Septerna, Inc.

Note 1. Organization and Basis of Presentation

Description of the Business

Septerna, Inc. (“Septerna” or the “Company”) is a clinical-stage biotechnology company with a world-class team of G protein-coupled receptor (“GPCR”) experts and drug developers advancing cutting-edge science to unlock the full potential of GPCR therapies for patients with significant unmet needs. The Company’s proprietary Native Complex Platform™ is designed to enable new approaches to GPCR drug discovery and has led to the development of a diverse pipeline of novel oral small molecule drug candidates. The Company is advancing programs in endocrinology, immunology and inflammation, metabolic diseases and additional therapeutic areas, both independently and with partners.

The Company’s proprietary Native Complex Platform™ replicates the natural structure, function, and dynamics of GPCRs outside of cells at an industrial scale. The Company’s foundational technologies enable it to isolate, purify, and reconstitute full-length, properly folded GPCR proteins within ternary complexes with ligands and transducer proteins in a lipid bilayer that mimics the cell membrane. The Company then applies state-of-the-art discovery tools and technologies to these defined and tunable protein complexes to structurally design, screen for, and optimize potential product candidates. Leveraging its platform, the Company has transformed GPCR oral small molecule drug discovery to an industrialized and iterative structure-based drug design approach to expand the landscape of druggable GPCR targets with novel oral small molecule medicines for patients. The Company’s Native Complex Platform™ is designed to enable it to target certain GPCRs for the first time, uncover novel binding pockets for validated receptors, and pursue a wide spectrum of pharmacologies, including agonists, antagonists, and allosteric modulators, to affect GPCR signaling in different ways to achieve desired therapeutic effects.

The Company was incorporated in Delaware in December 2019, under the name GPCR NewCo, Inc. In June 2021, the Company changed its name to Septerna, Inc. The Company is headquartered in South San Francisco, California.

Reverse Stock Split

On October 18, 2024, the Company effected a 1-for-8.6103 reverse stock split of its issued and outstanding shares of common stock. Upon the effectiveness of the reverse stock split, (i) all shares of outstanding common stock were adjusted; (ii) the conversion ratio of the convertible preferred stock was adjusted; (iii) the number of shares of common stock for which each outstanding option to purchase common stock is exercisable were adjusted; and (iv) the exercise price of each outstanding option to purchase common stock was adjusted. All of the outstanding common stock (including shares of common stock subject to the Company’s options and as converted for the outstanding convertible preferred stock), share prices, exercise prices and per share amounts contained in the condensed financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. The par value per share and the authorized number of shares of common stock and preferred stock were not adjusted as a result of the reverse stock split. The number of authorized shares did not change.

Initial Public Offering

In October 2024, the Company completed its initial public offering (“IPO”), pursuant to which it issued and sold an aggregate of 18.4 million shares of its common stock at the IPO price of $18.00 per share, including 2.4 million shares that were issued to the underwriters pursuant to the full exercise of their option to purchase additional shares, resulting in net proceeds of $302.8 million, net of total offering costs of $28.4 million. Immediately prior to the closing of the IPO, the Company’s then outstanding convertible preferred stock automatically converted into 22,839,774 shares of common stock.

Following the closing of the IPO, no shares of convertible preferred stock were authorized or outstanding. In connection with the completion of the IPO, on October 28, 2024, the Company’s certificate of incorporation was amended and restated to (i) authorize 500.0 million shares of common stock, par value $0.001 per share, which eliminates all references to the previously existing series of convertible preferred stock; and (ii) authorize 10.0 million shares of undesignated preferred stock, par value $0.001 per share, that may be issued from time to time by the Company’s board of directors in one or more series.

Liquidity and Capital Resources

The accompanying unaudited condensed financial statements have been prepared assuming the Company will continue as a going concern, which assumes that the Company will realize its assets and satisfies its liabilities in the normal course of business. The Company is subject to risks inherent in operating an early-stage biotechnology business. These risks include, but are not limited to, dependence on the development of marketable products, the ability to attract, retain, and motivate qualified personnel, rapid technological changes and the rapidly evolving nature of the biotechnology industry.

The Company has incurred significant losses and negative cash flows from operations since its inception and expects to incur losses as a result of its continued research and development activities. To date, none of the Company’s product candidates have been approved by the U.S. Food and Drug Administration (the “FDA”) for commercial sale and, therefore, the Company has not generated any revenue from product sales.

The Company historically financed its operations primarily through the issuance of convertible promissory notes, convertible preferred stock, the sale of its common stock in an IPO, and most recently, through a one-time, non-refundable upfront payment upon commencement of its collaboration agreement with Novo Nordisk A/S (“Novo”) and achievement of a milestone event pursuant to its agreement with Vertex Pharmaceuticals Incorporated ("Vertex"). The Company will need additional financing to support its continuing operations and pursue its growth strategy. Until such time as the Company can generate significant revenue from product sales, if ever, it expects to finance its operations through equity offerings, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. The Company may not be able to obtain funding on acceptable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders.

For the nine months ended September 30, 2025 and 2024, the Company incurred net losses of $38.1 million and$51.1 million, respectively. The Company had an accumulated deficit of$156.5 million as of September 30, 2025. The Company believes its cash, cash equivalents, and marketable securities of$561.6 million as of September 30, 2025 will be sufficient to fund its operations for at least 12 months from the date of issuance of the unaudited condensed financial statements.

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in conformity with generally accepted accounting principles in the U.S. (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) that are necessary for the fair presentation of the unaudited interim condensed financial statements for the periods presented have been included. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification and Accounting Standards Updates (“ASUs”), of the Financial Accounting Standards Board (“FASB”). The interim condensed financial statements are unaudited. The operating results presented in these unaudited interim condensed financial statements are not necessarily indicative of the results that may be expected for the full year or for any other future annual or interim period. Actual results could differ materially from estimates and assumptions. As appropriate, the Company assesses estimates each period and updates them to reflect current information, and generally reflect any changes in estimates in the period first identified.

The balance sheet data at December 31, 2024 was derived from the audited financial statements included in Septerna’s Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 27, 2025. These interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Significant Accounting Policies

During the nine months ended September 30, 2025, there were no changes to the Company’s significant accounting policies as described in Note 2 of the audited financial statements for the year ended December 31, 2024, except as described below.

Revenue Recognition

The Company accounts for revenue in accordance with ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). Under ASC 606, the Company recognizes revenue when the customer obtains control of the promised goods or services at an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following four steps: (i) confirm it has a contract with a customer that creates enforceable rights and obligations; (ii) identify promised products or services to be transferred to a customer; (iii) determine the transaction price, or the amount it expects to receive, including an estimate of uncertain amounts subject to a constraint to ensure revenue is not recognized in an amount that would result in a significant reversal upon resolution of the uncertainty, is determinable and allocated to the performance obligations; and (iv) recognize revenue when or as performance obligations are satisfied.

Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract. To the extent a contract includes multiple promised goods and services, the Company applies judgment to determine whether promised goods and services are both capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. For arrangements that include multiple performance obligations, the Company allocates the transaction price to the identified performance obligations based on the standalone selling price of each distinct performance obligation. In instances where standalone selling price is not directly observable, the Company develops assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract using a cost plus margin approach, which is an estimation method used when standalone selling price is not directly observable. Key assumptions used within this estimation method may include full-time equivalent personnel effort and estimated external costs associated with the performance obligation.

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method, depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in management’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period for any changes.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation.

The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized over time if either (i) the customer simultaneously receives and consumes the benefits provided by the entity’s performance, (ii) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (iii) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. If the entity does not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer.

The Company’s revenues are primarily derived through its license and research and development service arrangements. Payments to the Company under these arrangements typically include one or more of the following: one-time, non-refundable upfront payment, research and development service funding, milestone and other contingent payments to the Company for the achievement of defined collaboration objectives and certain collaboration, research and development and commercial milestones, as well as royalties based on net sales of approved drugs.

Consideration received prior to revenue recognition is recorded as deferred revenue in the condensed balance sheets. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying condensed balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, non-current. Contract assets represent research and development services which have been performed but have not yet been billed and are reduced when they are subsequently billed. Such contract assets include accounts receivable when the Company’s right to consideration is unconditional. For its current contracts, the Company recognizes revenue as the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time or over time, and, if over time, revenue recognized is based on the use of an input method.

When no remaining performance obligations are required of the Company, or following the completion of the performance obligation period, such amounts are recognized as revenue upon transfer of control of the goods or services to the customer.

The terms of the Company’s collaborative arrangements include one or more of the following:

(i)

Licenses of intellectual property, or IP -If the license to the Company’s IP is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from consideration allocated to the license when the license is transferred to the customer and the customer can use and benefit from the licenses. For a license that is determined not to be distinct, it is combined with other promises and the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company generally recognizes revenue using the cost incurred to date as compared to the total estimated cost of each performance obligation. The impact on revenue of changes in total estimated costs are recognized on a cumulative basis in the period that the change occurs. If estimates of the total cost change, or if contract amendments change the scope of the performance obligation, the required adjustments to revenue could be material.

(ii)

Customer options -The Company evaluates the customer options for material rights or options to acquire additional goods or services at no incremental consideration or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until the option is exercised and performance obligations are satisfied. If an option is not exercised before the option right expires, the Company will accelerate and recognize all remaining revenue related to the material right performance obligation.

(iii)

Research and development services -The promises under the Company's collaboration agreement include research and development services to be performed by the Company for or on behalf of the customer. Payments or reimbursements resulting from the Company's research and development efforts are recognized as the services are performed and presented on a gross basis because the Company is the principal for such efforts. Reimbursements are recognized in revenue in the Company’s condensed statements of operations and comprehensive loss. Expenses incurred as part of the Company’s efforts to perform the research and development services are recognized in research and development expense in the Company’s condensed statements of operations and comprehensive loss.

(iv)

Manufacturing services -The promises under the Company's collaboration agreement include manufacturing services to be performed by the Company. Payments or reimbursements resulting from the Company's manufacturing services are recognized as the services are performed and presented on a gross basis because the Company is the principal for such efforts. Reimbursements are recognized in revenue in the Company’s condensed statements of operations and comprehensive loss. Expenses incurred to perform the manufacturing services are recognized in research and development expense in the Company’s condensed statements of operations and comprehensive loss.

(v)

Milestone payments -At the inception of each arrangement that includes development or regulatory milestone payments, the Company evaluates the probability of reaching the milestones and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur in the future, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control or the licensee’s, such as regulatory approvals, are not considered probable of being achieved until those approvals are received, and therefore, consideration included in the transaction price is constrained. The Company applied the variable consideration allocation exception under ASC 606 whereby variable milestone payments are not estimated and included in the transaction price at inception. The transaction price is then allocated to each performance obligation on a relative standalone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

(vi)

Commercial milestone payments and royalties -For arrangements that include sales-based royalties, including milestone payments based on levels of sales, if the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Accounting Pronouncements Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB, under its Accounting Standards Codification (“ASC”) or other standard setting bodies, and adopted by the Company as of the specified date.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset in developing reasonable and supportable forecasts during the application of the current expected credit loss model for current accounts receivable and current contract assets arising from transactions under ASC 606. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-05.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, an accounting standard update that requires the Company to disclose more detailed information about the types of expenses (including employee compensation, depreciation, and amortization) included in each relevant income statement expense caption. In January 2025, the FASB issued ASU 2025-0, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date", to clarify the effective date of ASU 2024-03. These amendments are effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that these updates will have on its disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The standard is intended to improve income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This update also includes certain other amendments to improve the effectiveness of income tax disclosures. The ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis. Early adoption and retrospective reporting are permitted. The Company is currently evaluating the impact of ASU 2023-09 on its interim condensed financial statements.

Note 2. Balance Sheet Components

Restricted Cash

Restricted cash is comprised of cash that is restricted as to withdrawal or use under the terms of certain contractual agreements. In connection with the Company’s lease agreement, the Company is required to maintain a collateral account to secure a letter of credit issued to its landlord. The collateral account is classified as restricted cash on the Company’s condensed balance sheets.

Prepaid Expenses and Other Current Assets

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

Property and Equipment, Net

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

Depreciation and amortization expense was $0.4 million and $1.2 million for thethree and nine months ended September 30, 2025, respectively. Depreciation and amortization expense was $0.4 million and $1.0 million for thethree and nine months ended September 30, 2024 respectively.

Deferred Revenue

Deferred revenue consists of amounts received prior to satisfying revenue recognition criteria (see Note 3).

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

Note 3. Collaboration and Research Service Arrangements

For the nine months ended September 30, 2025, the Company's revenue is comprised solely of arrangements with Novo and Vertex. For the nine months ended September 30, 2024, the Company's revenue was solely comprised of arrangements with Vertex.

Novo Collaboration Agreement

On May 13, 2025, the Company entered into a Collaboration and License Agreement with Novo (the “Novo Collaboration Agreement”). Under the Novo Collaboration Agreement, the Company and Novo are exclusively collaborating to leverage the Company’s proprietary Native Complex Platform™ to discover, develop and commercialize multiple potential oral small molecule therapies for metabolic-related diseases based on certain specified molecular targets.

Upon effectiveness of the Novo Collaboration Agreement on July 1, 2025, the Company and Novo have commenced four simultaneous research and development programs (each an “R&D Program”), each pursuing one or more Collaboration Targets (as defined in the Novo Collaboration Agreement) from discovery through development candidate selection. Subject to certain limitations, Novo also has a right to modify the research plan with the option to commence additional R&D Programs. Novo will reimburse the Company for 100% of the fully burdened costs arising from all research and development activities undertaken by the Company under the Novo Collaboration Agreement. After development candidate selection, beginning with investigational new drug-enabling activities, Novo will be responsible for all further global development and commercialization for each product candidate at its sole cost and expense unless the profit share option described below is exercised. Novo is also responsible for all commercialization costs subject to the Company’s profit share option for up to one program under the Novo Collaboration Agreement. Pursuant to the terms of the Novo Collaboration Agreement, the Company will provide Novo with exclusive licenses to enable Novo to develop and commercialize products directed at the Collaboration Targets. The Company retains all other rights to its Native Complex Platform™ and all of the Company’s other research and development programs.

Upon effectiveness of the Novo Collaboration Agreement, the Company received a one-time, non-refundable upfront payment of $195.0 million in July 2025, which was recorded as deferred revenue in its condensed balance sheet. The Company is also eligible to receive up to $498.0 million in research, development, regulatory, and commercial milestone payments for each R&D Program. In addition, the Company is entitled to escalating, tiered royalties ranging from mid to high single-digits based on global product sales on a country-by-country and product-by-product basis with respect to a R&D Program until the later of ten years after the date of first commercial sale of the first product in such R&D Program in such country, expiration of specified patent rights covering such product in such country or the expiration of specified regulatory exclusivity for the first product in such R&D Program in such country.

Under the Novo Collaboration Agreement, the Company has a one-time option to share in the global development costs and operating profits or losses (in lieu of milestones and royalties) with respect to one licensed product (the "Profit Share Option"), subject to certain terms, conditions and limitations. In the event that the Company chooses to exercise the Profit Share Option, it will be required to pay Novo all previously reimbursed developmental costs pertaining to that program and reimburse Novo for a portion of the R&D costs incurred under the selected licensed product and will share in the profits resulting from the commercialization of the licensed product.

Unless earlier terminated, the term of the Novo Collaboration Agreement continues until expiration of the last royalty term for the applicable product in the applicable country. The Novo Collaboration Agreement is subject to customary termination provisions, including termination by a party for the other party’s uncured, material breach. The Novo Collaboration Agreement also includes customary representations and warranties, covenants and indemnification obligations.

The Company concluded the Agreement is not within the scope of Accounting Standards Codification 808, Collaborative Arrangements as the Company does not share equally in the exposure to significant risk. Accordingly, the Company assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, Novo, is a customer.

At commencement, the Company identified several potential performance obligations within the Novo Collaboration Agreement, including research and development services on research targets, option rights held by Novo, license to use the Company’s intellectual property to conduct research and development activities, and participation on the joint steering committee (“JSC”). At inception of the Novo Collaboration Agreement, the Company identified the following performance obligations:

(i)

Four combined performance obligations comprised of the license, related research services, and participation of the JSC for the four R&D Programs;

(ii)

Manufacturing services related to one of the R&D Programs; and

(iii)

A material R&D Program modification right held by Novo.

The Company concluded that the license granted at contract inception is not distinct from the research services as the research services significantly modify the intellectual property underlying the license. As a result, for each R&D Program, the license has been combined with the research services and JSC participation into a single performance obligation, which is the combined performance obligation comprised of the license, related research services, and JSC participation.

In assessing whether the various options under the Novo Collaboration Agreement represent material rights, the Company considered the additional consideration the Company would be entitled to upon option exercise and the standalone selling price of the underlying goods and services. For the material rights identified above, the Company concluded that each of the options provided Novo with a discount that it otherwise would not have received.

The Company recognizes revenue related to the combined license and research services performance obligation and the manufacturing performance obligation over time using the input method. Under the input method, the extent of progress towards completion is measured based on the ratio of actual cost incurred to date to the total estimated cost at completion of the performance obligations, which the Company believes best measures its progress towards satisfying the performance obligations. A cost-based input method of revenue recognition requires management to make estimates of cost to complete the performance obligation. Judgment is required to evaluate assumptions related to cost estimates. The estimated standalone selling prices for the material rights were determined based on the estimated discount provided to Novo and the probability that Novo would exercise the options.

The following table presents revenue recognized, unrecognized transaction price, and estimated revenue expected to be recognized in the future as of September 30, 2025 (in thousands):

(1)

Comprised of the allocation of the $195.0 million one-time, non-refundable upfront payment, $153.8 million to the four R&D programs and manufacturing services and $41.2 million to the material right, and $94.0 million of variable consideration related to estimated research and manufacturing services for the four R&D Programs.

(2)

Recorded within revenue in the condensed statement of operations for thethree and nine months ended September 30, 2025, comprisedof $12.8 million of the one-time, non-refundable upfront payment and $8.5 million variable considerations related to estimated research services for the four R&D Programs.

Amounts due to the Company for satisfying the revenue recognition criteria or that are contractually due based upon the terms of the Novo Collaboration Agreement are recorded as accounts receivable in the Company’s balance sheets. Contract liabilities consist of amounts received prior to satisfying the revenue recognition criteria, which are recorded as deferred revenue in the Company’s balance sheets.

The following table summarizes the changes in deferred revenue for thenine months ended September 30, 2025 (in thousands):

(1)

Comprised of $61.6 million of deferred revenue, current and $120.6 million of deferred revenue, non-current, which is expected to be recognized over the next 3.8 years. As of September 30, 2025, all of the Company's performance obligations are outstanding.

The Company periodically assesses the probability of receiving payments from achieving the research and development, collaboration target, and regulatory milestones and includes the payment in the transaction price when they are deemed probable. Royalties and commercial sale milestones will be recognized when the subsequent sales occur based on the sales or usage-based royalty exception. The Company also periodically reassesses the Profit Share Option. As of September 30, 2025, none of the milestones were deemed probable and no royalty revenue has been recognized, and the Profit Share Option was deemed improbable with no expense recognized for repayment of reimbursements to Novo.

As of September 30, 2025, $8.5 million of the Company’s accounts receivable was attributed to the Novo Collaboration Agreement.

As of September 30, 2025 and December 31, 2024, no allowance for credit loss was recorded related to accounts receivable.

Vertex Asset Purchase and Research Service Agreement

Vertex Asset Purchase Agreement

In September 2023, the Company entered into an asset purchase agreement with Vertex, under which Vertex acquired an in-process research and development ("IPR&D") asset related to a GPCR program, including all intellectual property, materials, and compounds associated with the program (the “Vertex Asset Purchase Agreement”). The Vertex Asset Purchase Agreement also provides for a potential milestone payment payable to the Company contingent upon the achievement of a milestone event.

In July 2025, this milestone event was determined to have been achieved and, as a result, the Company received a payment of $12.5 million in August 2025, which wasrecorded as a gain on sale of non-financial asset within total operating expenses in the Company’s condensed statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2025. The Company will not receive any other payments related to this IPR&D asset.

Vertex Research Service Agreement

In conjunction with the Vertex Asset Purchase Agreement in September 2023, the Company entered into research service agreement with Vertex under which the Company agreed to perform certain exploratory research activities for Vertex (the "Vertex Research Service Agreement"). The Company recognized service revenue associated with the Vertex Research Service Agreement over the performance period of the research services as the services are provided in accordance with ASC 606. The Vertex Research Service Agreement expired in September 2025.

During the three and nine months ended September 30, 2025, the Company recorded service revenue of $0.2 million and $0.5 million, respectively, related to research activities performed in connection with the Vertex Research Service Agreement. During the three and nine months ended September 30, 2024, the Company recorded service revenue of $0.2 million and $0.9 million, respectively, related to research activities performed in connection with the Vertex Research Service Agreement. As of September 30, 2025 and December 31, 2024, $0.2 million of the Company’s accounts receivable was attributed to the Vertex Research Service Agreement.

Note 4. Marketable Securities and Fair Value Measurements

The Company records marketable securities and cash equivalents at their estimated fair values, which are based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data.

Fair value is determined based on a three-tier hierarchy under the authoritative guidance for fair value measurements and disclosures that prioritizes the inputs used in measuring fair value as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurements and unobservable (i.e., supported by little or no market activity).

Money market funds are highly liquid investments and are classified as Level 1. The pricing information for these assets is readily available and can be independently validated as of the measurement date. Marketable securities, including U.S. Treasury securities, U.S. government agency securities, commercial paper, and corporate debt securities, are classified as Level 2. These securities are valued using fair value from third-party pricing services, which may use observable inputs based on real-time trade data for similar assets, broker/dealer quotes, bids and/or offers and other observable inputs.

The carrying amounts of the Company’s prepaid and other current assets, accounts payable, and accrued and other current liabilities approximate fair value due to their short maturities.

The fair value measurements of the Company’s cash equivalents and marketable securities are identified at the following levels within the fair value hierarchy (in thousands):

Marketable Securities

As of September 30, 2025 and December 31, 2024, the Company’s marketable securities consist of debt securities, including U.S. Treasury and agency securities, corporate debt securities and commercial paper. These marketable securities are carried at fair value and are included in the tables above. The Company records an allowance for credit losses when unrealized losses are due to credit-related factors. At each reporting date, the Company evaluates securities with unrealized losses to determine whether such losses, if any, are due to credit-related factors. The Company evaluates, among others, whether the Company has the intention to sell any of these marketable securities and whether it is not more likely than not that the Company will be required to sell any of them before recovery of the amortized cost basis. Neither of these criteria were met at September 30, 2025 or December 31, 2024. The credit ratings of the securities held remain of the highest quality. Moreover, the Company continues to receive payments of interest and principal as they become due, and the Company's expectation is that those payments will continue to be received timely. Based on this evaluation, as of September 30, 2025 and December 31, 2024, the Company determined that unrealized losses of its marketable securities were primarily attributable to changes in interest rates and non-credit related factors. As such, no allowances for credit losses were recorded at September 30, 2025 or December 31, 2024.

Interest receivable as of September 30, 2025 and December 31, 2024 was $1.9 million and $1.0 million, respectively, and is recorded as a component of prepaid expenses and other current assets on the Company’s condensed balance sheets.

As of September 30, 2025 and December 31, 2024, all marketable securities in an unrealized loss position had been in an unrealized loss position for less than 12 months. As of September 30, 2025, the Company held 31 marketable securities in an unrealized loss position. As of December 31, 2024, the Company held 36 marketable securities in an unrealized loss position.

As of September 30, 2025, the following table summarizes the amortized cost and the unrealized gains (losses) of the marketable securities presented within marketable securities and cash equivalents (in thousands):

As of December 31, 2024, the following table summarizes the amortized cost and the unrealized gains (losses) of the marketable securities presented within marketable securities and cash equivalents (in thousands):

As of September 30, 2025, the following table summarizes marketable securities in an unrealized loss position (in thousands):

As of December 31, 2024, the following table summarizes marketable securities in an unrealized loss position (in thousands):

Note 5. Commitments and Contingencies

Legal Proceedings

In the ordinary course of business, the Company may be subject to legal proceedings, claims and litigation, as the Company operates in an industry susceptible to patent or other legal claims. The Company is not currently a party to any legal proceeding that, if determined adversely to the Company, in management’s opinion, is expected to individually or in the aggregate have a material adverse effect on its business, financial condition or liquidity and results of operations.

Indemnifications

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. As permitted under Delaware law and in accordance with its bylaws, the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. The Company is also party to indemnification agreements with its officers and directors.

The maximum potential amount of future payments that the Company could be required to make under these provisions is not determinable; however, the Company currently holds director and officer liability insurance. This insurance limits the Company’s exposure and may enable it to recover a portion of any future amounts paid. The Company believes that the fair value of these indemnification obligations is minimal. In addition, the Company is not currently aware of any indemnification claims that could have a material effect on its condensed financial statements.

Note 6. Common Stock

As of September 30, 2025 and December 31, 2024, the Company was authorized to issue 500.0 million shares of common stock, par value $0.001 per share.

The Company reserved the following shares of common stock, on an as-converted basis, for future issuance:

Note 7. Stock-Based Compensation

Stock Plans

In October 2024, the Company’s board of directors adopted, and its stockholders approved, the 2024 Stock Option and Incentive Plan (the “2024 Plan”), which superseded the Company’s 2021 Stock Option and Grant Plan, as amended (the “2021 Plan”) (together, the “Stock Plans”).

On January 1, 2025,2.2 million shares of common stock, representing 5% of the Company’s outstanding shares of common stock as of December 31, 2024, were added to the 2024 Plan. As of September 30, 2025, there were 4.4 million shares available for issuance under the 2024 Plan.

Restricted Stock Awards

The following summarizes restricted stock award activity:

Restricted stock awards of 228,020 and 576,829 shares were subject to repurchase as of September 30, 2025 and December 31, 2024, respectively. The aggregate grant date fair value of shares vested during the three and nine months ended September 30, 2025 was $0.3 million and $1.0 million, respectively.

Stock Options

The following summarizes stock option activity:

The aggregate fair value of stock options that vested for the three and nine months ended September 30, 2025 was $1.6 million and $3.3 million, respectively. The stock options granted in thethree months ended September 30, 2025 had a weighted-average grant-date fair value per share of $9.23 and a total grant-date fair value of $10.3 million. The stock options granted in thenine months ended September 30, 2025 had a weighted-average grant-date fair value per share of $8.83 and a total grant-date fair value of $15.1 million. The total intrinsic value of stock options exercised during three and nine months ended September 30, 2025 was $0.6 million and $1.3 million, respectively.

Of the total stock options granted during the nine months ended September 30, 2025, options to purchase 0.2 million shares granted to one of the Company's officers include accelerated vesting provisions associated with certain change of control events.

Stock Option Valuation

The weighted-average assumptions used to value employee and non-employee stock option awards granted under the Stock Plans using the Black Scholes option pricing model, were as follows:

2024 ESPP

In October 2024, the Company’s board of directors adopted, and its stockholders approved, the 2024 Employee Stock Purchase Plan (the “2024 ESPP”), which became effective immediately prior to the effective date of the Company's IPO. As of September 30, 2025, there were 0.4 million shares available for issuance under the 2024 ESPP.

As of September 30, 2025, no shares under the 2024 ESPP were issued as no purchases had taken place yet. For the three and nine months ended September 30, 2025, the Company recorded approximately $0.4 million and $0.7 million, respectively, of compensation expense associated with the 2024 ESPP.

Stock-based Compensation Expense

Stock-based compensation expense for restricted stock awards, stock options and the 2024 ESPP recognized in the Company’s condensed statements of operations and comprehensive loss is presented as follows (in thousands):

As of September 30, 2025, total unrecognized stock-based compensation expense related to unvested restricted stock awards and unvested stock options was $25.1 million, which is expected to be recognized over a weighted-average period of 2.8 years. As of September 30, 2025, total unrecognized stock-based compensation expense related to the 2024 ESPP was $0.9 million, which is expected to be recognized over a weighted average period of 1.1 years.

Note 8. Related Parties

Third Rock Ventures

In August 2021, the Company entered into a service agreement (the “TRV service agreement”) with Third Rock Ventures, LLC (“TRV”), a holder of more than 5% of the Company’s outstanding capital stock, under which TRV provides consulting services to the Company. For the three and nine months ended September 30, 2025, the Company incurredno fees under the TRV service agreement. For thethree and nine months ended September 30, 2024, under the TRV service agreement, the Company incurred fees of$0.1 million and $0.2 million, respectively, which were recorded within general and administrative expenses in the Company’s condensed statements of operations and comprehensive loss. As of December 31, 2024, $0.1 million of expense related to TRV was recorded in accrued expenses and other current liabilities. There wereno expenses related to TRV in accrued expenses and other current liabilities on the Company’s condensed balance sheets at September 30, 2025.

The Company’s former interim Chief Medical Officer, and also a member of the Company’s board of directors, is affiliated with TRV (the “TRV Board Member”). The TRV Board Member did not receive any cash compensation from the Company for his service as its interim Chief Medical Officer, as his services were provided to the Company through the TRV service agreement. The TRV Board

Member ceased serving as interim Chief Medical Officer in September 2024. In December 2024, the Company entered into a separate consulting agreement with the TRV Board Member, which includes cash compensation to be paid directly to the TRV Board member.

During the three and nine months ended September 30, 2025, total fees incurred related to the TRV Board Member’s consulting services were immaterial and $0.1 million, respectively. As of September 30, 2025, outstanding accounts payable to the TRV Board Member for consulting services was immaterial.

For the three and nine months ended September 30, 2024, the fees attributed to consulting services provided by the TRV Board Member as the interim Chief Medical Officer were $0.1 million and $0.2 million, respectively. Additionally, as compensation for his services as the Company's interim Chief Medical Officer, the Company granted him options to purchase 23,227 shares of common stock during thenine months ended September 30, 2024 at an exercise price of $2.76 per share.

Note 9. Net Income (Loss) Per Share

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

The Company had 4,645,443 shares of potentially dilutive securities, comprised of outstanding stock options, restricted stock awards, and ESPP shares, not included in the calculation of diluted net loss per share for thenine months ended September 30, 2025 and 2,986,349 shares for thethree and nine months ended September 30, 2024 because to do so would be anti-dilutive.

Note 10. Segment Information

The Company operates inone segment, which is GPCR oral small molecule drug discovery. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The measure of segment profit or loss is net income (loss), which is also reported on the condensed statements of operations and comprehensive income (loss) as net income (loss).

The measure of segment assets is reported on the balance sheet as total assets. The CODM uses segment net loss to monitor spending, assess performance for the Company and management, evaluate the progress of completing corporate goals, decide how to allocate resources among the Company’s clinical and pre-clinical portfolios, and make strategic decisions about business development opportunities.

The CODM is regularly provided with the following significant segment expenses:

(1)

Other segment expenses include facility-related and office-related costs, information technology costs, general laboratory costs, and other operating expenses.

As of September 30, 2025 and December 31, 2024, all of the Company’s property and equipment was maintained in the U.S. For the three and nine months ended September 30, 2025 and 2024, the Company’s revenue was generated from providing research services and was earned in the U.S.