Monte Rosa Therapeutics, Inc.

Notes to the condensed consolidated financial statements

(unaudited)

1. Description of business and liquidity

Business

Monte Rosa Therapeutics, Inc. is a biotechnology company developing a portfolio of novel small molecule precision medicines that employ the body’s natural mechanisms to selectively degrade therapeutically-relevant proteins. As used in these condensed consolidated financial statements, unless the context otherwise requires, references to the Company or Monte Rosa refer to Monte Rosa Therapeutics, Inc. and its wholly owned subsidiaries Monte Rosa Therapeutics AG and Monte Rosa Therapeutics Securities Corporation. Monte Rosa Therapeutics AG, a Swiss operating company, was incorporated under the laws of Switzerland in April 2018. Monte Rosa Therapeutics, Inc. was incorporated in Delaware in November 2019. The Company is headquartered in Boston, Massachusetts with research operations in both Boston and Basel, Switzerland.

Liquidity considerations

Since inception, the Company has devoted substantially all its efforts to business planning, research and development, recruiting management and technical staff, and raising capital and has financed its operations primarily through issuance and sale of convertible promissory notes, convertible preferred stock, public offerings of common stock or warrants to purchase common stock, registered direct offerings, and through its collaborations with F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc., or Roche, and with Novartis AG, or Novartis.

The Company’s continued discovery and development of its product candidates 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 and infrastructure and extensive compliance-reporting capabilities. Even if product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

As of June 30, 2026, the Company had an accumulated deficit of$565.1 million. The Company has incurred losses and negative cash flows from operations since inception, including net losses of$87.9 million for the six months ended June 30, 2026 and $38.6 million for the year ended December 31, 2025. The Company expects that its operating losses and negative cash flows will continue for the foreseeable future as the Company continues to develop its product candidates. The Company currently expects that its cash, cash equivalents, and marketable securities of$621.1 million as of June 30, 2026 will be sufficient to fund operating expenses and capital requirements for at least 12 months from the date the second quarter interim condensed consolidated financial statements are issued. However, additional funding will be necessary to fund future discovery research, preclinical and clinical activities. The Company will seek additional funding through public financings, debt financings, collaboration agreements, strategic alliances and licensing arrangements. Although it has been successful in raising capital in the past, there is no assurance that the Company will be successful in obtaining such additional financing on terms acceptable to it, if at all, and the Company may not be able to enter into collaborations or other arrangements. If the Company is unable to obtain funding, it could be forced to delay, reduce or eliminate its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect the Company’s business prospects, and even the ability to continue operations.

2. Summary of significant accounting policies

Basis of presentation

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S., or GAAP, and are stated in U.S. dollars. 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, or ASUs, of the Financial Accounting Standards Board, or FASB. All intercompany balances and transactions have been eliminated in consolidation.

Unaudited financial information

The Company’s condensed consolidated financial statements included herein have been prepared in conformity with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC. In the Company’s opinion, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the financial position and results of operations for the reported interim periods. The

Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

Recently issued accounting pronouncements

The Company has elected to use the extended transition period for complying with new or revised accounting standards as available under the Jumpstart Our Business Startups Act, or the JOBS Act.

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 requires disclosure of, in a tabular presentation, each relevant expense caption on the face of the income statement that includes any of the following natural expenses: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization (DD&A) recognized as part of oil- and gas-producing activities or other types of depletion expenses. The tabular disclosure would also include certain other expenses, when applicable. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements and related disclosures.

\\

3. 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 thousands):

Money market funds are highly liquid investments and are actively traded. The pricing information on the Company’s money market funds is based on quoted prices in active markets for identical securities. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.

The fair value of pension plan assets has been determined as the surrender value of the portfolio of active insured members held within the Columna Collective Foundation Group investment fund and is classified within Level 2 of the fair value hierarchy.

Marketable securities consist of corporate debt securities and U.S. Treasury securities which are classified as available-for-sale pursuant to ASC 320, Investments—Debt and Equity Securities. Marketable securities are classified within Level 2 of the fair value hierarchy because pricing inputs are other than quoted prices in active markets. The fair values of these investments are estimated by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities based on historical data and other observable inputs.

There wereno transfers among Level 1, Level 2 or Level 3 categories in thesix months ended June 30, 2026 and 2025.

4. Marketable securities

Marketable securities as of June 30, 2026 consisted of the following (in thousands):

Marketable securities as of December 31, 2025 consisted of the following (in thousands):

As of June 30, 2026, unrealized gain and losses on marketable securities are recorded in accumulated other comprehensive loss in equity on the accompanying condensed consolidated balance sheet. There wereno realized gains or losses recognized on the sale or maturity of marketable securities for thethree and six months ended June 30, 2026 and 2025 and, as a result, the Company did not reclassify any amounts out of accumulated other comprehensive loss for the same periods.

The Company holds debt securities of companies with high credit quality and has determined that there was no material change in the credit risk of any of its debt securities. The Company also believes that it will be able to collect both principal and interest amounts due to it at maturity.

5. Property and equipment, net

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

The following table summarizes depreciation expense incurred (in thousands):

6. Accrued expenses and other current liabilities

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

7. Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use, or ROU, assets and operating lease liabilities in the condensed consolidated balance sheets. The Company hasno finance leases as of June 30, 2026.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, management estimated the incremental borrowing rate based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

Klybeckstrasse Lease

In March 2021, the Company entered into an operating lease agreement, or the Klybeckstrasse Lease, for office and laboratory space with Wincasa AG, or the Basel Landlord, that occupies approximately 21,422 square feet located at Klybeckstrasse 191, 4057 Basel, Basel-City, Switzerland. In April 2023, the Company and the Basel Landlord amended the Klybeckstrasse Lease which increased the office and laboratory space square footage from 21,422 square feet to 44,685 square feet and extended the term of the lease through June 30, 2027. In March 2026, the Company and the Basel Landlord again amended the Klybeckstrasse Lease, the Second Amendment, to extend the term of the lease through June 30, 2028. The Second Amendment was accounted for as a lease modification and resulted in increases to the related ROU asset and operating lease liability of $1.0 million.

Harrison Avenue Lease

In December 2021, the Company entered into a non-cancelable lease agreement, or the Harrison Avenue Lease, for 63,327 square feet of office and laboratory space to support its expanding operations. The term of the lease commenced on April 1, 2022 and the Company’s obligation to pay rent began on December 21, 2022. The initial term of the lease is 128 months following the commencement date, at which point the Company has the option to extend the lease an additional 5 years. The Company has determined that it is not reasonably certain to exercise the option to extend the lease and has not included the extension period in the lease term. The annual base rent under the Harrison Avenue Lease is $95 per square foot for the first year, which is subject to scheduled annual increases of 3%, plus certain costs, operating expenses and property management fees.

The components of lease expense are as follows (in thousands):

The variable lease expenses generally include common area maintenance and property taxes.

The following table summarizes lease expense incurred (in thousands):

Short-term lease costs for the three and six months ended June 30, 2026 and 2025 were immaterial.

The weighted average remaining lease term and discount rate related to the Company's leases are as follows:

Supplemental cash flow information and other information relating to the Company's leases are as follows (in thousands):

Future minimum lease payments under non-cancelable leases as of June 30, 2026 for each of the years ending December 31 are as follows (in thousands):

8. Commitments and contingencies

Legal proceedings

From time to time, the Company may be subject to legal proceedings, claims and disputes that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. As of June 30, 2026, the Company is not a party to any litigation and does not have a contingency reserve established for any litigation liabilities.

9. Collaboration and license agreements

Roche collaboration and license agreement

In October 2023, Monte Rosa Therapeutics AG, a wholly-owned subsidiary of Monte Rosa Therapeutics, Inc, or the Company, entered into a collaboration and license agreement, or the Roche Agreement, with Roche. Pursuant to the Roche Agreement, the parties will seek to identify and develop molecular glue degraders, or MGDs, against cancer or neurological disease targets using the Company’s proprietary drug discovery engine for an initial set of targets in oncology and neuroscience selected by Roche, wherein a certain number of targets selected by Roche are for a limited time subject to replacement rights owned by Roche. The Company will lead preclinical discovery and research activities with Roche leading late preclinical and clinical development activities.

Under the Roche Agreement, Roche will have a worldwide, exclusive license under patents and know-how controlled by the Company to develop and commercialize products directed to applicable targets. The license exclusivity is subject to the Company’s retained rights solely to fulfill its obligations under the arrangement.

The research collaboration activities governed by the Roche Agreement are overseen by a joint research committee.

Unless earlier terminated, the Roche Agreement will remain in effect for each product licensed under the Roche Agreement until expiration of the royalty term for the applicable product. The parties have included termination provisions in the Roche Agreement, allowing termination of the Roche Agreement in its entirety, on a country-by-country or a target-by-target basis.

Pricing

In November 2023, the Company received a $50.0 million non-refundable upfront payment for the initial set of targets. Pursuant to the terms of the Roche Agreement, the Company expects to be entitled to receive from Roche certain variable consideration including potential preclinical milestones up to $172 million, and potential clinical, commercial and sales milestones exceeding $2 billion. The Company is also eligible to receive tiered royalties ranging from high-single-digits to low-teens on any products that are commercialized by Roche as a result of the collaboration.

To date through June 30, 2026, the Company has received$16.0 million related to Roche's decision to pay preclinical milestones and $3.0 million related to Roche's decision to exercise its option rights to replace certain targets for research and development services. The related payments are initially classified as deferred revenue in the accompanying condensed consolidated balance sheet and recognized in revenue as the related research and development services are performed.

This agreement represents a transaction with a customer and therefore is accounted for under ASC 606, Revenue From Contracts With Customers.

The Company determined that the development and commercialization licenses for each of the collaboration targets is neither capable of being distinct nor distinct within the context from the promised initial research services. In addition, the Company has determined that each target in the agreement is distinct from other targets because: (i) Roche can benefit from the license and research services for a given target on their own since the results related thereto can be evaluated discretely and (ii) the results of the research and development of each target does not affect either the Company’s ability to perform or Roche’s ability to assess the results for any other target. As such, the Company has identified certain performance obligations within the agreement as follows:

•

Performance obligations for the research and development of initial targets; and

•

Performance obligations for the research and development services related to Roche’s option to replace certain targets.

The total transaction price of the Roche Agreement is allocated to the performance obligations based on their relative standalone selling price. The Company developed the standalone selling price for the performance obligations included in the Roche Agreement by determining the total estimated costs to fulfill each performance obligation identified with the objective of determining the price at which it would sell such an item if it were to be sold regularly on a standalone basis. The allocated transaction price is recognized as revenue from collaboration agreements in one of two ways:

•

Research and development of the initial targets: The Company recognizes the portion of the transaction price allocated to each of the research and development performance obligations as the research and development services are provided, using an input method, in proportion to costs incurred to date for each research development target as compared to total costs incurred and expected to be incurred in the future to satisfy the underlying obligation related to said research and development target. The transfer of control occurs over this period and, in management’s judgment, is the best measure of progress towards satisfying the performance obligation.

•

Option rights to replace targets: The transaction price allocated to the replacement option rights, which are considered material rights, is deferred until the period that Roche elects to exercise or elects to not exercise its option right to license and commercialize the underlying research and development target. Upon Roche's exercise of a replacement option right, the Company will recognize the portion of the transaction price allocated using the input method described above. Any payments made to exercise replacement option rights will be added to the allocated value and recognized as the related services are performed.

To date through June 30, 2026, a total of$53.8 million related to the Roche Agreement has been recognized as collaboration revenue in the condensed consolidated statements of operations and comprehensive (loss) income, including$5.8 million and$7.5 million recognized in the three and six months ended June 30, 2026, respectively. The remaining$15.2 million of the upfront payment and subsequent milestone and replacement target payments related to customer options are recorded as deferred revenue in the liabilities section of the condensed consolidated balance sheet, with$9.3 million included in current liabilities and$5.9 million included in non-current liabilities.

The following table summarizes the deferred revenue amounts allocated to the Roche Agreement performance obligations (in thousands):

The Company expects that the remaining deferred revenue for the initial targets will be recognized within 11 months. The Company expects that deferred revenue related to replacement targets will be recognized within 28 months. Due to the uncertain nature of the research and development being performed by the Company, it may take longer than anticipated torecognize revenue related to the performance obligations for the initial and replacement targets. Any amounts remaining in deferred revenue will be recognized at the conclusion of the Roche Agreement in October 2028.

As of June 30, 2026, potential research, development and regulatory milestone payments that the Company is eligible to receive were excluded from the transaction price as they were fully constrained by uncertain events. The Company will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and if necessary, the Company will adjust its estimate of the transaction price. Any additions to the transaction price would be reflected in the period as a cumulative revenue catch-up based on the ratio of costs incurred to the total estimated costs expected applied to the revised transaction price. Sales-based royalties and milestone payments, which predominantly relate to the license, will be recognized if and when the related sales occur.

2024 Novartis License Agreement

In October 2024, Monte Rosa Therapeutics AG, a wholly-owned subsidiary of the Company, entered into a license agreement, the 2024 Novartis Agreement, with Novartis. Pursuant to the 2024 Novartis Agreement, the Company granted to Novartis an exclusive, royalty-bearing, sublicensable and transferable license to develop, manufacture, and commercialize VAV1 MGDs, including MRT-6160, which is currently in Phase 1 clinical development for immune-mediated conditions. The Company was responsible for completing the Phase 1 clinical study and Novartis is responsible for all subsequent development and commercial activities starting at Phase 2.

Pricing

In December 2024, the Company received a $150 million non-refundable upfront payment. Pursuant to the 2024 Novartis Agreement, the Company is entitled to receive from Novartis up to $2.1 billion in development, regulatory, and sales milestones, beginning upon initiation of Phase 2 studies including (a) potential development and regulatory milestone payments, exceeding $1.5 billion if multiple indications achieve regulatory approval in multiple territories, and (b) potential sales milestone payments in connection with sales outside of the U.S., and tiered royalties on sales outside of the U.S. Novartis will be responsible for costs associated with Phase 2 clinical studies. The Company and Novartis also agreed to a net profit and loss sharing arrangement, pursuant to which the Company could co-fund any global clinical development from Phase 3 onwards and will share 30% of any profits and losses associated with the manufacturing and commercialization of the licensed products in the U.S. The Company has defined opportunities to opt out of the net profit and loss sharing arrangement prior to the initiation of Phase 3 clinical trials, in such case, sales in the U.S. would be entitled to the potential sales milestone payments and tiered royalties as sales outside of the U.S. Any costs for any co-funded development and commercialization activities are subject to budgets reviewed by the Company and Novartis.

The goods and services that the Company was obligated to deliver and perform (the License and Licensor Clinical Trial) were accounted for under ASC 606 as they represented a transaction with a customer.

The Company has concluded that the License and the completion of the Licensor Clinical Trial promises are treated as a single, combined performance obligation. The Company has determined the total transaction price to be $150 million, which consists solely of the upfront payment. All milestone payments were constrained as the achievement of the milestones are contingent upon the success of the underlying research and development activities and are generally outside the control of the Company. The Company’s options to share in further development and commercialization efforts via its opt-in/opt-out rights will be assessed and accounted for as separate units of accounting under the relevant guidance if, and when, such options are exercised by the Company.

The revenue the Company recognized associated with the combined performance obligation was recognized over time using a cost-based input methodology. The transfer of control occurred over the course of the Licensor Clinical Trial promise and, in management’s judgment, was the best measure of progress towards satisfying the combined performance obligation.

The total transaction price of $150 million plus $1.2 million of incremental cost reimbursements related to the Novartis Agreement was recognized as collaboration revenue in the condensed consolidated statements of operations and comprehensive loss by September 30, 2025.

2025 Novartis License Agreement

In September 2025, Monte Rosa Therapeutics AG, a wholly-owned subsidiary of the Company, entered into a collaboration, option, and license agreement, the 2025 Novartis Agreement, with Novartis. Pursuant to the 2025 Novartis

Agreement, the Company granted to Novartis an exclusive, royalty-bearing, sublicensable and transferable license to degraders for one immunology and inflammation, or I&I program, or the First Licensed Program, and the option to obtain exclusive, royalty-bearing, sublicensable and transferable licenses with respect to two additional programs from the Company’s growing preclinical immunology portfolio, or the Options, and the programs, or the Optioned I&I Programs. Such Options are individually exercisable at Novartis’ discretion until a program meets criteria for investigational new drug application-filing-readiness. On a program-by-program basis, if Novartis does not exercise an Option, all rights with respect to such program are retained by the Company; if Novartis does exercise its Option, such program becomes a Licensed Program, or together, with the First Licensed Program, the Licensed Programs. Under the 2025 Novartis Agreement, the Company will apply its proprietary AI/ML-enabled QuEEN™ engine for the discovery and development of degraders for the First Licensed Program and the Optioned I&I Programs. The Licensed Programs will be further developed and commercialized by Novartis, unless otherwise agreed to by the parties in accordance with the 2025 Novartis Agreement. Research activities for the Licensed Programs governed by the Agreement will be overseen by a Joint Research Committee.

Pricing

In September 2025, the Company received a $120.0 million non-refundable upfront payment from Novartis. Pursuant to the 2025 Novartis Agreement, the Company is entitled to receive from Novartis payments to maintain the Options totaling up to $60.0 million, and is eligible to receive from Novartis (1) preclinical milestone payments relating to the First Licensed Program and option exercise payments related to the Options of up to $180.0 million, (2) up to $5.4 billion in clinical development, regulatory, and sales milestones relating to the First Licensed Program and the two Optioned I&I Programs, beginning upon initiation of Phase 1 studies, including (a) potential development and regulatory milestone payments up to $2.2 billion if regulatory approval is achieved for multiple indications in multiple territories and (b) potential sales milestone payments up to $3.2 billion, allocated across licensed products, and (3) tiered royalties on global net sales in the high-single to low double-digit range for the First Licensed Program and in the low double-digit range for the two Optioned I&I Programs. The Company will be responsible for costs related to research activities, while Novartis will be responsible for costs related to development and commercialization activities.

The goods and services that the Company is obligated to deliver and perform under the 2025 Novartis Agreement will be accounted for under ASC 606 as they represent a transaction with a customer.

The Company has concluded that the transaction price at inception is $180 million, which consists of the $120 million upfront payment and $60 million of option maintenance payments due over the course of the contract term. The Company has identified the following performance obligations in the contract:

•

License and research services for an immunology target

•

Research services for certain immunology targets to support the Immunology License Options

•

Material Right First Immunology License Option

•

Material Right Second Immunology License Option

The total transaction price of the 2025 Novartis Agreement is allocated to the performance obligations based on their relative standalone selling prices, or the price at which it would sell such an item if it were to be sold regularly on a standalone basis. The standalone selling price of performance obligations related to license and research services were determined using a cost-plus margin approach. The standalone selling price related to material rights for immunology license options were determined by benchmarking to comparable transactions, probability adjusted for the likelihood of exercise.

The allocated transaction price is recognized as revenue from collaboration agreements in one of two ways:

•

License and research services for immunology targets: The Company recognizes the portion of the transaction price allocated to each of the research performance obligations as the research services are provided, using an input method, in proportion to costs incurred to date for each research development target as compared to total costs incurred and expected to be incurred in the future to satisfy the underlying obligation related to said research services. The transfer of control occurs over this period and, in management’s judgment, is the best measure of progress towards satisfying the performance obligation.

•

Material option rights: The transaction price allocated to the options rights, which are considered material rights, is deferred until the period that Novartis elects to exercise its option right to license and commercialize the underlying immunology program. The Company will recognize the portion of the transaction price allocated to the option rights upon exercise. The Company has no further obligations to perform research services subsequent to the option exercise.

To date through June 30, 2026,$7.5 million of revenue related to the 2025 Novartis Agreement has been recognized as collaboration revenue in the condensed consolidated statements of operations and comprehensive (loss) income, including$3.2 million and$5.7 million recognized in the three and six months ended June 30, 2026, respectively. The remaining$112.5 million has been recorded as deferred revenue on the condensed consolidated balance sheets, with$12.8 million included in current liabilities related to performance obligations expected to be completed within 12 months from June 30, 2026 and$99.7 million included in non-current liabilities related to performance obligations expected to be completed later than 12 months from June 30, 2026. The total transaction price of $180 million includes $60 million of future option maintenance payments which are not included in deferred revenue on the condensed consolidated balance sheet.

The following table summarizes the unearned amount of the 2025 Novartis Agreement transaction price allocated to the performance obligations (in thousands):

The Company expects that that the remaining deferred revenue for the license and research services for a named immunology target and research services for two additional immunology targets to be recognized within 52 months. The deferred revenue related to material right license options will be recognized when Novartis exercises such options rights or at the expiration of the option rights. Due to the uncertain nature of the research and development being performed by the Company, it may take longer than anticipated to recognize revenue related to the performance obligations related to research services.

10. Equity

Undesignated preferred stock

The Company had 10,000,000 shares authorized of undesignated preferred stock, par value of $0.0001, of whichno shares were issued and outstanding as of June 30, 2026.

Common stock

As of June 30, 2026, the Company had 500,000,000 shares of common stock authorized, of which 85,226,427 shares were issued and outstanding.

Additionally, as of June 30, 2026, the Company had 16,487,961 outstanding pre-funded warrants to purchase shares of the Company's common stock to accredited investors. The pre-funded warrants are immediately exercisable at an exercise price of $0.0001 per share at any time after the date of issuance. A holder of a pre-funded warrant may not exercise such pre-funded warrant if the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder, up to 19.99%) of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise.

The Company has assessed the pre-funded warrants for appropriate equity or liability classification. During this assessment, the Company determined the pre-funded warrants are a freestanding instrument that does not meet the definition of a liability pursuant to ASC 480 and does not meet the definition of a derivative pursuant to ASC 815. The pre-funded warrants are indexed to the Company’s common stock and meet all other conditions for equity classification under ASC 480 and ASC 815. Based on the results of this assessment, the Company concluded that the pre-funded warrants are a freestanding equity-linked financial instrument that meets the criteria for equity classification under ASC 480 and ASC 815. Accordingly, the pre-funded warrants are classified as equity and are accounted for as a component of additional paid-in capital at the time of issuance. The Company also determined that the pre-funded warrants should be included in the determination of basic and diluted earnings per share in accordance with ASC 260, Earnings per Share.

The holders of common stock are entitled to dividends when and if declared by the Company's board of directors, subject to the preferences applicable to any outstanding shares of preferred stock. The Company's board of directors hasnot declared any dividends and the Company hasnot paid any dividends.

The holders of common stock are entitled toone vote per share on all matters to be voted upon by the stockholders.

During the three and six months ended June 30, 2026,509,300 and 5,525,963 pre-funded warrants were exercised, respectively. These exercises included net-settlements pursuant to the terms of the applicable pre-funded warrant agreements, whereby the holders elected to have pre-funded warrants withheld in a cashless exercise in lieu of paying the $0.0001 per share exercise price. As a result, during thethree months ended June 30, 2026,5 pre-funded warrants were withheld to cover the aggregate exercise price, resulting in the issuance of 509,295 shares of common stock from the exercise of pre-funded warrants. During the six months ended June 30, 2026,35 pre-funded warrants were withheld to cover the aggregate exercise price, resulting in the issuance of 5,525,928 shares of common stock from the exercise of pre-funded warrants. During the three and six months ended June 30, 2025, no pre-funded warrants were exercised.

As of June 30, 2026 and December 31, 2025, the Company has reserved the following shares of common stock for the exercise of stock options, vesting of restricted stock and pre-funded warrants:

At-the-market offerings

In July 2022, the Company entered into a sales agreement, or the 2022 Sales Agreement, with Jefferies LLC, or Jefferies, as amended on March 20, 2025, pursuant to which the Company could offer and sell shares of its common stock pursuant to the then-effective prospectus from time to time in “at-the-market” offerings, or the ATM Program, through Jefferies, as the Company’s sales agent. Effective January 7, 2026, the Company terminated the prospectus pursuant to which it had been able to sell shares from time to time in at-the-market offerings under the 2022 Sales Agreement.

On February 11, 2026, the Company filed a registration statement on Form S-3ASR (File No. 333-293389) with the SEC, or the 2026 Automatic Shelf Registration Statement, in relation to the registration of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof for the purposes of selling, from time to time, our common stock, debt securities or other equity securities in one or more offerings. In connection with the ATM Program and pursuant to the 2026 Automatic Shelf Registration Statement, the Company filed a new prospectus supplement with the SEC on February 11, 2026, for the offer and sale of up to $100.0 million of shares of common stock from time to time through Jefferies.

The Company agreed to pay Jefferies a commission of up to 3.0% of the gross proceeds of any shares sold by Jefferies under the Sales Agreement. During thesix months ended June 30, 2026 and 2025, the Company didnot sell shares of common stock under the ATM Program.

Underwritten public offerings

In January 2026, the Company entered into an underwriting agreement with Jefferies LLC, TD Securities (USA) LLC, and Piper Sandler & Co. as representatives of the several underwriters, related to an underwritten public offering, or the 2026 Offering, of 13,000,000 shares of common stock at a price of $24.00 per share, and, in lieu of common stock to certain investors, pre-funded warrants to purchase 1,375,000 shares of common stock at a price of $23.9999 per pre-funded warrant, which represents the price per share at which shares of common stock were sold in the 2026 Offering, minus $0.0001, which is the exercise price of each pre-funded warrant. The pre-funded warrants are immediately exercisable and may be exercised at any time until the pre-funded warrants are exercised in full. Aggregate gross proceeds from the 2026 Offering were $345.0 million, or aggregate net proceeds of $323.8 million after deducting the underwriter discounts, commissions, and other offering costs.

11. Stock-based compensation

2020 Stock incentive plan

The Company’s 2020 Stock Option and Grant Plan, or the 2020 Plan, provided for the Company to grant stock options, restricted stock and other stock awards, to employees, non-employee directors, and consultants. Upon the effectiveness of the 2021 Plan (as defined below), no further issuances were made under the 2020 Plan.

2021 Stock Option and Incentive Plan

The Company’s 2021 Stock Option and Incentive Plan, or the 2021 Plan, was approved by the Company’s board of directors on May 28, 2021 and the Company’s stockholders on June 17, 2021 and became effective on the date immediately prior to the date on which the registration statement for the Company’s initial public offering, or IPO, was declared effective. The 2021 Plan provides for the grant of incentive stock options; non-qualified stock options; stock appreciation rights; restricted stock units, or RSUs; restricted stock awards; unrestricted stock awards; cash-based awards and dividend equivalent rights to the Company’s officers, employees, directors and consultants. The number of shares initially reserved for issuance under the 2021 Plan was 4,903,145. Under the evergreen provision of the 2021 Plan, the shares available for issuance under the 2021 Plan will be automatically increased each January 1st by 5% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31st or such lesser number of shares as may be determined by the Company’s compensation, nomination and corporate governance committee. Effective January 1, 2026 the number of shares available under the 2021 Plan automatically increased by 3,277,186 shares pursuant to the evergreen provision of the 2021 Plan. As of June 30, 2026,2,241,117 shares were available for issuance under the 2021 Plan.

2021 Employee Stock Purchase Plan

The Company’s 2021 Employee Stock Purchase Plan, or the 2021 ESPP, was approved by the Company’s board of directors on May 28, 2021 and the Company’s stockholders on June 17, 2021 and became effective on the date immediately prior to the date on which the registration statement for the Company’s IPO was declared effective. A total of 439,849 shares of the Company’s common stock were initially reserved for issuance under the 2021 ESPP. The shares available for issuance under the 2021 ESPP will be automatically increased on each January 1st, through January 1, 2031, by the least of (i)439,849 shares of the Company’s common stock, (ii)1% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31st or (iii) such lesser number of shares of the Company’s common stock as determined by the plan administrator of the 2021 ESPP. Effective January 1, 2026 the number of shares available under the 2021 ESPP automatically increased by 439,849 shares pursuant to the evergreen provision of the 2021 ESPP. As of June 30, 2026,2,078,644 shares were available for issuance under the 2021 ESPP.

2026 Inducement Plan

The Company’s 2026 Inducement Plan, or the 2026 Plan, was approved by the Company’s board of directors on March 16, 2026 and became effective on the same date. The 2026 Plan provides for the grant of non-qualified stock options, stock appreciation rights, RSUs, restricted stock awards, unrestricted stock awards, and dividend equivalent rights exclusively to individuals who were not previously employees or directors of the Company, as an inducement material to the individuals' entry into employment with the Company and in accordance with the requirements of Nasdaq Stock Market Rule 5635(c)(4). The number of shares reserved for issuance under the 2026 Plan was 1,500,000. As of June 30, 2026,1,428,075 shares were available for issuance under the 2026 Plan.

Stock option activity

The Company has granted stock options to employees, non-employee directors, and others under the 2021 Plan and under the 2026 Plan.

The following summarizes stock option activity:

The aggregate intrinsic value of options granted is calculated as the difference between the exercise price of the options and the estimated fair value of the Company’s common stock.

Restricted stock unit activity

The Company has granted RSUs to employees under the 2021 Plan and under the 2026 Plan. Each of the RSUs represents the right to receive one share of the Company’s common stock upon vesting. The RSUs will typically vest over two or four years provided the individual remains in continuous service of the Company. Accordingly, stock-based compensation expense for each RSU is recognized on a straight-line basis over the vesting term. The fair value of each RSU is based on the closing price of the Company’s common stock on the date of grant.

The following summarizes RSU activity:

The aggregate fair value of RSUs that vested during the six months ended June 30, 2026 and 2025 was$2.9 million and$0.5 million, respectively. The weighted average grant date fair value of RSUs that vested during the six months ended June 30, 2026 and 2025 was$7.03 and$7.55 per share, respectively.

Stock-based compensation expense

Stock-based compensation expense is classified as follows (in thousands):

As of June 30, 2026 total unrecognized stock-based compensation cost related to unvested stock options and restricted stock units was$48.4 million and$11.6 million, respectively. The Company expects to recognize this remaining cost over a weighted average period of 2.6 years and 3.0 years, respectively.

12. Income taxes

The following table summarizes the income tax provision recorded (in thousands):

For the three and six months ended June 30, 2026, the income tax provision was primarily related to interest income on marketable securities in Massachusetts. For the three and six months ended June 30, 2025, the income tax provision was primarily driven by the current federal and state taxes related to the $150 million upfront payment for the Novartis License Agreement, which was expected to be recognized as taxable net controlled foreign corporation tested income, or NCTI.

The Company continues to maintain a full valuation allowance against all of its deferred tax assets. The Company has evaluated the positive and negative evidence involving its ability to realize its deferred tax assets. The Company has considered its history of cumulative net losses incurred since inception and its lack of any commercial products. The Company has concluded that it is more likely than not that it will not realize the benefits of its deferred tax assets. The Company reevaluates the positive and negative evidence at each reporting period.

13. Net (loss) earnings per common share

Basic and diluted net (loss) earnings per share is calculated based upon the weighted-average number of shares of common stock outstanding during the period. Shares of the Company's common stock underlying pre-funded warrants are included in the calculation of the basic and diluted earnings per share.

Basic and diluted net (loss) earnings per share are as follows (in thousands except share and per share amounts):

The following outstanding potentially dilutive securities have been excluded from the calculation of diluted net (loss) earnings per common share, as their effect is anti-dilutive:

14. Employee retirement plans

The Company, in compliance with Swiss Law, is contracted with the AXA Leben AG, or AXA, for the provision of pension benefits in a defined benefit plan. All benefits are organized in a semi-autonomous collective foundation within the framework of the contract with AXA. Insurance benefits due are paid directly to the entitled persons by AXA in the name of and for the account of the collective foundation. The pension plan is financed by contributions of both employees and the Company. The contract between the Company and the collective foundation can be terminated by either side. In the event of a termination, the Company would have an obligation to find alternative pension arrangements for its employees. Because there is no guarantee that the employee pension arrangements would be continued under the same conditions, there is a risk, albeit remote, that a pension obligation may fall on the Company. The pension assets are pooled for all affiliated companies; the investment of assets is done by the governing bodies of the collective foundation.

The following table summarizes pension expense incurred (in thousands):

In February 2021, the Company adopted a defined contribution plan intended to qualify under Section 401(k) of the Internal Revenue Code covering all eligible U.S. based employees of the Company. All employees are eligible to become participants of the plan immediately upon hire. Each active employee may elect, voluntarily, to contribute a percentage of their compensation to the plan each year, subject to certain limitations. The Company reserves the right, but is not obligated, to make additional contributions to this plan. The Company makes safe-harbor match contributions of 100% of the first 4% of each participant’s eligible compensation. In January 2024, the Company adopted a defined contribution supplemental pension plan for eligible Swiss based employees defined by Swiss Law Art.1e BVV 2, or the 1e Plan. Employees earning above a defined threshold are eligible and automatically enrolled in the 1e Plan and required contributions are determined by age and salary under Swiss Law. The Company and the employee share the costs of the 1e Plan.

The following table summarizes defined contribution expenses incurred (in thousands):

15. Segment data

The Company defines its segments based on the way in which internally reported financial information is regularly reviewed by the chief operating decision maker, or CODM, to analyze financial performance, make decisions, and allocate resources. The Company manages its operations as a single operating and reportable segment committed to developing a portfolio of novel and proprietary MGDs. MGDs are small molecule drugs that employ the body’s natural protein destruction mechanisms to selectively degrade therapeutically-relevant proteins. As the internal reporting is based on the consolidated results, the Company has identifiedone operating and reportable segment. The CODM uses net (loss) income in the budget and forecasting process and considers budget-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources. The measure of the operating segment assets is reported on the condensed consolidated balance sheet as total assets.

The accounting policies used in the segment reporting are the same as those described in the summary of significant accounting policies. (See Note 2 in our annual report on Form 10-K for the year ended December 31, 2025.) The Company’s CODM is the Chief Executive Officer.

The Company's reportable segment net revenues and (loss) income for thethree and six months ended June 30, 2026 and 2025 consisted of the following (in thousands):

Other development and discovery expenses are related to the development of our QuEENTM discovery engine and our disclosed and undisclosed programs, including CDK2. The Company's tangible assets are held in the U.S. and Switzerland with 37% and 29% of the assets held in Switzerland as of June 30, 2026 and December 31, 2025, respectively. All of the Company's collaboration revenue was generated in Switzerland during each of the three and six months ended June 30, 2026 and 2025.