Operating lease costs were $1.2 million and $1.2 million for the three months ended March 31, 2026 and March 31, 2025, respectively.
Variable lease costs were $0.5 million and $0.6 million for the three months ended March 31, 2026 and March 31, 2025, respectively. Variable lease costs represent additional costs incurred, related to administration, maintenance and property tax costs, which are billed based on both usage and as a percentage of the Company’s share of total square footage.
During the three months ended March 31, 2026 and March 31, 2025, cash paid for amounts included in the measurement of lease liabilities was $0.5 million and $0.1 million, respectively.
6. Commitments and Contingencies
Contingencies
From time to time, the Company may be involved in litigation related to claims that arise in the ordinary course of its business activities. The Company accrues for these matters when it is probable that future expenditures will be made and these expenditures can be reasonably estimated. As of March 31, 2026, the Company does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows.
Indemnification
The Company enters into standard indemnification arrangements in the ordinary course of business with vendors, clinical trial sites and other parties. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party. The term of these indemnification agreements is generally perpetual following execution. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. Accordingly, the Company has not recorded a liability related to such indemnification agreements as of March 31, 2026.
7. Income Taxes
The Company did not record a federal or state income tax provision for the three months ended March 31, 2026 and March 31, 2025. The Company continues to maintain a full valuation allowance against its net deferred tax assets as the Company believes it is not more likely than not that the benefit will be realized.
The Company’s 2023 tax year is currently under examination by the IRS. There are currently no proposed adjustments.
8. Common Stock
As of March 31, 2026 and December 31, 2025, the Company’s certificate of incorporation authorized the Company to issue 300,000,000 shares of common stock at a par value of $0.0001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Company’s board of directors. As of March 31, 2026 and December 31, 2025, no dividends have been declared to date.
The Company has completed several underwritten public follow-on offerings, from which shares of common stock and pre-funded warrants were issued. As of March 31, 2026, the following aggregate warrants to purchase shares of the Company’s common stock were issued and outstanding:
following the effective date of the 2019 Plan are not issued under the 2015 Plan will be available for issuance under the 2019 Plan.
Options granted under the 2019 Plan may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees, directors and consultants.
The 2019 Plan is subject to an annual increase on the first day of each year beginning in 2020 and ending in 2029, equal to the lesser of 4% of the shares outstanding on the last day of the immediately preceding fiscal year, and such smaller number of shares as determined by the Company’s board of directors. Options granted under the 2019 Plan have a term of 10 years (or five years if granted to a 10% stockholder) and generally vest over a 4-year period with 1-year cliff vesting.
As of March 31, 2026, the number of shares available for issuance under the 2019 Plan was 3,007,833.
2015 Equity Incentive Plan
In 2015, the Company established its 2015 Plan which provides for the granting of stock options to employees, directors and consultants of the Company. Options granted under the 2015 Plan may be either ISOs or NSOs.
2019 Employee Stock Purchase Plan
In May 2019, the Company’s board of directors adopted and the Company’s stockholders approved the 2019 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides eligible employees with the opportunity to acquire an ownership interest in the Company through periodic payroll deductions up to 15% of eligible compensation. The offering period is determined by the Company in its discretion but may not exceed 27 months. The per-share purchase price on the applicable exercise date for an offering period is equal to the lesser of 85% of the fair market value of the common stock at either the first business day or last business day of the offering period, provided that no more than 4,000 shares of common stock may be purchased by any one employee during each offering period.
The ESPP is intended to constitute an “employee stock purchase plan” under Section 423(b) of the Internal Revenue Code of 1986, as amended. A total of 195,000 shares of common stock were initially reserved for issuance under the ESPP, subject to an annual increase on January 1 of each year, beginning on January 1, 2020, equal to the lesser of 1% of the shares outstanding on the last day of the immediately preceding fiscal year and such smaller number of shares as may be determined by the Company’s board of directors, provided, however, that no more than 2,500,000 shares may be issued under the ESPP.
As of March 31, 2026, the number of shares available for issuance under the ESPP was 3,565,724.
For the three months ended March 31, 2026 and March 31, 2025, the Company recorded $0.2 million and $0.2 million, respectively, of compensation expense related to employee participation in the ESPP.
Stock-Based Compensation Expense
Total stock-based compensation expense recorded related to awards granted to employees and non-employees was as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2026 |
|
2025 |
|
Research and development |
|
$ |
8,353 |
|
$ |
6,020 |
|
General and administrative |
|
|
6,183 |
|
|
4,217 |
|
Total stock-based compensation expense |
|
$ |
14,536 |
|
$ |
10,237 |
|
Risk-Free Interest Rate. The risk-free rate assumption is based on U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options.
Expected Dividend Rate. The Company has not paid and does not anticipate paying any dividends in the near future. Accordingly, the Company has estimated the dividend yield to be zero.
The Company accounts for forfeitures as they occur.
Fair Value of Common Stock
The fair value of the Company’s common stock is determined based on the market price on the date of grant.
10. Significant Agreements
Novartis License Agreement
In September 2018, the Company entered into a License Agreement with Novartis to develop and commercialize Novartis’ LXS196 (also known as IDE196), a Phase 1 protein kinase C (“PKC”) inhibitor, for the treatment of cancers with GNAQ and GNA11 mutations. The Company renamed Novartis’ LXS196 oncology as IDE196, and which has a non-proprietary name of darovasertib. Under the license agreement, Novartis granted to the Company a worldwide, exclusive, sublicensable license to research, develop, manufacture, and commercialize certain defined compounds and products, including IDE196 and certain other PKC inhibitors, as well as companion diagnostic products, collectively referred to as the licensed products, for any purpose. The Company paid Novartis an upfront payment of $2.5 million and issued 263,615 shares of its Series B redeemable convertible preferred stock concurrently with the execution of the license agreement.
In March 2025, the FDA granted Breakthrough Therapy designation (“BTD”) for darovasertib, a potential first-in-class PKC inhibitor, for the neoadjuvant treatment of adult patients with primary uveal melanoma (“UM”) for whom enucleation has been recommended. Under the license agreement with Novartis, the Company paid Novartis a $1.0 million milestone payment in April 2025.
Subject to completion of certain clinical and regulatory development milestones, the Company agreed to make additional milestone payments in the aggregate of up to $8.0 million, and subject to achievement of certain commercial sales milestones, the Company agreed to make milestone payments in the aggregate of up to $20.0 million. The Company also agreed to pay mid to high single-digit tiered royalty payments based on annual worldwide net sales of licensed products, payable on a licensed product-by-licensed product and country by country basis until the latest of the expiration of the last to expire exclusively licensed patent, the expiration of regulatory exclusivity, and the ten year anniversary of the first commercial sale of such product in such country. The royalty payments are subject to reductions for lack of patent coverage, loss of market exclusivity, and payment obligations for third-party licenses.
The Company owns or controls all commercial rights in its darovasertib program in UM, including in mUM and in primary UM, subject to certain economic obligations pursuant to its exclusive, worldwide license to darovasertib with Novartis.
Pfizer Clinical Trial Collaboration and Supply Agreements
In March 2020, the Company entered into a Clinical Trial Collaboration and Supply Agreement with Pfizer, Inc. (as amended in September 2020, April 2021, September 2021 and May 2023, the “Pfizer Agreement”). Pursuant to the Pfizer Agreement, Pfizer supplies the Company with their MEK inhibitor, binimetinib, and their cMET inhibitor, crizotinib, to evaluate combinations of darovasertib independently with each of the Pfizer compounds, in patients with tumors harboring activating GNAQ or GNA11 mutations. Under the Pfizer Agreement, the Company is the sponsor of the combination studies and will provide darovasertib and pay for the costs of the combination studies. Pfizer will provide binimetinib and crizotinib for use in the clinical trial at no cost to the Company. The Pfizer Agreement provides that the Company and Pfizer will jointly own clinical data generated from the clinical trial and will also jointly own inventions, if any, relating to the combined use of darovasertib and binimetinib, or
independently, to the combined use of darovasertib and crizotinib. The Company and Pfizer have formed a joint development committee responsible for coordinating all regulatory and other activities under the agreement.
In March 2022, the Company and Pfizer entered into a Second Clinical Trial Collaboration and Supply Agreement, as amended in May 2023 (the “Second Pfizer Agreement”), pursuant to which the Company is evaluating darovasertib and crizotinib as a combination therapy in mUM in a planned Phase 2/3 potential registration-enabling clinical trial. Pursuant to the Second Pfizer Agreement, the Company is the sponsor of the combination trial and the Company will provide darovasertib and pay for the costs of the combination trial, and Pfizer will provide crizotinib for the planned combination trial at no cost to the Company for up to an agreed-upon number of mUM patients. The Company and Pfizer will jointly own clinical data from the planned combination trial and all inventions relating to the combined use of darovasertib and crizotinib. The Company and Pfizer have formed a joint development committee responsible for coordinating all regulatory and other activities under the Second Pfizer Agreement.
Separately, in March 2022, the Company and Pfizer also entered into a Third Clinical Trial Collaboration and Supply Agreement (the “Third Pfizer Agreement”), pursuant to which the Company could, subject to preclinical validation and FDA feedback and guidance, evaluate darovasertib and crizotinib, as a combination therapy in cMET-driven tumors such as NSCLC and/or HCC in a Phase 1 clinical trial. Pursuant to the Third Pfizer Agreement, the Company was the sponsor of the planned combination trial, and the Company would provide darovasertib and pay for the costs of the combination trial. Pfizer would provide crizotinib for the planned combination trial at no cost to the Company. Pursuant to Amendment No. 1 to the Second Pfizer Agreement, as described below, the Company and Pfizer terminated the Third Pfizer Agreement.
In May 2023, the Company continued its relationship with Pfizer by entering into Amendment No. 4 to the Pfizer Agreement relating to the supply of crizotinib in support of this Phase 2 clinical trial, pursuant to which Pfizer will continue to provide the Company with an additional defined quantity of crizotinib at no cost.
Also, in May 2023, the Company expanded its relationship with Pfizer to support the Phase 2/3 registrational trial to evaluate darovasertib and crizotinib as a combination therapy in mUM by entering into Amendment No. 1 to the Second Pfizer Agreement. Under Amendment No. 1 to the Second Pfizer Agreement, Pfizer will provide the Company with a first defined quantity of crizotinib at no cost, as well as an additional second defined quantity of crizotinib at a lump-sum cost. The Third Pfizer Agreement was terminated by the Company and Pfizer under Amendment No. 1 to the Second Pfizer Agreement.
In December 2024, the Company entered into Amendment No. 5 to the Pfizer Agreement for the supply of crizotinib in the Phase 1/2 clinical trial for Pfizer to provide the Company a defined quantity of crizotinib at defined costs.
Cancer Research UK and University of Manchester Exclusive Option and License Agreement
The Company entered into an exclusive license under the Evaluation, Option and License Agreement with Cancer Research Technologies Ltd., also known as Cancer Research United Kingdom Ltd. (“CRT”), and the University of Manchester, pursuant to which the Company holds exclusive worldwide license rights covering a broad class of PARG inhibitors.
In January 2022, the Company exercised its option for an exclusive worldwide license covering a broad class of poly (ADP-ribose) glycohydrolase (“PARG”), inhibitors from CRT, and the University of Manchester, and in connection therewith, paid a one-time option exercise fee of £250,000.
In April 2023, the Company incurred an obligation to pay milestone payments in an aggregate amount of £750,000 to CRT based upon the achievement of certain milestones relating to first and second tumor histologies in connection with the Phase 1 portion of the IDE161-001 Phase 1/2 clinical trial in oncologic diseases.
CRT is eligible for remaining payments aggregating up to £18.75 million upon the achievement of specific development and regulatory approval events for development of a PARG inhibitor in oncologic diseases, including an aggregate of up to £1.5 million and up to £2.25 million for the achievement of certain Phase 2 and Phase 3 development milestones, respectively, in each case as relating to first and second tumor histologies.
The Company will also pay low single-digit tiered royalties, and potentially also sales-based milestones, to CRT based on net sales of licensed products. In addition, in the event the Company sublicenses the intellectual property, it will also be obligated to pay CRT a specified percentage of any sublicense revenue.
Gilead Clinical Study Collaboration and Supply Agreement
In November 2023, the Company entered into a Clinical Study Collaboration and Supply Agreement with Gilead Sciences, Inc. (“Gilead”), (the “Gilead CSCSA”), to clinically evaluate IDE397 in combination with Trodelvy (sacituzumab govitecan-hziy), a Trop-2 directed antibody drug conjugate (“ADC”), in patients having MTAP-deletion urothelial cancer (“UC”), in a Phase 1 clinical trial.
In February 2025, the Company expanded its clinical study collaboration and entered into an additional Clinical Study Collaboration and Supply Agreement with Gilead (the “Second Gilead CSCSA”), to evaluate the IDE397 and Trodelvy combination in MTAP-deletion NSCLC.
The Company is the study sponsor and Gilead will provide the supply of Trodelvy. Gilead will bear internal or external costs incurred in connection with its supply of Trodelvy. The Company will bear all internal and external costs and expenses associated with the conduct of the combination study. The Company and Gilead each retain commercial rights to its respective compounds, including with respect to use as a monotherapy agent or combination agent.
In March 2026, the Company deprioritized its clinical activity with Gilead evaluating the combination of IDE397 and Trodelvy.
Biocytogen Option and License Agreement
In July 2024, the Company entered into an Option and License Agreement (the “Biocytogen Option and License Agreement”), pursuant to which Biocytogen granted us an option for an exclusive worldwide license from Biocytogen to develop and commercialize products in connection with a potential first-in-class B7H3/PTK7 topoisomerase-I-inhibitor-payload BsADC program (the “Option”). Under the terms of the Biocytogen Option and License Agreement, the Company paid Biocytogen an upfront fee and an exercise fee totaling $6.5 million upon exercise of the option. The Company received IND clearance from the FDA for IDE034 in the fourth quarter of 2025. The Company initiated a Phase 1 dose escalation trial in the first quarter of 2026. Dosing of the first patient with IDE034 triggered a $5.0 million milestone payment to Biocytogen, pursuant to the Biocytogen Option and License Agreement.
Biocytogen is eligible to receive additional development and regulatory milestone payments and commercial milestone payments, as well as low to mid-single-digit royalties on net sales. Total remaining milestone payments equal an aggregate of $395.0 million, including development and regulatory milestone payments of up to $95.0 million. The Company's royalty obligations continue with respect to each country and each product until the later of (i) the date on which such product is no longer covered by certain intellectual property rights in such country and (ii) the 10th anniversary of the first commercial sale of such product in such country.
Hengrui Pharma License Agreement
In December 2024, the Company entered into an exclusive License Agreement (the “Hengrui Pharma License Agreement”) with Hengrui Pharma, pursuant to which Hengrui Pharma granted the Company an exclusive worldwide license outside of Greater China, for IDE849 (SHR-4849), a potential first-in-class Phase 1 DLL3 TOP1i ADC. In April 2025, the Company received U.S. IND clearance for the initiation of a Phase 1 clinical trial to evaluate IDE849 in solid tumors.
Under the terms of the Hengrui Pharma License Agreement, Hengrui Pharma is eligible to receive upfront and milestone payments, totaling $1.045 billion. The remaining milestone payments include $198.0 million in development and regulatory milestone payments and commercial success-based milestones. Hengrui Pharma is also
eligible to receive mid-single to low-double digit royalties on net sales outside of Greater China. The Company owns or controls all commercial rights outside of Greater China for IDE849.
In October 2025, the initiation of the first Phase 1 clinical trial, or first dosing of first patient, was achieved for IDE849 (SHR-4849). Under the license agreement with Hengrui Pharma, the Company paid Hengrui Pharma a $2.0 million milestone payment.
Servier License Agreement
In August 2025, the Company entered into an exclusive license agreement with Servier pursuant to which the Company granted to Servier an exclusive license under certain intellectual property rights controlled by the Company relating to darovasertib to develop and commercialize products in all countries worldwide except for the United States for all diagnostic, prophylactic and therapeutic uses in humans. The Company received an upfront payment of $210.0 million and are eligible to receive development and regulatory milestone payments of up to an aggregate of $100.0 million, commercial milestone payments of up to an aggregate of $220.0 million, clinical trial cost sharing and clinical trial cost reimbursement, and royalties on net sales of products outside of the United States ranging from mid-teens to low-twenties percentages. Servier will be responsible for the regulatory and commercial activities for darovasertib outside the United States. The Company and Servier will collaborate on the development of darovasertib and share the associated costs. The Company retains all rights to darovasertib in the United States. The Servier license agreement will remain in effect on a product-by-product and country-by-country basis until expiration of royalty obligations.
GSK Collaboration, Option and License Agreement
In June 2020, the Company entered into the Collaboration, Option and License Agreement (the “GSK Collaboration Agreement”), with an affiliate of GSK plc, GLAXOSMITHKLINE INTELLECTUAL PROPERTY (NO. 4) LIMITED (“GSK”), pursuant to which the Company and GSK have entered into a collaboration for its synthetic lethality programs targeting MAT2A, Pol Theta and Werner Helicase (“Werner” or “WRN”).
In December 2025, GSK notified the Company of its intention to terminate the Agreement, which will be effective 90 days following the date of GSK’s notice, or March 9, 2026. During the ninety-day transition period, GSK will transfer the Pol Theta (IDE705) and WRN (IDE275) clinical programs to the Company in accordance with the applicable provisions of the Agreement.
11. Revenue Recognition
The Company recognizes revenue in accordance with ASC 606 for the Servier License Agreement (see Note 10. Significant Agreements).
Servier License Agreement:
In connection with the Servier License Agreement entered into in August 2025 (see Note. 10 Significant Agreements), the Company recognized $6.6 million in collaboration revenue for the three months ended March 31, 2026.
The Company identified the following performance obligations associated with the Servier License Agreement:
•Development and commercialization license (the “D&C license”) for regulatory and commercial rights to darovasertib outside the US
•Two research and development services for the development of the darovasertib program
The Company has determined the above performance obligations to be distinct due to the advanced clinical stage of darovasertib and availability of clinical data from multiple clinical trials.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in, or implied, by these forward-looking statements. Please also see the section of this Quarterly Report on Form 10-Q titled “Note Regarding Forward-Looking Statements.”
Overview
We are a precision medicine oncology company committed to the discovery, development and commercialization of transformative therapies for cancer. Our approach integrates expertise in small-molecule drug discovery, structural biology and bioinformatics with robust internal capabilities in identifying and validating translational biomarkers to develop tailored, potentially first-in-class targeted therapies aligned to the genetic drivers of disease. We have built a deep pipeline of product candidates focused on synthetic lethality and antibody-drug conjugates (ADCs), for molecularly defined solid tumor indications. Our clinical development strategy is to evaluate our product candidates in rational combinations, where appropriate, and earlier in the course of disease in the adjuvant and neoadjuvant setting, which we believe has the potential to maximize their impact. Our mission is to bring forth the next wave of precision oncology therapies that are more selective, more effective, and deeply personalized with the goal of altering the course of disease and improving clinical outcomes for patients with cancer.
Our current clinical pipeline consists of nine potential first-in-class product candidates across four clinical focus areas, as described below.
Darovasertib for Uveal Melanoma
Darovasertib is an oral, potent and selective small molecule inhibitor of protein kinase C and our most advanced clinical program. We are developing darovasertib for uveal melanoma (UM), a rare, aggressive form of ocular cancer in both the metastatic and pre-metastatic settings of UM, as described below.
•Metastatic UM (mUM). We are evaluating darovasertib in combination with crizotinib, Pfizer’s oral c-MET inhibitor, in a potentially registration-enabling, Phase 2/3 trial (OptimUM-02) for human leukocyte antigen-A*02:01 negative (HLA*A2(-)), patients with first line mUM. In April 2026, we reported positive topline data from OptimUM-02, which demonstrated a statistically significant improvement in the primary endpoint of progression free survival, as well as a statistically significant improvement in the secondary endpoint of overall survival rate as assessed by blinded independent central review. We plan to provide complete data from the primary analysis of OptimUM-02 trial in a late-breaking oral presentation at the 2026 American Society for Clinical Oncology meeting in Chicago, Illinois.
We plan to complete a new drug application (NDA) submission in the second half of 2026 to support a potential U.S. accelerated approval. The FDA has agreed to review our NDA under the Oncology Center of Excellence Real-Time Oncology Review program, which allows an applicant to pre-submit components of its NDA for review before the complete filing is submitted to provide a more efficient review process and ensure safe and effective treatments are available to patients as early as possible.
We are also evaluating the combination of darovasertib and crizotinib in HLA*A2:01 positive (HLA*A2(+)), mUM patients in our ongoing, single-arm Phase 2 OptimUM-01 trial. We have completed enrollment of approximately 100 patients in this trial and plan to present updated clinical data at a medical conference in the second half of 2026 to support a potential regulatory submission to the FDA. This submission has the potential to expand the labeled use of darovasertib and/or guideline inclusion to enable use of the combination in these HLA*A2(+) patients.
•Adjuvant UM. In collaboration with our partner, Servier, we plan to initiate a global Phase 3 registrational trial (OptimUM-11) of darovasertib and crizotinib in the adjuvant setting of primary UM in the first half of 2026.
We have successfully completed a Type C meeting with the U.S. FDA to align on the Phase 3 registrational design of the OptimUM-11 trial. The trial will enroll approximately 450 primary uveal melanoma patients with increased risk of metastasis, irrespective of HLA status, randomized 1:1 to treatment with darovasertib combined with crizotinib for 12-months or observation. The primary endpoint is superiority by relapse-free survival.
In August 2025, we entered into an exclusive license agreement with Servier, for the development and commercialization of darovasertib outside of the United States. We received an upfront payment of $210.0 million and are eligible to receive up to $320.0 million in milestone payments, clinical trial cost sharing and clinical trial cost reimbursement, as well as double-digit royalties on net sales in all territories outside of the United States
•Neoadjuvant UM. We are also evaluating darovasertib as a monotherapy in the neoadjuvant setting of primary UM, where the goal of treatment is to prevent enucleation (surgical eye removal), preserve vision prior to and post-plaque brachytherapy and potentially delay or prevent progression to metastatic disease. Enrollment and site activation is continuing in our randomized Phase 3 trial of neoadjuvant darovasertib (OptimUM-10), which will include approximately 450 patients across plaque brachytherapy-eligible and enucleation-eligible cohorts. We expect to reach full enrollment in the trial by the end of 2027. We are also conducting a Phase 2 trial of neoadjuvant darovasertib (OptimUM-09) and are targeting to provide a clinical data update from this trial at a medical conference in the second half of 2026.
Antibody-Drug Conjugates / DNA Damage Response (DDR) Combinations
•IDE849 is a potential first-in-class, DLL3 TOP1 ADC being evaluated by our partner, Hengrui Pharma, in a multi-site, open label Phase 1 clinical trial in China in patients with small-cell lung cancer (SCLC) and neuroendocrine carcinomas (NEC). Hengrui Pharma is targeting to initiate Phase 3 registrational trials in China in 2027 for IDE849 in SCLC and to provide a clinical data update on this program in the second half of 2026. We are currently conducting a global Phase 1/2 trial of IDE849 in SCLC and NEC with the goal of providing a clinical update and initiating a monotherapy registrational trial by the end of 2026.
•IDE034 is a potential first-in-class, B7H3/PTK7 bispecific TOP1 ADC. We initiated a Phase 1 dose escalation trial in the first quarter of 2026 and are targeting to provide a clinical data update by the end of 2026. Dosing of the first patient with IDE034 triggered a $5.0 million milestone payment to Biocytogen, pursuant to our Option and License Agreement.
•IDE161 is a potential first-in-class, oral small molecule poly (ADP-ribose) glycohydrolase (PARG) inhibitor in a Phase 1 dose optimization trial to inform future combination studies with IDE849 and other TOP1-based ADCs where PARG inhibition may synergize with the payload to deepen responses. We initiated a Phase 1 clinical combination trial of IDE161 with IDE849 in SCLC, NEC, and potentially other DLL3-overexpressing solid tumors in the first quarter of 2026. We may also evaluate clinical combinations of IDE161 with IDE034 (B7H3/PTK7) and potentially other TOP1 ADCs in collaboration with third parties.
•IDE705 is a potential first-in-class, oral small molecule inhibitor of the helicase domain of Pol Theta that had been in a Phase 1 combination trial with niraparib, GSK’s small molecule inhibitor of PARP, in patients with BRCA+ or other HRD-positive tumors. In December 2025, GSK notified us of its intention to terminate the GSK Collaboration Agreement, which became effective on March 9, 2026. We plan to discontinue development of IDE705 and are currently evaluating strategic options for this asset.
MTAP Pathway
•IDE397 is a potential first-in-class, oral small molecule inhibitor of methionine adenosyltransferase 2a (MAT2A), which we are developing for patients with solid tumors with methylthioadenosine phosphorylase (MTAP) gene deletion. In March 2026, we made the strategic decision to prioritize our proprietary MTAP-deleted pipeline, including IDE397 and IDE892, and the advancement of our CDKN2A-deficiency program and deprioritize our clinical activity with Gilead evaluating the combination of IDE397 and Trodelvy. Based on
preliminary data from these trials supporting the mechanistic rationale of the combination in MTAP-deleted cancers, we may evaluate additional combinations between IDE397 and other TOP1 payload ADCs, including IDE034, our B7H3/PTK7 bispecific TOP1 ADC.
•IDE892 is a potential first-in-class, oral small molecule MTA-cooperative inhibitor of PRMT5 being developed for patients with high priority MTAP-deleted solid tumors, including non-small cell lung cancer (NSCLC) and pancreatic ductal adenocarcinoma (PDAC). We initiated a Phase 1 dose escalation trial with IDE892 in MTAP-deleted NSCLC and PDAC in the first quarter of 2026 and, pending completion, will target to initiate a Phase 1 combination cohort with IDE397 in MTAP-deleted cancers in mid-2026 with expansion in the second half of 2026.
Next Generation Therapies
•IDE574 is a potential first-in-class, oral small molecule equipotent dual inhibitor of the lysine acetyltransferase (KAT) 6 and 7, both of which have been shown to support cancer cell survival. We initiated a Phase 1 dose escalation trial in patients with breast, lung, prostate and colorectal cancers in the first quarter of 2026.
•IDE275 is a potential first-in-class, oral small molecule inhibitor of the helicase domain of the Werner protein, a RecQ enzyme involved in the maintenance of genome integrity. In December 2025, GSK notified us of its intention to terminate the GSK Collaboration Agreement, which became effective on March 9, 2026. We plan to discontinue development of IDE275 and are currently evaluating strategic options for this asset.
Corporate Update
We do not have any products approved for sale and have not generated any product revenue since inception. We have funded our operations primarily through the sale and issuance of common stock and the upfront payment and certain milestone payments received from GSK and the upfront payment received from Servier. As of March 31, 2026, we had cash, cash equivalents and marketable securities of approximately $972.9 million, consisting primarily of money market funds, U.S. government securities, commercial paper and corporate bonds.
Since our inception in June 2015, we have devoted substantially all of our resources to discovering and developing our product candidates. We have incurred significant operating losses to date and expect that our operating expenses will increase significantly as we advance our product candidates through preclinical and clinical development; seek regulatory approval and prepare for, and, if approved, proceed to commercialization; acquire, discover, validate and develop additional product candidates; obtain, maintain, protect and enforce our intellectual property portfolio; and hire additional personnel. For information about our specific program costs and expenses, see Note 10. Significant Agreements.
Our net losses were $98.5 million and $72.2 million for the three months ended March 31, 2026 and March 31, 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $835.1 million.
Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of our product candidates, by ourselves or, for some programs, in collaboration with our strategic partners.
Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates.
We believe that our cash, cash equivalents, and short-term and long-term marketable securities will be sufficient to fund our planned operations for at least twelve months from the date of the issuance of our Quarterly Report on Form 10-Q filed on May 5, 2026.
These funds will support our efforts through potential achievement of multiple preclinical and clinical milestones across multiple programs.
Components of Operating Results
Collaboration Revenues
To date, we have not generated any revenue from product sales, and we do not expect to generate any revenue from product sales unless and until we are able to obtain regulatory approval and commercialize one of our product candidates in the future. Our revenue consists exclusively of collaboration revenue under the Servier License Agreement, including amounts that are recognized related to previously received upfront payments, development and regulatory milestone payments and amounts due and payable to us for research and development services.
When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract asset or contract liability is recorded. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met. Contract assets are recorded when revenue has been recognized for services performed that are not yet billable to a customer.
In August 2025, we entered into the Servier License Agreement for development and commercial rights to darovasertib in all countries worldwide except for the United States. We recognized revenue related to the D&C license performance obligation at a point in time upon execution of the contract. We recognize revenue related to amounts allocated to research and development services over time, as the underlying services are performed over the period through the completion of program development activities. The timing of revenue recognition, billings, and cash collections results in accounts receivable, contract assets, and contract liabilities on the balance sheets. We will also recognize revenue from regulatory milestones as they are achieved. Future net product sales may also result in royalty payments.
Operating Expenses
Research and Development Expenses
Substantially all of our research and development expenses consist of expenses incurred in connection with the discovery and development of our product candidates. These expenses include certain payroll and personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expenses for our research and product development employees, fees to third parties to conduct certain research and development activities on our behalf including fees to CMOs and CROs in support of manufacturing and clinical activity for darovasertib, IDE397, IDE849, IDE161, IDE275, IDE705, IDE892, IDE034, and IDE574 and consulting costs, costs for laboratory supplies, costs for product licenses and allocated overhead, including rent, equipment, depreciation, information technology costs and utilities. We expense both internal and external research and development expenses as they are incurred.
We have entered into various agreements with CMOs and CROs. Our research and development accruals are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced, are included in accrued liabilities on our balance sheet. If the actual timing of the performance of services or the level of effort varies from the original estimates, we will adjust the accrual accordingly. Payments made to CMOs and CROs under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered.
Costs of certain activities, such as preclinical studies, are generally recognized based on an evaluation of the progress to completion of specific tasks. Nonrefundable payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses and other current assets on our balance sheet. The capitalized amounts are recognized as expense as the goods are delivered or the related services are performed.
We do not allocate our internal costs by product candidate, including internal costs, such as payroll and other personnel expenses, laboratory supplies and allocated overhead. With respect to internal costs, several of our departments support multiple product candidate research and development programs, and therefore the costs cannot be allocated to a particular product candidate or development program. The following table summarizes our external clinical development expenses by program:
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, 2026 |
|
March 31, 2025 |
|
External clinical development expenses(1): |
|
|
|
|
|
Darovasertib |
|
$ |
23,332 |
|
$ |
23,018 |
|
IDE397 |
|
|
3,515 |
|
|
3,741 |
|
IDE161 |
|
|
1,607 |
|
|
2,448 |
|
IDE849 |
|
|
4,765 |
|
|
423 |
|
IDE892 |
|
|
2,180 |
|
|
860 |
|
IDE034 |
|
|
6,808 |
|
|
38 |
|
IDE574 |
|
|
3,052 |
|
|
643 |
|
Personnel related and stock-based compensation |
|
|
20,072 |
|
|
15,814 |
|
Other research and development expenses(2) |
|
|
30,395 |
|
|
23,901 |
|
Total research and development expenses |
|
$ |
95,726 |
|
$ |
70,886 |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, 2026 |
|
December 31, 2025 |
|
External clinical development expenses(1): |
|
|
|
|
|
Darovasertib |
|
$ |
23,332 |
|
$ |
23,254 |
|
IDE397 |
|
|
3,515 |
|
|
3,432 |
|
IDE161 |
|
|
1,607 |
|
|
1,791 |
|
IDE849 |
|
|
4,765 |
|
|
6,908 |
|
IDE892 |
|
|
2,180 |
|
|
2,269 |
|
IDE034 |
|
|
6,808 |
|
|
837 |
|
IDE574 |
|
|
3,052 |
|
|
1,433 |
|
Personnel related and stock-based compensation |
|
|
20,072 |
|
|
16,988 |
|
Other research and development expenses(2) |
|
|
30,395 |
|
|
29,687 |
|
Total research and development expenses |
|
$ |
95,726 |
|
$ |
86,599 |
|
(1)External clinical development expenses include manufacturing and clinical trial costs. These expenses are primarily for services provided by external consultants, CMOs and CROs.
(2)Other research and development expenses include manufacturing and clinical trial costs for preclinical and earlier clinical stage programs. These expenses are primarily for services provided by external consultants, CMOs and CROs.
We are focusing substantially all of our resources on the development of our product candidates. We expect our research and development expenses to increase substantially during the next few years, as we seek to initiate and/or advance clinical trials for our product candidates, complete our clinical program, pursue regulatory approval of our product candidates and prepare for a possible commercial launch. Predicting the timing or the cost to complete our clinical program or validation of our commercial manufacturing and supply processes is difficult and delays may occur because of many factors, including factors outside of our control. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. Furthermore, we are unable to predict when or if our product candidates will receive regulatory approval with any certainty.
General and Administrative Expenses
General and administrative expenses consist primarily of payroll and personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expense, professional fees for legal, patent, consulting, accounting and tax services, allocated overhead, including rent, equipment, depreciation, information technology costs and utilities, and other general operating expenses not otherwise classified as research and development expenses.
We anticipate that our general and administrative expenses will increase, as a result of increased personnel costs, including salaries, benefits and stock-based compensation expense, patent costs for our product candidates, expanded infrastructure and higher consulting, legal and accounting services associated with maintaining
compliance with our Nasdaq stock exchange listing and requirements of the SEC, investor relations costs and director and officer insurance policy premiums associated with being a public company.
Other Income
Interest Income and Other Income, Net
Interest income and other income, net consists primarily of interest income earned on our cash, cash equivalents and marketable securities.
Results of Operations
A discussion regarding our financial condition and results of operations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 and the three months ended March 31, 2026 compared to the three months ended December 31, 2025 is presented below.
Comparison of Three Months Ended March 31, 2026 and March 31, 2025
The following table summarizes our results of operations for the periods indicated (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
March 31, 2026 |
|
March 31, 2025 |
|
Change |
|
% Change |
|
Revenue: |
|
|
|
|
|
|
|
|
|
Collaboration revenue |
|
$ |
6,560 |
|
$ |
— |
|
$ |
6,560 |
|
|
100 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
95,726 |
|
|
70,886 |
|
|
24,840 |
|
|
35 |
% |
General and administrative |
|
|
19,378 |
|
|
13,503 |
|
|
5,875 |
|
|
44 |
% |
Loss from operations |
|
|
(108,544 |
) |
|
(84,389 |
) |
|
(24,155 |
) |
|
(29 |
%) |
Interest income and other income, net |
|
|
10,005 |
|
|
12,211 |
|
|
(2,206 |
) |
|
(18 |
%) |
Net loss |
|
$ |
(98,539 |
) |
$ |
(72,178 |
) |
$ |
(26,361 |
) |
|
(37 |
%) |
Collaboration Revenue
Collaboration Revenue was $6.6 million for the three months ended March 31, 2026 as a result of revenue recognized from the Servier License Agreement. In connection with the Servier License Agreement, we recognized revenue related to amounts allocated to the two research and development services performance obligations over time, as the underlying services are performed over the period through the completion of program development activities.
Research and Development Expenses
Research and development expenses increased by $24.8 million, or 35%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to increases of $19.5 million in fees paid to CROs and consultants and milestone fees related to the advancement of our lead product candidates through preclinical and clinical studies, $4.3 million in personnel-related expenses, including salaries, benefits and stock-based compensation, to support our growth and $1.0 million in costs for laboratory supplies, facilities and information technology costs to support our research and development programs.
General and Administrative Expenses
General and administrative expenses increased by $5.9 million, or 44%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in general and administrative expenses was
primarily due to increases of $2.9 million in personnel-related expenses, including salaries, benefits and stock-based compensation and $3.0 million in consulting services related to company growth.
Interest Income and Other Income, Net
Interest income decreased by $2.2 million, or 18%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to lower interest rates and lower investment balances.
Comparison of Three Months Ended March 31, 2026 and December 31, 2025
The following table summarizes our results of operations for the periods indicated (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
March 31, 2026 |
|
December 31, 2025 |
|
Change |
|
% Change |
|
Revenue: |
|
|
|
|
|
|
|
|
|
Collaboration revenue |
|
$ |
6,560 |
|
$ |
10,876 |
|
$ |
(4,316 |
) |
|
(40 |
%) |
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
95,726 |
|
|
86,599 |
|
|
9,127 |
|
|
11 |
% |
General and administrative |
|
|
19,378 |
|
|
18,847 |
|
|
531 |
|
|
3 |
% |
Loss from operations |
|
|
(108,544 |
) |
|
(94,570 |
) |
|
(13,974 |
) |
|
(15 |
%) |
Interest income and other income, net |
|
|
10,005 |
|
|
11,297 |
|
|
(1,292 |
) |
|
(11 |
%) |
Net loss |
|
$ |
(98,539 |
) |
$ |
(83,273 |
) |
$ |
(15,266 |
) |
|
(18 |
%) |
Collaboration Revenue
Collaboration Revenue decreased by $4.3 million, or 40%, during the three months ended March 31, 2026 compared to the three months ended December 31, 2025 as a result of revenue recognized from the Servier License Agreement. In connection with the Servier License Agreement, we recognized revenue related to amounts allocated to the two research and development service performance obligations over time, as the underlying services are performed over the period through the completion of program development activities.
Research and Development Expenses
Research and development expenses increased by $9.1 million, or 11%, during the three months ended March 31, 2026 compared to the three months ended December 31, 2025 primarily due to $6.0 million in fees paid to CROs and consultants and milestone fees related to the advancement of our lead product candidates through preclinical and clinical studies and $3.1 million in personnel-related expenses, including salaries, benefits and stock-based compensation, to support our growth.
General and Administrative Expenses
General and administrative expenses increased by $0.5 million, or 3%, during the three months ended March 31, 2026 compared to the three months ended December 31, 2025 primarily due to increases of $1.3 million in personnel-related expenses, including salaries, benefits and stock-based compensation, partially offset by a decrease of $0.8 million in consulting fees.
Interest Income and Other Income, Net
Interest income decreased by $1.3 million, or 11%, during the three months ended March 31, 2026 compared to the three months ended December 31, 2025, primarily due to lower interest rates and lower investment balances.
Liquidity and Capital Resources; Plan of Operations
Sources of Liquidity
We have funded our operations primarily through the sale and issuance of common stock and the upfront payment and certain milestone payments received from GSK and the upfront payment received from Servier. As of March 31, 2026, we had cash, cash equivalents and marketable securities of approximately $972.9 million, consisting primarily of money market funds, U.S. government securities, commercial paper, and corporate bonds.
On January 19, 2024, we entered into a new Open Market Sales Agreement, or the January 2024 Sales Agreement, with Jefferies LLC, or Jefferies, relating to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, shares of common stock, par value $0.0001 per share, or common stock, having aggregate gross proceeds of up to $350.0 million through Jefferies as sales agent.
During the year ended December 31, 2025, we sold an aggregate of 984,000 shares of our common stock for aggregate net proceeds of $25.0 million at a weighted average sales price of approximately $26.00 per share under the at-the-market offering pursuant to the January 2024 Sales Agreement with Jefferies as sales agent.
During the three months ended March 31, 2026, we sold no shares of common stock under the at-the-market offering pursuant to the January 2024 Sales Agreement with Jefferies as sales agent.
As of March 31, 2026, approximately $156.6 million of common stock remained available to be sold pursuant to the January 2024 Sales Agreement.
We may cancel our at-the-market program at any time upon written notice, pursuant to its terms.
Material Cash Requirements
We have primarily incurred net losses since our inception. For the three months ended March 31, 2026 and March 31, 2025, we had net losses of $98.5 million and $72.2 million, respectively, and we expect to incur substantial additional losses in future periods. As of March 31, 2026, we had an accumulated deficit of $835.1 million. Based on our current business plan, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our planned operations for at least the next 12 months from the issuance date of this Quarterly Report on Form 10-Q.
To date, we have not generated any product revenue. We do not expect to generate any meaningful product revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates, and we do not know when, or if, it will occur. We expect to continue to incur significant losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for our product candidates, and begin to commercialize any approved products. We are subject to all of the risks typically related to the development of new product candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. Moreover, we expect to incur additional costs associated with operating as a public company.
We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We may seek to raise capital through private or public equity or debt financings, collaboration or other arrangements with corporate sources, or through other sources of financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategies. We anticipate that we will need to raise substantial additional capital, the requirements for which will depend on many factors, including:
•the scope, timing, rate of progress and costs of our drug discovery, preclinical development activities, laboratory testing and clinical trials for our product candidates;
•the number and scope of clinical programs we decide to pursue;
•the scope and costs of manufacturing development and commercial manufacturing activities;
•the extent to which we acquire or in-license other product candidates and technologies;
•the cost, timing and outcome of regulatory review of our product candidates;
•the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
•our ability to establish and maintain collaborations on favorable terms, if at all;
•our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates;
•the costs associated with being a public company; and
•the cost and timing associated with commercializing our product candidates if they receive marketing approval.
A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation or asset sale transactions.
Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to others rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.
We enter into contracts in the normal course of business with third-party contract organizations for preclinical and clinical studies and testing, manufacture and supply of our preclinical and clinical materials and providing other services and products for operating purposes. These contracts generally provide for termination following a certain period after notice, and therefore, we believe that our non-cancelable obligations under these agreements are not material.
For more information, see Notes 5. Operating Leases, 6. Commitments and Contingencies, 7. Income Taxes and 10. Significant Agreements, each in the unaudited interim condensed financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.
See the section of this Quarterly Report on Form 10-Q titled “Part I, Item 1A. – Risk Factors” for additional risks associated with our substantial capital requirements.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements as defined in the rules and regulations of the SEC.
Summary Statement of Cash Flows
The following table sets forth the primary sources and uses of cash, cash equivalents, and restricted cash for each of the periods presented below (in thousands):
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2026 |
|
2025 |
|
Net cash provided by (used in): |
|
|
|
|
|
Operating activities |
|
$ |
(75,170 |
) |
$ |
(60,342 |
) |
Investing activities |
|
|
118,952 |
|
|
79,817 |
|
Financing activities |
|
|
1,181 |
|
|
26,143 |
|
Net increase in cash, cash equivalents and restricted cash |
|
$ |
44,963 |
|
$ |
45,618 |
|
Cash Flows from Operating Activities
Net cash used in operating activities was $75.2 million for the three months ended March 31, 2026. Cash used in operating activities was primarily due to the use of funds in our operations to develop our product candidates resulting in a net loss of $98.5 million, adjusted for net non-cash charges of $14.5 million and changes in net operating assets and liabilities of $8.9 million. Our non-cash charges consisted of $14.5 million in stock-based compensation, $0.7 million in depreciation and $0.5 million of the amortization of right of use assets, partially offset by $1.2 million accretion of discounts on marketable securities. The net change in our operating assets and liabilities consisted primarily of cash inflows resulting from a $0.7 million increase in lease liabilities, $3.1 million increase in accounts payable, $3.0 million decrease in prepaid expenses and other assets and $2.7 million increase in accrued and other liabilities due to fees paid to CROs, CMOs and consultants in support of research and manufacturing activities, partially offset by cash outflows resulting from a $0.6 million increase in contract assets related to the Servier License Agreement.
Net cash used in operating activities was $60.3 million for the three months ended March 31, 2025. Cash used in operating activities was primarily due to the use of funds in our operations to develop our product candidates resulting in a net loss of $72.2 million, adjusted for net non-cash charges of $7.6 million and changes in net operating assets and liabilities of $4.2 million. Our non-cash charges consisted of $10.2 million in stock-based compensation, $0.6 million in depreciation and $0.5 million of the amortization of right of use assets, partially offset by $3.8 million accretion of discounts on marketable securities. The net change in our operating assets and liabilities consisted primarily due to cash inflows from $2.7 million in accounts payable, $2.9 million accrued and other liabilities in support of research and manufacturing activities and $0.6 million in lease liabilities, partially offset by outflows of $2.0 million in prepaid and other assets.
Cash Flows from Investing Activities
Net cash provided by investing activities was $119.0 million for the three months ended March 31, 2026, which consisted primarily of $42.6 million used to purchase marketable securities and $1.0 million used to purchase property and equipment, partially offset by $162.5 million provided by maturities of marketable securities.
Net cash provided by investing activities was $79.8 million for the three months ended March 31, 2025, which consisted primarily of $105.2 million used to purchase marketable securities and $1.3 million used to purchase property and equipment, offset by $186.4 million provided by maturities of marketable securities.
Cash Flows from Financing Activities
Net cash provided by financing activities was $1.2 million for the three months ended March 31, 2026, which consisted primarily of $1.2 million in proceeds from exercise of common stock options, offset by costs related to the at-the-market offering program.
Net cash provided by financing activities was $26.1 million for the three months ended March 31, 2025, which consisted primarily of $25.0 million in net proceeds from at-the-market offerings and $1.1 million in proceeds from exercise of common stock options.
Critical Accounting Policies
Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue recognized and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
For more detail on our critical accounting policies, refer to Note 2 in the unaudited interim condensed financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, and the notes to the financial statements appearing elsewhere in our Annual Report on Form 10-K filed with the SEC on February 17, 2026. For the three months ended March 31, 2026, there were no material changes to our critical accounting policies from those disclosed in our Annual Report on Form 10-K filed with the SEC on February 17, 2026.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Interest Rate Sensitivity
The market risk inherent in our financial instruments and in our financial position represents the potential loss arising from adverse changes in interest rates or exchange rates. As of March 31, 2026, we had cash, cash equivalents and marketable securities of approximately $972.9 million, consisting of bank deposits, interest-bearing money market funds, investments in U.S. government securities, commercial paper and corporate bonds, for which the fair value would be affected by changes in the general level of U.S. interest rates. Even if the fair value of certain government securities, commercial paper, and corporate bonds is affected by changes in U.S. interest rates, the principal of such instruments will be due to us upon maturity.
The primary objective of our investment activities is to preserve capital to fund our operations. We also seek to maximize income from our investments without assuming significant risk. Because our investments are primarily short-term in duration and our holdings in U.S. Treasury securities mature prior to our expected need for liquidity, we believe that our exposure to interest rate risk is not significant.
While we have seen higher inflation in the past few years, we do not believe that inflation or exchange rate fluctuations have had a significant impact on our results of operations for any periods presented herein.
Item 4. Controls and Procedures.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Management necessarily applies its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2026.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
