What changed in this filing

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Item 1. Business

2026-02-25 compared with 2025-02-26 · 254 added, 339 removed, 1321 unchanged (31% of the section changed)

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We offer our customers a variety of software solutions that accelerate all stages of molecule discovery, design, and optimization.

In 2024, 19 of the top 20 pharmaceutical companies, measured by 2023 revenue, licensed our solutions, accounting for $74.7 million, or 41%, of our software revenue in 2024.

We had 235, 222, and 227 customers with an annual contract value, or ACV, of at least $100,000, which represented 87%, 83%, and 82% of our total ACV, for the years ended December 31, 2024, 2023, and 2022, respectively.

The widespread adoption of our software, supported by our global team of sales, technical, and scientific personnel, has driven steady growth in our software revenue.

Biopharmaceutical companies are increasingly adopting our software at a larger scale, and we anticipate this scaling-up will drive future revenue growth.

Our ability to expand within our customer base is demonstrated by the increasing number of our customers with an ACV at higher thresholds.

For the year ended December 31, 2024, we had 61 customers with an ACV of at least $500,000 compared to 54 for the year ended December 31, 2023.

Furthermore, the number of customers with an ACV of at least $1.0 million increased to 31 for the year ended December 31, 2024, compared to 27 and 18 for the years ended December 31, 2023 and 2022, respectively.

We also had eight customers with an ACV of at least $5.0 million for the year ended December 31, 2024, compared to four customers for each of the years ended December 31, 2023 and 2022.

In addition, our customer retention rate for our customers with an ACV of at least $100,000 for the year ended December 31, 2024 was 95% and was 92% or higher for each of the previous 10 fiscal years.

Our customer retention rate for our customers with an ACV of at least $500,000 was 100% for the year ended December 31, 2024 and 98% for the year ended December 31, 2023.

We believe the growth in the number of our larger customers demonstrates that companies are increasingly recognizing the power and appreciating the scientific and financial benefits of using our platform at scale while the retention in our customer base is indicative of the continued value of our platform.

See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Performance" for additional information regarding ACV and customer retention rate.

In 2025, all of the top 20 pharmaceutical companies, measured by 2024 revenue, which we refer to as our top 20 pharma industry cohort, licensed our solutions, accounting for $73.7 million, or 37%, of our software revenue and $80.8 million, or 41%, of our annual contract value, or ACV, in 2025.

The widespread adoption of our software, supported by our global team of sales, technical, and scientific personnel, has driven growth in our software business.

Our ability to expand within our customer base is demonstrated by the increasing average ACV from our commercial customers with an ACV of over $1.0 million.

For the year ended December 31, 2025, we had 27 commercial customers with an ACV of at least $1.0 million compared to 29 such customers for the year ended December 31, 2024.

The average ACV per commercial customer with an ACV of over $1.0 million grew to $3.9 million for the year ended December 31, 2025 compared to $3.3 million for the year ended December 31, 2024.

We believe the scaling up among the largest customers within our commercial customer cohort demonstrates that companies are increasingly recognizing the power and appreciating the scientific and financial benefits of using our platform at scale and the continued value of our platform.

Our commercial customer cohort includes all of our customers purchasing our computational software solutions for commercial use, excluding government and academic institutions and customers from which we derive contribution revenue.

See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Performance" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Change in Key Operating Metrics" for additional information regarding these operating metrics, including ACV and our industry and customer cohorts.

We also leverage our platform and capabilities across a portfolio of collaborative and proprietary drug discovery programs spanning a wide range of disease targets and indications.

Our drug discovery group, which we refer to as the Schrödinger therapeutics group, is comprised of a multidisciplinary team of approximately 180 experts in protein science, biochemistry, biophysics, medicinal and computational chemistry, and discovery scientists with expertise in preclinical and early clinical development.

We have entered into drug discovery collaborations with biopharmaceutical companies under

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which our collaborators are pursuing research in a number of therapeutic areas, including programs in oncology, antifungal diseases, fibrosis, inflammatory bowel disease, metabolic disease, autoimmune disease, immuno-oncology, cardiopulmonary disease and tuberculosis.

When we engage in drug discovery with these collaborators, we typically provide access to our platform and platform experts who assist the drug discovery collaborator in identifying molecules that have activity against one or more specified protein targets.

Our drug discovery group, which we refer to as the Schrödinger therapeutics group, is comprised of a multidisciplinary team of experts in protein science, biochemistry, biophysics, medicinal and computational chemistry, and discovery scientists with expertise in preclinical and early clinical development.

We have entered into drug discovery collaborations with biopharmaceutical companies under which our collaborators are pursuing research in a number of therapeutic areas, including programs in oncology, antifungal diseases, fibrosis, inflammatory bowel disease, metabolic disease, autoimmune disease, immuno-oncology, cardiopulmonary disease, CNS diseases, and tuberculosis.

When we engage in drug discovery with these collaborators, we typically provide

access to our platform and platform experts who assist the drug discovery collaborator in identifying molecules that have activity against one or more specified protein targets.

Our collaboration agreements typically include upfront consideration, discovery, development, commercial and regulatory milestones, and royalties from future sales of commercialized products.

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In June 2022, the U.S.

Food and Drug Administration, or FDA, cleared our first investigational new drug application, or IND, for our MALT1 inhibitor, which we refer to as SGR-1505.

Food and Drug Administration, or the FDA, cleared our first investigational new drug application, or IND, for our MALT1 inhibitor, which we refer to as SGR-1505.

We have initiated dosing in a Phase 1 clinical trial of SGR-1505, which is designed as an open-label, multi-center dose escalation trial in patients with relapsed or refractory B-cell malignancies.

The trial is designed to evaluate the safety, pharmacokinetics, pharmacodynamics, maximum tolerated dose and/or recommended dose of SGR-1505.

Exploratory cohorts will evaluate additional pharmacokinetics, pharmacodynamics, preliminary anti-tumor activity and safety to establish the recommended dose.

We anticipate reporting initial data from the trial in the second quarter of 2025.

We also completed a Phase 1 clinical trial of SGR-1505 in 73 healthy volunteers to gather additional data, including data relating to the safety, tolerability, and pharmacokinetics of SGR-1505, as well as the effect of food and drug-drug interactions.

In the healthy volunteer trial, SGR-1505 was generally well tolerated with no drug-related serious adverse events or dose limiting toxicities observed.

In the trial, we observed that SGR-1505 achieved greater than 90 percent inhibition of IL-2 secretion in an activated T cell whole blood assay at 100 mg twice a day (n=4), confirming target engagement and meeting the pharmacodynamic goals for the trial.

Inhibition of IL-2 secretion is a marker for target engagement and pathway modulation as it is tightly linked to MALT1 and the downstream NF-κB signaling.

The data supported continued evaluation of SGR-1505 in the ongoing Phase 1 clinical trial in patients with relapsed or refractory B-cell malignancies.

In addition, in August 2023, the FDA granted orphan drug designation to SGR-1505 for the potential treatment of mantle cell lymphoma.

In July 2023, the FDA cleared our IND for our CDC7 inhibitor, which we refer to as SGR-2921.

In July 2024, the FDA granted Fast Track designation to SGR-2921 in patients with relapsed or refractory acute myeloid leukemia, or AML.

In addition, in January 2025, the FDA granted orphan drug designation to SGR-2921 in patients with relapsed or refractory AML.

We have initiated dosing in a Phase 1 clinical trial of SGR-2921, which is designed as an open-label, multi-center dose-escalation clinical trial in patients with relapsed or refractory AML or high-risk myelodysplastic syndrome.

The trial is designed to evaluate the safety and tolerability of SGR-2921 as a monotherapy and to identify the recommended Phase 2 dose, including the maximum tolerated dose.

Secondary and exploratory objectives of the trial include evaluating the pharmacokinetics and pharmacodynamics of SGR-2921 and investigating preliminary anti-tumor activity.

We anticipate reporting initial data from the trial in the second half of 2025.

The trial is designed to evaluate the safety, pharmacokinetics, pharmacodynamics, maximum tolerated dose, maximum administered dose and/or recommended dose of SGR-1505.

Backfill cohorts evaluate additional pharmacokinetics, pharmacodynamics, preliminary anti-tumor activity and safety to support the recommended dose.

In March 2024, we also submitted an IND to the FDA for our novel Wee1/Myt1 inhibitor, which we refer to as SGR-3515, and the FDA cleared the IND in April 2024.

We recently initiated dosing in a Phase 1 clinical trial of SGR-3515 in patients with advanced solid tumors.

We have initiated dosing in a Phase 1 clinical trial of SGR-3515 in patients with advanced solid tumors.

The trial is a dose-escalation trial designed to evaluate the safety, tolerability, and recommended Phase 2 dose of SGR-3515.

Secondary and exploratory objectives of the trial include

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evaluating the pharmacokinetics and preliminary anti-tumor activity of SGR-3515.

We anticipate reporting initial data from the trial in the second half of 2025.

Secondary and exploratory objectives of the trial include evaluating the pharmacokinetics and preliminary anti-tumor activity of SGR-3515.

We anticipate reporting initial data from the trial in the second quarter of 2026.

We plan to explore strategic partnerships for the SGR-1505 and SGR-3515 programs to advance the development of these programs beyond our ongoing Phase 1 clinical trials.

In August 2025, we announced the discontinuation of the clinical development program for SGR-2921, our CDC7 inhibitor, which was being evaluated in a Phase 1 dose-escalation clinical trial in patients with relapsed/refractory acute myeloid leukemia, or AML, or high-risk myelodysplastic syndromes.

Despite early evidence of monotherapy activity observed in the Phase 1 clinical trial, based on the profile observed prior to discontinuation, including two emergent events where SGR-2921 was considered to have contributed to two deaths in patients with AML, we determined the path to development as a combination therapy would be difficult to pursue.

For the year ended December 31, 2025, we generated total revenue of $255.9 million and had a net loss of $103.3 million.

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We are the leader in the field of physics-based computational drug discovery, and we believe our computational platform is far ahead of that of our nearest competitors.

We intend to maintain our industry-leading position by introducing new capabilities and refining our software to further strengthen our technology and advance the science underlying our platform.

We intend to maintain our industry-leading position by introducing new capabilities and refining our software to further strengthen our technology and advance the science

underlying our platform.

For example, in 2024, we launched an initiative to expand our computational platform to predict toxicology risk early in drug discovery, which is being funded by $19.5 million in grants from the Bill & Melinda Gates Foundation.

The goal of this initiative is to develop a computational solution designed to improve the properties of novel drug development candidates and reduce the risk of development failure associated with binding to off-target proteins, which can be associated with serious side effects.

We continue to advance our predictive toxicology initiative and have made the beta version available to customers, which encompasses approximately 50 representative kinases in addition to multiple key anti-targets.

The goal of this initiative is to develop a computational solution designed to improve the properties of drug development candidates and reduce the risk of development failure associated with binding to off-target proteins, which can be associated with serious side effects.

We expect to launch our predictive toxicology solution commercially and make it available more broadly to our customers during 2026.

• Growing and expanding our software business:

We have experienced steady growth in our software revenues, achieving $180.4 million in revenue in 2024, an increase of 13% compared to 2023, primarily driven by broad adoption of our software solutions by the biopharmaceutical industry.

Biopharmaceutical companies are increasingly adopting our software at a larger scale, and we anticipate that this scaling-up will drive future revenue growth.

We have experienced steady growth in our software business, achieving $199.5 million in revenue in 2025, an increase of 11% compared to 2024.

In addition, ACV was $198.5 million in 2025, a 4% increase compared to 2024, reflecting continued adoption of our software solutions by the biopharmaceutical industry.

Biopharmaceutical companies are increasingly adopting our software at a larger scale, and we anticipate that this scaling-up will drive future growth.

▪ Advancing our collaborative programs:

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▪ Progressing our proprietary drug discovery programs :

We plan to progress the development of our proprietary drug discovery programs, including SGR-1505, SGR-2921 and SGR-3515, and continue to advance new programs where we can leverage our computational platform to identify novel molecules.

As we progress these programs, we plan to strategically evaluate on a program-by-program basis advancing them into preclinical and clinical development ourselves, entering into collaborations to co-develop them with leading industry partners, or out-licensing them to maximize clinical and commercial opportunity.

We plan to progress the development of our proprietary drug discovery programs, including SGR-1505 and SGR-3515, and continue to advance new programs where we can leverage our computational platform to identify novel molecules.

As we progress these programs, we plan to strategically evaluate on a program-by-program basis advancing them into and through preclinical development ourselves, entering into collaborations to co-develop them with leading industry partners, or out-licensing them to maximize their development, clinical and commercial potential.

Beyond our planned investments to complete our ongoing Phase 1 dose-escalation clinical trials of SGR-1505 and SGR-3515, we do not intend to initiate additional clinical trials or advance our other proprietary preclinical programs into clinical trials independently.

We plan to explore strategic partnerships for the SGR-1505 and SGR-3515 programs to advance the development of these programs beyond our ongoing Phase 1 clinical trials.

• Leveraging the synergies between our businesses:

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Central to our ability to pursue these distinct lines of business is a firewall policy consisting of a set of well-established protocols and technology measures designed to ensure that the intellectual property of our software customers and drug discovery collaborators remains confidential and segregated.

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Industry Overview

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Traditional drug discovery involves experimental screening of existing libraries of molecules to find molecules with detectable activity, or "hit molecules," followed by many iterations of chemical synthesis to optimize those hit molecules to a development candidate that can be advanced into human clinical trials.

Efforts to optimize initial hit molecules for a drug discovery project involve costly and iterative synthesis and testing of molecules seeking to identify a molecule with the required property profile.

Efforts to optimize initial hit molecules for a drug discovery project involve costly and iterative synthesis and testing of molecules seeking to identify a

molecule with the required property profile.

The optimal profile has an acceptable balance of properties such as potency, selectivity, solubility, bioavailability, half-life, permeability, drug-drug interaction profile, synthesizability, and toxicity.

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However, despite all of these challenges, physics-based methods have a significant advantage over machine learning in that they do not require a training set and can, in principle, compute properties of molecules that are well beyond existing industry experience and data.

Over the past several decades and with the concerted effort of hundreds of our scientists and software engineers, we have developed a computational platform that is capable of predicting critical properties of molecules with a high degree of accuracy.

Over the past several decades since our founding in 1990, and with the concerted effort of hundreds of our scientists and software engineers, we have developed a computational platform that is capable of predicting critical properties of molecules with a high degree of accuracy.

We have built our platform on a foundation of rigorous, physics-based methods, combined with the rapid data processing and scaling advantages of machine learning, that together provide a significant advantage over traditional methods.

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• reducing the average time and cost required to identify a development candidate;

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• increasing the probability of drug discovery programs entering clinical development.

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the ability to computationally ideate and explore novel, high-quality drug-like molecules for consideration by discovery project teams utilizing computational enumeration and generative machine learning techniques that are trained and constructed to yield molecules that are synthetically feasible;

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• Large-Scale Molecule Evaluation :

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We are the leading provider of computational software solutions for drug discovery to the biopharmaceutical industry.

In 2024, 19 of the top 20 pharmaceutical companies, measured by 2023 revenue, licensed our solutions, accounting for $74.7 million, or 41%, of our software revenue in 2024.

Additionally, in 2025, our software was used by researchers around the world at more than 1,750 academic institutions.

The widespread adoption of our software is supported by an approximately 240-person global team of sales, technical, and scientific personnel.

The widespread adoption of our software is supported by our global team of sales, technical, and scientific personnel.

Our direct sales operations span across the United States, the European Union, United Kingdom, Japan, India, and South Korea, and we have sales distributors in other important markets, including China.

We have a diverse and large existing customer base, ranging from startup biotechnology companies to the largest global pharmaceutical companies as well as an increasing number of materials science customers.

Our ten largest software customers represented approximately 39% of our software revenue in 2024, including one customer that makes up 11% of total software revenue.

We continue to expand our customer base as we provide education and information to increase the awareness of the potential of our computational platform across different industries.

As of December 31, 2024, we had 1,752 active customers, which we define as the number of customers who had an ACV of at least $1,000 in a given fiscal year.

Included in the number of customers are entities we derive software contribution revenue from, which for the year ended December 31, 2024, consisted of Gates Ventures, LLC and the Bill & Melinda Gates Foundation.

We had 235, 222, and 227 customers with an ACV of at least $100,000 for the years ended December 31, 2024, 2023, and 2022, respectively.

We believe there is a significant opportunity to expand the adoption of our platform within our customer base.

For example, in November 2024, we entered into an expanded, three-year, software agreement with Novartis, which is more fully described in "— Collaboration Agreements ." The three-year agreement substantially increases Novartis' access to our computational predictive modeling technology and enterprise informatics platform to industry-leading scale.

Biopharmaceutical companies are increasingly adopting our software at a larger scale, and we anticipate that this scaling-up will drive future revenue growth.

Our ability to expand within our customer base is demonstrated by the increasing number of our customers with an ACV at higher thresholds.

For the year ended December 31, 2024, we had 61 customers with an ACV of at least $500,000 compared to 54 for the year ended December 31, 2023.

In addition, we had 31, 27, and 18 customers for the years ended December 31, 2024, 2023, and 2022, respectively, with an ACV of at least

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$1.0 million.

Furthermore, we also had eight customers with an ACV of at least $5.0 million for the year ended December 31, 2024, compared to four customers for each of the years ended December 31, 2023 and 2022.

For the year ended December 31, 2024, our top 10 customers, measured by ACV, accounted for $73.1 million of our total ACV compared to $51.0 million for the year ended December 31, 2023.

Our ACV was $198.5 million and $190.8 million for the years ended December 31, 2025 and 2024, respectively.

We believe biopharmaceutical companies are increasingly recognizing and appreciating the scientific and financial benefits of using our platform at scale.

Furthermore, we believe our sales and marketing approach and the quality of our software solutions result in long-term relationships and high retention with our largest customers.

This is demonstrated by the length of our key relationships, with the average tenure of our 10 largest software customers in 2024 being nearly 21 years.

Furthermore, our ability to expand our customer relationships over time is exemplified by our ability to retain our customers with an ACV of at least $100,000.

For the year ended December 31, 2024, our year-over-year customer retention rate for our customers with an ACV of at least $100,000 was 95% and was 92% or higher for each of the previous 10 fiscal years.

Our customer retention rate for our customers with an ACV of at least $500,000 was 100%, 98%, 100% for the years ended December 31, 2024, 2023, and 2022, respectively.

We believe our high retention rate for our customer base coupled with our ability to expand our customers’ use of our software will continue to drive revenue growth.

The figures below show the different ways in which we are accelerating our growth.

See "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Performance" for additional information regarding ACV and customer retention rate.

The figures below show our ACV for each of the past two fiscal years based on customer and industry cohorts:

Our top 20 pharma industry cohort had an ACV of $80.8 million in 2025 compared to $70.0 million in 2024, and our commercial customer cohort had an ACV of $177.4 million in 2025 compared to $165.8 million in 2024.

We believe there is a significant opportunity to continue to expand the adoption of our platform within our existing customer base.

For the year ended December 31, 2025, we had 27 commercial customers with an ACV of at least $1.0 million compared to 29 such customers for the year ended December 31, 2024.

Two of the 29 commercial customers with an ACV of at least $1.0 million for the year ended December 31, 2024 were acquired prior to the end of 2025.

The average ACV per commercial customer with an ACV of over $1.0 million grew to $3.9 million for the year ended December 31, 2025 compared to $3.3 million for the year ended December 31, 2024.

We believe biopharmaceutical companies are increasingly recognizing and appreciating the scientific and financial benefits of using our platform at scale and the continued value of our platform.

Furthermore, we believe our sales and marketing approach and the quality of our software solutions result in high retention with our commercial customers, our largest customer cohort.

This is demonstrated by our gross and net dollar retention rate for our commercial customers.

For the years ended December 31, 2025 and 2024, our gross dollar retention rate for our commercial customers was 96%.

Our net dollar retention rate for our commercial customers was 100% for the year ended December 31, 2025, compared to 113% for the year ended December 31, 2024.

We believe our high gross retention rate for our commercial customer cohort coupled with our ability to expand our customers’ use of our software will continue to drive growth.

See "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Performance" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Change in Key Operating Metrics" for additional information regarding these metrics, including ACV, customer cohorts, and gross and net dollar retention rate.

Our Software Solutions for Drug Discovery

We offer our customers a variety of software solutions that accelerate all stages of molecule discovery, design, and optimization pursuant to agreements with terms typically for one year.

Our licenses give our customers the ability to

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execute a certain number of calculations across specified software solutions.

Our licenses give our customers the ability to execute a certain number of calculations across specified software solutions.

Certain of our key software solutions are highlighted below, along with the particular stage of drug discovery in which they are employed.

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◦ GlideWS is our next-generation virtual screening program that utilizes a more accurate and robust description of protein-ligand interaction solvation effects.

This and other novel features enable GlideWS to more reliably find hit molecules for challenging protein targets when screening libraries of molecules.

This and other novel features enable

GlideWS to more reliably find hit molecules for challenging protein targets when screening libraries of molecules.

◦ Shape uses the three-dimensional structure and shape of earlier known hit molecules to find new hits when screening libraries of molecules.

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When AutoDesigner is deployed in conjunction with multiparameter optimization, machine learning, and FEP+ simulations, it provides a streamlined approach to create and evaluate large sets of synthetically tractable, lead-like, potent ligands.

◦ RetroSynth , newly developed and released in the first quarter of 2026, is a machine learning-based retrosynthetic analysis method that can be used to determine synthetic routes for virtual compounds ideated either by project teams or de novo design compound ideation systems, such as AutoDesigner.

In addition to determining synthetic routes, RetroSynth is also capable of assessing ease of synthesis, which enables project teams to directly balance anticipated costs and timelines associated with compound synthesis versus the expected value of the compounds, as assessed by FEP+ and DeepAutoQSAR.

• Software Solutions Used Throughout the Drug Discovery Process:

◦ LiveDesign is our user-friendly enterprise informatics solution that enables interactive and collaborative molecule design, aggregation and sharing of data, and end-to-end discovery project

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coordination between chemists, modelers, and biologists.

◦ LiveDesign is our user-friendly enterprise informatics solution that enables interactive and collaborative molecule design, aggregation and sharing of data, and end-to-end discovery project coordination between chemists, modelers, and biologists.

LiveDesign Biologics is our informatics solution for drug discovery teams designing biologics, which builds upon our LiveDesign offering.

LiveDesign is also complemented by our separate product LiveDesign Machine Learning, which provides a central hub to train and utilize machine learning methods in LiveDesign, including DeepAutoQSAR and RetroSynth.

In January 2026, we announced that Lilly TuneLab, a platform launched by Lilly will be made available in LiveDesign, allowing participating biotechnology companies to access TuneLab workflows.

◦ Maestro is our user-friendly modeling environment, which allows expert modelers to utilize our advanced modeling solutions.

Furthermore, in 2024, we launched our predictive toxicology initiative and have made the beta version available to customers, which encompasses approximately 50 representative kinases in addition to multiple key anti-targets.

We expect to launch our predictive toxicology solution commercially and make it available more broadly to our customers during 2026.

Our Software Solutions for Materials Science

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We also collaborate with a number of materials science companies to help accelerate the discovery and development of new materials.

For example, in 2022, we entered into a collaboration with Eonix LLC, or Eonix, to accelerate the discovery and design of materials for safer, energy dense lithium ion batteries.

Under the terms of this collaboration, we received an equity stake in Eonix, and will be eligible to receive additional equity upon the successful completion of certain technical milestones.

In 2023, we also entered into a research collaboration with Copernic Catalysts, Inc.

For example, in 2023, we entered into a research collaboration with Copernic Catalysts, Inc.

to help accelerate the discovery and development of sustainable catalysts for applications in e-fuels and bulk chemicals.

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The figure below illustrates the advantages in time, cost, and molecule quality of our computational drug design approach over traditional drug discovery approaches.

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Our collaboration agreements typically include upfront consideration, discovery, development, commercial and regulatory milestones, and royalties from future sales of commercialized products.

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We define an active collaborative drug discovery program as a program that we are actively progressing for, or together with, a collaborator of ours, or a program that our collaborator is progressing and which we are eligible to receive milestone payments, option fees, and/or future royalties.

Furthermore, as of December 31, 2024, we had an aggregate of 13 collaborative programs for which we were eligible to receive future royalties on commercial sales, if any, of collaborative programs that receive marketing approval compared to 12 programs as of December 31, 2023.

Furthermore, as of December 31, 2025, we had an aggregate of 16 collaborative programs for which we were eligible to

receive future royalties on commercial sales, if any, of collaborative programs that receive marketing approval compared to 13 programs as of December 31, 2024.

We track the aggregate number of collaborators which we have collaborated with, or partnered with, for drug discovery and development since 2018, and as of December 31, 2025, we have had 20 collaborators.

The number of collaborators is a cumulative number and we only include those collaborations from which we have derived revenue since the fiscal year ended December 31, 2018.

While our drug discovery revenue-generating collaborations are an important component of our business, our strategy is also to invest in our proprietary drug discovery programs including SGR-1505, SGR-2921 and SGR-3515, which we describe in more detail below under "—Our Proprietary Drug Discovery Business." We evaluate our proprietary drug discovery programs individually to determine the advisability of entering into preclinical and clinical development ourselves to co-develop them with leading industry partners, entering into collaborations, or out-licensing programs to optimize their development and clinical and commercial potential.

We intend to pursue additional proprietary drug discovery programs as our existing programs advance through discovery and development stages, internally or with partners, and we will continue to evaluate new collaborative programs that fit our selection criteria and where the collaborator’s particular expertise, resources or intellectual property has the potential to create substantial value.

While our drug discovery revenue-generating collaborations are an important component of our business, our strategy is also to advance new programs where we can leverage our computational platform to identify novel molecules.

We evaluate our proprietary drug discovery programs individually to determine the advisability of advancing them into and through preclinical development ourselves, entering into collaborations to co-develop them with leading industry partners, or out-licensing programs to maximize their development, clinical and commercial potential.

We also plan to continue to evaluate new collaborative programs that fit our selection criteria and where the collaborator’s particular expertise, resources or intellectual property has the potential to create substantial value.

We plan to explore strategic partnerships for the SGR-1505 and SGR-3515 programs to advance the development of these programs beyond our ongoing Phase 1 clinical trials.

Our Drug Discovery Collaborations

Over the last decade, leveraging our platform and expertise, we have steadily developed a portfolio of drug discovery collaborative programs.

We have entered into a number of collaborations with leading biopharmaceutical companies under which our collaborators are pursuing research in a number of therapeutics areas, including without limitation, various programs in oncology, antifungal diseases, fibrosis, inflammatory bowel disease, metabolic disease, autoimmune disease, immuno-oncology, cardiopulmonary disease and tuberculosis.

Many of these programs are pursuing novel molecules for targets where a low-dose small molecule inhibitor or activator with optimal drug-like properties has been difficult to achieve or where selectivity for the target of interest has been difficult to achieve relative to other proteins.

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Under our collaboration agreements, we agree to design drugs for a particular protein target or targets using our computational platform and know-how exclusively for the collaborator.

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Collaboration Agreements

Our current collaborators include, but are not limited to, Ajax Therapeutics, Inc., BMS, Bright Angel Therapeutics Inc., Eli Lilly and Company, or Lilly, Novartis, Otsuka Pharmaceutical Co., Ltd., or Otsuka, Sanofi S.A., and Structure Therapeutics Inc.

Our current collaborators include, but are not limited to, Ajax Therapeutics, Inc., BMS, Bright Angel Therapeutics Inc., Lilly, Novartis, Otsuka Pharmaceutical Co., Ltd., or Otsuka, Sanofi S.A., and Structure Therapeutics Inc.

(formerly ShouTi, Inc.).

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From time to time, we may also receive distributions on account of our equity stakes in our collaborators.

For example, in February 2023, Nimbus announced the closing of the acquisition by Takeda of Nimbus Lakshmi, Inc., a wholly-owned subsidiary of Nimbus, and its TYK2 program, which includes the TYK2 inhibitor, NDI-034858, which is being evaluated for the treatment of multiple immune-mediated diseases following positive results from the Phase 2b clinical trial in psoriasis.

For example, in February 2023, Nimbus Therapeutics, LLC, or Nimbus, announced the closing of the acquisition by Takeda of Nimbus Lakshmi, Inc., a wholly-owned subsidiary of Nimbus, and its TYK2 program, which includes the TYK2 inhibitor, NDI-034858, which is being evaluated for the treatment of multiple immune-mediated diseases following positive results from the Phase 2b clinical trial in psoriasis.

We received an aggregate of $147.2 million in cash distributions related to the Takeda acquisition in 2023.

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However, because these collaborations are not under our control, we cannot predict whether or when we might achieve any event-based increases in research funding payments, milestone payments, royalty or other payments under these collaborations or estimate the full amount of such payments, and we may never receive any such payments.

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further discussion of the risks we face with respect to receipt of any of these payments, please refer to "Risk Factors—Risks Related to Drug Discovery—We may never realize a return on our investment of resources and cash in our drug discovery collaborations".

For a further discussion of the risks we face with respect to receipt of any of these payments, please refer to "Risk Factors—Risks Related to Drug Discovery—We may never realize a return on our investment of resources and cash in our drug discovery collaborations".

How We Work with Our Collaborators.

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The collaborator retains the intellectual property related to any molecules developed under the collaboration.

Generally, our collaborators are not contractually required to provide us with, nor do we expect generally to receive, access to nonpublic information regarding key developments related to the advancement of these collaboration programs, such as clinical trial results, including safety and efficacy data, regulatory communications, or commercialization plans and strategies.

To the extent we do receive such information, our collaboration agreements generally require us to maintain the confidentiality of information we receive under the collaboration.

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Under the terms of the agreement, we received a $55.0 million upfront payment from BMS in November 2020, an additional upfront payment in December 2022, and a program fee in December 2024.

As of December 31, 2024, we are eligible to receive up to $482.0 million from BMS in total milestone payments for the one remaining neurology target currently subject to the collaboration.

As of December 31, 2025, we are eligible to receive from BMS up to $482.0 million in total milestone payments for the one neurology target currently subject to the collaboration.

As of December 31, 2025, we have recognized $32.0 million in revenue related to milestones under this agreement.

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No revenue had been recognized related to milestones under this agreement as of December 31, 2025.

We are also entitled to a tiered percentage royalty on annual net sales of each product commercialized by Novartis under the agreement ranging

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from mid single-digits to low double-digits, subject to certain specified reductions.

We are also entitled to a tiered percentage royalty on annual net sales of each product commercialized by Novartis under the agreement ranging from mid single-digits to low double-digits, subject to certain specified reductions.

See "—Collaboration Agreement with Novartis Pharma AG" for additional information relating to this agreement.

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Since then, we have expanded into other therapeutic areas, including immunology and neurology.

Our strategy is to pursue a number of proprietary programs and strategically evaluate on a program-by-program basis advancing them into preclinical and clinical development ourselves, entering into collaborations to co-develop them with leading industry partners, or out-licensing them to maximize their clinical and commercial opportunities.

Our strategy is to pursue a number of proprietary programs and strategically evaluate on a program-by-program basis advancing them into and through

preclinical development ourselves, entering into collaborations to co-develop them with leading industry partners, or out-licensing them to maximize their development, clinical and commercial potential.

The following is a summary of our proprietary drug discovery programs:

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• Identification of unsolved design challenges .

We determine whether there are property profile challenges that could be solved by the application of our computational platform and provide a clinically meaningful differentiated, novel, high value product opportunity.

We determine whether there are property profile challenges that could be solved by the application of our computational platform and provide a well-timed and clinically meaningful differentiated, novel, high value product opportunity.

• Assessment of potential value of pathways and mechanisms.

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We continue to evaluate a number of additional targets using this analysis.

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Our MALT1 Inhibitor

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Combining multi-parameter optimization, FEP+, and machine learning, we were able to prioritize tight-binding compounds with drug-like properties, and identified multiple novel and distinct chemical series which showed strong anti-tumor activity, ultimately enabling us to select SGR-1505 as our development candidate in under two years.

Preclinical Development of SGR-1505

As shown in the figures below, in preclinical studies, SGR-1505 showed anti-tumor activity in a MALT1 enzymatic assay and strong anti-proliferative effect on cell viability in a Bruton's tyrosine kinase, or BTK, inhibitor resistant OCI-LY3 B-cell non-Hodgkin’s lymphoma cell line, when compared to ibrutinib, a covalent BTK inhibitor.

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As shown in the figures below, in preclinical studies, SGR-1505 also demonstrated strong anti-tumor activities as a single agent in BTK inhibitor resistant OCI-LY3 cells and in BTK sensitive OCI-LY10 B-cell non-Hodgkin’s lymphoma in vivo cell-line derived xenograft (CDX) models.

TPGS = D-alpha-tocopheryl polyethylene glycol succinate, a solvent used in co-administration for drug dosing in animals;

TID = three times a day dosing;

SDD = spray dried dispersion;

SEM = scanning electron microscopy, a method used to measure cell volume

In addition, as shown in the figures below, SGR-1505 demonstrated strong anti-tumor activity in combination with ibrutinib in BTK inhibitor sensitive in viv o models, such as the ABC-DLBCL patient-derived xenograft (PDX) model LY2298 and the OCI-LY10 CDX model.

Beyond ABC-DLBCL disease models, as shown in the figures below, SGR-1505 also demonstrated single agent anti-tumor activity in an in vivo mantle cell lymphoma REC-1 CDX model.

SGR-1505 also showed strong combination effects with venetoclax (an inhibitor of the anti-apoptotic protein B-cell lymphoma 2 (BCL2)) on inhibition of cancer cell viability in the OCI-LY10 CDX model.

QD = once per day dosing;

BID = twice a day dosing

These data suggest that targeting MALT1 with SGR-1505 may expand therapeutic options for patients with selected B-cell lymphomas, such as ABC-DLBCL, with the possibility of expanding into other B-cell lymphomas such as mantle cell lymphoma.

In addition, SGR-1505, in combination with BTK inhibitors, demonstrated potential to overcome drug-induced resistance to BTK inhibitors in samples derived from patients with relapsed/refractory B-cell lymphomas.

In addition, in a series of biochemical and cell-based assays, we compared the potency of SGR-1505 against JNJ-6633, a MALT1 inhibitor advanced into Phase 1 clinical development by Johnson & Johnson, as measured by IC 50 and

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IC 90 values, which are measures of the potency of a compound in inhibiting specific biological functions.

As shown in the graphic below, SGR-1505 demonstrated better potency in all assays tested.

All competitor data is internally generated by contract research organizations, using commercially available tools or synthesized by third-party research chemists using publicly available structure information.

Clinical Development of SGR-1505

In August 2023, the FDA granted orphan drug designation to SGR-1505 for the potential treatment of mantle cell lymphoma.

In June 2025, the FDA granted fast track designation for SGR-1505 for the treatment of adult patients with Waldenström macroglobulinemia, or WM, that have failed at least two lines of therapy, including a Bruton’s tyrosine kinase, or BTK, inhibitor.

Furthermore, in October 2025, the FDA granted orphan drug designation to SGR-1505 for the potential treatment of WM.

We are exploring strategic opportunities to advance the clinical development of SGR-1505 beyond our ongoing Phase 1 clinical trial.

Phase 1 Clinical Trial of SGR-1505 in Patients with Relapsed or Refractory B-cell Malignancies

The FDA cleared our IND for SGR-1505 in June 2022.

We have initiated dosing in a Phase 1 clinical trial of SGR-1505, which is designed as an open-label, multi-center dose escalation clinical trial in patients with relapsed or refractory B-cell malignancies.

We are evaluating SGR-1505 in a Phase 1 clinical trial, which is designed as an open-label, multi-center dose escalation clinical trial in patients with relapsed or refractory B-cell malignancies.

We anticipate enrolling up to 98 patients in the United States and Europe with confirmed mature B-cell malignancies who are 18 years or older and have a life expectancy of equal to or greater than 12 weeks.

SGR-1505 will be administered orally.

The trial is designed to evaluate the safety, pharmacokinetics, pharmacodynamics, maximum tolerated dose and/or recommended dose of SGR-1505.

Exploratory cohorts will evaluate additional pharmacokinetics, pharmacodynamics, preliminary anti-tumor activity and safety to establish the recommended dose.

We anticipate reporting initial data from the trial in the second quarter of 2025.

In August 2023, the FDA granted orphan drug designation to SGR-1505 for the potential treatment of mantle cell lymphoma.

The trial is designed to evaluate the safety, pharmacokinetics, pharmacodynamics, maximum tolerated dose, maximum administered dose, and/or recommended dose of SGR-1505.

Backfill cohorts evaluate additional pharmacokinetics, pharmacodynamics, preliminary anti-tumor activity and safety to support the recommended dose.

In June 2025, we reported initial clinical data from our ongoing Phase 1 clinical trial of SGR-1505 in patients with relapsed or refractory B-cell malignancies.

As of May 13, 2025, the data cut-off date, 49 patients were enrolled and evaluable for safety.

Patients had a median of four (range two to nine) prior lines of therapy, with the most common being anti-CD20 antibodies (94%), BTK inhibitors (55%), B-cell lymphoma 2 protein, or BCL-2, inhibitors (18%), and BTK+BCL-2 inhibitors (18%).

Based on the initial data, SGR-1505 was observed to be generally well-tolerated with no dose-limiting toxicities or deaths due to treatment-emergent adverse events, or TEAEs.

Forty three percent of patients (n=21) experienced ≥ 1 any-grade treatment-related adverse event, or TRAE, with the most common (≥ 10%) being rash (12%) and fatigue (12%).

Ten patients (20%) experienced treatment-emergent serious adverse events, or SAEs;

one was treatment-related.

All blood bilirubin increased TEAEs were asymptomatic, reported in patients with UGT1A1 polymorphisms and none were Grade 4.

The below table shows the common (≥10%) TEAEs and TRAEs in the safety population (n=49), as of the data cut-off date of May 13, 2025:

Additionally, SGR-1505 demonstrated preliminary clinical activity, and responses were observed in multiple histologies, including in patients with chronic lymphocytic leukemia, or CLL, and WM.

The overall response rate across all dose levels and patients who had at least one follow-up disease assessment or disease progression was 22% (n=10/45), with the best overall response being partial response, or PR (n=4).

Two additional patients had PRs with lymphocytosis, or PR-L, one additional patient had an independently confirmed clinical PR-L that did not meet iwCLL PR criteria, and one additional patient with marginal zone lymphoma had a partial metabolic response.

In December 2025, we reported additional clinical data from our ongoing Phase 1 clinical trial of SGR-1505 at the American Society of Hematology Annual Meeting.

The additional data demonstrated that, consistent with prior observations, SGR-1505 was generally well tolerated at the doses evaluated.

As of October 1, 2025, the data cut-off date for the additional clinical data, a total of 61 patients were enrolled and evaluable for safety and 12 patients (20%) experienced treatment-emergent SAEs;

three were treatment-related.

Of the 61 patients, 52 patients had at least one follow-up disease assessment or disease progression, and the overall response rate across all doses was 25% (n=13/52), with the best overall response being an independently verified complete response in one patient with Activated B-cell, or ABC, a subtype of diffuse large B-cell lymphoma, or ABC-DLBCL.

All patients (n=7) with WM had an objective response, with the best response among such patients being a Very Good Partial Response..

Additionally, in December 2025, we reported further clinical data on eight patients with CLL/small lymphocytic lymphoma who have been previously treated with both a BTK inhibitor and a BCL-2 inhibitor, which we refer to as the “double-exposed” patients.

The below table shows the double-exposed patients, together with their mutational status and best overall response as of the data cut-off date of October 1, 2025:

In the eight “double-exposed” patients, two achieved independently verified PR-L, including one patient who received seven lines of prior therapy and carried the BCL2 resistance mutation D103Y.

Phase 1 Clinical Trial of SGR-1505 in Healthy Volunteers

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All bilirubin elevations reversed upon discontinuation of SGR-1505.

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As shown in the figure below, we observed greater than 90 percent inhibition of IL-2 secretion in an activated T cell whole blood assay in the cohort of healthy volunteers who received doses of SGR-1505 at 100 mg twice a day for 10 days (n=4), confirming target engagement and meeting the pharmacodynamic goals for the study.

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QD = once a day dosing, Q12H = twice a day dosing

The data from the healthy volunteer trial support continued evaluation of SGR-1505 in our ongoing Phase 1 clinical trial in patients with relapsed or refractory B-cell malignancies.

Our CDC7 Inhibitor

We are advancing SGR-2921, our novel CDC7 inhibitor, for the treatment of relapsed or refractory acute myeloid leukemia or high risk myelodysplastic syndrome.

CDC7 is a serine/threonine protein kinase that has been shown to play important roles in DNA replication initiation and in response to replication stress and DNA damage.

CDC7 levels are high in certain tumors, including acute myeloid leukemia, or AML, and are thought to be linked to these cancer cells’ proliferative capacity and ability to bypass normal DNA damage responses.

CDC7 phosphorylates and activates the enzymes responsible for DNA replication initiation and proteins involved in replication stress response.

Disruption of CDC7 activity in cancer cells leads to delayed DNA replication, increased replication stress, cell cycle abnormalities, and cell death.

The antiproliferative potential of CDC7 inhibition was validated by a third party in Phase 1 clinical trials of a CDC7 inhibitor in which responses were observed in patients, including those with duodenal, esophageal and cervical cancer.

Prior to this positive result, existing CDC7 inhibitors were not sufficiently tight-binding (as measured by their affinity for the target), lacked selectivity, and demonstrated poor pharmacokinetic properties.

In order to maximize the anti-cancer activities of CDC7 inhibitors, very tight-binding inhibitors are required to achieve durable clinical impact as monotherapy or in the context of clinical combinations.

Using our computational platform, we identified multiple tight-binding, selective, and novel CDC7 inhibitor series, and selected SGR-2921 as our development candidate.

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Preclinical Development of SGR-2921

As shown in Tables 1 and 2 below, SGR-2921 demonstrated inhibition of recombinant human CDC7 in a biochemical kinase assay and in a biophysical assay, as measured by the average IC 50 value, which is a measure of the potency of a compound in inhibiting specific biological functions.

Table 1 also shows that SGR-2921 demonstrated strong binding affinity to CDC7 with an average equilibrium dissociation constant, or KD, which is a measure of binding affinity between a protein and a binding partner, in the picomolar range.

Further, SGR-2921 showed inhibition of the phosphorylation of the serine in position 53, or S53, of the protein MCM2, or pMCM2, a downstream substrate of CDC7, in COLO205, a colorectal cancer cell line, and in two acute myeloid leukemia cell lines, MV-4-11 and MOLM-16.

Table 1 Average IC 50 of CDC7 Kinase Activity and Binding Affinity to CDC7 for SGR-2921

Average IC 50 [nM]

0.0277 ± 0.0054

Table 2 In Vitro Cell Based IC 50 Values of pMCM2 (S53) by SGR-2921

COLO205 [IC 50 (nM)]

MV-4-11 [IC 50 (nM)]

MOLM-16 [IC 50 (nM)]

SGR-2921 also showed anti proliferative activity in vitro in COLO205, MV-4-11 and MOLM-16 cell lines.

Table 3 summarizes the average IC 50 value from the individual assays.

Table 3 In Vitro Cell Based Viability IC 50 Values of SGR-2921

Cell line COLO205 [IC 50 (nM)]

MV-4-11 [IC 50 (nM)]

MOLM-16 [IC 50 (nM)]

Cell viability

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As shown in the figures below, SGR-2921 showed tumor growth inhibition resulting in tumor regression in the COLO205 colorectal cancer CDX model, which is a colorectal cancer cell line derived xenograft model, at doses that did not result in significant body weight loss.

SGR-2921 also showed a dose-dependent increase in plasma drug concentration and a dose-dependent decrease in intratumoral pMCM2 in the COLO205 CDX model.

In mouse models of AML, SGR-2921 also showed strong anti-tumor activity at doses that were tolerated.

SGR-2921 also showed strong anti-proliferative activity in leukemia cell samples derived from AML patients that varied with respect to mutational status of driver mutations in key genes that are hallmarks of clinical AML, including TP53, FLT3, IDH, or NPM, as well as whether the patient samples were derived from a patient naive to treatment or were relapsed or refractory following previous AML treatments.

We observed that the cell samples were generally sensitive to SGR-2921, as measured by their IC 50 values, and we observed that patient samples which contained TP53, or p53, mutations demonstrated particular sensitivity to SGR-2921.

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SGR-2921 showed potent anti-proliferative activity in AML patient-derived samples ex vivo independently of driver mutations, including in p53 mutated AML

Furthermore, as shown in the figures below, in preclinical models SGR-2921 showed single-agent activity and activity in combination with decitabine, which is a type of chemotherapy medication used for the treatment of myelodysplastic syndromes, in standard-of-care resistant models representing difficult-to-treat disease.

SGR-2921 combination treatment with decitabine in patient derived AML samples resulted in synergistic activity ex vivo, particularly in p53 mutant models

ZIP, or zero interaction potency, synergy score is a model used to capture the drug interaction relationships by comparing the change in the potency of the dose-response curves between individual drugs and their combinations

Clinical Development of SGR-2921

The FDA cleared our IND for SGR-2921 in July 2023.

We have initiated dosing in our Phase 1 clinical trial of SGR-2921, which is designed as an open-label, multi-center dose escalation clinical trial in patients with relapsed or refractory acute myeloid leukemia or high-risk myelodysplastic syndrome.

We anticipate enrolling up to 144 patients in the United States and Europe with a confirmed diagnosis of refractory acute myeloid leukemia or high-risk myelodysplastic syndrome who are 18 years or older and have a life expectancy equal to or greater than 8 weeks.

SGR-2921 will be administered orally.

To evaluate the effect of CYP3A4 inhibition on SGR-2921 exposure, patients will be enrolled into one of two staggered, parallel study treatment arms.

Treatment Arm A will evaluate increasing dose levels of SGR-2921.

Treatment Arm B will evaluate increasing dose levels of SGR-2921 with the concomitant administration of azole antifungals that are strong CYP3A4 inhibitors.

Safety and tolerability must be demonstrated in treatment Arm A, at the first two dose levels before initiating treatment Arm B.

Patients will be treated at increasing doses of SGR-2921 until all dose levels have been investigated or any dose level is found to exceed the maximum tolerated dose.

A recommended Phase 2 dose will be selected from one of the tolerable dose levels which will not exceed the maximum tolerated dose.

The trial is designed to evaluate the safety and tolerability of SGR-2921 as a monotherapy and to identify the recommended Phase 2 dose, including the maximum

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tolerated dose.

Secondary and exploratory objectives of the trial include evaluating the pharmacokinetics and pharmacodynamics of SGR-2921 and investigating preliminary anti-tumor activity.

We anticipate reporting initial data from the Phase 1 clinical trial of SGR-2921 in the second half of 2025.

In July 2024, the FDA granted Fast Track designation to SGR-2921 in patients with relapsed or refractory acute myeloid leukemia.

In addition, in January 2025, the FDA granted orphan drug designation to SGR-2921 in patients with relapsed or refractory acute myeloid leukemia.

The data from the healthy volunteer trial support the continued evaluation of SGR-1505 in our ongoing Phase 1 clinical trial in patients with relapsed or refractory B-cell malignancies.

Our Wee1/Myt1 Inhibitor

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Existing third party Wee1 inhibitors may have off-target effects resulting from inhibition of other kinases and proteins, some of which are liver enzymes responsible for elimination of drug and drug metabolites from the body, potentially making dosing and combinations more challenging.

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Preclinical Development of SGR-3515

As shown in the table below, in preclinical studies, we have benchmarked SGR-3515 against ZN-c3, a Wee1 inhibitor being advanced by Zentalis Pharmaceuticals, Inc., or Zentalis, and RP-6306, a PKMyt1 inhibitor being advanced by Repare Therapeutics, or Repare.

SGR-3515 demonstrated an improved selectivity profile against broad kinomes compared to ZN-c3 and RP-6306.

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K i was measured in kinase activity assay.

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As shown in the first figure below, in cell line derived xenograft models, SGR-3515 demonstrated superior in vivo anti-tumor activity related to single inhibition of Wee1 or My1 as compared to ZN-c3 and RP-6306.

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****P<0.001, ***P<0.005, **P<0.01

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As shown in the figures below, we observed that SGR-3515 sustained strong anti-tumor activity in vivo leading to full tumor regression at the 40 mpk and 60 mpk dose levels with an intermittent dosing schedule.

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Secondary and exploratory objectives of the trial include evaluating the pharmacokinetics and preliminary anti-tumor activity of SGR-3515.

We anticipate reporting initial data from the trial in the second half of 2025.

We anticipate reporting initial data from the trial in the second quarter of 2026.

We are exploring strategic opportunities to advance the clinical development of SGR-3515 beyond our ongoing Phase 1 clinical trial.

Other Proprietary Programs

We are also progressing a number of other programs in the areas of oncology, immunology, and neurology and a number of undisclosed programs in multiple therapeutic areas.

All of these programs are currently in the discovery stage, and we have not yet identified a development candidate for any of these programs, except for SGR-4174, our SOS1 inhibitor, as well as a development candidate for our EGFR C797S program, both of which are in preclinical development.

A number of these programs are discussed below.

SOS1 (SGR-4174).

We are also progressing a number of other programs in the areas of oncology, immunology, inflammation and neurology and a number of undisclosed programs in multiple therapeutic areas.

All of these programs are currently in the discovery stage or being progressed through IND-enabling studies.

A number of our early discovery programs are modality switch programs, which pursue a different therapeutic modality against an already clinically validated target or pathway.

We believe this strategy allows us to leverage existing target validation while exploring opportunities to enhance target engagement, selectivity, pharmacokinetics, or other product attributes.

Besides our clinical candidates, SGR-1505 and SGR-3515, we have identified several other development candidates for our programs:

SGR-4174, our SOS1 inhibitor, SGR-5573, our EGFR C797S inhibitor, and SGR-6016, our NLRP3 inhibitor.

SGR-4174, our SOS1 inhibitor.

SOS1 plays a critical role in cell signaling pathways and is involved in the activation and regulation of the KRAS gene.

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Previously, SGR-4174, a SOS1 inhibitor, was being advanced in collaboration with BMS, after which it was returned to us based on BMS' portfolio prioritization decisions.

Our current plan is to seek to advance this program through a collaboration.

SGR-5573, our EGFR C797S inhibitor.

EGFR inhibitors are first-line standard of care agents for advanced non-small cell lung cancer patients with activating EGFR mutations.

We have identified multiple EGFR C797S inhibitors with potential to treat patients whose disease progressed following first-line treatment, potentially achieving deeper, more durable responses through new combination regimens.

In February 2025, we announced that we have identified a development candidate for our EGFR C797S program.

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PRMT5-MTA inhibition has demonstrated clinical responses in both hematologic and solid tumors with improved safety versus PRMT5 inhibitors due to a synthetic lethal targeting of cancer cells with MTAP-deletions.

We have identified selective, potent PRMT5-MTA inhibitors with potential applications in solid tumors, brain metastases and primary CNS tumors.

NLRP3 is a validated target, and mutations in the NLRP3 gene are associated with a broad spectrum of inflammatory and auto-immune diseases.

We have identified structurally distinct, selective, NLRP3 inhibitors with anti-inflammatory activity in preclinical models, and we are continuing to optimize brain-penetrant lead molecules.

SGR-5573 is our potent, selective, brain-penetrant inhibitor of osimertinib-resistant EGFR variants.

LRRK2, a genetically validated target, is a large multifunctional kinase enzyme, and mutations in the LRRK2 gene have been shown to be associated with the development of Parkinson's disease.

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Fox Foundation for Parkinson's Research to investigate modes of safely inhibiting the LRRK2 protein for the treatment of Parkinson's disease.

With respect to SGR-5573, SGR-4174, and our LRRK2 program, our current plan is to seek to advance these programs through a collaboration or together with a partner.

SGR-6016, our NLRP3 inhibitor.

NLRP3 is a validated target, and mutations in the NLRP3 gene are associated with a broad spectrum of inflammatory, auto-immune and cardiometabolic diseases.

We have identified structurally distinct, selective, NLRP3 inhibitors with anti-inflammatory activity in preclinical models, and we are continuing to optimize brain-penetrant lead molecules.

SGR-6016 is our brain-penetrant NLRP3 inhibitor development candidate we are advancing for the treatment of neurodegenerative diseases.

Besides SGR-6016, we are also separately advancing peripheral NLRP3 inhibitors for the treatment of inflammation and cardiometabolic diseases.

We have identified a large number of protein targets that we believe are amenable to our computational platform, and now have a significant inventory of targets that we can potentially advance into discovery programs.

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We are actively pursuing strategic alliances with collaborators, as well as progressing internal initiatives, that enable us to generate high-quality protein structures for these targets, which will enable us to initiate additional discovery efforts.

Our initial programs were focused on discovering and developing inhibitors for targets in DNA damage response pathways and genetically defined cancers.

Genomic instability of malignant cells leads to genetic mutations that can drive resistance to kinase inhibitors, creating the need for second and third generation drugs targeting the same disease.

Our computational platform has been shown to be capable of predicting the impact that mutations in the kinase domain have on drug binding, potency, and drug sensitivity.

Use of our platform to assess and evaluate the impact of clinical mutations on drug potency can be a powerful tool for drug discovery.

We believe that deploying our platform at scale with access to genomic profiling data for patients puts us in a strong position to predict the impact of active-site resistance mutations with clinically relevant accuracy to optimize the design of molecules that are robust against common resistant mutations.

Technical Details of Our Key Technologies

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Therefore, the ability to predict the binding affinity of a drug molecule to a target protein with a high degree of accuracy can significantly accelerate discovery of new efficacious medicines.

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Accurately calculating the binding affinity of a drug molecule to a protein is enormously complex and requires a full characterization of all the physical contributions to the binding.

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As a result, our FEP+ solution can be used to explore very large numbers of molecules to identify drug candidates much more rapidly than would be possible solely using experimental approaches.

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In a peer-reviewed article published in collaboration with a large biopharmaceutical company, the ability of FEP+ to prioritize molecules for synthesis expected to bind more tightly than an initial hit was compared with several other industry-standard approaches.

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By further combining this functionality with our ability to enumerate large sets of molecules provided by PathFinder and our ability to build and manage complex workflows utilizing cloud resources, we are able to deploy these capabilities at scale to advance projects.

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Active Learning FEP+ is depicted in the figure below.

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We believe the principal competitive factors in our market include, among other things, accuracy of computations, level of customer satisfaction and functionality, ease of use, breadth and depth of solution and application functionality,

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brand awareness and reputation, modern and adaptive technology platform, integration, security, scalability and reliability of applications, total cost, ability to innovate and respond to customer needs rapidly, and ability to integrate with legacy enterprise infrastructures and third-party applications.

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Our software solutions face competition from competitors in the business of selling or providing simulation and modeling software to biopharmaceutical companies.

These competitors include BIOVIA, a brand of Dassault Systèmes SE, or BIOVIA, Chemical Computing Group (US) Inc., Cresset Biomolecular Discovery Limited, Cadence Design Systems, Inc., Optibrium Limited, Cyrus Biotechnology, Inc., Molsoft LLC, Insilico Medicine, Inc., Iktos, XtalPi Inc., AbCellera, Inductive Bio, Inc., Chemaxon, PerkinElmer, Inc., and Simulations Plus, Inc.

We also have competitors in materials science, such as BIOVIA and Materials Design, Inc., and in enterprise software for the life sciences, such as BIOVIA, Certara USA, Inc., Chemaxon, Revvity, Inc.

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We also face competition in finding and establishing clinical trial sites, enrolling subjects for clinical trials, accessing combination studies and recruiting credible principal investigators and advisors from key clinical disciplines and academic centers.

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For example, with respect to our MALT1 inhibitor, SGR-1505, which we are advancing for the treatment of patients with relapsed or refractory B-cell malignancies, we are aware of several MALT1 inhibitors in clinical development, including by AbbVie Inc., Ono Pharmaceutical Co., Ltd., HotSpot Therapeutics, and Recursion Pharmaceuticals, Inc.

and Recursion Pharmaceuticals, Inc.

In addition, we are also aware of other therapeutics, such as bi-specifics and CAR-Ts, both approved and in clinical development, for the treatment of B-cell lymphomas.

With respect to our CDC7 inhibitor, SGR-2921, which we are advancing for the treatment of relapsed or refractory acute myeloid leukemia or high-risk myelodysplastic syndrome, we are aware of several CDC7 inhibitors in Phase 1 clinical development, including by Chia Tai Tianqing Pharmaceutical Group Co., Ltd., Lin BioScience, Inc., and Cancer Research UK.

With respect to our Wee1/Myt1 inhibitor, SGR-3515, which we are advancing for the treatment of solid tumors, we are aware of several Wee1 inhibitors in clinical development, including by Zentalis, Debiopharm International SA, IMPACT Therapeutics, Inc., Shouyao Holdings Co.

Ltd., BioCity Biopharma, and Aprea Therapeutics, Inc., as well as a Myt1 inhibitor in clinical development being advanced by Repare.

Ltd., BioCity Biopharma, and Aprea Therapeutics, Inc., as well as a Myt1 inhibitor in clinical development being advanced by Debiopharm.

Furthermore, we are also aware of a Wee1/Myt1 inhibitor in preclinical development being advanced by Acrivon Therapeutics, Inc.

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We are also entitled to a tiered percentage royalty ranging from mid-single-digits

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to low double-digits on products commercialized by Novartis under the agreement, subject to certain specified reductions.

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(1) with respect to each Licensed Product that incorporates any Licensed Software identified in the Master License Agreement as of the Effective Date, twenty years after the Effective Date or (2) with respect to each Licensed Product that incorporates any Licensed Software added to the Master License Agreement after the Effective Date, twenty years after such addition, each, a Royalty Term.

In addition, if we incorporate specified Licensed Software improvements into a Licensed Product, then the Royalty Term for such Licensed Product will be extended for an additional

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ten years per incorporated improvement.

If we or our affiliates receive consideration for specified services provided using Licensed Products in the form of equity securities, or Services Project Securities, then (1) if and when such securities may be transferred to Columbia University under applicable state and federal securities laws, we have agreed to transfer, assign or otherwise cause to be delivered to Columbia University a number of such Services Project Securities equal to the applicable royalty rate multiplied by the total number of Services Project Securities, or the Columbia Securities, and (2) until such time as the Columbia Securities are transferred, assigned or delivered to Columbia University, at the time we receive cash consideration as a result of owning Services Project Securities, whether on account of a dividend, distribution, sale or otherwise, we have agreed to pay Columbia University a portion of such proceeds that is equal to the applicable royalty rate multiplied by such amount received in cash.

In addition, if we incorporate specified Licensed Software improvements into a Licensed Product, then the Royalty Term for such Licensed Product will be extended for an additional ten years per incorporated improvement.

If we or our affiliates receive consideration for specified services provided using

Licensed Products in the form of equity securities, or Services Project Securities, then (1) if and when such securities may be transferred to Columbia University under applicable state and federal securities laws, we have agreed to transfer, assign or otherwise cause to be delivered to Columbia University a number of such Services Project Securities equal to the applicable royalty rate multiplied by the total number of Services Project Securities, or the Columbia Securities, and (2) until such time as the Columbia Securities are transferred, assigned or delivered to Columbia University, at the time we receive cash consideration as a result of owning Services Project Securities, whether on account of a dividend, distribution, sale or otherwise, we have agreed to pay Columbia University a portion of such proceeds that is equal to the applicable royalty rate multiplied by such amount received in cash.

Under the Master License Agreement, we have agreed to indemnify Columbia University for losses incurred in any third-party action arising out of the exercise of any rights granted to us under the Master License Agreement or as a result of any breach of the Master License Agreement by us.

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The technology licensed under the 1994 Columbia Agreement is incorporated into our Jaguar quantum mechanical program, which we market and distribute as part of our physics-based computational platform.

The 1994 Columbia Agreement grants us a worldwide, exclusive, license to the software code developed by Columbia University and incorporated into the electronic structure software program PS-

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GVB v1.0, or the PS-GVB Code, and all improvement to the PS-GVB v1.0 software program and PS-GVB Code developed by Columbia University, or the PS-GVB Improvements, including all PS-GVB Code and PS-GVB Improvements that are incorporated into any new products, new releases, and new versions related to the software, or the New PS-GVB Module Code, in each case, to reproduce, use, execute, copy, operate, sublicense, and distribute in connection with the marketing and sale of our products and services, to develop improvements thereto, and to conduct research and backup disaster recovery.

The 1994 Columbia Agreement grants us a worldwide, exclusive, license to the software code developed by Columbia University and incorporated into the electronic structure software program PS-GVB v1.0, or the PS-GVB Code, and all improvement to the PS-GVB v1.0 software program and PS-GVB Code

developed by Columbia University, or the PS-GVB Improvements, including all PS-GVB Code and PS-GVB Improvements that are incorporated into any new products, new releases, and new versions related to the software, or the New PS-GVB Module Code, in each case, to reproduce, use, execute, copy, operate, sublicense, and distribute in connection with the marketing and sale of our products and services, to develop improvements thereto, and to conduct research and backup disaster recovery.

We may only sublicense the PS-GVB Code, the PS-GVB Improvements, and the New PS-GVB Module Code, or the Licensed PS-GVB Software, to the extent they are incorporated into a product that is sold directly by us or that is distributed on our behalf.

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In September 2001, we entered into a license agreement, or the 2001 Columbia Agreement, with Columbia University, which was amended on September 9, 2004 and November 1, 2008.

The technology licensed under the 2001 Columbia Agreement is incorporated into our Prime protein modelling program, which we market and distribute as part of

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our physics-based computational platform.

The 2001 Columbia Agreement grants us a worldwide, exclusive license to the protein folding code developed by Columbia University, or the Folding Code;

The technology licensed under the 2001 Columbia Agreement is incorporated into our Prime protein modelling program, which we market and distribute as part of our physics-based computational platform.

The 2001 Columbia Agreement grants us a worldwide, exclusive license to the

protein folding code developed by Columbia University, or the Folding Code;

all improvements to the Folding Code and to any of our products, software, or code that incorporates any part of the Folding Code, including any improvements thereto and new versions or new releases thereof, that are developed by Columbia University, or the Folding Code Improvements;

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Our obligation to pay any royalty under the 2003 Columbia Agreement, including any royalty paid pursuant to the Royalty Amendment, expired pursuant to its terms on June 19, 2023.

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Columbia University is responsible for the copyright registration of the PLOP Code and PLOP Improvements.

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Upon termination, any third party that has licensed a Water Site Product from us will retain the right to use such

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product, subject to the terms of their existing license agreement with us, and we will have the right to continue to provide support to any such third parties for the duration of their license agreement.

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As of January 20, 2026, we owned or held exclusive license rights to approximately 40 patents and patent applications, including approximately 14 issued or allowed U.S.

cases, five pending U.S.

patents, five pending U.S.

non-provisional patent applications, 17 issued or allowed non-U.S.

cases, including nine granted European patents which have been validated among multiple individual European Patent Convention nations, eight non-European patents, and two pending foreign patent applications relating to our computational platform.

patents, including nine granted European patents which have been validated among multiple individual European Patent Convention nations, eight non-European patents, and two pending foreign patent applications relating to our computational platform.

While we believe that the specific and generic claims contained in our wholly-owned and licensed pending U.S.

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Any patents that are issued or that may issue from these families are expected to expire between 2026 and 2038, absent any adjustments or extensions.

As of January 24, 2025, there were approximately 10 published patent families related to our proprietary drug discovery business, and several of our drug discovery collaborators have filed patent applications related to our collaborations that include employees of ours as inventors, including over 100 compound patents and patent applications since 2010.

As of January 20, 2026, there were approximately 10 published patent families related to our proprietary drug discovery business, and several of our drug discovery collaborators have filed patent applications related to our collaborations that include employees of ours as inventors.

We do not own any intellectual property rights related to these inventions.

As of January 24, 2025, we wholly-

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owned approximately 12 pending U.S.

As of January 20, 2026, we wholly-owned approximately 15 pending U.S.

patent applications, including U.S.

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We have sales operations in the United States, Europe, Japan, India, and South Korea and we also have established distribution channels in other important markets, including China.

These efforts are led by our approximately 240-person global team of sales, technical, and scientific personnel.

These efforts are led by our global team of sales, technical, and scientific personnel.

Our marketing strategy leverages our strong base of scientific publications to support the continued growth of our computational platform into computational chemistry markets across industries and academia worldwide.

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Drug Discovery Business

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We expect to utilize a variety of types of collaboration, distribution, and other arrangements with one or more of these third parties to develop and ultimately commercialize our development candidates.

Over time, we may also create a commercial organization for drug product sales if and as we advance the development of any product candidates that we determine to commercialize ourselves.

Manufacturing

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• satisfactory completion of an FDA inspection of the manufacturing facility or facilities, including those of third parties, at which the product candidate or components thereof are manufactured to assess compliance

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with current good manufacturing practices, or cGMP, requirements and to assure that the facilities, methods, and controls are adequate to preserve the product’s identity, strength, quality, and purity;

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• approval of an NDA for the new drug product authorizing marketing of the new drug product for particular indications in the United States;

• compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct any post- approval studies required by the FDA.

• compliance with any approval or post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct any post- approval studies required by the FDA.

Preclinical Studies

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While animal testing may still be conducted, the FDA was authorized to rely on alternative non-clinical tests, including cell-based assays, microphysiological systems or bioprinted or computer models.

In April 2025, the FDA released a roadmap to replace animal testing in preclinical safety studies with scientifically validated new approach methodologies, such as organ-on-a-chip systems, computational modeling, and advanced in vitro assays.

The IND and IRB Processes

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Clinical holds are imposed by the FDA whenever there is concern for patient safety and may be a result of new data, findings, or developments in clinical, nonclinical, and/or chemistry, manufacturing, and controls.

A clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical trial or to suspend an ongoing investigation.

clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical trial or to suspend an ongoing investigation.

A partial clinical hold is a delay or suspension of only part of the clinical work requested under the IND.

For example, a specific protocol or part of a protocol may not be allowed to proceed, while other protocols may be allowed.

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more than 30 days after imposition of a clinical hold or partial clinical hold, the FDA will provide the sponsor a written explanation of the basis for the hold.

No more than 30 days after imposition of a clinical hold or partial clinical hold, the FDA will provide the sponsor a written explanation of the basis for the hold.

Following issuance of a clinical hold or partial clinical hold, a clinical trial may only resume after the FDA has so notified the sponsor of its decision to lift the hold.

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or 15 days after the investigational product receives designation from the FDA as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy.

In October 2025, the FDA issued final guidance further clarifying the statutory and regulatory requirements governing expanded access.

In addition, the Right to Try Act, among other things, provides a federal framework for certain patients to access certain investigational products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval.

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There is no obligation for a manufacturer to make its investigational products available to eligible patients as a result of the Right to Try Act.

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Human Clinical Trials in Support of an NDA

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Specifically, action plans must include the sponsor’s goals for enrollment, the underlying rationale for those goals, and an explanation of how the sponsor intends to meet them.

In addition to these requirements, the legislation directs the FDA to issue new guidance on diversity action plans.

In June 2024, the FDA issued draft guidance outlining the general requirements for diversity action plans.

Unlike most guidance documents issued by the FDA, the diversity action plan guidance, when finalized, will have the force of the law because FDORA specifically dictates that the form and manner for submission of diversity action plans are specified in FDA guidance.

Unlike most guidance documents issued by the FDA, the diversity action plan guidance, when finalized, will have the force of the law.

In January 2025, in response to an executive order issued by President Trump on Diversity, Equity and Inclusion programs, the FDA removed this draft guidance from its website.

The implications of this action are not yet known.

In June 2023, the FDA issued draft guidance with updated recommendations for GCPs aimed at modernizing the design and conduct of clinical trials.

That action, along with similar actions by the Trump administration to remove many other healthcare webpages, is currently the subject of ongoing litigation.

In July 2025, the U.S.

District Court for the District of Columbia ruled that the Trump administration’s actions to remove these webpages, including the draft diversity action plan guidance, are unlawful under the Administrative Procedure Act.

The court ordered the restoration of many of these webpages.

In late July 2025, the FDA restored the draft diversity action plan guidance to its website with a statement that information on the webpage may be modified and/or removed in the future subject to the terms of the court’s order and implemented in accordance with applicable law.

Accordingly, there is considerable uncertainty surrounding the draft guidance and how the FDA will consider diversity action plans in connection with its review of marketing applications.

In September 2025, the FDA issued final guidance with updated recommendations for GCPs aimed at modernizing the design and conduct of clinical trials.

The updates are intended to help pave the way for more efficient clinical trials to facilitate the development of medical products.

The draft guidance is adopted from the International Council for Harmonisation’s recently updated E6(R3) draft guideline that was developed to enable the incorporation of rapidly

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developing technological and methodological innovations into the clinical trial enterprise.

In addition, the FDA issued draft guidance outlining recommendations for the implementation of decentralized clinical trials.

The final guidance is adopted from the International Council for Harmonisation’s recently updated E6(R3) draft guideline that was developed to enable the incorporation of rapidly developing technological and methodological innovations into the clinical trial enterprise.

In October 2025, the FDA issued final guidance that focuses on patient-focused drug development.

The guidance outlines how stakeholders, such as patients, caregivers, researchers and medical product developers, can submit patient experience data in support of the development and approval of drug products.

To that end, the guidance provides an overview of clinical outcome assessments in clinical trials, and the role that clinical outcome assessments may play in in evaluating the clinical benefit of a medical product.

In some cases, the FDA may approve an NDA for a product candidate but require the sponsor to conduct additional clinical trials to further assess the product candidate’s safety and effectiveness after approval.

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and any clinically important increase in the case of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.

Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified

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period, or at all.

Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all.

The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.

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The responsible party is allowed 30 days to correct the noncompliance and submit the required information.

As of December 19, 2024, the FDA has issued six notices of non-compliance, signaling its willingness to enforce the reporting requirements.

As of December 30, 2025, the FDA has issued eight notices of non-compliance, signaling its willingness to enforce the reporting requirements.

While these notices of non-compliance did not result in civil monetary penalties, the failure to submit clinical trial information to clinicaltrials.gov, as required, is a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for each day the violation continues.

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The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other things, must develop methods for testing the identity, strength, quality, purity, and potency of the final drug.

Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life.

Additionally, appropriate packaging

must be selected and tested and stability studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life.

The FDA’s regulations require that pharmaceutical products be manufactured in approved facilities and in accordance with cGMPs.

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Manufacturers and other entities involved in the manufacture and distribution of approved pharmaceuticals are subject to periodic unannounced inspections by the FDA for compliance with cGMPs and other requirements.

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PREVENT Pandemics Act, which was enacted in December 2022, clarifies that foreign drug manufacturing establishments are subject to registration and listing requirements even if a drug or biologic undergoes further manufacture, preparation, propagation, compounding, or processing at a separate establishment outside the United States prior to being imported or offered for import into the United States.

The PREVENT Pandemics Act, which was enacted in December 2022, clarifies that foreign drug manufacturing establishments are subject to registration and listing requirements even if a drug or biologic undergoes further manufacture, preparation, propagation, compounding, or processing at a separate establishment outside the United States prior to being imported or offered for import into the United States.

Manufacturers and others involved in the manufacture and distribution of products must also register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP regulations.

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A deferral may be granted for several reasons, including a finding that the product or therapeutic candidate is ready for approval for use in adults before pediatric trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric trials begin.

Pursuant to the Food and Drug Administration Safety and Innovation Act of 2012, or FDASIA, the FDA must send a PREA Non-Compliance letter to sponsors who have failed to submit their pediatric assessments required under PREA, have failed to seek or obtain a deferral or deferral extension or have failed to request approval for a required pediatric formulation.

Pursuant to the Food and Drug Administration Safety and Innovation Act of 2012, or FDASIA, the FDA must send a PREA Non-Compliance letter to sponsors who have failed to submit their

pediatric assessments required under PREA, have failed to seek or obtain a deferral or deferral extension or have failed to request approval for a required pediatric formulation.

FDASIA further requires the FDA to publicly post the PREA Non-Compliance letter and sponsor’s response.

Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although the FDA has recently taken steps to limit what it considers abuse of this statutory exemption in the PREA by announcing that it does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease.

Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although the FDA has taken steps to limit what it considers abuse of this statutory exemption in the PREA by announcing that it does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease.

The FDA also maintains a list of diseases that are exempt from PREA requirements due to low prevalence of disease in the pediatric population.

In May 2023, the FDA issued new draft guidance that further describes the pediatric study requirements under the PREA.

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Expedited Review Programs

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require a sponsor to have its confirmatory clinical trial underway before accelerated approval is awarded, require a sponsor of a product granted accelerated approval to submit progress reports on its post-approval studies to FDA every six months until the study is completed;

and use expedited procedures to withdraw accelerated approval of an NDA or BLA if certain conditions are not met, including where a confirmatory trial fails to verify the product’s clinical benefit or where evidence demonstrates the product is not shown to be safe or effective under the conditions of use.

effective under the conditions of use.

The FDA may also use such procedures to withdraw an accelerated approval if a sponsor fails to conduct any required post-approval trial of the product with due diligence, including with respect to “conditions specified by the Secretary.” The new procedures include the provision of due notice and an explanation for a proposed withdrawal, and opportunities for a meeting with the FDA Commissioner or the Commissioner’s designee and a written appeal, among other things.

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Although single-arm trials have been commonly used to support accelerated approval, a randomized controlled trial is the preferred approach as it provides a more robust efficacy and safety assessment and allows for direct comparisons to an available therapy.

To that end, the FDA outlined considerations for designing, conducting, and analyzing data for trials intended to

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support accelerated approvals of oncology therapeutics.

To that end, the FDA outlined considerations for designing, conducting, and analyzing data for trials intended to support accelerated approvals of oncology therapeutics.

Subsequently, in December 2024 and January 2025, the FDA issued additional draft guidance relating to accelerated approval.

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The benefits of a regenerative advanced therapy designation include early interactions with the FDA to expedite development and review, benefits available to breakthrough therapies, potential eligibility for priority review and accelerated approval based on surrogate or intermediate endpoints.

Even if a product candidate qualifies for one or more of these designations or programs, there is no guarantee it would result in approval of our marketing applications or that such approval, if granted, would be on an expedited basis.

Filing and Review of an NDA

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The FDA may request additional information rather than accept the application for filing and, the application may be resubmitted with the additional information.

The resubmitted application is also subject to review before the FDA accepts it for filing.

The resubmitted application is also subject to review

before the FDA accepts it for filing.

In October 2025, the FDA issued internal guidance clarifying that “materially incomplete or inadequately organized” applications that would not permit timely, efficient and complete review will be the subject of a Refusal to File determination.

The internal guidance also provides that the agency will issue a Refusal to File determination for an application that relies on a single adequate and well-controlled investigation to support approval if prior communications with the FDA determined the need for more than one clinical study and any justification for a single investigation is inadequate.

Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

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The FDA seeks to meet these timelines for review of an application but its ability to do so may be affected by a variety of factors, including government budget and funding levels, the ability to hire and retain key personnel and statutory, regulatory and policy changes.

Average review times at the FDA have fluctuated in recent years as

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Average review times at the FDA have fluctuated in recent years as a result.

For example, during the past decade, the U.S.

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The FDA may also refer an application for a novel product to an advisory committee or explain why such referral was not made.

Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that review, evaluate and provide a recommendation as to whether the application should be approved and under what conditions.

Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific

experts, that review, evaluate and provide a recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but the FDA considers such recommendations carefully when making decisions.

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The CRL may require additional clinical or other data, additional pivotal Phase 3 clinical trials and/or other significant and time-consuming requirements related to clinical trials, preclinical studies or manufacturing.

If a CRL is issued, the sponsor will have one year to respond to the deficiencies

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identified by the FDA, at which time the FDA can deem the application withdrawn or, in its discretion, grant the sponsor an additional six-month extension to respond.

If a CRL is issued, the sponsor will have one year to respond to the deficiencies identified by the FDA, at which time the FDA can deem the application withdrawn or, in its discretion, grant the sponsor an additional six-month extension to respond.

For those seeking to challenge FDA’s CRL decision, the FDA has indicated that sponsors may request a formal hearing on the CRL or they may file a request for reconsideration or a request for a formal dispute resolution.

While CRLs were previously treated by the FDA as confidential and were only disclosed in action packages for approved products, the FDA announced in September 2025 that it will now release CRLs promptly after they are issued to sponsors.

Since that announcement, the FDA has posted a number of complete response letters on its website.

If the FDA approves a new product, it may limit the approved indications for use of the product, require that contraindications, warnings, or precautions be included in the product labeling, or require that post-approval studies, including post-marketing clinical trials, be conducted to further assess the drug’s safety after approval.

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However, FDA regulations impose rigorous restrictions on manufacturers’ communications, prohibiting the promotion of off-label uses.

For example, in September 2025, President Trump issued a Memorandum directing HHS to ensure transparency and accuracy in direct-to-consumer prescription drug advertising, including by increasing the amount of information regarding any risks associated with the use of any such prescription drug required to be provided in prescription drug advertisements.

To that end, the FDA announced that it is initiating a rulemaking process “to eliminate the ‘adequate provision’ loophole that allows pharmaceutical advertisements to hide safety information by placing it in another format or location.” In this context, the FDA declared that it will no longer tolerate what it characterized as “deceptive practices” in prescription drug advertising and that it would “aggressively deploy” its available enforcement tools, with “heightened scrutiny” of fair balance and disclosures in social media promotions.

The FDA also issued a generic notice letter directing companies to remove any noncompliant advertising and bring all promotional communications into compliance.

In September 2021, the FDA published final regulations which describe the types of evidence that the FDA will consider in determining the intended use of a drug product.

Moreover, with passage of the Pre-Approval Information Exchange Act in December 2022, sponsors of products that have not been approved may proactively communicate to

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payors certain information about products in development to help expedite patient access upon product approval.

Moreover, with passage of the Pre-Approval Information Exchange Act in December 2022, sponsors of products that have not been approved may proactively communicate to payors certain information about products in development to help expedite patient access upon product approval.

In addition, in January 2025, the FDA published final guidance outlining its policies governing the distribution of scientific information to healthcare providers about unapproved uses of approved products.

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The PDMA, its implementing regulations and state laws limit the distribution of prescription pharmaceutical product samples, and the DSCSA imposes requirements to ensure accountability in distribution and to identify and remove counterfeit and other illegitimate products from the market.

Manufacturers were required by November 2023 to have such systems and processes in place to comply with the DSCSA, but, so as not to disrupt supply chains, the FDA has granted certain exemptions from enhanced drug distribution security requirements for eligible trading partners for particular periods of time.

Manufacturers were required by November 2023 to have such systems and processes in place to comply with the DSCSA, but, so as not to

disrupt supply chains, the FDA has granted certain exemptions from enhanced drug distribution security requirements for eligible trading partners for particular periods of time.

For wholesale drug distributors, the final DSCSA deadline was August 27, 2025, marking the date for mandatory transition to a fully electronic, interoperable system for tracking prescription drugs at the package level throughout the United States.

Orphan Drug Designation and Exclusivity

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If a product designated as an orphan drug ultimately receives marketing approval for an indication broader than what was designated in its orphan drug application, it may not be entitled to exclusivity.

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The period of exclusivity begins on the date that the marketing application is approved by the FDA and applies only to the indication for which the product has been designated.

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Under Omnibus legislation signed by President Trump on December 27, 2020, the requirement for a product to show clinical superiority applies to drugs and biologics that received orphan drug designation before enactment of the FDA Reauthorization Act of 2017, but have not yet been approved or licensed by the FDA.

In September 2021, the Court of Appeals for the 11th Circuit held that, for the purpose of determining the scope of exclusivity, the term "same disease or condition" in the statute means the designated "rare disease or condition" and could not be interpreted by the FDA to mean the "indication or use." Thus, the court concluded, orphan drug exclusivity applies to the entire designated disease or condition rather than the "indication or use." Although there have been legislative proposals to overrule this decision, they have not been enacted into law.

In January 2023, the FDA announced that, in matters beyond the scope of that court order, the FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which the orphan drug was approved.

The FDA and Congress may further reevaluate the Orphan Drug Act and its regulations and policies.

In February 2025, in a case challenging the scope of orphan drug exclusivity, a federal district court in Washington, D.C.

fully embraced the reasoning of a prior decision from the Court of Appeals for the 11th Circuit holding that the term “same disease or condition” in the statute means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use.” In April 2025, the FDA appealed this decision to the U.S.

Court of Appeals for the D.C.

The implications of this decision, and its impact on the FDA’s implementation of the Orphan Drug Act, are unclear at this point.

Section 505(b)(2) NDAs

NDAs for most new drug products are based on two full clinical studies which must contain substantial evidence of the safety and efficacy of the proposed new product.

These applications are submitted under Section 505(b)(1) of the FDCA.

These applications are submitted under Section 505(b)(1) of the

The FDA is, however, authorized to approve an alternative type of NDA under Section 505(b)(2) of the FDCA.

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An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance.

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cases where such NCE exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the sponsor may submit its application four years following the original product approval.

In cases where such NCE exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the sponsor may submit its application four years following the original product approval.

The FDCA also provides for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted by or for the sponsor and are essential to the approval of the application.

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A patent claiming a new drug product may be eligible for a limited patent term extension under the Hatch- Waxman Act, which permits a patent restoration of up to five years for patent term lost during the FDA regulatory review.

The restoration period granted on a patent covering a product is typically one-half the time between the effective date of the IND and the submission date of an application, plus the time between the submission date of an application and the ultimate approval date.

The restoration period granted on a patent covering a product is typically one-half the time between the effective date of the

IND and the submission date of an application, plus the time between the submission date of an application and the ultimate approval date.

Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date.

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• federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs;

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• federal Open Payments (or federal "sunshine" law), which requires pharmaceutical and medical device companies to monitor and report certain financial interactions with certain healthcare providers to the Center for Medicare & Medicaid Services, or CMS, within the U.S.

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In addition to California, a number of other states have passed comprehensive privacy laws similar to the CCPA and CPRA.

These laws are either in effect or will go into effect sometime before the end of 2026.

Like the CCPA and CPRA, these laws create obligations related to the processing of personal information, as well as special obligations for the processing of “sensitive” data, which includes health data in some cases.

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For example, the State of Washington passed the My Health My Data Act in 2023 which specifically regulated health information that is not otherwise regulated by the HIPAA rules, and the law also has a private right of action, which further increases the relevant compliance risk.

Connecticut and Nevada have also passed similar laws regulating consumer health data, and more states are considering such legislation in 2025.

These laws may impact our

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business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our product candidates, if approved.

Some states have also passed similar laws regulating consumer health data, and more states are considering such legislation.

These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our product candidates, if approved.

Plaintiffs’ lawyers are also increasingly using privacy-related statutes at both the state and federal level to bring lawsuits against companies for their data-related practices.

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We may be subject to fines and other penalties if we fail to report such prices accurately.

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Outside the United States, ensuring adequate coverage and payment for any product candidates we may develop will face challenges.

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With issuance of this rule, CMS stated that it will explore all options to incorporate value into payments for Medicare Part B pharmaceuticals and improve beneficiaries' access to evidence-based care.

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In addition, in October 2020, HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program to import certain prescription drugs from Canada into the United States.

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It originally was set to go into effect on January 1, 2022, but with passage of the Inflation Reduction Act of 2022, or IRA, has been delayed by Congress to January 1, 2032.

The IRA has implications for Medicare Part D, which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option of paying a monthly premium for outpatient prescription drug coverage.

prescription drug coverage.

Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;

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CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond.

This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13 years, but it does not apply to drugs and biologics that have been approved for a single rare disease or condition.

This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13 years.

Drugs and biologics that have been approved for a single rare disease or condition were originally categorically excluded from price negotiation.

With passage of the One Big Beautiful Bill Act in July 2025, Congress extended this exemption to drugs and biologics with multiple orphan drug designations.

In August 2024, the HHS published the results of the first Medicare drug price negotiations for ten selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis.

The prices of these ten drugs will become effective January 1, 2026.

The prices of these ten drugs became effective January 1, 2026.

On January 17, 2025, CMS announced its selection of 15 additional drugs covered by Part D for the second cycle of negotiations.

Following the change in administrations, CMS issued a public statement on January 29, 2025, declaring that lowering the cost of prescription drugs is a top priority of the new administration and CMS is committed to considering opportunities to bring greater transparency in the negotiation program.

The second cycle of negotiations with participating drug companies will occur during 2025, and any negotiated prices for this second set of drugs will be effective starting January 1, 2027.

The second cycle of negotiations with participating drug companies occurred during 2025, and any negotiated prices for this second set of drugs will be effective starting January 1, 2027.

Further, the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated "maximum fair price" under the law or for taking price increases that exceed inflation.

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The new law also caps Medicare out-of-pocket drug costs at an estimated $2,000 beginning in 2025.

The IRA includes a provision exempting orphan drugs from Medicare price negotiation but this exclusion has been interpreted by CMS in final guidance issued in July 2023 to apply only to those orphan drugs with an approved indication (or indications) for a single rare disease or condition.

The final guidance clarifies that CMS will consider only active designations/approvals when evaluating a drug for the exclusion, such that designations/indications withdrawn before the selected drug publication date will not be considered.

CMS also clarified that, if a drug loses its orphan drug exclusion status, the agency will use the earliest date of approval/licensure to determine whether the product is a qualifying single source drug subject to price negotiations.

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In June 2023, Merck filed a lawsuit against HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution.

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HHS has generally won the substantive disputes in these cases, and various federal district court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical industry.

Certain of these cases are now on appeal, and, on October 30, 2024, the Court of Appeals for the Third Circuit heard oral argument in these cases.

In October 2024, the Court of Appeals for the Third Circuit heard oral argument in three of these cases, and in April 2025, the U.S.

Court of Appeals for the Second Circuit and the U.S.

Court of Appeals for the Third Circuit heard arguments in an additional three cases.

In May 2025, the U.S.

Court of Appeals for the Third Circuit rejected a challenge to the Medicare price negotiation program, finding that the program did not violate the company’s due process rights under the Constitution since there is no protected property interest in selling goods to Medicare beneficiaries at a price higher than what the government is willing to pay in reimbursement.

Litigation involving these and other provisions of the IRA will continue with unpredictable and uncertain results.

In April 2025, President Trump issued an executive order which directs HHS to take steps to reduce the prices of pharmaceutical products.

The executive order repeats many of the proposals advanced during the first Trump Administration, including directing the FDA to streamline and improve its existing drug importation program so as to make it easier for states to obtain approval without sacrificing the safety or quality of drug products.

Other provisions of the executive order relate to the 340B drug discount program.

Specifically, one provision calls on the Secretary of HHS to determine the hospital acquisition cost for covered outpatient drugs at hospital outpatient departments and to consider and propose any appropriate adjustments for Medicare payment.

With respect to the IRA’s Medicare drug pricing program, the executive order, among other things, calls for alignment in “the treatment of small molecule prescription drugs with that of biological products, ending the distortion that undermines relative investment in small molecule prescription drugs, coupled with other reforms to prevent any increase in overall costs to Medicare and its beneficiaries.”

Further, in May 2025, President Trump issued an additional executive order calling on pharmaceutical manufacturers to voluntarily reduce the prices of medicines in the United States.

The executive order directs the Secretary of HHS to communicate most-favored-nation, or MFN, price targets to pharmaceutical manufacturers to bring prices in line with comparably developed nations.

The executive order further provides that if such actions do not lower the costs of pharmaceuticals, the Secretary of HHS would pursue other actions, including proposing a rulemaking that imposes MFN pricing in the United States.

Subsequently, HHS indicated that the proposed MFN pricing will apply only to brand products without generic or biosimilar competition and the referenced foreign countries will include only those in which the branded product similarly does not have generic or biosimilar competition.

HHS also indicated that the MFN target price will be the lowest price in a country that is a member of the Organization for Economic Co-operation and Development, or OECD, with a gross domestic product per capita of at least 60% of the U.S.

gross domestic product per capita.

Based on previous estimates, there are likely at least 22 OECD countries that would satisfy this criterion.

The implications of these actions remain unclear and could result in litigation.

More recently, in July 2025, the President issued letters to 17 pharmaceutical companies reiterating the requirements of the May 2025 executive order and demanding that such companies extend MFN pricing to Medicaid patients, guarantee MFN pricing for newly-launched drug products, repatriate increased revenues earned abroad to lower prices for American patients and provide for direct purchasing at MFN pricing.

The letters also urged these companies to stipulate that they will not offer other developed nations lower prices for new drugs than the prices offered for such products in the United States.

The letters called for engagement with the FDA and CMS within 60 days to implement these changes and threatened to take action to address what the letters characterized as “abusive drug pricing practices.” Subsequently, the Trump administration has announced deals with nearly all such pharmaceutical companies to reduce the costs of drugs.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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On January 31, 2022, the new Clinical Trials Regulation (EU) No 536/2014, or the Clinical Trials Regulation, became effective in the European Union and replaced the prior Clinical Trials Directive 2001/20/EC, or the Clinical Trials Directive.

The Clinical Trials Regulation aims at simplifying and streamlining the authorization, conduct and transparency

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of clinical trials in the European Union.

The Clinical Trials Regulation aims at simplifying and streamlining the authorization, conduct and transparency of clinical trials in the European Union.

Under the new coordinated procedure for the approval of clinical trials, the sponsor of a clinical trial to be conducted in more than one member state of the European Union, or EU Member State, will only be required to submit a single application for approval.

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Products from small- and medium-sized enterprises may qualify for earlier entry into the PRIME scheme than larger companies.

Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated marketing authorization application assessment once a dossier has been submitted.

authorization application assessment once a dossier has been submitted.

Importantly, a dedicated agency contact and rapporteur from the Committee for Human Medicinal Products, or CHMP, or Committee for Advanced Therapies are appointed early in PRIME scheme facilitating increased understanding of the product at EMA’s committee level.

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A marketing authorization may be granted only to a sponsor established in the European Union.

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Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted (1) a product-specific waiver, (2) a class waiver, or (3) a deferral for one or more of the measures included in the PIP.

Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the European Union, sponsors have to demonstrate compliance with all measures included in an EMA-approved Paediatric Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted (1) a product-specific waiver, (2) a class waiver, or (3) a deferral for one or more of the measures included in the PIP.

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid across the European Economic Area (i.e.

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Thus, a marketing authorization under exceptional circumstances is granted for an initial five years, after which the authorization will become valid indefinitely, unless the EMA decides that safety grounds merit one additional five-year renewal.

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Conditional Marketing Authorization

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Even if a compound is considered to be a new chemical entity so that the innovator gains the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company obtained marketing authorization based on an MAA with a complete independent data package of pharmaceutical tests, preclinical tests, and clinical trials.

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The European Union pharmaceutical legislation is currently undergoing a complete review process, in the context of the Pharmaceutical Strategy for Europe initiative, launched by the European Commission in November 2020.

The European Commission’s proposal for revision of several legislative instruments related to medicinal products was published in April 2023 and includes, among other things, provisions that would potentially reduce the duration of regulatory data protection.

The European Parliament requested several amendments in April 2024.

At this time, the proposed revisions remain to be agreed and adopted by the European Parliament and European Council and the proposals may therefore be substantially revised before adoption, which is not anticipated before early 2026.

The revisions may, however, have a significant impact on the pharmaceutical industry in the long term, if and when adopted.

In December 2025, the European Parliament and European Council reached a provisional political agreement on the revision of EU pharmaceutical legislation, which is expected to be adopted by mid-2026.

Key changes include updating regulatory data exclusivity to a new system with a regulatory data protection period of eight years and a reduced market exclusivity period of one year (which can be extended if specific conditions are fulfilled), adding launch/supply obligations, incentivizing antibiotic innovation with transferable vouchers, and streamlining approval procedures in the European Union.

If the legislation is finalized in line with the provisional political agreement, it will have a significant impact on the pharmaceutical industry.

Periods of Authorization and Renewals

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There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any products, if approved in those countries.

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General Data Protection Regulation

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Data Privacy Framework.

If these challenges are successful, they may not only impact the EU-U.S.

There is currently one pending litigation against the EU-U.S.

Data Privacy Framework before the CJEU.If these challenges are successful, they may not only impact the EU-U.S.

Data Privacy Framework, but also further limit the viability of the standard contractual clauses and other data transfer mechanisms.

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The EU and the United Kingdom reached an agreement on their new partnership in the Trade and Cooperation Agreement, which entered into force on May 1, 2021.

As of January 1, 2021, the Medicines and Healthcare Products Regulatory Agency, or the MHRA, became responsible for supervising medicines and medical devices in Great Britain, comprising England, Scotland and Wales under domestic law, whereas Northern Ireland continues to be subject to EU rules under the Northern Ireland Protocol, as amended by the so called Windsor Framework agreed in February 2023.

As of January 1, 2021, the Medicines and Healthcare Products Regulatory Agency, or the MHRA, became responsible for supervising medicines and medical devices in Great Britain, comprising

England, Scotland and Wales under domestic law, whereas Northern Ireland continues to be subject to EU rules under the Northern Ireland Protocol, as amended by the so called Windsor Framework agreed in February 2023.

As of January 1, 2025, the changes introduced by the Windsor Framework resulted in the MHRA being responsible for approving all medicinal products destined for the United Kingdom market (Great Britain and Northern Ireland), and the EMA will no longer have any role in approving medicinal products destined for Northern Ireland.

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As of February 3, 2026, we had 850 full-time employees, including a total of 363 employees with Ph.D.

Of these full-time employees, 626 of these employees are located in the United States and 265 of these employees are located in our offices outside of the United States.

Additionally, as of February 3, 2025, 33.6% of our full-time employees

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self-identified as female, 0.4% self-identified as non-binary, and 0.7% chose not to disclose their gender, and 37.5% of our executive team self-identified as female.

Of these full-time employees, 587 are located in the United States and 263 are located in our offices outside of the United States.

Additionally, as of February 3, 2026, 32% of our full-time employees self-identified as female, 0.6% self-identified as non-binary, and 5.4% chose not to disclose their gender, and 25% of our executive team self-identified as female.

Further, 28.6% of our new hires since January 1, 2026 self-identify as female, 0% self-identify as non-binary, and 42.9% have chosen not to disclose their gender.

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Our employees are our greatest asset and we strive to create a work environment that is inclusive, challenging and rewarding.

We are committed to embedding a long-term, formal Environmental, Social, and Governance, or ESG, strategy within our business, a commitment we refer to as Corporate Sustainability.

In 2022, we completed a "double materiality assessment," where we worked to determine the ESG-related topics most important to both our company and our stakeholders.

The assessment was informed by both internal and external stakeholders and by key ESG standards and frameworks such as the Global Reporting Initiative, Sustainability Accounting Standards Board and United Nations Sustainable Development Goals.

We are committed to embedding a long-term, formal environmental, social, and governance strategy within our business, a commitment we refer to as Corporate Sustainability.

In 2022, we completed a "double materiality assessment," where we worked to determine the sustainability-related topics most important to both our company and our stakeholders.

The assessment was informed by both internal and external stakeholders and by key standards and frameworks such as the Global Reporting Initiative, Sustainability Accounting Standards Board and United Nations Sustainable Development Goals.

This assessment serves as the foundation for our annual Corporate Sustainability Report and continues to serve as the foundation for our comprehensive, data-driven, Corporate Sustainability strategy.

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We continue to focus many of our recruiting efforts on attracting a broad candidate pipeline of top talent in the science and technology industries.

Further, we utilize a standardized interviewing model to reduce unconscious bias and to create a consistent hiring process across our open positions.

A selected group of senior leaders, Employee Resource Group, or ERG, representatives and passionate employees meet monthly to discuss strategy, priorities, and goals for best supporting our workforce.

This group also regularly seeks feedback from employees and provides a forum for voices to be heard across all levels of the organization.

We currently have employee-led ERGs that provide spaces for all employees to advance inclusivity and create opportunities for education and awareness.

While membership in our ERGs directly comprises approximately one-third of our employees, these forums provide an environment for community support, professional development, and educational opportunities for our entire employee population.

Further, we utilize a standardized interviewing model to promote equal opportunity and consistency in our hiring process across our open positions.

A selected group of senior leaders, employee resource group representatives and passionate employees meet monthly to discuss strategy, priorities, and goals for best supporting our workforce.

These forums provide an environment for community support, professional development, and educational opportunities for our entire employee population.

In an industry known for its fierce competition for talent, we have been able to maintain high retention and low turnover rates.

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We strategically recruit talent through various methods.

Prospective employees are identified by leveraging our current employee network and our existing and growing relationships with computational chemistry professors and labs, and by hosting networking events.

Prospective employees are identified by leveraging our current employee network and our existing and growing relationships with computational chemistry professors and labs,

and by hosting networking events.

We maintain a strong presence at industry conferences and post job openings to industry-specific online career forums.

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We monitor our compensation programs closely using comprehensive industry surveys and data to guide us, and we provide what we consider to be a competitive mix of incentives, including competitive salaries and bonuses, a 401(k) retirement plan with an employer matching contribution, participation in our equity programs, and health and welfare benefits, including, for example, access to a variety of mental health, family care, and reproductive health benefits for our employees based in the United States.

We routinely review our compensation practices and analyze the equity of our compensation decisions for all employees.

A small number of our employees who are located in Europe and Japan are covered by some type of collective bargaining agreement.

Consistent with our commitment to equal opportunity and non-discrimination, we routinely review our compensation practices and analyze our compensation decisions for all employees.

A small number of our employees who are located in Europe and Japan are covered by a collective bargaining agreement.

We consider our relations with our employees to be good.

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This allows our employees to develop a work schedule that best suits their individual needs.

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Our company culture encourages engagement, both among our employees and within the communities we live and work.

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This list may be updated from time to time.

• For information concerning our software, drug discovery programs, computational platform, please visit:

• For information concerning our software, drug discovery programs, and computational platform, please visit:

www.schrodinger.com.

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These websites and social media channels, and the contents thereof, are not incorporated by reference into this Annual Report nor deemed filed with the SEC.

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

What changed 10-K

Item 1. Business