Praxis Precision Medicines, Inc. 10-Q

Item 1. Financial Statements. PRAXIS PRECISION MEDICINES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Amounts in thousands, except share and per share data) September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 149,527 $ 215,372 Marketable securities 117,630 177,195 Prepaid expenses and other current assets 6,687 11,805 Total current assets 273,844 404,372 Long-term marketable securities 122,008 76,961 Property and equipment, net 174 230 Operating lease right-of-use assets 362 1,131 Other non-current assets — 416 Total assets $ 396,388 $ 483,110 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 30,819 $ 12,528 Accrued expenses 21,628 23,763 Operating lease liabilities 436 1,259 Total current liabilities 52,883 37,550 Long-term liabilities: Non-current portion of operating lease liabilities — 110 Total liabilities 52,883 37,660 Commitments and contingencies (Note 6) Stockholders’ equity: Preferred stock, $ 0.0001 par value; 10,000,000 shares authorized and no shares issued or outstanding as of September 30, 2025 and December 31, 2024 — — Common stock, $ 0.0001 par value; 150,000,000 shares authorized; 21,165,933 shares issued and outstanding as of September 30, 2025, and 19,422,358 shares issued and outstanding as of December 31, 2024 14 14 Additional paid-in capital 1,394,088 1,281,522 Accumulated other comprehensive gain 500 654 Accumulated deficit ( 1,051,097 ) ( 836,740 ) Total stockholders’ equity 343,505 445,450 Total liabilities and stockholders’ equity $ 396,388 $ 483,110 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 PRAXIS PRECISION MEDICINES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in thousands, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Collaboration revenue $ — $ 302 $ — $ 1,090 Operating expenses: Research and development 65,797 41,881 189,609 96,125 General and administrative 12,562 15,256 39,545 41,174 Total operating expenses 78,359 57,137 229,154 137,299 Loss from operations ( 78,359 ) ( 56,835 ) ( 229,154 ) ( 136,209 ) Other income: Other income, net 4,425 4,925 14,797 12,069 Total other income 4,425 4,925 14,797 12,069 Net loss $ ( 73,934 ) $ ( 51,910 ) $ ( 214,357 ) $ ( 124,140 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 3.36 ) $ ( 2.75 ) $ ( 9.97 ) $ ( 7.21 ) Weighted average common shares outstanding, basic and diluted 21,977,268 18,884,562 21,506,021 17,210,604 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 PRAXIS PRECISION MEDICINES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (Amounts in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net loss $ ( 73,934 ) $ ( 51,910 ) $ ( 214,357 ) $ ( 124,140 ) Change in unrealized gain (loss) on marketable securities, net of tax 105 1,402 ( 154 ) 1,331 Comprehensive loss $ ( 73,829 ) $ ( 50,508 ) $ ( 214,511 ) $ ( 122,809 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 3 PRAXIS PRECISION MEDICINES, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (Amounts in thousands, except share data) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Gain Total Stockholders’ Equity Shares Amount Balance at December 31, 2024 19,422,358 $ 14 $ 1,281,522 $ ( 836,740 ) $ 654 $ 445,450 Stock-based compensation expense — — 8,786 — — 8,786 Issuance of common stock from at-the-market public offerings, net of commission costs of $ 1,120 694,212 — 54,904 — — 54,904 Issuance of common stock from exercise of pre-funded warrants 173,840 — — — — — Vesting of restricted stock units 55,850 — — — — — Shares withheld for taxes for vesting of restricted stock units ( 18,765 ) — ( 1,195 ) — — ( 1,195 ) Issuance of common stock upon exercise of stock options 14,422 — 560 — — 560 Change in unrealized gain on marketable securities, net of tax — — — — 5 5 Net loss — — — ( 69,296 ) — ( 69,296 ) Balance at March 31, 2025 20,341,917 $ 14 $ 1,344,577 $ ( 906,036 ) $ 659 $ 439,214 Stock-based compensation expense — — 7,770 — — 7,770 Issuance of common stock from at-the-market offerings, net of commission costs of $ 579 657,477 — 28,360 — — 28,360 Issuance of common stock from exercise of pre-funded warrants 26,509 — — — — — Issuance of common stock under employee stock purchase plan 9,319 — 294 — — 294 Vesting of restricted stock units 5,860 — — — — — Shares withheld for taxes for vesting of restricted stock units ( 608 ) — ( 23 ) — — ( 23 ) Change in unrealized gain on marketable securities, net of tax — — — — ( 264 ) ( 264 ) Net loss — — — ( 71,127 ) — ( 71,127 ) Balance at June 30, 2025 21,040,474 $ 14 $ 1,380,978 $ ( 977,163 ) $ 395 $ 404,224 Stock-based compensation expense — — 7,447 — — 7,447 Issuance of common stock from at-the-market offerings, net of issuance and commission costs of $ 359 102,364 — 4,907 — — 4,907 Vesting of restricted stock units 3,746 — — — — — Shares withheld for taxes for vesting of restricted stock units ( 1,106 ) — ( 52 ) — — ( 52 ) Issuance of common stock upon exercise of stock options 20,455 — 808 — — 808 Change in unrealized gain on marketable securities, net of tax — — — — 105 105 Net loss — — — ( 73,934 ) — ( 73,934 ) Balance at September 30, 2025 21,165,933 $ 14 $ 1,394,088 $ ( 1,051,097 ) $ 500 $ 343,505 4 Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Gain (Loss) Total Stockholders’ Equity Shares Amount Balance at December 31, 2023 8,791,877 $ 13 $ 723,577 $ ( 653,921 ) $ — $ 69,669 Stock-based compensation expense — — 14,475 — — 14,475 Issuance of common stock from follow-on public offering and accompanying pre-funded warrants, net of underwriting discounts, commissions and offering costs of $ 10,836 3,802,025 — 161,649 — — 161,649 Issuance of common stock from at-the-market public offerings, net of issuance and commission costs of $ 376 209,852 — 6,169 — — 6,169 Issuance of common stock from a collaboration and license agreement 443,253 — 17,265 — — 17,265 Vesting of restricted stock units 11,095 — — — — — Shares withheld for taxes for vesting of restricted stock units ( 3,689 ) — ( 137 ) — — ( 137 ) Issuance of common stock upon exercise of stock options 3,634 — 143 — — 143 Change in unrealized gain on marketable securities, net of tax — — — — 3 3 Net loss — — — ( 39,553 ) — ( 39,553 ) Balance at March 31, 2024 13,258,047 $ 13 $ 923,141 $ ( 693,474 ) $ 3 $ 229,683 Stock-based compensation expense — — 5,878 — — 5,878 Issuance of common stock from follow-on public offering and accompanying pre-funded warrants, net of underwriting discounts, commissions and offering costs of $ 14,013 3,849,558 1 215,987 — — 215,988 Issuance of common stock from exercise of pre-funded warrants 622,123 — — — — — Issuance of common stock under employee stock purchase plan 25,146 — 311 — — 311 Vesting of restricted stock units 726 — — — — — Shares withheld for taxes for vesting of restricted stock units ( 242 ) — ( 13 ) — — ( 13 ) Issuance of common stock upon exercise of stock options 148 — 4 — — 4 Change in unrealized loss on marketable securities, net of tax — — — — ( 74 ) ( 74 ) Net loss — — — ( 32,677 ) — ( 32,677 ) Balance at June 30, 2024 17,755,506 $ 14 $ 1,145,308 $ ( 726,151 ) $ ( 71 ) $ 419,100 Stock-based compensation expense — — 12,432 — — 12,432 Issuance of common stock from at-the-market public offerings, net of issuance and commission costs of $ 70 25,189 1,442 1,442 Issuance of common stock from exercise of stock options 4,971 201 201 Vesting of restricted stock units 51 — — — — — Shares withheld for taxes for vesting of restricted stock units ( 20 ) — ( 1 ) — — ( 1 ) Change in unrealized loss on marketable securities, net of tax — — — — 1,402 1,402 Net loss — — — ( 51,910 ) — ( 51,910 ) Balance at September 30, 2024 17,785,697 $ 14 $ 1,159,382 $ ( 778,061 ) $ 1,331 $ 382,666 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 PRAXIS PRECISION MEDICINES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in thousands) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net loss $ ( 214,357 ) $ ( 124,140 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 112 311 Stock-based compensation expense 24,003 32,785 Non-cash operating lease expense 769 690 Amortization of premiums and discounts on marketable securities, net ( 2,921 ) ( 3,620 ) Non-cash collaboration and license agreement expense — 2,500 Changes in operating assets and liabilities: Prepaid expenses and other current assets 5,534 564 Accounts payable 18,291 9,195 Accrued expenses ( 3,228 ) 8,005 Operating lease liabilities ( 933 ) ( 835 ) Deferred revenue — ( 1,090 ) Other ( 13 ) — Net cash used in operating activities ( 172,743 ) ( 75,635 ) Cash flows from investing activities: Purchases of property and equipment ( 56 ) — Purchases of marketable securities ( 233,537 ) ( 302,101 ) Maturities of marketable securities 250,836 64,525 Net cash provided by (used in) investing activities 17,243 ( 237,576 ) Cash flows from financing activities: Issuance of common stock from follow-on public offering and accompanying pre-funded warrants, net of underwriting discounts, commissions and offering costs — 377,636 Issuance of common stock from collaboration and license agreement — 14,765 Proceeds from at-the-market offerings, net of issuance and commission costs 89,263 7,647 Payments of tax withholdings related to vesting of restricted stock units ( 1,270 ) ( 151 ) Proceeds from exercise of stock options and employee stock purchase plan purchases 1,662 659 Net cash provided by financing activities 89,655 400,556 (Decrease) increase in cash, cash equivalents and restricted cash ( 65,845 ) 87,345 Cash, cash equivalents and restricted cash, beginning of period 215,788 81,716 Cash, cash equivalents and restricted cash, end of period $ 149,943 $ 169,061 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents 149,527 168,645 Restricted cash 416 416 Total cash, cash equivalents and restricted cash $ 149,943 $ 169,061 Supplemental disclosures of non-cash activities: Issuance costs from at-the-market offering included in accrued expenses $ 221 $ 36 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 PRAXIS PRECISION MEDICINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Nature of the Business Praxis Precision Medicines, Inc. (“Praxis” or the “Company”) is a clinical-stage biopharmaceutical company translating insights from genetic epilepsies into the development of therapies for central nervous system ("CNS"), disorders characterized by neuronal excitation-inhibition imbalance. Normal brain function requires a delicate balance of excitation and inhibition in neuronal circuits, which, when dysregulated, can lead to abnormal function and both rare and more prevalent neurological disorders. The Company is applying genetic insights to the discovery and development of therapies for neurological disorders through two proprietary platforms, using its understanding of shared biological targets and circuits in the brain. Each platform has multiple programs currently, with significant potential for additional program and indication expansion: • Cerebrum ™, the Company's small molecule platform, utilizes deep understanding of neuronal excitability and neuronal networks and applies a series of computational and experimental tools to develop orally available precision therapies • Solidus ™, the Company's antisense oligonucleotide, or ASO, platform, is an efficient, targeted precision medicine discovery and development engine anchored on a proprietary, computational methodology The Company's platforms utilize a deliberate, pragmatic and patient-guided approach, leveraging a suite of translational tools, including novel transgenic and predictive translational animal models and electrophysiology markers, to enable an efficient path to proof-of-concept in patients. Through this approach, the Company has established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy. Praxis was incorporated in 2015 and commenced operations in 2016. The Company has funded its operations primarily with proceeds from the issuance of redeemable convertible preferred stock, from the sale of common stock through an initial public offering, at-the-market offerings under its shelf registration statement, and follow-on public offerings of common stock and pre-funded warrants to purchase common stock. From inception through September 30, 2025, the Company raised $ 1.2 billion in aggregate cash proceeds from these transactions, net of issuance costs. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Programs currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales. Liquidity In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) , the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. The Company has incurred recurring losses since its inception, including a net loss of $ 214.4 million for the nine months ended September 30, 2025. In addition, as of September 30, 2025, the Company had an accumulated deficit of $ 1.1 billion. The Company expects to continue to generate operating losses for the foreseeable future. 7 The Company expects that its cash, cash equivalents and marketable securities as of September 30, 2025 of $ 389.2 million, together with net proceeds of $ 567.0 million from the October 2025 financing, will be sufficient to fund its operating expenditures and capital expenditure requirements necessary to advance its program activities for at least one year from the date of issuance of these condensed consolidated financial statements. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations. The Company's inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies. There can be no assurance that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and ASUs of the FASB. The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended September 30, 2025 are consistent with those discussed in Note 2 to the consolidated financial statements included in the Company's 2024 Annual Report on Form 10-K, other than as noted below. Unaudited Interim Condensed Consolidated Financial Information The accompanying condensed consolidated balance sheet as of September 30, 2025, the condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024, the condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2025 and 2024, the condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and 2024 and the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 2025 and 2024 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual consolidated financial statements, and in the opinion of management reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of September 30, 2025, the results of its operations for the three and nine months ended September 30, 2025 and 2024 and its cash flows for the nine months ended September 30, 2025 and 2024. Financial statement disclosures for the three and nine months ended September 30, 2025 and 2024 are condensed and do not include all disclosures required for an annual set of financial statements in accordance with GAAP. The results for the three and nine months ended September 30, 2025 are not necessarily indicative of results to be expected for the year ended December 31, 2025, any other interim periods, or any future year or period. Common Stock Warrants The Company accounts for warrants to purchase shares of its common stock in accordance with the guidance in FASB ASC No. 480, Distinguishing Liabilities from Equity (ASC 480) and ASC No. 815, Derivatives and Hedging (ASC 815). The Company classifies warrants issued for the purchase of shares of its common stock as either equity or liability instruments based on an assessment of the specific terms and conditions of each respective contract. Such assessment includes determining whether the warrants are freestanding financial instruments or embedded in a host instrument, whether the warrants are liabilities within the scope of ASC 480, whether the warrants meet the definition of a derivative in ASC 815 and whether the warrants meet the requirements for equity classification pursuant to the indexation and equity classification criteria in ASC 815. The Company determines the classification for its warrants at the time of issuance and updates its assessment, as necessary. Warrants that meet all of the criteria for equity classification are recorded as a component of additional paid-in capital. Recently Enacted Tax Legislation The One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. on July 4, 2025. The OBBBA legislation provides for the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, revisions to the international tax framework and the reinstatement of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented in future 8 periods. While tax changes in the OBBBA do not have a material impact to the Company's effective tax rate, we anticipate that certain tax provisions in the OBBBA, namely the provision allowing for immediate expensing of certain research and development expenses, will result in accelerated deductions of previously capitalized expenses of approximately $ 203.9 million. We continue to evaluate the tax and other provisions of the OBBBA and the potential effects on our financial position, results of operations, and cash flows. Recent Accounting Pronouncements Recently Issued Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures . ASU No. 2023-09 provides more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. For public companies, the amendments are effective for annual periods beginning after December 15, 2024 and can be applied prospectively or retrospectively. The Company has determined that the effects of adopting the amendments in ASU 2023-09 will only impact its disclosures and will not have a material impact on its consolidated financial position and the results of its operations when such amendment is adopted. In November 2023, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update, or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements. 3. Cash Equivalents and Marketable Securities The following is a summary of the Company's investment portfolio as of September 30, 2025 and December 31, 2024 (in thousands): As of September 30, 2025 Gross Unrealized Estimated Cost Gains Losses Fair Value Cash equivalents: Money market funds $ 76,033 $ — $ — $ 76,033 Available-for-sale securities: Debt securities issued by U.S. government agencies 98,033 204 — 98,237 Corporate debt securities 99,583 240 — 99,823 Commercial paper 1,928 1 — 1,929 Other debt securities 39,594 55 — 39,649 Total cash equivalents and marketable securities $ 315,171 $ 500 $ — $ 315,671 As of December 31, 2024 Gross Unrealized Estimated Cost Gains Losses Fair Value Cash equivalents: Money market funds $ 128,652 $ — $ — $ 128,652 Debt securities issued by U.S. government agencies 15,953 2 — 15,955 Available-for-sale securities: Debt securities issued by U.S. government agencies 128,215 475 — 128,690 Corporate debt securities 107,695 157 — 107,852 Commercial paper 8,775 19 — 8,794 Other debt securities 8,819 1 — 8,820 Total cash equivalents and marketable securities $ 398,109 $ 654 $ — $ 398,763 9 As of September 30, 2025, the Company had 4 securities with a total fair market value of $ 16.1 million in an unrealized loss position. The Company believes that any unrealized losses associated with the decline in value of its securities is temporary and primarily related to the change in market interest rates since purchase, and believes that it is more likely than not that it will be able to hold its debt securities to maturity. The Company anticipates a full recovery of the amortized cost basis of its debt securities at maturity and an allowance was not recognized. Contractual maturities of the marketable securities at each balance sheet date are as follows (in thousands): September 30, 2025 December 31, 2024 Within one year $ 117,630 $ 177,195 After one year through five years 122,008 76,961 Total $ 239,638 $ 254,156 Securities are evaluated for impairment at the end of each reporting period. The Company did not record any impairment related to its available-for-sale securities during the three and nine months ended September 30, 2025 and 2024. 4. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets measured at fair value based on a fair value hierarchy. The following fair value hierarchy is used to classify financial assets based on observable inputs and unobservable inputs used to value the financial assets: • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets; • Level 2: Quoted prices for similar assets in active markets, quoted prices in markets that are not active, or inputs which are unobservable, either directly or indirectly, for substantially the full term of the asset; or • Level 3: Prices or valuation techniques that require inputs that are both significant to the valuation of the asset and unobservable. The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of September 30, 2025 and December 31, 2024 (in thousands): As of September 30, 2025 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 76,033 $ — $ — $ 76,033 Debt securities issued by US. government agencies 98,237 — — 98,237 Corporate debt securities — 99,823 — 99,823 Commercial paper — 1,929 — 1,929 Other debt securities — 39,649 — 39,649 $ 174,270 $ 141,401 $ — $ 315,671 10 As of December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 128,652 $ — $ — $ 128,652 Debt securities issued by US. government agencies 144,644 — — 144,644 Corporate debt securities — 107,852 — 107,852 Commercial paper — 8,794 — 8,794 Other debt securities — 8,821 — 8,821 $ 273,296 $ 125,467 $ — $ 398,763 5. Accrued Expenses Accrued expenses consisted of the following (in thousands): September 30, 2025 December 31, 2024 Accrued external research and development expenses $ 15,624 $ 13,363 Accrued personnel-related expenses 3,683 9,365 Accrued other expenses 2,321 1,035 Total accrued expenses $ 21,628 $ 23,763 6. Commitments and Contingencies In May 2021, the Company entered into a sublease agreement for office space located in Boston, Massachusetts that expires on January 31, 2026, with no option to renew or terminate early. The base rent increases by approximately 2 % annually. The Company issued a letter of credit to the landlord related to the security deposit, secured by restricted cash, which is reflected within prepaid expenses and other current assets and other non-current assets on the accompanying condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024, respectively. This lease qualifies as an operating lease. 7. Collaboration and License Agreements UCB Option and License Agreement In December 2022, the Company entered into an Option and License Agreement (“the Collaboration Agreement”) with UCB Biopharma SRL (“UCB”) for the discovery of small molecule therapeutics as potential treatments of KCNT1-related epilepsies. Under the terms of the Collaboration Agreement, the Company has agreed to perform general biology-related research services as part of a mutually agreed upon research plan in exchange for a $ 5.0 million upfront payment. In addition, the Company provided UCB an exclusive option to in-license global development and commercialization rights to any resulting KCNT1 small molecule development candidate identified as part of the research plan. If UCB exercises its option to in-license global development and commercialization rights, the Collaboration Agreement stipulates that UCB will assume research, development, manufacturing and commercialization responsibilities and costs. Under the terms of the Collaboration Agreement, the Company was eligible to receive an option fee and future success-based development and commercialization milestone payments, totaling up to $ 98.5 million, in addition to tiered royalties on net sales of any resulting products from the Collaboration Agreement. The Company concluded that UCB is a customer, and as such, the arrangement falls within the scope of Topic 606. At the commencement of the Collaboration Agreement, the Company identified one performance obligation, which was to perform the research services for UCB. The Company determined the transaction price to be $ 5.0 million, comprised of the upfront payment it received. The option provided to UCB was determined not to be a material right. The Company recognized revenue for its research services performance obligation over time using an input method over the duration of the research services. In December 2024, UCB exercised its option to in-license global 11 development and commercialization rights for a KCNT1 development candidate as part of the Collaboration Agreement. Upon notice of the exercise, the Company recognized the $ 6.0 million option exercise fee and the $ 2.6 million of remaining collaboration revenue associated with the $ 5.0 million up front payment as collaboration revenue within the December 31, 2024 consolidated statement of operations, as the Company had no further research service obligations under the terms of the Collaboration Agreement. The Company did not recognize any collaboration revenue associated with this Collaboration Agreement during the three and nine months ended September 30, 2025. As of September 30, 2025, there was no deferred revenue recorded in the condensed consolidated balance sheet. During the three and nine months ended September 30, 2024, the Company recognized $ 0.3 million and $ 1.1 million, respectively, related to the Collaboration Agreement in the condensed consolidated statement of operations. As of December 31, 2024, there was no deferred revenue recorded in the consolidated balance sheet. Tenacia Collaboration and License Agreement On January 4, 2024, the Company entered into an exclusive collaboration and license Agreement (“the License Agreement”) with Tenacia Biotechnology (Shanghai) Co., Ltd. (“Tenacia”), a China-based portfolio company of Bain Capital, which provides Tenacia an exclusive license to use certain intellectual property for the development and commercialization of ulixacaltamide and products containing ulixacaltamide in China, Hong Kong, Macau and Taiwan. Tenacia is solely responsible for the development and commercialization under the arrangement, with the exception of the associated manufacturing. The Company also entered into a Stock Purchase Agreement (“the Stock Purchase Agreement”) with BCPE Tenet Holdings Cayman, Ltd. (“BCPE”), a related party of Tenacia. Pursuant to the terms of the License Agreement, the Company was entitled to an up-front, non-refundable and non-creditable cash payment of $ 5.0 million, net of certain tax withholdings. In addition, the Company is eligible to receive $ 264.0 million in success-based development and commercialization milestone payments as well as tiered royalties on net sales. Pursuant to the terms of the Stock Purchase Agreement, the Company issued and sold 443,253 shares of its common stock to BCPE at a price per share of $ 22.5605 for aggregate gross proceeds of $ 10.0 million. The per share price was based on a 20 % premium over the 30-day volume-weighted average price. Under the terms of the License Agreement, the Company granted to Tenacia an exclusive license to use certain intellectual property for the development and commercialization of ulixacaltamide and products containing ulixacaltamide in China, Hong Kong, Macau and Taiwan. Tenacia is solely responsible for the development and commercialization under the arrangement, with the exception of the associated manufacturing. The Company concluded that the License Agreement and the Stock Purchase Agreement is a combined arrangement since they were executed at the same time and in contemplation of each other with the same counterparty or a related party thereof and the combined arrangement falls within the scope of Topic 606. The Company’s obligations under the arrangement comprise a single promise, or one performance obligation, related to the exclusive development and commercialization license granted to Tenacia. Total proceeds associated with the combined arrangement at inception were $ 14.8 million consisting of the following: (i) $ 10.0 million gross proceeds from the sale of common stock under the Stock Purchase Agreement and (ii) $ 4.8 million, net of tax, related to the up-front payment under the License Agreement, both of which were received in January 2024. During the three and nine months ended September 30, 2025 and 2024, the Company did not achieve any development or sales milestones or earn any royalties under the License Agreement. The Company recorded the common stock sold to BCPE at its issuance date fair value of $ 38.95 per share, or $ 17.3 million in the aggregate, which exceeded the proceeds received which were calculated based on the 20 % premium over the prior 30-day volume-weighted average price. Accordingly, there is no transaction price allocable to the performance obligation. The Company accounted for the excess of the fair value of the equity securities issued over the total proceeds received as consideration paid to a customer for which no distinct good or service was transferred in exchange. As a result, the transaction gives rise to negative revenue on a cumulative basis in the amount of $ 2.5 million, which was recorded at the inception of the collaboration and license agreement in research and development expense in the accompanying consolidated statement of operations. For agreements where the licenses are considered separate performance obligations or represent the only performance obligation, the Company recognizes revenue at the point in time that the Company effectively grants the license, as the licenses or assignments represent functional intellectual property. 12 As of September 30, 2025 and December 31, 2024, the Company did not have any receivables or deferred revenue related to the arrangement with Tenacia. The Company did not recognize any contract assets related to costs to obtain a contract with a customer or costs to fulfill a contract with a customer through September 30, 2025 because no qualifying costs were incurred. During the three and nine months ended September 30, 2025 and 2024, the Company did not recognize any revenue associated with the combined arrangement. 8. Common Stock and Preferred Stock Common Stock As of September 30, 2025 and December 31, 2024, the authorized capital stock of the Company included 150,000,000 shares of common stock, $ 0.0001 par value. As of September 30, 2025 and December 31, 2024, the Company did no t hold any treasury shares. Follow-On Public Offerings January 2024 Public Offering On January 16, 2024, the Company completed a public offering of: (i) an aggregate of 3,802,025 shares of its common stock at a public offering price of $ 35.50 per share, including the underwriters' full exercise of their option to purchase 633,750 additional shares of common stock, and (ii) pre-funded warrants to purchase 1,056,725 shares of common stock at a public offering price of $ 35.4999 per share of common stock underlying the warrants. The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, less the $ 0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $ 161.6 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company. The pre-funded warrants are exercisable at any time on or after the date of issuance at the option of the holder, subject to a beneficial ownership blocker that may limit exercisability. No holder may exercise any portion of the warrants that would cause the aggregate number of shares of common stock beneficially owned by such holder, together with its affiliates, to exceed 4.99 % (or 9.99 %) of the issued and outstanding common stock. A holder of a pre-funded warrant may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company. The pre-funded warrants do not expire. The pre-funded warrants may be settled through either physical or net share settlement. Following the occurrence of certain fundamental transactions, the holders of the pre-funded warrants have the right to receive upon exercise of the warrants the same amount and kind of securities, cash, or property as they would have been entitled to receive if they had been holders of the common shares issuable under the warrants immediately prior to such transaction. During the year ended December 31, 2024, 152,145 pre-funded warrants were exercised via a cashless exercise, resulting in 152,142 shares of common stock issued. No cash proceeds associated with the exercise were received by the Company. During the nine months ended September 30, 2025, 200,355 pre-funded warrants were exercised via cashless exercise, resulting in 200,349 shares of common stock issued. No cash proceeds associated with the exercise were received by the Company. As of September 30, 2025, a total of 704,225 pre-funded warrants associated with this offering remained outstanding. April 2024 Public Offering On April 2, 2024, the Company completed a public offering of: (i) an aggregate of 3,849,558 shares of its common stock at a public offering price of $ 56.50 per share, including the underwriters' full exercise of their option to purchase 530,973 additional shares of common stock, and (ii) pre-funded warrants to purchase 221,238 shares of common stock at a public offering price of $ 56.4999 per share of common stock underlying the warrants. The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $ 0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $ 216.0 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company. The pre-funded warrants are exercisable at any time on or after the date of issuance at the option of the holder, subject to a beneficial ownership blocker that may limit exercisability. No holder may exercise any portion of the warrants that would cause the aggregate number of shares of common stock beneficially owned by such holder, together with its affiliates, to exceed 4.99 % (or 9.99 %) of the issued and outstanding common stock. A holder of a 13 pre-funded warrant may increase or decrease this percentage up to 19.99 % by providing at least 61 days' prior notice to the Company. The pre-funded warrants do not expire. The pre-funded warrants may be settled through either physical or net share settlement. Following the occurrence of certain fundamental transactions, the holders of the pre-funded warrants have the right to receive upon exercise of the warrants the same amount and kind of securities, cash or property as they would have been entitled to receive if they had been holders of the common shares issuable under the warrants immediately prior to such transaction. As of September 30, 2025, none of the pre-funded warrants have been exercised and all remained outstanding. The Company determined that the pre-funded warrants related to the January 2024 and April 2024 public offerings are freestanding financial instruments because they are both legally detachable and separately exercisable from the common stock sold in the offering. As such, the Company evaluated the pre-funded warrants to determine whether they represent instruments that require liability classification pursuant to the guidance in ASC 480. However, the Company concluded that the pre-funded warrants are not a liability within the scope of ASC 480 due to their characteristics. Further, the Company determined that the pre-funded warrants do not meet the definition of a derivative under ASC 815 because they do not meet the criteria regarding no or little initial net investment. Accordingly, the Company assessed the pre-funded warrants relative to the guidance in ASC No. 815-40, Contracts in Entity’s Own Equity , to determine the appropriate treatment. The Company concluded that the pre-funded warrants are both indexed to its own stock and meet all other conditions for equity classification. Accordingly, the Company has classified the pre-funded warrants as permanent equity. Shares Reserved for Future Issuance The Company has reserved the following shares of common stock for future issuance: September 30, 2025 December 31, 2024 Shares reserved for exercise of outstanding stock options 2,070,371 1,809,343 Shares reserved for exercise of pre-funded warrants related to the January 2024 Financing 704,225 904,580 Shares reserved for exercise of pre-funded warrants related to the April 2024 Financing 221,238 221,238 Shares reserved for future awards under the 2020 Stock Option and Incentive Plan 462,188 91,343 Shares reserved for future awards under the 2020 Employee Stock Purchase Plan 294,552 109,648 Shares reserved for future awards under the 2024 Inducement Plan 950,600 112,774 Shares reserved for vesting of restricted stock units 516,119 224,473 Total shares of authorized common stock reserved for future issuance 5,219,293 3,473,399 Preferred Stock As of September 30, 2025 and December 31, 2024, the authorized capital stock of the Company included 10,000,000 shares of undesignated preferred stock, $ 0.0001 par value. 9. Stock-Based Compensation 2024 Inducement Plan In January 2024, the Board of Directors ("the Board") adopted the 2024 Inducement Plan (the "Inducement Plan") without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market LLC listing rules ("Rule 5635(c)(4)"). In accordance with Rule 5635(c)(4), the Inducement Plan allows the Company to grant awards only to a newly hired employee who was not previously an employee or non-employee director or to an employee who is being rehired following a bona fide period of non-employment if such award is a material inducement to such employee entering into employment. In January 2025, the number of shares of common stock authorized for issuance under the Inducement Plan was increased by 870,000 shares. The total number of shares of common stock authorized for issuance under the Inducement Plan as of September 30, 2025 and December 31, 2024 was 1,000,000 shares and 130,000 shares, respectively. 2020 Stock Option and Incentive Plan The total number of shares of common stock authorized for issuance under the 2020 Stock Option and Incentive Plan (the "2020 Plan”) as of September 30, 2025 and December 31, 2024 was 2,941,950 shares and 1,970,833 shares, respectively. 14 2017 Stock Incentive Plan The total number of shares of common stock authorized for issuance under the 2017 Stock Incentive Plan (the "2017 Plan") as of September 30, 2025 and December 31, 2024 was 395,850 shares. Any authorization to issue new options under the 2017 Plan was cancelled upon the effectiveness of the 2020 Plan and no further awards will be granted under the 2017 Plan. 2020 Employee Stock Purchase Plan The total number of shares of common stock authorized for issuance under the 2020 Employee Stock Purchase Plan (the "2020 ESPP”) as of September 30, 2025 and December 31, 2024 was 369,368 shares and 175,145 shares, respectively. Restricted Stock Units The following table summarizes the Company’s restricted stock unit activity: Shares Weighted Average Grant Date Fair Value Unvested as of December 31, 2024 224,473 $ 71.71 Issued 387,431 61.51 Vested ( 65,339 ) 99.63 Forfeited ( 30,446 ) 59.46 Unvested as of September 30, 2025 516,119 $ 61.24 As of September 30, 2025, total unrecognized compensation cost related to unvested restricted stock units was $ 25.0 million, which is expected to be recognized over a weighted-average period of 3.09 years. Stock Options The following table summarizes the Company’s stock option activity: Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding as of December 31, 2024 1,809,343 $ 90.84 Granted 324,670 60.03 Exercised ( 34,877 ) 39.21 $ 738 Cancelled or Forfeited ( 28,765 ) 67.76 Outstanding as of September 30, 2025 2,070,371 $ 87.20 7.94 $ 8,662 Exercisable as of September 30, 2025 1,197,365 $ 108.73 7.28 $ 6,571 Vested and expected to vest as of September 30, 2025 2,070,371 $ 87.20 7.94 $ 8,662 Valuation of Stock Options The weighted-average assumptions that the Company used in the Black-Scholes option pricing model to determine the grant-date fair value of stock options granted to employees and non-employees on the date of grant were as follows for the nine months ended September 30, 2025. No stock options were granted during the three months ended September 30, 2025. 15 Nine Months Ended September 30, 2025 Risk-free interest rate 4.45 % Expected term (in years) 6.00 Expected volatility 93.08 % Expected dividend yield — % Weighted average grant-date fair value per share $ 46.74 As of September 30, 2025, total unrecognized compensation cost related to unvested stock options was $ 36.4 million, which is expected to be recognized over a weighted-average period of 2.24 years. Stock-Based Compensation Stock-based compensation expense was allocated as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Research and development $ 2,959 $ 4,640 $ 9,969 $ 12,298 General and administrative 4,488 7,792 14,034 20,487 Total stock-based compensation expense $ 7,447 $ 12,432 $ 24,003 $ 32,785 10. Net Loss per Share The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have been anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Outstanding stock options 2,070,371 1,829,324 2,070,371 1,829,324 Unvested restricted stock units 516,119 222,674 516,119 222,674 Potential shares issuable under the 2020 ESPP 13,795 7,391 13,795 7,391 2,600,285 2,059,389 2,600,285 2,059,389 Common shares issuable upon exercise of the pre-funded warrants that were sold in connection with the January 2024 and April 2024 underwritten public offerings are included in the calculation of basic weighted average number of common shares outstanding for the three and nine months ended September 30, 2025. Consistent with the guidance in ASC 260-10-45-13, the underlying common shares are issuable for little to no consideration and there are no vesting conditions or contingencies associated with the warrants. Accordingly, the aggregate number of common shares underlying the pre-funded warrants have been considered outstanding for purposes of the calculation of basic net loss per share from the date of issuance. 11. Related Party Transactions On September 11, 2019, the Company entered into a Cooperation and License Agreement (the “License Agreement”) with RogCon Inc. (“RogCon”). Under the License Agreement, RogCon granted to the Company an exclusive, worldwide license under RogCon's intellectual property to research, develop and commercialize products for the treatment of all forms of epilepsy and/or neurodevelopmental disorders in each case caused by any mutation of the SCN2A gene. Pursuant to the terms of the License Agreement, the Company will conduct, at its own cost and expense, the research and development activities assigned to it under the associated research plan. In addition, the Company is responsible for reimbursing RogCon for any costs associated with research and development activities RogCon performs at the request of the Company. One of the founders of RogCon became the Company's General Counsel in June 2020. The Company continues to reimburse RogCon for its out-of-pocket costs incurred for 16 activities performed under the License Agreement. Expenses incurred during all periods presented were not material. 12. Segment Information The Company has one operating segment. The Company's operating segment discovers and develops therapies for CNS disorders. The Company's chief operating decision maker ("CODM"), its Chief Executive Officer, manages the Company's operations on a consolidated basis for the purposes of assessing performance and allocating resources based on net loss that also is reported on the condensed consolidated statement of operations as consolidated net loss. Net loss is used by the CODM to make key strategic and operational decisions. The operating segment's revenue is derived from a single domestic collaboration agreement from which the segment licenses certain development or product candidates and has performed research and development services. The measure of segment assets is reported on the condensed consolidated balance sheet as total consolidated assets. The majority of the Company's long-lived assets are held in the United States. The following table presents selected financial information about the Company's single operating segment for the three and nine months ended September 30, 2025 and 2024 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Collaboration revenue $ — $ 302 $ — $ 1,090 Program-specific expenses: Ulixacaltamide 11,644 19,976 53,542 43,160 Vormatrigine 20,899 6,613 52,589 9,205 Relutrigine 14,965 1,263 30,851 3,514 Elsunersen 2,219 380 4,297 1,586 Other early stage assets 3,142 1,179 5,664 3,242 Personnel-related expenses 12,116 9,472 37,059 27,582 Stock-based compensation expense 7,447 12,432 24,003 32,786 Depreciation expense 19 92 112 311 Other segment expenses (a) 5,908 5,730 21,037 15,913 Interest income 4,425 4,925 14,797 12,069 Net loss $ ( 73,934 ) $ ( 51,910 ) $ ( 214,357 ) $ ( 124,140 ) (a) Other segment expenses includes research and development and general and administrative costs not attributable to a specific program . 13. Subsequent Events The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the consolidated financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. The Company has concluded that no subsequent events have occurred that require disclosure other than those noted below. October 2025 Public Offering On October 20, 2025, the Company completed a public offering of: (i) an aggregate of 3,527,072 shares of its common stock at a public offering price of $ 157.00 per share, including the underwriters' full exercise of their option to purchase 501,592 additional shares of common stock, and (ii) pre-funded warrants to purchase 318,470 shares of common stock at a public offering price of $ 156.9999 per share of common stock underlying the warrants. The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, less the $ 0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $ 567.0 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company. 17