Source: sec
Source ID: 0001628280-26-055494
URL: https://www.sec.gov/Archives/edgar/data/1662579/000162828026055494/cccc-20260630.htm
Symbol: (CCCC)
Published: 2026-08-11 07:29:11 EDT
Time precision: minute
Title: 10-Q 10-Q

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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________________________________________
FORM
10-Q
________________________________________________
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
June 30, 2026
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to ___________________
Commission File Number:
001-39567
________________________________________________
C4 Therapeutics, Inc.
(Exact Name of Registrant as Specified in its Charter)
________________________________________________
Delaware
47-5617627
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
490 Arsenal Way
,
Suite 120
,
Watertown
,
MA
02472
(Address of principal executive offices)
(Zip Code)
(
617
)
231-0700
(Registrant’s telephone number, including area code)
________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock, $0.0001 par value per share
CCCC
The Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
x
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
x
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
x
Smaller reporting company
x
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
x
As of July 31, 2026, the registrant had
123,025,136
shares of common stock, $0.0001 par value per share, outstanding.
Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, or Form 10-Q, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains express or implied forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Form 10-Q may include, but are not limited to, statements about:
•
the initiation, timing, progress, results, safety and efficacy, and cost of our research and development programs and our current and future preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials, the period during which the results of the trials will become available, and our research and development programs;
•
our ability to obtain funding for our operations necessary to continue or complete further development, manufacturing and commercialization of our product candidates;
•
our ability to obtain and maintain regulatory approval for any of our current or future product candidates;
•
the period of time over which we anticipate our existing cash and cash equivalents, and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements;
•
our ability to identify and develop product candidates for treatment of additional disease indications;
•
the potential attributes and benefits of our product candidates;
•
the rate and degree of market acceptance and clinical utility for any product candidates we may develop;
•
the pricing and reimbursement of our product candidates, if approved, including the possibility for reduced pricing of any approved products if they are later subject to mandatory price negotiation with the Centers for Medicare & Medicaid Services under the Inflation Reduction Act of 2022 or other applicable laws;
•
the effects of competition with respect to any of our current or future product candidates, as well as innovations by current and future competitors in our industry;
•
the implementation of our strategic plans for our business, any product candidates we may develop, and our TORPEDO
®
platform;
•
the ability and willingness of our third-party strategic collaborators to continue research, development, and manufacturing activities relating to our product candidates, including our ability to advance programs under our existing collaboration agreements with F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., or Roche, Betta Pharmaceuticals Co., Ltd., or Betta Pharma, and Merck KGaA, Darmstadt, Germany, or MKDG, or other new collaboration agreements;
•
the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates;
•
our financial performance, including but not limited to our estimates of our future expenses, revenues, capital requirements, and our needs for additional financing;
•
future agreements with third parties in connection with the manufacturing and commercialization of our product candidates, if approved;
•
the size and growth potential of the markets for our product candidates and our ability to serve those markets;
•
regulatory developments in the United States and foreign countries;
•
our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;
•
our ability to attract and retain key scientific or management personnel;
•
developments relating to our competitors and our industry;
•
the effect of any geopolitical conflicts or new or increased international tariffs, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business operations, including but not limited to our preclinical studies, ongoing clinical trials and future clinical trials; and
Table of Contents
•
other risks and uncertainties, including those discussed in Part II, Item 1A - Risk Factors in this Form 10-Q.
In some cases, forward-looking statements can be identified by terminology such as “will,” “may,” “should,” “could,” “expects,” “intends,” “plans,” “aims,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those expressed or implied by the forward-looking statements. No forward-looking statement is a promise or a guarantee of future performance.
The forward-looking statements in this Form 10-Q represent our views as of the date of this Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Form 10-Q.
Table of Contents
SUMMARY OF RISK FACTORS
Our ability to implement our business strategy is subject to numerous risks that you should be aware of before making an investment decision. These risks are described more fully in Part II, Item 1A - Risk Factors in this Form 10-Q. These risks include, among others:
•
We are a clinical-stage biopharmaceutical company and have incurred significant losses since our inception. We expect to incur losses over at least the next several years and may never achieve or maintain profitability.
•
We will need substantial additional funding to pursue our business objectives and continue our operations. If we are unable to raise capital when needed, we may be required to delay, limit, reduce or terminate our research or product development programs or future commercialization efforts.
•
Our approach to the discovery and development of product candidates based on our TORPEDO platform is unproven, which makes it difficult to predict the time, cost and likelihood of successfully developing any products.
•
While we are a clinical-stage company and have commenced clinical trials of several product candidates, we have never obtained regulatory approval to commercialize any of our product candidates. Our business could be harmed if we are unable to develop, manufacture, obtain regulatory approval for, commercialize, or gain market acceptance of our product candidates, or if we experience significant delays in doing any of these things.
•
We cannot be certain of the timely completion or outcome of our preclinical testing and clinical trials. In addition, the results of preclinical studies may not be predictive of the results of clinical trials and the results of any early-stage clinical trials we commence may not be predictive of the results of later-stage clinical trials.
•
Our preclinical studies and clinical trials may fail to demonstrate adequately the safety and efficacy of any of our product candidates, which would prevent, delay, or require additional research or analysis to proceed with development, regulatory approval, and commercialization of our current and future product candidates.
•
We have ongoing collaborations with Roche, Betta Pharma, and MKDG. We may also seek to enter into additional collaborations in the future with third parties for the discovery, development and/or commercialization of certain of our product candidates. However, we may never realize the full potential benefits under these existing or potential collaboration arrangements.
•
We face substantial competition, which may result in others discovering, developing or commercializing products for the same indication and/or patient population before or more successfully than we do.
•
We rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for preclinical and clinical testing, as well as for commercial manufacture if any of our product candidates receive marketing approval. This reliance on third parties may increase the risk that we will not have sufficient quantities of our product candidates in a timely manner, or at an acceptable cost or quality.
•
Potential changes in government programs or policies and changes in government staffing or funding levels could affect various aspects of our business, and our degrader clinical candidates that require government review or approval may experience delays in obtaining requisite authorizations.
•
International trade policies, including tariffs, sanctions, and trade barriers may adversely affect our business, financial condition and results of operations and prospects.
•
If we are unable to obtain and maintain patent protection for our technology and any future products or if the scope of the patent protection obtained is not sufficiently broad or enforceable, our competitors could develop and commercialize technology, product candidates, or products similar or identical to ours, and our ability to successfully commercialize our technology, product candidates, and any future products may be impaired.
Table of Contents
NOTE REGARDING COMPANY REFERENCES
Unless the context otherwise requires, the terms “C4 Therapeutics,” “the Company,” “we,” “us,” and “our” in this Form 10-Q refer to C4 Therapeutics, Inc. and its consolidated subsidiary.
NOTE REGARDING TRADEMARKS
We own or have rights to various trademarks, service marks and trade names that are used in connection with the operation of our business, including our company name, C4 Therapeutics, our logo, the name of our TORPEDO technology platform and the names of our BIDAC and MONODAC protein degrader product candidates. This Form 10-Q may also contain trademarks, service marks, and trade names of third parties, including, without limitation, our collaboration partners Roche, Biogen, MKDG, and Pfizer Inc., or Pfizer, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names, or products in this Form 10-Q is not intended to and does not imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks, and trade names referred to in this Form 10-Q may appear without the
®
,
TM
or
SM
symbols, but the omission of such references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable owner of these trademarks, service marks, and trade names.
Table of Contents
Table of Contents
Page
PART I.
FINANCIAL INFORMATION
Item 1.
Financial Statements (Unaudited)
1
Condensed Consolidated Balance Sheets
1
Condensed Consolidated Statemen
t
s
of Operations and Comprehensive Loss
2
Condensed Consolidated Statement
s
of Stockholders' Equity
3
Condensed Consolidated Statements of Cash Flows
5
Notes to Unaudited Condensed Consolidated Financial Statements
6
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
21
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
27
Item 4.
Controls and Procedures
28
PART II.
OTHER INFORMATION
Item 1.
Legal Proceedings
29
Item 1A.
Risk Factors
29
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
71
Item 3.
Defaults Upon Senior Securities
71
Item 4.
Mine Safety Disclosures
71
Item 5.
Other Information
71
Item 6.
Exhibits
72
SIGNATURES
74
i
Table of Contents
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
C4 Therapeutics, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(Unaudited)
June 30,
2026
December 31,
2025
Assets
Current assets:
Cash and cash equivalents
$
78,610
$
74,603
Marketable securities, current
175,053
173,934
Accounts receivable
1,334
2,401
Prepaid expenses and other current assets
7,905
7,172
Total current assets
262,902
258,110
Marketable securities, non-current
46,786
48,563
Property and equipment, net
4,149
4,744
Right-of-use asset
37,637
40,532
Restricted cash
3,443
3,443
Other assets
4,487
3,683
Total assets
$
359,404
$
359,075
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
1,121
$
858
Accrued expenses and other current liabilities
13,785
13,314
Deferred revenue, current
26,661
12,493
Operating lease liability, current
6,680
6,367
Total current liabilities
48,247
33,032
Deferred revenue, net of current
13,714
15,841
Operating lease liability, net of current
50,178
53,615
Total liabilities
112,139
102,488
Commitments and contingencies (see Note 12)
Stockholders’ equity:
Preferred stock, par value of $
0.0001
per share;
10,000,000
shares authorized, and
no
shares issued or outstanding as of June 30, 2026 and December 31, 2025, respectively
—
—
Common stock, par value of $
0.0001
per share;
300,000,000
shares authorized as of June 30, 2026, and December 31, 2025, respectively, and
122,905,756
and
96,914,418
shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively
12
9
Additional paid-in capital
1,035,154
995,221
Accumulated other comprehensive income
(
444
)
50
Accumulated deficit
(
787,457
)
(
738,693
)
Total stockholders’ equity
247,265
256,587
Total liabilities and stockholders’ equity
$
359,404
$
359,075
See accompanying notes to unaudited condensed consolidated financial statements.
1
Table of Contents
C4 Therapeutics, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Revenue from collaboration agreements
$
6,641
$
6,463
$
12,793
$
13,701
Operating expenses:
Research and development
24,471
26,197
49,077
53,269
General and administrative
8,593
8,767
17,924
18,097
Total operating expenses
33,064
34,964
67,001
71,366
Loss from operations
(
26,423
)
(
28,501
)
(
54,208
)
(
57,665
)
Other income, net:
Interest and other income, net
2,788
2,481
5,444
5,323
Total other income, net
2,788
2,481
5,444
5,323
Net loss
$
(
23,635
)
$
(
26,020
)
$
(
48,764
)
$
(
52,342
)
Net loss per share − basic and diluted
$
(
0.18
)
$
(
0.37
)
$
(
0.38
)
$
(
0.74
)
Weighted-average shares outstanding − basic and diluted
130,696,742
71,005,743
128,398,417
70,919,871
Other comprehensive loss:
Unrealized loss on marketable securities
(
122
)
(
73
)
(
494
)
(
83
)
Comprehensive loss
$
(
23,757
)
$
(
26,093
)
$
(
49,258
)
$
(
52,425
)
See accompanying notes to unaudited condensed consolidated financial statements.
2
Table of Contents
C4 Therapeutics, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share amounts)
(Unaudited)
Common Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
Shares
Amount
Balance as of December 31, 2025
96,914,418
$
9
$
995,221
$
50
$
(
738,693
)
$
256,587
Issuance of common stock upon exercise of warrants
6,187,000
1
—
—
—
1
Issuance of common stock upon exercise of stock options
271,175
—
605
—
—
605
Issuance of common stock upon vesting of restricted stock units, net of shares repurchased for tax withholding
606,925
—
(
200
)
—
—
(
200
)
Issuance of common stock under 2020 ESPP
43,361
—
56
—
—
56
Stock-based compensation
—
—
2,671
—
—
2,671
Change in unrealized loss, net on marketable securities
—
—
—
(
372
)
—
(
372
)
Net loss
—
—
—
—
(
25,129
)
(
25,129
)
Other
13,471
—
28
—
—
28
Balance as of March 31, 2026
104,036,350
$
10
$
998,381
$
(
322
)
$
(
763,822
)
$
234,247
Issuance of common stock upon exercise of warrants
9,508,500
1
—
—
—
1
Issuance of common stock pursuant to the at-the-market equity program, net
9,273,620
1
33,547
—
—
33,548
Issuance of common stock upon exercise of stock options
77,657
—
176
—
—
176
Stock-based compensation
—
—
3,036
—
—
3,036
Change in unrealized loss, net on marketable securities
—
—
—
(
122
)
—
(
122
)
Net loss
—
—
—
—
(
23,635
)
(
23,635
)
Other
9,629
—
14
—
—
14
Balance as of June 30, 2026
122,905,756
$
12
$
1,035,154
$
(
444
)
$
(
787,457
)
$
247,265
See accompanying notes to unaudited condensed consolidated financial statements.
3
Table of Contents
Common Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
Shares
Amount
Balance as of December 31, 2024
70,625,899
$
7
$
849,625
$
53
$
(
633,699
)
$
215,986
Issuance of common stock upon vesting of restricted stock units, net of shares repurchased for tax withholding
321,342
—
(
155
)
—
—
(
155
)
Issuance of common stock under 2020 ESPP
35,589
—
109
—
—
109
Stock-based compensation
—
—
5,507
—
—
5,507
Change in unrealized loss, net on marketable securities
—
—
—
(
10
)
—
(
10
)
Net loss
—
—
—
—
(
26,322
)
(
26,322
)
Other
6,831
—
25
—
—
25
Balance as of March 31, 2025
70,989,661
$
7
$
855,111
$
43
$
(
660,021
)
$
195,140
Stock-based compensation
—
—
4,992
—
—
4,992
Change in unrealized loss, net on marketable securities
—
—
—
(
73
)
—
(
73
)
Net loss
—
—
—
—
(
26,020
)
(
26,020
)
Other
17,422
—
25
—
—
25
Balance as of June 30, 2025
71,007,083
$
7
$
860,128
$
(
30
)
$
(
686,041
)
$
174,064
See accompanying notes to unaudited condensed consolidated financial statements.
4
Table of Contents
C4 Therapeutics, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Six Months Ended June 30,
2026
2025
Cash flows used in operating activities:
Net loss
$
(
48,764
)
$
(
52,342
)
Adjustments to reconcile net loss to cash used in operating activities:
Stock-based compensation expense
5,707
10,499
Depreciation and amortization expense
696
1,071
Reduction in carrying amount of right-of-use asset
2,895
3,317
Net accretion of discounts on marketable securities
(
1,275
)
(
1,364
)
Other
42
48
Changes in operating assets and liabilities:
Accounts receivable
1,067
901
Prepaid expenses and other current and long-term assets
(
1,537
)
3,974
Accounts payable
263
889
Accrued expenses and other current liabilities
471
(
6,103
)
Operating lease liability
(
3,124
)
(
2,833
)
Deferred revenue
12,041
(
3,399
)
Net cash used in operating activities
(
31,518
)
(
45,342
)
Cash flows provided by (used in) investing activities:
Proceeds from maturities of marketable securities
113,080
115,551
Purchases of marketable securities
(
111,641
)
(
47,320
)
Purchases of property and equipment, net
(
101
)
(
185
)
Net cash provided by investing activities
1,338
68,046
Cash flows provided by (used in) financing activities:
Proceeds from exercise of stock options
781
—
Proceeds from issuance of common stock from at-the-market equity offering
33,548
—
Proceeds from exercise of warrants
2
—
Payments for repurchase of common stock for tax withholding
(
200
)
(
155
)
Other
56
109
Net cash provided by (used in) financing activities
34,187
(
46
)
Net change in cash, cash equivalents and restricted cash
4,007
22,658
Cash, cash equivalents and restricted cash at beginning of period
78,046
58,942
Cash, cash equivalents and restricted cash at end of period
$
82,053
$
81,600
Reconciliation of cash, cash equivalents and restricted cash:
Cash, cash equivalents and restricted cash at end of period
$
82,053
$
81,600
Less: restricted cash
(
3,443
)
(
3,443
)
Cash and cash equivalents at end of the period
$
78,610
$
78,157
Supplemental disclosures of cash flow information:
Cash paid for leases
$
4,666
$
4,666
Supplemental disclosures of non-cash investing activities:
Capital expenditures in accounts payable and accrued expenses
$
—
$
294
See accompanying notes to unaudited condensed consolidated financial statements.
5
Table of Contents
C4 THERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1.
Nature of the business and basis of presentation
C4 Therapeutics, Inc., or, together with its subsidiary, the Company, is a clinical-stage biopharmaceutical company dedicated to delivering on the promise of targeted protein degradation, or TPD, science to create a new generation of small-molecule medicines that transform patients’ lives. Leveraging our proprietary TORPEDO platform, the Company efficiently designs and optimizes small-molecule protein degraders that are highly active against their desired targets by harnessing the body’s natural process for destroying unwanted proteins. Our strategy is to develop degraders that modulate clinically validated disease pathways with best-in-class or first-in-class potential to address significant unmet patient needs. To date, our degraders have demonstrated oral bioavailability and catalytic activity, and we have also leveraged our capability to design compounds that are brain penetrant.
Our clinical pipeline is comprised of two oncology programs while our discovery efforts are focused on inflammation, neuroinflammation, and neurodegeneration. Additionally, our partnership strategy allows us to further expand our reach in both oncology and non-oncology indications.
The Company was incorporated in Delaware on October 7, 2015 and has its principal office in Watertown, Massachusetts.
Liquidity and capital resources
Since its inception, the Company’s primary activities have been focused on research and development activities, building the Company’s intellectual property, recruiting and retaining personnel, and raising capital to support these activities. To date, the Company has funded its operations primarily with proceeds received from the sales of redeemable convertible preferred stock, public offerings of the Company’s common stock, private placements of the Company's common stock, debt financing, and through its collaboration agreements.
The Company has incurred recurring losses since its inception, including net losses of $
48.8
million and $
52.3
million for the six months ended June 30, 2026 and 2025, respectively. In addition, as of June 30, 2026, the Company had an accumulated deficit of $
787.5
million. To date, the Company has not generated any revenue from product sales as none of its product candidates have been approved for commercialization. The Company expects to continue to generate operating losses for the foreseeable future.
The Company expects that its cash, cash equivalents, and marketable securities of $
300.4
million as of June 30, 2026 will be sufficient to fund its operations for at least the next twelve months from the date of issuance of these condensed consolidated financial statements. Accordingly, the
condensed
consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.
Risks and uncertainties
The Company is subject to risks common to other life science companies in the early development stage including, but not limited to, uncertainty of ability to raise additional financing, product development and commercialization, development by its competitors of new technological innovations, dependence on key personnel, market acceptance of products, lack of marketing and sales history, product liability, protection of proprietary technology and intellectual property, and compliance with regulations of the Food and Drug Administration, or the FDA, and other government agencies. If the Company does not successfully advance its programs into and through human clinical trials and commercialize any of its product candidates either directly or through collaborations with other companies, the Company may be unable to produce product revenue or achieve profitability. There can be no assurance that the Company’s research and development efforts will be successful, adequate protection for the Company’s intellectual property will be obtained, any products developed will obtain necessary government regulatory approval, or any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies.
Note 2.
Summary of significant accounting policies
Basis of presentation and consolidation
The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, regarding interim financial reporting, and the instructions to Form 10-Q and
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Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations.
These condensed consolidated financial statements include the accounts of C4 Therapeutics, Inc. and its subsidiary, C4T Securities Corporation. All intercompany balances and transactions have been eliminated in consolidation.
Unaudited interim financial information
The accompanying condensed consolidated balance sheet as of June 30, 2026, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2026 and 2025, the condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2026 and 2025, and the condensed consolidated statements of cash flows for the six months ended June 30, 2026 and 2025, and the related interim disclosures are unaudited. These unaudited condensed consolidated financial statements include all adjustments necessary, consisting of only normal recurring adjustments, to fairly state the financial position and the results of the Company’s operations and cash flows for interim periods in accordance with U.S. GAAP. Interim period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2025, and notes thereto, which are included in the Company’s 2025 Annual Report on Form 10-K that was filed with the SEC on February 26, 2026, or the 2025 Annual Report.
Use of estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, amounts and timing of revenues recognized under the Company’s research and development collaboration arrangements, prepaid and accrued research and development expense, incremental borrowing rate used in the measurement of lease liabilities, and estimated volatility used in fair valuation of stock options. The Company bases its estimates and assumptions on historical experience and known trends when available and on various factors that it believes to be reasonable under the circumstances. This process may result in actual results differing materially from those estimated amounts used in the preparation of the condensed consolidated financial statements. The Company assesses estimates on an ongoing basis.
Significant accounting policies
The Company’s significant accounting policies are disclosed in Note 2,
Summary of significant accounting policies
, to the audited consolidated financial statements for the year ended December 31, 2025, which are included in the Company’s 2025 Annual Report. Since the date of those consolidated financial statements, there have been no material changes to the Company’s significant accounting policies.
Recently issued accounting standards
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, or ASU 2024-03. ASU 2024-03 requires enhanced disclosures of disaggregated income statement expenses. Disclosure within the notes of the financial statements for each annual and interim period should include: employee compensation, depreciation, and intangible asset amortization, included in each relevant expense caption; certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirement; a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect that adoption of ASU 2024-03 will have on its consolidated financial statements.
Note 3.
Fair value measurements
The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of June 30, 2026 (in thousands):
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Fair Value
Level 1
Level 2
Level 3
Cash equivalents:
Money market funds
$
78,341
$
78,341
$
—
$
—
Marketable securities:
Corporate debt securities
183,747
—
183,747
—
U.S. government debt securities
22,589
—
22,589
—
U.S. Treasury securities
15,503
—
15,503
—
Total cash equivalents and marketable securities
$
300,180
$
78,341
$
221,839
$
—
There have been no transfers between fair value levels during the six months ended June 30, 2026.
The following table sets forth the fair value of the Company’s financial assets by level within the fair value hierarchy at December 31, 2025 (in thousands):
Fair Value
Level 1
Level 2
Level 3
Cash equivalents:
Money market funds
$
59,857
$
59,857
$
—
$
—
Corporate debt securities
11,476
—
11,476
—
U.S. government debt securities
3,000
—
3,000
—
Marketable securities:
Corporate debt securities
176,614
—
176,614
—
U.S. Treasury securities
29,130
—
29,130
—
U.S. government debt securities
16,753
—
16,753
—
Total cash equivalents and marketable securities
$
296,830
$
59,857
$
236,973
$
—
The Company classifies its money market funds, which are valued based on quoted market prices in active markets, with no valuation adjustment, as Level 1 assets within the fair value hierarchy.
Marketable securities consist of U.S. Treasury securities, U.S. government debt securities, and corporate debt securities, all of 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, which are either directly or indirectly observable as of the reporting date, and fair value is determined using models or other valuation methodologies on a recurring basis.
Note 4.
Marketable securities
Marketable securities as of June 30, 2026 consisted of the following (in thousands):
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Marketable securities, current:
Corporate debt securities
$
148,852
$
4
$
(
292
)
$
148,564
U.S. government debt securities
15,025
—
(
35
)
14,990
U.S. Treasury securities
11,502
1
(
4
)
11,499
Marketable securities, non-current:
Corporate debt securities
35,264
—
(
81
)
35,183
U.S. Treasury securities
4,013
—
(
9
)
4,004
U.S. government debt securities
7,627
—
(
28
)
7,599
Total marketable securities, current and non-current
$
222,283
$
5
$
(
449
)
$
221,839
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Marketable securities as of December 31, 2025 consisted of the following (in thousands):
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Marketable securities, current:
Corporate debt securities
$
131,038
$
50
$
(
37
)
$
131,051
U.S. Treasury securities
28,107
26
(
2
)
28,131
U.S. government debt securities
14,756
—
(
4
)
14,752
Marketable securities, non-current:
Corporate debt securities
45,544
33
(
14
)
45,563
U.S. government debt securities
2,002
—
(
1
)
2,001
U.S. Treasury securities
1,000
—
(
1
)
999
Total marketable securities, current and non-current
$
222,447
$
109
$
(
59
)
$
222,497
Marketable securities classified as current have maturities of less than one year and are classified as available-for-sale. Marketable securities classified as non-current are those that: (i) have a maturity of greater than one year, and (ii) are not intended to be liquidated within the next twelve months, although these funds are available for use and, therefore, are classified as available-for-sale. No available-for-sale debt securities held as of June 30, 2026
or December 31, 2025 had remaining maturities greater than five years.
Based on factors such as historical experience, market data, issuer-specific factors, and current economic conditions, the Company did
not
record an allowance for credit losses at June 30, 2026 and
December 31, 2025,
related to these securities.
Note 5.
Property and equipment
Property and equipment consisted of the following (in thousands):
June 30,
2026
December 31,
2025
Property and equipment:
Laboratory equipment
$
8,861
$
8,819
Leasehold improvements
4,548
4,548
Furniture and fixtures
1,435
1,435
Office equipment
621
621
Computer equipment
157
98
Total property and equipment
15,622
15,521
Less: accumulated depreciation
(
11,473
)
(
10,777
)
Total property and equipment, net
$
4,149
$
4,744
Depreciation expense related to property and equipment is as follows (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Depreciation expense
$
336
$
416
$
696
$
780
Note 6.
Leases
The Company leases office and laboratory space under a non-cancelable operating lease. In addition, the Company subleases a portion of its office and laboratory space. In September 2025, the Company entered into a sublease agreement with a third party, or the 2025 Sublease, for a portion of the office and laboratory space in Suite 200 at 490 Arsenal Way, Watertown, Massachusetts. The term of the 2025 Sublease ends in January 2029, with an option to extend for an additional
two year
term. The Company began recognizing sublease income upon the commencement of the 2025 Sublease in February 2026.
There have been no material changes to the terms of the Company’s lease during the six months ended June 30, 2026. For additional information, please read Note 6,
Leases
, to the audited consolidated financial statements included in the Annual Report.
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Note 7.
Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
June 30,
2026
December 31,
2025
Accrued expenses and other current liabilities:
Accrued compensation and benefits
$
5,056
$
8,656
Accrued research and development
7,734
3,259
Other
995
1,399
Total accrued expenses and other current liabilities
$
13,785
$
13,314
Note 8.
Collaboration and license agreement
s
Roche Degrader-Antibody Conjugate Collaboration and License Agreement
On April 8, 2026, the Company entered into a new collaboration and license agreement with Roche, or the Roche DAC Agreement, to develop degrader-antibody conjugates, or DACs, an emerging modality designed to selectively target and neutralize disease-causing proteins in cancer cells.
Under the terms of the Roche DAC Agreement, the Company granted Roche a worldwide, exclusive license under certain of the Company's intellectual property rights to develop, manufacture, and commercialize DACs directed to two initial undisclosed oncology targets exclusive to the collaboration. The Company will use its proprietary TORPEDO platform to design degrader payload candidates. Roche will select and design the antibody as well as conjugate the antibody to the degrader payload. The Company received an upfront cash payment of $
20.0
million in the second quarter of 2026 and is eligible to receive discovery, regulatory, and commercial milestone payments totaling over $
1.0
billion in the aggregate. Roche is responsible for all development, regulatory approval, manufacturing, and commercialization activities and associated costs. The Company is entitled to tiered royalties on future net sales, subject to reductions under customary circumstances as described in the Roche DAC Agreement. In addition, under the Roche DAC Agreement, Roche retains an option to add one additional target exercisable within a specified period following the effective date of the agreement. If Roche exercises this option, the additional program would also provide additional potential milestones and royalties.
The collaboration is managed by a joint research committee, or the Roche DAC JRC, which is comprised of representatives from both Roche and the Company. Roche may terminate the Roche DAC Agreement for convenience on a target-by-target basis or in its entirety upon prior written notice, with such termination taking effect ninety (
90
) days upon the Company's receipt of such notice. Each party also has various termination rights under certain circumstances, including but not limited to insolvency or a material breach by the other party, subject to certain conditions.
Roche DAC Agreement Accounting
The Company identified two performance obligations at the outset of the Roche DAC Agreement, represented by the two potential research and development targets. While the Company is obligated under the Roche DAC Agreement to provide the exclusive license and perform certain research activities, the Company determined that the license, the research activities, and participation on the Roche DAC JRC are considered promised services. Participation on the Roche DAC JRC to oversee the research activities contemplated under the Roche DAC Agreement was determined to be quantitatively and qualitatively immaterial and, therefore, was excluded from the performance obligations. The total transaction price of the Roche DAC Agreement is allocated to the performance obligations based on their relative standalone selling price. The Company recognizes the transaction price allocated to the performance obligations as the research and development services are provided, using an input method, in proportion to costs incurred to date for each research and development target as compared to total costs incurred and expected to be incurred in the future to satisfy the underlying obligation. The transaction price was not allocated to the option right, which is not discounted and therefore not considered a material right.
As of June 30, 2026, the total transaction price of $
20.0
million is allocated to the two performance obligations and $
17.3
million remains unsatisfied.
Amounts due to the Company that have not yet been received are recorded as accounts receivable and amounts received that have not yet been recognized as revenue are recorded as deferred revenue on the Company’s condensed consolidated balance sheet.
Pfizer Collaboration and Supply Agreement
On September 30, 2025, the Company entered into a Clinical Trial Collaboration and Supply Agreement with Pfizer, or the Pfizer Agreement. Pursuant to the Pfizer Agreement, Pfizer will supply the Company with elranatamab (ELREXFIO
®
), a
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B-cell maturation antigen CD3 targeted bispecific antibody, for the Company's ongoing Phase 1b trial evaluating the safety and tolerability of cemsidomide, an IKZF1/3 degrader, and dexamethasone in combination with elranatamab as a second-line or later therapy for patients with multiple myeloma. Under the terms of the Pfizer Agreement, Pfizer will supply elranatamab for use in the trial at no cost to the Company, while the Company will sponsor, conduct and pay the costs of the trial. The Pfizer Agreement provides that the Company and Pfizer will jointly own clinical data generated from the trial. The collaboration is managed by a joint development committee responsible for coordinating all regulatory and other activities under the Pfizer Agreement. Under the terms of the Pfizer Agreement, each party has various termination rights under certain circumstances, including material breach, insolvency, and other customary provisions, subject to certain conditions.
MKDG Collaboration and License Agreement
On March 1, 2024, the Company entered into a license and collaboration agreement with MKDG, or the MKDG Agreement, to discover
two
targeted protein degraders against critical oncogenic proteins.
Under the terms of the MKDG Agreement, the Company granted MKDG a worldwide, exclusive license under certain of the Company's intellectual property rights to develop, manufacture, and commercialize
two
targeted protein degraders against critical oncogenic proteins within the KRAS family. MKDG is responsible for all development, regulatory approval, manufacturing and commercialization costs. Under the terms of the MKDG Agreement, MKDG agreed to make an upfront cash payment of $
16.0
million and to fund the Company's discovery research efforts. The Company is eligible to receive approximately $
740
million in the aggregate in discovery, regulatory, and commercial milestone payments across the collaboration, plus tiered royalties on net sales. Royalties payable from MKDG to the Company range from mid-single digit to low-double digit percentages, subject to reductions under certain circumstances as described in the MKDG Agreement. In April 2025, the Company earned a $
1.0
million milestone for the achievement of a discovery milestone for one of the active collaboration targets, which resulted in the addition of $
1.0
million to the transaction price for the collaboration. As the research activities with MKDG have progressed and evolved over time, there is only
one
target on which the parties continue to collaborate.
The collaboration is managed by a joint research committee, or MKDG JRC, and a joint steering committee, or MKDG JSC, each of which is comprised of representatives of MKDG and the Company. Under the MKDG Agreement, MKDG has final decision-making authority over the MKDG JSC, which has the authority to decide matters that cannot be resolved by the MKDG JRC. MKDG may terminate the MKDG Agreement on a project-by-project basis or in its entirety upon
60
days
’
prior written notice.
Each party also has various termination rights under certain circumstances, including but not limited to patent challenges, insolvency, or a material breach by the other party, subject to certain conditions.
MKDG Agreement Accounting
The Company originally identified
two
performance obligations at the outset of the MKDG Agreement, represented by the
two
potential research and development targets. While the Company is obligated under the MKDG Agreement to provide the exclusive license and perform certain research activities, the Company determined that the license, the research activities, and participation on the MKDG JRC and MKDG JSC are considered promised services. Participation on the MKDG JRC and MKDG JSC to oversee the research activities contemplated under the MKDG Agreement was determined to be quantitatively and qualitatively immaterial and, therefore, was excluded from the performance obligations. The total transaction price of the MKDG Agreement is allocated to the performance obligations based on their relative standalone selling price. The Company recognizes the transaction price allocated to the performance obligations as the research and development services are provided, using an input method, in proportion to costs incurred to date for each research and development target as compared to total costs incurred and expected to be incurred in the future to satisfy the underlying obligation. Incremental fees for research and development services are paid at agreed upon FTE rates and recognized as revenue in the period incurred.
As of June 30, 2026, the total transaction price of $
17.0
million is allocated to the
one
remaining performance obligation and $
2.2
million remains unsatisfied.
Amounts due to the Company that have not yet been received are recorded as accounts receivable and amounts received that have not yet been recognized as revenue are recorded as deferred revenue on the Company’s condensed consolidated balance sheet.
Betta Pharma License and Collaboration Agreement
On May 29, 2023, the Company entered into a license and collaboration agreement, or the Betta Pharma License Agreement, with Betta Pharma to collaborate
on the development, manufacturing, and commercialization of CFT8919 in Greater China, comprised of mainland China, Hong Kong SAR, Macau SAR and Taiwan, with the Company retaining rights to CFT8919 in the rest of the world other than Greater China, or the C4T Territory.
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Under the terms of the Betta Pharma License Agreement, the Company grants Betta Pharma an exclusive license under certain of the Company's intellectual property rights to develop, manufacture and commercialize CFT8919 for all uses in humans in Greater China. Betta Pharma is responsible for all development, regulatory approval, manufacturing and commercialization costs in Greater China except where Betta Pharma acts as the Company's agent in Greater China in connection with a global trial sponsored by the Company. As part of the collaboration, Betta Pharma made an upfront cash payment of $
10.0
million to the Company and has agreed to make up to $
357.0
million in aggregate milestone payments, plus tiered royalties on net sales of CFT8919 in Greater China. These payments are subject to a withholding tax by the State Taxing Authority of the People's Republic of China. Royalties payable from Betta Pharma to the Company range from low to mid double-digit percent, subject to certain reductions under certain circumstances as described in the Betta Pharma License Agreement. In addition, as part of the collaboration, the Company has agreed to make milestone payments to Betta Pharma of up to $
40.0
million following the Company's receipt of approval of a New Drug Application for CFT8919 from the FDA, with the milestone amount based on the percentage of patients in contemplated clinical trials that were enrolled by Betta Pharma and the line of therapy of the approval. In addition, the Company has agreed to pay Betta Pharma tiered royalties on net sales of CFT8919 in the C4T Territory in the low single digit percent range, subject to reductions under certain circumstances as described in the Betta Pharma License Agreement.
In connection with the execution of the Betta Pharma License Agreement, the Company, Betta Pharma, and an affiliate of Betta Pharma, (Betta Investment (Hong Kong) Limited, or Betta Investment), entered into a stock purchase agreement dated
May 29, 2023
, or the Betta Stock Purchase Agreement, and together with the Betta Pharma License Agreement, the Betta Agreements, pursuant to which Betta Investment agreed to purchase
5,567,928
shares of the Company's common stock for an aggregate purchase price of approximately $
25.0
million, or $
4.49
per share, which represented a
25
% premium over the
60
-trading-day volume weighted average closing price as of
two
trading days prior to the effective date of the Betta Stock Purchase Agreement. The Betta Stock Purchase Agreement has certain restrictions customary to agreements of this nature. T
he closing under the Betta Stock Purchase Agreement occurred on January 4, 2024.
The $
25.0
million of proceeds that the Company received were recorded as $
20.0
million for the issuance of shares, with the remaining $
5.0
million of premium paid on the share price recorded as consideration for revenue under the
Betta Pharma License and Collaboration Agreement.
The collaboration is managed by a joint steering committee, which is composed of representatives from both Betta Pharma and the Company. Following the completion of the dose escalation phase of the Phase 1 trial of CFT8919, Betta Pharma may terminate the Betta Pharma License Agreement for convenience upon at least
90
days’ prior written notice. Each party also has various termination rights under certain circumstances, including but not limited to regulatory safety stoppages, patent challenges, insolvency, or a material breach by the other party, subject to certain conditions.
Betta Agreements accounting
The Company expects to recognize revenue under the Betta Agreements from one type of arrangement, the licensing agreement. The Betta Agreements will consist of the following activities: (1) license of intellectual property, (2) clinical supply agreement, (3) manufacturing technology transfer, and (4) commercial manufacturing supply agreement. The clinical supply agreement, or the Betta Pharma Supply Agreement, was signed on August 31, 2024.
The Company recognizes the transaction price allocated to the performance obligation as the costs related to manufactured clinical supply are incurred, using an input method, in proportion to costs incurred to date as compared to total costs incurred and expected to be incurred in the future to satisfy the underlying obligation. The clinical manufacturing costs are paid at agreed upon rates and included in the estimated transaction price. The estimated transaction price as of June 30, 2026, is $
125.0
million, consisting of t
he $
10.0
million upfront cash consideration, $
5.0
million from the closing of the Betta Stock Purchase Agreement, a $
2.0
million milestone achieved in December 2023 under the Betta Pharma License Agreement, and the
estimated consideration expected to be received from the manufactured clinical supply of $
108.0
million. This estimate includes a number of assumptions, including but not limited to the duration and total volume of clinical supply to be provided by the Company pursuant to the Betta Pharma Supply Agreement. In the event there are fluctuations in the Company's assumptions, the estimates of consideration expected to be received pursuant to the Betta Pharma Supply Agreement will also change. Due to scientific and technical uncertainties of the clinical trials, the Company cannot be certain that this amount will be recognized as revenue in future periods.
Amounts due to the Company that have not yet been received are recorded as accounts receivable and amounts received that have not yet been recognized as revenue are recorded as deferred revenue on the Company’s consolidated balance sheet.
Roche Collaboration and License Agreement
In March 2016, the Company entered into a license agreement with F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., or Roche, which was amended in June 2016 and again in March 2017. The Company and Roche amended and restated that agreement (as so amended) in December 2018. This amended and restated agreement is referred to as the 2018 Roche
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Agreement. Under the 2018 Roche Agreement, the Company and Roche agreed to collaborate in the research, development, manufacture and commercialization of target-binding degrader medicines using the Company’s proprietary TORPEDO platform for the treatment of cancers and other indications. Under the 2018 Roche Agreement, the Company may elect to opt into certain co-development rights, in which case the Company will receive an increased royalty rate on future product sales from products directed to that target. In addition, if the Company opts into certain co-detailing rights, it is also entitled to reimbursement of certain commercialization costs. Upon entry into the 2018 Roche Agreement, the Company received additional upfront consideration of $
40.0
million.
In November 2020, the Company signed a further amendment, the effect of which was to provide that the parties would develop up to
five
potential targets, with Roche maintaining its option rights to license and commercialize products directed to those targets. The November 2020 amendment also provides a mechanism through which the Company and Roche can mutually agree to terminate the 2018 Roche Agreement on a target-by-target basis by the entry into a Mutual Target Termination Agreement. Upon the entry into a Mutual Target Termination Agreement, the 2018 Roche Agreement provides that all rights and responsibilities for know-how and other intellectual property in support of products that use inhibition as their mode of action revert to Roche and all rights and responsibilities for know-how and other intellectual property in support of products that use degradation as their mode of action revert to the Company. In support of this allocation of rights, Roche provides the Company, and the Company provides Roche, with a perpetual irrevocable, fully paid up, exclusive (even as to the party granting the license), sublicensable (including in multiple tiers) license to the patents and know-how that are allocated to a party under a Mutual Target Termination Agreement. As the research activities with Roche have progressed and evolved over time, there are now
two
targets on which the parties continue to collaborate, with Roche maintaining its option rights to license and commercialize products directed to those
two
targets. In December 2023, the Company signed a second amendment to the 2018 Roche Agreement, the effect of which was to update the terms of the agreement as it pertains to the
two
targets on which the parties continue to collaborate. Under the second amendment to the 2018 Roche Agreement, Roche retains its option rights to license and commercialize products directed to those targets but the timing of its option rights is adjusted to begin upon Roche's receipt of the dose range finding data package. There was no material impact to the accounting in 2023 as a result of the second amendment to the 2018 Roche Agreement.
Under the 2018 Roche Agreement, as amended, the Company receives annual research plan payments of $
1.0
million for each active research plan. For the
two
targets that remain under collaboration among the parties, Roche is required to pay the Company fees of $
2.0
million upon the progression of targets to the lead series identification achievement phase. In March 2025, the Company achieved this $
2.0
million milestone for each of the active collaboration targets, which resulted in the addition of $
4.0
million to the transaction price for the collaboration. In the event Roche exercises its option rights as to one of these targets, Roche is required to pay the Company an option exercise fee of $
8.0
million.
Under the 2018 Roche Agreement, as amended, for each target option exercised by Roche, the Company is eligible to receive milestone payments up to $
273.0
million upon the achievement of certain development milestones with respect to corresponding products, subject to certain reductions and exclusions based on intellectual property coverage. Roche is also required to pay the Company up to $
150.0
million per target in one-time sales-based milestone payments upon the achievement of specified levels of net sales of a product directed to such target. Finally, Roche is required to pay the Company tiered royalties ranging from the mid-single digits to mid-teen percentages on net sales of products sold by Roche pursuant to its exercise of its option rights, subject to certain reductions. For sales of products for which the Company exercises its co-development right, the applicable royalty rates will be increased by a low-single digit percentage.
The collaboration is managed by a joint research committee, or the Roche JRC. The Company has control over the Roche JRC prior to Roche’s exercise of its option rights as to a particular target, with Roche assuming control of the Roche JRC thereafter. Roche may terminate the 2018 Roche Agreement on a target-by-target or product-by-product basis under several scenarios, upon at least
90
days’ prior written notice.
Each party also has various termination rights under certain circumstances, including but not limited to insolvency or a material breach by the other party, subject to certain conditions.
Roche Agreement accounting
At commencement, the Company identified
twelve
performance obligations within the 2018 Roche Agreement, represented by the
six
potential research and development targets then included in the collaboration and the option rights held by Roche for each of those
six
targets. A non-exclusive royalty-free license to use the Company’s intellectual property to conduct research and development activities and participation on the Roche JRC were identified as promised services. However, the Company determined that the research and development license and research and development services were not distinct from one another, and participation on the Roche JRC was determined to be quantitatively and qualitatively immaterial.
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The total transaction price of the 2018 Roche Agreement is allocated to the performance obligations based on their relative standalone selling price. The allocated transaction price is recognized as revenue from collaboration agreements in one of two ways:
•
Research and development 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 and 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: The transaction price allocated to the option rights, which are considered material rights, is recognized in 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.
The following table summarizes the allocation of the total transaction price to the identified performance obligations under the arrangement, and the amount of the transaction price unsatisfied as of June 30, 2026 (in thousands):
Transaction
Price
Allocated
Transaction
Price
Unsatisfied
Performance obligations:
Research and development targets
$
21,272
$
3,975
Option rights
2,460
2,460
Total
$
23,732
$
6,435
Amounts due to the Company that have not yet been received are recorded as accounts receivable and amounts received that have not yet been recognized as revenue are recorded as deferred revenue on the Company’s condensed consolidated balance sheet.
Biogen Collaboration Research and License Agreement
In December 2018, the Company entered into a collaboration research and license agreement, or the Biogen Agreement, with Biogen MA, Inc., or Biogen. In February 2020, the Company and Biogen amended the Biogen Agreement to provide further clarity around Biogen’s ownership of target binding moieties (which are portions of molecules), and any related intellectual property that are directed at or bind to collaboration targets. This amendment further provided that Biogen licenses to the Company rights to use these Biogen target binding moieties and any related intellectual property as needed in order to conduct the research and development activities contemplated under the Biogen Agreement. Pursuant to the terms of the Biogen Agreement, the Company and Biogen agreed to collaborate on research activities to develop novel treatments for neurological conditions such as Alzheimer's disease and Parkinson's disease through medicines that rely on TPD as their mode of action, all of which are created using the Company’s degrader technology. Under the terms of the Biogen Agreement, the Company was engaged to develop TPD therapeutics that utilize degrader technology for up to
five
target proteins over a period of
54
months, ending in June 2023. On a target-by-target basis, after successful completion of a defined target evaluation period, Biogen assumes full rights and responsibility for continued development of each target. As of June 30, 2024, the research term of the Biogen Agreement has been fully satisfied.
In exchange for the non-exclusive research license from Biogen, as well as a $
45.0
million nonrefundable upfront payment, the Company has granted Biogen a license to develop, commercialize, and manufacture products related to each of the targets (which is contingent on the parties not terminating the agreement), performs initial research services for drug discovery, has provided a non-exclusive research and commercial license to its intellectual property, and participates on the joint steering committee. For any target, following the achievement of development candidate criteria and prior to any IND-enabling study, Biogen will bear all costs and expenses and will have sole discretion and decision-making authority with respect to the performance of further activities with respect to any degrader under development under the Biogen Agreement and all products that incorporate that degrader. Biogen is also required to pay the Company up to $
35.0
million per target in development milestones and $
26.0
million per target in one-time sales-based payments for the first product to achieve certain levels of net sales. In addition, Biogen is required to pay the Company royalties on a licensed product-by-licensed product basis, on worldwide net product sales. All milestone and sales-based payments are made after the Company has met the defined criteria in the joint research plan for that target, at which time Biogen will have control of the products related to the targets for commercialization; the receipt of these payments is contingent on the further development of products directed to the targets to commercialization by Biogen, without any additional research and development efforts from the Company.
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In February 2026, the Company earned a $
2.0
million milestone from Biogen after Biogen advanced BIIB145, a BTK degrader that the Company delivered to Biogen, into the clinic. In September 2025, the Company earned a $
2.0
million milestone from Biogen after Biogen advanced BIIB142, a development candidate for IRAK4 that the Company delivered to Biogen, into the clinic. The Company's performance obligation under the Biogen Agreement was fully satisfied as of March 2024 and the transaction price has been fully allocated.
Merck License and Collaboration Agreement
On December 11, 2023, the Company and Merck Sharp & Dohme, LLC, or Merck, entered into an exclusive license and collaboration agreement, the Merck Agreement, to develop DACs. The Merck Agreement was terminated by Merck, effective
late November 2025.
Under the terms of the Merck Agreement, the Company received a
$
10.0
million
upfront payment. The Company and Merck collaborated to develop DACs directed to an initial undisclosed oncology target that was exclusive to the collaboration. The performance obligation under the Merck Agreement was fully satisfied upon the termination of the agreement in 2025 and the transaction price has been fully allocated.
Revenue from collaboration agreements for the three and six months ended June 30, 2026 and 2025 in the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Revenue from collaboration agreements:
Roche DAC Agreement
$
2,666
$
—
$
2,666
$
—
MKDG Agreement
1,833
3,428
3,595
6,581
Betta Agreements
15
54
20
514
Roche Agreement
2,127
1,932
4,512
4,428
Biogen Agreement
—
—
2,000
—
Merck Agreement
—
1,049
—
2,178
Total revenue from collaboration agreements
$
6,641
$
6,463
$
12,793
$
13,701
Financial information related to the collaboration and license agreements consisted of the following in the Company’s condensed consolidated balance sheet as of June 30, 2026 (in thousands):
Accounts
Receivable
Deferred Revenue,
Current
Deferred Revenue,
Net of Current
Deferred Revenue,
Total
Supplemental information:
Roche DAC Agreement
$
—
$
17,334
$
—
$
17,334
MKDG Agreement
953
2,153
—
2,153
Betta Agreements
5
989
13,714
14,703
Roche Agreement
376
6,185
—
6,185
Biogen Agreement
—
—
—
—
Total
$
1,334
$
26,661
$
13,714
$
40,375
Financial information related to the collaboration and license agreements consisted of the following in the Company’s condensed consolidated balance sheet as of December 31, 2025 (in thousands):
Accounts
Receivable
Deferred Revenue,
Current
Deferred Revenue,
Net of Current
Deferred Revenue,
Total
Supplemental information:
MKDG Agreement
$
1,892
$
3,913
$
—
$
3,913
Betta Agreements
9
531
14,194
14,725
Roche Agreement
500
8,049
1,647
9,696
Total
$
2,401
$
12,493
$
15,841
$
28,334
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Supplemental financial information related to the collaboration and license agreements for the three and six months ended June 30, 2026 and 2025 is (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Revenue recognized that was included in the contract liability at the beginning of the period
$
2,820
$
6,512
$
6,560
$
11,821
As of June 30, 2026, the aggregate amount of the transaction price allocated to performance obligations under the Roche DAC, MKDG Agreement, Betta Agreements, and Roche Agreement that were partially unsatisfied was $
146.6
million. The vast majority of the remaining transaction price to be recognized as revenue is based on the estimated manufactured clinical supply costs under the Betta Pharma collaboration. Due to scientific and technical uncertainties of the clinical trials, the Company cannot be certain that this amount will be recognized as revenue in future periods.
Note 9.
Stockholders’ equity
At-The-Market Equity Program
In October 2024, the Company filed a registration statement on Form S-3, or the 2024 Registration Statement, with the SEC that became effective in November 2024 and registered the offering, issuance and sale of an unspecified amount of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof. Simultaneously, the Company entered into a sales agreement with TD Securities (USA) LLC, as sales agent, to provide for the issuance and sale by the Company of up to $
200.0
million of common stock from time to time in “at-the-market” offerings under the 2024 Registration Statement and related prospectus filed with the 2024 Registration Statement, or the ATM Program. In October 2025, the Company terminated the sales agreement prospectus related to the ATM Program. A total of
3,769,483
shares of the Company's common stock at an average purchase price of $
2.55
had been sold through the ATM Program, as of October 16, 2025, which sales resulted in net proceeds of $
9.4
million.
In November 2025, the Company filed a registration statement on Form S-3, or the 2025 Registration Statement, with the SEC that became effective in December 2025 and registered the offering, issuance and sale of up to $
400.0
million of common stock, preferred stock, debt securities, warrants and/or units or any combination thereof, together with a sales agreement prospectus for the offer and sale of up to $
125.0
million of common stock from time to time in “at-the-market” offerings under the ATM Program. For the three and six months ended June 30, 2026, a total of
9,273,620
shares of the Company's common stock had been sold at a weighted average price of $
3.71
per share under the ATM Program, which resulted in net proceeds of $
33.5
million.
Certificate of Amendment to Fifth Amended and Restated Certificate of Incorporation
In June 2025, the Company's stockholders approved, and the Company filed, an amendment to the Company's Fifth Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from
150,000,000
to
300,000,000
. The certificate of amendment, which was filed with the Secretary of State of the State of Delaware, became effective in June 2025.
Underwritten Offering
In October 2025, the Company entered into an underwriting agreement with Jefferies LLC, TD Securities (USA) LLC and Evercore Group L.L.C., or collectively, the Underwriters, related to an underwritten offering, or the 2025 Offering, of (i)
21,895,000
shares, or the Shares, of the Company’s common stock, par value $
0.0001
per share; (ii) in lieu of common stock to certain investors, pre-funded warrants to purchase an aggregate of
28,713,500
shares of common stock, or the Pre-Funded Warrants; (iii) accompanying Class A warrants to purchase an aggregate of
50,608,500
shares of common stock (or pre-funded warrants in lieu thereof), or the Class A Warrants, and together with the Class B Warrants (as defined below), the Class A and Class B Warrants; and (iv) accompanying Class B warrants to purchase an aggregate of
50,608,500
shares of common stock (or pre-funded warrants in lieu thereof), or the Class B Warrants, and together with the Pre-Funded Warrants and the Class A Warrants, the Warrants. Each Share was offered and sold together with accompanying Class A and Class B Warrants each exercisable for
one
share of common stock at a combined offering price of $
2.47
per Share and accompanying Class A and Class B Warrants, and each Pre-Funded Warrant was offered and sold together with accompanying Class A and Class B Warrants at a combined offering price of $
2.4699
per Pre-Funded Warrant and accompanying Class A and Class B Warrants. The Company received net proceeds from the 2025 Offering, after deducting the underwriting discount and commissions and estimated offering expenses, of approximately $
116.9
million. If all Warrants are exercised, the aggregate net proceeds to the Company from the 2025 Offering, after deducting underwriting discounts and commissions and offering expenses, are expected to be $
341.7
million. See Note 10,
Warrants,
for details.
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Note 10.
Warrants
In connection with the 2025 Offering, the Company issued
28,713,500
Pre-Funded Warrants, which have an initial exercise price per share of $
0.0001
, subject to certain adjustments. Each Pre-Funded Warrant can be exercised for
one
share of common stock. The Pre-Funded Warrants may be exercised at any time after the date of issuance by cash or cashless exercise, at the holder’s election, until all of the Pre-Funded Warrants are exercised in full, subject to a beneficial ownership limitation. The Pre-Funded Warrants do not expire.
In connection with the 2025 Offering, the Company issued
50,608,500
Class A Warrants that can be exercised either for
one
share of common stock at an initial exercise price per share of $
2.22
or for
one
pre-funded warrant for an exercise price of $
2.2199
, subject to certain adjustments. Each Class A Warrant is exercisable immediately and will expire on the earlier of (i) 30 calendar days following the public release of nine-month median follow-up data from any expansion cohort in the Company’s planned Phase 1b trial of cemsidomide with elranatamab and (ii) the fifth anniversary of the date of issuance.
In connection with the 2025 Offering, the Company issued
50,608,500
Class B Warrants that can be exercised either for
one
share of common stock at an initial exercise price per share of $
2.22
or for
one
pre-funded warrant for an exercise price of $
2.2199
, subject to certain adjustments. Each Class B Warrant is exercisable immediately and expires on the fifth anniversary of the date of issuance; provided that the Company may require the mandatory exercise of the Class B Warrants on or after the
six-month
anniversary of the date of issuance and so long as the per share closing price of the Common Stock on The Nasdaq Global Select Market on each of the
ten
consecutive trading days prior to the date of the Company’s notice of mandatory exercise is above $
6.66
, subject to certain adjustments.
The Class A and Class B Warrants are exercisable solely by means of a cash exercise. However, if, at the time a holder exercises its Class A Warrants, there is no effective registration statement registering the issuance of the shares of Common Stock underlying such Class A or Class B Warrant or prior consent has been provided by the Company, then a holder may elect to exercise such warrant through cashless exercise pursuant to the terms of the applicable warrant agreement, provided that in no event will the exercise of Class A and Class B Warrants be settled in cash. If the Company consents to a cashless exercise for a holder of Class A or Class B Warrants, a similar allowance for cashless exercise shall be provided to all holders of the same class of warrants.
All Warrants are classified as equity and the following table summarizes the warrant activity for the six months ended June 30, 2026:
Pre-Funded
Class A
Class B
Outstanding at December 31, 2025
28,713,500
50,608,500
50,608,500
Exercised
(
15,695,500
)
—
—
Outstanding at June 30, 2026
13,018,000
50,608,500
50,608,500
Note 11.
Stock-based compensation
Stock-based compensation expense for the three and six months ended June 30, 2026 and 2025 was classified in the Company’s condensed consolidated statement of operations and comprehensive loss as follows (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Stock-based compensation expense:
General and administrative
$
1,681
$
2,535
$
3,190
$
5,454
Research and development
1,355
2,457
2,517
5,045
Total stock-based compensation expense
$
3,036
$
4,992
$
5,707
$
10,499
In June 2026, the Company's stockholders approved the second amendment to the Company's 2020 Stock Option and Incentive Plan (the "2020 Plan"). The amendment modified the 2020 Plan's evergreen provision to provide that the Company's outstanding pre-funded warrants will be included in the total number of shares of common stock deemed issued and outstanding as of each December 31 for purposes of calculating the annual automatic increase in the share reserve under the 2020 Plan.
Stock options
During the six months ended June 30, 2026, the Company granted stock options for the purchase of
652,220
shares of common stock with a weighted average exercise price of $
3.80
per share and a weighted average grant-date fair value of $
2.98
per share. As of June 30, 2026,
10,769,256
stock options remained outstanding, and the unrecognized compensation
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cost related to outstanding stock options was $
10.0
million, which is expected to be recognized over a weighted-average period of
1.9
years.
Performance-accelerated restricted stock units
During the six months ended June 30, 2026, the Company’s Board of Directors authorized the issuance of
1,588,140
performance-accelerated restricted stock units, or PARSUs, to certain employees, including members of the Company’s leadership team under the 2020 Plan. PARSUs are valued on the grant date using the grant date market price of the underlying shares. The PARSUs will vest in tranches at the earlier of the achievement of certain discovery and clinical milestones, or February 13, 2029. Upon vesting, each PARSU automatically converts into
one
share of the Company's common stock.
No
PARSUs vested during the six months ended June 30, 2026. As of June 30, 2026,
1,434,780
PARSUs remained outstanding, and the unrecognized compensation cost related to outstanding PARSUs was $
2.4
million, which is expected to be recognized over a weighted-average period of
2.6
years.
Time-based restricted stock units
During the six months ended June 30, 2026, the Company issued
2,829,710
restricted stock units, or RSUs, that were subject to time-based vesting conditions to its employees. RSUs are valued on the grant date using the grant date market price of the underlying shares. A total of
712,681
RSUs vested during the six months ended June 30, 2026 on their respective vesting schedules. Upon vesting, each RSU automatically converts into
one
share of the Company’s common stock. During the six months ended June 30, 2026, the Company indirectly repurchased
105,756
shares of its common stock through net-share settlement as consideration for employee tax withholding obligations arising upon vesting of the RSUs, which tax amounts were remitted to the applicable revenue authorities by the Company in cash on behalf of the RSU holders. As of June 30, 2026, there were a total of
4,172,111
RSUs outstanding and the unrecognized compensation cost related to outstanding RSUs was $
9.8
million, which is expected to be recognized over a weighted-average period of
2.5
years.
Inducement grants
During the six months ended June 30, 2026, the Company granted non-qualified stock options for the purchase of
419,320
shares of common stock with a weighted average exercise price of $
2.50
per share and a weighted average grant-date fair value of $
2.00
per share. As of June 30, 2026,
1,099,060
inducement stock options remained outstanding, and the unrecognized compensation cost related to outstanding inducement stock options was $
1.9
million, which is expected to be recognized over a weighted-average period of
3.0
years. These inducement stock options have been granted outside of the Company's stockholder-approved equity incentive plan in accordance with Nasdaq Listing Rule 5635(c)(4).
Note 12.
Commitments and contingencies
Legal proceedings
The Company is not currently a party to any material legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to such legal proceedings.
Note 13.
Loss per share
For periods in which the Company reports a net loss attributable to common stockholders, potentially dilutive securities have been excluded from the computation of diluted net loss per share as their effects would be anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same. For purposes of the dilutive net loss per share calculation, outstanding stock options, unvested time-based restricted stock unit awards, and outstanding common stock warrants are considered to be common stock equivalents, but they were excluded from the Company’s calculation of diluted net loss per share allocable to common stockholders because their inclusion would have been anti-dilutive. Restricted stock units for which the performance or market vesting conditions have been met are considered to be common stock equivalents, while restricted stock units with performance or market vesting conditions that were not met as of June 30, 2026 are not considered to be common stock equivalents. The weighted
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Table of Contents
average number of shares of common stock outstanding also includes all issued pre-funded warrants because their exercise requires only nominal consideration for the delivery of the shares.
The Company excluded the following potential common shares presented based on amounts outstanding at period end from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:
As of June 30,
2026
2025
Anti-dilutive common stock equivalents:
Class A Warrants
50,608,500
—
Class B Warrants
50,608,500
—
Options to purchase common stock
11,868,316
14,164,955
Restricted stock units
5,606,891
2,957,988
Total anti-dilutive common stock equivalents
118,692,207
17,122,943
Basic and diluted loss per share is computed by dividing net loss by the weighted-average common shares outstanding for the three and six months ended June 30, 2026 and 2025 (in thousands, except share and per share data):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Numerator:
Net loss
$
(
23,635
)
$
(
26,020
)
$
(
48,764
)
$
(
52,342
)
Denominator:
Weighted-average number of shares used in computing net loss per share − basic and diluted
130,696,742
71,005,743
128,398,417
70,919,871
Net loss per share − basic and diluted
$
(
0.18
)
$
(
0.37
)
$
(
0.38
)
$
(
0.74
)
Note 14.
Income taxes
For the three and six months ended June 30, 2026 and 2025, the Company recorded
no
income tax provision or benefit due to losses generated where no benefit was recorded due to the valuation allowance. The Company continues to maintain a full valuation allowance for its U.S. federal and state deferred tax assets as of June 30, 2026 due to uncertainty regarding future taxable income.
Note 15.
Segment reporting
The Company operates as
one
operating segment. The Company's chief operating decision maker, or CODM, is its chief executive officer, who reviews financial information presented on a consolidated basis. The CODM manages and allocates resources to the operations of the Company on a total company basis by assessing the overall level of resources available and how to best deploy these resources across functions and research and development projects that are in line with the Company's long-term company-wide strategic goals. Consistent with this decision-making process, the CODM uses operating expenses to monitor budget versus actual results for purposes of evaluating performance and to make decisions about the allocation of resources. The CODM does not utilize revenue in the decision-making process as a significant amount of the revenues recognized by the Company are derived from the upfront payments received from its collaboration partners. See Note 8,
Collaboration and license agreements,
for details.
These financial metrics used by the CODM to make key operating decisions consist of development, research, and general and administrative expenses.
The following table presents selected financial information with respect to the Company’s single operating segment for the three and six months ended June 30, 2026 and 2025 (in thousands):
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Table of Contents
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Revenue
$
—
$
—
$
—
$
—
Operating expenses:
Development expenses
12,597
12,605
25,186
27,155
Research expenses
8,524
8,846
17,234
16,570
General and administrative
8,907
8,521
18,874
17,142
Segment operating expenses
30,028
29,972
61,294
60,867
Reconciliation of profit or loss
Non-operating income
(
2,788
)
(
2,481
)
(
5,444
)
(
5,323
)
Adjustments or reconciling items(1)
(
3,605
)
(
1,471
)
(
7,086
)
(
3,202
)
Consolidated net loss
$
(
23,635
)
$
(
26,020
)
$
(
48,764
)
$
(
52,342
)
(1)
The reconciling items include revenue and stock-based compensation expense for the three and six months ended June 30, 2026 and 2025.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited condensed consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026. As discussed in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025.
Business Overview
We are a clinical-stage biopharmaceutical company dedicated to delivering on the promise of targeted protein degradation, or TPD, science to create a new generation of small-molecule medicines that transform patients’ lives. Leveraging our proprietary TORPEDO platform, we efficiently design and optimize small-molecule protein degraders that are highly active against their desired targets by harnessing the body’s natural process for destroying unwanted proteins. Our strategy is to develop degraders that modulate clinically validated disease pathways with best-in-class or first-in-class potential to address significant unmet patient needs. To date, our degraders have demonstrated oral bioavailability and catalytic activity, and we have also leveraged our capability to design compounds that are brain penetrant.
Our most advanced product candidate, cemsidomide, is an orally bioavailable MonoDAC degrader of protein targets called IKZF1 and IKZF3. The United States Food and Drug Administration, or the FDA, has granted orphan drug designation to cemsidomide for the treatment of multiple myeloma, or MM. In June 2026, at the European Hematology Association, or EHA, 2026 Congress, we presented updated data from the Phase 1 trial of cemsidomide in combination with dexamethasone in MM. Consistent with previously disclosed data, this analysis demonstrated cemsidomide's generally well-tolerated safety profile and compelling anti-myeloma activity, supporting its development as a potential best-in-class IKZF1/3 degrader. Cemsidomide is currently being studied in the Phase 2 MOMENTUM clinical trial evaluating the efficacy of cemsidomide in combination with dexamethasone in patients with relapsed/refractory MM. Enrollment for the Phase 2 MOMENTUM trial is expected to be complete in the first quarter of 2027 with initial investigator-assessed overall response rate data expected in the second half of 2027.
We are also conducting a Phase 1b trial evaluating cemsidomide in combination with dexamethasone and elranatamab, pursuant to the Pfizer Agreement, for earlier lines of MM treatment. Enrollment in the trial is ongoing and we expect to provide an update on the dose escalation progress in the second half of 2026 and report data from all cohorts in mid-2027. In addition, we plan to initiate an additional Phase 1b trial in the first half of 2027 that will evaluate cemsidomide in two combination cohorts, (1) cemsidomide, dexamethasone, and daratumumab, an anti-CD38 antibody, or (2) cemsidomide, dexamethasone,and carfilzomib, a proteasome inhibitor. The goal of the trial is to characterize cemsidomide's dose and safety with approved standard of care MM therapies. We believe our clinical development strategy provides an efficient path toward bringing cemsidomide to the growing myeloma patient population across multiple lines of therapy.
Our other clinical oncology product candidate is CFT8919, an orally bioavailable, allosteric, mutant-selective BiDAC degrader of epidermal growth factor receptor, or EGFR, with an L858R mutation in non-small cell lung cancer, or NSCLC. In May 2023, we entered into a license and collaboration agreement with Betta Pharma to collaborate on the development and commercialization of CFT8919 in mainland China, Hong Kong SAR, Macau SAR and Taiwan, with us retaining rights to develop and commercialize CFT8919 in the rest of the world. In November 2024, Betta Pharma initiated a Phase 1 clinical trial in NSCLC patients with the EGFR L858R mutation in Greater China. Based on the evolving treatment landscape for EGFR mutated NSCLC, capital priorities, and available clinical data to date, we will not advance CFT8919 into the next phase of clinical development outside of Greater China at this time.
We are also advancing an internal discovery pipeline focused on developing new degraders for the treatment of inflammation, neuroinflammation, and neurodegeneration. We have engineered degraders that have successfully achieved blood-brain barrier penetration in preclinical studies. A key part of our strategy is selecting targets where there is a strong degrader rationale over other therapeutic modalities. In addition, we are advancing a discovery pipeline in collaboration with MKDG and Roche. Our partnership strategy allows us to potentially further expand our reach in both oncology and non-oncology indications.
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Financial Operations Overview
Revenues
To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for the foreseeable future. Our revenues to date have been generated through research collaboration and license agreements. We recognize revenue over the expected performance period under each agreement. We expect that our revenue for the next several years will be derived primarily from our current collaboration agreements and any additional collaborations that we may enter into in the future. To date, we have not received any royalties under any of our existing collaboration agreements.
For a description of our collaboration agreements with Roche, Biogen, Betta Pharma, and MKDG, please see Note 8,
Collaboration and license agreements
, to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Research and development expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, and include:
•
salaries, benefits, and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions;
•
expenses incurred under agreements with third parties, including contract research organizations, or CROs, and other third parties that conduct research, preclinical, and clinical activities on our behalf as well as contract manufacturing organizations, or CMOs, that manufacture our product candidates for use in our preclinical and clinical trials;
•
cost of outside consultants, including their fees and related travel expenses;
•
costs of laboratory supplies and acquiring materials for preclinical studies and clinical trials;
•
facility-related expenses, which include direct depreciation costs of equipment and allocated expenses for rent and maintenance of facilities and other operating costs; and
•
third-party licensing fees.
We expense research and development costs as incurred. Costs for external development activities are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our condensed consolidated financial statements as prepaid or accrued research and development expenses. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses and expensed as the related goods are delivered or the services are performed.
We expect that our research and development expenses will continue to increase substantially in connection with our planned preclinical and clinical development activities.
General and administrative expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, legal, business development, and administrative functions. General and administrative expenses also include legal fees relating to corporate matters; professional fees for accounting, auditing, tax, and consulting services; insurance costs; travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
We expect that our general and administrative expenses will potentially increase in the future to support increased research and development activities. These increases will likely include higher costs related to the hiring of additional personnel; fees to outside consultants, lawyers and accountants; and investor and public relations costs.
Other income, net
Other income, net primarily consists of the following:
•
interest income earned on our cash, cash equivalents, and marketable securities and accretion of discount on marketable securities.
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Results of operations
Comparison of the three and six months ended June 30, 2026 and 2025
Revenue
Revenue from our collaboration and license agreements consisted of the following for the three and six months ended June 30, 2026 and 2025 (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Revenue from collaboration agreements:
Roche DAC Agreement
$
2,666
$
—
$
2,666
$
—
MKDG Agreement
1,833
3,428
3,595
6,581
Betta Agreements
15
54
20
514
Roche Agreement
2,127
1,932
4,512
4,428
Biogen Agreement
—
—
2,000
—
Merck Agreement
—
1,049
—
2,178
Total revenue from collaboration agreements
$
6,641
$
6,463
$
12,793
$
13,701
The $0.2 million increase in revenue in the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, is primarily driven by $2.7 million of revenue recognized under the Roche DAC Agreement, which commenced in April 2026. This was partially offset by:
•
a $1.6 million decrease in revenue related to the MKDG collaboration from the decision in 2025 to prioritize one KRAS project; and
•
a $1.0 million decrease related to our Merck collaboration terminating in 2025.
The $0.9 million decrease in revenue in the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, is primarily driven by:
•
a $3.0 million decrease in revenue related to the MKDG collaboration from the decision in 2025 to prioritize one KRAS project; and
•
a $2.2 million decrease related to our Merck collaboration terminating in 2025.
This is partially offset by:
•
$2.7 million of revenue recognized under the Roche DAC Agreement, which commenced in April 2026; and
•
a $2.0 million milestone achieved under the Biogen collaboration.
Research and development expenses
The following table summarizes our research and development expenses for the three and six months ended June 30, 2026 and 2025 (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Research and development expenses:
Personnel expenses
$
6,875
$
8,851
$
15,781
$
18,494
Preclinical development and discovery expenses
7,068
6,466
12,561
13,743
Clinical expenses
4,600
4,728
9,079
9,437
Facilities and supplies
3,209
3,709
6,623
6,839
Professional fees
1,188
1,275
2,426
2,586
Intellectual property and other expenses
1,531
1,168
2,607
2,170
Total research and development expenses
$
24,471
$
26,197
$
49,077
$
53,269
The $1.7 million decrease in research and development expenses in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 is primarily driven by a $2.0 million decrease in personnel expenses as a result of lower stock-based compensation expense and a reduction in research and development headcount, which was partially
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offset by a $0.6 million increase in preclinical development and discovery expenses as a result of progress made on our collaboration programs and internal programs.
The $4.2 million decrease in research and development expenses in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 is primarily driven by:
•
a $2.7 million decrease in personnel expenses as a result of lower stock-based compensation expense and a reduction in research and development headcount; and
•
a $1.2 million decrease in preclinical development and discovery expenses as a result of the termination of the Merck collaboration in 2025 and the decision to prioritize one project under the MKDG collaboration in 2025.
General and administrative expenses
The following table summarizes our general and administrative expenses for the three and six months ended June 30, 2026 and 2025 (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
General and administrative expenses:
Personnel expenses
$
5,362
$
6,260
$
11,658
$
13,084
Professional fees
2,053
1,475
3,965
2,943
Facilities and other expenses
1,178
1,032
2,301
2,070
Total general and administrative expenses
$
8,593
$
8,767
$
17,924
$
18,097
The $0.2 million decrease in general and administrative expenses in the three months ended June 30, 2026, as compared to the three months ended June 30, 2025 is primarily driven by a $0.9 million
decrease in personnel expenses related to lower stock-based compensation expense. This was partially offset by a $0.6 million
increase in professional fees.
The $0.2 million decrease in general and administrative expenses in the six months ended June 30, 2026, as compared to the six months ended June 30, 2025 is primarily driven by a $1.4 million
decrease in personnel expenses related to lower stock-based compensation expense. This was partially offset by a $1.0 million
increase in professional fees.
Other income, net
The $0.3 million increase in other income, net in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 is primarily driven by a $0.3 million increase in interest and other income resulting from increased invested balances as we generated cash from financing activities.
The change in other income, net in the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was not significant.
Liquidity and capital resources
Sources of liquidity
Since inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical programs and our product candidates through clinical development. We do not currently have any approved products and have never generated any revenue from product sales. To date, we have financed our operations primarily through the sale of preferred stock, public offerings of our common stock, private placements of our common stock, and through payments from collaboration partners. As of June 30, 2026, we had cash, cash equivalents and marketable securities of approximately $300.4 million.
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Cash flows
The following table summarizes our sources and uses of cash for the periods presented (in thousands):
Six Months Ended June 30,
2026
2025
Net change in cash, cash equivalents and restricted cash:
Net cash used in operating activities
$
(31,518)
$
(45,342)
Net cash provided by investing activities
1,338
68,046
Net cash provided by (used in) financing activities
34,187
(46)
Total net change in cash, cash equivalents and restricted cash
$
4,007
$
22,658
Operating activities
Net cash used in operating activities for the six months ended June 30, 2026 was $31.5 million, and was driven primarily by the following uses of cash:
•
net loss of $48.8 million;
•
$3.1 million decrease in our operating lease liability; and
•
$1.5 million increase in prepaid expenses and other current and long-term assets.
These were offset by an increase in deferred revenue of $12.0 million, primarily a result of the April 2026 Roche DAC Agreement, non-cash expenses of $8.1 million, which primarily consisted of stock-based compensation expense of $5.7 million, and a decrease in accounts receivable of $1.1 million.
Investing activities
Net cash provided by investing activities for the six months ended June 30, 2026 was $1.3 million, and was driven primarily by the sales and maturities of marketable securities, net of purchases.
Financing activities
Net cash provided by financing activities for the six months ended June 30, 2026 was $34.2 million, and was driven primarily by proceeds from issuance of common stock from the ATM Program, as defined below.
Funding requirements
Since our inception, we have incurred significant operating losses, and we expect to continue to incur significant expenses and increasing operating losses for the foreseeable future as we advance the preclinical programs and our product candidates through clinical development. In addition, we expect to continue to incur costs associated with operating as a public company.
Specifically, we anticipate that our expenses will increase substantially in the future, if and as we:
•
continue our ongoing Phase 1 and Phase 2 trials;
•
initiate later-stage development and potential registrational trials for our product candidates;
•
advance additional product candidates into preclinical and clinical development;
•
continue to invest in our proprietary TORPEDO platform;
•
advance, expand, maintain and protect our intellectual property portfolio;
•
hire additional clinical, regulatory, quality and scientific personnel;
•
add operational, financial and management information systems and personnel to support our ongoing research, product development, potential future commercialization efforts, operations as a public company and general and administrative roles;
•
seek marketing approvals for any product candidates that successfully complete clinical trials; and
•
ultimately establish a sales, marketing, and distribution infrastructure and scale up external manufacturing capabilities to commercialize any products for which we may obtain marketing approval.
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Because of the numerous risks and uncertainties associated with development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital and operating costs associated with our current and anticipated preclinical and clinical development. Our future capital requirements will depend on many factors, including:
•
the progress, costs, and results of ongoing and planned first-in-human Phase 1 and Phase 2 trials for our lead product candidate and any future clinical development of our lead product candidate;
•
the scope, progress, costs and results of preclinical and clinical development for our other product candidates and development programs;
•
the number and development requirements of other product candidates that we pursue;
•
the progress and success of our existing and any future collaborations with third-party partners, including whether or not we receive additional research support or milestone payments from our existing collaboration partners upon the achievement of milestones;
•
the costs, timing, and outcome of regulatory review of our product candidates;
•
the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;
•
our willingness and ability to establish additional collaboration arrangements with other biotechnology or pharmaceutical companies on favorable terms, if at all, for the development or commercialization of current or additional future product candidates;
•
the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; and
•
the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval.
As a result of the anticipated expenditures described above, we will need to obtain substantial additional financing to support our continuing operations and pursue our long-term business plan. Until such time, if ever, that we can generate substantial revenue from product sales, we expect to finance our cash needs through a combination of equity offerings, private placements of equity securities, debt offerings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements. Although we may receive potential future milestone and royalty payments under our collaborations with Roche, Biogen, Betta Pharma, and MKDG, we do not have any committed external sources of funds as of June 30, 2026.
Adequate additional funds may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
If we raise additional capital through the sale of equity securities, each investor’s ownership interest will be diluted, and the terms of any securities we may issue could include liquidation or other preferences that adversely affect the rights of holders of our common stock. Preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as making acquisitions or capital expenditures or declaring dividends.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.
At-the-market equity program
In October 2024, we filed a registration statement on Form S-3, or the 2024 Registration Statement, with the SEC that became effective on November 13, 2024 and registered the offering, issuance and sale of an unspecified amount of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof. Simultaneously, we entered into a sales agreement with TD Securities (USA) LLC, as sales agent, to provide for the issuance and sale by us of up to $200.0 million of common stock from time to time in “at-the-market” offerings under the 2024 Registration Statement and related prospectus filed with the 2024 Registration Statement, or the ATM Program. On October 16, 2025, we terminated the sales agreement prospectus related to the ATM Program. A total of 3,769,483 shares of our common stock at an average purchase price of $2.55 had been sold through the ATM Program as of October 16, 2025, which sales resulted in net proceeds of $9.4 million.
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In November 2025, the Company filed a registration statement on Form S-3, or the 2025 Registration Statement, with the SEC that became effective on December 10, 2025 and registered the offering, issuance and sale of up to $400.0 million of common stock, preferred stock, debt securities, warrants and/or units or any combination thereof, together with a sales agreement prospectus for the offer and sale of up to $125.0 million of common stock from time to time in “at-the-market” offerings under the ATM Program. For the three and six months ended June 30, 2026, a total of 9,273,620 shares of our common stock had been sold at an average price of $3.71 under the ATM Program, which resulted in net proceeds of $33.5 million. Please see Note 9,
Stockholders' equity,
to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Underwritten offering
In October 2025, we entered into an underwriting agreement with Jefferies LLC, TD Securities (USA) LLC and Evercore Group L.L.C., or collectively, the Underwriters, related to an underwritten offering, or the 2025 Offering, of (i) 21,895,000 shares, or the Shares, of our common stock; (ii) in lieu of common stock to certain investors, pre-funded warrants to purchase an aggregate of 28,713,500 shares of common stock, or the Pre-Funded Warrants; (iii) accompanying Class A warrants to purchase an aggregate of 50,608,500 shares of common stock (or pre-funded warrants in lieu thereof), or the Class A Warrants, and together with the Class B Warrants (as defined below), the Class A and Class B Warrants; and (iv) accompanying Class B warrants to purchase an aggregate of 50,608,500 shares of common stock (or pre-funded warrants in lieu thereof), or the Class B Warrants, and together with the Pre-Funded Warrants and the Class A Warrants, the Warrants. Each Share was offered and sold together with accompanying Class A and Class B Warrants each exercisable for one share of common stock at a combined offering price of $2.47 per Share and accompanying Class A and Class B Warrants, and each Pre-Funded Warrant was offered and sold together with accompanying Class A and Class B Warrants at a combined offering price of $2.4699 per Pre-Funded Warrant and accompanying Class A and Class B Warrants. We received net proceeds from the 2025 Offering, after deducting the underwriting discount and commissions and other estimated offering expenses, of approximately $116.9 million. If all Warrants are exercised, the aggregate net proceeds to us from the 2025 Offering, after deducting underwriting discounts and commissions and estimated offering expenses, are expected to be $341.7 million. As of June 30, 2026, a total of 15,695,500 Pre-Funded Warrants have been exercised for shares of common stock at a price of $0.0001 per share. No Class A or Class B Warrants have been exercised.
Contractual obligations
We enter into contracts in the normal course of business with contract manufacturing organizations, contract research organizations, and other vendors to assist in the performance of our research and development activities and other services and products for operating purposes. These contracts generally provide for termination on notice, and therefore are cancellable contracts and not included in the table of contractual obligations and commitments.
During the six months ended June 30, 2026, except for the minimum rental commitments disclosed in Note 6,
Leases
,
to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there were no significant changes to our contractual obligations and commitments described under "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2025.
Critical accounting policies and use of estimates
Our critical accounting policies are those policies that require the most significant judgments and estimates in the preparation of our unaudited condensed consolidated financial statements. We have determined that our most critical accounting policies are those relating to revenue recognition from collaborations, research and development expense recognition, lease liability measurement, and stock-based compensation. There have been no significant changes to our existing critical accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 26, 2026.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. Our interest-earning assets consist of cash, cash equivalents, and marketable securities. Our interest income is sensitive to changes in the general level of interest rates, primarily United States interest rates. As of June 30, 2026, we had marketable securities of $221.8 million, which consisted of corporate debt securities, U.S. government debt securities, and U.S. Treasury securities. Our marketable securities are short term in nature with a weighted-average maturity date of 0.7 years. As such, while these interest-earning instruments carry a degree of interest rate risk, historical fluctuations in interest income have not been significant for us.
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Item 4. Controls and Procedures.
Evaluation of disclosure controls and procedures
Our management, with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of June 30, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on the evaluation of our disclosure controls and procedures as of June 30, 2026, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date are effective at the reasonable assurance level.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent limitation on the effectiveness over financial reporting
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute, assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but there can be no assurance that such improvements will be sufficient to provide us with effective internal control over financial reporting. See “Risk Factors—
We will continue to incur additional costs as a result of operating as a public company and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.
”
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. As of the date of this Quarterly Report on Form 10-Q, we were not a party to any material legal matters or claims.
Item 1A. Risk Factors.
Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below together with all the other information in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes appearing at the end of this Quarterly Report on Form 10-Q, in evaluating our company. The risks and uncertainties described below and in our other filings with the SEC, may not be the only ones that we face. The occurrence of any of the events or developments described below, if they actually occur, could harm our business, financial condition, results of operations and growth prospects. As a result, the market price of our common stock could decline, and you may lose all or part of your investment in our common stock.
The
risk factors denoted with a "*", if any, are newly added or have been materially updated from our Annual Report on Form 10-K for the year ended December 31, 2025.
Risks related to our financial position and need for additional capital
We are a clinical-stage biopharmaceutical company and have incurred significant losses since our inception. We expect to incur losses over at least the next several years and may never achieve or maintain profitability.
We are a clinical-stage biopharmaceutical company with limited operating history. Our net loss was $48.8 million and $52.3 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $787.5 million. To date, we have not generated any revenue from product sales and have financed our operations primarily through sales of our equity interests, including public offerings of our common stock, proceeds from our collaborations, share issuances and debt financing. We are still in the early stages of development of our product candidates. As a result, we expect that it will be several years, if ever, before we have a product candidate ready for regulatory approval and commercialization. We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability.
We expect to continue to incur significant expenses and increasing operating losses for at least the next several years. We anticipate that our expenses will increase substantially if and as we:
•
initiate, conduct, and successfully complete first-in-human and later-stage clinical trials of our product candidates and as we expand the scope of our proprietary research and development portfolios;
•
leverage our TORPEDO platform to identify and then advance additional product candidates into preclinical and clinical development;
•
expand the capabilities of our TORPEDO platform;
•
seek marketing approvals for any product candidates that successfully complete clinical trials;
•
ultimately establish a sales, marketing, and distribution infrastructure and scale up external manufacturing capabilities to commercialize any products for which we expect to obtain marketing approval;
•
advance, expand, maintain, and protect our intellectual property portfolio; and
•
manage staffing needs to meet the changing needs of the business as we advance additional product candidates and/or continue to develop existing product candidates.
Further, we expect to continue to incur additional costs associated with operating as a public company, including significant legal, accounting, insurance, investor relations, and other expenses.
Our expenses could increase beyond our expectations if we are required by the FDA, the European Medicines Agency, or other regulatory authorities to perform trials in addition to those that we currently expect, or if we experience any delays in either establishing appropriate manufacturing arrangements for or completing our clinical trials or the clinical development of any of our product candidates.
Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses we will incur or when, if ever, we will be able to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or
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annual basis, which could materially impair our ability to raise capital or continue operations. This could cause a decline in the value of our company or our common stock and you may lose all or part of your investment.
If one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing those approved products. Even if we are able to generate revenues from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations.
We will need substantial
additional funding to pursue our business objectives and continue our operations. If we are unable to raise capital when needed, we may be required to delay, limit, reduce, or terminate our research or product development programs or future commercialization efforts.
We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we prepare for and initiate, conduct, and complete our ongoing and planned clinical trials of our product candidates, advance our TORPEDO platform and continue research and development activities, expand our proprietary research and development portfolios and initiate and continue clinical trials of, and potentially seek marketing approval for, our current and future preclinical programs. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales, and distribution. Further, we expect to continue to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our research, product development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
We had cash, cash equivalents, and marketable securities of approximately $300.4 million as of June 30, 2026. We believe that these funds will be sufficient to fund our planned operating expenses to the end of 2028. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our current capital resources sooner than we currently expect. While, as of June 30, 2026, holders have exercised Pre-Funded Warrants to purchase 15,695,500 shares of common stock, we cannot predict whether any additional Pre-Funded Warrants or any Class A Warrants or Class B Warrants issued in the 2025 Offering will be exercised and, therefore, have not included any anticipated proceeds from the potential exercise of these warrants in our estimate of our cash runway.
Our future capital requirements will depend on many factors, including:
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the timing, progress, costs, and results of our ongoing and planned first-in-human Phase 1 and Phase 2 clinical trials for our product candidates and any future clinical development, including any Phase 3 clinical trials, of those product candidates;
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the number, scope, progress, costs, and results of clinical development stage programs and our other product candidates and development programs;
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the success of our ongoing collaborations;
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the costs, timing, and outcomes of regulatory review of our product candidates;
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the costs and timing of future commercialization activities, including product manufacturing, marketing, sales, and distribution, for any of our product candidates for which we expect to receive marketing approval;
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the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval and the timing of the receipt of any such revenue;
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any delays or interruptions, including delays due to any global health epidemics, that we experience in our preclinical studies, clinical trials, and/or supply chain;
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the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims; and
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our ability to establish collaboration arrangements with other biotechnology or pharmaceutical companies on favorable terms, if at all, for the development or commercialization of our product candidates or access to our TORPEDO platform.
Our current cash, cash equivalents, and marketable securities will not be sufficient for us to fund any of our product candidates through regulatory approval. As a result, we will need to raise substantial additional capital to complete the development and commercialization of our product candidates. Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete. We may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In
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addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for several years, if at all. Adequate additional funds may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.
If one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing those approved products. Even if we are able to generate revenues from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations.
We remain early in the development lifecycle, which may make it difficult for you to evaluate the success of our business to date and assess our future viability.
We commenced operations in late 2015 and initiated our first Phase 1/2 clinical trial in 2021. Our activities to date have been limited to organizing and staffing our company, business planning, raising capital, conducting discovery and research activities, filing patent applications, identifying potential product candidates, developing and advancing our TORPEDO platform, undertaking preclinical studies, establishing arrangements with third parties for the manufacture of initial quantities of our product candidates, and preparing for and conducting early-stage clinical trials. While we have conducted clinical trials and our partner Betta Pharma is conducting a clinical trial evaluating one of our product candidates, all of our other potential product candidates are still in the discovery stage. We have not yet demonstrated our ability to obtain marketing approvals, manufacture a commercial-scale product directly or through a third party or conduct sales, marketing, and distribution activities necessary for successful product commercialization. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history or if we had already successfully completed some or all of these types of activities in the past.
In addition, as a biopharmaceutical company, we may encounter unforeseen expenses, difficulties, complications, delays, and other known and unknown challenges. We will need to transition at some point from a company with a research and development focus to a company capable of supporting commercial activities and we may not be successful in making that transition.
We expect our financial condition and operating results to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
Until the time, if ever, when we can generate substantial revenue from product sales, we expect to finance our cash needs through a combination of equity offerings, share issuances, private placements, debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements. Although we may receive potential future payments under our collaborations, we do not currently have any committed external source of funds. If we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted and the terms of any securities we may issue in the future may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions, or capital expenditures or declaring dividends.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.
Risks related to the discovery and development of our product candidates
Our approach to the discovery and development of product candidates based on our TORPEDO platform for targeted protein degradation is unproven, which makes it difficult to predict the time, cost of development, and likelihood of successfully developing any products.
Our future success depends on the successful development of targeted protein degradation, which is a novel therapeutic approach. Very few small-molecule product candidates using targeted protein degradation, such as those developed through our TORPEDO platform, have been tested in humans and none of the product candidates developed through our TORPEDO platform have been approved in the United States, Europe, or any other jurisdiction. The scientific research that forms the basis of our efforts using our TORPEDO platform is ongoing and the data underlying the feasibility of developing these types of therapeutic products is both preliminary and limited. If any adverse learnings are made by other
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developers of targeted protein degraders, there is a risk that development of our product candidates could be materially impacted. Discovery and development of small molecules that harness the ubiquitin proteasome pathway to degrade protein targets have been impeded largely by the complexities and limited understanding of the functions, biochemistry, and structural biology of the specific components of the ubiquitin-proteasome system, including E3 ligases and their required accessory proteins involved in target protein ubiquitination, as well as by challenges of engineering compounds that promote protein-to-protein interactions.
While we have conducted early-stage clinical trials, at this time, we have not yet completed a late stage or registrational clinical trial of any product candidate. Although some of our earlier-stage product candidates have produced observable results in animal studies, these product candidates may not demonstrate the same chemical and pharmacological properties in humans and may interact with human biological systems in unforeseen, ineffective or harmful ways. As a result, there could be adverse effects from treatment with any of our current or future product candidates that we cannot predict at this time.
It is difficult for us to predict the time and cost of developing our novel product candidates and we cannot predict whether the application of our TORPEDO platform, or any similar or competitive protein degradation platforms, will result in the development of product candidates that may receive marketing approval. Any development problems we experience in the future related to our TORPEDO platform or any of our research programs may cause significant delays or unanticipated costs or may prevent the development of a commercially viable product. Any of these factors may prevent us from completing our preclinical studies or any clinical trials that we may initiate, as well as from commercializing any product candidates we may develop on a timely or profitable basis, if at all.
Our preclinical studies and clinical trials may fail to demonstrate adequately the safety and efficacy of any of our product candidates, which would prevent or delay development, regulatory approval, and commercialization. Further, the results of preclinical studies may not be predictive of future results in later studies or trials and initial success in clinical trials may not be indicative of results obtained when these trials are completed or in later stage clinical trials.
Before obtaining regulatory approval for the commercial sale of any of our product candidates, we must demonstrate through lengthy, complex, and expensive preclinical studies and clinical trials that our product candidates are both safe and effective for use in each target indication. This testing is expensive and can take many years to complete. Further, the outcome of these activities is inherently uncertain, as failure can occur at any time during the clinical development process. Because many of our product candidates are in an early stage of development and have either never been tested in humans or have only completed early clinical trials, there is a high risk of failure. In addition, because targeted protein degraders are a relatively new class of product candidates, any failures or adverse outcomes in preclinical or clinical testing seen by other developers in this class could materially impact the success of our programs. We may never succeed in developing marketable products.
It is also possible that the results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. Preclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their product candidates. Although product candidates may demonstrate promising results in preclinical studies and early clinical trials, they may not prove to be effective or safe in subsequent clinical trials. The results of the dose escalation portion of our completed, ongoing, and planned first-in-human Phase 1/2 clinical trials of our product candidates may not be predictive of the results of further clinical trials of these product candidates or any other product candidates and, in the case of ongoing and