What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-03 compared with 2024-02-27 · 135 added, 97 removed, 669 unchanged (26% of the section changed)

3 unchanged sentences

Balance Sheets

Statements of Operations and Comprehensive Gain ( Loss )

Statements of Operations and Comprehensive Loss

Statements of Stockholders’ Equity

7 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, 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, 2023, 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 27, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting

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, 2024, 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 March 3, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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Any payments made in advance of services provided are recorded as prepaid assets, which are expensed as the contracted services are performed.

The Company estimates the amount of work completed through review of detailed budgets and timelines included in its contracts and agreements, and updates these estimates with information obtained from third-party service providers and internal personnel on a quarterly basis.

The Company estimates the amount of work completed through the review of detailed budgets and timelines included in its contracts and agreements and updates these estimates with information obtained from third-party service providers and internal personnel on a quarterly basis.

Given the significant judgments made by management in estimating the progress or stage of completion of the services, auditing the Company’s accrued and prepaid research and development expenses related to CROs was especially challenging.

auditing accrued and prepaid research and development expenses related to CROs required a high degree of auditor judgment and an increased extent of effort.

Specifically, because the amount of accrued and prepaid research and development expenses is dependent on management’s receipt of timely and accurate reporting from third-party service providers, management’s estimates of work completed as of the balance sheet date, and management’s estimates of the period over which this work will be performed, auditing accrued and prepaid research and development expenses related to CROs required a high degree of auditor judgment and an increased extent of effort.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s accrued and prepaid research and development expenses included the following, among others:

Our audit procedures related to the Company’s accrued and prepaid research and development expenses related to CROs included the following, among others:

• We tested the effectiveness of controls over the estimation of accrued and prepaid research and development expenses related to CROs.

1 unchanged sentence

We tested the accuracy and completeness of the underlying information used in the estimates and evaluated the significant assumptions that are used by management to estimate the recorded amounts by performing the following procedures:

◦ Performed corroborating inquiries with the Company’s research and development personnel that oversee the contract research organization’s studies to obtain information regarding the nature and extent of progress of the clinical studies.

◦ Performed corroborating inquiries with the Company’s research and development personnel that oversee the CRO’s studies to obtain information regarding the nature and extent of progress of the clinical studies.

◦ Obtained written confirmations directly from the Company’s third-party service providers regarding the accuracy and completeness of contracted amounts and percentage of completion.

4 unchanged sentences

San Francisco, California

February 27, 2024

March 3, 2025

We have served as the Company's auditor since 2018.

6 unchanged sentences

Short-term investments 284,536 431,011

Accounts receivable — 1,983

Tax credit receivable — 83

Prepaid expenses and other current assets (Note 5) 6,540 11,257

23 unchanged sentences

Accumulated deficit ( 710,052 ) ( 499,748 )

Accumulated other comprehensive gain (loss) 345 ( 1,958 )

Accumulated other comprehensive gain 321 345

Total stockholders’ equity 304,081 473,576

2 unchanged sentences

Pliant Therapeutics, Inc.

Statements of Operations and Comprehensive Gain (Loss)

Statements of Operations and Comprehensive Loss

(In thousands, except number of shares and per share amounts)

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Net loss $ ( 210,304 ) $ ( 161,336 ) $ ( 123,321 )

Net unrealized gain (loss) on short-term investments 2,303 ( 1,757 ) ( 169 )

Total other comprehensive gain (loss) 2,303 ( 1,757 ) ( 169 )

Net unrealized (loss) gain on short-term investments ( 24 ) 2,303 ( 1,757 )

Total other comprehensive (loss) gain ( 24 ) 2,303 ( 1,757 )

Comprehensive loss $ ( 210,328 ) $ ( 159,033 ) $ ( 125,078 )

10 unchanged sentences

Balance at December 31, 2021 36,083,301 $ 3 $ 414,348 $ ( 201 ) $ ( 215,091 ) $ 199,059

Common stock issued in a public offering, net of offering expenses 12,432,432 2 215,399 — — 215,401

Issuance of common stock under benefit plans 403,680 — 1,360 — — 1,360

6 unchanged sentences

Issuance of common stock under benefit plans 1,396,414 — 5,002 — — 5,002

Vesting of restricted stock awards 21,841 — 2 — — 2

Stock-based compensation expense — — 44,483 — — 44,483

Net unrealized loss on short-term investments — — — ( 1,757 ) — ( 1,757 )

Net unrealized gain on short-term investments — — — 2,303 — 2,303

Net loss — — — — ( 161,336 ) ( 161,336 )

Balance at December 31, 2023 59,921,002 $ 6 $ 972,973 $ 345 $ ( 499,748 ) $ 473,576

Common stock issued in a public offering, net of offering expenses 9,583,334 1 269,781 — — 269,782

Issuance of common stock under benefit plans 939,836 — 3,207 — — 3,207

Stock-based compensation expense — — 37,626 — — 37,626

Net unrealized gain on short-term investments — — — 2,303 — 2,303

Net unrealized loss on short-term investments — — — ( 24 ) — ( 24 )

Net loss — — — — ( 210,304 ) ( 210,304 )

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Non-cash operating lease expense 3,451 2,390 1,858

(Accretion) amortization on short-term investments and debt ( 4,990 ) ( 1,806 ) 1,262

Amortization (accretion) on short-term investments and debt 2,510 ( 4,990 ) ( 1,806 )

Changes in operating assets and liabilities:

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Purchase of property and equipment ( 3,848 ) ( 921 ) ( 1,760 )

Net cash (used in) provided by investing activities ( 127,012 ) ( 150,204 ) 73,699

Net cash provided by (used in) investing activities 140,340 ( 127,012 ) ( 150,204 )

Cash flows from financing activities

2 unchanged sentences

Payment of offering costs — ( 847 ) ( 557 )

Payment of debt issuance costs — ( 150 ) —

Proceeds from term loan — 10,000 —

Proceeds from term loan, net of issuance costs 19,910 — 9,850

Net cash provided by financing activities 23,117 274,405 226,854

Net increase (decrease) in cash and cash equivalents 7,954 31,032 ( 17,981 )

Cash and cash equivalents at beginning of period 33,684 51,665 50,882

Cash, cash equivalents and restricted cash at beginning of period 64,716 33,684 51,665

Cash, cash equivalents and restricted cash at end of period $ 72,670 $ 64,716 $ 33,684

6 unchanged sentences

Supplemental disclosures of noncash investing and financing activities:

Net unrealized gain(loss) on short-term investments $ 2,303 $ ( 1,757 ) $ ( 169 )

Net unrealized (loss) gain on short-term investments $ ( 24 ) $ 2,303 $ ( 1,757 )

Purchase of property and equipment in accounts payable $ 236 $ — $ —

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To date, our revenues have been generated solely from the Collaboration and License Agreement with Novartis (the “Novartis Agreement”).

The Novartis Agreement includes licenses of intellectual property, cost reimbursements, research and development services, upfront signing fees, milestone payments and royalties on future licensee’s product sales.

The Novartis Agreement, which was terminated effective April 18, 2023, included licenses of intellectual property, cost reimbursements, research and development services, upfront signing fees, milestone payments and royalties on future licensee’s product sales.

As part of accounting for this arrangement, we must apply judgment to determine whether the performance obligations are distinct, and develop assumptions in determining the stand-alone selling price for each distinct performance obligation identified in the contract.

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The cost associated with full-time equivalent researchers is estimated each period and billable to Novartis based at specified full-time equivalent rates.

The sales-based royalties, including milestone payments based on the level of sales, are considered to be predominately related to the license included in the arrangement, and we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

To date, we have not recognized any royalty revenue from the Novartis Agreement.

Sales-based royalties, including milestone payments based on the level of sales, are considered to be predominately related to the license included in the arrangement, and we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

We did not recognize any royalty revenue from the Novartis Agreement during the period it was in effect.

We recognize contract assets when we have a right to consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditional on something other than the passage of time.

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Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, short-term investments and accounts receivable.

The Company invests in money market funds, U.S.

Treasury securities, government notes and corporate debt securities.

The Company limits its credit risk associated with its cash and cash equivalents by placing them with banks and institutions it believes are highly credit worthy and in highly rated investments.

However, the Company had deposits in excess of the Federal Deposit Insurance Corporation (“FDIC”)

insured limit of $250,000.

The Company invests in Money Market Funds, United States (“U.S.”) Treasury securities, government notes and corporate debt securities.

The Company limits its credit risk associated with its cash and cash equivalents by placing them with banks and institutions it believes are highly credit worthy and in

highly rated investments.

However, the Company had deposits in excess of the Federal Deposit Insurance Corporation (“FDIC”) insured limit of $250,000.

The Company performs credit evaluations of its customer, and the risk with respect to accounts receivable is further mitigated by the short duration of customer payment terms, generally within 60 days, and the pedigree of the customer base.

During the years ended December 31, 2023, 2022 and 2021, Novartis accounted for 100 % of the Company’s revenue and accounts receivable.

During the year ended December 31, 2024, the Company had no revenue or accounts receivable, and during the years ended December 31, 2023 and 2022, Novartis accounted for 100 % of the Company’s revenue and accounts receivable.

The Company’s future results of operations involve several other risks and uncertainties.

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The Company operates and manages its business as one reportable and operating segment, which is the business of developing and commercializing novel therapies for fibrotic diseases.

The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for allocating and evaluating financial performance.

The Company’s chief executive officer, who is the chief operating decision maker ("CODM"), reviews financial information on an aggregate basis for allocating and evaluating financial performance;

however, our CODM is regularly provided with more detailed expense information than what is included in our Statement of Operations and Comprehensive Loss.

See Note 13 for further details.

The single operating segment constitutes all of the Company activity, the chief operating decision maker regularly reviews the entity-wide operating results and performance .

2 unchanged sentences

The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents.

Cash equivalents consist primarily of amounts invested in Money Market Funds, United States (“U.S.”) treasury securities, U.S.

government agency securities and corporate debt securities and are stated at fair value.

Cash equivalents consist of amounts invested in Money Market Funds and are stated at fair value.

Restricted Cash

Our restricted cash balance of $ 1.4 million as of December 31, 2023 represented cash required to be held as collateral by a financial institution to guarantee lease payments due to our landlord at Oyster Point Blvd, South San Francisco, California (the "Oyster Point Lease").

Our restricted cash balance of $ 1.4 million as of December 31, 2024 and 2023 represented cash required to be held as collateral by a financial institution to guarantee lease payments due to our landlord at Oyster Point Blvd, South San Francisco, California (the "Oyster Point Lease").

Short-Term Investments

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As a result, short-term investments may include securities with maturities beyond twelve months that are classified within current assets in the Balance Sheets.

As of December 31, 2023 and 2022, all of the Company’s short-term investments were classified as available-for-sale and were carried at fair market value with unrealized losses recorded in other comprehensive gain (loss) in the statements of operations and comprehensive loss.

As of December 31, 2024 and 2023, all of the Company’s short-term investments were classified as available-for-sale and were carried at fair market value with unrealized losses recorded in other comprehensive (loss) gain in the statements of operations and comprehensive loss.

See Note 3 for further details.

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Deferred income tax assets are reduced, as necessary, by a valuation allowance when management determines it is more likely than not that some or all the tax benefits will not be realized.

The Company accounts for uncertain tax positions in accordance with ASC No.

740 , Income Taxes .

The Company accounts for uncertain tax positions in accordance with ASC 740 , Income Taxes .

The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities.

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Comprehensive loss includes net loss as well as other changes in stockholders' equity that result from transactions and economic events other than those with stockholders.

The Company's comprehensive gain (loss) represents unrealized losses on short-term investments.

The Company's comprehensive gain (loss) represents unrealized losses and gains on short-term investments.

Interest and other income (expense)

7 unchanged sentences

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280), or Topic 280, which improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

We adopted the provisions of Topic 280 and the adoption did not have a material impact to our financial statements.

Recently Announced Accounting Pronouncements

I n October 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-06 "Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative", which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standard Codification (the "Codification").

This ASU will become effective on the date the SEC removes the applicable disclosure from Regulation S-X or Regulation S-K, with early adoption prohibited.

If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not be become effective for any entity.

The Company expects the new guidance will have an immaterial impact on its financial statements, and intends to adopt the guidance when it becomes effective.

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting - Improvements to Reportable Segment Disclosures”, which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

The guidance is effective for the Company's annual periods beginning in 2024 and interim periods beginning in the first quarter of fiscal year 2025.

The Company adopted the standard on December 31, 2024.

The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

See Note 13, Segment, for the updated segment disclosures as a result of adopting this ASU.

Accounting Pronouncements Not Yet Adopted

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

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and foreign jurisdictions.

The guidance is effective for the Company beginning in the fourth quarter of fiscal year 2026.

The Company expects the new guidance will have an immaterial impact on its financial statements, and intends to adopt the guidance prospectively when it becomes effective in the fourth quarter of fiscal year 2026.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted.

The Company is currently evaluating the impact of this standard on its disclosures and will adopt the ASU for its 2025 10-K.

In November 2024, the FASB issued ASU 2024-03 “Disaggregation of Income Statement Expenses,” which aims 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 in commonly presented expense captions.

The guidance is effective for the Company's annual periods beginning in 2027 and interim periods beginning in the first quarter of fiscal year 2028.

The Company is currently evaluating the impact of the new guidance.

Financial Instruments

48 unchanged sentences

The following summarizes the remaining contractual maturities of the Company’s short-term investments as of December 31, 2024:

Adjusted Cost Market Value

Mature in 1 year or less $ 276,666 $ 277,008

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Treasury, U.S.

government agency and corporate debt securities to interest and other income(expense),net in its statement of operations and comprehensive gain (loss).

government agency and corporate debt securities to interest and other income (expense), net in its statement of operations and comprehensive loss.

Property and Equipment, net

2 unchanged sentences

Leasehold improvements 2,118 1,663

Construction-in-progress 52 66

Furniture and Fixture 1,775 —

Computer equipment and software 1,105 124

Total property and equipment 12,249 11,327

Construction-in-progress 346 52

Total property and equipment, gross 16,332 12,249

Accumulated depreciation ( 10,807 ) ( 8,682 )

Total property and equipment, net 5,525 3,567

Depreciation expense during the years ended December 31, 2023 and 2022 was $ 1.8 million, and for 2021 depreciation expense was $ 1.5 million.

Depreciation expense during the year ended December 31, 2024 was $ 2.1 million and for each of the years ended December 31, 2023 and 2022 was $ 1.8 million.

Prepaid Expenses and Other Current Assets

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In May 2022, as amended in October 2022, we entered into a term loan facility (the “Oxford Loan Agreement”) with Oxford Finance LLC (the "Lender") for up to $ 100.0 million.

At closing, we entered into a term loan for $ 10.0 million and we decided not to draw upon the additional $ 65.0 million that became available to us over the course of 2023 as certain conditions related to the development of bexotegrast and one of our preclinical product candidates were satisfied.

As of December 31, 2023, the time period to draw upon the additional $ 65.0 million had lapsed.

In connection with the Oxford Loan Agreement, we granted a security interest in substantially all of our current and future assets.

There are no warrants or financial covenants associated with the Oxford Loan Agreement.

Borrowings under the Oxford Loan Agreement bear interest at a rate per annum equal to 1-month term Secured Overnight Financing Rate (SOFR) plus 8.5 %, subject to an agreed upon floor and cap.

The Oxford Loan Agreement requires the Company to make monthly interest-only payments until July 1, 2026 with monthly interest and principal payments thereafter until the maturity date of May 1, 2027.

At closing, we entered into a term loan for $ 10.0 million and we decided not to draw upon the additional $ 65.0 million that became available to us over the course of 2023

as certain conditions related to the development of bexotegrast and one of our preclinical product candidates were satisfied.

As of December 31, 2023, the time period to draw upon the additional $ 65.0 million had lapsed.

On March 11, 2024, we entered into an Amended and Restated Loan and Security Agreement (the “Amended Loan Agreement”) with the Lender to borrow a series of term loans up to an aggregate principal amount of $ 150.0 million (the “Term Loans”), of which $ 50.0 million is subject to the Lender’s sole discretion.

The availability of additional term loans is dependent upon the status of BEACON-IPF, a global Phase 2b trial in patients with idiopathic pulmonary fibrosis (IPF).

Pursuant to the Amended Loan Agreement, we drew an initial Term Loan of $ 30.0 million, inclusive of $ 10.0 million in principal amount previously outstanding under the Oxford Loan Agreement.

Under the agreement, additional borrowing of up to an additional $ 70.0 million of Term Loans would be available at our option, $ 35.0 million being available commencing October 1, 2025 contingent upon the continued operation of the BEACON-IPF study and a further $ 35.0 million being available upon demonstrating that BEACON-IPF had achieved positive Phase 2b data sufficient to support continued development, in the sole discretion of Oxford.

Given the discontinuation of the BEACON-IPF trial, we do not expect to have access to additional borrowing under the Oxford Agreement.

Refer to Note 19 for further discussion regarding the discontinuation of BEACON-IPF.

In connection with the Amended Loan Agreement, the Company granted the Lender a security interest in substantially all of the Company’s assets now owned or hereafter acquired, excluding intellectual property to the extent the aggregate amount of Term Loans advanced and outstanding does not exceed $ 50.0 million (but including the right to payments and proceeds of intellectual property) and certain customary exceptions.

There are no warrants or current financial covenants associated with the Amended Loan Agreement, however, if the aggregate original principal amount of Term Loans exceeds $ 30.0 million and, in Oxford’s sole discretion, bexotegrast demonstrates negative Phase 2b or Phase 3 data in IPF, or the Company has been issued a complete response letter by the FDA for its IPF new drug application submission, the Company is required to maintain a cash balance of at least 50 % of the aggregate outstanding principal of Term Loans then outstanding.

The principal amount outstanding under the Term Loans will accrue interest at a floating per annum rate equal to (i) the greater of (a) 1-month term Chicago Mercantile Exchange (“CME”) Term Secured Overnight Financing Rate (“SOFR”) on the last business day of the month that immediately precedes the month in which the interest will accrue and (b) three and one-half percent ( 3.50 %) plus (ii) five and one-quarter percent ( 5.25 %), subject to an agreed upon floor of 8.75 %.

Beginning on July 1, 2028, which may be extended to July 1, 2029 (subject to certain conditions set forth in the Amended Loan Agreement), the Company is required to repay the Term Loans in consecutive equal monthly payments of principal, together with applicable interest, in arrears.

Interest on the Term Loans is paid on a monthly basis.

All unpaid principal and accrued and unpaid interest with respect to each Term Loan will be due and payable in full on March 1, 2029, which may be extended to March 1, 2030 (subject to certain conditions set forth in the Amended Loan Agreement).

Accrued interest as of December 31, 2024 and December 31, 2023 is included in other accrued liabilities.

The Company will be required to make a final payment of 5.50 % (or 7.25 % if the amortization date of the Term Loans has been extended to July 1, 2029 (as discussed above)) of the original principal amount of the Term Loans that were drawn, payable at maturity or upon any earlier acceleration or prepayment of the Term Loans.

The Company may prepay the Term Loans in whole or in part, subject to a prepayment fee equal to (i) if prepaid on or before the first anniversary date of the funding date of such Term Loan, 3.00 % of the principal amount of the applicable Term Loan prepaid, (ii) if prepaid after the first anniversary and on or before the second anniversary of the funding date of such Term Loan, 2.00 % of the principal amount of the applicable Term Loan prepaid, and (iii) if prepaid after the second anniversary and on or before the third anniversary of the funding date of such Term Loan prepaid, 1.00 % of the principal amount of the applicable Term Loan prepaid.

The Agreement contains representations and warranties, affirmative, and negative covenants, and events of default that are customary for loans of this type.

The occurrence of an event of default could result in the acceleration of the obligations under the Amended Loan Agreement, termination of the Term Loan commitments and the right by the Lender to foreclose on the collateral securing the obligations.

During the existence of an event of default, the Term Loans would accrue interest at a rate per annum equal to 5.00 % above the otherwise applicable interest rate.

The estimated fair value of the term loan as of December 31, 2024 was measured using Level 3 inputs and approximates the carrying value recorded to the balance sheet.

The effective interest rate for the term loan is 12.69 % and interest expense during the years ended December 31, 2023 and 2022 was $ 1.3 million and $ 0.8 million, respectively.

The effective interest rate for the term loan is 11.51 % for December 31, 2024 and 12.69 % for the years ended December 31, 2023 and 2022, respectively.

Interest expense during the years ended December 31, 2024, 2023 and 2022 was $ 3.0 million, $ 1.3 million and $ 0.8 million, respectively.

Future maturities of debt as of December 31, 2024 are as follows (in thousands):

As of December 31, 2024

2028 $ 20,000

unamortized debt issuance costs ( 166 )

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(1) to provide worldwide license rights to PLN-1474, (2) to provide research and development services for PLN-1474, (3) to provide non-exclusive license rights to integrin research targets, and (4) to provide research and development services on integrin research targets.

On February 17, 2023, Novartis exercised their right to terminate the Novartis Agreement as part of their new strategy focusing on a limited number of therapeutic areas.

On February 17, 2023, Novartis exercised their right to terminate the Novartis Agreement.

The termination took effect on April 18, 2023, and effective upon the termination, all rights and licenses granted to Novartis under the Novartis Agreement, including PLN-1474, the related investigational new drug (“IND”), and the validated research target, reverted back to us.

The payment obligations of Novartis with respect to future milestones, royalties and research and development funding were also terminated.

Revenues associated with the Novartis Agreement for the years ended December 31, 2023, 2022 and 2021, were $ 1.6 million, $ 9.7 million and $ 7.6 million, respectively, which consisted of revenue generated from research and development services and a $ 4.0 million contingent payment received in 2022 associated with the integrin research target program.

As of December 31, 2023 and 2022, there was a receivable of nil and $ 2.0 million, respectively, related to the Novartis Agreement.

There were no contract assets or contract liabilities as of December 31, 2023 and 2022.

Revenues associated with the Novartis Agreement for the years ended December 31, 2024, 2023 and 2022, were nil , $ 1.6 million and $ 9.7 million, respectively, which consisted of revenue generated from research and development services and a $ 4.0 million contingent payment received in 2022 associated with the integrin research target program.

As of December 31, 2024 and 2023, there were no receivables, contract assets or contract liabilities related to the Novartis Agreement.

Preferred Stock

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The preferred stock may be issued in series, and the Company’s board of directors is authorized to determine the rights, preferences, and terms of each series.

These rights, preferences and terms could include dividend rights, conversion rights, voting rights, terms of redemptions, liquidation preferences and

sinking fund terms.

As of December 31, 2023 and 2022, the Company was authorized to issue 10,000,000 shares of preferred stock and there was no outstanding preferred stock as of December 31, 2023 and 2022.

These rights, preferences and terms could include dividend rights, conversion rights, voting rights, terms of redemptions, liquidation preferences and sinking fund terms.

As of December 31, 2024 and 2023, the Company was authorized to issue 10,000,000 shares of preferred stock and there was no preferred stock outstanding as of December 31, 2024 and 2023.

As of December 31, 2024 and 2023, the Company had 300,000,000 authorized shares of common stock, at a par value of $ 0.0001 per share.

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No dividends have been declared or paid by the Company since its inception.

The terms of the Amended Loan Agreement restrict our ability to declare and pay dividends.

The holders of shares of common stock are entitled to share ratably in the Company’s remaining assets available for distribution to its stockholders in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or upon occurrence of a deemed liquidation event.

Shares reserved for future issuance

Outstanding stock option awards 6,953,487 5,569,567

Outstanding stock options 8,300,804 6,953,487

Vesting of RSUs 932,634 874,748

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The following table sets forth the outstanding PSUs associated with the TSR goal and related activity for the years ended December 31, 2024 and 2023:

Performance Stock Units

Weighed Average Grant Date Fair Value

Unvested balance as of December 31, 2021

354,532 $ 29.15

Unvested balance as of December 31, 2022

354,532 $ 29.15

( 25,782 ) $ 29.15

Performance Stock Units Weighted Average Grant Date Fair Value

Unvested balance as of December 31, 2022 354,532 $ 29.15

328,750 $ 29.15

Forfeited ( 25,782 ) $ 29.15

Unvested balance at December 31, 2023 328,750 $ 29.15

Vested ( 155,290 ) $ 29.15

Forfeited ( 173,460 ) 29.15

Unvested balance at December 31, 2024 — $ —

As of December 31, 2022, 177,266 PSUs, with a weighted average grant date fair value of $ 17.57 , associated with clinical development milestones met their vesting conditions.

In March and July 2023 the second and the third clinical development vesting conditions were achieved and the remaining 531,792 PSUs relating to clinical development vesting

conditions vested, representing total stock based compensation of $ 7.3 million.

There are no remaining PSUs with clinical development performance conditions outstanding as of December 31, 2023.

As of December 31, 2023, the Company had $ 2.6 million of unrecognized stock-based compensation expense related to unvested PSUs associated with market based vesting conditions are expected to be recognized over a remaining weighted-average period of 0.54 years.

In March and July 2023 the second and the third clinical development vesting conditions were achieved and the remaining 531,792 PSUs relating to clinical development vesting conditions vested.

There are no remaining PSUs outstanding as of December 31, 2024.

2020 Employee Stock Purchase Plan

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Additions based on tax positions related to current year 2,505 2,475

Additions for tax positions of prior year 303 144

(Reductions) additions for tax positions of prior year ( 240 ) 303

December 31 $ 10,239 $ 7,974

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and outside of U.S., respectively.

The Company operates and manages its business as one reportable and operating segment, which is the business of developing and commercializing novel therapies for patients.

The CODM reviews financial information on an aggregate basis for allocating and evaluating financial performance.

The Company defines its segments based on the way in which internally reported financial information is regularly reviewed by the CODM to analyze financial performance, make decisions, and allocate resources.

The CODM assesses performance for the segment and decides how to allocate resources based on net loss which is also reported on the Statement of Operations and Comprehensive Loss as consolidated net loss.

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

Our CODM is regularly provided with more detailed expense information than what is included in our Statement of Operations and Comprehensive Loss.

The table below shows a reconciliation of the Company’s net loss, including the significant expense categories regularly provided to and reviewed by the CODM, as computed under U.S.

GAAP to the Company’s total net loss in the statements of operations (in thousands)

2024 2023 2022

Revenue $ — $ 1,580 $ 9,685

Operating expenses:

Bexotegrast - clinical trial and outside service third party contracting costs 86,365 51,446 29,890

Employee-related expenses - research and development (excluding stock-based compensation) 35,489 28,685 21,727

General and administrative costs (excluding stock-based compensation) 35,537 31,418 26,082

Other segment items 70,974 74,176 59,186

Segment loss 228,365 184,145 127,200

Reconciliation of segment loss

Interest and other (income) expense, net ( 21,085 ) ( 24,076 ) ( 4,670 )

Interest expense 3,024 1,267 791

Net loss $ 210,304 $ 161,336 $ 123,321

Other segment items include total stock-based compensation and research and development costs related to other pipeline programs and other non-program costs (excluding employee-related expenses).

Commitments and Contingencies

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The Company currently has directors’ and officers’ insurance.

On September 28, 2023, the Company entered into a lease agreement for a premise consisting of approximately 100,904 square feet located at Oyster Point Blvd, South San Francisco, California (the "Oyster Point Lease"), which the Company intends to use as laboratory and office space.

The lease term of approximately seven years will start upon the Landlord’s substantial completion of tenant improvements, and may be extended for a period of eight years at then prevailing market rates for a comparable property.

Future lease payments are approximately $ 43.7 million and are expected to start in the third quarter of 2024.

Additionally, the Company is required to provide a letter of credit to the Landlord in the amount of $ 1.4 million in connection with the Oyster Point Lease.

The Company has not recognized a right-of-use asset ("ROU") or aggregate lease liability as of December 31, 2023 for this lease as the Company did not control the underlying assets at any time during the year ended December 31, 2023.

Existing leases

In conjunction with the Oyster Point Lease, we modified the lease term of our existing lease to end upon the start date of the Oyster Point Lease.

As a result of this modification, we reduced our lease liability and our right-of-use asset by $ 1.8 million as of December 31, 2023.

Additionally, we paid a refundable security deposit of approximately $ 0.4 million at inception of the lease term which has been reclassified from other non-current assets to other current assets in the balance sheet of December 31, 2023.

On September 28, 2023, the Company entered into a lease agreement for premises consisting of approximately 100,904 square feet of office and laboratory space located at Oyster Point Blvd, South San Francisco, California (the "Oyster Point Lease"), which is being used as a single unified the Company headquarters.

The lease term of approximately seven years started in the second quarter of 2024 when the Landlord substantially completed tenant improvements, and may be extended for a period of eight years at then prevailing market rates for a comparable property.

Future lease payments are approximately $ 41.9 million which represent payments due for the initial term of the lease.

We excluded extension options that are not reasonably certain to be exercised from our lease terms.

Our lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease term.

Additionally, the Company

provided a letter of credit to the Landlord in the amount of $ 1.4 million in connection with the Oyster Point Lease, which is classified as restricted cash as of December 31, 2024.

Though the Oyster Point Lease is accounted for as a single contract, the office space was occupied in March 2024 while the laboratory space was occupied in June 2024.

Accordingly, the Company measured and allocated consideration to each lease component.

Upon commencement of each lease component the Company recognized an aggregate right-of-use asset ("ROU") and lease liability of $ 23.7 million and $ 6.1 million during the quarters ended March 31, 2024 and June 30, 2024, respectively.

Operating lease ROU assets and liabilities on our balance sheets represent the present value of our remaining lease payments over the remaining lease terms.

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Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term.

In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the date of adoption of Topic 842 or the date of lease modification.

In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the date of the commencement of the new lease.

The undiscounted future non-cancellable lease payments of the Company's operating lease liability as of December 31, 2024 were as follows (in thousands):

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Operating Leases

Thereafter 12,693

Total undiscounted lease payments 41,881

Present value discount ( 11,900 )

Total discounted lease payments 29,981

Total current operating lease liabilities 542

Total non-current operating lease liabilities 29,439

Total lease liability $ 29,981

The weighted-average remaining lease terms and discount rates related to the Company's operating leases were as follows:

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Short-term lease expense and variable lease payments recorded in operating expenses were immaterial for the years ended December 31, 2024, 2023 and 2022.

Lease expenses for the years ended December 31, 2023, 2022 and 2021 are as follows (in thousands)

Lease expenses are as follows (in thousands)

As of December 31,

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Both of the non-employee directors resigned from the Company's Board of Directors in 2022.

The shares of common stock subject to these options ve st have all vested .

The stock-based compensation expense related to these options was immaterial during the years ended December 31, 2022, and 2021.

There were no related party transactions during the year ended December 31, 2023.

The shares of common stock subject to these options have all vested .

The stock-based compensation expense related

to these options was immaterial during the year ended December 31, 2022.

There were no related party transactions during the years ended December 31, 2024 and 2023.

Defined Contribution Plan

9 unchanged sentences

Performance-based restricted stock units* — 328,750 354,532

Unvested restricted shares — — 21,841

Total 9,233,438 8,156,985 6,432,024

*PSUs outstanding based on target level of achievement of 100 %.

Subsequent Event

In March 2025, we announced that we were discontinuing the BEACON-IPF Phase 2b trial following a prespecified data review and recommendation by the trial’s independent DSMB, as well as a secondary review and recommendation by an outside expert panel, due to an imbalance in safety events between the treatment and placebo groups.

The Company plans to analyze the complete data from the BEACON-IPF trial and evaluate next steps for bexotegrast’s development.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data