What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-05 compared with 2024-11-06 · 107 added, 146 removed, 195 unchanged (56% of the section changed)

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We believe this approach will increase the likelihood of successfully translating a specific pharmacological mechanism into clinical benefit.

We are advancing a pipeline of medicine candidates to address targets in precision oncology and genetic disease, including our lead product candidates described below.

• ReDiscover Trial .

RLY-2608 is the lead program in our efforts to discover and develop mutant selective inhibitors of PI3Kα.

In December 2021, we dosed the first patient in a first-in-human clinical trial for RLY-2608, the first known allosteric, pan-mutant and isoform-selective phosphoinostide 3 kinase alpha, or PI3Kα, inhibitor in clinical development, or the ReDiscover Trial.

In April 2022, we initiated the second arm of the dose escalation part of this trial, evaluating RLY-2608 in combination with fulvestrant for patients with HR+, HER2–, PI3Kα-mutated, locally advanced or metastatic breast cancer.

In July 2023, we initiated a dose expansion cohort in patients with PI3Kα-mutant, HR+, HER2- locally advanced or metastatic breast cancer, with patients receiving a 600 mg twice daily, or BID, dose of RLY-2608 in combination with fulvestrant.

In the fourth quarter of 2023, we initiated two additional dose expansion cohorts of RLY-2608 in combination with fulvestrant – a second 600 mg BID cohort as well as one at 400 mg BID.

In the fourth quarter of 2023, we also initiated a triplet combination arm with RLY-2608, fulvestrant and the cyclin dependent kinase 4/6, or CDK 4/6, inhibitor ribociclib.

In June 2024, we announced our plan to initiate an additional triplet combination arm with RLY-2608, fulvestrant, and atirmociclib, Pfizer Inc.’s, or Pfizer’s, investigative selective-CDK4 inhibitor, pursuant to a clinical trial collaboration with Pfizer.

• Clinical Data .

In September 2024, we announced interim clinical data for RLY-2608 with a data cut-off date of August 12, 2024.

This interim clinical data showed that among patients with PI3Kα-mutated, HR+/HER2- metastatic breast cancer who received the 600 mg BID dose in combination with fulvestrant, or our recommended Phase 2 dose, and who did not have a PTEN or AKT co-mutation, the median progression free survival was 9.2 months and the objective response rate was 33% across all mutations and 53% in patients with kinase mutations.

Additionally, the interim clinical data showed that RLY-2608 in combination with fulvestrant was generally well tolerated in the patients treated across all doses as of the August 12, 2024 data cut-off date.

The overall tolerability profile consisted of mostly low-grade treatment-related adverse events that were manageable and reversible, and safety outcomes were generally as expected across dose levels based on exposure and consistent with mutant-selective PI3Kα inhibition.

We believe that, overall, while the interim clinical data from the ReDiscover Trial disclosed to date are preliminary, the data suggest interim efficacy signals in the patient population defined above, and support selective target engagement across doses and mutation types with an encouraging interim safety and tolerability profile.

• Lirafugratinib (RLY-4008).

• ReFocus Trial .

Lirafugratinib, or RLY-4008, is a potent, selective and oral small molecule inhibitor of fibroblast growth factor receptor 2, or FGFR2.

In the third quarter of 2020, we initiated a first-in-human clinical trial for lirafugratinib, or the ReFocus Trial, which is a two-part global trial in patients with FGFR2-altered tumors.

The first part of the trial, or the dose escalation, is complete, and the second part of the trial, or the dose expansion, is ongoing at a 70 mg once daily, or QD, recommended Phase 2 dose in patients with cholangiocarcinoma, or CCA, and other FGFR2-altered solid tumors.

Enrollment for the ReFocus Trial has been closed to allow the data to mature and inform

our future clinical development decisions.

In September 2024, we announced that we plan to seek a global commercialization partner for lirafugratinib in order to maintain focus on the remainder of our portfolio.

This announcement followed a meeting with the U.S.

Food and Drug Administration, or the FDA, regarding the lirafugratinib regulatory path, at which meeting the FDA suggested that we first file a new drug application, or NDA, in CCA, followed by a tumor agnostic supplemental NDA for FGFR2 fusions with data from more patients and more follow up.

• Clinical Data .

In October 2024, we presented updated interim FGFR2 fusion tumor agnostic clinical data at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics.

We believe that while the interim clinical data from the ReFocus Trial disclosed to date are preliminary, the data show interim efficacy signals in the CCA pan-FGFR, or FGFRi, treatment-naïve, FGFR2-fusion CCA cohort and non-CCA solid tumor expansion cohorts and further support our hypothesis that selective inhibition of FGFR2 can improve the treatment for patients with FGFR2-driven tumors.

Additionally, the safety analysis from the interim clinical data disclosed to date for the CCA cohorts and tumor agnostic cohorts has been generally consistent.

Most treatment emergent adverse events were expected FGFR2 on-target, low-grade, monitorable, manageable and largely reversible.

We are advancing a pipeline of medicine candidates to address targets in precision oncology and genetic disease, including RLY-2608, our lead product candidate discussed below.

RLY-2608 is the first known allosteric, pan-mutant and isoform-selective phosphoinostide 3 kinase alpha, or PI3Kα, inhibitor in clinical development.

It is the lead program in our efforts to discover and develop mutant selective inhibitors of PI3Kα.

• Breast Cancer and Solid Tumors

o ReDiscover Trial .

In December 2021, we dosed the first patient in a first-in-human clinical trial for RLY-2608, or the ReDiscover Trial.

Since then, we have predominantly focused on evaluating RLY-2608 in combination with fulvestrant for patients with HR+, HER2–, PI3Kα-mutated, locally advanced or metastatic breast cancer.

In the fourth quarter of 2023, we initiated a triplet combination arm with RLY-2608, fulvestrant and the cyclin dependent kinase 4/6, or CDK 4/6, inhibitor ribociclib.

In the fourth quarter of 2024, we initiated an additional triplet combination arm with RLY-2608, fulvestrant, and atirmociclib, Pfizer Inc.’s, or Pfizer’s, investigative selective-CDK4 inhibitor, pursuant to a clinical trial collaboration with Pfizer.

We also intend to initiate a Phase 3 registrational study, or the ReDiscover-2 Trial, which will evaluate the safety and efficacy of RLY-2608 plus fulvestrant in PI3Kα-mutated, HR+/HER2- advanced breast cancer patients previously treated with a CDK4/6 inhibitor.

The comparator arm in the ReDsicover-2 Trial will be capivasertib plus fulvestrant.

o Clinical Data .

In September 2024, we announced interim clinical data for RLY-2608 with a data cut-off date of August 12, 2024, and in December 2024, we announced additional updated interim clinical data for RLY-2608 at the San Antionio Breast Cancer Symposium 2024 with a data cut-off date of November 4, 2024.

We believe that, overall, while the clinical data from the ReDiscover Trial disclosed to date are preliminary, the data suggest differentiated interim efficacy signals in the specified patient population and support selective target engagement across doses and mutation types with an encouraging interim safety and tolerability profile.

• Vascular Malformations

o RLY-2608-201 Clinical Trial .

In the first quarter of 2025, we initiated the global Phase 2 clinical trial for RLY-2608 in patients with PIK3CA-related overgrowth spectrum, or PROS, and malformations driven by PIK3CA mutations.

While our initial focus is on precision oncology, we believe our Dynamo® platform may also be broadly applied to other areas of precision medicine, such as genetic diseases.

In addition to the clinical stage product candidates described above, we announced three discovery stage programs in June 2024, including two novel programs from our genetic disease portfolio to address clinically and commercially validated targets in vascular malformations and Fabry disease, respectively, and an NRAS-selective inhibitor.

We also have five additional active discovery stage programs across both precision oncology and genetic diseases.

In addition to the programs mentioned above, we are progressing our NRAS-selective inhibitor, RLY-8161, to address NRAS-mutated solid tumors as well as our non-inhibitory chaperone for Fabry disease.

We also have one active early-stage discovery program.

We are focused on using the novel insights derived from our approach to transform the lives of patients suffering from debilitating and life-threatening diseases through the discovery, development, and commercialization of our therapies.

We were incorporated in May 2015.

We have devoted substantially all of our resources to developing our lead product candidates, developing our innovative computational and experimental approaches on protein motion, building our intellectual property portfolio, business planning, raising capital, and providing general and administrative support for these operations.

We have devoted substantially all of our resources to developing our product candidates, developing our innovative computational and experimental approaches on protein motion, building our intellectual property portfolio, business planning, raising capital, and providing general and administrative support for these operations.

To date, we have principally financed our operations through private placements of preferred stock and common stock, convertible debt, and proceeds from public offerings of our common stock.

In December 2024, we entered into an exclusive global licensing agreement, or the Elevar Agreement, with Elevar Therapeutics, Inc., or Elevar, pursuant to which Elevar was granted global development and commercialization rights for lirafugratinib.

Under the terms of the Elevar Agreement, we received $5.0 million in upfront consideration and $2.7 million in conjunction with the transfer of active pharmaceutical ingredient and other materials as of March 31, 2025.

We are eligible to receive up to $495.0 million in regulatory and commercial milestone payments, as well as tiered royalties.

In September 2024, we completed a public offering, or the September 2024 Offering, of 32,857,143 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 4,285,714 shares, at an offering price of $7.00 per share.

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In August 2021, we entered into a sales agreement, or the 2021 Sales Agreement, with Cowen and Company, LLC, or Cowen, pursuant to which we could offer and sell shares of our common stock having aggregate gross proceeds of up to $300.0 million from time to time in "at-the-market" offerings through Cowen, as our sales agent.

As of September 30, 2024, we sold 4,915,669 shares of common stock under the 2021 Sales Agreement, from which we received $48.2 million in proceeds, which were net of $1.2 million in commissions paid to Cowen.

In August 2024, the 2021 Sales Agreement was terminated by mutual agreement between us and Cowen.

Separately, we entered into a new sales agreement, or the 2024 Sales Agreement, with TD Securities (USA) LLC, or TD Securities, pursuant to which we may offer and sell shares of our common stock having aggregate gross proceeds of up to $250.0 million from time to time in “at-the-market” offerings through TD Securities, as our sales agent.

As of September 30, 2024, we have not sold any shares under the 2024 Sales Agreement.

Through termination of the 2021 Sales Agreement, we sold 4,915,669 shares of common stock under the 2021 Sales Agreement, from which we received $48.2 million in proceeds, which were net of $1.2 million in commissions paid to Cowen and other offering expenses.

In August 2024, we also entered into a new sales agreement, or the 2024 Sales Agreement, with TD Securities (USA) LLC, or TD Securities, pursuant to which we may offer and sell shares of our common stock having aggregate gross proceeds of up to $250.0 million from time to time in “at-the-market” offerings through TD Securities, as our sales agent.

As of March 31, 2025, we have not sold any shares under the 2024 Sales Agreement.

In January 2024, we entered into a securities purchase agreement with Nextech Crossover I SCP for the private placement of 2,500,000 shares of common stock at $12.00 per share, or the Private Placement.

We received $29.8 million in proceeds from the Private Placement, which were net of $0.2 million in offering expenses.

In September 2022, we completed a public offering, or the September 2022 Offering, of 11,320,755 shares of common stock at an offering price of $26.50 per share.

We received proceeds of $284.7 million, which was net of $15.3 million in underwriting discounts and commissions, as well as other offering expenses.

On April 15, 2021, we entered into an Agreement and Plan of Merger, or the Merger Agreement, and, on April 22, 2021, we acquired ZebiAI Therapeutics, Inc., or ZebiAI.

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In December 2020, we entered into a global collaboration and license agreement with Genentech, Inc., a member of the Roche Group, or Genentech, for the development and commercialization of RLY-1971 (now referred to as migoprotafib, or GDC-1971), or the Genentech Agreement.

Under the terms of the Genentech Agreement, we received $75.0 million in an upfront payment in 2021, as well as $45.0 million in milestone payments from Genentech as of September 30, 2024.

On July 11, 2024, we received notice that Genentech exercised its right to terminate the Genentech Agreement.

Genentech elected to terminate the Genentech Agreement without cause, and the termination will become effective 180 days after the date of receipt of the notice of termination, or the Termination Date.

Until the Termination Date, the obligations of the parties under the Genentech Agreement will continue as currently provided.

As a result of the termination of the Genentech Agreement, we will not be entitled to receive any further milestones or other payments due after the

Termination Date.

The parties will also cease to have any development or commercialization obligations after the Termination Date and the licenses that we granted to Genentech pursuant to the Genentech Agreement will cease to be in effect as of the Termination Date.

Under the terms of the Genentech Agreement, we received $75.0 million in an upfront payment in 2021, as well as $45.0 million in milestone payments.

Genentech elected to terminate the Genentech Agreement without cause, effective as of January 7, 2025, or the Termination Date.

As of the Termination Date, we are no longer entitled to receive any further milestones or other payments due after the Termination Date.

The parties also ceased to have any development or commercialization obligations as of the Termination Date and the licenses that we granted to Genentech pursuant to the Genentech Agreement ceased to be in effect as of the Termination Date.

We will not continue development of migoprotafib.

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Our financial condition and results of operations may also be impacted by other factors we may not be able to control, such as public health crises, global supply chain disruptions, uncertain global economic conditions, global trade disputes or political instability as further discussed in the section "Risk Factors" in this Quarterly Report on Form 10-Q.

We do not believe that such factors had a material adverse impact on our results of operations during the three and nine months ended September 30, 2024 and 2023.

We do not believe that such factors had a material adverse impact on our results of operations during the three months ended March 31, 2025 and 2024.

Since our inception, we have incurred significant operating losses on an aggregate basis.

Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future product candidates.

Our net losses were $261.7 million and $258.5 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, we had an accumulated deficit of $1.7 billion.

Our net losses were $77.1 million and $81.4 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, we had an accumulated deficit of $1.8 billion.

These losses have resulted primarily from costs incurred in connection with research and development activities, licensing and patent investment, and general and administrative costs associated with our operations.

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We anticipate that our expenses will increase substantially if and as we:

• conduct our current and future clinical trials of our lead product candidates;

• conduct our current and future clinical trials of our lead product candidate;

• conduct additional preclinical research and development of our early-stage programs;

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If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and may be forced to reduce or terminate our operations.

We believe our cash, cash equivalents, and investments of $839.6 million as of September 30, 2024 will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2027.

We believe our cash, cash equivalents, and investments of $710.4 million as of March 31, 2025 will enable us to fund our operating expenses and capital expenditure requirements into 2029.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

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Components of our Results of Operations

To date, our revenue primarily consists of amounts related to the Genentech Agreement.

To date, our revenue primarily consists of amounts related to the Genentech Agreement and Elevar Agreement.

Operating Expenses

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Research and Development Expenses include:

• salaries, benefits, and other employee related costs, including stock compensation expense, for personnel engaged in research and development functions;

• salaries, benefits, and other employee costs, including stock compensation expense, for personnel engaged in research and development functions;

• costs of outside consultants, including their fees, stock compensation, and related travel expenses;

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Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our financial statements as prepaid expenses or accrued research and development expenses.

Our lead product candidates are in clinical development.

We also have several active discovery stage programs across both precision oncology and genetic diseases.

Our lead product candidate is in clinical development.

We also have preclinical programs across both precision oncology and genetic diseases.

Costs incurred for these programs include costs incurred to support our discovery research and translational science efforts up to the initiation of first-in-human clinical development.

Platform research and other research and development activities include costs that are not specifically allocated to active product candidates, including facilities costs, depreciation expense, and other costs.

Employee related expenses include salary, wages, stock compensation, and other costs related to our personnel, which are not allocated to specific programs or activities.

Employee expenses include salary, wages, stock compensation, and other costs related to our personnel, which are not allocated to specific programs or activities.

We cannot determine with certainty the duration and costs of future clinical trials and future development costs, if, when, or to what extent we will generate revenue from the commercialization and sale of any of our product candidates for which we obtain marketing approval or our other research and development costs.

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The duration, costs, and timing of clinical trials and development of our product candidates will depend on a variety of factors, including:

• the scope, rate of progress, expense, and results of our preclinical development activities, any future clinical trials of our lead product candidates, or other product candidates and other research and development activities that we may conduct;

• the scope, rate of progress, expense, and results of our preclinical development activities, any future clinical trials of our lead product candidate, or other product candidates and other research and development activities that we may conduct;

• uncertainties in clinical trial design and patient enrollment or drop out or discontinuation rates;

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Research and development activities are central to our business model.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We expect to continue to incur significant research and development expenses for the foreseeable future as we continue to conduct clinical trials of our lead product candidates, as well as identify and develop additional product candidates.

later-stage clinical trials.

We expect to continue to incur significant research and development expenses for the foreseeable future as we continue to conduct clinical trials of our lead product candidate, initiate clinical trials for our other product candidates, as well as identify and develop additional product candidates.

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate.

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General and Administrative Expenses

General and administrative expenses primarily consist of salaries and other related costs, including stock compensation, for personnel in our executive, finance, corporate, and business development and administrative functions.

General and Administrative Expenses primarily consist of salaries and other employee costs, including stock compensation, for personnel in our executive, finance, corporate, and business development and administrative functions.

General and Administrative Expenses also include legal fees relating to patent and corporate matters;

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Results of Operations

Comparison of the three months ended September 30, 2024 and 2023

The following table summarizes our results of operations for the three months ended September 30, 2024 and 2023:

Three Months Ended September 30,

(in thousands)

License and other revenue

Operating expenses:

Research and development expenses

Change in fair value of contingent consideration liability

General and administrative expenses

Total operating expenses

Loss from operations

Other income, net

We recognized no revenue for the three months ended September 30, 2024 compared to $25.2 million for the three months ended September 30, 2023.

The decrease of $25.2 million was primarily due to recognition of $25.0 million in variable consideration under the Genentech Agreement previously constrained during the three months ended September 30, 2023.

By comparison, no amounts were recognized during the three months ended September 30, 2024, as research and development services provided under the Genentech Agreement were completed in 2023.

Research and Development Expenses

The following summarizes our research and development expenses for the three months ended September 30, 2024 and 2023:

Three Months Ended September 30,

(in thousands)

External costs for programs in clinical trials

External costs for platform technologies and preclinical programs

Employee related expenses

Other expenses

Total research and development expenses

Research and development expenses were $76.6 million for the three months ended September 30, 2024 compared to $81.5 million for the three months ended September 30, 2023.

The decrease of $4.9 million was primarily due to the impact of prioritization of certain programs in our pipeline, as previously disclosed in 2023 and earlier in 2024.

Change in Fair Value of Contingent Consideration Liability

Change in fair value of our contingent consideration liability under the Merger Agreement with ZebiAI was $0 for the three months ended September 30, 2024 compared to a decrease of $1.2 million for the three months ended September 30, 2023.

During the three months ended June 30, 2024, the Contingent Milestone Payments and Contingent Earnout Payments were both reduced to $0.

During the three months ended September 30, 2024, there were no further changes to such amounts.

General and Administrative Expenses

General and administrative expenses were $19.8 million for the three months ended September 30, 2024 compared to $18.5 million for the three months ended September 30, 2023.

The increase of $1.3 million was primarily due to an increase in stock compensation expense, partially offset by decreases in other employee compensation costs and certain other general and administrative expenses.

Other Income, Net

Other income, net, was $8.3 million for the three months ended September 30, 2024 compared to $7.8 million for the three months ended September 30, 2023.

The increase of $0.4 million was primarily a result of fluctuations in interest rates.

Comparison of the nine months ended September 30, 2024 and 2023

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023:

Nine Months Ended September 30,

Comparison of the three months ended March 31, 2025 and 2024

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

(in thousands)

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Other income, net

We recognized revenue of $10.0 million for the nine months ended September 30, 2024 compared to $25.5 million for the nine months ended September 30, 2023.

The decrease of $15.5 million was primarily due to recognition of $25.0 million in variable consideration under the Genentech Agreement previously constrained during the nine months ended September 30, 2023.

By comparison, only $10.0 million was recognized during the nine months ended September 30, 2024, specifically in connection with a milestone achieved under the Genentech Agreement.

During the three months ended March 31, 2025, the Company recognized $7.7 million of revenue from the Elevar Agreement, as each of the Company's performance obligations thereunder were completed in the current period.

During the three months ended March 31, 2024, the Company recognized $10.0 million of revenue from the Genentech Agreement, specifically in connection with a milestone achieved thereunder in the prior period.

Research and Development Expenses

The following summarizes our research and development expenses for the nine months ended September 30, 2024 and 2023:

Nine Months Ended September 30,

The following summarizes our research and development expenses for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

(in thousands)

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Total research and development expenses

Research and development expenses were $251.0 million for the nine months ended September 30, 2024 compared to $252.5 million for the nine months ended September 30, 2023.

The decrease of $1.5 million was primarily due to the impact of prioritization of certain programs in our pipeline, as previously disclosed in 2023 and earlier in 2024, partially offset by an increase in stock compensation expense.

Research and development expenses were $73.8 million for the three months ended March 31, 2025 compared to $82.4 million for the three months ended March 31, 2024.

The decrease of $8.6 million was primarily due to the series of strategic choices made to streamline the research organization throughout 2024.

Change in Fair Value of Contingent Consideration Liability

Change in fair value of our contingent consideration liability under the Merger Agreement with ZebiAI was a decrease of $13.2 million for the nine months ended September 30, 2024 compared to a decrease of $4.4 million for the nine months ended September 30, 2023.

During the nine months ended September 30, 2024, the Contingent Milestone Payments and Contingent Earnout Payments were both reduced to $0.

Change in fair value of our contingent consideration liability under the Merger Agreement with ZebiAI was $0 for the three months ended March 31, 2025 compared to a decrease of $1.8 million for the three months ended March 31, 2024.

During the year ended December 31, 2024, the Contingent Milestone Payments and Contingent Earnout Payments were both reduced to $0.

During the three months ended March 31, 2025, there were no further changes to such amounts.

General and Administrative Expenses

General and administrative expenses were $59.7 million for the nine months ended September 30, 2024 compared to $58.2 million for the nine months ended September 30, 2023.

The increase of $1.5 million was primarily due to an increase in stock compensation expense, partially offset by decreases in other employee compensation costs and certain other general and administrative expenses.

General and administrative expenses were $18.7 million for the three months ended March 31, 2025 compared to $19.8 million for the three months ended March 31, 2024.

The decrease of $1.1 million was primarily due to a decrease in stock compensation expense, partially offset by costs to obtain the Elevar Agreement, which were expensed commensurate with the timing of revenue recognized during the three months ended March 31, 2025.

Other Income, Net

Other income, net, was $25.8 million for the nine months ended September 30, 2024 compared to $22.3 million for the nine months ended September 30, 2023.

The increase of $3.5 million was primarily a result of fluctuations in interest rates.

Other income, net, was $7.8 million for the three months ended March 31, 2025 compared to $9.0 million for the three months ended March 31, 2024.

The decrease of $1.2 million was primarily a result of fluctuations in interest rates.

Liquidity and Capital Resources

As of September 30, 2024, we had cash, cash equivalents, and investments of $839.6 million.

As of March 31, 2025, we had cash, cash equivalents, and investments of $710.4 million.

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses.

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To date, we have principally financed our operations through private placements of preferred stock and common stock, convertible debt, and proceeds from public offerings of our common stock.

In December 2024, we entered into the Elevar Agreement pursuant to which Elevar was granted global development and commercialization rights for lirafugratinib.

As of March 31, 2025, we had received $5.0 million in upfront consideration and $2.7 million in conjunction with the transfer of active pharmaceutical ingredient and other materials from Elevar pursuant to the Elevar Agreement.

In September 2024, we completed the September 2024 Offering of 32,857,143 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 4,285,714 shares, at an offering price of $7.00 per share.

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333-258768), which would have expired in August 2024.

In August 2021, we entered into the 2021 Sales Agreement with Cowen, pursuant to which we had the ability to offer and sell shares of our common stock having aggregate gross proceeds of up to $300.0 million from time to time in "at-the-market" offerings through Cowen, as our sales agent.

In August 2021, we entered into the 2021 Sales Agreement with Cowen, pursuant to which we could offer and sell shares of our common stock having aggregate gross proceeds of up to $300.0 million from time to time in "at-the-market" offerings through Cowen, as our sales agent.

In August 2024, the 2021 Sales Agreement was terminated by mutual agreement between us and Cowen.

Separately, we entered into the 2024 Sales Agreement with TD Securities, pursuant to which we may offer and sell shares of our common stock having aggregate gross proceeds of up to $250.0 million from time to time in “at-the-market” offerings through TD Securities, as our sales agent.

As of September 30, 2024, we have not sold any shares under the 2024 Sales Agreement.

In August 2024, we also entered into the 2024 Sales Agreement with TD Securities, pursuant to which we may offer and sell shares of our common stock having aggregate gross proceeds of up to $250.0 million from time to time in “at-the-market” offerings through TD Securities, as our sales agent.

As of March 31, 2025, we have not sold any shares under the 2024 Sales Agreement.

In January 2024, we entered into a securities purchase agreement with Nextech Crossover I SCP for the Private Placement.

We received $29.8 million in proceeds from the Private Placement, which were net of $0.2 million in offering expenses.

As of September 30, 2024, we have received $120.0 million in upfront and milestone payments from Genentech pursuant to the Genentech Agreement.

Through the Termination Date, we received $120.0 million in upfront and milestone payments from Genentech pursuant to the Genentech Agreement.

In September 2022, we completed the September 2022 Offering of 11,320,755 shares of common stock at an offering price of $26.50 per share.

We received proceeds of $284.7 million, which was net of $15.3 million in underwriting discounts and commissions, as well as other offering expenses.

The following table summarizes our sources and uses of cash for each of the periods presented:

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

Cash used in operating activities

Cash (used in) provided by investing activities

Cash provided by investing activities

Cash provided by financing activities

Net increase (decrease) in cash, cash equivalents, and restricted cash

Net (decrease) increase in cash, cash equivalents, and restricted cash

Operating Activities

During the nine months ended September 30, 2024, we used $191.2 million of cash on operating activities, primarily resulting from our net loss of $261.7 million, offset by non-cash charges of $57.3 million and cash provided by changes in our operating assets and liabilities of $13.2 million.

During the nine months ended September 30, 2023, we used $211.1 million of cash on operating activities, primarily resulting from our net loss of $258.5 million and cash used to fund changes in our operating assets and liabilities of $11.9 million, offset by non-cash charges of $59.2 million.

During the three months ended March 31, 2025, we used $73.2 million of cash on operating activities, resulting from our net loss of $77.1 million and cash used to fund changes in our operating assets and liabilities of $15.1 million, offset by non-cash charges of $18.9 million.

During the three months ended March 31, 2024, we used $50.3 million of cash on operating activities, resulting from our net loss of $81.4 million, offset by non-cash charges of $23.1 million and cash provided by changes in our operating assets and liabilities of $8.0 million.

Investing Activities

During the nine months ended September 30, 2024, net cash used in investing activities was $70.1 million, primarily consisting of $68.1 million in net purchases of investments and $2.0 million for the acquisition of property and equipment.

During the nine months ended September 30, 2023, net cash provided by investing activities was $198.0 million, primarily consisting of $202.0 million in proceeds from net maturities of investments, offset by $4.0 million for the acquisition of property and equipment.

During the three months ended March 31, 2025, net cash provided by investing activities was $42.5 million, consisting of $42.8 million in proceeds from net maturities and sales of investments, offset by $0.4 million for the acquisition of property and equipment.

During the three months ended March 31, 2024, net cash provided by investing activities was $10.5 million, consisting of $12.3 million in proceeds from net maturities and sales of investments, offset by $1.8 million for the acquisition of property and equipment.

Financing Activities

During the nine months ended September 30, 2024, net cash provided by financing activities was $269.4 million, primarily consisting of $265.9 million in net proceeds from the Private Placement, at-the-market offerings, and the September 2024 Offering, as well as $3.5 million in proceeds from the exercise of stock options and purchases under our 2020 Employee Stock Purchase Plan, or ESPP.

During the nine months ended September 30, 2023, net cash provided by financing activities was $12.8 million, primarily consisting of $9.4 million in net proceeds from at-the-market offerings, as well as $3.5 million in proceeds from the exercise of stock options and purchases under our ESPP.

During the three months ended March 31, 2025, net cash provided by financing activities was $0.

During the three months ended March 31, 2024, net cash provided by financing activities was $48.9 million, consisting of $47.7 million in net proceeds from the Private Placement and at-the-market offerings, as well as $1.2 million in proceeds from the exercise of stock options.

Funding Requirements

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In addition, we continue to incur additional costs associated with operating as a public company.

As of September 30, 2024, we had cash, cash equivalents, and investments of $839.6 million.

We believe that our existing cash, cash equivalents, and investments will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2027.

As of March 31, 2025, we had cash, cash equivalents, and investments of $710.4 million.

We believe that our existing cash, cash equivalents, and investments will enable us to fund our operating expenses and capital expenditure requirements into 2029.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Because of the numerous risks and uncertainties associated with the development of our product candidates, as well as our preclinical programs, and because the extent to which we may enter into collaborations with third parties for the development of our product candidates is unknown, we are unable to estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates.

with completing the research and development of our product candidates.

Our future capital requirements will depend on many factors, including:

• the impact of any business interruptions to our operations, including the timing and enrollment of patients in our planned clinical trials, or to those of our manufacturers, suppliers, or other vendors, resulting from public health epidemics or outbreaks of infectious disease or ongoing geopolitical conflicts and related global economic sanctions;

• the scope, progress, results, and costs of our current and future clinical trials of our lead product candidates and additional preclinical research of our other programs;

• the scope, progress, results, and costs of our current and future clinical trials of our lead product candidate and additional preclinical research of our other programs;

• the scope, progress, results, and costs of drug discovery, preclinical research, and clinical trials for our other product candidates;

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• the costs, timing, and outcome of regulatory review of our product candidates;

• our ability to establish and maintain collaborations on favorable terms, if at all;

• the success of any existing or future collaborations that we may enter into with third parties;

• our ability to establish and maintain licenses or collaborations on favorable terms, if at all;

• the success of any existing or future licenses or collaborations that we may enter into with third parties;

• the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates;

• the achievement of milestones or occurrence of other developments that trigger payments under any existing or future collaboration agreements, if any;

• the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under any existing or future collaboration agreements, if any;

• the costs and timing of future commercialization activities, including drug sales, marketing, manufacturing, and distribution, for any of our product candidates for which we receive marketing approval, to the extent that such sales, marketing, manufacturing, and distribution are not the responsibility of any collaborator that we may have at such time;

• the achievement of milestones or occurrence of other developments that trigger payments under any existing or future license or collaboration agreements, if any;

• the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under any existing or future license or collaboration agreements, if any;

• the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;

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Additional debt or preferred equity financing, if available, may involve agreements that include restrictive covenants that may limit our ability to take specific actions, such as incurring debt, making capital expenditures, or declaring dividends, which could adversely impact our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute your ownership interest.

If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technology, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.

that may not be favorable to us.

If we are unable to raise additional funds through equity or debt financings or collaborations, strategic alliances or licensing arrangements with third parties when needed, we may be required to delay, limit, reduce, and/or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Contractual Obligations and Commitments

On July 11, 2024, we received notice that Genentech exercised its right to terminate the Genentech Agreement, as further discussed in the section "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q.

There were no other material changes to our contractual obligations and commitments during the three months ended September 30, 2024.

Effective as of January 7, 2025, Genentech elected to terminate the Genentech Agreement without cause, as further discussed in the section "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q.

There were no other material changes to our contractual obligations and commitments during the three months ended March 31, 2025.

For more information on our contractual obligations and commitments, please refer to "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024, as well as Note 9, Commitments and Contingencies, of the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

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For a discussion of our critical accounting estimates, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 26, 2025, the notes to our audited financial statements appearing in our Annual Report on Form 10-K, and the notes to the financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

There have been no material changes to these critical accounting policies and estimates through September 30, 2024 from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2023.

There have been no material changes to these critical accounting policies and estimates through March 31, 2025 from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Recently Issued and Adopted Accounting Pronouncements

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We are exposed to market risk related to changes in interest rates of our investment portfolio of cash equivalents and short-term investments.

As of September 30, 2024, our cash equivalents consisted of money market funds.

As of September 30, 2024, our investments consisted of investments in U.S.

As of March 31, 2025, our cash equivalents consisted of money market funds.

As of March 31, 2025, our investments consisted of investments in U.S.

treasury bills and United States agency securities that have contractual maturities of less than two years.

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The potential change in fair value for interest rate sensitive instruments has been assessed on a hypothetical 100 basis point adverse movement across all maturities.

As of September 30, 2024, we estimate that such hypothetical 100 basis point adverse movement would not result in a material impact on our condensed consolidated results of operations.

As of September 30, 2024, we had no debt outstanding and, therefore, are not exposed to interest rate risk with respect to debt.

As of March 31, 2025, we estimate that such hypothetical 100 basis point adverse movement would not result in a material impact on our condensed consolidated results of operations.

As of March 31, 2025, we had no debt outstanding and, therefore, are not exposed to interest rate risk with respect to debt.

Foreign currency exchange risk

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To date, foreign currency transaction gains and losses have not been material to our financial statements and we have not had a formal hedging program with respect to foreign currency.

We estimate that a 10% increase or decrease in current exchange rates would not have a material effect on our financial results for the three and nine months ended September 30, 2024 and 2023.

While we have not engaged in the hedging of our foreign currency transactions to date, we are evaluating the costs and benefits of initiating such a program and may in the future hedge selected significant transactions denominated in currencies other than the U.S.

dollar as we expand our international operations and our risk grows.

We estimate that a 10% increase or decrease in current exchange rates would not have a material effect on our financial results for the three months ended March 31, 2025 and 2024.

While we have not engaged in the hedging of our foreign currency transactions to date, we are evaluating the costs and benefits of initiating such a program and may in

the future hedge selected significant transactions denominated in currencies other than the U.S.

dollar if and/or as we expand our international operations and our risk grows.

Contr ols and Procedures.

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Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, our disclosure controls and procedures were effective.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2025, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHE R INFORMATION

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What changed 10-Q

Item 2. Management’s Discussion and Analysis