RIGEL PHARMACEUTICALS INC 10-Q

Item 1. Financial Statements RIGEL PHARMACEUTICALS, INC. CONDENSED BALANCE SHEET S (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ September 30, 2024 December 31, 2023 (1) ​ ​ (unaudited) ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 51,692 ​ $ 32,786 Short-term investments ​ 9,422 ​ 24,147 Accounts receivable, net ​ 30,575 ​ 30,550 Inventories ​ ​ 4,784 ​ 5,522 Prepaid and other current assets ​ 9,994 ​ 6,261 Total current assets ​ 106,467 ​ 99,266 Property and equipment, net ​ 99 ​ 165 Intangible assets, net ​ ​ 27,687 ​ ​ 13,878 Operating lease right-of-use assets ​ ​ 405 ​ ​ 861 Other assets ​ 4,761 ​ 3,055 Total assets ​ $ 139,419 ​ $ 117,225 Liabilities and stockholders’ deficit ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 3,815 ​ $ 7,142 Accrued compensation ​ 7,924 ​ 8,676 Accrued research and development ​ 3,593 ​ 3,513 Acquisition-related liabilities ​ ​ 5,000 ​ ​ — Revenue reserves and refund liability ​ ​ 22,192 ​ ​ 15,684 Loans payable, net, current portion ​ ​ — ​ ​ 7,229 Other accrued liabilities ​ 9,967 ​ 5,334 Deferred revenue ​ ​ 1,355 ​ ​ 1,355 Lease liabilities, current portion ​ ​ 466 ​ ​ 692 Other long-term liabilities, current portion ​ ​ — ​ ​ 3,642 Total current liabilities ​ 54,312 ​ 53,267 Long-term portion of lease liabilities ​ — ​ 285 Long-term portion of loans payable, net ​ ​ 59,762 ​ ​ 52,373 Other long-term liabilities ​ 39,981 ​ 39,944 Total liabilities ​ ​ 154,055 ​ ​ 145,869 ​ ​ ​ ​ ​ ​ ​ Commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ deficit: ​ ​ ​ ​ ​ ​ Common stock (2) ​ 17 ​ 17 Additional paid-in capital (2) ​ 1,389,742 ​ 1,378,881 Accumulated other comprehensive income ​ 11 ​ 8 Accumulated deficit ​ ( 1,404,406 ) ​ ( 1,407,550 ) Total stockholders’ deficit ​ ( 14,636 ) ​ ( 28,644 ) Total liabilities and stockholders’ deficit ​ $ 139,419 ​ $ 117,225 (1) The balance sheet as of December 31, 2023 has been derived from the audited financial statements included in Rigel’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (SEC) on March 5, 2024 . (2) Common stock and additional paid-in capital have been restated to reflect the 1-for-10 reverse stock split effected on June 27, 2024 on a retroactive basis for the periods presented. See Accompanying Notes to Condensed Financial Statements 3 ​ Table of Contents RIGEL PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF OPERATION S (In thousands, except per share amounts) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2024 2023 2024 2023 Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales, net ​ $ 38,927 ​ $ 27,129 ​ $ 98,380 ​ ​ 74,755 Contract revenues from collaborations ​ ​ 16,380 ​ ​ 1,005 ​ ​ 23,302 ​ ​ 5,335 Government contracts ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,000 Total revenues ​ ​ 55,307 ​ ​ 28,134 ​ ​ 121,682 ​ ​ 81,090 Costs and expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of product sales ​ ​ 8,026 ​ ​ 1,268 ​ ​ 12,858 ​ ​ 3,320 Research and development ​ 6,182 ​ 6,475 ​ ​ 17,748 ​ ​ 21,336 Selling, general and administrative ​ 27,043 ​ 24,856 ​ ​ 83,539 ​ ​ 78,891 Total costs and expenses ​ 41,251 ​ 32,599 ​ 114,145 ​ 103,547 Income (loss) from operations ​ 14,056 ​ ( 4,465 ) ​ 7,537 ​ ( 22,457 ) Interest income ​ 425 ​ 672 ​ 1,570 ​ ​ 1,594 Interest expense ​ ​ ( 2,060 ) ​ ​ ( 1,899 ) ​ ​ ( 5,963 ) ​ ​ ( 4,965 ) Net income (loss) ​ $ 12,421 ​ $ ( 5,692 ) ​ $ 3,144 ​ $ ( 25,828 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.71 ​ $ ( 0.33 ) ​ $ 0.18 ​ $ ( 1.49 ) Diluted ​ $ 0.70 ​ $ ( 0.33 ) ​ $ 0.18 ​ $ ( 1.49 ) Weighted average shares used in computing net income (loss) per share (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ 17,600 ​ ​ 17,436 ​ ​ 17,556 ​ ​ 17,389 Diluted ​ ​ 17,648 ​ ​ 17,436 ​ ​ 17,599 ​ ​ 17,389 (1) Share and per share amounts have been restated to reflect the 1-for-10 reverse stock split effected on June 27, 2024 on a retroactive basis for all periods presented. ​ See Accompanying Notes to Condensed Financial Statements ​ 4 ​ Table of Contents RIGEL PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF COMPREHENSIVE INCOME ( LOSS) (In thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2024 2023 2024 2023 Net income (loss) ​ $ 12,421 ​ $ ( 5,692 ) ​ $ 3,144 ​ ​ ( 25,828 ) Other comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net unrealized gain on short-term investments ​ 20 ​ 10 ​ 3 ​ ​ 138 Comprehensive income (loss) ​ $ 12,441 ​ $ ( 5,682 ) ​ $ 3,147 ​ $ ( 25,690 ) ​ See Accompanying Notes to Condensed Financial Statements ​ 5 ​ Table of Contents RIGEL PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF STOCK HOLDERS’ DEFICIT (In thousands, except share amounts) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Accumulated Other ​ ​ ​ ​ Total ​ ​ Common Stock (1) ​ Paid-in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital (1) (Loss) Income Deficit Deficit Balance as of January 1, 2024 17,482,513 ​ $ 17 ​ $ 1,378,881 ​ $ 8 ​ $ ( 1,407,550 ) ​ $ ( 28,644 ) Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 8,247 ) ​ ( 8,247 ) Net change in unrealized loss on short-term investments — ​ ​ — ​ ​ — ​ ​ ( 13 ) ​ ​ — ​ ( 13 ) Issuance of common stock upon exercise of options 9,066 ​ ​ — ​ ​ 89 ​ ​ — ​ ​ — ​ 89 Issuance of common stock upon vesting of restricted stock units (RSUs) ​ 48,658 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation expense — ​ ​ — ​ ​ 5,144 ​ ​ — ​ ​ — ​ 5,144 Balance as of March 31, 2024 17,540,237 ​ ​ 17 ​ ​ 1,384,114 ​ ​ ( 5 ) ​ ​ ( 1,415,797 ) ​ ​ ( 31,671 ) Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,030 ) ​ ​ ( 1,030 ) Net change in unrealized loss on short-term investments — ​ ​ — ​ ​ — ​ ​ ( 4 ) ​ ​ — ​ ​ ( 4 ) Issuance of common stock upon exercise of options and participation in Purchase Plan 36,130 ​ ​ — ​ ​ 252 ​ ​ — ​ ​ — ​ ​ 252 Issuance of common stock upon vesting of RSUs ​ 17,750 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation expense — ​ ​ — ​ ​ 2,539 ​ ​ — ​ ​ — ​ ​ 2,539 Balance as of June 30, 2024 ​ 17,594,117 ​ $ 17 ​ $ 1,386,905 ​ $ ( 9 ) ​ $ ( 1,416,827 ) ​ $ ( 29,914 ) Net income — ​ ​ — ​ ​ — ​ ​ — ​ ​ 12,421 ​ ​ 12,421 Net change in unrealized gain on short-term investments — ​ ​ — ​ ​ — ​ ​ 20 ​ ​ — ​ ​ 20 Issuance of common stock upon exercise of options 16,363 ​ ​ — ​ ​ 158 ​ ​ — ​ ​ — ​ ​ 158 Issuance of common stock upon vesting of RSUs ​ 2,500 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation expense — ​ ​ ​ ​ ​ 2,679 ​ ​ — ​ ​ — ​ ​ 2,679 Balance as of September 30, 2024 17,612,980 ​ $ 17 ​ $ 1,389,742 ​ $ 11 ​ $ ( 1,404,406 ) ​ $ ( 14,636 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Accumulated Other ​ ​ ​ ​ Total ​ ​ Common Stock (1) ​ Paid-in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Amount Capital (1) (Loss) Deficit Deficit Balance as of January 1, 2023 17,339,816 ​ $ 17 ​ $ 1,368,979 ​ $ ( 153 ) ​ $ ( 1,382,459 ) ​ $ ( 13,616 ) Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 13,536 ) ​ ( 13,536 ) Net change in unrealized gain on short-term investments — ​ ​ — ​ ​ — ​ ​ 126 ​ ​ — ​ 126 Issuance of common stock upon exercise of options 95 ​ ​ — ​ ​ 1 ​ ​ — ​ ​ — ​ 1 Issuance of common stock upon vesting of RSUs ​ 26,625 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation expense — ​ ​ — ​ ​ 2,768 ​ ​ — ​ ​ — ​ 2,768 Balance as of March 31, 2023 17,366,536 ​ ​ 17 ​ ​ 1,371,748 ​ ​ ( 27 ) ​ ​ ( 1,395,995 ) ​ ​ ( 24,257 ) Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 6,600 ) ​ ​ ( 6,600 ) Net change in unrealized gain on short-term investments — ​ ​ — ​ ​ — ​ ​ 2 ​ ​ — ​ ​ 2 Issuance of common stock upon exercise of options and participation in Purchase Plan 52,379 ​ ​ — ​ ​ 554 ​ ​ — ​ ​ — ​ ​ 554 Issuance of common stock upon vesting of RSUs ​ 16,875 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation expense — ​ ​ — ​ ​ 2,186 ​ ​ — ​ ​ — ​ ​ 2,186 Balance as of June 30, 2023 ​ 17,435,790 ​ $ 17 ​ $ 1,374,488 ​ $ ( 25 ) ​ $ ( 1,402,595 ) ​ $ ( 28,115 ) Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 5,692 ) ​ ​ ( 5,692 ) Net change in unrealized gain on short-term investments — ​ ​ — ​ ​ — ​ ​ 10 ​ ​ — ​ ​ 10 Issuance of common stock upon exercise of options 883 ​ ​ — ​ ​ 8 ​ ​ — ​ ​ — ​ ​ 8 Stock-based compensation expense — ​ ​ — ​ ​ 1,955 ​ ​ — ​ ​ — ​ ​ 1,955 Balance as of September 30, 2023 17,436,673 ​ $ 17 ​ $ 1,376,451 ​ $ ( 15 ) ​ $ ( 1,408,287 ) ​ $ ( 31,834 ) ​ ​ ​ ​ ​ ​ ​ ​ (1) All share amounts in this column, including appropriate reclassifications between common stock and additional paid-in capital, have been restated to reflect the 1-for-10 reverse stock split effected on June 27, 2024 on a retroactive basis for all periods presented. ​ See Accompanying Notes to Condensed Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6 ​ Table of Contents ​ RIGEL PHARMACEUTICALS, INC. CONDENSED STATEMENTS OF CASH FLOW S (In thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2024 2023 Operating activities ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ 3,144 ​ $ ( 25,828 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ Stock-based compensation expense ​ 10,306 ​ ​ 6,873 (Gain) loss on sale and disposal of fixed assets ​ ​ ( 23 ) ​ ​ 376 Depreciation and amortization ​ 1,624 ​ ​ 945 Net amortization of discount on short-term investments and term loans ​ ​ ( 433 ) ​ ​ ( 219 ) Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable, net ​ ( 25 ) ​ ​ 16,774 Inventories ​ ​ ( 1,161 ) ​ ​ ( 1,359 ) Prepaid and other current and non-current assets ​ ( 3,484 ) ​ ​ 5,329 Right-of-use assets ​ 456 ​ ​ 922 Accounts payable ​ ( 3,327 ) ​ ​ 491 Accrued compensation ​ ( 752 ) ​ ​ ( 773 ) Accrued research and development ​ 80 ​ ​ ( 1,954 ) Revenue reserves and refund liability ​ ​ 6,508 ​ ​ 2,398 Other accrued liabilities ​ 4,566 ​ ​ ( 1,455 ) Lease liability ​ ​ ( 511 ) ​ ​ ( 966 ) Deferred revenue ​ ​ — ​ ​ ( 14 ) Other current and long-term liabilities ​ — ​ ( 1,043 ) Net cash provided by operating activities ​ 16,968 ​ 497 Investing activities ​ ​ ​ ​ ​ ​ Maturities of short-term investments ​ 32,950 ​ ​ 35,650 Purchases of short-term investments ​ ( 17,562 ) ​ ​ ( 18,222 ) Capital expenditures ​ ​ ( 10 ) ​ ​ — Payments for acquisition of intangible assets ​ ( 360 ) ​ ​ ( 15,000 ) Proceeds from sale of property and equipment ​ ​ 26 ​ ​ 149 Net cash provided by investing activities ​ 15,044 ​ 2,577 Financing activities ​ ​ ​ ​ ​ ​ Net proceeds from term loan financing ​ ​ — ​ ​ 19,950 Net proceeds from issuances of common stock upon exercise of options ​ 499 ​ ​ 563 Closing purchase price payment related to asset acquisition ​ ​ ( 10,000 ) ​ ​ — Cost share payments to a collaboration partner ​ ​ ( 3,605 ) ​ ​ ( 2,632 ) Net cash (used in) provided by financing activities ​ ( 13,106 ) ​ 17,881 Net increase in cash and cash equivalents ​ 18,906 ​ 20,955 Cash and cash equivalents at beginning of period ​ 32,786 ​ ​ 24,459 Cash and cash equivalents at end of period ​ $ 51,692 ​ $ 45,414 Supplemental disclosure of cash flow information ​ ​ ​ ​ ​ ​ Interest paid ​ $ 5,292 ​ $ 4,167 Acquisition-related liabilities ​ $ 5,000 ​ $ — ​ See Accompanying Notes to Condensed Financial Statements ​ ​ 7 ​ Table of Contents Rigel Pharmaceuticals, In c. Notes to Condensed Financial Statements (unaudited) In this report, “Rigel,” “we,” “us” and “our” refer to Rigel Pharmaceuticals, Inc. 1. Organization and Summary of Significant Accounting Policies Description of Business We are a biotechnology company dedicated to developing and providing novel therapies that significantly improve the lives of patients with hematologic disorders and cancer. We focus on products that address signaling pathways that are critical to disease mechanisms. TAVALISSE ® (fostamatinib disodium hexahydrate) is our first product approved by the US Food and Drug Administration (FDA). TAVALISSE is the only approved oral spleen tyrosine kinase (SYK) inhibitor for the treatment of adult patients with chronic immune thrombocytopenia (ITP) who have had an insufficient response to a previous treatment. The product is also commercially available in Europe and the United Kingdom (UK) (as TAVLESSE), and in Canada, Israel and Japan (as TAVALISSE) for the treatment of chronic ITP in adult patients. REZLIDHIA ® (olutasidenib) is o ur second FDA-approved product. REZLIDHIA capsules are indicated for the treatment of adult patients with relapsed or refractory (R/R) acute myeloid leukemia (AML) with a susceptible isocitrate dehydrogenase-1 (IDH1) mutation as detected by an FDA-approved test. W e in-licensed REZLIDHIA from Forma Therapeutics, Inc., now Novo Nordisk (Forma), with exclusive, worldwide rights for its development, manufacturing and commercialization. GAVRETO ® (pralsetinib) is our third FDA-approved product which we began commercializing on June 27, 2024. GAVRETO is a once daily, small molecule, oral, kinase inhibitor of wild-type rearranged during transfection (RET) and oncogenic RET fusions. GAVRETO is approved by the FDA for the treatment of adult patients with metastatic RET fusion-positive non-small cell lung cancer (NSCLC) as detected by an FDA-approved test. GAVRETO is also approved under accelerated approval based on overall response rate and duration response rate, for the treatment of adult and pediatric patients 12 years of age and older with advanced or metastatic RET fusion-positive thyroid cancer who require systemic therapy and who are radioactive iodine-refractory (if radioactive iodine is appropriate). We acquired the rights to research, develop, manufacture and commercialize GAVRETO in the US from Blueprint Medicines Corporation (Blueprint) pursuant to an Asset Purchase Agreement entered in February 2024. ​ We continue to advance the development of R289, our dual interleukin receptor-associated kinases 1 and 4 (IRAK 1/4) inhibitor program, in an open-label, Phase 1b study to determine the tolerability and preliminary efficacy of the drug in patients with lower-risk myelodysplastic syndrome (MDS) who are relapsed, refractory or resistant to prior therapies. We have strategic development collaborations with the University of Texas MD Anderson Cancer Center (MDACC) to expand our evaluation of olutasidenib in AML and other hematologic cancers with IDH1 mutations, and with Collaborative Network for Neuro-Oncology Clinical Trials (CONNECT) to conduct a Phase 2 clinical trial to evaluate olutasidenib in combination with temozolomide in patients with high-grade glioma (HGG) harboring an IDH1 mutation. We have a receptor-interacting serine/threonine-protein kinase 1 (RIPK1) inhibitor program in clinical development with our partner Eli Lilly and Company (Lilly). We also have product candidates in clinical development with partners BerGenBio ASA (BerGenBio) and Daiichi Sankyo (Daiichi). 8 ​ Table of Contents Reverse Stock Split We filed with the Secretary of State of the State of Delaware a certificate of amendment to our Amended and Restated Certificate of Incorporation, to effect a 1-for-10 reverse stock split, effective June 27, 2024. As a result of the reverse stock split, every ten issued and outstanding shares of our common stock were automatically combined into one issued and outstanding share of common stock. Accordingly, an amount equal to the par value of the decreased shares resulting from the reverse stock split was reclassified from common stock to additional paid-in capital on the condensed balance sheet and statement of changes in stockholders’ deficit. No fractional shares were issued in connection with the reverse stock split. Stockholders who otherwise would be entitled to receive fractional shares of common stock were entitled to receive the cash value equal to the fraction to which the stockholder would otherwise be entitled, multiplied by the closing price of the common stock as reported by Nasdaq on the last trading day prior to the effective date of the split. As a result of the reverse stock split, proportionate adjustments were made to the number of shares underlying (and as applicable, the exercise or conversion prices of) our outstanding equity awards and to the number of shares of common stock issuable under our equity incentive plans. The reverse stock split did not change the par value of our common stock, which remains $ 0.001 , or the authorized number of shares of our common stock. All share amounts and per share amounts disclosed in this Quarterly Report on Form 10-Q have been adjusted to reflect the reverse stock split on a retroactive basis for all periods presented. Basis of Presentation Our accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (US GAAP), for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Act of 1933, as amended (Securities Act). Accordingly, they do not include all the information and notes required by US GAAP for complete financial statements. These unaudited condensed financial statements include only normal and recurring adjustments that we believe are necessary to fairly state our financial position and the results of our operations and cash flows. Interim-period results are not necessarily indicative of results of operations or cash flows for a full-year or any subsequent interim period. The balance sheet as of December 31, 2023 has been derived from audited financial statements at that date but does not include all disclosures required by US GAAP for complete financial statements. Because certain disclosures required by US GAAP for complete financial statements are not included herein, these interim unaudited condensed financial statements and the notes accompanying them should be read in conjunction with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ from these estimates. Significant Accounting Policies Our significant accounting policies are described in “Note 1 – Description of Business and Summary of Significant Accounting Policies” to our “Notes to Financial Statements” contained in Part II, Item 8, “Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to these accounting policies except for the accounting consideration related to the Asset Purchase Agreement with Blueprint as discussed below in “Note 5 – In-licensing and Acquisition.” Liquidity As of September 30, 2024, we had approximately $ 61.1 million in cash, cash equivalents and short-term investments. We finance our operations primarily through sales of our products, and contract payments under our collaboration agreements, as well as through equity securities and debt financing. Based on our current operating plan, we believe that our existing cash, cash equivalents, and short-term investments will be sufficient to fund our expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of this Form 10-Q. 9 ​ Table of Contents Recently Issued Accounting Standards In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update expands public entities’ segment disclosures, among others, requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss; an amount and description of its composition for other segment items; and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under this update are also required for public entities with a single reportable segment. This update is effective for our Annual Report on Form 10-K for the fiscal year ending December 31, 2024, and interim periods thereafter. Early adoption is permitted. The update should be applied retrospectively to all periods presented in the financial statements. We are currently evaluating the impact of adopting this update on our financial statements and disclosures. In December 2023, FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which enhance the annual disclosure requirements regarding the tax rate reconciliation and incomes taxes paid information. This update is effective for our fiscal year ending December 31, 2025, and maybe adopted on a prospective or retrospective basis. Early adoption is permitted. We are currently assessing the impact of adopting this guidance but do not expect it to have a significant impact to our financial statements and disclosures. Other recently issued accounting guidance not discussed in this Quarterly Report on Form 10-Q are either not applicable or did not have, or are not expected to have, a material impact on us. 2. Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period and the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. Potentially dilutive securities include stock options, RSUs and shares issuable under our Employee Stock Purchase Plan (Purchase Plan). The dilutive effect of these potentially dilutive securities is reflected in diluted earnings per share using the treasury stock method. Under the treasury stock method, an increase in the fair market value of our common stock can result in a greater dilutive effect from potentially dilutive securities. The following table sets forth the computation of basic and diluted earnings per share (in thousands except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2024 2023 2024 2023 ​ EPS Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ 12,421 ​ $ ( 5,692 ) ​ $ 3,144 ​ $ ( 25,828 ) ​ EPS Denominator—Basic: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average common shares outstanding ​ 17,600 ​ 17,436 ​ 17,556 ​ 17,389 ​ EPS Denominator—Diluted: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average common shares outstanding ​ 17,600 ​ ​ 17,436 ​ ​ 17,556 ​ ​ 17,389 ​ Dilutive effect of stock options, RSUs and shares under Purchase Plan ​ 48 ​ ​ — ​ ​ 43 ​ ​ — ​ Weighted-average shares outstanding and common stock equivalents ​ 17,648 ​ 17,436 ​ 17,599 ​ 17,389 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.71 ​ $ ( 0.33 ) ​ $ 0.18 ​ $ ( 1.49 ) ​ Diluted ​ $ 0.70 ​ $ ( 0.33 ) ​ $ 0.18 ​ $ ( 1.49 ) ​ ​ 10 ​ Table of Contents The potential shares of common stock that were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been antidilutive are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2024 2023 ​ 2024 2023 Stock options ​ ​ 3,667 ​ ​ 3,428 ​ ​ 3,668 ​ ​ 3,428 RSUs ​ ​ 107 ​ ​ 193 ​ ​ 110 ​ ​ 193 Shares under Purchase Plan ​ ​ 22 ​ ​ 30 ​ ​ 22 ​ ​ 30 Total ​ ​ 3,796 ​ ​ 3,651 ​ ​ 3,800 ​ ​ 3,651 ​ ​ 3. Revenues Revenues disaggregated by category were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2024 2023 ​ 2024 2023 Product sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross product sales ​ $ 56,322 ​ $ 38,585 ​ $ 143,728 ​ $ 105,239 Discounts and allowances ​ ​ ( 17,395 ) ​ ​ ( 11,456 ) ​ ​ ( 45,348 ) ​ ​ ( 30,484 ) Total product sales, net ​ ​ 38,927 ​ ​ 27,129 ​ ​ 98,380 ​ ​ 74,755 Revenues from collaborations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ License revenue ​ ​ 10,000 ​ ​ — ​ ​ 10,000 ​ ​ — Milestone revenue ​ ​ — ​ ​ 75 ​ ​ — ​ ​ 75 Delivery of drug supplies, royalty and others ​ ​ 6,380 ​ ​ 930 ​ ​ 13,302 ​ ​ 5,260 Total revenues from collaborations ​ ​ 16,380 ​ ​ 1,005 ​ ​ 23,302 ​ ​ 5,335 Government contracts ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,000 Total revenues ​ $ 55,307 ​ $ 28,134 ​ $ 121,682 ​ $ 81,090 ​ Revenue from product sales are related to sales of our commercial products to our customers. For detailed discussions of our revenues from collaborations and government contracts, see “Note 4 – Sponsored Research, License Agreements and Government Contracts.” Our net product sales include gross product sales, net of chargebacks, discounts and fees, government and other rebates and returns. Of the total discounts and allowances from gross product sales for the nine months ended September 30, 2024 and 2023, $ 44.6 million and $ 29.7 million, respectively, was accounted for as additions to revenue reserves and refund liability, and $ 0.7 million and $ 0.8 million, respectively, as reductions in accounts receivable (as it relates to allowance for prompt pay discount) and prepaid and other current assets (as it relates to certain chargebacks and other fees that were prepaid) in the condensed balance sheet. The following tables summarize the activities in chargebacks, discounts and fees, government and other rebates and returns that were accounted for within revenue reserves and refund liability, for each of the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chargebacks, ​ Government ​ ​ ​ ​ ​ ​ Discounts and ​ and Other ​ ​ ​ ​ ​ ​ Fees ​ Rebates ​ Returns ​ Total Balance as of January 1, 2024 $ 8,236 ​ $ 3,517 ​ $ 3,931 ​ $ 15,684 Provision related to current period sales ​ ​ 34,565 ​ ​ 9,167 ​ ​ 884 ​ ​ 44,616 Credit or payments made during the period ​ ​ ( 31,363 ) ​ ​ ( 6,441 ) ​ ​ ( 304 ) ​ ​ ( 38,108 ) Balance as of September 30, 2024 $ 11,438 ​ $ 6,243 ​ $ 4,511 ​ $ 22,192 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chargebacks, ​ Government ​ ​ ​ ​ ​ ​ ​ ​ Discounts and ​ and Other ​ ​ ​ ​ ​ ​ ​ ​ Fees ​ Rebates ​ Returns ​ Total Balance as of January 1, 2023 $ 6,213 ​ $ 2,636 ​ $ 3,296 ​ $ 12,145 Provision related to current period sales ​ ​ 23,150 ​ ​ 5,932 ​ ​ 623 ​ ​ 29,705 Credit or payments made during the period ​ ​ ( 21,504 ) ​ ​ ( 5,631 ) ​ ​ ( 172 ) ​ ​ ( 27,307 ) Balance as of September 30, 2023 $ 7,859 ​ $ 2,937 ​ $ 3,747 ​ $ 14,543 11 ​ Table of Contents The following table summarizes the percentages of revenues from each of our customers who individually accounted for 10% or more of the total net product sales and revenues from collaborations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ ​ Nine Months Ended September 30, ​ ​ 2024 2023 ​ ​ 2024 2023 McKesson Corporation ​ ​ 43 % ​ ​ 49 % ​ ​ ​ 44 % ​ ​ 46 % Cencora Inc. (formerly ASD Healthcare) ​ ​ 19 % ​ ​ 18 % ​ ​ ​ 20 % ​ ​ 20 % Cardinal Health, Inc. ​ ​ * ​ ​ 28 % ​ ​ ​ 15 % ​ ​ 27 % Kissei ​ ​ 23 % ​ ​ * ​ ​ ​ 14 % ​ ​ * * Denotes less than 10% ​ ​ 4. Sponsored Research, License Agreements and Government Contracts Sponsored Research and License Agreements We conduct research and development programs independently and in connection with our corporate collaborators. As of September 30, 2024, we are a party to collaboration agreements with Lilly to develop and commercialize ocadusertib (previously R552), a RIPK1 inhibitor, for the treatment of non-central nervous system (non-CNS) diseases and collaboration aimed at developing additional RIPK1 inhibitors for the treatment of central nervous system (CNS) diseases; with Grifols S.A. (Grifols) to commercialize fostamatinib for human diseases in all indications in Grifols territory which includes Europe, the UK, Turkey, the Middle East, North Africa and Russia (including Commonwealth of Independent States); with Kissei Pharmaceutical Co., Ltd. (Kissei) to develop and commercialize fostamatinib in Japan, China, Taiwan and the Republic of Korea (Korea), and olutasidenib in Japan, Korea and Taiwan; with Medison Pharma Trading AG (Medison Canada) and Medison Pharma Ltd. (Medison Israel and, together with Medison Canada, Medison) to commercialize fostamatinib in all indications, in Medison territory which includes Canada and Israel; and with Knight Therapeutics International SA (Knight) to commercialize fostamatinib in all indications, in Knight territory which includes Latin America, consisting of Mexico, Central and South America, and the Caribbean. Further, we are also a party to collaboration agreements, but do not have ongoing performance obligations with BerGenBio for the development and commercialization of AXL receptor tyrosine kinase ( AXL) inhibitors in oncology, and with Daiichi to pursue research related to murine double minute 2 ( MDM2) inhibitors, a novel class of drug targets called ligases. Under the above existing agreements that we entered into in the ordinary course of business, we received or may be entitled to receive upfront cash payments, payments contingent upon specified events achieved by such partners and royalties on any net sales of products sold by such partners under the agreements. As of September 30, 2024, total future contingent payments to us under all of the above existing agreements, excluding terminated agreements, could exceed $ 1.4 billion if all potential product candidates achieved all of the payment triggering events under all of our current agreements. Of this amount, $ 279.5 million relates to the achievement of development events, $ 306.1 million relates to the achievement of regulatory events and $ 873.5 million relates to the achievement of certain commercial events. This estimated future contingent amount does not include any estimated royalties that could be due to us if the partners successfully commercialize any of the licensed products. Future events that may trigger payments to us under the agreements are based solely on our partners’ future efforts and achievements of specified development, regulatory and/or commercial events. We account for the milestone payments when such milestones are considered probable of being achieved, and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until uncertainty associated with the approvals has been resolved. The transaction price is then allocated to each performance obligation, on a relative standalone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, we re-evaluate the probability of achieving such milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, and recorded as part of contract revenues from collaborations during the period of adjustment. 12 ​ Table of Contents Global Exclusive License Agreement with Lilly We have a global exclusive license agreement and strategic collaboration with Lilly (Lilly Agreement) entered in February 2021, which became effective in March 2021, upon clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, to develop and commercialize ocadusertib (previously R552) for the treatment of non-CNS diseases. In addition, the collaboration is aimed at developing additional RIPK1 inhibitors for the treatment of CNS diseases. Pursuant to the terms of the Lilly Agreement, we granted Lilly the exclusive rights to develop and commercialize ocadusertib and related RIPK1 inhibitors in all indications worldwide. The parties’ collaboration is governed through a joint governance committee and appropriate subcommittees. Under the terms of the Lilly Agreement, we were entitled to receive a non-refundable and non-creditable upfront cash payment amounting to $ 125.0 million, which we received in April 2021. We are also entitled to additional milestone payments for non-CNS disease products consisting of up to $ 330.0 million in milestone payments upon the achievement of specified development, regulatory and commercial milestones, and up to $ 100.0 million in sales milestone payments on a product-by-product basis. In addition, depending on the extent of our co-funding of ocadusertib development activities, we would be entitled to receive tiered royalty payments on net sales of non-CNS disease products at percentages ranging from the mid-single digits to high-teens, subject to certain standard reductions and offsets. We are also eligible to receive milestone payments for CNS disease products consisting of up to $ 255.0 million in milestone payments upon the achievement of specified development, regulatory and commercial milestones, and up to $ 150.0 million in sales milestone payments on a product-by-product basis. We would be entitled to receive tiered royalty payments on net sales of CNS disease products up to low-double digits, subject to certain standard reductions and offsets. Under the Lilly Agreement, we were responsible for performing and funding initial discovery and identification of CNS disease development candidates. Following candidate selection, Lilly is responsible for performing and funding all future development and commercialization of the CNS disease development candidates. Under the Lilly Agreement, we are responsible for 20 % of the development costs for ocadusertib in the US, Europe, and Japan, up to a specified cap, and Lilly is responsible for funding the remainder of all development activities for ocadusertib and other non-CNS disease development candidates. Pursuant to the terms of the Lilly Agreement, we have the right to opt-out of co-funding the ocadusertib development activities in the US, Europe and Japan at two different specified times and as a result receive lesser royalties from sales. Prior to us providing our first opt-out notice as discussed below, under the Lilly Agreement, we were required to fund our share of the ocadusertib development activities up to a maximum funding commitment of $ 65.0 million through April 1, 2024. We accounted for this agreement under ASC 606 and identified the following distinct performance obligations at inception of the agreement: (a) granting of the license rights over the non-CNS penetrant intellectual property (IP), and (b) granting of the license rights over the CNS penetrant IP which will be delivered to Lilly upon completion of the additional research and development efforts specified in the agreement. We concluded that each of these performance obligations is distinct. We based our assessment on the assumption that Lilly can benefit from each of the licenses on its own by developing and commercializing the underlying product using its own resources. At the inception of the Lilly Agreement, given our rights to opt-out from the development of ocadusertib, we believed at the minimum, we had a commitment to fund the development costs up to $ 65.0 million as discussed above. We considered this commitment to fund the development costs as a significant financing component of the contract, which we accounted for as a reduction of the upfront fee to derive the transaction price. This financing component was recorded as a liability at its net present value of approximately $ 57.9 million using a 6.4 % discount rate. Interest expense was accreted on such liability over the expected commitment period, adjusted for timing of expected cost share payments. No interest was accreted during the three and nine months ended September 30, 2024 and 2023. At the inception, we allocated the net transaction price of $ 67.1 million to each performance obligation based on our best estimate of its relative standalone selling price using the adjusted market assessment approach. The transaction price allocated to the non-CNS penetrant IP of $ 60.4 million was recognized as revenue upon delivery of the non-CNS penetrant IP to Lilly during the first quarter of 2021. The transaction price allocated to the CNS penetrant IP of $ 6.7 million was recognized as revenue from the effective date of the Lilly Agreement through the eventual acceptance by Lilly in June 2022 using the input method. There was no outstanding deferred revenue related to Lilly Agreement as of September 30, 2024 and December 31, 2023. 13 ​ Table of Contents On September 28, 2023, we entered into an amendment to the Lilly Agreement which provides, among others that if we exercise our first opt-out right, we have the right to opt-in to the co-funding of ocadusertib development, upon us providing notice to Lilly within 30 days of certain events as specified in the Lilly Agreement, and as a result receive greater royalties from sales. Following the amendment to the Lilly Agreement, on September 29, 2023, we provided the first opt-out notice to Lilly, and our share on the ocadusertib development cost was capped to $ 22.6 million through April 1, 2024. If we exercise our opt-in right, we will be required to continue to share in global development costs, and if we later exercise our second opt-out right (no later than April 1, 2025), our share in global development costs will be up to a specified cap through December 31, 2025, as provided for in the Lilly Agreement. Lilly billed us $ 21.4 million for our share of development costs incurred through April 1, 2024, and the amount was fully paid as of September 30, 2024. The outstanding liability to Lilly reported within other long-term liabilities (current and non-current) in the condensed balance sheets as of September 30, 2024 and December 31, 2023 amounted to $ 40.0 million and $ 43.6 million, respectively. As discussed above, following the amendment to the Lilly Agreement, and us providing the first opt-out notice to Lilly, our cost share obligation for ocadusertib development ended on April 1, 2024. Although currently we are no longer obligated to pay Lilly for our share in the ocadusertib development cost incurred subsequent to April 1, 2024, the outstanding liability reported in our condensed balance sheet as of September 30, 2024 amounting to $ 40.0 million has not been recognized as revenue because we cannot conclude that it is probable that a significant reversal of the amount of revenue, if recognized, will not occur until the likelihood of us exercising our opt-in right becomes remote, or when the opt-in right period lapses. Grifols License Agreement We have an exclusive commercialization license agreement with Grifols entered in January 2019 with exclusive rights to commercialize fostamatinib for human diseases, and non-exclusive rights to develop fostamatinib in Grifols territory. Under the agreement, we received an upfront payment of $ 30.0 million, with the potential for $ 297.5 million in total regulatory and commercial milestones. We are also entitled to receive stepped double-digit royalty payments based on tiered net sales which may reach 30 % of net sales. In January 2020, the European Commission (EC) granted a centralized Marketing Authorization (MA) for fostamatinib valid throughout the European Union (EU) and in the UK after the departure of the UK from the EU for the treatment of chronic ITP in adult patients who are refractory to other treatments. With this approval, in February 2020, we received $ 20.0 million non-refundable payment, composed of a $ 17.5 million payment due upon Marketing Authorization Application (MAA) approval by the European Medicines Agency (EMA) of fostamatinib for the first indication and a $ 2.5 million creditable advance royalty payment, based on the terms of our collaboration agreement with Grifols. We accounted for this agreement under ASC 606, and recognized the corresponding revenue in the period we satisfied the performance obligations. There was no outstanding deferred revenue related to the Grifols license agreement as of September 30, 2024 and December 31, 2023. We have a commercial supply agreement with Grifols entered in October 2020 to supply and sell our drug product priced at a certain markup specified in the agreement, in quantities Grifols order from us pursuant to and in accordance with the agreement. For the three and nine months ended September 30, 2024, we recognized $ 2.0 million of revenue related to the delivery of drug supply to Grifols. No revenue and $ 2.8 million of revenue was recognized for the three and nine months ended September 30, 2023, respectively, related to the delivery of drug supply to Grifols. We recognized royalty revenue from Grifols of $ 1.3 million and $ 3.5 million for the three and nine months ended September 30, 2024, respectively, and $ 0.8 million and $ 2.3 million for the three and nine months ended September 30, 2023, respectively. ​ Kissei License Agreement – Olutasidenib ​ On September 3, 2024, we entered into a collaboration and license agreement with Kissei, pursuant to which Kissei was granted exclusive rights to develop and commercialize olutasidenib in all human diseases in Japan, Korea and Taiwan. Kissei is responsible for performing and funding the development activities for olutasidenib in the Kissei territory and we retained the co-exclusive right to conduct development activities in the Kissei territory solely for the purpose of supporting and obtaining regulatory approval of and commercializing olutasidenib in the world outside the Kissei territory. Under the terms of the agreement, we received a one-time, non-refundable, and non-creditable upfront cash payment of $ 10.0 million, with the potential for up to an additional $ 152.5 million in development, regulatory and commercial milestone payments, and will receive mid twenty to lower thirty percent, tiered, escalated net sales-based 14 ​ Table of Contents payments for the supply of olutasidenib, subject to certain standard reductions and offsets . Pursuant to the agreement, Kissei is responsible for companion diagnostic development in Japan, for which we will share 50 % of the costs incurred by Kissei, up to $ 3.0 million, which are creditable against future milestones and transfer price payments owed to us . We remain responsible for the manufacture and supply of olutasidenib for all development and commercialization activities under the agreement. Pursuant to the concurrently executed supply agreement, we will supply Kissei with bulk drug product for use under the collaboration and license agreement. ​ We accounted for this agreement following ASC 606 and concluded at the inception of the agreement, the upfront cash payment of $ 10.0 million was the consideration for granting the license right to Kissei, and there are no other material deliverables associated with the upfront payment. Accordingly, we recognized the upfront payment as revenue during the three and nine months ended September 30, 2024. The variable considerations related to future development, regulatory and commercial milestones were fully constrained because it was probable that a significant reversal of cumulative revenue would occur, given the inherent uncertainty of success with these future milestones. We will re-evaluate the transaction price in each reporting period as uncertain events are resolved or other changes in circumstances occur. We will recognize revenues related to the supply of olutasidenib upon delivery and when we are entitled to receive the product transfer price payments. Under the license and services agreement with Forma as discussed in “Note 5, In-licensing and Acquisition”, Forma is entitled to a certain portion of sublicensing revenue, which include, but are not limited to, upfront payments, milestone payments and royalties, that we receive from a third party sublicensee. Following the collaboration and license agreement with Kissei as discussed above, Forma is entitled to a portion of the sublicensing revenue we receive from Kissei. With the receipt of the upfront payment from Kissei, we recognized a $ 2.3 million sublicense revenue fee payable to Forma for the three and nine months ended September 30, 2024, which we recorded within cost of product sales. The amount was outstanding and recorded within other accrued liabilities in the condensed balance sheet as of September 30, 2024. Kissei License Agreement – Fostamatinib ​ We have an exclusive license and supply agreement with Kissei entered in October 2018, amended in November 2022, October 2023, August 2024, and September 2024, to develop and commercialize fostamatinib in all current and potential indications in Japan, China, Taiwan and Korea. Kissei is responsible for performing and funding all development activities for fostamatinib in the above-mentioned territories. At the inception of the agreement, we received an upfront cash payment of $ 33.0 million. Further, the agreement provides for up to $ 115.0 million in potential development, regulatory and commercial milestone payments, and mid- to upper twenty percent, tiered, escalated net sales-based payments for the supply of fostamatinib. Under the agreement, we granted Kissei the license rights to fostamatinib in Kissei’s territory and are obligated to supply Kissei with drug product for use in clinical trials and pre-commercialization activities. We are also responsible for the manufacture and supply of fostamatinib for all future development and commercialization activities. In April 2022, Kissei announced that an NDA was submitted to Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) for fostamatinib in chronic ITP which entitled us to receive a $ 5.0 million non-refundable and non-creditable milestone payment. In December 2022, Kissei announced that Japan’s PMDA approved the NDA for fostamatinib in chronic ITP, which entitled us to receive a $ 20.0 million non-refundable and non-creditable milestone payment. We accounted for this agreement under ASC 606, and recognized the corresponding revenue in the period we satisfied the performance obligations. As of September 30, 2024 and December 31, 2023, the remaining deferred revenue was related to the material right associated with discounted fostamatinib supply which amounted to $ 1.4 million . No revenue was recognized during the three and nine months ended September 30, 2024 and 2023 associated with the remaining performance obligation. ​ For the three and nine months ended September 30, 2024, we recognized revenue from Kissei of $ 3.0 million and $ 7.5 million, respectively, related to the delivery of fosmatinib drug supply for commercial use. No such revenue was recognized during the three and nine months ended September 30, 2023. 15 ​ Table of Contents Medison Commercial and License Agreements We have exclusive commercial and license agreements with Medison entered in October 2019 for the commercialization of fostamatinib for chronic ITP in Medison territory, pursuant to which, we received a $ 5.0 million upfront payment with respect to the agreement in Canada. We accounted for this agreement under ASC 606 and identified the following combined performance obligations at inception of the agreement: (a) granting of the license and (b) obtaining regulatory approval in Canada of fostamatinib in ITP. However, under the agreement, we have the option to buy back all rights to the product in Canada within six months from obtaining regulatory approval for the treatment of auto immune hemolytic anemia in Canada. We determined that the non-refundable upfront fee represented the transaction price, however, due to the buyback provision, we accounted this upfront payment as financing arrangement under ASC 606. In 2022, management concluded that the likelihood of exercising the buyback option right was remote considering the top-line results from our Phase 3 trial of fostamatinib in warm auto immune hemolytic anemia (wAIHA) which showed that the trial did not demonstrate statistical significance in the primary efficacy endpoint, and the guidance received from the FDA. As such, in accordance with ASC 606, we relieved the outstanding financing liability which included the upfront payment and accreted interest, and recognized such amount as revenue in 2022. There was no outstanding deferred revenue related to Medison commercial and license agreement as of September 30, 2024 and December 31, 2023. For the three and nine months ended September 30, 2024, we recognized revenue from Medison of $ 0.1 million and $ 0.2 million, respectively, related to the delivery of drug supply and earned royalties. For the three and nine months ended September 30, 2023, we recognized $ 0.2 million of revenue related to the delivery of drug supplies and a milestone pursuant to the commercial and license agreement . Knight Commercial License and Supply Agreement We have commercial license and supply agreements with Knight entered in May 2022 for the commercialization of fostamatinib for approved indications in Knight territory. Pursuant to such commercial license agreement, we received a $ 2.0 million one-time, non-refundable, and non-creditable upfront payment, with potential for up to an additional $ 20.0 million in regulatory and sales-based commercial milestone payments, and will receive twenty- to mid-thirty percent, tiered, escalated net-sales based royalty payments for products sold in the Knight territory. We accounted for this agreement under ASC 606 and identified that the upfront payment was a consideration for granting Knight the license to commercialize fostamatinib for approved indication in the Knight territory, and no further material deliverables associated to such upfront payment. As such, we recognized the upfront payment as revenue in 2022. We are also responsible for the exclusive manufacture and supply of fostamatinib for all future development and commercialization activities under the agreement. Government Contracts US Department of Defense (DOD) Government contract revenue for the nine months ended September 30, 2023 of $ 1.0 million was from an award we received from DOD to support our Phase 3 clinical trial to evaluate the safety and efficacy of fostamatinib for the treatment of hospitalized high-risk patients with COVID-19. No revenue was recognized during the three and nine months ended September 30, 2024 and during the three months ended September 30, 2023 from this grant. Biomedical Advanced Research and Development (BARDA) In August 2023, we were awarded up to $ 0.8 million by BARDA, part of the Office of the Assistant Secretary for the Preparedness and Response at the US Department of Health and Human Services (DHHS), for our evaluation of fostamatinib in mitigating the impact of long-term respiratory distress. No revenue was recognized during the three and nine months ended September 30, 2024 and 2023 from this grant. Through September 30, 2024, we have received $ 0.1 million of the award. 16 ​ Table of Contents Strategic Development Collaborations with MDACC and CONNECT In December 2023, we entered into a Strategic Collaboration Agreement with MDACC, a comprehensive cancer research, treatment, and prevention center. The collaboration will expand our evaluation of olutasidenib in AML and other hematologic cancers. Under the collaboration, we will provide MDACC the study materials and $ 15.0 million in time-based milestone payments as compensation for services to be provided for the studies, over the five-year collaboration term, unless terminated earlier as provided for in the agreement. Through September 30, 2024, we provided $ 2.0 million funding to MDACC. In January 2024, we announced our collaboration with CONNECT, an international collaborative network of pediatric cancer centers, to conduct a Phase 2 clinical trial to evaluate olutasidenib in glioma. Under the collaboration, we will provide funding up to $ 3.0 million and study material over the four-year collaboration. We account for the funding we provide under the above research collaboration agreements as prepaid research and development in the balance sheet to the extent the payment is made in advance of services being rendered, and recognize such amount as research and development expense within the statements of operations as the collaborative partners render the services under the respective agreement. 5. In-licensing and Acquisition ​ Asset Purchase Agreement with Blueprint ​ On February 22, 2024, we acquired the US rights to research, develop, manufacture and commercialize GAVRETO (pralsetinib) from Blueprint pursuant to an Asset Purchase Agreement. The acquired assets include, among other things, applicable intellectual property related to pralsetinib in the US, including patents, copyrights and trademarks, as well as clinical regulatory and commercial data and records. Pursuant to the Asset Purchase Agreement, we agreed to pay a purchase price of $ 15.0 million, of which, $ 10.0 million was payable upon our first commercial sale of GAVRETO and an additional $ 5.0 million is payable on the first anniversary of the closing date of the agreement, subject to certain conditions. Blueprint is also eligible to receive up to $ 97.5 million in future commercial milestone payments and up to $ 5.0 million in future regulatory milestone payments. The potential regulatory milestones include full regulatory approval of pralsetinib (or related compounds) for the treatment of adult RET-fusion positive thyroid cancer, and maintenance of the current regulatory approval of pralsetinib for the treatment of adult RET-fusion positive thyroid cancer during the period beginning on February 22, 2024 and ending on the third anniversary of the first commercial sale of pralsetinib subject to certain conditions. Subject to the terms and conditions of the Asset Purchase Agreement, Blueprint would be entitled to tiered royalty payments on net sales of products containing pralsetinib (or related compounds) ranging from 10 % to 30 %, subject to certain reductions and offsets. ​ In accordance with ASC 805 Business Combinations (ASC 805) , the transaction was accounted for as an asset acquisition, because substantially all of the fair value of the gross assets acquired is concentrated in a single asset, which is the GAVRETO product rights. The GAVRETO product rights comprised developed technology, customers, trademarks and trade name, and are considered a single asset as they are inextricably linked. ASC 805 provides for a screen test, wherein if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the assets acquired are not considered to be a business. ​ The following table summarizes the total purchase consideration in connection with the asset acquisition (in thousands): ​ ​ ​ ​ ​ Closing purchase price ​ $ 15,000 Transaction costs ​ ​ 360 Total purchase consideration ​ $ 15,360 ​ $ 10.0 million of the closing purchase price was paid in July 2024, and the remaining $ 5.0 million is outstanding and presented as acquisition-related liabilities in the condensed balance sheet as of September 30, 2024. In accordance with the guidance, we classified the payment of the closing purchase price under financing activity in the condensed statements of cash flows, considering that the payment was not made soon after the acquisition date. The transaction 17 ​ Table of Contents costs have been paid in cash as of September 30, 2024. The contingent considerations relating to future commercial and regulatory milestones were not included in the total purchase price consideration, and will be accounted for when the contingency is resolved and the consideration becomes payable. Royalties are recognized within cost of product sales, as revenue from GAVRETO product sales is recognized. In an asset acquisition, the acquiring entity should recognize the assets acquired at cost to the acquiring entity which includes transaction costs and consideration given, allocated based on a relative fair value of the assets acquired measured at acquisition date. The fair value of the developed technology, customers, trademarks and trade name was estimated using a multi-period excess earnings income approach that discounts expected cash flows to present value by applying discount rate that represents the estimated rate that market participants would use to value such assets. The relative fair value are based on estimates that required judgement and certain assumptions, categorized as Level 3 in the fair value hierarchy. Since we acquired a single asset, the total purchase consideration was recorded as intangible assets. The related intangible assets is being amortized on a straight-line basis over the estimated useful life of 12 years , and the related amortization is recorded within cost of product sales. ​ Simultaneously and in connection with entering into the Asset Purchase Agreement, we also entered into certain supporting agreements, including a customary transition agreement, pursuant to which, during the transition period, Blueprint will transition regulatory and distribution responsibility for GAVRETO to us. We also agreed to purchase certain drug product inventories from Blueprint under a Material Transfer Agreement, and received such inventories amounting to approximately $ 6.5 million during the nine months ended September 30, 2024. License and Transition Services Agreement with Forma We have a license and transition services agreement with Forma entered in July 2022, for an exclusive license to develop, manufacture and commercialize olutasidenib, a proprietary inhibitor of mutated IDH1 (mIDH1), for any uses worldwide, including for the treatment of AML and other malignancies. Pursuant to the terms of the license and transition services agreement, we paid an upfront fee of $ 2.0 million, with the potential to pay up to $ 67.5 million of additional payments upon achievement of specified development and regulatory milestones and up to $ 165.5 million of additional payments upon achievement of certain commercial milestones. In addition, subject to the terms and conditions of the license and transition services agreement, Forma would be entitled to tiered royalty payments on net sales of licensed products at percentages ranging from low-teens to mid-thirties, as well as certain portion of our sublicensing revenue, subject to certain standard reductions and offsets. The transaction was accounted for as an acquisition of asset under ASC 730, Research and Development . In accordance with the guidance, in a transaction accounted for as an asset acquisition, any acquired in-process research and development (IPR&D) that does not have alternative future use is charged to expense at the acquisition date. At the acquisition date, the acquired license asset was accounted for as IPR&D, and we anticipated no other economic benefit to be derived from such acquired licensed asset other than the primary indications. As such, we accounted for the upfront fee of $ 2.0 million as IPR&D and recorded such cost within research and development expense in the statements of operations in 2022. Under the accounting guidance, we account for contingent payments when a contingency is resolved, and the consideration becomes payable. We account for m ilestone payment obligations incurred at development stage and prior to a regulatory approval of an indication associated with the acquired licensed asset as research and development expense when the event requiring payment of the milestone occurs. Milestone payment obligations incurred upon and after a regulatory approval of an indication associated with the acquired licensed asset, and at the commercial stage, are recorded as intangible assets when the event requiring payment of the milestones occurs. Prior to the FDA approval of REZLIDHIA in December 2022, a certain regulatory milestone was met which entitled Forma to receive a $ 2.5 million milestone payment. Because such milestone payment obligation was incurred prior to a regulatory approval of an indication associated with the acquired licensed asset, we recorded such amount as research and development expense in the fourth quarter of 2022. On December 1, 2022, the FDA approved REZLIDHIA capsules for the treatment of adult patients with R/R AML with susceptible IDH1 mutations as detected by an FDA-approved test. Following the FDA approval, we launched REZLIDHIA and made first shipments of the product to our customers in December 2022. With this FDA approval and first commercial sale of the product, Forma was entitled to receive a total of $ 15.0 million milestone payments. Since such milestone payment obligations were incurred upon and after regulatory approval of the 18 ​ Table of Contents product, we recorded such amount as intangible assets on our condensed balance sheet in the fourth quarter of 2022. No new milestone was met in 2023 and during the nine months ended September 30, 2024. The amount recorded as intangible asset is being amortized on a straight-line basis over the estimated useful life of 14 years , and the related amortization is recorded within cost of product sales . Royalties are recognized within cost of product sales, as revenue from REZLIDHIA product sales is recognized. 6. Stock-Based Compensation ​ Stock-based compensation for the periods presented was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2024 2023 ​ 2024 2023 Selling, general and administrative ​ $ 2,360 ​ $ 1,596 ​ $ 9,067 ​ $ 5,127 Research and development ​ ​ 284 ​ ​ 347 ​ ​ 1,239 ​ ​ 1,746 Total stock-based compensation expense ​ $ 2,644 ​ $ 1,943 ​ $ 10,306 ​ $ 6,873 ​ During the nine months ended September 30, 2024, we granted stock options to purchase 679,662 shares of common stock with weighted-average grant-date fair value of $ 9.36 per share, and 25,657 stock options were exercised. The stock options granted during the nine months ended September 30, 2024 generally vest over 3 years . As of September 30, 2024, there were 3,650,540 stock options outstanding, of which, 132,250 are outstanding performance-based stock options wherein the achievement of the corresponding corporate-based milestones were assessed not probable as of September 30, 2024. Accordingly, none of the $ 2.5 million grant date fair value for these awards has been recognized as stock-based compensation expense as of September 30, 2024. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The following table summarizes the weighted-average assumptions relating to options granted pursuant to our Equity Incentive Plans (our 2018 Equity Incentive Plan and Inducement Plan, as amended) for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ 2024 2023 2024 2023 Risk-free interest rate ​ 3.8 % 4.3 % ​ 4.1 % 3.8 % Expected term (in years) ​ 6.0 ​ 6.0 ​ ​ 6.1 ​ 6.9 ​ Dividend yield ​ 0.0 % 0.0 % ​ 0.0 % 0.0 % Expected volatility ​ 88.7 % 86.7 % ​ 87.6 % 83.4 % ​ During the nine months ended September 30, 2024, we granted 291,373 RSUs with a grant-date weighted-average fair value of $ 12.52 per share, and 68,908 RSUs were released. The RSUs granted during the nine months ended September 30, 2024 generally vest over 3 years . As of September 30, 2024, there were 375,076 RSUs outstanding. As of September 30, 2024, there was approximately $ 12.0 million of unrecognized stock-based compensation cost which is expected to be recognized over a remaining weighted-average period of 2.08 years, related to time-based stock options, performance-based stock options wherein achievement of the corresponding corporate-based milestones was considered as probable, and RSUs. In March 2024, April 2024 and July 2024, our Board of Directors approved additional 158,122 shares of common stock reserved for issuance under our Inducement Plan. In May 2024, our stockholders approved an amendment to our 2018 Plan, to, among other items, add an additional 650,000 shares to the number of shares of common stock authorized for issuance under our 2018 Plan. As of September 30, 2024, there were 1,520,361 shares of common stock available for future grant under our Equity Incentive Plans. 19 ​ Table of Contents Employee Stock Purchase Plan Our Purchase Plan provides for a 24 -month offering period comprises four six-month purchase periods with a look-back option. A look-back option is a provision in our Purchase Plan under which eligible employees can purchase shares of our common stock at a price per share equal to the lesser of 85 % of the fair market value on the first day of the offering period or 85 % of the fair market value on the purchase date. Our Purchase Plan also includes a feature that provides for a new offering period to begin when the fair market value of our common stock on any purchase date during an offering period falls below the fair market value of our common stock on the first day of such offering period. This feature is called a “reset.” Participants are automatically enrolled in the new offering period. Our 24 -month offering period under our Purchase Plan ended on June 30, 2024, and a new 24 -month offering period started on July 1, 2024. The fair value of awards under our Purchase Plan is estimated on the date of our new offering period using the Black-Scholes option pricing model, which is being amortized over the requisite service periods. As of September 30, 2024, there was approximately $ 0.4 million of unrecognized stock-based compensation cost which is expected to be recognized over a remaining weighted-average period of 1.20 years, related to our Purchase Plan. ​ During the nine months ended September 30, 2024, there were 35,902 shares purchased under the Purchase Plan. As of September 30, 2024, there were 213,681 shares reserved for future issuance under the Purchase Plan. 7. Other Balance Sheet Components Inventories Inventories for the periods presented consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ September 30, 2024 December 31, 2023 Raw materials ​ $ 1,569 ​ $ 4,609 Work in process ​ ​ 1,811 ​ ​ 1,876 Finished goods ​ ​ 5,830 ​ ​ 1,508 Total ​ $ 9,210 ​ $ 7,993 Reported as: ​ ​ ​ ​ ​ ​ Inventories ​ $ 4,784 ​ $ 5,522 Other assets ​ ​ 4,426 ​ ​ 2,471 Total ​ $ 9,210 ​ $ 7,993 ​ Inventories as of September 30, 2024 and December 31, 2023 include inventories acquired from Forma pursuant to the license and transition services agreement. Inventories as of September 30, 2024 also include inventories acquired from Blueprint pursuant to a Material Transfer Agreement as discussed in “Note 5 – In-licensing and Acquisition”. As of September 30, 2024, advance payments to the manufacturer of our raw materials were included within prepaid and other current assets in the condensed balance sheet amounted to $ 3.4 million. No such advance payment was included within prepaid and other current assets as of December 31, 2023. Non-current inventories consists of active pharmaceutical ingredients classified as raw materials which have multi-year shelf life, as well as certain work in process and finished goods inventories that are not expected to be consumed beyond our normal operating cycle. ​ 20 ​ Table of Contents Intangible assets ​ Intangible assets consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ September 30, 2024 December 31, 2023 Intangible assets cost ​ $ 30,360 ​ $ 15,000 Accumulated amortization ​ ( 2,673 ) ​ ( 1,122 ) Intangible assets, net ​ $ 27,687 ​ $ 13,878 ​ See “Note 5 – In-licensing and Acquisition” for related discussions of capitalized intangible assets. Amortization expense recorded within cost of product sales in the condensed statements of operations for the three months ended September 30, 2024 and 2023 was $ 0.6 million and $ 0.3 million, respectively, and for the nine months ended September 30, 2024 and 2023 was $ 1.6 million and $ 0.8 million, respectively. The following table presents the estimated future amortization expense of intangible assets as of September 30, 2024 (in thousands): ​ ​ ​ ​ Remainder of 2024 ​ $ 588 2025 ​ ​ 2,351 2026 ​ ​ 2,351 2027 ​ ​ 2,351 2028 ​ ​ 2,351 Thereafter ​ ​ 17,695 ​ ​ $ 27,687 ​ ​ 8. Cash, Cash Equivalents and Short-Term Investments Cash, cash equivalents and short-term investments for the periods presented consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ September 30, 2024 December 31, 2023 Cash ​ $ 25,853 ​ $ 8,247 Money market funds ​ 12,070 ​ 9,685 US treasury bills ​ 6,980 ​ 12,594 Government-sponsored enterprise securities ​ 8,484 ​ 11,233 Corporate bonds and commercial paper ​ 7,727 ​ 15,174 ​ ​ $ 61,114 ​ $ 56,933 Reported as: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 51,692 ​ $ 32,786 Short-term investments ​ 9,422 ​ 24,147 ​ ​ $ 61,114 ​ $ 56,933 ​ Cash equivalents and short-term investments include the following securities with gross unrealized gains and losses (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ ​ As of September 30, 2024 ​ Cost ​ Gains ​ Losses ​ Fair Value US treasury bills ​ $ 6,979 ​ $ 1 ​ $ — ​ $ 6,980 ​ Government-sponsored enterprise securities ​ ​ 8,483 ​ ​ 1 ​ ​ — ​ ​ 8,484 ​ Corporate bonds and commercial paper ​ 7,718 ​ 9 ​ — ​ 7,727 ​ Total ​ $ 23,180 ​ $ 11 ​ $ — ​ $ 23,191 ​ 21 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Gross ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ ​ As of December 31, 2023 ​ Cost ​ Gains ​ Losses ​ Fair Value US treasury bills ​ $ 12,591 ​ $ 3 ​ $ — ​ $ 12,594 ​ Government-sponsored enterprise securities ​ ​ 11,230 ​ ​ 7 ​ ​ ( 4 ) ​ ​ 11,233 ​ Corporate bonds and commercial paper ​ 15,172 ​ 5 ​ ( 3 ) ​ 15,174 ​ Total ​ $ 38,993 ​ $ 15 ​ $ ( 7 ) ​ $ 39,001 ​ ​ As of September 30, 2024 and December 31, 2023, our cash equivalents and short-term investments had a weighted-average time to maturity of approximately 39 days and 82 days , respectively. Our short-term investments are classified as available-for-sale securities. Accordingly, we have classified these securities as short-term investments on our condensed balance sheets as they are available for use in the current operations. A s of September 30, 2024 and December 31, 2024, t here were no individual securities that were in a significant unrealized loss position, and the individual securities with unrealized position have been in a loss position for less than one year. We regularly review the securities in an unrealized loss position and evaluate the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. We have no t recognized any credit losses as of September 30, 2024 and December 31, 2023. 9. Fair Value The table below summarizes the fair value of our cash equivalents and short-term investments measured at fair value on a recurring basis, and are categorized based upon the lowest level of significant input to the valuations (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets at Fair Value as of September 30, 2024 ​ Level 1 Level 2 Level 3 Total Money market funds ​ $ 12,070 ​ $ — ​ $ — ​ $ 12,070 US treasury bills ​ ​ — ​ ​ 6,980 ​ ​ — ​ ​ 6,980 Government-sponsored enterprise securities ​ — ​ 8,484 ​ — ​ 8,484 Corporate bonds and commercial paper ​ — ​ 7,727 ​ — ​ 7,727 Total ​ $ 12,070 ​ $ 23,191 ​ $ — ​ $ 35,261 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets at Fair Value as of December 31, 2023 ​ Level 1 Level 2 Level 3 Total Money market funds ​ $ 9,685 ​ $ — ​ $ — ​ $ 9,685 US treasury bills ​ ​ — ​ ​ 12,594 ​ ​ — ​ ​ 12,594 Government-sponsored enterprise securities ​ — ​ 11,233 ​ — ​ 11,233 Corporate bonds and commercial paper ​ — ​ 15,174 ​ — ​ 15,174 Total ​ $ 9,685 ​ $ 39,001 ​ $ — ​ $ 48,686 ​ ​ ​ 10. Debt The following table summarizes loans payable, net (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ September 30, 2024 December 31, 2023 Principal outstanding ​ $ 60,000 ​ $ 60,000 Unamortized debt issuance costs ​ ​ ( 238 ) ​ ​ ( 398 ) Principal outstanding, net of unamortized debt issuance costs ​ $ 59,762 ​ $ 59,602 ​ ​ ​ ​ ​ ​ ​ Reported as: ​ ​ ​ ​ ​ ​ Loans payable, net, current portion ​ $ — ​ $ 7,229 Long-term portion of loans payable, net ​ ​ 59,762 ​ ​ 52,373 ​ ​ $ 59,762 ​ $ 59,602 ​ 22 ​ Table of Contents The outstanding loans payable as of the periods presented was related to our Credit and Security Agreement (Credit Agreement) with MidCap Financial Trust (MidCap) entered into on September 27, 2019 (Closing Date) and amended on March 29, 2021 (First Amendment), February 11, 2022 (Second Amendment), July 27, 2022 (Third Amendment), and on April 11, 2024 (Fourth Amendment). The Credit Agreement provides for a $ 60.0 million term loan credit facility. At the Closing Date, $ 10.0 million was funded (Tranche 1), in May 2020, an additional $ 10.0 million was funded (Tranche 2), at the Second Amendment, an additional $ 10.0 million was funded (Tranche 3), at the Third Amendment, an additional $ 10.0 million was funded (Tranche 4), and in March 2023, an additional $ 20.0 million was funded (Tranche 5). As of September 30, 2024, no remaining funds were available for draw under the term loan credit facility. The First Amendment to the Credit Agreement extended the period through which Tranche 3 was available to us. The Second Amendment to the Credit Agreement, among other things, amended the applicable funding conditions, applicable commitments and certain other terms relating to available credit facilities (Tranches 3 and 4), added additional term loan credit facility (Tranche 5), and revised certain terms related to the financial covenants. Prior to the Fourth Amendment to the Credit Agreement as discussed below, the term loans would mature on September 1, 2026, and the interest-only period was through October 1, 2024. The term loans bore interest equal to the sum of one-month Secured Overnight Financing Rate (SOFR) , plus an adjustment of 0.11448% , subject to 1.50 % applicable floor, plus applicable margin of 5.65 % , and a final payment fee of 2.5 % of principal due at maturity date. Following the Fourth Amendment to the Credit Agreement, the term loans mature on September 1, 2027, and the interest-only period is through October 1, 2025. The term loans bear interest equal to the sum of one-month SOFR plus an adjustment of 0.11448% , subject to a 4.00 % applicable floor, plus applicable margin of 6.50 % . A final payment fee of 4.25 % of principal is due at maturity date. The amendment was accounted for as debt modification in accordance with the standards. The unamortized debt issuance costs are continuously being amortized as interest expense through maturity using the effective interest rate method. We may make voluntary prepayments, in whole or in part, subject to certain prepayment premiums and additional interest payments. The Credit Agreement also contains certain provisions, such as event of default and change in control provisions, which, if triggered, would require us to make mandatory prepayments on the term loan, which are subject to certain prepayment premiums and additional interest payments. The obligations under the amended Credit Agreement are secured by a perfected security interest in all of our assets including our intellectual property. Interest expense, including amortization of the debt discount and accretion of the final fees related to the Credit Agreement for the three months ended September 30, 2024 and 2023 was $ 2.1 million and $ 1.9 million, respectively, and for the nine months ended September 30, 2024 and 2023 was $ 6.0 million and $ 5.0 million, respectively. Accrued interest of $ 1.9 million was included within other accrued liabilities in the condensed balance sheet as of September 30, 2024. The following table presents the future minimum principal payments of the outstanding loan as of September 30, 2024 (in thousands): ​ ​ ​ ​ Remainder of 2024 ​ $ — 2025 ​ ​ 7,500 2026 ​ ​ 30,000 2027 ​ ​ 22,500 Principal amount (Tranches 1, 2, 3 and 4) ​ $ 60,000 ​ The amended Credit Agreement contains certain covenants which, among others, require us to deliver financial reports at designated times of the year and maintain minimum unrestricted cash and trailing net revenues. As of September 30, 2024, we were not in violation of any covenants. 23 ​ Table of Contents 11. Leases We have a sublease agreement with Atara Biotherapeutics, Inc. entered in October 2022 to sublease an office space located in South San Francisco, California. Subject to the terms of the sublease agreement, the lease term commenced in November 2022 and shall expire in May 2025. This leased facility is currently held as our Headquarters following the expiration of our previously leased facility in January 2023. The weighted average remaining term of our leases as of September 30, 2024 was 0.67 years. We previously leased our prior headquarter space located in South San Francisco, California with Healthpeak Properties, Inc. (formerly known as HCP BTC, LLC), and had a sublease agreement with an unrelated third-party to sublet a portion of the leased facility. Both leases expired in January 2023. The components of our operating lease expense were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 Fixed operating lease expense $ 166 $ 166 ​ $ 498 ​ ​ 944 Variable operating lease expense ​ ​ 28 ​ ​ 75 ​ ​ 84 ​ ​ 105 Total operating lease expense $ 194 $ 241 ​ $ 582 $ 1,049 ​ Supplemental information related to our operating lease were as follow (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 Cash payments included in the measurement of operating lease liabilities ​ $ 184 ​ $ 178 ​ $ 552 ​ ​ 1,352 ​ Supplemental information related to our operating sublease was as follow (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 Fixed sublease expense $ — $ — ​ $ — ​ ​ 365 Variable sublease expense ​ ​ — ​ ​ — ​ ​ — ​ ​ 77 Sublease income ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 442 ) Net $ — $ — ​ $ — $ — ​ The following table presents the future lease payments as of September 30, 2024 (in thousands): ​ ​ ​ ​ ​ Remainder of 2024 ​ $ 187 2025 ​ ​ 301 Total minimum payments required ​ $ 488 ​ ​ 12. Subsequent Event Purchase commitment In the ordinary course of business, we enter into agreements with contract manufacturers to manufacture our inventory products. In October 2024, we entered into an agreement with a third-party contract manufacturer to manufacture TAVALISSE that are expected to be delivered starting in fiscal year 2026 through 2029, for a total contract price of approximately $ 24.0 million. Although the agreement provides a cancellation clause with or without cause upon written notice, we may or may not be subject to payment of a cancellation fee. The level of cancellation fee is generally dependent on the timing of the written notice in relation to the commencement date of work, with the maximum cancellation fee equal to the full price of the work order. 24 ​ Table of Contents ​