What changed in this filing

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Item 1. Financial Statements

2025-05-06 compared with 2024-11-07 · 225 added, 253 removed, 385 unchanged (55% of the section changed)

3 unchanged sentences

(In thousands)

September 30, 2024

March 31, 2025

December 31, 2024 (1)

8 unchanged sentences

Operating lease right-of-use assets

Liabilities and stockholders’ deficit

Liabilities and stockholders’ equity

Current liabilities:

2 unchanged sentences

Accrued research and development

Acquisition-related liabilities

Revenue reserves and refund liability

3 unchanged sentences

Lease liabilities, current portion

Other long-term liabilities, current portion

Total current liabilities

Acquisition-related liabilities

Long-term portion of lease liabilities

2 unchanged sentences

Total liabilities

Stockholders’ deficit:

Common stock (2)

Stockholders’ equity:

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Accumulated deficit

1 unchanged sentence

( 1,390,065 )

Total stockholders’ deficit

Total liabilities and stockholders’ deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

(1) The balance sheet as of December 31, 2024 has been derived from the audited financial statements included in Rigel’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (SEC) on March 4, 202 5.

(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

2 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Product sales, net

Contract revenues from collaborations

Government contracts

Total revenues

7 unchanged sentences

Interest expense

Income (loss) before income taxes

Provision for income taxes

Net income (loss)

1 unchanged sentence

Weighted average shares used in computing net income (loss) per share (1)

(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.

(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 prior period presented.

See Accompanying Notes to Condensed Financial Statements

2 unchanged sentences

(In thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Net income (loss)

Other comprehensive income:

Net unrealized gain on short-term investments

Other comprehensive loss:

Net unrealized loss on short-term investments

Comprehensive income (loss)

1 unchanged sentence

RIGEL PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF STOCK HOLDERS’ DEFICIT

CONDENSED STATEMENTS OF STOCK HOLDERS’ EQUITY (DEFICIT)

(In thousands, except share amounts)

Accumulated Other

Common Stock (1)

Comprehensive

Stockholders’

(Loss) Income

Income (Loss)

Balance as of January 1, 2025

1 unchanged sentence

Net change in unrealized loss on short-term investments

Issuance of common stock upon exercise of options

Issuance of common stock upon exercise of options, net of shares withheld

Issuance of common stock upon vesting of restricted stock units (RSUs)

2 unchanged sentences

( 1,378,619 )

Net change in unrealized loss on short-term investments

Issuance of common stock upon exercise of options and participation in Purchase Plan

Issuance of common stock upon vesting of RSUs

Stock-based compensation expense

Balance as of June 30, 2024

( 1,416,827 )

Net change in unrealized gain on short-term investments

Issuance of common stock upon exercise of options

Issuance of common stock upon vesting of RSUs

Stock-based compensation expense

Balance as of September 30, 2024

( 1,404,406 )

Accumulated Other

2 unchanged sentences

Stockholders’

Income (Loss)

Balance as of January 1, 2024

( 1,407,550 )

Net change in unrealized gain on short-term investments

Net change in unrealized loss on short-term investments

Issuance of common stock upon exercise of options

3 unchanged sentences

( 1,415,797 )

Net change in unrealized gain on short-term investments

Issuance of common stock upon exercise of options and participation in Purchase Plan

Issuance of common stock upon vesting of RSUs

Stock-based compensation expense

Balance as of June 30, 2023

( 1,402,595 )

Net change in unrealized gain on short-term investments

Issuance of common stock upon exercise of options

Stock-based compensation expense

Balance as of September 30, 2023

( 1,408,287 )

(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

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Stock-based compensation expense

(Gain) loss on sale and disposal of fixed assets

Depreciation and amortization

10 unchanged sentences

Lease liability

Deferred revenue

Other current and long-term liabilities

Net cash provided by operating activities

Net cash used in operating activities

Investing activities

1 unchanged sentence

Purchases of short-term investments

Capital expenditures

Payments for acquisition of intangible assets

Proceeds from sale of property and equipment

Net cash provided by investing activities

Net cash (used in) provided by investing activities

Financing activities

Net proceeds from term loan financing

Net proceeds from issuances of common stock upon exercise of options

Closing purchase price payment related to asset acquisition

Net proceeds from issuance of common stock from equity plans

Cost share payments to a collaboration partner

Net cash (used in) provided by financing activities

Net increase in cash and cash equivalents

Net cash provided by (used in) financing activities

Net decrease in cash, cash equivalents and restricted cash

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Cash, cash equivalents, and restricted cash at end of period

Supplemental disclosure of cash flow information

Interest paid

Increase in right-of-use assets and lease liability

Acquisition-related liabilities

13 unchanged sentences

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 ® (pralsetinib) is our third FDA-approved product which we began commercializing in June 2024.

GAVRETO is a once daily, small molecule, oral, kinase inhibitor of wild-type rearranged during transfection (RET) and oncogenic RET fusions.

4 unchanged sentences

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).

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.

We also have a receptor-interacting serine/threonine-protein kinase 1 (RIPK1) inhibitor program in clinical development with our partner Eli Lilly and Company (Lilly).

Basis of Presentation

11 unchanged sentences

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, 2024.

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.”

As of September 30, 2024, we had approximately $ 61.1 million in cash, cash equivalents and short-term investments.

As of March 31, 2025, we had approximately $ 77.1 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.

1 unchanged sentence

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 November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures.

This new guidance improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions.

This guidance is effective for our annual reporting for the fiscal year ending December 31, 2027, and interim reporting periods beginning for the fiscal year ending December 31, 2028, early adoption is permitted.

Upon adoption, this guidance may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements.

We are currently evaluating this guidance and assessing the potential impact 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.

4 unchanged sentences

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,

Three Months Ended March 31,

EPS Numerator:

8 unchanged sentences

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,

Three Months Ended March 31,

Stock options

1 unchanged sentence

Revenues disaggregated by category were as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Product sales:

3 unchanged sentences

Revenues from collaborations:

License revenue

Milestone revenue

1 unchanged sentence

Total revenues from collaborations

Government contracts

Total revenues

Revenue from product sales are related to sales of our commercial products to our customers.

Revenue from product sales is 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.

Of the total discounts and allowances from gross product sales for the three months ended March 31, 2025 and 2024, $ 16.1 million and $ 12.3 million, respectively, was accounted for as additions to revenue reserves and refund liability, and $ 0.5 million and $ 0.1 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):

2 unchanged sentences

Provision related to current period sales

Adjustment related to prior period sales

Credit or payments made during the period

Balance as of September 30, 2024

Balance as of March 31, 2025

Discounts and

2 unchanged sentences

Credit or payments made during the period

Balance as of September 30, 2023

Balance as of March 31, 2024

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,

Three Months Ended March 31,

McKesson Corporation

(formerly ASD Healthcare)

Optime Care, Inc.

Cardinal Health, Inc.

3 unchanged sentences

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;

As of March 31, 2025, 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.

4 unchanged sentences

(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.

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;

Reddy’s Laboratories (Dr.

Reddy’s) to commercialize olutasidenib in Dr.

Reddy’s territory which includes Latin America, South Africa, India, Australia, New Zealand, and certain countries in the CIS, Southeast Asia region and North Africa.

Further, we are also a party to collaboration agreements, but do not have ongoing performance obligations with BerGenBio ASA (BerGenBio) for the development and commercialization of AXL receptor tyrosine kinase i nhibitor, R428 (now referred to as bemcentinib (BGB324)), and with Daiichi Sankyo (Daiichi) to pursue research related to murine double minute 2 ( MDM2) inhibitor, DS-3032 (now referred as melademetan).

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.

As of March 31, 2025, total future contingent payments to us under all of the above existing agreements was approximately $ 1.5 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, $ 310.6 million relates to the achievement of regulatory events and $ 902.0 million relates to the achievement of certain commercial events.

21 unchanged sentences

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.

Under the Lilly Agreement, if we exercised our first opt-out right prior to September 30, 2023, 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:

6 unchanged sentences

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.

No interest was accreted during the three months ended March 31, 2025 and 2024.

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.

1 unchanged sentence

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.

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.

There was no outstanding deferred revenue related to Lilly Agreement as of March 31, 2025 and December 31, 2024.

In September 2023, we provided our first-opt out notice to Lilly, and concurrently entered into a second amendment to the Lilly Agreement.

The amended Lilly Agreement provided, 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.

If we decide to exercise our opt-in right, we will be required to continue to share in global development costs, capped at a specified amount and for a specified period if we exercise our second opt-out right.

As discussed above, following us providing the first opt-out notice to Lilly, our cost share obligation for ocadusertib development ended on April 1, 2024.

We paid Lilly a total of $ 21.4 million for our share of development costs incurred through April 1, 2024.

As of March 31, 2025 and December 31, 2024, the outstanding liability to Lilly reported within other long-term liabilities in the condensed balance sheets amounted to $ 40.0 million.

Although our cost share obligation for the ocadusertib development ended on April 1, 2024, the outstanding liability reported in our condensed balance sheet as of December 31, 2024 and March 31, 2025 amounting to $ 40.0 million has not been recognized as revenue during the respective periods, 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.

On April 30, 2025, we provided notice to Lilly of our decision not to exercise our opt-in right following our evaluation of certain events specified in the Lilly Agreement.

Following this notification, we are no longer obligated to share in any future global development costs, which resulted in the release of the $ 40.0 million remaining cost share liability currently on our condensed balance sheet.

Grifols License Agreement

5 unchanged sentences

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.

There was no outstanding deferred revenue related to the Grifols license agreement as of March 31, 2025 and December 31, 2024.

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.

For the three months ended March 31, 2025, we recognized $ 3.3 million of revenue related to the delivery of drug supply to Grifols.

No revenue was recognized related to delivery of drug supplies to Grifols during the three months ended March 31, 2024.

For the three months ended March 31, 2025, and 2024, we recognized royalty revenue from Grifols of $ 1.4 million and $ 1.1 million, 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.

We entered into a collaboration and license agreement with Kissei in September 2024 to grant exclusive rights to Kissei 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

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 .

2 unchanged sentences

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.

Accordingly, we recognized the upfront payment as revenue during the third quarter of 2024.

No revenue was recognized during the three months ended March 31, 2025 related to this collaboration and license agreement.

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.

We have an exclusive license and supply agreement with Kissei entered in October 2018, amended in November 2022, October 2023, August 2024, September 2024 and October 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.

1 unchanged sentence

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.

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.

2 unchanged sentences

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.

As of March 31, 2025 and December 31, 2024, 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 months ended March 31, 2025 and 2024 associated with the remaining performance obligation, respectively.

In January 2025, Kissei announced the Korean Ministry of Food and Drug Safety approved fostamatinib for the treatment of chronic ITP, which entitled us to receive a $ 3.0 million non-refundable and non-creditable milestone payment that we recognized as revenue in the three months ended March 31, 2025.

For the three months ended March 31, 2025 and 2024, we recognized revenue from Kissei of $ 1.6 million and $ 2.3 million, respectively, related to the delivery of fostamatinib drug supply for commercial use.

Medison Commercial and License Agreements

6 unchanged sentences

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 .

There was no outstanding deferred revenue related to Medison commercial and license agreement as of March 31, 2025 and December 31, 2024.

For the three months ended March 31, 2025 and 2024, we recognized revenue from Medison of $ 0.4 million and $ 0.1 million, respectively, related to the delivery of drug supply and earned royalties.

Knight Commercial License and Supply Agreement

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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.

No revenue was recognized during the three months ended March 31, 2025 and 2024 from Knight.

Reddy’s Commercial License Agreement

We have a commercial license agreement with Dr.

Reddy’s entered in November 2024, pursuant to which, we granted Dr.

Reddy’s an exclusive license to develop and commercialize olutasidenib in Dr.

Reddy’s territory.

Pursuant to the commercial license agreement, we were entitled to receive a $ 4.0 million one-time, non-refundable and non-creditable upfront payment , which amount, net of applicable foreign withholding taxes was received in February 2025.

In addition, we are entitled to a potential for up to an additional $ 36.0 million in regulatory and sales-based commercial milestone payments, and will receive high teens- to thirty percent, tiered, escalated net-sales based royalty payments for products sold in Dr.

Reddy’s territory, subject to certain standard reductions and offsets.

Reddy’s is responsible for performing and funding all development activities necessary to obtain regulatory approval and commercialize olutasidenib in the Dr.

Reddy’s territory.

We are responsible for the exclusive manufacture and supply of olutasidenib for all future development and commercialization activities under the agreement.

We accounted for this agreement following ASC 606 and concluded at the inception of the agreement, the upfront cash payment of $ 4.0 million was the consideration for granting the license right to Dr.

Reddy’s, which revenue was recognized during the fourth quarter of 2024.

No revenue was recognized during the three months ended March 31, 2025 related to the commercial license agreement with Dr.

Government Contract

In August 2023, we were awarded up to $ 0.8 million by Biomedical Advanced Research and Development (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 months ended March 31, 2025 and 2024 from this grant.

Through March 31, 2025, we have received $ 0.1 million of the award .

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.

We have a Strategic Collaboration Agreement with MDACC, a comprehensive cancer research, treatment, and prevention center, entered in December 2023.

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.

Through March 31, 2025, we provided $ 5.3 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.

We account for the funding we provide under the above research collaboration agreements as prepaid research and development in the condensed 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.

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.

We acquired the US rights to research, develop, manufacture and commercialize GAVRETO from Blueprint pursuant to an Asset Purchase Agreement entered in February 2024.

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.

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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.

We accounted for this transaction as an asset acquisition in accordance with ASC 805 Business Combinations (ASC 805) 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

Transaction costs

Total purchase consideration

$ 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

costs have been paid in cash as of September 30, 2024.

The total purchase price consideration amounted to $ 15.4 million, comprised the closing purchase price of $ 15.0 million and transaction costs of $ 0.4 million.

Of the total closing purchase price, $ 10.0 million was paid in July 2024.

The remaining $ 5.0 million was outstanding and presented as acquisition-related liabilities in the condensed balance sheet as of March 31, 2025.

As of March 31, 2025 and December 31, 2024, we classified the outstanding acquisition-related liabilities as non-current considering the amount is expected to be payable in a period longer than one year as of balance sheet date.

In accordance with the guidance, we classify payments of the closing purchase price under financing activity in the condensed statements of cash flows, considering that the payments are not made soon after the acquisition date.

Since we acquired a single asset, the total purchase consideration was recorded as intangible assets at acquisition date.

The related intangible assets are 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.

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

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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.

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.

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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

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.

Since such milestone payment obligations were incurred upon and after regulatory approval of the product, we recorded such amount as intangible assets on our condensed balance sheet in the fourth quarter of 2022.

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 .

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Stock-based compensation for the periods presented was as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Selling, general and administrative

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Total stock-based compensation expense

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.

During the three months ended March 31, 2025, we granted stock options to purchase 589,877 shares of common stock with weighted-average grant-date fair value of $ 17.09 per share, and 126,226 stock options were exercised.

The stock options granted during the three months ended March 31, 2025 generally vest over 3 years .

As of March 31, 2025, there were 3,965,254 stock options outstanding, of which, 185,814 are outstanding performance-based stock options wherein the achievement of the corresponding corporate-based milestones were assessed not probable as of March 31, 2025.

Accordingly, none of the $ 3.5 million grant date fair value for these awards has been recognized as stock-based compensation expense as of March 31, 2025.

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,

Three Months Ended March 31,

Risk-free interest rate

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Expected volatility

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.

During the three months ended March 31, 2025, we granted 318,262 RSUs with a grant-date weighted-average fair value of $ 22.49 per share, and 125,783 RSUs were released.

The RSUs granted during the three months ended March 31, 2025 generally vest over 3 years .

As of March 31, 2025, there were 568,024 RSUs outstanding.

As of March 31, 2025, there was approximately $ 23.2 million of unrecognized stock-based compensation cost which is expected to be recognized over a remaining weighted-average period of 2.38 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.

As of March 31, 2025, there were 605,514 shares of common stock available for future grant under our Equity Incentive Plans.

Employee Stock Purchase Plan

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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.

As of March 31, 2025, 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 1.02 years, related to our Purchase Plan.

As of March 31, 2025, there were 184,174 shares reserved for future issuance under the Purchase Plan.

Other Balance Sheet Components

Inventories for the periods presented consist of the following (in thousands):

September 30, 2024

March 31, 2025

December 31, 2024

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Finished goods

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.

Non-current i nventories included within other assets in the condensed balance sheet consist of active pharmaceutical ingredient (API) 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.

Advance payments to our contract manufacturers to manufacture APIs as well as APIs pending final release for commercial usage are classified as prepaid inventory and included within prepaid and other current assets in the condensed balance sheet .

See prepaid and other current assets below for related details.

Prepaid and other current assets

Prepaid and other current assets for the periods presented consist of the following (in thousands):

March 31, 2025

December 31, 2024

Prepaid inventory

Prepaid research and development costs

Total prepaid and other current assets

Intangible assets

Intangible assets consist of the following (in thousands):

September 30, 2024

March 31, 2025

December 31, 2024

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Intangible assets, net

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):

Amortization expense recorded within cost of product sales in the condensed statements of operations for the three months ended March 31, 2025 and 2024 was $ 0.6 million and $ 0.4 million, respectively.

The following table presents the estimated future amortization expense of intangible assets as of March 31, 2025 (in thousands):

Remainder of 2025

Cash, Cash Equivalents and Short-Term Investments

Cash, cash equivalents and short-term investments for the periods presented consist of the following (in thousands):

September 30, 2024

Cash, Cash Equivalents, Restricted Cash, and Short-Term Investments

Cash, cash equivalents, restricted cash, and short-term investments for the periods presented consist of the following (in thousands):

March 31, 2025

December 31, 2024

Restricted cash

Money market funds

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Short-term investments

Restricted cash reported within other assets

Cash equivalents and short-term investments include the following securities with gross unrealized gains and losses (in thousands):

As of September 30, 2024

As of March 31, 2025

US treasury bills

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Corporate bonds and commercial paper

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.

As of March 31, 2025 and December 31, 2024, our cash equivalents and short-term investments had a weighted-average time to maturity of approximately 98 days and 69 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.

As of March 31, 2025, a total of 19 individual securities had been in an unrealized loss position for 12 months or less, and the losses were determined to be temporary.

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.

We have no t recognized any credit losses as of March 31, 2025 and December 31, 2024.

The following table shows the fair value and gross unrealized losses of our investments in individual securities that are in an unrealized loss position, aggregated by investment category (in thousands):

As of March 31, 2025

Gross Unrealized Losses

Government-sponsored enterprise securities

Corporate bonds and commercial paper

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

Assets at Fair Value as of March 31, 2025

Money market funds

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The following table summarizes loans payable, net (in thousands):

September 30, 2024

March 31, 2025

December 31, 2024

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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 % .

The Credit Agreement provides for a $ 60.0 million term loan credit facility, which was fully funded as of March 31, 2025 and December 31, 2024.

Under the Credit Agreement, as amended, 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 Secured Overnight

Financing Rate (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.

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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):

Interest expense, including amortization of the debt discount and accretion of the final fees related to the Credit Agreement for the three months ended March 31, 2025 and 2024 was $ 1.9 million and $ 1.9 million, respectively.

Accrued interest of $ 2.2 million was included within other accrued liabilities in the condensed balance sheet as of March 31, 2025.

The following table presents the future minimum principal payments of the outstanding loan as of March 31, 2025 (in thousands):

Remainder of 2025

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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.

As of March 31, 2025, we were not in violation of any covenants.

Commitments and Contingencies

Operating 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.

(Atara) entered in October 2022 to sublease an office space currently used as headquarters located in South San Francisco, California.

Subject to the terms of the sublease agreement, the lease term commenced in November 2022 and expire in May 2025.

In February 2025, we entered into a lease agreement with 611 Gateway Center LP (611 Gateway) to lease the same office space currently subleased from Atara.

Subject to the terms of the lease agreement, the lease term shall commence following the expiration of the sublease with Atara and shall expire in July 2027.

In accordance with ASC 842, Leases , at lease measurement date, we recognized the operating lease right-of-use asset and lease liability of approximately $ 1.2 million.

The amount recognized as operating right-of-use lease asset and lease liability represents the present value of the future minimum lease payments over the term of the lease, measured using our incremental borrowing rate.

The components of our operating lease expense were as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Fixed operating lease expense

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Total operating lease expense

Supplemental information related to our operating lease were as follow (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Cash payments included in the measurement of operating lease liabilities

Supplemental information related to our operating sublease was as follow (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Fixed sublease expense

Variable sublease expense

Sublease income

The following table presents the future lease payments as of September 30, 2024 (in thousands):

For the three months ended March 31, 2025 and 2024, cash payments included in the measurement of operating lease liabilities amounted to $ 0.2 million and $ 0.2 million, respectively.

The weighted average remaining term of our leases as of March 31, 2025 was 2.33 years.

The following table presents the future lease payments as of March 31, 2025 (in thousands):

Remainder of 2025

Total minimum payments required

Subsequent Event

Purchase commitment

Purchase Commitments and Obligations

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.

Although the agreements generally provide a termination clause with or without cause, we may still be subjected to payment of cancellation fees.

The level of cancellation fees is generally dependent on the timing of the written notice in relation to the commencement of work, with the maximum cancellation fees equal to the full price of the work order.

In October 2024, we entered into an agreement with a third-party contract manufacturer to manufacture TAVALISSE that is expected to be delivered starting in 2026 through 2029.

As of March 31, 2025, the contractual obligation not included in our financial statements related to an agreement that may potentially be subjected to cancellation fees of approximately $ 20.8 million, of which, $ 2.8 million is expected to be due in the remainder of 2025, and $ 9.7 million is expected to be due in 2026 and 2027.

As of March 31, 2025, we have no t incurred any cancellation fees under our agreements with contract manufacturers.

Legal Contingencies

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business.

We are not presently a party to any material legal proceedings that, if determined adversely us, would have a material adverse effect on us.

In March 2025, we entered into a settlement agreement with Annora Pharma Private Ltd., Hetero Labs Ltd., and Hetero USA, Inc.

(collectively, Annora), resolving patent litigation related to our product TAVALISSE (fostamatinib).

The litigation resulted from submission by Annora of an Abbreviated New Drug Application (ANDA) to the FDA seeking approval to market a generic version of TAVALISSE in the US.

Under the terms of the settlement agreement, Annora will have a license to sell its generic product in the second quarter of 2032 or earlier under certain circumstances.

In accordance with the settlement agreement, the parties terminated all ongoing litigation between us and Annora regarding TAVALISSE patents pending in New Jersey.

For more information, see “ Part II, Item 1, Legal Proceedings” of this Quarterly Report on Form 10-Q.

The quarterly provision for or benefit from income taxes is based on applying the estimated annual effective tax rate to the year-to-date pre-tax income (loss), adjusted for any discrete items.

We update our estimate of our annual effective tax rate at the end of each quarterly period.

For the three months ended March 31, 2025, we recorded $ 0.1 million of provision for income tax primarily related to estimated state taxes.

We do not expect to owe federal income tax due to sufficient net operating loss carryforwards that were generated prior to the enactment of the Tax Cuts and Jobs Act, as well as significant research and development credit carryforwards.

For the three months ended March 31, 2024, we did no t record a provision for income taxes due to our pre-tax book loss.

We continue to record a full valuation allowance on our deferred tax assets considering our cumulative losses in prior years.

The realization of deferred tax assets is dependent if there are sufficient positive evidences that exists to conclude that it is more-likely-than-not that our deferred tax assets will be realized.

This assessment requires significant judgment.

In making this determination, all available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed.

If sufficient positive evidence may become available to allow us to reach a conclusion that a portion of the valuation allowance against the deferred tax assets may be reversed, the reversal would result in an income tax benefit for the quarterly and annual fiscal period in which we determine to release such valuation allowance.

Segment Information

We view our operations and manage our business as one operating segment, and our chief operating decision maker (CODM) is our chief executive officer.

The following table presents segment information for the periods presented:

Three Months Ended March 31,

(in thousands)

Total Revenues

Employee related expenses

Commercial related expenses

Outside clinical trial related expenses

Cost of product sales

Consultants and third-party services

Other segment items

Interest expense, net

Provision for income taxes

Segment income (loss)

There is no reconciling items or adjustments between segment income (loss) presented above and net income (loss) as presented in our statements of operations.

The CODM does not review assets in evaluating the segment results and therefore such information is not presented.

For details of revenues disaggregated by category, see “Note 3 – Revenues.”

Employee related expenses primarily comprised salaries, employee benefits, other employee related expenses and stock-based compensation expense.

For details of stock-based compensation expense, see “Note 6 – Stock-Based Compensation.” Other segment items for the periods presented primarily comprised travel related expenses, business insurance, taxes and licenses, and facility related expenses.

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

What changed 10-Q

Item 1. Financial Statements