Design Therapeutics, Inc.

Previous wording

In May 2025, we reported results from a completed Phase 1, double-masked, placebo-controlled, randomized, SAD/MAD clinical trial evaluating the safety, tolerability and systemic PK of DT-168 ophthalmic solution in normal healthy volunteers. DT-168 eye drops were well-tolerated in all participants with a maximum dose of two 0.5% drops twice-daily for seven days. There were no serious adverse events, no ocular adverse events (AEs) and no treatment discontinuations due to AEs in the trial. All observed AEs were deemed not related to DT-168 by the trial investigator. In parallel with the Phase 1 trial, we conducted reference range studies which showed consistently different splicing in the corneal endothelium between unaffected eye donors and surgical samples from mutant TCF4 FECD patients, supporting the potential for corneal endothelium biomarkers as a clinical proof-of-concept measure of drug activity. We are conducting a Phase 2 biomarker trial of DT-168 to evaluate safety, tolerability, and corneal endothelium biomarkers in FECD patients who are scheduled for corneal transplant surgery. Data is now expected in 2027 due to a delay in the anticipated supply of DT-168 blow-fill-seal eye droppers.

Current wording

In May 2025, we reported results from a completed Phase 1, double-masked, placebo-controlled, randomized, SAD/MAD clinical trial evaluating the safety, tolerability and systemic PK of DT-168 ophthalmic solution in normal healthy volunteers. DT-168 eye drops were well-tolerated in all participants with a maximum dose of two 0.5% drops twice-daily for seven days. There were no serious adverse events, no ocular adverse events (AEs) and no treatment discontinuations due to AEs in the trial. All observed AEs were deemed not related to DT-168 by the trial investigator. In parallel with the Phase 1 trial, we conducted reference range studies which showed consistently different splicing in the corneal endothelium between unaffected eye donors and surgical samples from mutant TCF4 FECD patients, supporting the potential for corneal endothelium biomarkers as a clinical proof-of-concept measure of drug activity. We are conducting a Phase 2 biomarker trial of DT-168 to evaluate safety, tolerability, and corneal endothelium biomarkers in FECD patients who are scheduled for corneal transplant surgery, with data expected in 2027.

Previous wording

In the fourth quarter of 2025, we announced DT-818 as our GeneTAC® small molecule development candidate for the treatment of DM1. In preclinical studies, DT-818 has demonstrated a potential best-in-disease profile for DM1, including a greater than 90% reduction in toxic RNA foci in DM1 patient cells, corresponding splicing correction and selective targeting of mutant DMPK. In an actin repeat mouse model of DM1 (HSALR mouse model), DT-818 treatment resulted in improved myotonia and foci reduction. In tissue distribution studies in NHPs, DT-818 levels were observed to be at expected pharmacologic levels in key target tissues at well-tolerated doses. In the first half of 2026, we initiated dosing DM1 patients in a Phase 1 MAD trial of DT-818. The Phase 1 trial is an open-label study designed to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamic effects of multiple ascending doses of DT-818 in adults with DM1. We anticipate reporting data from this study in 2027.

Current wording

In the fourth quarter of 2025, we announced DT-818 as our GeneTAC® small molecule development candidate for the treatment of DM1. In preclinical studies, DT-818 has demonstrated a potential best-in-disease profile for DM1, including a greater than 90% reduction in toxic RNA foci in DM1 patient cells, corresponding splicing correction and selective targeting of mutant DMPK. In an actin repeat mouse model of DM1 (HSALR mouse model), DT-818 treatment resulted in improved myotonia and foci reduction. In tissue distribution studies in NHPs, DT-818 levels were observed to be at expected pharmacologic levels in key target tissues at well-tolerated doses. In the first half of 2026, we initiated dosing DM1 patients in a Phase 1 MAD trial of DT-818. The Phase 1 trial is an open-label study designed to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamic effects of multiple ascending doses of DT-818 in adults with DM1. We anticipate reporting data from this trial in 2027.

Previous wording

To date, we have incurred net losses and negative cash flows from operations since our inception and as of June 30, 2026 had an accumulated deficit of $334.8 million. Our cash, cash equivalents and investment securities balance as of June 30, 2026 was $207.4 million. Our net losses have resulted primarily from costs incurred in connection with organizing and staffing our company, business planning, raising capital, developing and optimizing our technology platform, identifying potential product candidates, undertaking research and nonclinical studies, clinical development activities, engaging in manufacturing for our development programs, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales.

Current wording

To date, we have incurred net losses and negative cash flows from operations since our inception and as of September 30, 2026 had an accumulated deficit of $355.1 million. Our cash, cash equivalents and investment securities balance as of September 30, 2026 was $208.6 million. Our net losses have resulted primarily from costs incurred in connection with organizing and staffing our company, business planning, raising capital, developing and optimizing our technology platform, identifying potential product candidates, undertaking research and nonclinical studies, clinical development activities, engaging in manufacturing for our development programs, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales.

Previous wording

Research and Development Expenses. The increase in research and development expenses compared to the same period of the prior year was primarily due to an increase in FA clinical activities and higher indirect expenses.

Current wording

Research and Development Expenses. The increase in research and development expenses compared to the same period of the prior year was primarily due to an increase in clinical activities and higher indirect expenses.

Previous wording

General and Administrative Expenses. The decrease in general and administrative expenses was primarily due to a decrease in stock-based compensation expenses during the three months ended June 30, 2026 as compared to the same period in 2025.

Current wording

General and Administrative Expenses. The increase in general and administrative expenses was primarily due to a $0.5 million increase in employee compensation, including $0.2 million in stock-based compensation expenses, and $0.1 million in other expenses incurred during the three months ended September 30, 2026 as compared to the same period in 2025.

Previous wording

The following table summarizes our operating expenses for the six months ended June 30, 2026 and 2025 (in thousands):

Current wording

The following table summarizes our operating expenses for the nine months ended September 30, 2026 and 2025 (in thousands):

Previous wording

Research and Development Expenses. The decrease in research and development expenses compared to the same period of the prior year was primarily due to a reduction in expenses associated with our FECD and other direct programs.

Current wording

Research and Development Expenses. The increase in research and development expenses compared to the same period of the prior year was primarily due to an increase in clinical activities and higher indirect expenses.

Previous wording

The following table summarizes our research and development expenses by program and other direct and indirect costs for the six months ended June 30, 2026 and 2025 (in thousands):

Current wording

The following table summarizes our research and development expenses by program and other direct and indirect costs for the nine months ended September 30, 2026 and 2025 (in thousands):

Previous wording

General and Administrative Expenses. The increase in general and administrative expenses was primarily due to an increase in professional services expenses incurred during the six months ended June 30, 2026 as compared to the same period in 2025.

Current wording

General and Administrative Expenses. The increase in general and administrative expenses was primarily due to a $0.6 million increase in professional services expenses and a $0.5 million increase in employee compensation, offset by a $0.3 million decrease in other expenses incurred during the nine months ended September 30, 2026 as compared to the same period in 2025.

Previous wording

As of June 30, 2026, we had $207.4 million of combined cash, cash equivalents and investment securities, a decrease of $12.4 million from the $219.8 million of cash, cash equivalents and investment securities at December 31, 2025. Further detail of the change in our cash and cash equivalents for the six months ended June 30, 2026 and 2025 is summarized below (in thousands):

Current wording

As of September 30, 2026, we had $208.6 million of combined cash, cash equivalents and investment securities, a decrease of $11.2 million from the $219.8 million of cash, cash equivalents and investment securities at December 31, 2025. Further detail of the change in our cash and cash equivalents for the nine months ended September 30, 2026 and 2025 is summarized below (in thousands):

Previous wording

Operating Activities. The increase in our net cash used in operating activities was primarily due to the $1.0 million increase in net loss for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Current wording

Operating Activities. The increase in our net cash used in operating activities was primarily due to the $4.3 million increase in net loss for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.

Previous wording

Investing Activities. The decrease in net cash provided by investing activities was primarily due to a net decrease in cash provided from the maturities and purchases of our investment securities during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. We have classified our investment securities as available-for-sale and all investments are made in accordance with our investment policy.

Current wording

Investing Activities. The decrease in net cash provided by investing activities was primarily due to a net decrease in cash provided from the maturities and purchases of our investment securities during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. We have classified our investment securities as available-for-sale and all investments are made in accordance with our investment policy.

Previous wording

Financing Activities. The increase in net cash provided by financing activities was primarily due to sales of an aggregate of 2,006,550 shares of our common stock pursuant to the ATM Program for aggregate net proceeds of approximately $19.9 million during the six months ended June 30, 2026. We had no sales pursuant to our ATM Program during the three months ended June 30, 2026. Additional financing activities included proceeds received from the issuance of common stock through our employee stock purchase plan and from employee stock option exercises.

Current wording

Financing Activities. The increase in net cash provided by financing activities was primarily due to sales of an aggregate of 3,140,522 shares of our common stock pursuant to the ATM Program for aggregate net proceeds of approximately $37.1 million during the nine months ended September 30, 2026. Additional financing activities included proceeds received from the issuance of common stock through our employee stock purchase plan and from employee stock option exercises.

Previous wording

In May 2025, we filed a shelf registration statement on Form S-3 (the 2025 Shelf Registration Statement). The 2025 Shelf Registration Statement permits: (i) the offering, issuance and sale by us of up to a maximum aggregate offering price of $300.0 million of common stock, preferred stock, debt securities and warrants in one or more offerings and in any combination; and (ii) the offering, issuance and sale by us of up to a maximum aggregate offering price of $100.0 million of our common stock that may be issued and sold under our ATM Program. The $100.0 million of common stock that may be issued and sold under the ATM Program is included in the $300.0 million of securities that may be issued and sold under the 2025 Shelf Registration Statement. During the six months ended June 30, 2026, we sold an aggregate of 2,006,550 shares of our common stock pursuant to the ATM Program for aggregate net proceeds of approximately $19.9 million. We had no sales pursuant to our ATM Program during the three months ended

Current wording

In May 2025, we filed a shelf registration statement on Form S-3 (the 2025 Shelf Registration Statement). The 2025 Shelf Registration Statement permits: (i) the offering, issuance and sale by us of up to a maximum aggregate offering price of $300.0 million of common stock, preferred stock, debt securities and warrants in one or more offerings and in any combination; and (ii) the offering, issuance and sale by us of up to a maximum aggregate offering price of $100.0 million of our common stock that may be issued and sold under our ATM Program. Promptly following the filing of this Quarterly Report on Form 10-Q, we intend to file a prospectus supplement with the Securities and Exchange Commission to increase the maximum aggregate offering price that may be issued and sold under our ATM Program to $200.0 million (the “ATM Prospectus Supplement”). The common stock that may be issued and sold under the ATM Program is included in the $300.0 million of securities that may be issued and sold under the 2025 Shelf Registration Statement. During the nine months ended September 30, 2026, we sold an aggregate of 3,140,522 shares of our common stock pursuant to the ATM Program for aggregate net proceeds of approximately $37.1 million. As of September 30, 2026, we had $36.4 million available for future issuances of common stock pursuant to the ATM Program, which does not take into account the additional amount that will become available upon our filing of the ATM Prospectus Supplement.

Previous wording

In February 2019, we entered into a Human Therapeutics Exclusive License Agreement (License Agreement) with the Wisconsin Alumni Research Foundation (WARF). Under the License Agreement, we licensed the exclusive, worldwide, royalty-bearing, sublicensable rights to certain WARF patents and the nonexclusive worldwide rights to certain know-how to develop and commercialize products for the prevention, diagnosis and treatment of disease. As consideration for the license, we agreed to pay an upfront fee of $0.3 million, which we immediately expensed as a research and development expense in our statements of operations as there was no alternative future use for the license.

Current wording

In February 2019, we entered into a Human Therapeutics Exclusive License Agreement, as amended in May 2026, (License Agreement) with the Wisconsin Alumni Research Foundation (WARF). Under the License Agreement, we licensed the exclusive, worldwide, royalty-bearing, sublicensable rights to certain WARF patents and the nonexclusive worldwide rights to certain know-how to develop and commercialize products for the prevention, diagnosis and treatment of disease. As consideration for the license, we agreed to pay an upfront fee of $0.3 million, which we immediately expensed as a research and development expense in our statements of operations as there was no alternative future use for the license.

Previous wording

For the six months ended June 30, 2026, no payments were made pursuant to the License Agreement. In 2022, pursuant to the License Agreement, we paid $0.1 million to WARF upon the acceptance of an IND in the United States. We will be required to make further aggregate milestone payments of up to $17.5 million upon achievement of certain other regulatory and commercial milestones. We may also be required to pay royalties based on annual net product sales in the low single digits on our or our sublicensees’ net product sales on a country-by-country and product-by-product basis, and are subject to a minimum royalty of $0.1 million per calendar year upon first commercial product sale. Further, we may be required to pay sublicense fees in the mid-single digits percentage for fees, royalties or other payments earned from the granting of sublicenses to the WARF patents and know-how. The Company will recognize these milestone payments and royalties when paid or payable. There were no additional payments or royalties recorded through June 30, 2026.

Current wording

For the nine months ended September 30, 2026, no payments were made pursuant to the License Agreement. In 2022, pursuant to the License Agreement, we paid $0.1 million to WARF upon the acceptance of an IND in the United States. We will be required to make further aggregate milestone payments of up to $17.5 million upon achievement of certain other regulatory and commercial milestones. We may also be required to pay royalties based on annual net product sales in the low single digits on our or our sublicensees’ net product sales on a country-by-country and product-by-product basis, and are subject to a minimum royalty of $0.1 million per calendar year upon first commercial product sale. Further, we may be required to pay sublicense fees in the mid-single digits percentage for fees, royalties or other payments earned from the granting of sublicenses to the WARF patents and know-how. The Company will recognize these milestone payments and royalties when paid or payable. There were no additional payments or royalties recorded through September 30, 2026.

Previous wording

We are responsible for reimbursing WARF for costs incurred in connection with prosecuting and maintaining patent rights that are specific to the License Agreement. Expenses recognized in connection with legal patent fees under this License Agreement were immaterial for the six months ended June 30, 2026 and 2025.

Current wording

We are responsible for reimbursing WARF for costs incurred in connection with prosecuting and maintaining patent rights that are specific to the License Agreement. Expenses recognized in connection with legal patent fees under this License Agreement were immaterial for the nine months ended September 30, 2026 and 2025.

Previous wording

During the year ended December 31, 2025, we recorded $0.1 million to research and development expenses related to regulatory milestones, which is included in accrued expenses and other current liabilities as of June 30, 2026 and December 31, 2025. There were no additional payments or royalties recorded for the six months ended June 30, 2026. We may be obligated to make aggregate regulatory milestone payments of up to $0.8 million for each product incorporating licensed patent rights and pay a royalty on worldwide net sales on a product-by-product basis. The Company will recognize these milestone payments and royalties when paid or payable.

Current wording

During the year ended December 31, 2025, we recorded $0.1 million to research and development expenses related to regulatory milestones, which was included in accrued expenses and other current liabilities as of December 31, 2025 and paid during the three and nine months ended September 30, 2026. There were no additional payments or royalties recorded for the three and nine months ended September 30, 2026. We may be obligated to make aggregate regulatory milestone payments of up to $0.8 million for each product incorporating licensed patent rights and pay a royalty on worldwide net sales on a product-by-product basis. The Company will recognize these milestone payments and royalties when paid or payable.