Protagonist Therapeutics, Inc

**Note 1.**Organization and Description of Business

Protagonist Therapeutics, Inc. (the “Company”) is a biopharmaceutical company built on a proprietary peptide technology platform. The Company’s programs fall into three broad therapeutic areas: (i) inflammation and immunology (“I&I”), (ii) hematology and (iii) metabolic diseases. The Company’s aim is to develop medicines for biologically and commercially validated targets which demonstrate a strong differentiation compared to existing therapies.

ICOTYDE® (icotrokinra) was approved in the United States in March 2026 for the treatment of moderate-to-severe plaque psoriasis in adults and pediatric patients 12 years of age or older who weigh at least 40 kg and are candidates for systemic therapy or phototherapy. ICOTYDE is the first and only targeted oral peptide that precisely blocks the Interleukin-23 receptor (“IL-23R”) and is licensed to Janssen Biotech, Inc., a Johnson & Johnson company (“JNJ”). ICOTYDE was jointly discovered by the Company and JNJ scientists, with the Company having primary responsibility for the development of ICOTYDE through Phase 1, and JNJ assuming responsibility for further development and commercialization. In September 2026, the European Commission granted approval of JNJ’s marketing application for ICOTYDE for the treatment of adults and pediatric patients 12 years of age and older with moderate-to-severe plaque psoriasis. ICOTYDE has also received regulatory approval in Japan and China. ICOTYDE is in Phase 3 development for additional immune-mediated diseases, including psoriatic arthritis, ulcerative colitis, and Crohn’s disease.

MIMRYLO™ (rusfertide), a subcutaneously delivered first-in-class hepcidin mimetic, was approved in the United States in August 2026 for the treatment of erythrocytosis in adults with the rare blood disorder polycythemia vera (“PV”). On September 30, 2026, MIMRYLO was also approved in the United Arab Emirates. MIMRYLO is licensed to Takeda Pharmaceuticals, Inc. (“Takeda”) and is the first and only hepcidin mimetic approved for PV, a blood cancer characterized by excessive production of red blood cells. The Company discovered and led development for MIMRYLO through its New Drug Application (“NDA”) filing in December 2025, and Takeda is responsible for further development and commercialization.

The Company also has a number of clinical and pre-clinical programs addressing biologically and commercially validated targets, including IL-17 oral peptide antagonist PN-881, obesity triple agonist peptide PN-477, obesity dual agonist peptide PN-458, oral small molecule hepcidin functional mimetic PN-8047, and IL-4 and amylin programs.

The Company is headquartered in Newark, California and has one wholly-owned subsidiary, Protagonist Pty Limited (“Protagonist Australia”), located in Brisbane, Queensland, Australia.

**Note 2.**Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted and, accordingly, the condensed consolidated balance sheet as of September 30, 2026 has been derived from the Company’s unaudited consolidated financial statements at that date but does not include all of the information required by GAAP for complete consolidated financial statements. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair presentation of the Company’s condensed consolidated financial statements. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future period.

The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 25, 2026.

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany transactions and balances have been eliminated upon consolidation.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, accruals for research and development activities, stock-based compensation, income taxes, marketable securities and leases. Estimates related to revenue recognition include assumptions used to determine standalone selling price utilized to allocate the transaction price between distinct performance obligations, assumptions used to recognize revenue over time for certain performance obligations for which a cost-based input method is used as the measure of progress, estimates of whether contingent consideration should be included in the transaction price at each reporting period, and estimates related to royalty revenue recognition. Management bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to forecasted amounts and future events. Actual results may differ materially from these estimates.

There has been uncertainty and disruption in the global economy and financial markets due to a number of factors, including but not limited to geopolitical instability and changes in trade policies, including tariffs or other trade restrictions or the threat of such actions and retaliatory actions. The Company’s business may also be impacted by changes or disruptions at the U.S. Food and Drug Administration (the “FDA”) and other government agencies. The Company has taken into consideration any known impacts to its accounting estimates to date and is not aware of any additional specific events or circumstances that would require any additional updates to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the filing date of this Quarterly Report on Form 10-Q. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Cash as Reported in Condensed Consolidated Statements of Cash Flows

Cash as reported in the condensed consolidated statements of cash flows includes the aggregate amounts of cash and cash equivalents and restricted cash as presented on the condensed consolidated balance sheets.

Cash as reported in the condensed consolidated statements of cash flows consisted of (in thousands):

Restricted cash as of September 30, 2026 and 2025 consists of a cash deposit held as security in connection with a letter of credit related to the Company’s facility lease entered into in March 2017, as subsequently amended, and a cash deposit held as security in connection with the issuance of a bank guarantee in May 2025 to maintain the active status of the Company’s value-added tax registration.

Stock-Based Compensation Expense

The Company has granted stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”).

Stock-based compensation expense associated with stock options is based on the estimated grant date fair value using the Black-Scholes valuation model, which requires the use of assumptions related to expected stock price volatility, option term, risk-free interest rate and dividend yield. The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

Stock-based compensation expense associated with RSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date. For RSUs, the Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

PSUs allow the recipients of such awards to earn fully vested shares of the Company’s common stock upon the achievement of pre-established performance objectives. Stock-based compensation expense associated with PSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date and is recognized when the performance objective is expected to be achieved. The Company evaluates the probability of achieving the performance criteria on a quarterly basis. The cumulative effect on current and prior periods of a change in the estimated number of PSUs expected to be earned is recognized as compensation expense or as reduction of previously recognized compensation expense in the period of the revised estimate. No stock-based compensation related to PSUs was recognized for the three and nine months ended September 30, 2026 and the three months ended September 30, 2025. During the nine months ended September 30, 2025, the Company recognized $1.8 million of stock-based compensation expense related to 75,500 PSUs that vested during the third quarter of 2025. As of September 30, 2026,122,100 PSUs were outstanding.

The Company recognizes forfeitures of stock-based awards as they occur.

Total stock-based compensation expense was as follows (in thousands):

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies during the three and nine months ended September 30, 2026, as compared to those disclosed in Note 2. Summary of Significant Accounting Policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Recently Issued Accounting Pronouncements Not Yet Adopted as of September 30, 2026

In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-11Interim Reporting (Topic 270) – Narrow Scope Improvements(“ASU 2025-11”), which clarifies interim disclosure requirements. ASU 2025-11 also requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This guidance is effective for the Company for interim reporting periods within annual reporting periods beginning on January 1, 2028. Early adoption is permitted. The guidance may be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses(“ASU 2024-03”), which requires detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. In January 2025, the FASB issued an update to ASU 2024-03 clarifying that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. ASU 2024-03 is effective for the Company for fiscal years beginning on January 1, 2027, and for interim periods beginning on January 1, 2028. Early adoption is permitted. The guidance may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or (2) retrospectively to all prior periods presented in the financial statements. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial statements and continues to evaluate disclosure presentation alternatives.

Note 3. License and Collaboration Agreements

JNJ License and Collaboration Agreement

The Company and JNJ are parties to an Amended and Restated License and Collaboration Agreement, which was originally effective in July 2017, amended in May 2019, amended and restated in July 2021 and amended in November 2024 (as amended, the “JNJ License and Collaboration Agreement”). The JNJ License and Collaboration Agreement relates to the development, manufacture and commercialization of oral IL-23R antagonist drug candidates and enables JNJ to develop collaboration compounds for multiple indications. Under the JNJ License and Collaboration Agreement, JNJ is required to use commercially reasonable efforts to develop at least one collaboration compound for at least two indications.

During the first quarter of 2026, the Company earned a $50.0 million milestone payment upon FDA approval of ICOTYDE for the treatment of moderate-to-severe plaque psoriasis in adults and pediatric patients 12 years of age or older who weigh at least 40 kg and are candidates for systemic therapy or phototherapy. The Company has earned a total of $387.5 million in non-refundable upfront and milestone payments from JNJ under the JNJ License and Collaboration Agreement from inception in 2017 through September 30, 2026.

Upcoming potential development milestones under the JNJ License and Collaboration Agreement include:

Pursuant to the agreement, the Company is eligible to receive future sales milestone payments and tiered royalties on net product sales at percentages ranging from 6% to 10%. In addition, the Company remains eligible to receive sales milestones of up to $425.0 million.

Takeda Collaboration Agreement

In January 2024, the Company entered into a worldwide license and collaboration agreement for MIMRYLO with Takeda, which became effective in March 2024, and was amended in March 2025 (the “Takeda Collaboration Agreement”).

Pursuant to the Takeda Collaboration Agreement, the Company and Takeda agreed to jointly develop and commercialize MIMRYLO and potentially other specified second-generation injectable hepcidin mimetic compounds

(the “Licensed Products”) in the United States (the “Profit-Share Territory”). Takeda was solely and exclusively responsible for the development and commercialization of the Licensed Products in all other countries (the “Takeda Territory”). The Company and Takeda shared the costs of the development, manufacture and commercialization activities for the Licensed Products in the Profit-Share Territory, provided that (i) the Company led, and was solely responsible for its costs associated with, completion of the ongoing Phase 3 VERIFY trial evaluating MIMRYLO for the treatment of PV; (ii) Takeda led, and was solely responsible for its costs associated with, U.S. regulatory and pre-commercialization activities related to MIMRYLO in the Profit-Share Territory; and (iii) Takeda led commercialization of MIMRYLO in the Profit-Share Territory, though the Company held an option to co-detail. Takeda was solely responsible for all costs for the development, manufacture and commercialization of the Licensed Products in the Takeda Territory. The Company granted Takeda a non-transferable, sublicensable and, except for certain specified exceptions, exclusive license to certain intellectual property of the Company to exercise its rights and perform its obligations under the Takeda Collaboration Agreement. In March 2025, the Company and Takeda agreed, pursuant to the provisions of the Takeda Collaboration Agreement, as amended, that Takeda would assume responsibility for leading and implementing the regulatory strategy and associated activities for preparation of the NDA related to MIMRYLO in PV, which was submitted to the FDA in December 2025 and approved in August 2026. The Company was primarily responsible for clinical development activities through the NDA filing and for conducting ongoing MIMRYLO long-term extension studies.

Pursuant to the Takeda Collaboration Agreement, the Company received a one-time, non-refundable upfront payment of $300.0 million in April 2024 and a $25.0 million milestone payment in September 2025.

On April 28, 2026, the Company announced that it exercised its right to opt out of the U.S. profit and loss sharing arrangement (50% to the Company and 50% to Takeda) under the Takeda Collaboration Agreement. Following the Company’s exercise of the opt-out right, the Company transitioned applicable development and commercial activities to Takeda, and Takeda assumed sole operational and financial responsibility for such activities in the United States. The opt-out election triggered a $200.0 million payment, and the FDA’s approval of MIMRYLO in August 2026 triggered an additional $200.0 million opt-out payment and a separate $75.0 million milestone payment. Following the opt-out, the Company is also eligible to receive up to $800.0 million in development and sales milestone payments for MIMRYLO in PV, and tiered royalties ranging from 14% to 29% on annual net worldwide sales, with an approximate 21% weighted-average royalty rate at $1.5 billion in annual net sales and a 29% tier applying to incremental annual net sales above $1.5 billion.

Upcoming potential development milestones under the Takeda Collaboration Agreement include:

The Company was obligated to perform certain wind-down activities during thethree-monthopt-out wind-down period which included transferring the VERIFY trial and other projects to Takeda, overseeing vendors and development activities until such activities are fully transferred to Takeda, and continuing to perform the MIMRYLO open-label extension. Such costs during the wind-down period (from April 28, 2026 to July 27, 2026) were shared (50%) with Takeda and the Company transferred the majority of the activities to Takeda by July 27, 2026. As agreed upon with Takeda, the Company will continue work on the MIMRYLO open-label extension after the wind-down period until completion, which is expected in the first quarter of 2027. Costs incurred by the Company for any remaining wind-down activities and MIMRYLO open-label extension after July 27, 2026 will be fully reimbursed by Takeda.

The Company initially evaluated the Takeda Collaboration Agreement and concluded that it had elements that were within the scope of ASC Topic 606 and ASC Topic 808. As of the effective date of the Takeda Collaboration Agreement, the Company identified two distinct performance obligations: (i) the MIMRYLO license delivered upon the effectiveness of the Takeda Collaboration Agreement and (ii) certain development services to be provided prior to the opt-out period, including certain of the Company’s responsibilities to complete the VERIFY Phase 3 clinical trial in PV

and associated manufacturing services. Following the completion of the wind-down period on July 27, 2026, the Takeda Collaboration Agreement no longer meets the definition of a collaborative arrangement under ASC Topic 808.

The Company determined that the initial transaction price totaled $300.0 million, which was comprised of the upfront payment. The Company initially excluded any future estimated milestones or royalties from this transaction price, all of which were either constrained or subject to the sales- and usage-based royalty exception. As part of the Company’s evaluation of this variable consideration constraint, it determined that the potential payments were contingent upon developmental and regulatory milestones that were uncertain and were highly susceptible to factors outside of its control. The Company allocated $254.1 million of the initial transaction price to the license and $45.9 million to the development services based upon the relative standalone selling price of each performance obligation. The estimate of standalone selling price for the license was determined based on discounted cash flows for the expected development and commercialization of MIMRYLO and included assumptions for forecasted revenues, development timelines and expenses, discount rates, and probabilities of technical and regulatory success. The estimate of standalone selling price for the development services was determined based on forecasted costs and expenses over the expected development period. For the license of MIMRYLO, the Company determined that Takeda could benefit from the license at the time the license was granted and therefore, the related performance obligation was satisfied at that point in time.

The amount allocated to the license, which represents functional intellectual property that was transferred at a point in time, was satisfied upon transfer of the license to Takeda. The amount allocated to development services will be recognized over time based on a measure of the Company’s efforts toward satisfying the performance obligation relative to the total expected efforts or inputs to satisfy the performance obligation (e.g., costs incurred compared to total budget). As of the opt-out date, the development services performance obligation remained partially unsatisfied.

The exercise of the opt-out right results in a contract modification under ASC Topic 606 because it changes the enforceable rights and obligations of the parties under the Takeda Collaboration Agreement. As a result, the remaining unconstrained consideration was allocated to the remaining development services performance obligation, and the modification was accounted for as part of the existing contract.

Revenue Recognition* *

For the three months ended September 30, 2026, the Company recognized license and collaboration revenue of $274.4 million. This revenue was primarily driven by the proportional recognition of $266.6 million related to the $275.0 million in opt-out and milestone payments earned under the Takeda Collaboration Agreement during the period, ongoing development services, and other revenues. The remaining $8.4 million in unrecognized revenue related to the $275.0 million payments in opt-out and milestone payments earned during the period that was recorded as deferred revenue on the Company’s condensed consolidated balance sheet and is expected to be recognized through the conclusion of the development services performance obligation.

For the nine months ended September 30, 2026, the Company recognized license and collaboration revenue of $544.3 million. This revenue was primarily driven by proportional recognition of $460.5 million related to $475.0 million in milestone payments earned under the Takeda Collaboration Agreement during the period, ongoing development services, and other revenues, and (ii) a $50.0 million milestone payment related to the JNJ License and Collaboration Agreement, and other revenues.

For the three and nine months ended September 30, 2026, the Company recognized $1.8 million and $8.0 million of revenue, respectively, that was included in the deferred revenue balance at the beginning of the period. None of the costs to obtain or fulfill the contracts were capitalized.

Note 4. Fair Value Measurements

Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance

establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

*Level 2—*Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In determining fair value, the Company utilizes quoted market prices, broker or dealer quotations, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

The following tables present the fair value of the Company’s financial assets determined using the inputs defined above (in thousands):

The Company’s certificates of deposit, U.S. Treasury and agency securities, including U.S. Treasury bills, commercial paper and corporate debt securities are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques, for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets.

The carrying amount of the Company’s remaining financial assets and liabilities, including cash, receivables and payables, approximates their fair value due to their short-term nature.

Note 5. Cash Equivalents and Marketable Securities

Cash equivalents and marketable securities consisted of the following (in thousands):

All of the Company’s marketable securities are classified as available-for-sale. Current marketable securities of $301.8 million and $439.0 million held as of September 30, 2026 and December 31, 2025, respectively, had contractual maturities of less thanone year. Noncurrent marketable securities of $34.6 million and $78.6 million held as of September 30, 2026 and December 31, 2025, respectively, had contractual maturities of at leastone year but no more thantwo years. The Company does not intend to sell its securities that are in an unrealized loss position, and it is not more likely than not that the Company will be required to sell its securities before recovery of their amortized cost basis, which may be at maturity.

During the nine months ended September 30, 2026 and 2025, the Company sold $3.4 million and $7.0 million of marketable securities and realized a net gain of $5.0 thousand and a net loss of $5.0 thousand, respectively. The Company evaluated securities with unrealized losses to determine whether such losses, if any, were due to credit-related factors and determined that there wereno credit-related losses to be recognized as of September 30, 2026 and December 31, 2025.

**Note 6.**Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

Other current assets as of September 30, 2026 included $5.0 million in proceeds from option exercises not yet received.

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

Accrued Expenses and Other Payables

Accrued expenses and other payables consisted of the following (in thousands):

Note 7. Stockholders’ Equity

Stock Repurchase Program

On September 8, 2026, the Company announced that its board of directors authorized a share repurchase program under which the Company may repurchase up to $300.0 million of its outstanding common stock (the “Repurchase Program”). The Repurchase Program has no fixed expiration, does not obligate the Company to repurchase any specific number of shares and may be modified, suspended or discontinued at any time without prior notice. Under the Repurchase Program, stock repurchases may be made from time to time in open market or through privately negotiated transactions, including transactions pursuant to a trading plan adopted in accordance with Rule 10b5-1 under

the Securities Exchange Act of 1934, as amended. The Company intends to fund repurchases from its cash, cash equivalents and marketable securities, as well as royalties and other payments received under its collaboration arrangements with Takeda related to MIMRYLO and JNJ related to ICOTYDE. The timing and amount of any repurchases will depend on market conditions, alternative capital deployment opportunities and other factors.

During the three and nine months ended September 30, 2026, the Company repurchased 40,560 shares of its common stock under the Repurchase Program for an aggregate purchase price of $5.8 million. As of September 30, 2026, $294.2 million remained available and authorized for repurchases. Shares purchased under the Repurchase Plan during the three months ended September 30, 2026 are held as Treasury shares. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds elsewhere in this Quarterly Report on Form 10-Q for additional information.

Pre-Funded Warrants

In August 2023, the Company entered into certain agreements with certain accredited investors and their affiliates (the “Investors”) under which the Company issued pre-funded warrants with an exercise price of $0.001 per share (the “Pre-Funded Warrants”). The Pre-Funded Warrants will expire on the day they are exercised in full. The Pre-Funded Warrants are exercisable at any time prior to expiration except that the Pre-Funded Warrants cannot be exercised by the Investors if, after giving effect thereto, the Investors would beneficially own more than 9.99% of the Company’s common stock, subject to certain exceptions. In accordance with ASC Topic 260, “Earnings Per Share”, outstanding Pre-Funded Warrants are included in the computation of basic net income (loss) per share because the exercise price is negligible, and they are fully vested and exercisable after the original issuance date. No Pre-Funded Warrants were exercised during the three and nine months ended September 30, 2026 and 2025. As of September 30, 2026, Pre-Funded Warrants to purchase 1,500,000 shares of common stock remained outstanding.

Note 8. Income Taxes

The Company recorded income tax expense of $6.6 million and $7.3 million for the three and nine months ended September 30, 2026, respectively. The Company recorded income tax expense ofzero and $0.2 million for the three and nine months ended September 30, 2025, respectively. The increases in income tax expense were due to pretax income recorded as compared to pretax losses for the prior year periods. The tax provision for the three and nine months ended September 30, 2026 was determined using an estimated annual effective tax rate, adjusted for discrete items, if any.

Note 9. Net Income (Loss) per Share

The computation of basic net income (loss) per share of common stock is based on the weighted-average number of shares of common stock outstanding during each period. The computation of diluted net income (loss) per share of common stock is based on the weighted-average number of shares of common stock outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, RSUs, PSUs, the Company’s employee stock purchase plan (“ESPP”), and warrants.

In periods when the Company has net income, the dilutive effect of all potentially outstanding shares is computed using the treasury stock method. In periods in which the Company reports a net loss, all common stock equivalents are deemed anti-dilutive such that basic net loss per share of common stock and diluted net loss per share of common stock are equal.

The following table sets forth the computation of basic and diluted net income (loss) per share(in thousands, except share and per share data):

Approximately 0.9 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, PSUs and under the ESPP, as applicable) were excluded from the diluted net income per share of common stock computation for the three and nine months ended September 30, 2026 because their effect was anti-dilutive. Approximately 9.1 million potentially dilutive shares of common stock (consisting of shares subject to outstanding stock options, RSUs, PSUs, and under the ESPP, as applicable) were excluded from the diluted net loss per share of common stock computation for the three and nine months ended September 30, 2025 due to the Company’s net loss for these periods.

Note 10. Segment Reporting

Operating segments are components of an enterprise for which separate financial information is available and which are evaluated by a company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and to assess performance.

The Company operates and manages its business asone operating segment, which primarily focuses on the discovery and development of innovative medicines in areas of unmet medical need. The Company’s Chief Executive Officer serves as the Company’s CODM and manages and allocates resources to the operations of the Company on an entity-wide basis. Managing and allocating resources on an entity-wide basis enables the CODM to assess the overall level of resources available and how to best deploy these resources across functions and research and development projects based on unmet medical need, scientific data, probability of technical and regulatory successful development, market potential and other considerations, and, as necessary, reallocate resources among the Company’s internal research and development portfolio and external opportunities to best support the long-term growth of the Company’s business. The Company’s CODM reviews financial information on an aggregate basis for the purpose of allocating resources and evaluating financial performance, including segment net income (loss), which is also reported on the condensed consolidated statement of operations as consolidated net income (loss).

Segment information was as follows (in thousands):

(1)Amounts exclude employee wages and benefits, stock-based compensation and expense allocations.

(2) As of April 1, 2025, the information regularly provided to the CODM was changed to reclassify pre-clinical expenses from development expense to discovery expense. Prior period segment information has been recast to reflect this change.

(3)Other segment items include foreign currency related income (expense) and other miscellaneous income (expense).

The accounting policies of the Company’s operating segment are the same as those described in Note 2. Summary of Significant Accounting Policies. The measure of segment assets is reported as total assets on the Company’s condensed consolidated balance sheets for the periods presented.