million and $ 41.8 million for the years ended December 31, 2025, 2024 and 2023, respectively. In November 2024, we granted 639,710 performance contingent stock options ("PCSOs") with both service and market conditions to certain employees. The market condition relates to the achievement of a share price threshold that requires the average price of our common stock to be equal to or greater than $ 154.05 for a period of one calendar year. To the extent that the market conditions are met, one-third of the PCSOs vest on the third, fourth and fifth anniversary date of the grant date, subject to continued service. The maximum contractual term of our outstanding PCSOs is 10 years from the date of grant. As of December 31, 2025, the market condition for the PCSOs had not been met. No PCSOs were granted in the year ended December 31, 2025. Stock Unit Award Activity In March 2022, our Board authorized the issuance of RSUs under our 2020 Plan and adopted a form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement, which is intended to serve as a standard form agreement for RSU grants issued to employees. In November 2024, we granted 175,513 shares of performance-based stock units ("PSUs"), which contain service and market conditions to certain employees. Subject to continuous service requirements, the market condition is measured based on our total shareholder return (“TSR”) relative to the TSR of our peer group comprised in the Nasdaq Biotechnology Index over a period of four years . No PSUs were granted in the year ended December 31, 2025. Stock unit award activity for the year ended December 31, 2025 was as follows: 146 Table of Contents RSUs PSUs (in thousands, except share and per share data) Number of Shares Weighted- Average Grant-Date Fair Value Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Number of Shares Weighted- Average Grant-Date Fair Value Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands, except share and per share data) Unvested at December 31, 2024 1,241,272 $ 67.32 1.46 $ 101,611 175,513 $ 151.48 3.85 $ 14,367 Granted 1,799,831 49.04 — Vested and released ( 630,006 ) 62.29 — Cancelled ( 70,508 ) 69.52 — Unvested at December 31, 2025 2,340,589 $ 54.55 1.42 $ 107,995 175,513 $ 151.48 2.85 $ 8,098 Shares Available for Grant Shares available for grant under our 2020 Plan for the year ended December 31, 2025 were as follows: Number of Shares Balance — December 31, 2024 6,275,934 Shares authorized 6,244,651 Options and RSUs granted ( 4,251,310 ) Shares forfeited (1) 311,571 Shares withheld for taxes 240,845 Balance — December 31, 2025 8,821,691 ___________________________________________ (1) A total of 1,791 shares were forfeited under the 2020 Plan due to net exercises of stock options. 2020 Employee Stock Purchase Plan In June 2020, our Board adopted, and our stockholders approved, the 2020 Employee Stock Purchase Plan (the “2020 ESPP”), which became effective on June 11, 2020. The 2020 ESPP permits participants to purchase common stock through payroll deductions of up to 15 % of their eligible compensation. Employees enrolled in the 2020 ESPP purchase shares of common stock at a price per share equal to 85 % of the lower of the fair market value at the start or end of the six-month purchase periods within the two-year offering period. A total of 650,000 shares of common stock were approved to be initially reserved for issuance under the 2020 ESPP. In addition, the number of shares of common stock available for issuance under the 2020 ESPP is automatically increased on the first day of each calendar year during the 10 -year term of the 2020 Plan, beginning with January 1, 2021 and ending with January 1, 2030, by an amount of 1 % of the outstanding number of shares of our common stock on December 31 of the preceding calendar year or such lesser amount as determined by our Board. Effective January 1, 2026, the number of shares of common stock available under the 2020 ESPP increased by 1,310,588 shares pursuant to the evergreen provision of the 2020 ESPP. During the years ended December 31, 2025, 2024 and 2023, employees purchased 147,870 , 90,517 and 76,275 shares of common stock through our 2020 ESPP at an average price of $ 27.14 , $ 38.60 and $ 26.71 per share, respectively. As of December 31, 2025, a total of 2,019,358 shares of our common stock remain available for future issuance under our 2020 ESPP. Stock-based Compensation The following assumptions were used in the Black-Scholes options pricing model for stock options and ESPP shares. 147 Table of Contents Year Ended December 31, 2025 2024 2023 Expected volatility Stock Options 63.5 % - 67.5 % 69.2 % - 71.1 % 71.3 % - 74.0 % ESPP 51.7 % - 108.4 % 38.1 % - 62.7 % 38.1 % - 99.7 % Expected term (in years) Stock Options 5.2 - 5.4 5.3 - 5.4 5.3 - 5.4 ESPP 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Risk-free interest rate Stock Options 3.6 % - 4.5 % 3.5 % - 4.5 % 3.5 % - 4.6 % ESPP 3.6 % - 4.4 % 4.3 % - 5.4 % 4.2 % - 5.4 % No PCSOs or PSUs were granted in the years ended December 31, 2025 or 2023. The following assumptions were used in the Monte Carlo simulation model for PCSOs and PSUs granted in the year ended December 31, 2024 to estimate our stock-based compensation expense. PCSOs PSUs Expected volatility 61.6 % 59.9 % Expected term (in years) 5.9 5.9 Risk-free interest rate 4.2 % 4.1 % Our expected dividend yield is zero as we have not declared and do not anticipate declaring any dividends. We recorded total stock-based compensation expense for the years ended December 31, 2025, 2024 and 2023 related to the 2014 Plan, the 2020 Plan and the 2020 ESPP in the consolidated statements of operations and allocated the amounts as follows: Year Ended December 31, 2025 2024 2023 (In thousands) Research and development $ 74,054 $ 42,819 $ 23,275 General and administrative 64,791 42,003 25,485 Total stock-based compensation expense $ 138,845 $ 84,822 $ 48,760 As of December 31, 2025, there was $ 301.6 million of unrecognized stock-based compensation expense related to unvested employee and non-employee awards, which is expected to be recognized over a weighted-average period of 2.7 years. 10. Funding Arrangement Our vaccine development program for VAX-A1, a novel conjugate vaccine candidate designed to prevent disease caused by Group A Streptococcus, has been funded in part by a grant obtained from Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator (“CARB-X”), a global non-profit partnership dedicated to accelerating antibacterial innovation to tackle the rising global threat of drug-resistant bacteria. The CARB-X grant provided funding of $ 11.7 million upon the achievement of VAX-A1 development milestones through June 2024. As of the second quarter of 2024, all of these milestones had been successfully achieved, and no further amounts will be funded under this CARB-X grant. Our vaccine development program for VAX-GI, a novel preclinical vaccine candidate being developed as a preventative treatment for dysentery and shigellosis, which is caused by Shigella bacteria, is currently funded in part by two grants obtained from the National Institutes of Health (“NIH”) administered by the University of Maryland, Baltimore. Our first grant from the NIH was awarded in April 2021 and provides for potential funding up to five years totaling approximately $ 0.5 million. In June 2023, we received another grant from the NIH that provides for potential funding up to five years totaling approximately $ 4.6 million. We have received and expect to continue to receive funding under each of these grants. 148 Table of Contents We are currently working on a discovery program with the University of North Carolina at Chapel Hill and the University of Chicago to develop a vaccine candidate for the prevention of Chlamydia, which is funded in part by a grant from the NIAID that provides potential funding up to five years totaling approximately $ 9.5 million. As of December 31, 2025, we have received and expect to continue to receive funding under this grant. Income from grants is recognized in the period during which the related specified expenses are incurred, provided that the conditions under which the grants were provided have been met. We recognized $ 0.5 million, $ 1.0 million and $ 4.8 million of grant income and recorded the amounts in Other income (expense), net in the consolidated statements of operations during the years ended December 31, 2025, 2024 and 2023, respectively. The grant receivable related to unreimbursed, eligible costs incurred under the agreements, recorded within prepaid expenses and other current assets, was not material as of December 31, 2025, and was $ 0.4 million as of December 31, 2024. 11. Net Loss Per Share The following table sets forth the computation of basic and diluted net loss per share and excludes shares which are legally outstanding, but subject to repurchase by us: Year Ended December 31, 2025 2024 2023 Net loss (in thousands) $ ( 766,628 ) $ ( 463,927 ) $ ( 402,266 ) Weighted-average shares outstanding used in computing net loss per share, basic and diluted 136,089,506 121,997,348 97,157,690 Net loss per share, basic and diluted $ ( 5.63 ) $ ( 3.80 ) $ ( 4.14 ) The following potentially dilutive securities were excluded from the computation of diluted net loss per share for the period presented because including them would have been antidilutive: Year Ended December 31, 2025 2024 2023 Stock options 11,612,299 10,036,284 9,351,546 Restricted stock units 2,516,102 1,416,785 753,462 Employee stock purchase plan 345,087 112,260 103,628 Total 14,473,488 11,565,329 10,208,636 149 Table of Contents 12. Income Taxes Our loss before income taxes was primarily derived from our business operations within the United States. The Company has not recognized a current or deferred tax expense/(benefit) for federal, state or foreign jurisdictions in the years ending December 31, 2025, 2024 or 2023, respectively, due to tax losses in the various jurisdictions. There were no federal, state, local or foreign income taxes paid, net of refunds, for the years ended December 31, 2025, 2024 or 2023. The differences between income tax expected at the U.S. federal statutory income tax rate of 21% and the reported income tax rate are summarized as follows: Year Ended December 31, 2025 % 2024 % 2023 % (In Thousands, Except for Percentages) Loss from continuing operations U.S. Federal Statutory Tax Rate $ ( 160,792 ) 21.0 % $ ( 97,425 ) 21.0 % $ ( 84,476 ) 21.0 % State and Local Income Taxes, Net of Federal Income Tax Effect (1) ( 29 ) — % 65 — % 39 — % Effect of Cross-Border Tax Laws Global intangible low-taxed income 11,407 ( 1.5 ) % — — % — — % Tax Credits Research and Development tax credits ( 8,706 ) 1.1 % ( 11,297 ) 2.4 % ( 6,644 ) 1.6 % Change in Valuation Allowance 139,663 ( 18.2 ) % 108,613 ( 23.4 ) % 87,744 ( 21.8 ) % Nondeductible/Non-taxable Items Stock Based Compensation 3,089 ( 0.4 ) % ( 18,483 ) 4.0 % ( 1,668 ) 0.4 % Section 162(m) Limitation 12,103 ( 1.6 ) % 16,420 ( 3.5 ) % 4,525 ( 1.1 ) % Other (2) 3,265 ( 0.4 ) % 2,107 ( 0.5 ) % 480 ( 0.1 ) % Effective Tax Rate $ — — % $ — — % $ — — % ______________________________________________________________ (1) State taxes in California represented the majority (greater than 50%) of the tax effect within this category. (2) Other includes immaterial foreign tax effects and immaterial worldwide changes in unrecognized tax benefits in the years ending December 31, 2025, 2024 and 2023. There was no impact from the changes in tax laws, tax rates or cross-border tax regulations enacted for the years ended December 31, 2025, 2024 or 2023. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents significant components of our deferred tax assets and liabilities as of December 31, 2025 and 2024: 150 Table of Contents As of December 31, 2025 2024 (in thousands) Deferred tax assets: Net operating losses $ 336,106 $ 195,869 Unrealized gain/loss — 3,465 Accrued and others 6,471 14,637 R&D Credits 38,272 26,709 Capitalized R&D expenditures 221,258 155,356 Accrued manufacturing expenses 471 6,909 Lease liability 35,114 21,228 Intangible assets 27,337 29,253 Stock compensation 22,800 14,652 Capitalized Interest 732 — Total deferred tax assets 688,561 468,078 Less: Valuation allowance ( 645,313 ) ( 446,098 ) Net deferred tax asset 43,248 21,980 Deferred tax liabilities: ROU asset ( 34,674 ) ( 21,524 ) Fixed Assets ( 1,295 ) ( 456 ) Unrealized gain/loss ( 7,279 ) — Total deferred tax liabilities ( 43,248 ) ( 21,980 ) Net deferred taxes $ — $ — At December 31, 2025, we have net operating loss (“NOL”) carryforwards of approximately $ 796.1 million and $ 1,907.7 million available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. The federal and state NOL carryforwards, except the federal loss carryforward arising in tax years beginning after December 31, 2017, begin to expire in 2034 unless previously utilized. Federal NOLs arising in tax years beginning after December 31, 2017 have an indefinite carryover period and do not expire. Our state NOL carryforwards generally have a 20-year carryover period. We had no foreign NOL carryforwards at December 31, 2025. At December 31, 2025, we have research credit carryforwards of $ 40.3 million and $ 12.3 million available to offset future income tax liabilities, if any, for federal and California income tax purposes, respectively. The federal research and development tax credit carryforwards expire beginning in 2039 unless previously utilized. The California tax credits can be carried forward indefinitely. Utilization of the NOL and research credit carryforward may be subject to an annual limitation due to the ownership percentage change limitations under Section 382 and Section 383, respectively, provided by the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions. The annual limitation may result in the expiration of the NOL before utilization. We have experienced ownership changes in the past. There were no ownership changes identified in 2025, as such we determined that no federal research credits will expire unutilized or are excluded from our research credit carryforwards. Subsequent ownership changes may affect the limitation in future years. We have evaluated the positive and negative evidence bearing upon the realizability of our deferred tax assets. Based on our history of operating losses, we have concluded that it is more likely than not that the benefit of our deferred tax assets will not be realized. Accordingly, we have provided a full valuation allowance for deferred tax assets as of December 31, 2025 and 2024. We have uncertain tax benefits (“UTBs”) totaling $ 14.0 million and $ 9.5 million as of December 31, 2025 and 2024, respectively, which were netted against deferred tax assets subject to valuation allowance. The UTBs had no effect on the effective tax rate. We recognize interest and penalties related to UTBs, when they occur, as a component of income tax expense. To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the provision for income taxes in the period such determination is made. There were no interest or penalties recognized for the years ended December 31, 2025 or 2024. We do not expect our UTBs to change significantly over the next 12 months. 151 Table of Contents A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows: December 31, 2025 2024 2023 (in thousands) Balance at the beginning of the year $ 9,525 $ 4,447 $ 1,754 Additions based on tax positions related to current year 4,316 5,166 2,208 Additions based on tax positions related to prior years 195 — 485 Reductions based on tax positions related to prior years — ( 88 ) — Balance at end of year $ 14,036 $ 9,525 $ 4,447 We file U.S. federal, state and foreign tax returns in certain jurisdictions in which we operate as required. In general, we are no longer subject to tax examination by the Internal Revenue Service or state taxing authorities for years before 2019. Although the federal and state statutes are closed for purposes of assessing additional income tax in those prior years, the taxing authorities may still make adjustments to the NOL and credit carryforwards used in open years. Therefore, the tax statutes should be considered open as it relates to the NOL and credit carryforwards used in open years. Our Swiss corporate income and capital tax returns are subject to examination by the Swiss tax authorities for five years after the end of the corresponding tax period. We do not have any tax audits or other issues pending. It is our intention to reinvest the earnings of our non-U.S. subsidiary in those operations and not to repatriate the earnings to the United States. Accordingly, we do not provide for deferred taxes on differences between financial reporting and tax basis in our investments in foreign subsidiaries as they are considered permanent in duration or are not expected to reverse in the foreseeable future. As of December 31, 2025, there are no unremitted earnings of our foreign subsidiary. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law in the United States, and contains a wide range of tax reform provisions, including extending and modifying certain key Tax Act provisions, such as 100% bonus depreciation and the business interest expense limitation. Additionally, the OBBBA repealed mandatory capitalization and amortization of domestic R&D expenses, reverting to the immediate expensing of R&D expenditures for tax years beginning in 2025. The enactment of this legislation did not have a material impact on our consolidated financial statements, effective income tax rate, or cash tax position for the year ended December 31, 2025. 13. Segment Reporting We operate and manage our business as one reportable and operating segment. Our chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance based on consolidated net loss, as is reported in our consolidated statements of operations. Our long-lived assets are based in the United States and Switzerland. Long-lived assets are comprised of property and equipment. As of December 31, 2025 and 2024, property and equipment based in the United States was $ 39.7 million and $ 40.8 million, respectively. As of December 31, 2025 and 2024, property and equipment based in Switzerland was $ 217.7 million and $ 157.2 million, respectively. This following table presents segment operation results for the year ended December 31, 2025, 2024 and 2023: 152 Table of Contents Year Ended December 31, 2025 2024 2023 Operating expenses: Research and development - external costs (1) $ 600,690 $ 349,510 $ 261,984 Research and development - internal costs (2) 193,616 127,134 70,357 Acquired manufacturing rights (Note 7) — — 75,000 General and administrative 129,369 92,902 60,700 Total operating expenses $ 923,675 $ 569,546 $ 468,041 Total other income, net $ 157,047 $ 105,619 $ 65,775 Net loss $ 766,628 $ 463,927 $ 402,266 ____________________________________________________________ (1) Research and development - external costs consist primarily of product and clinical development, research, facility, depreciation, professional and consulting services expenses attributed to the research and development departments. (2) Research and development - internal costs consist of internal employee costs including stock-based compensation expenses. 14. Subsequent Events In February 2026, we completed an underwritten public offering of 12,650,000 shares of our common stock, which included the full exercise of the underwriters' option to purchase an additional 1,650,000 shares, at a price of $ 50.00 per share. In aggregate, we received approximately $ 600.2 million in net proceeds after deducting underwriting discounts and commissions and other estimated offering expenses payable by us. On February 18, 2026, we entered into a Development and Manufacturing Services Agreement with Lonza. Under the agreement, Lonza will perform manufacturing process development and commercial manufacture and supply of certain key components for our proprietary PCV franchise. The agreement has an initial term through December 31, 2038, with options for additional renewal periods. Under the terms of the agreement, if we elect to terminate the agreement for convenience prior to the expiration of the initial term or any committed renewal period, we will be obligated to pay Lonza the greater of a fixed dollar amount or an amount based on certain cancellation fees specified in the agreement. 153 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.