Relay Therapeutics Inc
For the period ended Dec 31, 2024. Filed Feb 26, 2025.
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FY2024 · Filed Feb 26, 2025
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Relay Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Relay Therapeutics, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements").
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
| Accrued Research and Development Expenses | |
| Description of the Matter | As discussed in Note 2 to the consolidated financial statements, the Company makes estimates to determine the expense recognized and related accrued research and development expenses at each balance sheet date.Auditing the Company’s estimates of accrued research and development expenses was challenging due to the judgment required in evaluating assumptions used in the estimation. In particular, the estimate was sensitive to significant assumptions including, but not limited to, expected patient enrollment, estimates of services received and efforts expended, and estimated project duration. |
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| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s estimation of accrued research and development expenses. Our audit procedures included, among others, reviewing the Company’s contracts with third parties, evaluating the methodology used in developing the estimate, testing the completeness and accuracy of the underlying data, and evaluating the significant assumptions discussed above.To assess the reasonableness of the significant assumptions, we corroborated the progress of clinical trials by inquiring of the Company’s executives responsible for overseeing its clinical trial activities, obtained and verified information directly from third parties related to patient enrollment data and costs of services, and performed a sensitivity analysis to evaluate the change in the estimate resulting from changes in significant assumptions. In |
addition, we tested subsequent invoices received from such third parties to validate the Company’s estimate as of the balance sheet date.
/s/Ernst & Young LLP
We have served as the Company’s auditor since 2017.
Boston, Massachusetts
February 26, 2025
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