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What changed in Relay Therapeutics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Relay Therapeutics, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+392 added−360 removedSource: 10-K (2024-12-31) vs 10-K (2024-02-22)

Top changes in Relay Therapeutics, Inc.'s 2024 10-K

392 paragraphs added · 360 removed · 295 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

191 edited+75 added−24 removed516 unchanged
Biggest changeAny collaborations we have entered into or will enter into may pose risks, including the following: • Collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; • Collaborators may not perform their obligations as expected; • The clinical trials conducted as part of these collaborations may not be successful; • Collaborators may not pursue development and/or commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities; • Collaborators may delay clinical trials, provide insufficient funding for clinical trials, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • We may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or commercialized under a collaboration and, consequently, may have limited ability to inform our stockholders about the status of such product candidates; • Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • Product candidates developed in collaboration with us may be viewed by any collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • A collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate; • Disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development of any programs or product candidates, may cause delays or termination of the research, development, manufacture or commercialization of such programs or product candidates, may lead to additional responsibilities for us with respect to such programs or product candidates or may result in litigation or arbitration, any of which would be time-consuming and expensive; • Collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation.
Biggest changeAny licenses or collaborations we have entered into or will enter into may pose risks, including the following: • Licensees or collaborators may have significant discretion in determining the efforts and resources that they will apply to these licenses or collaborations; • Licensees or collaborators may not perform their obligations as expected; • The clinical trials conducted as part of these licenses or collaborations may not be successful; • Licensees or collaborators may not pursue development and/or commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the licensees' or collaborators’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities; • Licensees or collaborators may delay clinical trials, provide insufficient funding for clinical trials, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • We may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or commercialized under a license or collaboration and, consequently, may have limited ability to inform our stockholders about the status of such product candidates; • Licensees or collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the licensees or collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; 43 • Product candidates developed in collaboration with us may be viewed by any licensee or collaborator as competitive with their own product candidates or products, which may cause licensees or collaborators to cease to devote resources to the commercialization of our product candidates; • A licensee or collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate; • Disagreements with licensees or collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development of any programs or product candidates, may cause delays or termination of the research, development, manufacture or commercialization of such programs or product candidates, may lead to additional responsibilities for us with respect to such programs or product candidates or may result in litigation or arbitration, any of which would be time-consuming and expensive; • Licensees or collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • Disputes may arise with respect to the ownership of intellectual property developed pursuant to our licenses or collaborations; • Licensees or collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and • Licenses or collaborations may be terminated for the convenience of the licensee or collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
In addition, there can be no assurance that we will be able to rapidly identify, design and synthesize the necessary compounds or that these or other problems related to the development of this novel mechanism will not arise in the future, which may cause significant delays, or we raise problems we may not be able to resolve.
In addition, there can be no assurance that we will be able to rapidly identify, design and synthesize the necessary compounds or that these or other problems related to the development of this novel mechanism will not arise in the future, which may cause significant delays, or raise problems that we may not be able to resolve.
This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.
This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.
Uncertainties or disagreements around our rights under any such intellectual property may undermine our ability to partner our programs with third parties. In addition, the DESRES Agreement is complex and certain provisions may be susceptible to multiple interpretations.
Uncertainties or disagreements around our rights under any such intellectual property may undermine our ability to partner our programs with third parties. In addition, the DESRES Agreement is complex and certain provisions may be susceptible to multiple interpretations.
Our ability to generate revenue depends on a number of factors, including, but not limited to, our ability to: • successfully complete preclinical studies; • successfully enroll subjects in, and complete, clinical trials; • have our IND applications go into effect for our planned clinical trials or future clinical trials; • receive regulatory approvals from applicable regulatory authorities; • initiate and successfully complete all safety studies required to obtain U.S. and foreign marketing approval for our product candidates; • establish commercial manufacturing capabilities or make arrangements with third-party manufacturers for clinical supply and commercial manufacturing; • obtain and maintain patent and trade secret protection or regulatory exclusivity for our product candidates; • launch commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others; • obtain and maintain acceptance of the product candidates, if and when approved, by patients, the medical community and third-party payors; • effectively compete with other therapies; • obtain and maintain healthcare coverage and adequate reimbursement; • enforce and defend intellectual property rights and claims; • take precautionary measures to help minimize the risk of any future pandemics or outbreaks similar to COVID-19 to our employees; and • maintain a continued acceptable safety profile of the product candidates following approval.
Our ability to generate revenue depends on a number of factors, including, but not limited to, our ability to: • successfully complete preclinical studies; • successfully enroll subjects in, and complete, clinical trials; • have our IND applications go into effect for our planned clinical trials or future clinical trials; • receive regulatory approvals from applicable regulatory authorities; • initiate and successfully complete all safety studies required to obtain U.S. and foreign marketing approval for our product candidates; • establish commercial manufacturing capabilities or make arrangements with third-party manufacturers for clinical supply and commercial manufacturing; • obtain and maintain patent and trade secret protection or regulatory exclusivity for our product candidates; • launch commercial sales of our product candidates, if and when approved, whether alone or in partnership or collaboration with others; • obtain and maintain acceptance of the product candidates, if and when approved, by patients, the medical community and third-party payors; • effectively compete with other therapies; • obtain and maintain healthcare coverage and adequate reimbursement; • enforce and defend intellectual property rights and claims; • take precautionary measures to help minimize the risk of any future pandemics or outbreaks similar to COVID-19 to our employees; and • maintain a continued acceptable safety profile of the product candidates following approval.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of the stockholders may be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office, and special meetings of stockholders may not be called by any other person or persons; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds (2/3) of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than a majority of all outstanding shares of our voting stock to amend any bylaws by stockholder action and not less than two-thirds (2/3) of all outstanding shares of our voting stock to amend specific provisions of our Certificate of Incorporation; and • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval, which preferred stock may include rights superior to the rights of the holders of common stock.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of the stockholders may be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office, and special meetings of stockholders may not be called by any other person or persons; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; 73 • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds (2/3) of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than a majority of all outstanding shares of our voting stock to amend any bylaws by stockholder action and not less than two-thirds (2/3) of all outstanding shares of our voting stock to amend specific provisions of our Certificate of Incorporation; and • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval, which preferred stock may include rights superior to the rights of the holders of common stock.
Any acquisition involves numerous risks and operational, financial, and managerial challenges, including the following, any of which could adversely affect our business, financial condition, or results of operations: • difficulties in integrating new operations, technologies, products, and personnel; • challenges maintaining uniform procedures, controls and policies with respect to our financial accounting systems; • lack of synergies or the inability to realize expected synergies and cost-savings; • underperformance of any acquired technology, product, or business relative to our expectations and the price we paid; • negative near-term impacts on financial results after an acquisition, including acquisition-related earnings charges; • the potential loss of key employees, customers, and strategic partners of acquired companies; • claims by terminated employees and shareholders of acquired companies or other third parties related to the transaction; 76 • the assumption or incurrence of additional debt obligations or expenses, or use of substantial portions of our cash; • the issuance of equity securities to finance or as consideration for any acquisitions that dilute the ownership of our stockholders; • the issuance of equity securities to finance or as consideration for any acquisitions may not be an option if the price of our common stock is low or volatile which could preclude us from completing any such acquisitions; • any collaboration, strategic alliance and licensing arrangement may require us to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms that are not favorable to us; • diversion of management’s attention and company resources from existing operations of the business; • inconsistencies in standards, controls, procedures, and policies; • the impairment of intangible assets as a result of technological advancements, or worse-than-expected performance of acquired companies; • assumption of, or exposure to, historical liabilities of the acquired business, including unknown contingent or similar liabilities that are difficult to identify or accurately quantify; and • risks associated with acquiring intellectual property, including potential disputes regarding acquired companies’ intellectual property.
Any acquisition involves numerous risks and operational, financial, and managerial challenges, including the following, any of which could adversely affect our business, financial condition, or results of operations: • difficulties in integrating new operations, technologies, products, and personnel; • challenges maintaining uniform procedures, controls and policies with respect to our financial accounting systems; • lack of synergies or the inability to realize expected synergies and cost-savings; • underperformance of any acquired technology, product, or business relative to our expectations and the price we paid; • negative near-term impacts on financial results after an acquisition, including acquisition-related earnings charges; • the potential loss of key employees, customers, and strategic partners of acquired companies; • claims by terminated employees and shareholders of acquired companies or other third parties related to the transaction; 68 • the assumption or incurrence of additional debt obligations or expenses, or use of substantial portions of our cash; • the issuance of equity securities to finance or as consideration for any acquisitions that dilute the ownership of our stockholders; • the issuance of equity securities to finance or as consideration for any acquisitions may not be an option if the price of our common stock is low or volatile which could preclude us from completing any such acquisitions; • any collaboration, strategic alliance and licensing arrangement may require us to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms that are not favorable to us; • diversion of management’s attention and company resources from existing operations of the business; • inconsistencies in standards, controls, procedures, and policies; • the impairment of intangible assets as a result of technological advancements, or worse-than-expected performance of acquired companies; • assumption of, or exposure to, historical liabilities of the acquired business, including unknown contingent or similar liabilities that are difficult to identify or accurately quantify; and • risks associated with acquiring intellectual property, including potential disputes regarding acquired companies’ intellectual property.
Clinical trial enrollment may be affected by other factors including: • the severity of the disease under investigation; • the eligibility criteria for the clinical trial in question; • the availability of an appropriate genomic screening test; • the perceived risks and benefits of the product candidate under study; • the resources and efforts required to facilitate timely enrollment in clinical trials; • the availability of approved products that treat the same indications as our product candidates; 41 • the patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; • the proximity and availability of clinical trial sites for prospective patients; and • factors we may not be able to control that may limit patients, principal investigators or staff or clinical site availability, such as uncertain geopolitical conditions or current or future pandemics.
Clinical trial enrollment may be affected by other factors including: • the severity of the disease under investigation; • the eligibility criteria for the clinical trial in question; • the availability of an appropriate genomic screening test; • the perceived risks and benefits of the product candidate under study; • the resources and efforts required to facilitate timely enrollment in clinical trials; • the availability of approved products that treat the same indications as our product candidates; • the patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; • the proximity and availability of clinical trial sites for prospective patients; and • factors we may not be able to control that may limit patients, principal investigators or staff or clinical site availability, such as uncertain geopolitical conditions or current or future pandemics.
Furthermore, any failure or perceived failure by us or any third-party collaborators, service providers, contractors or consultants to comply with our privacy, confidentiality, data security or similar obligations to third parties, or any data security incidents or other security compromises or breaches that result in the unauthorized access, use, acquisition, disclosure, release or transfer of confidential or sensitive information, including physician data, patient data, or any personally identifiable information, may result in governmental investigations, enforcement actions, regulatory fines, litigation or public statements against us, could cause third parties to lose trust in us or could result in claims by third parties asserting that we have breached our privacy, confidentiality, data security or similar obligations, any of which could have a material adverse effect on our reputation, business, financial condition or results of operations.
Furthermore, any failure or perceived failure by us or any third-party collaborators, service providers, contractors or consultants to comply with our privacy, confidentiality, data security or similar obligations to third parties, or any data cybersecurity incidents or other security compromises or breaches that result in the unauthorized access, use, acquisition, disclosure, release or transfer of confidential or sensitive information, including physician data, patient data, or any personally identifiable information, may result in governmental investigations, enforcement actions, regulatory fines, litigation or public statements against us, could cause third parties to lose trust in us or could result in claims by third parties asserting that we have breached our privacy, confidentiality, data security or similar obligations, any of which could have a material adverse effect on our reputation, business, financial condition or results of operations.
Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and 64 • the priority of invention of patented technology.
Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology.
To the extent that any disruption or security compromises, incident, or breach were to result in a loss of, or damage to, our systems, infrastructure, data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed, the further development and commercialization of our product candidates or any future product candidates could be hindered or delayed, we could be required to expend significant amounts of money and other resources to repair, remediate, or replace our information systems or networks, the market perception of the effectiveness of our security measures could be harmed and our reputation and credibility could be damaged.
To the extent that any disruption or security compromises, cybersecurity incident, or breach were to result in a loss of, or damage to, our systems, infrastructure, data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed, the further development and commercialization of our product candidates or any future product candidates could be hindered or delayed, we could be required to expend significant amounts of money and other resources to repair, remediate, or replace our information systems or networks, the market perception of the effectiveness of our security measures could be harmed and our reputation and credibility could be damaged.
Our quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside of our control and may be difficult to predict, including the following: • the timing and success or failure of clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; • our ability to successfully recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts; • our ability to obtain marketing approval for our product candidates, and the timing and scope of any such approvals we may receive; • the timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may change from time to time; • the cost of manufacturing our product candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers; • our ability to attract, hire and retain qualified personnel; • expenditures that we will or may incur to develop additional product candidates; • the level of demand for our product candidates should they receive approval, which may vary significantly; • the risk/benefit profile, cost and reimbursement policies with respect to our product candidates, if approved, and existing and potential future therapeutics that compete with our product candidates; 54 • the changing and volatile U.S. and global economic environments or ongoing geopolitical conflicts; and • future accounting pronouncements or changes in our accounting policies.
Our quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside of our control and may be difficult to predict, including the following: • the timing and success or failure of clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; • our ability to successfully recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts; • our ability to obtain marketing approval for our product candidates, and the timing and scope of any such approvals we may receive; • the timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may change from time to time; • the cost of manufacturing our product candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers; • our ability to attract, hire and retain qualified personnel; • expenditures that we will or may incur to develop additional product candidates; 46 • the level of demand for our product candidates should they receive approval, which may vary significantly; • the risk/benefit profile, cost and reimbursement policies with respect to our product candidates, if approved, and existing and potential future therapeutics that compete with our product candidates; • the changing and volatile U.S. and global economic environments or ongoing geopolitical conflicts; and • future accounting pronouncements or changes in our accounting policies.
Risks Related to the Regulatory Agency Review Process Disruptions at the FDA, the SEC and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being 74 developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
Risks Related to the Regulatory Agency Review Process Disruptions at the FDA, the SEC and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
Such authorities may impose a suspension or termination or clinical hold due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial 40 operations or clinical trial site by the FDA or other regulatory authorities, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Such authorities may impose a suspension or termination or clinical hold due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or clinical trial site by the FDA or other regulatory authorities, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
A public health crisis similar to the COVID-19 pandemic could adversely impact our preclinical, other nonclinical or clinical trial operations in the United States, 57 and we may experience delays in initiating, or fail to initiate, IND-enabling studies, recruiting and retaining patients, principal investigators and site staff for our clinical trials, dosing of patients in our clinical trials as well as in activating new trial sites, and protocol deviations.
A public health crisis similar to the COVID-19 pandemic could adversely impact our preclinical, other nonclinical or clinical trial operations in the United States, and we may experience delays in initiating, or fail to initiate, IND-enabling studies, recruiting and retaining patients, principal investigators and site staff for our clinical trials, dosing of patients in our clinical trials as well as in activating new trial sites, and protocol deviations.
While we seek to maintain adequate inventory of the API, drug product and starting materials used in our product candidates, any interruption or delay in the supply of components or materials, or our inability to obtain such API, drug product or starting 50 materials from alternate sources at acceptable prices in a timely manner could impede, delay, limit or prevent our development efforts, which could harm our business, results of operations, financial condition and prospects.
While we seek to maintain adequate inventory of the API, drug product and starting materials used in our product candidates, any interruption or delay in the supply of components or materials, or our inability to obtain such API, drug product or starting materials from alternate sources at acceptable prices in a timely manner could impede, delay, limit or prevent our development efforts, which could harm our business, results of operations, financial condition and prospects.
These payment obligations may decrease the value to us of certain transactional opportunities or otherwise burden our ability to enter into such transactions. We may be required to pay certain milestones and royalties under our license or collaboration agreements with third-party licensors or collaborators, which may adversely affect the overall profitability of any products that we may seek to commercialize.
These payment obligations may decrease the value to us of certain transactional opportunities or otherwise burden our ability to enter into such transactions. 45 We may be required to pay certain milestones and royalties under our license or collaboration agreements with third-party licensors or collaborators, which may adversely affect the overall profitability of any products that we may seek to commercialize.
The techniques used by cyber criminals change frequently, may not be recognized until launched and can originate from a wide variety of sources, including insider threats and outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign governments or agencies, or generated using artificial intelligence.
The techniques used by cyber criminals change frequently, may 69 not be recognized until launched and can originate from a wide variety of sources, including insider threats and outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign governments or agencies, or generated using artificial intelligence.
Moreover, increasing efforts by governmental and 73 third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.
Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.
Due to the size and complexity and the increasing amounts of confidential information that are maintained, our internal information technology systems and infrastructure and those of our third-party CROs, vendors and other contractors and consultants are potentially vulnerable to breakdown or other damage, service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as cyber-attacks or security compromises, incidents, or breaches from inadvertent or intentional actions by our employees, third-party CROs, vendors, contractors, consultants and/or third parties with whom we do business, or from cyber-attacks or security compromises, incidents, or breaches by malicious third parties (including the deployment of harmful malware, ransomware, digital extortion, denial-of-service attacks, supply chain attacks, social engineering and business email compromises, and other means to affect service reliability and threaten the confidentiality, integrity, availability, and security of systems, infrastructure or information), which may compromise our systems and infrastructure or those of our partners, third-party CROs, vendors, contractors, consultants and/or third parties with whom we do business, or lead to data leakage or compromise.
Due to the size and complexity and the increasing amounts of confidential information that are maintained, our internal information technology systems and infrastructure and those of our third-party CROs, vendors and other contractors and consultants are potentially vulnerable to breakdown or other damage, service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as cyber-attacks or security compromises, cybersecurity incidents, or breaches from inadvertent or intentional actions by our employees, third-party CROs, vendors, contractors, consultants and/or third parties with whom we do business, or from cyber-attacks or security compromises, incidents, or breaches by malicious third parties (including the deployment of harmful malware, ransomware, digital extortion, denial-of-service attacks, supply chain attacks, social engineering (including phishing attacks) and business email compromises, and other means to affect service reliability and threaten the confidentiality, integrity, availability, and security of systems, infrastructure or information), which may compromise our systems and infrastructure or those of our partners, third-party CROs, vendors, contractors, consultants and/or third parties with whom we do business, or lead to data leakage or compromise.
It is possible that our product candidates, including any product candidates we may seek to develop in the future, will never obtain regulatory approval. We have only limited experience in filing and supporting the applications necessary to gain regulatory approvals and expect to rely on third-party CROs and/or 44 regulatory consultants to assist us in this process.
It is possible that our product candidates, including any product candidates we may seek to develop in the future, will never obtain regulatory approval. We have only limited experience in filing and supporting the applications necessary to gain regulatory approvals and expect to rely on third-party CROs and/or regulatory consultants to assist us in this process.
Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating or from successfully challenging our intellectual property rights. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.
Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating or from successfully challenging our intellectual property rights. Uncertainties resulting from the 54 initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.
If these in-licenses are terminated, or if the underlying patent rights licensed thereunder fail to provide the intended exclusivity, competitors or other third parties would have the freedom to seek regulatory approval of, and to market, products identical to ours and we may be required to cease our development and commercialization of certain of our product candidates.
If these in-licenses are terminated, or if the underlying patent rights licensed thereunder fail to provide the intended exclusivity, competitors or other third parties would have the freedom to seek 55 regulatory approval of, and to market, products identical to ours and we may be required to cease our development and commercialization of certain of our product candidates.
Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. In addition, regulatory authorities may find fault with our manufacturing process or facilities or that of third-party contract manufacturers.
Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. In 37 addition, regulatory authorities may find fault with our manufacturing process or facilities or that of third-party contract manufacturers.
If these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we 47 may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed. We do not have the ability to independently conduct clinical trials.
If these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed. We do not have the ability to independently conduct clinical trials.
In either case, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain such a license, it could be granted on non-exclusive terms, thereby providing our competitors and other third parties access to the same technologies licensed to us.
In either case, we may not be able to obtain any required license on commercially reasonable terms or at 53 all. Even if we were able to obtain such a license, it could be granted on non-exclusive terms, thereby providing our competitors and other third parties access to the same technologies licensed to us.
Additionally, 66 under FDORA, sponsors of approved drugs must provide six months’ notice to the FDA of any changes in marketing status, such as the withdrawal of a drug, and failure to do so could result in the FDA placing the product on a list of discontinued products, which would revoke the product’s ability to be marketed.
Additionally, under FDORA, sponsors of approved drugs must provide six months’ notice to the FDA of any changes in marketing status, such as the withdrawal of a drug, and failure to do so could result in the FDA placing the product on a list of discontinued products, which would revoke the product’s ability to be marketed.
Moreover, these rules and regulations will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costly. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we are required to furnish a report by our management on our internal control over financial reporting.
Moreover, these rules and regulations may continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costly. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we are required to furnish a report by our management on our internal control over financial reporting.
Risks Related to Our Intellectual Property Risks Related to Protecting Our Intellectual Property If we are unable to adequately protect our proprietary technology or obtain and maintain patent protection for our technology and products or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products will be impaired.
Risks Related to Our Intellectual Property Risks Related to Protecting Our Intellectual Property If we are unable to adequately protect our proprietary technology or obtain and maintain patent protection for our technology and products or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize 50 technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products will be impaired.
We plan to engage third parties for clinical trials and/or to obtain necessary permits, licenses, patent registrations, and other regulatory approvals and we can be held liable for the corrupt or other illegal activities of our personnel, agents, or partners, even if we do not explicitly authorize or have prior knowledge of such activities.
We have engaged and plan to engage third parties for clinical trials and/or to obtain necessary permits, licenses, patent registrations, and other regulatory approvals and we can be held liable for the corrupt or other illegal activities of our personnel, agents, or partners, even if we do not explicitly authorize or have prior knowledge of such activities.
These regulatory review agencies and committees and the new requirements or guidelines they promulgate may lengthen the regulatory review process, require us to perform additional studies or trials, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our product candidates or lead to significant post-approval limitations or restrictions.
These regulatory review agencies and committees and the new requirements or guidelines they promulgate may lengthen the regulatory review process, require us to perform additional studies or trials, increase our development costs, lead to changes in regulatory positions and interpretations, delay or 64 prevent approval and commercialization of our product candidates or lead to significant post-approval limitations or restrictions.
In addition, this concentration of ownership might adversely affect the market price of our common stock by: • delaying, deferring or preventing a change of control of us; 80 • impeding a merger, consolidation, takeover or other business combination involving us; or • discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
In addition, this concentration of ownership might adversely affect the market price of our common stock by: • delaying, deferring or preventing a change of control of us; • impeding a merger, consolidation, takeover or other business combination involving us; or • discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our owned or licensed pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights cannot be predicted with any certainty.
Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our owned or 51 licensed pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights cannot be predicted with any certainty.
These products may compete with our product candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. 63 Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and resources from other aspects of our business.
These products may compete with our product candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and resources from other aspects of our business.
However, the Leahy-Smith Act and its implementation could make it more difficult to obtain patent protection for our inventions and increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could harm our business, results of operations and financial condition. 65 The U.S.
However, the Leahy-Smith Act and its implementation could make it more difficult to obtain patent protection for our inventions and increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could harm our business, results of operations and financial condition. The U.S.
In 75 particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.
In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.
Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.
Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products 33 to market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.
The key competitive factors affecting the success of all of our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the level of generic competition and the availability of reimbursement from government and other third-party payors. 46 The insurance coverage and reimbursement status of newly-approved products is uncertain.
The key competitive factors affecting the success of all of our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the level of generic competition and the availability of reimbursement from government and other third-party payors. The insurance coverage and reimbursement status of newly-approved products is uncertain.
This pathway, even if granted for any of our current or future product candidates, may not lead to a faster development or 72 regulatory review or approval process and it does not increase the likelihood that our product candidates will receive marketing approval in the United States. We may seek accelerated approval of our current and/or future product candidates.
This pathway, even if granted for any of our current or future product candidates, may not lead to a faster development or regulatory review or approval process and it does not increase the likelihood that our product candidates will receive marketing approval in the United States. We may seek accelerated approval of our current and/or future product candidates.
Loss of access to these facilities may result in increased costs, delays in the development of our product candidates or interruption of our business operations. Natural disasters or pandemics similar to the COVID-19 pandemic could disrupt our operations and have a material and adverse effect on our business, financial condition, results of operations and prospects.
Loss of access to these facilities may result in increased costs, delays in the development of our product candidates or interruption of our business operations. 70 Natural disasters or pandemics similar to the COVID-19 pandemic could disrupt our operations and have a material and adverse effect on our business, financial condition, results of operations and prospects.
If coverage and adequate reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment.
If coverage and adequate reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved 39 reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment.
If any of the physicians or other providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment.
If any of the physicians or other providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they 62 may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs and imprisonment.
In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.
In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and 66 may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.
Moreover, 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 and other nonclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their product candidates. Our preclinical and other nonclinical studies and future clinical trials may not be successful.
Moreover, 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 and other nonclinical studies and clinical trials have nonetheless failed to obtain 32 marketing approval of their product candidates. Our preclinical and other nonclinical studies and future clinical trials may not be successful.
If the market opportunities for our product candidates are smaller than we estimate or if any approval that we 45 obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability will be adversely affected, possibly materially.
If the market opportunities for our product candidates are smaller than we estimate or if any approval that we obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability will be adversely affected, possibly materially.
The number of patients with cancers and solid tumors may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our products, or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business.
The number of patients with cancers and solid tumors may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our products, or new patients may become increasingly difficult to identify or gain access to, all of 38 which would adversely affect our results of operations and our business.
If we are unable to successfully develop companion diagnostics for these therapeutic product candidates, or experience delays in doing so, the development of these therapeutic product candidates may be adversely affected, these therapeutic product candidates may not obtain marketing approval, and we may not realize the full commercial potential of any of these therapeutics that obtain 69 marketing approval.
If we are unable to successfully develop companion diagnostics for these therapeutic product candidates, or experience delays in doing so, the development of these therapeutic product candidates may be adversely affected, these therapeutic product candidates may not obtain marketing approval, and we may not realize the full commercial potential of any of these therapeutics that obtain marketing approval.
Comprehensive tax reform legislation could adversely affect our business and financial condition. The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service, or IRS, and the U.S. Treasury Department.
Tax reform legislation could adversely affect our business and financial condition. The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service, or IRS, and the U.S. Treasury Department.
Our current or future clinical trials or those of our future collaborators may reveal significant adverse events not seen in our preclinical or other nonclinical studies or early clinical data and may result in a safety profile that would inhibit regulatory approval or market acceptance of any of our product candidates.
Our current or future clinical trials or those of future collaborators or licensees may reveal significant adverse events not seen in our preclinical or other nonclinical studies or early clinical data and may result in a safety profile that would inhibit regulatory approval or market acceptance of any of our product candidates.
We may seek to establish additional collaborations, and, if we are not able to establish them on commercially reasonable terms, or at all, we may have to alter our development and commercialization plans. Our product development programs and the potential commercialization of our product candidates will require substantial additional cash to fund expenses.
We may seek to establish additional licenses and/or collaborations, and, if we are not able to establish them on commercially reasonable terms, or at all, we may have to alter our development and commercialization plans. Our product development programs and the potential commercialization of our product candidates will require substantial additional cash to fund expenses.
If disputes over intellectual property that we co-own or we own individually prevent or impair our ability to maintain our current collaboration arrangements on acceptable terms, or undermine our ability to successfully control the intellectual property necessary to protect our product candidates, we may be unable to successfully develop and commercialize the affected product candidates.
If disputes over intellectual property that we co-own or we own individually prevent or impair our ability to maintain our current licenses or collaboration arrangements on acceptable terms, or undermine our ability to successfully control the intellectual property necessary to protect our product candidates, we may be unable to successfully develop and commercialize the affected product candidates.
Given the vast number of patents in our field of technology, we cannot be certain that we do not infringe existing patents or that we will not infringe patents that may be granted in the future. Many companies have filed, and continue to file, patent applications related to SHP2 inhibitors, FGFR2 inhibitors and PI3K inhibitors.
Given the vast number of patents in our field of technology, we cannot be certain that we do not infringe existing patents or that we will not infringe patents that may be granted in the future. Many companies have filed, and continue to file, patent applications related to PI3K inhibitors and FGFR2 inhibitors.
If disputes over intellectual property that we co-own or we own individually prevent or impair our ability to maintain our current collaboration arrangements on acceptable terms, or undermine our ability to successfully control the intellectual property necessary to protect our product candidates, we may be unable to successfully develop and commercialize the affected product candidates.
If disputes over intellectual property that we co-own or we own individually prevent or impair our ability to maintain our current licensing or collaboration arrangements on acceptable terms, or undermine our ability to successfully control the intellectual property necessary to protect our product candidates, we may be unable to successfully develop and commercialize the affected product candidates.
We do not know if, when, or how the FDA may change the orphan drug regulations and policies in the future, and it is uncertain how any changes might affect our business. Depending on what changes the FDA may make to its orphan drug regulations and policies, our business could be adversely impacted.
We do not know if, when, or how the FDA 63 may change the orphan drug regulations and policies in the future, and it is uncertain how any changes might affect our business. Depending on what changes the FDA may make to its orphan drug regulations and policies, our business could be adversely impacted.
If the patent protection provided by the patents and 60 patent applications we hold or pursue with respect to our product candidates is not sufficiently broad to impede such competition, our ability to successfully commercialize our product candidates could be negatively affected, which would harm our business.
If the patent protection provided by the patents and patent applications we hold or pursue with respect to our product candidates is not sufficiently broad to impede such competition, our ability to successfully commercialize our product candidates could be negatively affected, which would harm our business.
The regulatory framework for the collection, use, safeguarding, sharing and transfer of information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. For example, the collection, use, storage, disclosure, transfer, or other processing of personal data of individuals in the EEA, including personal health data, is subject to the GDPR.
The regulatory framework for the collection, use, safeguarding, sharing and transfer of information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. For example, 58 the collection, use, storage, disclosure, transfer, or other processing of personal data of individuals in the EEA, including personal health data, is subject to the GDPR.
Our acquisitions expose us to risks that could adversely affect our business, and we may not achieve the anticipated benefits of acquisitions of businesses or technologies. As a part of our growth strategy, we may make selected acquisitions of complementary products and/or businesses, such as our acquisition of ZebiAI in April 2021.
Our acquisitions expose us to risks that could adversely affect our business, and we may not achieve the anticipated benefits of acquisitions of businesses or technologies. As a part of our business strategy, we may make selected acquisitions of complementary products and/or businesses, such as our acquisition of ZebiAI in April 2021.
Our ability to successfully develop our product candidates, and to ultimately supply our commercial products in quantities sufficient to meet the market demand, depends in part on our ability to obtain the API, drug product and starting materials for these products in accordance with regulatory requirements and in sufficient quantities for clinical testing and commercialization.
Our ability to successfully develop our product candidates, and to ultimately supply our commercial products in quantities sufficient to meet the market demand, depends in part on our ability to obtain the API, drug product and starting 42 materials for these products in accordance with regulatory requirements and in sufficient quantities for clinical testing and commercialization.
We have and may enter into other collaborations with third parties for the research, development, manufacture and commercialization of one or more of our programs or product candidates. If these collaborations are not successful, our business could be adversely affected.
We have and may enter into other licenses or collaborations with third parties for the research, development, manufacture and commercialization of one or more of our programs or product candidates. If these licenses or collaborations are not successful, our business could be adversely affected.
Any unforeseen disruptions arising from a public health crisis, including potential shutdowns or disruptions of businesses and government agencies, such as the SEC or FDA, could have a material adverse effect on our business and our results of operation and financial condition.
Any unforeseen disruptions arising from a public health crisis, including potential shutdowns or disruptions of businesses and government agencies, such as the SEC or FDA, could have a material adverse effect on our business and our results of operation and financial 49 condition.
If we decide to conduct clinical trials or enroll subjects in our ongoing or future clinical trials in Europe and/or the UK, we are subject to the supervision of local data protection authorities in those jurisdictions where we are monitoring the behavior of individuals in the EEA or UK (i.e., undertaking clinical trials).
If we decide to conduct clinical trials or enroll subjects in our ongoing or future clinical trials in Europe, we are subject to the supervision of local data protection authorities in those jurisdictions where we are monitoring the behavior of individuals in the EEA or UK (i.e., undertaking clinical trials).
This could result in an adverse reaction in the financial markets due to a loss of confidence in the 81 reliability of our financial statements. In addition, if we are not able to continue to meet these requirements, we may not be able to remain listed on Nasdaq.
This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, if we are not able to continue to meet these requirements, we may not be able to remain listed on Nasdaq.
Outside parties may: • have staffing difficulties; • fail to comply with contractual obligations; • experience regulatory compliance issues; • undergo changes in priorities or become financially distressed; or 48 • form relationships with other entities, some of which may be our competitors.
Outside parties may: • have staffing difficulties; • fail to comply with contractual obligations; • experience regulatory compliance issues; • undergo changes in priorities or become financially distressed; or • form relationships with other entities, some of which may be our competitors.
Likewise, similar events relating to the information technology systems of our 77 third-party collaborators who we rely on for the manufacture of our product candidates and to conduct clinical trials could also have a material adverse effect on our business.
Likewise, similar events relating to the information technology systems of our third-party collaborators who we rely on for the manufacture of our product candidates and to conduct clinical trials could also have a material adverse effect on our business.
A failure of one or more clinical trials can occur at any stage of testing. The outcome of 39 preclinical development testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results.
A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical development testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results.
In short, the foreign regulatory approval process involves all of the risks associated with FDA approval. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction.
In short, the foreign 60 regulatory approval process involves all of the risks associated with FDA approval. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction.
Risks Related to Operating as a Public Company We have incurred and will continue to incur increased costs as a result of operating as a public company, and our management has devoted and will continue to devote substantial time to compliance initiatives. As a public company, we have incurred and expect to incur significant legal, accounting and other expenses.
Risks Related to Operating as a Public Company We have incurred and will continue to incur significant costs as a result of operating as a public company, and our management has devoted and will continue to devote substantial time to compliance initiatives. As a public company, we have incurred and expect to incur significant legal, accounting and other expenses.
We cannot provide any assurances that any of our pending patent applications will issue, or that any of our pending patent applications that mature into issued patents will include claims with a scope sufficient to protect our lead product candidates under clinical development or our other product candidates.
We cannot provide any assurances that any of our pending patent applications will issue, or that any of our pending patent applications that mature into issued patents will include claims with a scope sufficient to protect our product candidates under clinical development or our other product candidates.
We are conducting, or have filed clinical trial applications to conduct, additional clinical trials outside the United States, including Australia, the United Kingdom, Europe and Asia and may conduct, or file clinical trial applications to conduct, additional clinical trials in other foreign jurisdictions in the future.
We have conducted or are conducting, or have filed clinical trial applications to conduct, additional clinical trials outside the United States, including Australia, the United Kingdom, Europe and Asia and may conduct, or file clinical trial applications to conduct, additional clinical trials in other foreign jurisdictions in the future.
These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to 82 elect directors of your choosing or cause us to take other corporate actions you desire.
These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing or cause us to take other corporate actions you desire.
We do not control the manufacturing process of, and will be completely dependent on, our contract manufacturers for compliance with cGMPs in connection with the manufacture of our product candidates.
We do not control the manufacturing 41 process of, and will be completely dependent on, our contract manufacturers for compliance with cGMPs in connection with the manufacture of our product candidates.
Healthcare providers, physicians and 70 third-party payors play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval.
Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval.
Risks Related to Business Disruptions Our internal information technology systems, or those of our third-party collaborators and/or partners, may fail or suffer security breaches, loss or leakage of data and other disruptions, which could result in a material disruption of our development programs, compromise sensitive information related to our business or prevent us from accessing critical information, potentially exposing us to liability or otherwise adversely affecting our business.
Risks Related to Business Disruptions Our internal information technology systems, or those of our third-party collaborators and/or partners, may fail or suffer cybersecurity breaches, loss or leakage of data and other disruptions, which could result in a material disruption of our development programs, compromise sensitive information related to our business or prevent us from accessing critical information, potentially exposing us to liability or otherwise adversely affecting our business.
In addition to the competitive clinical trial environment, the eligibility criteria of our planned clinical trials will further limit the pool of available study participants as we will require that patients have specific characteristics that we can measure to assure their cancer is either severe enough or not too advanced to include them in a study.
In addition to the competitive clinical trial environment, the eligibility criteria of our planned clinical trials will further limit the pool of available study participants as we will require that patients have specific characteristics that we can measure to assure their cancer or other disease is either severe enough or not too advanced to include them in a study.
Although we designed our first-in-human clinical trials of our lead product candidates and intend to design the future clinical trials for any other product candidates that we develop, we expect that CROs will conduct all of our clinical trials. As a result, many important aspects of our development programs, including their conduct and timing, are outside of our direct control.
Although we designed our first-in-human clinical trial of our lead product candidate and intend to design the future clinical trials for any other product candidates that we develop, we expect that CROs will conduct all of our clinical trials. As a result, many important aspects of our development programs, including their conduct and timing, are outside of our direct control.
We and our current and future collaborators may encounter difficulties in developing, obtaining regulatory approval for, manufacturing and commercializing companion diagnostics similar to those we face with respect to our therapeutic candidates themselves, including issues with achieving regulatory clearance or approval, production of sufficient quantities at commercial scale and with appropriate quality standards, and in gaining market acceptance.
We and our collaborators may encounter difficulties in developing, obtaining regulatory approval for, manufacturing and commercializing companion diagnostics similar to those we face with respect to our therapeutic candidates themselves, including issues with achieving regulatory clearance or approval, production of sufficient quantities at commercial scale and with appropriate quality standards, and in gaining market acceptance.
If we are unable to do so, we may have to curtail the development of the product candidate for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
If we are unable to do so, we may have to curtail the development of the product candidate for which we are seeking to license or collaborate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any 44 sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
While we also have other computational collaborations, mostly focused on developing machine learning models, such collaborations do not provide a substitute for the technology made available through our collaboration with D. E. Shaw Research. The termination of the DESRES Agreement or any significant reduction in our collaboration with D. E.
While we also have other computational collaborations, mostly focused on developing machine learning models, such collaborations do not provide a direct substitute for the technology made available through our collaboration with D. E. Shaw Research. The expiration or termination of the DESRES Agreement or any significant reduction in our collaboration with D. E.
Even if the side effects do not preclude the product from obtaining or maintaining marketing approval, undesirable side effects may inhibit market 42 acceptance of the approved product due to its tolerability versus other therapies. Any of these developments could materially harm our business, financial condition and prospects.
Even if the side effects do not preclude the product from obtaining or maintaining marketing approval, undesirable side effects may inhibit market acceptance of the 35 approved product due to its tolerability versus other therapies. Any of these developments could materially harm our business, financial condition and prospects.
If we do not receive the payments we expect under these agreements, our development of product candidates could be delayed and we may need additional resources to develop our product candidates. All of the risks relating to product development, regulatory approval and commercialization summarized and described in this report also apply to the activities of our collaborators.
If we do not receive the payments we expect under these agreements, our development of product candidates could be delayed and we may need additional resources to develop our product candidates. All of the risks relating to product development, regulatory approval and commercialization summarized and described in this report also apply to the activities of our licensees or collaborators.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRegardless of outcome, litigation can have an adverse impact on our business, financial condition, results of operations, and prospects because of defense and settlement costs, diversion of management resources, and other factors. It em 4. Mine Safety Disclosures. Not applicable. 84 PA RT II
Biggest changeRegardless of outcome, litigation can have an adverse impact on our business, financial condition, results of operations, and prospects because of defense and settlement costs, diversion of management resources, and other factors.
We occupy approximately (a) 46,631 square feet of office and laboratory space at 399 Binney Street, Cambridge, Massachusetts 02139, the lease term for which expires on April 30, 2029, with an option to extend the term by five years with 12 to 15 months' notice at agreed upon market rates, and (b) 41,474 square feet of office and laboratory space at 60 Hampshire Street, Cambridge, Massachusetts 02139, the lease term for which expires on June 30, 2032.
We occupy approximately (a) 46,631 square feet of office and laboratory space at 399 Binney Street, Cambridge, Massachusetts 02142, the lease term for which expires on April 30, 2029, with an option to extend the term by five years with 12 to 15 months' notice at agreed upon market rates, and (b) 41,474 square feet of office and laboratory space at 60 Hampshire Street, Cambridge, Massachusetts 02139, the lease term for which expires on June 30, 2032.
We have a process to assess and 83 review the cybersecurity practices of third-party vendors and service providers prior to onboarding and periodically throughout the engagement, including through vendor questionnaires and contractual requirements, as appropriate. Governance Related to Cybersecurity Risks The IT Director oversees and manages the day-to-day functions of our cybersecurity risk management program.
We have a process to assess and review the cybersecurity practices of third-party vendors and service providers prior to onboarding and periodically throughout the engagement, including through vendor questionnaires and contractual requirements, as appropriate. Governance Related to Cybersecurity Risks The IT Director oversees and manages the day-to-day functions of our cybersecurity risk management program.
Through the Audit Committee, the Board of Directors is informed of: (i) security initiatives, (ii) existing and emerging cybersecurity risks, including cybersecurity incidents; and (ii) any disclosure obligations arising from any cybersecurity incidents.
Through the Audit Committee, the Board of Directors is informed of: (i) security initiatives, (ii) existing and emerging cybersecurity risks, including cybersecurity incidents; and (iii) any disclosure obligations arising from any cybersecurity incidents.
Added
On December 18, 2024, David Hayes, or the Plaintiff, an alleged Relay Therapeutics stockholder, derivatively and on behalf of us as a nominal defendant, filed a complaint in the Court of Chancery of the State of Delaware, or the Court, captioned Hayes v. Borisy, et al. (C.A.
Added
No. 2024-1309-PAF), or the Derivative Complaint, against certain of our directors and officers, or the Defendants. The Derivative Complaint alleges that, in 2021, 2022, and 2023, the Defendants awarded the members of our Board of Directors excessive compensation.
Added
The Derivative Complaint asserts claims for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and breach of fiduciary duty of disclosure.
Added
The Derivative Complaint seeks a judgment against the Defendants declaring that Plaintiff may maintain the action on behalf of us and that he is an adequate representative of us; awarding to us the damages sustained as a result of the breaches of fiduciary duty and unjust enrichment alleged against the Defendants; directing us to take all necessary actions to reform and improve an effective 75 system of corporate governance and internal procedures; awarding us restitution from the Defendants; ordering the Defendants to disgorge and pay to us or cancel all profits, benefits, and other compensation obtained; awarding Plaintiff costs and disbursements of the action, including reasonable attorneys’, accountants’, and experts’ fees, costs, and expenses; and granting such other relief that the Court deems just and proper.
Added
On January 24, 2025, we, as nominal defendants, and the Defendants separately answered the complaint. We are unable to predict the outcome, or the reasonably possible loss or range of loss, if any, related to this matter. It em 4. Mine Safety Disclosures. Not applicable. 76 PA RT II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePrior to this time, there was no public market for our common stock. Holders of Our Common Stock As of February 1, 2024, there were approximately 47 holders of record of shares of our common stock. This number does not include stockholders for whom shares are held in "nominee" or "street" name.
Biggest changePrior to this time, there was no public market for our common stock. Holders of Our Common Stock As of February 3, 2025, there were approximately 32 holders of record of shares of our common stock. This number does not include stockholders for whom shares are held in "nominee" or "street" name.
Unregistered Sales of Equity Securities and Use of Proceeds None. Recent Sales of Unregistered Equity Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K. Item 6. [Reserved] Not applicable. 86
Unregistered Sales of Equity Securities and Use of Proceeds None. Recent Sales of Unregistered Equity Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K. Item 6. [Reserved] Not applicable. 78
The following performance graph compares the performance of our common stock to the Nasdaq Composite Index and to the Nasdaq Biotechnology Index from July 16, 2020, the closing market price on the first trading day of our common stock, through December 31, 2023.
The following performance graph compares the performance of our common stock to the Nasdaq Composite Index and to the Nasdaq Biotechnology Index from July 16, 2020, the closing market price on the first trading day of our common stock, through December 31, 2024.
The stock price performance included in this graph is not necessarily indicative of, nor is it intended to forecast, future stock price performance. 85 Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans will be included in our definitive proxy statement to be filed with the SEC with respect to our 2024 Annual Meeting of Stockholders and is incorporated herein by reference.
The stock price performance included in this graph is not necessarily indicative of, nor is it intended to forecast, future stock price performance. 77 Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans will be included in our definitive proxy statement to be filed with the SEC with respect to our 2025 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe aggregate gross proceeds for the Private Placement were approximately $30.0 million, before deducting offering expenses payable by us in 2024. 95 Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: Year Ended December 31, 2023 2022 2021 (in thousands) Cash used in operating activities $ (300,316 ) $ (229,490 ) $ (74,406 ) Cash provided by (used in) investing activities 257,634 (188,745 ) (479,511 ) Cash provided by financing activities 34,753 289,910 388,090 Net decrease in cash, cash equivalents, and restricted cash $ (7,929 ) $ (128,325 ) $ (165,827 ) Operating Activities During the year ended December 31, 2023, we used $300.3 million of cash on operating activities, primarily resulting from our net loss of $342.0 million and cash used to fund changes in our operating assets and liabilities of $32.5 million, offset by non-cash charges of $74.1 million.
Biggest changeCash Flows The following table summarizes our sources and uses of cash for each of the periods presented: Year Ended December 31, 2024 2023 2022 (in thousands) Cash used in operating activities $ (249,107 ) $ (300,316 ) $ (229,490 ) Cash (used in) provided by investing activities (41,083 ) 257,634 (188,745 ) Cash provided by financing activities 270,153 34,753 289,910 Net decrease in cash, cash equivalents, and restricted cash $ (20,037 ) $ (7,929 ) $ (128,325 ) Operating Activities During the year ended December 31, 2024, we used $249.1 million of cash on operating activities, primarily resulting from our net loss of $337.7 million, offset by non-cash charges of $74.0 million and cash provided by changes in our operating assets and liabilities of $14.6 million. 86 During the year ended December 31, 2023, we used $300.3 million of cash on operating activities, primarily resulting from our net loss of $342.0 million and cash used to fund changes in our operating assets and liabilities of $32.5 million, offset by non-cash charges of $74.1 million.
Platform research and other research and development activities include costs that are not specifically allocated to active product candidates, including facilities costs, depreciation expense and other costs. Employee related expenses include salary, wages, stock compensation, and other costs related to our personnel, which are not allocated to specific programs or activities.
Platform research and other research and development activities include costs that are not specifically allocated to active product candidates, including facilities costs, depreciation expense, and other costs. Employee expenses include salary, wages, stock compensation, and other costs related to our personnel, which are not allocated to specific programs or activities.
General and administrative expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax, and consulting services; other expenses associated with operating as a public company, including compliance with exchange listing and Securities and Exchange Commission, or SEC, requirements, director and officer insurance costs, and investor and public relations costs; travel expenses; and facility-related expenses, which include depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
General and Administrative Expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax, and consulting services; other expenses associated with operating as a public company, including compliance with exchange listing and Securities and Exchange Commission, or SEC, requirements, director and officer insurance costs, and investor and public relations costs; travel expenses; and facility-related expenses, which include depreciation costs and allocated expenses for rent and maintenance of facilities.
Investing Activities During the year ended December 31, 2023, net cash provided by investing activities was $257.6 million, consisting of $261.8 million in proceeds from net maturities of investments, offset by $4.1 million for the acquisition of property and equipment.
During the year ended December 31, 2023, net cash provided by investing activities was $257.6 million, consisting of $261.8 million in proceeds from net maturities of investments, offset by $4.1 million for the acquisition of property and equipment.
The duration, costs, and timing of clinical trials and development of our product candidates will depend on a variety of factors, including: • the scope, rate of progress, expense, and results of our preclinical development activities, any future clinical trials of our lead product candidates, or other product candidates and other research and development activities that we may conduct; • uncertainties in clinical trial design and patient enrollment or drop out or discontinuation rates; • establishing an appropriate safety and efficacy profile with IND-enabling studies; • the initiation and completion of future clinical trial results; • the timing, receipt, and terms of any approvals from applicable regulatory authorities including the FDA and non-U.S. regulators; • significant and changing government regulation and regulatory guidance; • potential additional studies requested by regulatory agencies; • establishing clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that we or our third-party manufacturers are able to make product successfully; • the impact of any business interruptions to our operations, including the timing and enrollment of patients in our planned clinical trials, or to those of our manufacturers, suppliers, or other vendors resulting from any public health crisis or ongoing geopolitical conflicts and related global economic sanctions; • the expense of filing, prosecuting, defending, and enforcing any patent claims and other intellectual property rights; and • maintaining a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates.
The duration, costs, and timing of clinical trials and development of our product candidates will depend on a variety of factors, including: • the scope, rate of progress, expense, and results of our preclinical development activities, any future clinical trials of our lead product candidate, or other product candidates and other research and development activities that we may conduct; • uncertainties in clinical trial design and patient enrollment or drop out or discontinuation rates; • establishing an appropriate safety and efficacy profile with IND-enabling studies; • the initiation and completion of future clinical trial results; • the timing, receipt, and terms of any approvals from applicable regulatory authorities including the FDA and non-U.S. regulators; • significant and changing government regulation and regulatory guidance; • potential additional studies requested by regulatory agencies; • establishing clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that we or our third-party manufacturers are able to make product successfully; • the impact of any business interruptions to our operations, including the timing and enrollment of patients in our planned clinical trials, or to those of our manufacturers, suppliers, or other vendors resulting from any public health crisis or ongoing geopolitical conflicts and related global economic sanctions; • the expense of filing, prosecuting, defending, and enforcing any patent claims and other intellectual property rights; and • maintaining a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates.
Operating Expenses Research and Development Expenses Research and development expenses include: • salaries, benefits, and other employee related costs, including stock compensation expense, for personnel engaged in research and development functions; • costs of outside consultants, including their fees, stock compensation, and related travel expenses; • expenses incurred under agreements with contract research organizations, or CROs, contract manufacturing organizations, or CMOs, and other vendors that conduct our clinical trials and preclinical activities; • costs of acquiring, developing, and manufacturing clinical trial materials and lab supplies; • costs related to compliance with regulatory requirements; and • facility costs, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies.
Operating Expenses Research and Development Expenses Research and Development Expenses include: • salaries, benefits, and other employee costs, including stock compensation expense, for personnel engaged in research and development functions; • costs of outside consultants, including their fees, stock compensation, and related travel expenses; 81 • expenses incurred under agreements with contract research organizations, or CROs, contract manufacturing organizations, or CMOs, and other vendors that conduct our clinical trials and preclinical activities; • costs of acquiring, developing, and manufacturing clinical trial materials, and lab supplies; • costs related to compliance with regulatory requirements; and • facility costs, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies.
We anticipate that our expenses will increase substantially if and as we: • conduct our current and future clinical trials of our lead product candidates; • conduct additional preclinical research and development of our early-stage programs; • initiate and continue research and preclinical and clinical development of our other product candidates; • seek to identify additional product candidates; • pursue marketing approvals for any of our product candidates that successfully complete clinical trials, if any; • establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; • require the manufacture of larger quantities of our product candidates for clinical development and potentially commercialization; • obtain, maintain, expand and protect our intellectual property portfolio; • acquire or in-license other drugs and technologies; • hire and retain additional clinical, regulatory, quality and scientific personnel; • build out new facilities or expand existing facilities to support our ongoing development activity; and • add operational, financial and management information systems and personnel, including personnel to support our drug development, any future commercialization efforts and our operations as a public company.
We anticipate that our expenses will increase substantially if and as we: • conduct our current and future clinical trials of our lead product candidate; • conduct additional preclinical research and development of our early-stage programs; 80 • initiate and continue research and preclinical and clinical development of our other product candidates; • seek to identify additional product candidates; • pursue marketing approvals for any of our product candidates that successfully complete clinical trials, if any; • establish a sales, marketing, and distribution infrastructure to commercialize any products for which we may obtain marketing approval; • require the manufacture of larger quantities of our product candidates for clinical development and potentially commercialization; • obtain, maintain, expand, and protect our intellectual property portfolio; • acquire or in-license other drugs and technologies; • hire and retain additional clinical, regulatory, quality, and scientific personnel; • build out new facilities or expand existing facilities to support our ongoing development activity; and • add operational, financial, and management information systems and personnel, including personnel to support our drug development, any future commercialization efforts, and our operations as a public company.
We 98 provided a letter of credit in connection with our facility lease agreement in the amount of $0.9 million with a financial institution, which expires commensurate with the lease in April 2029. 60 Hampshire Street In May 2021, the Company entered into an agreement to lease approximately 41,474 square feet of office and laboratory space at 60 Hampshire Street, Cambridge, Massachusetts 02139.
We provided a letter of credit in connection with our facility lease agreement in the amount of $0.9 million with a financial institution, which expires commensurate with the lease in April 2029. 60 Hampshire Street In May 2021, the Company entered into an agreement to lease approximately 41,474 square feet of office and laboratory space at 60 Hampshire Street, Cambridge, Massachusetts 02139.
RLY-2608 is the lead program in our efforts to discover and develop mutant selective inhibitors of PI3Kα. In December 2021, we dosed the first patient in a first-in-human clinical trial for RLY-2608, the first known allosteric, pan-mutant and isoform-selective phosphoinostide 3 kinase alpha, or PI3Kα, inhibitor in clinical development, or the ReDiscover Trial.
RLY-2608 is the first known allosteric, pan-mutant and isoform-selective phosphoinostide 3 kinase alpha, or PI3Kα, inhibitor in clinical development. It is the lead program in our efforts to discover and develop mutant selective inhibitors of PI3Kα. • ReDiscover Trial . In December 2021, we dosed the first patient in a first-in-human clinical trial for RLY-2608, or the ReDiscover Trial.
We also use judgment to determine whether milestones or other variable consideration should be included in the transaction price. As part of management's evaluation of the transaction price, we consider numerous factors, including whether the achievement of the milestones is outside of our control, contingent upon the efforts of others, or subject to scientific risks of success.
We also use judgment to 89 determine whether milestones or other variable consideration should be included in the transaction price. As part of management's evaluation of the transaction price, we consider numerous factors, including whether the achievement of the milestones is outside of our control, contingent upon the efforts of others, or subject to scientific risks of success.
Once the performance obligations are identified, the transaction price is allocated to each performance obligation based on the relative stand-alone selling price. We then recognize as revenue the amount of the transaction price allocated to the respective performance obligation when (or as) it is satisfied, either at a point in time or over time.
Once the performance obligations are identified, the transaction price is allocated to each performance obligation based on the relative stand-alone selling price. We then recognize revenue for the amount of the transaction price allocated to the respective performance obligation when (or as) it is satisfied, either at a point in time or over time.
If the performance obligation is satisfied over time, we recognize revenue based on the use of either an output or input method. Accrued Research and Development Expenses As part of the process of preparing our consolidated financial statements, we are required to estimate accrued research and development and manufacturing expenses.
If the performance obligation is satisfied over time, we recognize revenue based on the use of either an output or input method. Accrued Research and Development Expenses As part of the process of preparing our consolidated financial statements, we are required to estimate accrued research and development expenses.
We have devoted substantially all of our resources to developing our lead product candidates, developing our innovative computational and experimental approaches on protein motion, building our intellectual property portfolio, business planning, raising capital, and providing general and administrative support for these operations.
We have devoted substantially all of our resources to developing our product candidates, developing our innovative computational and experimental approaches on protein motion, building our intellectual property portfolio, business planning, raising capital, and providing general and administrative support for these operations.
Such payments for achievement of development and regulatory milestones total up to $7.3 million in the aggregate for each of the first three products we develop and up to $6.3 million in the aggregate for each product we develop after the first three. In addition, we are obligated to pay D. E.
Such payments for achievement of development and regulatory milestones total up to $7.3 million in the aggregate for each of the first three products we develop and up to $6.3 million in the aggregate for each product we develop after the first three. In addition, we are obligated to pay D.
We expect to continue to incur significant expenses , including the costs of operating as a public company, and generate increasing operating losses for at least the next several years.
We expect to continue to incur significant expenses , including the costs of operating as a public company, and generate significant operating losses for at least the next several years.
Pursuant to the Merger Agreement, upfront consideration included (a) payment of approximately $20.0 million in cash and (b) issuance of 1,914,219 shares of our common stock at an aggregate fair value of $61.8 million, both transferred to ZebiAI’s former stockholders, option holders, and warrant holders, or the ZebiAI Holders, upon closing.
Pursuant to the Merger Agreement, upfront consideration included payment of approximately $20.0 million in cash and issuance of 1,914,219 shares of our common stock at an aggregate fair value of $61.8 million, both transferred to ZebiAI’s former stockholders, option holders, and warrant holders, or the ZebiAI Holders, upon closing.
In August 2021, we entered into a sales agreement, or the Sales Agreement, with Cowen and Company, LLC, or Cowen, pursuant to which we may offer and sell shares of our common stock having aggregate gross proceeds of up to $300.0 million from time to time in "at-the-market" offerings through Cowen, as our sales agent, or At-the-Market Offerings.
In August 2021, we entered into a sales agreement, or the 2021 Sales Agreement, with Cowen and Company, LLC, or Cowen, pursuant to which we could offer and sell shares of our common stock having aggregate gross proceeds of up to $300.0 million from time to time in "at-the-market" offerings through Cowen, as our sales agent.
In August 2021, we entered into the Sales Agreement with Cowen pursuant to which we may offer and sell shares of our common stock having aggregate gross proceeds of up to $300.0 million from time to time in At-the-Market Offerings through Cowen, as our sales agent.
In August 2021, we entered into the 2021 Sales Agreement with Cowen, pursuant to which we could offer and sell shares of our common stock having aggregate gross proceeds of up to $300.0 million from time to time in "at-the-market" offerings through Cowen, as our sales agent.
Our future capital requirements will depend on many factors, including: • the impact of any business interruptions to our operations, including the timing and enrollment of patients in our planned clinical trials, or to those of our manufacturers, suppliers, or other vendors, resulting from public health epidemics or outbreaks of infectious disease or ongoing geopolitical conflicts and related global economic sanctions; • the scope, progress, results, and costs of our current and future clinical trials of our lead product candidates and additional preclinical research of our other programs; • the scope, progress, results, and costs of drug discovery, preclinical research, and clinical trials for our other product candidates; • the number of future product candidates that we pursue and their development requirements; • the costs, timing, and outcome of regulatory review of our product candidates; • our ability to establish and maintain collaborations on favorable terms, if at all; • the success of any existing or future collaborations that we may enter into with third parties; • the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates, such as the Genentech Agreement; • the achievement of milestones or occurrence of other developments that trigger payments under any existing or future collaboration agreements, if any; • the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under any existing or future collaboration agreements, if any; • the costs and timing of future commercialization activities, including drug sales, marketing, manufacturing, and distribution, for any of our product candidates for which we receive marketing approval, to the extent that such sales, marketing, manufacturing, and distribution are not the responsibility of any collaborator that we may have at such time; • the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; • the costs of preparing, filing, and prosecuting patent applications, maintaining, and enforcing our intellectual property rights and defending intellectual property-related claims; 97 • our headcount growth and associated costs as we expand our business operations and our research and development activities; and • the costs of operating as a public company.
Our future capital requirements will depend on many factors, including: • the impact of any business interruptions to our operations, including the timing and enrollment of patients in our planned clinical trials, or to those of our manufacturers, suppliers, or other vendors, resulting from public health epidemics or outbreaks of infectious disease or ongoing geopolitical conflicts and related global economic sanctions; • the scope, progress, results, and costs of our current and future clinical trials of our lead product candidate and additional preclinical research of our other programs; • the scope, progress, results, and costs of drug discovery, preclinical research, and clinical trials for our other product candidates; • the number of future product candidates that we pursue and their development requirements; • the costs, timing, and outcome of regulatory review of our product candidates; 87 • our ability to establish and maintain licenses or collaborations on favorable terms, if at all; • the success of any existing or future licenses or collaborations that we may enter into with third parties; • the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates; • the achievement of milestones or occurrence of other developments that trigger payments under any existing or future license or collaboration agreements, if any; • the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under any existing or future license or collaboration agreements, if any; • the costs and timing of future commercialization activities, including drug sales, marketing, manufacturing, and distribution, for any of our product candidates for which we receive marketing approval, to the extent that such sales, marketing, manufacturing, and distribution are not the responsibility of any licensee or collaborator that we may have at such time; • the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; • the costs of preparing, filing, and prosecuting patent applications, maintaining, and enforcing our intellectual property rights and defending intellectual property-related claims; • our headcount growth and associated costs if and as we expand our business operations and our research and development activities; and • the costs of operating as a public company.
We do not believe that such factors had a material adverse impact on our results of operations during the years ended December 31, 2023, 2022, and 2021. Since our inception, we have incurred significant operating losses on an aggregate basis.
We do not believe that such factors had a material adverse impact on our results of operations during the years ended December 31, 2024, 2023, and 2022. Since our inception, we have incurred significant operating losses on an aggregate basis.
We gained control of the space in January 2019 and the lease expires in April 2029, subject to certain renewal options, which have not been included in the measurement of our right of use asset and lease liability on the balance sheet through December 31, 2023.
We gained control of the space in January 2019 and the lease expires in April 2029, subject to certain renewal options, which have not been included in the measurement of our right of use asset and lease liability on the balance sheet through December 31, 2024.
The amendment commenced in October 2020 and also expires in April 2029, subject to certain renewal options, which have also not been included in the measurement of our right of use asset and lease liability on the balance sheet through December 31, 2023.
The amendment commenced in October 2020 and also expires in April 2029, subject to certain renewal options, which have also not been included in the measurement of our right of use asset and lease liability on the balance sheet through December 31, 2024.
In addition, if we obtain marketing approval for any of our lead product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. 89 As a result, we will need additional financing to support our continuing operations.
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. As a result, we will need additional financing to support our continuing operations.
In September 2020, we entered into an amendment to our existing facility lease agreement to expand the leased area by approximately 1,824 square feet of office space at 399 Binney Street, Cambridge, Massachusetts 02139.
In September 2020, we entered into an amendment to our existing facility lease agreement to expand the leased area by approximately 1,824 square feet of office space at 399 Binney Street, Cambridge, Massachusetts 02142.
We gained control of the space in July 2022 and the lease expires in June 2032. There are no renewal options. We provided a letter of credit in connection with the agreement in the amount of $1.8 million with a financial institution, which expires commensurate with the lease in June 2032.
We gained control of the space in July 2022 and the lease expires in June 2032. There are no renewal options. We provided a letter of credit in connection with the agreement in the amount of $1.2 million with a financial institution, which expires commensurate with the lease in June 2032.
The DESRES Agreement extended the term of the original agreement to August 16, 2025 and increased the annual fee from $1.0 million to $7.9 million, commencing on August 16, 2020. In May 2021, the annual fee was further increased, by mutual agreement of the parties, from $7.9 million to $9.9 million.
The DESRES Agreement extended the initial research term of the original agreement to August 16, 2025 and increased the annual fee from $1.0 million to $7.9 million, commencing on August 16, 2020. In May 2021, the annual fee was further increased, by mutual agreement of the parties, from $7.9 million to $9.9 million.
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 financial statements as prepaid expenses or accrued research and development expenses. Our lead product candidates are in clinical development.
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 financial statements as prepaid expenses or accrued research and development expenses. Our lead product candidate is in clinical development.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and other related costs, including stock compensation, for personnel in our executive, finance, corporate, and business development and administrative functions.
General and Administrative Expenses General and Administrative Expenses primarily consist of salaries and other employee costs, including stock compensation, for personnel in our executive, finance, corporate, and business development and administrative functions.
In August 2021, we filed a universal shelf registration statement on Form S-3ASR with the SEC, or the 2021 Shelf, to register for sale an amount of our common stock, preferred stock, debt securities, warrants and/or units in one or more offerings, which became effective upon filing with the SEC (File No. 333-258768).
In August 2024, we filed a universal shelf registration statement on Form S-3ASR with the SEC, or the 2024 Shelf, to register for sale an amount of our common stock, preferred stock, debt securities, warrants and/or units in one or more offerings, which became effective upon filing with the SEC (File No. 333-281308).
Financing Activities During the year ended December 31, 2023, net cash provided by financing activities was $34.8 million, primarily consisting of $30.3 million in net proceeds from At-the-Market Offerings, as well as $4.5 million in proceeds from stock option exercises and purchases under our Employee Stock Purchase Plan, or ESPP.
During the year ended December 31, 2023, net cash provided by financing activities was $34.8 million, primarily consisting of $30.3 million in net proceeds from at-the-market offerings, as well as $4.5 million in proceeds from stock option exercises and purchases under our ESPP.
As of December 31, 2023, we had an accumulated deficit of $1.4 billion. These losses have resulted primarily from costs incurred in connection with research and development activities, licensing and patent investment, and general and administrative costs associated with our operations.
As of December 31, 2024, we had an accumulated deficit of $1.7 billion. These losses have resulted primarily from costs incurred in connection with research and development activities, licensing and patent investment, and general and administrative costs associated with our operations.
To date, we have not made any material adjustments to our prior estimates of accrued research and development expenses. 100 Recently Issued and Adopted Accounting Pronouncements A description of recently issued accounting pronouncements that we have adopted is disclosed in Note 2, Significant Accounting Policies , to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
To date, we have not made any material adjustments to our prior estimates. Recently Issued and Adopted Accounting Pronouncements A description of recently issued accounting pronouncements that we have adopted is disclosed in Note 2, Significant Accounting Policies , to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
We believe this approach will increase the likelihood of successfully translating a specific pharmacological mechanism into clinical benefit. We are advancing a pipeline of medicine candidates to address targets in precision oncology and genetic disease, including our lead product candidates described below. • RLY-2608. • ReDiscover Trial .
We believe this approach will increase the likelihood of successfully translating a specific pharmacological mechanism into clinical benefit. We are advancing a pipeline of medicine candidates to address targets in precision oncology and genetic disease, including RLY-2608, our lead product candidate discussed below. RLY-2608.
We also have more than seven active discovery stage programs across both precision oncology and genetic diseases. Costs incurred for these programs include costs incurred to support our discovery 90 research and translational science efforts up to the initiation of first-in-human clinical development.
We also have several active discovery stage programs across both precision oncology and genetic diseases. Costs incurred for these programs include costs incurred to support our discovery research and translational science efforts up to the initiation of first-in-human clinical development.
Shaw Research royalty payments, as defined in the DESRES Agreement. We assessed the milestone and royalty events under the DESRES Agreement as of December 31, 2023 and 2022, concluding no such payments were due as of the balance sheet dates.
E. 88 Shaw Research royalty payments, as defined in the DESRES Agreement. We assessed the milestone and royalty events under the DESRES Agreement as of December 31, 2024 and 2023, concluding no such payments were due as of the balance sheet dates.
Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future product candidates. Our net losses were $342.0 million, $290.5 million, and $363.9 million for the years ended December 31, 2023, 2022, and 2021, respectively.
Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future product candidates. Our net losses were $337.7 million, $342.0 million, and $290.5 million for the years ended December 31, 2024, 2023, and 2022, respectively.
During the year ended December 31, 2022, we used $188.7 million of cash on investing activities, consisting of $179.7 million of net purchases of investments and $9.1 million for the acquisition of property and equipment.
During the year ended December 31, 2022, net cash used in investing activities was $188.7 million, consisting of $179.7 million in net purchases of investments and $9.1 million for the acquisition of property and equipment.
We believe our cash, cash equivalents, and investments of $750.1 million as of December 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2026. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
We believe our cash, cash equivalents, and investments of $781.3 million as of December 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
The increase of $83.7 million was due to $50.0 million of additional external costs in connection with the clinical trials for our lead product candidates, as well as $32.4 million of additional employee costs from increased headcount in our research and development functions, including an increase in stock compensation expense of $17.7 million.
The increase of $83.7 million was due to $50.0 million of additional external costs in connection with the clinical trials ongoing in the periods presented, as well as $32.4 million of additional employee costs from increased headcount in our research and development functions, including an increase in stock compensation expense of $17.7 million.
The increase of $9.0 million was primarily due to an increase in stock compensation expense, offset by decreases in other employee compensation costs, insurance fees, and other expenses. 93 Other Income, Net Other income, net, was $31.0 million for the year ended December 31, 2023 compared to $8.8 million for the year ended December 31, 2022.
The increase of $9.0 million was primarily due to an increase in stock compensation expense, partially offset by decreases in other employee compensation costs and certain other general and administrative expenses Other Income, Net Other income, net, was $31.0 million for the year ended December 31, 2023 compared to $8.8 million for the year ended December 31, 2022.
Federal or state income tax benefits for the net losses we have incurred in any year or for our earned research and development tax credits, due to our uncertainty of realizing a benefit from such items.
Income Taxes Since our inception in 2015, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in any year or for our earned research and development tax credits, due to our uncertainty of realizing a benefit from such items.
As of December 31, 2023, we had state research and development tax credit carryforwards of $8.5 million, which begin to expire in 2030. 92 Results of Operations Comparison of years ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 (in thousands) License and other revenue $ 25,546 $ 1,381 $ 24,165 Operating expenses: Research and development expenses $ 330,018 $ 246,355 $ 83,663 Change in fair value of contingent consideration liability (6,422 ) (11,677 ) 5,255 General and administrative expenses 74,950 65,978 8,972 Total operating expenses 398,546 300,656 97,890 Loss from operations (373,000 ) (299,275 ) (73,725 ) Other income, net 31,027 8,766 22,261 Net loss $ (341,973 ) $ (290,509 ) $ (51,464 ) License and Other Revenue We recognized license and other revenue of approximately $25.5 million and $1.4 million for the years ended December 31, 2023 and 2022, respectively.
The increase of $3.7 million was primarily a result of changes in interest rates. 84 Comparison of years ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 (in thousands) License and other revenue $ 25,546 $ 1,381 $ 24,165 Operating expenses: Research and development expenses $ 330,018 $ 246,355 $ 83,663 Change in fair value of contingent consideration liability (6,422 ) (11,677 ) 5,255 General and administrative expenses 74,950 65,978 8,972 Total operating expenses 398,546 300,656 97,890 Loss from operations (373,000 ) (299,275 ) (73,725 ) Other income, net 31,027 8,766 22,261 Net loss $ (341,973 ) $ (290,509 ) $ (51,464 ) License and Other Revenue We recognized license and other revenue of $25.5 million and $1.4 million for the years ended December 31, 2023 and 2022, respectively.
We received proceeds of $382.2 million, which was net of $20.3 million in underwriting discounts and commissions, as well as other offering expenses.
We received proceeds of $284.7 million, which was net of $15.3 million in underwriting discounts and commissions, as well as other offering expenses.
Research and Development Expenses The following summarizes our research and development expenses for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 (in thousands) External costs for programs in clinical trials $ 101,055 $ 51,094 $ 49,961 External costs for platform technologies and preclinical programs 74,474 80,612 (6,138 ) Employee related expenses 125,471 93,118 32,353 Other expenses 29,018 21,531 7,487 Total research and development expenses $ 330,018 $ 246,355 $ 83,663 Research and development expenses were $330.0 million for the year ended December 31, 2023 compared to $246.4 million for the year ended December 31, 2022.
Research and Development Expenses The following summarizes our research and development expenses for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 (in thousands) External costs for programs in clinical trials $ 101,055 $ 51,094 $ 49,961 External costs for platform technologies and preclinical programs 76,471 82,779 (6,308 ) Employee related expenses 125,471 93,118 32,353 Other expenses 27,021 19,364 7,657 Total research and development expenses $ 330,018 $ 246,355 $ 83,663 Research and development expenses were $330.0 million for the year ended December 31, 2023 compared to $246.4 million for the year ended December 31, 2022.
We expect that our research and development expenses will continue to increase for the foreseeable future as we continue to conduct clinical trials of our lead product candidates, as well as identify and develop additional product candidates.
We expect to continue to incur significant research and development expenses for the foreseeable future as we continue 82 to conduct clinical trials of our lead product candidate, initiate clinical trials for our other product candidates, as well as identify and develop additional product candidates.
We believe that, overall, while the interim clinical data from the ReDiscover Trial disclosed to date are preliminary, the data support selective target engagement across doses and mutation types with an encouraging interim safety and tolerability profile. • Lirafugratinib (RLY-4008). • ReFocus Trial .
We believe that, overall, while the clinical data from the ReDiscover Trial disclosed to date are preliminary, the data suggest differentiated interim efficacy signals in the specified patient population and support selective target engagement across doses and mutation types with an encouraging interim safety and tolerability profile.
As of December 31, 2023, we had Federal research and development tax credit carryforwards of $38.9 million, which begin to expire in 2035.
As of December 31, 2024, we had federal research and development tax credit carryforwards of $47.5 million, which begin to expire in 2035. As of December 31, 2024, we had state research and development tax credit carryforwards of $27.0 million, which begin to expire in 2030.
Change in Fair Value of Contingent Consideration Liability The change in fair value of our contingent consideration liability for Contingent Milestone Payments under the Merger Agreement with ZebiAI was a decrease of $11.7 million for the year ended December 31, 2022 compared to an increase of $2.8 million for the year ended December 31, 2021.
Change in Fair Value of Contingent Consideration Liability Change in fair value of our contingent consideration liability under the Merger Agreement with ZebiAI was a decrease of $13.2 million for the year ended December 31, 2024 compared to a decrease of $6.4 million for the year ended December 31, 2023.
Other Significant Arrangements We enter into contracts in the normal course of business with CROs and CMOs for clinical trials, preclinical research studies, and testing, manufacturing, and other services and products for operating purposes. These contracts do not contain any minimum purchase commitments and are cancelable by us upon prior notice of 30 days.
Other Significant Arrangements We enter into contracts in the normal course of business with CROs and CMOs for clinical trials, preclinical research studies, and testing, manufacturing, and other services and products for operating purposes.
Liquidity and Capital Resources As of December 31, 2023, we had cash, cash equivalents, and investments of $750.1 million. Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses.
The increase of $22.3 million was primarily a result of changes in interest rates. 85 Liquidity and Capital Resources As of December 31, 2024, we had cash, cash equivalents, and investments of $781.3 million. Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses.
In September 2022, we completed a public offering, or the September 2022 Offering, of 11,320,755 shares of common stock at an offering price of $26.50 per share. We received proceeds of $284.7 million, which was net of $15.3 million in underwriting discounts and commissions, as well as other offering expenses.
We received $29.8 million in proceeds from the Private Placement, which were net of $0.2 million in offering expenses. In September 2022, we completed a public offering, or the September 2022 Offering, of 11,320,755 shares of common stock at an offering price of $26.50 per share.
General and Administrative Expenses General and administrative expenses were $75.0 million for the year ended December 31, 2023 compared to $66.0 million for the year ended December 31, 2022.
During the year ended December 31, 2024, the Contingent Milestone Payments and Contingent Earnout Payments were both reduced to $0. General and Administrative Expenses General and administrative expenses were $76.6 million for the year ended December 31, 2024 compared to $75.0 million for the year ended December 31, 2023.
To date, we have principally financed our operations through private placements of preferred stock and common stock, convertible debt, and proceeds from public offerings of our common stock. We have also received an aggregate of $111.8 million in connection with the Genentech Agreement through December 31, 2023.
To date, we have principally financed our operations through private placements of preferred stock and common stock, convertible debt, and proceeds from public offerings of our common stock.
While our initial focus is on precision oncology, we believe our Dynamo platform may also be broadly applied to other areas of precision medicine, such as genetic diseases. In addition to the clinical stage product candidates described above, we have more than seven active discovery stage programs across both precision oncology and genetic diseases.
While our initial focus is on precision oncology, we believe our Dynamo® platform may also be broadly applied to other areas of precision medicine, such as genetic diseases.
Shaw Research. 399 Binney Street In December 2017, we entered into a facility lease agreement for approximately 44,336 square feet of office and laboratory space at 399 Binney Street, Cambridge, Massachusetts 02139, which was increased to 44,807 square feet in January 2018.
The initial research term under the DESRES Agreement will end on August 16, 2025, with the DESRES Agreement continuing thereafter on a target-by-target basis until all payment obligations have expired. 399 Binney Street In December 2017, we entered into a facility lease agreement for approximately 44,336 square feet of office and laboratory space at 399 Binney Street, Cambridge, Massachusetts 02142, which was increased to 44,807 square feet in January 2018.
In January 2024, we entered into a securities purchase agreement with Nextech Crossover I SCP for the private placement of 2,500,000 shares of common stock at $12.00 per share, or the Private Placement. The aggregate gross proceeds for the Private Placement were approximately $30.0 million, before deducting offering expenses payable by us in 2024.
As of December 31, 2024, we have not sold any shares under the 2024 Sales Agreement. In January 2024, we entered into a securities purchase agreement with Nextech Crossover I SCP for the private placement of 2,500,000 shares of common stock at $12.00 per share, or the Private Placement.
In October 2021, we completed a public offering, or the October 2021 Offering, of 15,188,679 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 1,981,132 shares, at an offering price of $26.50 per share.
In September 2024, we completed a public offering, or the September 2024 Offering, of 32,857,143 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 4,285,714 shares, at an offering price of $7.00 per share.
In the fourth quarter of 2023, we also initiated a triplet combination arm with RLY-2608, fulvestrant and the cyclin dependent kinase 4/6, or CDK 4/6, inhibitor ribociclib. • Clinical Data .
Since then, we have predominantly focused on evaluating RLY-2608 in combination with fulvestrant for patients with HR+, HER2–, PI3Kα-mutated, locally advanced or metastatic breast cancer. In the fourth quarter of 2023, we initiated a triplet combination arm with RLY-2608, fulvestrant and the cyclin dependent kinase 4/6, or CDK 4/6, inhibitor ribociclib.
By comparison, we only recognized revenue for research and development services provided under the Genentech Agreement during the year ended December 31, 2022.
The increase of $24.2 million was primarily due to recognition of $25.0 million in variable consideration previously constrained under the Genentech Agreement during the year ended December 31, 2023. By comparison, we only recognized revenue for research and development services provided under the Genentech Agreement during the year ended December 31, 2022.
We believe that our existing cash, cash equivalents, and investments will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2026. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
We also retain the right to develop migoprotafib in combination with our FGFR2 and PI3Kα programs. Inflation generally affects us by increasing our employee-related costs and clinical trial expenses, as well as other operating expenses.
We will not continue development of migoprotafib. Inflation generally affects us by increasing our employee-related costs and clinical trial expenses, as well as other operating expenses.
During the year ended December 31, 2021, we used $479.5 million of cash on investing activities, consisting of $450.7 million of net purchases of investments, $25.3 million for the acquisition of ZebiAI, and $3.5 million for the acquisition of property and equipment.
Investing Activities During the year ended December 31, 2024, net cash used in investing activities was $41.1 million, consisting of $39.1 million in net purchases of investments and $2.0 million for the acquisition of property and equipment.
Under the terms of the Genentech Agreement, we received $75.0 million in an upfront payment in 2021, as well as $45.0 million in milestone payments from Genentech as of the date of this Annual Report on Form 10-K.
Under the terms of the Genentech Agreement, we received $75.0 million in an upfront payment in 2021, as well as $45.0 million in milestone payments from Genentech as of December 31, 2024. Genentech elected to terminate the Genentech Agreement without cause, effective as of January 7, 2025, or the Termination Date.
We recognize revenue pursuant to ASC 606 when our customer obtains control of promised goods or services in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. 99 At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within the contract and determine those that are performance obligations.
Once a contract is determined to be within the scope of ASC 606, we assess the goods or services promised within the contract and determine those that are performance obligations at contract inception. We then determine the transaction price and allocate it to the performance obligations.
We received proceeds of $284.7 million, which was net of $15.3 million in underwriting discounts and commissions, as well as other offering expenses. In January 2024, we entered into a securities purchase agreement with Nextech Crossover I SCP for the Private Placement.
As of December 31, 2024, we have not sold any shares under the 2024 Sales Agreement. In January 2024, we entered into a securities purchase agreement with Nextech Crossover I SCP for the Private Placement. We received $29.8 million in proceeds from the Private Placement, which were net of $0.2 million in offering expenses.
We do not expect to record incremental losses in connection therewith in future periods. Change in Fair Value of Contingent Consideration Liability Change in fair value of contingent consideration liability consists of fluctuations in the estimated fair value of Contingent Milestone Payments under the Merger Agreement with ZebiAI.
Change in Fair Value of Contingent Consideration Liability Change in Fair Value of Contingent Consideration Liability consists of fluctuations in the estimated fair value of Contingent Milestone Payments, as well as changes in the recorded amounts of Contingent Earnout Payments, under the Merger Agreement with ZebiAI.
We received proceeds of $382.2 million, which was net of $20.3 million in underwriting discounts and commissions, as well as other offering expenses. In September 2022, we completed the September 2022 Offering of 11,320,755 shares of common stock at an offering price of $26.50 per share.
In September 2024, we completed the September 2024 Offering of 32,857,143 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 4,285,714 shares, at an offering price of $7.00 per share. We received proceeds of $218.2 million, which was net of $11.8 million in underwriting discounts and other offering expenses.
The increase of $8.6 million was primarily due to $9.2 million of additional employee costs from increased headcount in our general and administrative functions, including an increase of $1.9 million in stock compensation expense, offset by individually insignificant fluctuations in other general and administrative expenses.
The increase of $1.6 million was primarily due to an increase in stock compensation expense, partially offset by decreases in other employee compensation costs and certain other general and administrative expenses. Other Income, Net Other income, net, was $34.8 million for the year ended December 31, 2024 compared to $31.0 million for the year ended December 31, 2023.
We expect that our general and administrative expenses will increase in the future, as we increase our general and administrative personnel headcount to support personnel in research and development and to support our operations, generally, and as we increase our research and development activities and activities related to the potential commercialization of our product candidates.
We expect to continue to incur significant general and administrative expenses in the future and as we continue our research and development activities, as well as other activities related to the potential commercialization of our product candidates. Other Income, Net Other Income, Net primarily consists of interest income related to interest earned on our cash, cash equivalents, and investments.
As of December 31, 2023, we have sold 3,026,072 shares of common stock under the Sales Agreement, from which we have received proceeds of $30.3 million, which are net of $0.8 million in commissions paid to Cowen and other offering expenses.
In August 2024, the 2021 Sales Agreement was terminated by mutual agreement between us and Cowen. Through termination of the 2021 Sales Agreement, we sold 4,915,669 shares of common stock under the 2021 Sales Agreement, from which we received $48.2 million in proceeds, which were net of $1.2 million in commissions paid to Cowen and other offering expenses.
As of December 31, 2023, we have sold 3,026,072 shares of common stock under the Sales Agreement, from which we have received proceeds of $30.3 million, which are net of $0.8 million in commissions paid to Cowen and other offering expenses.
In August 2024, the 2021 Sales Agreement was terminated by mutual agreement between us and Cowen. Through termination of the 2021 Sales Agreement, we sold 4,915,669 shares of common stock under the 2021 Sales Agreement, from which we received $48.2 million in proceeds, which were net of $1.2 million in commissions paid to Cowen and other offering expenses.
General and Administrative Expenses General and administrative expenses were $66.0 million for the year ended December 31, 2022 compared to $57.4 million for the year ended December 31, 2021.
The fluctuation of $5.3 million was primarily attributable to changes in the assumptions underlying the fair value measurement between periods. General and Administrative Expenses General and administrative expenses were $75.0 million for the year ended December 31, 2023 compared to $66.0 million for the year ended December 31, 2022.
In connection therewith, the transaction price was increased by $25.0 million in variable consideration previously constrained, all of which was recognized as revenue during the year ended December 31, 2023, since each of the performance obligations under the Genentech Agreement were complete as of December 31, 2023.
The decrease of $15.5 million was primarily due to recognition of $25.0 million in variable consideration under the Genentech Agreement previously constrained during the year ended December 31, 2023. By comparison, only $10.0 million was recognized during the year ended December 31, 2024, specifically in connection with a milestone achieved under the Genentech Agreement.
Reasonable changes in these assumptions can cause material changes to the fair value of our contingent consideration liability. Revenue Recognition We account for revenue recognition in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , or ASC 606.
Revenue Recognition We account for revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , or ASC 606. In connection therewith, we recognize revenue when customers obtain control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for such goods or services.
Prior to our IPO, we had received gross proceeds of approximately $520.0 million from sales of preferred stock and issuance of convertible debt. On April 15, 2021, we entered into an Agreement and Plan of Merger, or the Merger Agreement, and on April 22, 2021, we acquired ZebiAI Therapeutics, Inc., or ZebiAI.
We received proceeds of $284.7 million, which was net of $15.3 million in underwriting discounts and commissions, as well as other offering expenses. On April 15, 2021, we entered into an Agreement and Plan of Merger, or the Merger Agreement, and, on April 22, 2021, we acquired ZebiAI Therapeutics, Inc., or ZebiAI.
As of December 31, 2023, we had Federal NOL carryforwards of $498.0 million available to reduce taxable income, of which $43.1 million expire beginning in 2035 and $454.9 million do not expire. As of December 31, 2023, we had state NOL carryforwards of $559.7 million available to reduce future state taxable income, which expire at various dates beginning in 2035.
As of December 31, 2024, we had federal net operating loss carryforwards of $596.3 million, of which $43.1 million begin to expire in 2035 and $553.2 million do not expire. As of December 31, 2024, we had state net operating loss carryforwards of $625.2 million, which begin to expire in 2035.
During the year ended December 31, 2021, net cash provided by financing activities was $388.1 million, primarily consisting of $382.2 million in net proceeds from the October 2021 Offering, as well as $5.9 in proceeds from stock option exercises and purchases under our ESPP. 96 Funding Requirements We expect our expenses to increase substantially in connection with our ongoing clinical development activities related to our product candidates and the ongoing preclinical development activities of our other programs.
Financing Activities During the year ended December 31, 2024, net cash provided by financing activities was $270.2 million, consisting of $265.9 million in net proceeds from the Private Placement, at-the-market offerings, and the September 2024 Offering, as well as $4.3 million in proceeds from the exercise of stock options and purchases under our 2020 Employee Stock Purchase Plan, or ESPP.
Research and Development Expenses The following summarizes our research and development expenses for the years ended December 31, 2022 and 2021: Year Ended December 31, Change 2022 2021 (in thousands) External costs for programs in clinical trials $ 51,094 $ 18,367 $ 32,727 External costs for platform technologies and preclinical programs 80,612 69,828 10,784 Employee related expenses 93,118 68,438 24,680 Other expenses 21,531 16,017 5,514 Total research and development expenses $ 246,355 $ 172,650 $ 73,705 Research and development expenses were $246.4 million for the year ended December 31, 2022 compared to $172.7 million for the year ended December 31, 2021.
Research and Development Expenses The following summarizes our research and development expenses for the years ended December 31, 2024 and 2023: Year Ended December 31, Change 2024 2023 (in thousands) External costs for programs in clinical trials $ 92,096 $ 101,055 $ (8,959 ) External costs for platform technologies and preclinical programs 76,392 76,471 (79 ) Employee related expenses 123,601 125,471 (1,870 ) Other expenses 27,000 27,021 (21 ) Total research and development expenses $ 319,089 $ 330,018 $ (10,929 ) Research and development expenses were $319.1 million for the year ended December 31, 2024 compared to $330.0 million for the year ended December 31, 2023.
In addition, we continue to incur additional costs associated with operating as a public company. We expect that our expenses will increase substantially as discussed in more detail in " ¾ Overview" above. As of December 31, 2023, we had cash, cash equivalents, and investments of $750.1 million.
Funding Requirements We expect to continue to incur significant expenses in connection with our ongoing clinical development activities related to our product candidates and the ongoing preclinical development activities of our other programs. In addition, we continue to incur additional costs associated with operating as a public company.
In July 2020, we closed our initial public offering and issued 23,000,000 shares of common stock for proceeds of $425.3 million, which was net of $34.7 million in underwriting discounts and commissions, as well as other offering expenses.
We received proceeds of $218.2 million, which was net of $11.8 million in underwriting discounts and other offering expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

16 edited+0 added−0 removed18 unchanged
Biggest changeWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 22, 2024 expressed an unqualified opinion thereon.
Biggest changeWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 26, 2025 expressed an unqualified opinion thereon.
Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, a company’s principal executive officer and principal financial officer, or persons performing similar functions, and effected by a company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: • pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of a company’s assets; • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that a company’s receipts and expenditures are being made only in accordance with authorizations of the company’s management and directors; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, a company’s principal executive officer and principal financial officer, or persons performing similar functions, and effected by a 91 company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: • pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of a company’s assets; • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that a company’s receipts and expenditures are being made only in accordance with authorizations of the company’s management and directors; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Evaluation of Disclosure Controls and Procedures Our management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as 101 of the end of the period covered by this Annual Report on Form 10-K.
Evaluation of Disclosure Controls and Procedures Our management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K.
While we have not engaged in the hedging of our foreign currency transactions to date, we are evaluating the costs and benefits of initiating such a program and may in the future hedge selected significant transactions denominated in currencies other than the U.S. dollar as we expand our international operations and our risk grows. I tem 8.
While we have not engaged in the hedging of our foreign currency transactions to date, we are evaluating the costs and benefits of initiating such a program and may in the future hedge selected significant transactions denominated in currencies other than the U.S. dollar if and/or as we expand our international operations and our risk grows. I tem 8.
As of December 31, 2023, our investments consisted of investments in U.S. treasury bills and United States agency securities that have contractual maturities of less than two years. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates.
As of December 31, 2024, our investments consisted of investments in U.S. treasury bills and United States agency securities that have contractual maturities of less than two years. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates.
Under the supervision of and with the participation of our principal executive officer and principal financial officer, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013 framework).
Under the supervision of and with the participation of our principal executive officer and principal financial officer, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013 framework).
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2023, our disclosure controls and procedures were effective. Internal Control over Financial Reporting Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2024, our disclosure controls and procedures were effective. Internal Control over Financial Reporting Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Opinion on Internal Control Over Financial Reporting We have audited Relay Therapeutics, Inc.’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Relay Therapeutics, Inc.
Opinion on Internal Control Over Financial Reporting We have audited Relay Therapeutics, Inc.’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Relay Therapeutics, Inc.
Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2023. Our independent registered public accounting firm has issued an attestation report of our internal control over financial reporting. This report appears below.
Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2024. Our independent registered public accounting firm has issued an attestation report of our internal control over financial reporting. This report appears below.
We estimate that a 10% increase or decrease in current exchange rates would not have a material effect on our financial results for the years ended December 31, 2023, 2022, and 2021.
We estimate that a 10% increase or decrease in current exchange rates would not have a material effect on our financial results for the years ended December 31, 2024, 2023, and 2022.
Rule 10b5-1 Trading Plans During the three months December 31, 2023 , none of our directors or officers adopted , materially modified , or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any non-Rule 10b5-1 trading arrangement.
Rule 10b5-1 Trading Plans During the three months ended December 31, 2024 , none of our directors or officers adopted , materially modified , or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any non-Rule 10b5-1 trading arrangement.
Changes in Internal Control Over Financial Reporting There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 102 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Relay Therapeutics, Inc.
Changes in Internal Control Over Financial Reporting There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 92 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Relay Therapeutics, Inc.
As of December 31, 2023, we estimate that such hypothetical 100 basis point adverse movement would not result in a material impact on our condensed consolidated results of operations. As of December 31, 2023, we had no debt outstanding and, therefore, are not exposed to interest rate risk with respect to debt.
As of December 31, 2024, we estimate that such hypothetical 100 basis point adverse movement would not result in a material impact on our consolidated results of operations. As of December 31, 2024, we had no debt outstanding and, therefore, are not exposed to interest rate risk with respect to debt.
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk. Interest rate risk We are exposed to market risk related to changes in interest rates of our investment portfolio of cash equivalents and short-term investments. As of December 31, 2023, our cash equivalents consisted of money market funds.
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk. 90 Interest rate risk We are exposed to market risk related to changes in interest rates of our investment portfolio of cash equivalents and short-term investments. As of December 31, 2024, our cash equivalents consisted of money market funds.
(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.
(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
Also, 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. /s/ Ernst & Young LLP Boston, Massachusetts February 22, 2024 103 It em 9B. Other Information.
Also, 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. /s/ Ernst & Young LLP Boston, Massachusetts February 26, 2025 93 It em 9B. Other Information.

Other RLAY 10-K year-over-year comparisons