Relay Therapeutics, Inc.

1. Nature of Business and Basis of Presentation

Relay Therapeutics, Inc. (the "Company") was incorporated in Delaware on May 4, 2015 and is headquartered in Cambridge, Massachusetts. The Company is a clinical-stage, precision medicine company transforming the drug discovery process by combining leading-edge computational and experimental technologies with the goal of bringing life-changing therapies to patients. As the Company believes it is among the first of a new breed of biotech created at the intersection of complementary techniques and technologies, the Company aims to push the boundaries of what’s possible in drug discovery. The Company’s Dynamo® platform integrates an array of leading-edge computational and experimental approaches designed to drug protein targets that have previously been intractable or inadequately addressed. The Company’s initial focus is on enhancing small molecule therapeutic discovery in targeted oncology and genetic disease indications. The Company’s lead product candidate, RLY-2608, is in clinical development. The Company is also progressing its NRAS-selective inhibitor, RLY-8161, to address NRAS-mutated solid tumors, as well as its non-inhibitory chaperone for Fabry disease. The Company also has one active early-stage discovery program.

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations, and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure, and extensive compliance-reporting capabilities.

The Company’s product candidates are in development. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval, or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees and consultants.

The Company has devoted substantially all of its resources to developing its product candidates by integrating its computation and experimental approaches, building its intellectual property portfolio, business planning, raising capital and providing general and administrative support for these operations.

The Company has incurred net operating losses since inception and had an accumulated deficit of$1.8 billion as of March 31, 2025. The Company expects that its existing cash, cash equivalents, and investments as of March 31, 2025 will enable it to fund its planned operating expenses and capital expenditures for at least one year from the date of the issuance of these condensed consolidated financial statements. The future viability of the Company is dependent on its ability to generate cash from operating activities or to raise additional capital to finance its operations. The Company’s failure to raise capital as and when needed could have a material adverse effect on its financial condition and ability to pursue its business strategies. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into license or collaboration arrangements or obtain government grants. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be forced to delay, reduce, or eliminate its research and development programs, product portfolio expansion, or commercialization efforts, which could adversely affect its business prospects. In the event the Company requires additional funding, there can be no assurance that it will be successful in obtaining sufficient funding on terms acceptable to the Company to fund its continuing operations, if at all.

2. Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") for reporting on Form 10-Q.

The Company’s condensed consolidated financial statements include the accounts of Relay Therapeutics, Inc. and its wholly-owned subsidiaries, Relay Therapeutics Securities Corporation and Relay ML Discovery, LLC.

All intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of March 31, 2025, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025 and 2024, the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2025 and 2024, and the condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024 are unaudited. The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s condensed consolidated financial position as of March 31, 2025, the condensed consolidated results of its operations for the three months ended March 31, 2025 and 2024, and condensed consolidated cash flows for the three months ended March 31, 2025 and 2024. The condensed consolidated financial data and other information disclosed in these notes related to the three months ended March 31, 2025 and 2024 are unaudited. The condensed consolidated results for the three months ended March 31, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim periods, or any future year or period.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the fair value of contingent milestone payments in connection with the acquisition of ZebiAI Therapeutics, Inc. ("ZebiAI") in 2021, the determination of the transaction price and standalone selling price of performance obligations under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), the accrual of research and development expenses, the valuation of equity instruments, and the incremental borrowing rate for determining operating lease assets and liabilities. Estimates are periodically reviewed in light of changes in circumstances, facts, and experience.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, the objective of which is to provide enhancements to annual income tax disclosures. In particular, the standard will require more detailed information in the income tax rate reconciliation, as well as the disclosure of income taxes paid disaggregated by jurisdiction, among other enhancements. ASU 2023-09 is effective for years beginning after December 15, 2024 and early adoption is permitted. The Company is currently evaluating the impact of the standard on the presentation of its condensed consolidated financial statements and footnotes.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), the objective of which is to improve disclosures around an entity's expenses. In particular, the standard will require disclosure of additional information about specific expense categories in the notes to the financial statements on an annual and interim basis. ASU 2024-03 is effective for years beginning after December 15, 2026, as well as for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of the standard on the presentation of its condensed consolidated financial statements and footnotes.

3. Segment Information

The Company’s chief operating decision maker (the "CODM") is the President and Chief Executive Officer and the Company views its operations as one segment, which is using innovative experimental and computational approaches on protein motion for making medicines to drug protein targets that have previously been intractable or inadequately addressed. The factors used in determining the Company’s segments include the nature of the Company’s operating activities, the organizational and reporting structure, and the type of information provided to and reviewed by the Company’s CODM to allocate resources and evaluate financial performance.

The measure of segment assets is reported on the Company’s condensed consolidated balance sheets as total condensed consolidated assets. The Company only operates in the United States and all tangible assets, consisting of property and equipment and operating lease right-of-use assets, are held in the United States.

The Company’s CODM uses condensed consolidated net loss to evaluate the Company’s expenditures and monitor budget-to-actual results. In connection therewith, the review of budget-to-actual results is used in assessing performance of the Company’sone operating segment, as well as in establishing resource allocations across the Company.

The following tables illustrates information about segment revenue, significant segment expenses, and segment net loss.

The expense categories and amounts in the table above align with the segment-level information regularly provided to the CODM.

(1) "Employee related expenses" within research and development expenses excludes stock compensation expense.

(2) "Other expenses" within research and development expenses excludes depreciation expense.

(3) "General and administrative expenses" excludes stock compensation expense and depreciation expense.

4. Fair Value Measurements

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values:

In determining the fair value of its investments at each date presented above, the Company relied on quoted prices for similar securities in active markets or using other inputs that are observable or can be corroborated by observable market data.

Fair Value of Contingent Consideration

In April 2021, the Company acquired ZebiAI.

Pursuant to the terms of the acquisition, the Company is liable for certain contingent consideration, including (a) up to $85.0 million in platform and program milestones ("Contingent Milestone Payments") and (b) up to $100.0 million in earnout payments ("Contingent Earnout Payments"), both payable to ZebiAI's former equity holders upon achievement.

The Company classified the Contingent Milestone Payments within Level 3 of the fair value hierarchy. Pursuant to ASC Topic 480, Distinguishing Liabilities from Equity ("ASC 480"), the Company has accounted for the Contingent Milestone Payments as a liability and remeasured the fair value at each reporting period based on the probability of achieving the contingent milestones and timing. Significant judgment has been used in determining the underlying assumptions. In connection therewith, the liability was recorded at $0 on the condensed consolidated balance sheet as of March 31, 2025.

The Company has not accounted for the Contingent Earnout Payments as derivatives under ASC Topic 815, Derivatives and Hedging ("ASC 815"). As such, they were only measured at fair value as of the acquisition date and have not been re-assessed at fair value as of each reporting period end. During the year ended December 31, 2024, the contingency was resolved without the consideration becoming payable. Therefore, no amount was recorded for the Contingent Earnout Payments on the condensed consolidated balance sheet as of March 31, 2025.

The following table reconciles the change in the contingent consideration liability:

5. Investments

The fair value of available-for-sale investments by type of security was as follows:

The following tables summarize the Company's available-for-sale debt securities in an unrealized loss position, aggregated by major security type and length of time in a continuous unrealized loss position:

As summarized in the tables immediately above, the Company held 49 and 58 debt securities that were in an unrealized loss position as of March 31, 2025 and December 31, 2024, respectively. The unrealized losses at March 31, 2025 and December 31, 2024 were attributable to changes in interest rates and do not represent credit losses. The Company does not intend to sell these securities and it is not more likely than not that it will be required to sell them before recovery of their amortized cost basis.

6. Common Stock

Each share of common stock entitles the stockholder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Company’s board of directors. As of March 31, 2025, no dividends had been declared.

At-the-Market Offering

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

During the three months ended March 31, 2024, the Company sold 1,889,597 shares of common stock under the 2021 Sales Agreement at a weighted-average price of $9.73 per share. The Company received $17.9 million in proceeds therefrom, which were net of $0.5 million in commissions paid to Cowen.

In August 2024, the 2021 Sales Agreement was terminated by mutual agreement between the Company and Cowen. Separately, the Company entered into a new sales agreement (the “2024 Sales Agreement”) with TD Securities (USA) LLC (“TD Securities”), pursuant to which the Company may offer and sell shares of its common stock having aggregate gross proceeds of up to $250.0 million from time to time in “at-the-market” offerings through TD Securities, as the Company’s sales agent.

During the three months ended March 31, 2025, there wereno sales of common stock under the 2024 Sales Agreement.

Private Placement

In January 2024, the Company entered into a securities purchase agreement with Nextech Crossover I SCP for the private placement of 2,500,000 shares of common stock at $12.00 per share (the "Private Placement"). The Company received $29.8 million in proceeds from the Private Placement, which were net of $0.2 million in offering expenses.

7. Net Loss per Share

The following table summarizes the computation of basic and diluted net loss per share of the Company:

For thethree months ended March 31, 2025 and 2024, the weighted-average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share is the same. In computing diluted net loss per share for the three months ended March 31, 2025 and 2024, the Company excluded the following potentially dilutive securities, as the effect would be anti-dilutive and reduce the net loss per share calculated for each period.

The amounts in the table above for options and restricted stock units are presented based on amounts outstanding at each period end.

8. Collaboration and License Agreements

Genentech, Inc.

In December 2020, the Company and Genentech, Inc. ("Genentech") entered into the Collaboration and License Agreement (as amended from time to time, the "Genentech Agreement"), which granted Genentech a license to develop and commercialize migoprotafib (GDC-1971, formerly known as RLY-1971).

Effective as of January 7, 2025 (the "Termination Date"), Genentech elected to terminate the Genetech Agreement without cause. As a result of the termination of the Genentech Agreement, the Company is not entitled to receive any further milestones or other payments due after the Termination Date. The parties ceased to have any development or commercialization obligations after the Termination Date and the licenses the Company granted to Genentech pursuant to the Genentech Agreement ceased to be in effect as of the Termination Date.

Through the Termination Date, consideration under the Genentech Agreement totaled $121.8 million.

During the three months ended March 31, 2025, the Company recognized $0 of revenue from the Genentech Agreement.

During the three months ended March 31, 2024, the Company recognized $10.0 million of revenue from the Genentech Agreement.

Elevar Therapeutics, Inc.

In December 2024, the Company and Elevar Therapeutics, Inc. ("Elevar") entered into the Exclusive License Agreement ("Elevar Agreement"), pursuant to which Elevar was granted exclusive global development and commercialization rights for lirafugratinib (RLY-4008), the Company's selective oral small molecule inhibitor of fibroblast growth factor receptor 2 ("FGFR2"). Upon execution of the Elevar Agreement, Elevar is responsible for all further development activities and global commercialization for lirafugratinib in FGFR2-driven cholangiocarcinoma and FGFR2-altered other solid tumors.

As of March 31, 2025, consideration under the Elevar Agreement totaled $7.7 million, which included $5.0 million in upfront consideration and $2.7 million for the transfer of active pharmaceutical ingredient and other materials. The Company is also eligible to receive up to $495.0 million in regulatory and commercial milestone payments, as well as tiered royalties.

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

9. Commitments and Contingencies

Intellectual Property License

In August 2016, the Company and D.E. Shaw Research, LLC ("D.E. Shaw Research") entered into the Collaboration and License Agreement, which was most recently amended in 2023 ("DESRES Agreement"). During the three months ended March 31, 2025 and 2024, there were no material changes to the contractual terms of the DESRES Agreement. Accordingly, there were no changes to the Company’s accounting treatment thereon through March 31, 2025.

For the three months ended March 31, 2025 and 2024, the Company recorded research and development expenses of $5.1 million and $2.5 million under the DESRES Agreement on its condensed consolidated statement of operations and comprehensive loss.

As of March 31, 2025 and December 31, 2024, the Company had prepaid balances of $3.5 million and $5.9 million, respectively, under the DESRES Agreement on its condensed consolidated balance sheets.

As of March 31, 2025 and December 31, 2024, the Company had accrued expense and accounts payable balances of $0 and $0.1 million under the DESRES Agreement on its condensed consolidated balance sheets.

Other Arrangements

The Company has certain other research and license arrangements and other collaborations with third parties, which provide the Company with specified research and/or development services.

10. Subsequent Events

In preparing the condensed consolidated interim financial statements as of March 31, 2025 and for the three month period then ended, the Company evaluated subsequent events for recognition and measurement purposes. The Company concluded that no events or transactions have occurred that require disclosure in the accompanying condensed consolidated financial statements, except as otherwise described in the notes above.