Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and notes thereto included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. In addition to historical information, this Annual Report contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to those set forth under the caption “Item 1A. Risk Factors.”
Overview
We are a clinical-stage biopharmaceutical company pioneering the research and development of GeneTAC® molecules, which are a novel class of small-molecule gene targeted chimera therapeutic candidates designed to be disease-modifying by addressing the underlying cause of diseases caused by inherited nucleotide repeat expansion mutations. Certain diseases caused by inherited nucleotide repeat expansion, such as Friedreich ataxia (FA) and fragile X syndrome, can result in reduced gene expression and deficiency of vital proteins; in other diseases, such as myotonic dystrophy type-1 (DM1), Fuchs endothelial corneal dystrophy (FECD), and Huntington's disease (HD), the nucleotide repeat expansions result in the generation of toxic gene products, often associated with pathological nuclear foci and broad splicing disruptions or the expression of mutant proteins that form toxic aggregates. Our GeneTAC® small molecules are designed to selectively target expanded genetic repeat sequences, modulate gene expression either by dialing up or down mRNA transcription, depending on the cause of the disease, and restore cellular health. As a platform, we believe that GeneTAC® molecules have broad potential applicability across currently unaddressed degenerative, monogenic nucleotide repeat expansion diseases affecting millions of individuals worldwide.
In preclinical studies for our lead program in FA, we have observed restoration of frataxin (FXN) levels in multiple cell types from FA patients and an in vivo murine model of FA using our FA GeneTAC® molecules. At doses that were observed to be well-tolerated in rodents and non-human primates (NHPs), FA GeneTAC® molecules achieved biodistribution to brain and heart, key organs affected by FA, at concentrations that exceeded those observed to restore FXN levels in FA patient cells. Further, and consistent with this favorable target-organ biodistribution, we observed increased endogenous FXN expression in the brain and heart in an animal model of FA after treatment with our FA GeneTAC® molecules. Previously, we reported clinical data for our lead FA GeneTAC® small molecule, DT-216, formulated as the prior DT-216 product candidate (DT-216P1) from a Phase 1 single-ascending dose (SAD) clinical trial in December 2022 and a Phase 1 multiple-ascending dose (MAD) clinical trial in August 2023. Both studies showed that DT-216 was generally well-tolerated and exhibited the ability to overcome the FXN transcription impairment that causes FA. Data from the Phase 1 MAD clinical trial for DT-216P1 suggests more sustained exposure to DT-216 is likely needed to achieve a more durable increase in FXN expression. We then shifted focus to developing DT-216 with a potentially improved formulation to enable more sustained exposure for the treatment of FA. These efforts resulted in a new product candidate, DT-216P2, which uses the same drug substance, DT-216. In nonclinical studies, we observed higher and more sustained DT-216 plasma levels after administration of DT-216P2 than was seen in studies with DT-216P1.
A Phase 1 SAD clinical trial of DT-216P2 in normal healthy volunteers to evaluate single doses using multiple routes of administration, specifically IV infusion and subcutaneous (SC) injection and infusion routes, has shown that DT-216P2 has been generally well-tolerated. Human plasma pharmacokinetics (PK) profiles of DT-216P2 were consistent with NHP data following both IV and SC single-dose administration and human PK data has demonstrated that DT-216P2 exhibited improved exposure and PK parameters compared to DT-216P1, including higher area under the curve (AUC) and sustained plasma levels at comparable doses.
We are conducting our RESTORE-FA (Reactivating Expression Suppressed Through Overcoming Repeat Expansion for FA) Phase 1/2 MAD clinical trial of DT-216P2. The RESTORE-FA trial is designed to evaluate the safety, tolerability, PK and pharmacodynamics (PD) of IV and SC of DT-216P2 in patients with FA. We anticipate providing an update from the RESTORE-FA trial on the effect of DT-216P2 on endogenous frataxin levels following 12 weeks of dosing in the second half of 2026.
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In June 2025, we received a clinical hold notice from the FDA regarding our IND application for DT-216P2. In December 2025, the clinical hold was lifted and we received clearance from the FDA to initiate clinical studies for DT-216P2.
In December 2022, we nominated our second GeneTAC® small molecule, DT-168, an eye drop for the treatment of FECD. When tested in vitro in FECD patient-derived corneal endothelial cells, our FECD GeneTAC® molecules led to robust reductions in the pathogenic nuclear RNA foci and corrected key mis-spliced transcripts to levels observed in control corneal endothelial cells from unaffected donors. DT-168 was well-tolerated and distribution of DT-168 was observed in and through the cornea in animal models after administration via eye drop. In addition, DT-168 has been evaluated in chronic toxicity studies of up to nine months in duration. We believe these preclinical data support the potential of our novel GeneTAC® small molecules to correct the most common underlying genetic cause of FECD. We are currently conducting an observational study in FECD to confirm disease characteristics and evaluate deterioration in the context of running a trial and to identify characteristics of FECD patients at risk of more rapid disease progression. We have achieved our enrollment goal for the observational study by recruiting and completing baseline assessments on approximately 250 FECD patients. Based on the baseline characteristics data, we have chosen approximately 100 patients for future follow-up visits. This will inform our clinical development efforts and we believe it could potentially increase the probability of DT-168 programmatic success.
In May 2025, we reported results from a completed Phase 1, double-masked, placebo-controlled, randomized, SAD/MAD clinical trial evaluating the safety, tolerability and systemic PK of DT-168 ophthalmic solution in normal healthy volunteers. DT-168 eye drops were well-tolerated in all participants with a maximum dose of two 0.5% drops twice-daily for seven days. There were no serious adverse events, no ocular adverse events (AEs) and no treatment discontinuations due to AEs in the trial. All observed AEs were deemed not related to DT-168 by the trial investigator. In parallel with the Phase 1 trial, we conducted reference range studies which showed consistently different splicing in the corneal endothelium between unaffected eye donors and surgical samples from mutant TCF4 FECD patients, supporting the potential for corneal endothelium biomarkers as a clinical proof-of-concept measure of drug activity. We are conducting a Phase 2 biomarker trial of DT-168 to evaluate safety, tolerability, and corneal endothelium biomarkers in patients with FECD. We anticipate reporting data from the Phase 2 biomarker trial in the second half of 2026.
In the fourth quarter of 2025, we announced DT-818 as our GeneTAC® small molecule development candidate for the treatment of DM1. In preclinical studies, DT-818 has demonstrated a potential best-in-disease profile for DM1, including a greater than 90% reduction in toxic RNA foci in DM1 patient cells, corresponding splicing correction and selective targeting of mutant DMPK. In an actin repeat mouse model of DM1 (HSALR mouse model), DT-818 treatment resulted in improved myotonia and foci reduction. In tissue distribution studies in NHPs, DT-818 levels were observed to be at expected pharmacologic levels in key target tissues at well-tolerated doses. In the fourth quarter of 2025, we obtained regulatory clearance to initiate clinical development of DT-818 and plan to begin dosing DM1 patients in a Phase 1 MAD trial in the first half of 2026. The study, with results anticipated in 2027, is expected to assess safety and correction of mis-splicing.
Our fourth program based on the GeneTAC® platform is focused on HD. We are currently conducting preclinical studies on promising HD GeneTAC® candidate molecules. We have observed reduced mutant huntingtin (mtHTT) mRNA and protein and preservation of wild type huntingtin (wtHTT) in HD patient cells after treatment with our HD GeneTAC® candidate molecules. In in vivo studies in zQ175DN mice, an animal model of HD, we observed a reduction of over 50% in mtHTT mRNA and protein in the brain striatum after eight weeks of systemic administration of our HD GeneTAC® candidate molecules. In the same study, wtHTT mRNA and protein levels were shown to be preserved after treatment with our HD GeneTAC® candidate molecules. We plan to continue to evaluate these HD candidate molecules in nonclinical studies. The final development candidate will be based on the molecules that perform favorably in relevant studies.
We have continued to make significant progress in advancing our GeneTAC® portfolio in preclinical studies to address other diseases and intend to declare additional product candidates as they progress towards the clinic.
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We believe the structure and mechanism of action of our GeneTAC® molecules may offer the disease-modifying potential of genomic therapeutics, while also offering broad tissue biodistribution, resolution of aberrant gene expression preserving endogenous regulatory control elements, and leveraging established manufacturing, regulatory, and distribution frameworks for small molecules.
To date, we have incurred net losses and negative cash flows from operations since our inception and as of December 31, 2025, had an accumulated deficit of $297.0 million. Our net losses have resulted primarily from costs incurred in connection with organizing and staffing our company, business planning, raising capital, developing and optimizing our technology platform, identifying potential product candidates, undertaking research and nonclinical studies, clinical development activities, engaging in manufacturing for our development programs, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales.
We expect our expenses and operating losses will increase substantially for the foreseeable future as we continue to conduct nonclinical studies and clinical trials for our product candidates, nominate additional product candidates from our discovery programs, and as we expand our clinical, regulatory, quality and manufacturing capabilities, incur significant commercialization expenses for marketing, sales, manufacturing and distribution, if we obtain marketing approval for any of our product candidates, and incur additional costs associated with operating as a public company.
We have funded our operations primarily through the sale of our common stock, convertible preferred stock, grant revenue and the issuance of convertible notes and debt. In March 2021, we completed our initial public offering in which we sold 13,800,000 shares of our common stock at $20.00 per share and received net proceeds, after underwriting discount and offering costs, of $254.3 million. During the year ended December 31, 2025, we sold an aggregate of 3,250,510 shares of our common stock pursuant to our “at-the-market” sales agreement (ATM Program) for aggregate net proceeds of approximately $24.8 million. Our cash, cash equivalents and investment securities balance as of December 31, 2025, was $219.8 million.
Components of Our Results of Operations
Research and Development Expenses
To date, our research and development expenses have consisted primarily of direct and indirect costs incurred in connection with the clinical development, nonclinical development and manufacturing of our product candidates and our discovery efforts. Research and development expenses are recognized as incurred.
Direct costs include:
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external research and development expenses incurred under agreements with contract research organizations, consultants and other vendors that conduct our clinical, nonclinical and discovery activities;
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expenses related to manufacturing our product candidates for clinical and nonclinical studies;
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laboratory supplies; and
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license fees.
Indirect costs include:
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personnel-related expenses, consisting of employee salaries, payroll taxes, bonuses, benefits and stock-based compensation charges for those individuals involved in research and development efforts; and
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facilities expenses which include allocated expenses for rent, depreciation and other overhead expenses, costs for general laboratory consumables and other indirect expenses.
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A significant portion of our research and development expenses have been direct costs, which we track by stage of development, nonclinical or clinical. However, we do not track our internal research and development expenses on a program specific basis, because these costs are deployed across multiple projects and, as such, are not separately classified.
We expect that our research and development expenses will increase for the foreseeable future as we continue the development of our FA, FECD, DM1 and HD programs and our other discovery programs, in particular as we advance our product candidates into and through clinical development. As of the date of this Annual Report on Form 10-K, we cannot reasonably determine with certainty the timing of initiation of future clinical trials, or the duration or completion costs of our current or future nonclinical studies and clinical programs, for our product candidates due to the inherently unpredictable nature of nonclinical and clinical development. Nonclinical and clinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future nonclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each product candidate’s commercial potential. We will need to raise substantial additional capital in the future. In addition, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
Our future research and development expenses may vary significantly based on a wide variety of factors such as:
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the number and scope, rate of progress, expense and results of our discovery, nonclinical and clinical development activities;
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the number of trials required for approval;
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the number of sites included in the trials;
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the countries in which the trials are conducted;
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the length of time required to enroll eligible patients;
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the number of patients that participate in the trials;
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the number of doses that patients receive;
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the drop-out or discontinuation rates of patients;
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potential additional safety monitoring requested by regulatory agencies;
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the scope and costs of designing and implementing drug product improvements (including alternate formulations) and manufacturing our product candidates;
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the duration of patient participation in the trials and follow-up;
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the phase of development of the product candidate;
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the efficacy and safety profile of the product candidate;
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the timing, receipt, and terms of any approvals from applicable regulatory authorities including FDA and non-U.S. regulators;
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maintaining a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates;
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establishing clinical or 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;
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significant and changing government regulation and regulatory guidance;
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the impact of any business interruptions to our operations or to those of the third parties with whom we work; and
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the extent to which we establish additional strategic collaborations or other arrangements.
A change in the outcome of any of these 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.
The process of conducting the necessary nonclinical and clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidates or any future candidates may be affected by a variety of factors. We may never succeed in achieving regulatory approval for any of our product candidates or any future candidates. Further, a number of factors, including those outside of our control, could adversely impact the timing and duration of our product candidates’ or any future candidates’ development, which could increase our research and development expenses.
General and Administrative
General and administrative expenses consist primarily of personnel-related expenses, including employee salaries, bonuses, benefits, and stock-based compensation charges, for personnel in executive and administrative functions. Other significant general and administrative expenses include insurance costs, legal fees relating to intellectual property and corporate matters and professional fees for accounting, tax and consulting services.
We anticipate that our general and administrative expenses will substantially increase in the foreseeable future as we add general and administrative personnel to support our expanded research and development activities and infrastructure and, if any of our product candidates or any future candidates receive marketing approval, commercialization activities, as well as to support our operations generally, including facility-related expenses and patent-related costs. We also expect to incur increased expenses related to accounting, audit, legal, regulatory and tax-related services, director and officer insurance premiums, board of director fees, investor and public relations, and other costs associated with operating as a public company.
Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024
The following table summarizes our operating expenses for the years ended December 31, 2025 and 2024 (in thousands):
Year Ended December 31,
Operating expenses:
Research and Development Expenses. Research and development expenses for our FA program increased in 2025 compared to 2024 primarily due to costs attributable to DT-216P2 clinical activities and costs for additional development activities.
Expenses for our FECD program increased in 2025 compared to 2024 primarily due to costs associated with DT-168 clinical activities and costs for additional development activities.
Other direct expenses increased in 2025 compared to 2024 primarily due to additional activities related to our early stage research programs. The increase in indirect expenses compared to the same period of the prior year was primarily due to employee related expenses including compensation, stock-based compensation and other support for our ongoing development programs.
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The following table summarizes our research and development expenses by program and by direct and indirect costs for the year ended December 31, 2025 and 2024 (in thousands):
Year Ended December 31,
General and Administrative Expenses. The increase in general and administrative expenses in 2025 compared to 2024 was primarily due to a $1.8 million increase in employee compensation, including $1.5 million in stock-based compensation expense, a $0.4 million one-time charge to deferred financing costs and $0.1 million in other expenses incurred during the year ended December 31, 2025 as compared to the same period in 2024.
Liquidity and Capital Resources
We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. Since our inception, we have funded our operations primarily through the sale of our common stock, convertible preferred stock, grant income and the issuance of convertible notes and notes payable. As of December 31, 2025, we had $219.8 million of combined cash, cash equivalents and investment securities, a decrease of $25.6 million from the $245.5 million of cash, cash equivalents and investment securities at December 31, 2024. The following table summarizes our cash flow activities (in thousands):
Year Ended December 31,
Net cash (used in) provided by:
Net increase (decrease) in cash and cash equivalents $ (5,707 ) $ 1,363
Operating Activities. The increase in our net cash used in operating activities was primarily due to the $20.1 million increase in net loss, partially offset by an increase in non-cash expenses and net working capital for the year ended December 31, 2025 compared to the same period of the prior year.
Investing Activities. The decrease in net cash provided by investing activities was primarily due to a net decrease in cash provided from the maturities and purchases of our investment securities during the year ended December 31, 2025 compared to the year ended December 31, 2024. We have classified our investment securities as available-for-sale and all investments are made in accordance with our investment policy.
Financing Activities. Net cash provided by financing activities for each of the years ended December 31, 2025 and 2024 was comprised of proceeds received from the issuance of common stock through our employee stock purchase plan and from employee stock option exercises. During the year ended December 31, 2025, we sold an aggregate of 3,250,510 shares of our common stock pursuant to the ATM Program for aggregate net proceeds of approximately $24.8 million.
Shelf Registration Statement
In May 2025, we filed a shelf registration statement on Form S-3 (the 2025 Shelf Registration Statement). The 2025 Shelf Registration Statement permits: (i) the offering, issuance and sale by us of up to a maximum aggregate offering price of $300.0 million of common stock, preferred stock, debt securities and warrants in one or more offerings and in any combination; and (ii) the offering, issuance and sale by us of up to a maximum aggregate offering price of $100.0 million of our common stock that may be issued and sold under our ATM Program. The $100.0 million of common stock that may be issued and sold under the ATM Program is included in the $300.0 million of securities that may be issued and sold under the 2025 Shelf Registration Statement. During the year ended
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December 31, 2025, we sold an aggregate of 3,250,510 shares of our common stock pursuant to the ATM Program for aggregate net proceeds of approximately $24.8 million.
We recorded a one-time non-cash charge to general and administrative expenses of approximately $0.4 million during the year ended December 31, 2025. The one-time charge was previously deferred in other assets on our balance sheets and related to deferred financing costs for our prior shelf registration statement on Form S-3.
Funding Requirements
Based on our current operating plan, we believe that our existing cash, cash equivalents and investment securities will be sufficient to fund our planned operating expenses and capital expenditure requirements for more than the next 12 months following the date of this Annual Report.
Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could expend our capital resources sooner than we expect. Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.
Our future capital requirements will depend on many factors, including:
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the scope, rate of progress and costs of our drug discovery, nonclinical development activities and clinical trials for any product candidates;
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the number and scope of clinical programs we decide to pursue;
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the scope and costs of designing and implementing drug product improvements (including alternate formulations) and manufacturing our product candidates and any future commercial manufacturing activities;
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the emergence of competing therapies and other adverse market developments;
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the cost, timing and outcome of seeking FDA, European Medicines Agency (EMA) and any other regulatory approvals for any product candidates;
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the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
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the terms and timing of establishing and maintaining strategic collaborations, licenses and other similar arrangements and the financial terms of such agreements;
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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;
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the costs associated with being a public company;
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the timing of any milestone and royalty payments to our current and future licensors;
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the extent to which we acquire or in-license other product candidates and technologies;
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our need and ability to retain key management and hire scientific, technical, business, and medical personnel;
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our implementation of additional internal systems and infrastructure, including operational, financial and management information systems;
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the costs associated with expanding our facilities or building out additional laboratory space; and
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the cost associated with commercialization activities for any of our current or future product candidates, if approved.
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Until such time, if ever, as we can generate substantial revenues from product sales to support our cost structure, we expect to finance our cash needs through public or private equity offerings, debt financings, or other capital sources which may include strategic collaborations, licensing arrangements or other arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Equity and debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through strategic collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and disruptions to and volatility in the credit and financial markets in the United States and worldwide as a result of macroeconomic factors, including geopolitical conflicts, inflation, tariffs, other fiscal and trade policy changes, bank failures, global supply chain and labor shortage challenges, and the effects of a health epidemic or pandemic. Because of the numerous risks and uncertainties associated with product development, we cannot predict the timing or amount of increased expenses and cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.
Contractual Obligations, Commitments and Material Cash Requirements
As of December 31, 2025, our base rent obligations under our lease was $1.6 million. In January 2026, our lease was further amended (the “Second Lease Amendment”). The Second Lease Amendment was approved by the Audit Committee of the Board in accordance with our Related Persons Transactions Policy and was effective upon the sale of the building on January 28, 2026. The Second Lease Amendment extends the lease term through December 2029 and reduces the base rent commencing on January 28, 2026, with an option to extend the lease term for a period of up to four years. We will pay approximately $3.4 million in future rent payments over the life of the Second Lease Amendment, which includes two months of rent abatement.
In February 2019, we entered into a Human Therapeutics Exclusive License Agreement (License Agreement) with the Wisconsin Alumni Research Foundation (WARF). Under the License Agreement, we licensed the exclusive, worldwide, royalty-bearing, sublicensable rights to certain WARF patents and the nonexclusive worldwide rights to certain know-how to develop and commercialize products for the prevention, diagnosis and treatment of disease. As consideration for the license, we agreed to pay an upfront fee of $0.3 million, which we immediately expensed as a research and development expense in our statements of operations as there was no alternative future use for the license.
For the year ended December 31, 2025, no payments were made pursuant to the License Agreement. In 2022, pursuant to the License Agreement, we paid $0.1 million to WARF upon the acceptance of an IND in the United States. We will be required to make further aggregate milestone payments of up to $17.5 million upon achievement of certain other regulatory and commercial milestones. We may also be required to pay royalties based on annual net product sales in the low single digits on our or our sublicensees’ net product sales on a country-by-country and product-by-product basis, and are subject to a minimum royalty of $0.1 million per calendar year upon first commercial product sale. Further, we may be required to pay sublicense fees in the mid-single digits percentage for fees, royalties or other payments earned from the granting of sublicenses to the WARF patents and know-how. The Company will recognize these milestone payments and royalties when paid or payable. There were no additional payments or royalties recorded through December 31, 2025.
We are responsible for reimbursing WARF for costs incurred in connection with prosecuting and maintaining patent rights that are specific to the License Agreement. Expenses recognized in connection with legal patent fees under this License Agreement were immaterial for each of the years ended December 31, 2025 and 2024.
We may terminate the License Agreement with 90 days written notice or for certain breaches of the agreement. WARF may terminate the License Agreement with 90 days written notice if first commercial sale does not occur before December 31, 2031. Unless terminated earlier by the parties, the term of the License Agreement will continue until the last licensed patent expires in all countries.
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In May 2024, we entered into a license agreement pursuant to which we received exclusive, worldwide, royalty-bearing, sublicensable rights to certain patents and technology to be used in the development and commercialization of certain products. We paid $0.2 million in license fees during the year ended December 31, 2024, which was expensed to research and development as there is no alternative future use for the license.
During the year ended December 31, 2025, we recorded $0.1 million to research and development expenses related to regulatory milestones, which is included in accrued expenses and other current liabilities as of December 31, 2025. There were no additional payments or royalties recorded through December 31, 2025. We may be obligated to make aggregate regulatory milestone payments of up to $0.8 million for each product incorporating licensed patent rights and pay a royalty on worldwide net sales on a product-by-product basis. The Company will recognize these milestone payments and royalties when paid or payable.
We may terminate the license agreement with 60 days’ written notice and each party may terminate the license agreement upon 30 days’ written notice for certain breaches of the agreement that remain uncured following 60 days’ notice to the other party of such breach. Unless terminated earlier by the parties, the term of the license agreement will continue until the last valid patent claim expires.
Additionally, we enter into agreements in the normal course of business with third-party vendors for nonclinical studies, clinical trial related services, research supplies and 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.
In addition to the contractual obligations above, we also expect to have future material cash requirements related to our ongoing and planned clinical trials, discovery and nonclinical programs, personnel and facilities-related expenses, external research and development and product development.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to research and development expenses. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies and estimates are described in more detail in Note 2 to our audited financial statements appearing in Part II, Item 8 of this Annual Report on Form 10-K, we believe the following accounting policies and estimates to be most critical to the preparation of our financial statements.
Accrued Research and Development Expenses
As part of the process of preparing our financial statements as of each balance sheet date, we are required to estimate our accrued expenses resulting from obligations under contracts with third-party vendors, contract research organizations (CROs) and consultants, in connection with research and development activities and conducting clinical trials. This process involves reviewing open contracts and purchase orders, communicating with our personnel and outside vendors to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. We make estimates of our accrued expenses as of each balance sheet date based on facts and circumstances known to us at that time. The accruals are dependent upon accurate reporting by CROs and other third-party vendors. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development expenses include the costs incurred for services performed by our vendors in connection with research and development activities and clinical trials for which we have not yet been invoiced. Since our inception, we have not experienced any material differences between accrued or prepaid costs and actual costs.
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We base our expenses related to research and development and clinical trial activities on our estimates of the services received and efforts expended pursuant to quotes and contracts with vendors that conduct these activities on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the research and development expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid expense accordingly. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made.
Recent Accounting Pronouncements
See Part II, Item 8, “Notes to Financial Statements — Note 2 — Basis of Presentation and Summary of Significant Accounting Policies” for a discussion of recent accounting pronouncements.
Other Information
Emerging Growth Company Status
We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act, as amended (JOBS Act), and we will remain an emerging growth company until December 31, 2026 (the fiscal year-end following the fifth anniversary of the completion of our initial public offering). For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved.
Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
We will remain an emerging growth company until December 31, 2026.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
As a "smaller reporting company," we are not required to provide the information otherwise required by this item.
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Item 8. Financial Statements and Supplementary Data.
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 129
Statements of Operations for the Years ended December 31, 2025 and 2024 131
Statements of Cash Flows for the Years ended December 31, 2025 and 2024 134
Notes to Financial Statements 135
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Design Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Design Therapeutics, Inc. (the Company) as of December 31, 2025 and 2024, the related statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We have served as the Company's auditor since 2020.
San Diego, California
March 9, 2026
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Design Therapeutics, Inc.
Balance Sheets
(in thousands, except share and par value data)
December 31, December 31,
Assets
Current assets:
Prepaid expenses and other current assets 3,939 2,563
Property and equipment, net 981 1,410
Right-of-use asset, related party 1,438 2,216
Other assets — 427
Liabilities and Stockholders' Equity
Current liabilities:
Operating lease liability, net, related party 645 1,534
Commitments and contingencies (See Note 11)
Stockholders' equity:
Accumulated other comprehensive income 403 475
Total liabilities and stockholders' equity $ 226,203 $ 252,093
The accompanying notes are an integral part of these financial statements.
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Design Therapeutics, Inc.
Statements of Operations
(in thousands, except share and per share data)
Year Ended December 31,
Operating expenses:
Net loss per share, basic and diluted $ (1.22 ) $ (0.88 )
The accompanying notes are an integral part of these financial statements.
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Design Therapeutics, Inc.
Statements of Comprehensive Loss
(in thousands, except share and per share data)
Year Ended December 31,
Other comprehensive loss:
Unrealized (loss) gain on available-for-sale securities (72 ) 413
The accompanying notes are an integral part of these financial statements.
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Design Therapeutics, Inc.
Statements of Stockholders’ Equity
(in thousands, except share data)
Accumulated
Additional Other Total
Common Stock Paid-in Comprehensive Accumulated Stockholders’
Shares Amount Capital (Loss) Income Deficit Equity
Unrealized gain on investments — — — 413 — 413
Unrealized loss on investments — — — (72 ) — (72 )
The accompanying notes are an integral part of these financial statements.
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Design Therapeutics, Inc.
Statements of Cash Flows
(in thousands)
Year Ended December 31,
Cash flows from operating activities
Reconciliation of net loss to net cash used in operating activities:
Amortization of premiums on investment securities, net (3,253 ) (6,198 )
Non-cash lease expense (21 ) 6
Deferred financing costs 427 —
Change in operating assets and liabilities:
Prepaid expense and other assets (1,376 ) 226
Accounts payable and other liabilities 4,486 (1,219 )
Net cash used in operating activities (54,358 ) (43,105 )
Cash flows from investing activities
Proceeds from maturities of investment securities 314,885 274,470
Purchases of property and equipment (193 ) (340 )
Net cash provided by investing activities 22,913 43,955
Cash flows from financing activities
Proceeds from the exercise of stock options 242 36
Issuance of common stock through employee stock purchase plan 649 477
Net cash provided by financing activities 25,738 513
Net decrease in cash and cash equivalents (5,707 ) 1,363
Cash and cash equivalents at beginning of period 22,563 21,200
Cash and cash equivalents at end of period $ 16,856 $ 22,563
Supplemental disclosures
Issuance costs included in accrued expenses $ 17 $ —
The accompanying notes are an integral part of these financial statements.
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Design Therapeutics, Inc.
Notes to Financial Statements
1. Organization
Design Therapeutics, Inc. (the “Company”) was incorporated in Delaware in December 2017 and is based in Carlsbad, California. The Company is a clinical-stage biopharmaceutical company pioneering the research and development of GeneTAC® molecules, which are a novel class of small-molecule gene targeted chimera therapeutic candidates designed to be disease-modifying by addressing the underlying cause of diseases caused by inherited nucleotide repeat expansion mutations. The Company’s lead product candidate is in Friedreich ataxia (“FA”), its second product candidate is in Fuchs endothelial corneal dystrophy (“FECD”), its third product candidate is in myotonic dystrophy type-1 (DM1), and it is also advancing GeneTAC® programs to address other diseases.
Liquidity and Capital Resources
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net operating losses since inception and had an accumulated deficit of $297.0 million as of December 31, 2025. The Company had cash, cash equivalents and investment securities of $219.8 million as of December 31, 2025, and has not generated positive cash flow from operations.
Management expects to incur net losses for the foreseeable future. There can be no assurance that the Company will ever earn revenues or achieve profitability, or if achieved, that they will be sustained on a continuing basis. In addition, the research, product development, and clinical development activities as well as the commercialization of the Company’s products, if approved, will require significant additional financing. The Company may be unable to secure such financing when needed, or if available, such financings may be under terms that are unfavorable to the Company or the current stockholders. If the Company is unable to raise additional funds when needed, it may be required to delay, reduce the scope of, or eliminate development programs, which may adversely affect its business and operations. The Company’s currently available cash, cash equivalents and investment securities as of December 31, 2025 are sufficient to meet its anticipated cash requirements for more than 12 months following the date the financial statements are issued.
2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Use of Estimates
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and anticipated actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.
Segment Reporting
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The Company operates in one operating and reportable segment, Design Therapeutics, Inc., which is focused on utilizing the Company’s proprietary GeneTAC® platform to design and develop therapeutic candidates for inherited diseases driven by nucleotide repeat expansion.
The Company’s CODM is its Chief Executive Officer. The CODM manages the Company's operations as one segment for the purposes of assessing performance and making operating decisions. The Company’s management of segment profit or loss and assets are evaluated at the consolidated level, and it manages its research activities on a consolidated basis.
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Concentrations of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and investment securities. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial position of the depository institution in which those deposits are held. Additionally, the Company has established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities at the date of acquisition of three months or less to be cash equivalents. These investments may include money market accounts, money market funds, U.S. Government agency securities, corporate debt securities and commercial paper. The carrying amounts approximate fair value due to the short maturities of these instruments. The Company’s cash reserves are in a readily available checking account.
Investment Securities
Investments in securities with maturities at the date of acquisition of more than three months are considered marketable securities. These investments may include money market accounts, money market funds, certificates of deposits, U.S. Treasury securities and high quality, marketable debt instruments of corporations and government sponsored enterprises. The Company determines the appropriate classification of its investments at the time of acquisition and reevaluates such determination at each balance sheet date. The Company has classified its investment holdings as available-for-sale, as the sale of such securities may be required prior to maturity to implement management strategies. Further, the Company classifies its available-for-sale investment securities, including those with maturities beyond one year, as current assets on its balance sheets based on the highly liquid nature of the securities and because these investments are considered available for use in current operations. The Company’s investment policy sets minimum credit quality criteria and maximum maturity limits on its investments to provide for safety of principle, liquidity and a reasonable rate of return. Available-for-sale securities are recorded at fair value, based on current market valuations. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and are reported as a separate component of other comprehensive income (loss) until realized. Allowances for credit losses are reported on the balance sheet, if any.
The cost of available-for-sale investment securities is adjusted for amortization of premiums and accretion of discounts until the securities mature. Such amortization and accretion is included in other income, net on the statements of operations. Realized gains and losses, if any, are also included in other income, net on the statement of operations and are derived using the specific identification method for determining the cost of the securities sold. During the periods presented, no realized gains or losses were recorded on the sale of investment securities and no impairments to reduce the value of any security was taken. See Note 5 for further discussion.
Property and Equipment, Net
Property and equipment generally consist of laboratory equipment, computer equipment and software, and furniture and fixtures and are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally three years to five years). Leasehold improvements are recorded at cost and are depreciated on a straight-line basis over the lesser of the remaining term of the related lease or the estimated useful lives of the assets. Repairs and maintenance costs are charged as incurred.
An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. The Company has not recognized any impairment losses for the years ended December 31, 2025 and 2024.
Leases
Leases consist of an operating lease the Company has related to its facility. At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term. The expected lease term includes noncancelable lease periods and, when applicable, periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option, as well as periods covered by an option
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to terminate the lease if the Company is reasonably certain not to exercise the option. For those leases where the implicit rate is not provided, the Company calculates the present value of lease payments using an incremental borrowing rate. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. At the lease commencement date, the Company records a corresponding right-of-use (“ROU”) lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. The Company accounts for lease and non-lease components as a single lease component. The Company may enter into leases with an initial term of 12 months or less (“Short-Term Leases”). For any Short-Term leases, the Company records the rent expense on a straight-line basis and ROU asset and lease obligations are not recognized.
After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement and (ii) the ROU asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term.
Research and Development Expenses
Research and development expenses are charged to expense in the period in which they are incurred and are comprised of the following types of costs incurred in connection with research and development activities and clinical trials: lab supplies and outside services incurred in connection with the Company’s early discovery efforts, contract services for clinical trials and related clinical manufacturing costs, salaries and benefits including share-based compensation expense, costs for allocated facilities and depreciation of equipment.
Patent Costs
Costs related to filing and pursuing patent applications are recorded as general and administrative expenses in the statements of operations and expensed as incurred since recoverability of such expenditures is uncertain.
Stock-Based Compensation
Stock options and restricted stock issued pursuant to the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) and 2018 Equity Incentive Plan (the “2018 Plan”), and option features associated with the rights to purchase shares pursuant to the Company’s 2021 Employee Stock Purchase Plan (the “ESPP”) are valued using the Black-Scholes option pricing model on the date of grant or subscription period. This option pricing model involves a number of estimates, including the expected lives of the stock options or subscription period, the Company's anticipated stock volatility and interest rates. The Company recognizes the expense for equity awards on a straight-line basis over the requisite service periods of the awards or the number of shares estimated to be issued pursuant to the ESPP. Forfeitures are recognized as they occur.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made.
The accounting guidance for uncertainty in income taxes prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities based on the technical merits of the position.
On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was signed into law. The Act reinstates and makes permanent 100% first-year bonus depreciation under Section 168(k) for qualified property acquired and placed in
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service after January 19, 2025. Additionally, the Act permanently allows immediate expensing of domestic research and experimentation expenditures under Section 174 for tax years beginning after December 31, 2024. The Company has reflected the effects of the Act in its income tax provision in accordance with ASC Topic 740.
Accounting Standards Updates
In December 2023, the FASB issued ASU 2023-09, ASC Topic 740, Income Taxes: Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted the ASU retrospectively for the period ending December 31, 2025, and it affects only the Company's disclosures and does not impact the Company's results of operations or financial condition.
In November 2024, the FASB issued Accounting Standard Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to enhance transparency into the nature and function of expenses. The amendments require that on an annual and interim basis, entities disclose disaggregated operating expense information about specific expense categories. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the amendments may be applied either prospectively or retrospectively. The Company is currently evaluating the impact that the updated standard will have on its financial statement disclosures.
3. Net Loss Per Share
Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents are comprised of stock options outstanding under the Company’s equity incentive plans and employee stock purchase rights under the Company’s ESPP, as applicable. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company's net loss position.
The following table sets forth the outstanding, potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive:
4. Fair Value Measurements
Accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets.
Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
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The carrying value of the Company’s cash, accounts payable and accrued liabilities are considered to be representative of their respective fair values due to the short-term nature of those instruments. The Company’s investment securities, which may include money market accounts, money market funds, certificates of deposits, U.S. Treasury securities, and high quality, marketable debt instruments of corporations and government sponsored enterprises, are measured at fair value in accordance with the fair value hierarchy. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis and no transfers between levels have occurred during the periods presented.
The following table summarizes the Company’s financial instruments measured at fair value on a recurring basis at December 31, 2025 and 2024 (in thousands):
Fair Value Measurement at End of Period Using:
Quoted Prices
In Active
Markets Significant
For Other Significant
Identical Observable Unobservable
Assets Inputs Inputs
Total (Level 1) (Level 2) (Level 3)
Assets:
U.S. Government agency securities 14,991 — 14,991 —
Assets:
U.S. Government agency securities 22,488 — 22,488 —
(1)
Included in cash and cash equivalents on the accompanying balance sheets.
Interest bearing money market accounts and certificates of deposit are valued at amortized cost, which approximates fair value. The Company obtains the fair value of its available-for-sale debt securities from a professional pricing service. Level 2 securities are valued using quoted market prices for similar instruments, non-binding market prices that are corroborated by observable market data and include our investments in marketable debt instruments of government sponsored enterprises.
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5. Investment Securities
The Company’s investment policy defines allowable investment securities and establishes guidelines relating to credit quality, diversification, and maturities of its investments to preserve principal and maintain liquidity. The Company’s investment securities consisted of the following at December 31, 2025 and 2024 (in thousands):
Estimated
Allowance Fair
Amortized Unrealized Unrealized for Credit Market
Maturity Cost Gains Losses Losses Value
U.S. Government agency securities Greater than 1 year 15,000 2 (11 ) — 14,991
Estimated
Allowance Fair
Amortized Unrealized Unrealized for Credit Market
Maturity Cost Gains Losses Losses Value
Certificates of deposits Within 1 year $ 2,884 $ 14 $ — $ — $ 2,898
U.S. Government agency securities Within 1 year 7,500 — (7 ) — 7,493
U.S. Government agency securities Greater than 1 year 14,999 1 (5 ) — 14,995
The Company reviews its investments at each reporting date to identify and evaluate whether a decline in fair value below the amortized cost basis of available-for-sale securities is due to credit-related factors and determines if such unrealized losses are the result of credit losses that require impairment. Factors considered in determining whether an unrealized loss is the result of a credit loss or other factors include the extent to which the fair value is less than the cost basis, any changes to the rating of the security by a rating agency, the financial condition and near-term prospects of the issuer, any historical failure of the issuer to make scheduled interest or principal payments, any adverse legal or regulatory events affecting the issuer or issuer’s industry, any significant deterioration in economic condition and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.
There were 4 and 12 securities in an unrealized loss position at December 31, 2025 and 2024, respectively. The Company determined that unrealized losses on its available-for-sale investment securities were primarily attributable to changes in interest rates. Each security remained at a high credit quality rating. Further, there had been no adverse conditions noted for any of the issuers and the Company does not intend to sell any of the securities prior to maturity. As such, an allowance for credit losses has not been recognized as of December 31, 2025 or 2024.
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The following tables present available-for-sale investments that were in an unrealized loss position as of December 31, 2025 and 2024, aggregated by security type and length of time in a continuous unrealized loss position (in thousands):
Less than 12 Months 12 Months or Greater Total
Estimated Estimated Estimated
Fair Fair Fair
Market Unrealized Market Unrealized Market Unrealized
Value Losses Value Losses Value Losses
U.S. Government agency securities $ 9,989 $ (11 ) $ — $ — $ 9,989 $ (11 )
Less than 12 Months 12 Months or Greater Total
Estimated Estimated Estimated
Fair Fair Fair
Market Unrealized Market Unrealized Market Unrealized
Value Losses Value Losses Value Losses
Certificates of deposits $ — $ — $ 490 $ — $ 490 $ —
Accrued interest receivable on available-for-sale investment securities, included in “Prepaid expenses and other current assets” on the Company’s balance sheets, was $1.7 million and $1.3 million at December 31, 2025 and 2024, respectively.
6. Balance Sheet Details
Prepaid expenses and other current assets consisted of the following (in thousands):
Property and equipment consisted of the following (in thousands):
Computer equipment and software 102 102
Less accumulated depreciation (2,264 ) (1,655 )
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Accrued expenses and other current liabilities consisted of the following (in thousands):
Accrued research and development costs 4,583 1,220
Current portion of operating lease liability, related party 890 800
7. Leases
In February 2021, the Company entered into a lease agreement with Crossing Holdings, LLC to rent office space (the “Lease”). Dr. Pratik Shah and entities that he controls are the sole members of Crossing Holdings, LLC. The lease commenced in September 2021 with a term of 72 months and an option to extend the lease term for a period of three years. Lease payments are subject to annual increases of 3% and the Company is responsible for its share of operating expenses and taxes, which are expensed as incurred. In March 2022, the Company entered into an amendment (the “Lease Amendment”) to its Lease with Crossing Holdings, LLC to rent additional office space in the same building. The Lease Amendment commenced in June 2022 and the term of the additional premises under the Lease Amendment coincides with the term of the Lease and ends in 2027. As of December 31, 2025, the weighed-average remaining lease term for the Company's leases was 1.7 years and the weighted-average discount rate used to determine the right-of-use asset and corresponding operating lease liability was 7.37%.
Maturities of operating lease liabilities, related party as of December 31, 2025 are as follows (in thousands):
Total future minimum lease payments 1,636
Less: Present value adjustment (101 )
Operating lease liabilities, related party $ 1,535
Rent expense was $0.9 million for each of the years ended December 31, 2025 and 2024.
In January 2026, the Lease was further amended (the “Second Lease Amendment”). The Second Lease Amendment was approved by the Audit Committee of the Board in accordance with the Company’s Related Persons Transactions Policy and was effective upon the sale of the building on January 28, 2026. The Second Lease Amendment extends the lease term through December 2029 and reduces the base rent commencing on January 28, 2026, with an option to extend the lease term for a period of up to four years. The Company will pay approximately $3.4 million in future rent payments over the life of the Second Lease Amendment, which includes two months of rent abatement.
8. Stockholders’ Equity
Shelf Registration Statement
In May 2025, the Company filed a shelf registration statement on Form S-3, which became effective in May 2025 (the “2025 Shelf Registration Statement”). The 2025 Shelf Registration Statement permits: (i) the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $300.0 million of common stock, preferred stock, debt securities and warrants in one or more offerings and in any combination; and (ii) the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $100.0 million of the Company's common stock that may be issued and sold under an "at-the-market” sales agreement ( the “ATM Program”). The $100.0 million of common stock that may be issued and sold under the ATM Program is included in the $300.0 million of securities that may be issued and sold under the 2025 Shelf Registration Statement. During the year ended December 31, 2025, the Company sold an aggregate of 3,250,510 shares of its common stock pursuant to the ATM Program for aggregate net proceeds of approximately $24.8 million.
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The Company recorded a one-time non-cash charge to general and administrative expenses of approximately $0.4 million during the year ended December 31, 2025. The one-time charge was previously deferred in other assets on the Company's balance sheets and related to deferred financing costs for the Company’s prior shelf registration statement on Form S-3.
9. Stock-Based Compensation
Equity Incentive Award Plans
Under the Company's 2021 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock awards, performance cash awards and other forms of stock awards to employees, directors and consultants, including employees and consultants of the Company’s affiliates. As of December 31, 2025, the Company had 5,459,041 shares available for grant under the 2021 Plan. In addition, the number of shares of common stock available for issuance under the 2021 Plan automatically increases on January 1 of each calendar year through January 1, 2031 in an amount equal to 5% of the total number of shares outstanding of the Company’s common stock on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by the Company’s board of directors. Effective January 1, 2026, the number of shares available for future issuance was increased by3,019,902 shares so that the total available for future issuance as of January 1, 2026 was 8,478,943 shares.
In August 2023, the Company granted two stock options, each to purchase up to 525,000 shares of the Company's common stock, which contain both time-based and performance-based conditions. The options have a weighted average grant date fair value of $1.64 per share. Stock-based compensation expense for awards with performance conditions is recognized straight-line over the expected performance period when the achievement of such performance conditions is determined to be probable. During the fourth quarter of 2025, the Company determined that the performance-based conditions were achieved. The Company recorded approximately $0.7 million and $0.2 million in related general and administrative stock-based compensation expense during the years ended December 31, 2025 and 2024, respectively.
A summary of the Company's stock option activity for the periods presented was as follows (in thousands, except year, share and per share data):
Weighted-
Average
Number of Weighted- Remaining
Options and Average Contractual Aggregate
Awards Exercise Term Intrinsic
Outstanding Price (Years) Value
The weighted-average grant date fair value per share of options granted was $4.29 and $2.11for the years ended December 31, 2025 and 2024, respectively. The aggregate intrinsic value of options exercised was $0.3 million and $0.1 million for the years ended December 31, 2025 and 2024, respectively, and the cash received from options exercised was $0.2 million and $36,000 for the years ended December 31, 2025 and 2024, respectively.
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The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of stock option grants for the periods presented were as follows:
Year EndedDecember 31,
Expected term (years) 6.34 6.11
Expected volatility 85.0 % 87.0 %
Risk-free interest rate 4.30 % 3.93 %
Expected dividend yield 0.0 % 0.0 %
The Company determines the assumptions used in the option pricing model in the following manner:
Expected Term—The expected term of stock options represents the period of time that the awards are expected to be outstanding. Because the Company does not have sufficient historical exercise behavior, it determines the expected term assumption using the simplified method for employees and board members, which calculates the expected term as the average time-to-vesting and the contractual life of the award. The expected term for non-employees is generally the contractual term.
Expected Volatility—Given the Company's limited historical stock price volatility data, the expected volatility assumption was determined by examining the historical volatilities of a group of industry peers whose share prices are publicly available.
Risk-Free Interest Rate—The risk-free rate assumption is based on the U.S. Treasury yield in effect at the time of the grant with maturities consistent with the expected term of the awards.
Expected Dividend Yield—The expected dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not intend to pay dividends and, therefore, uses an expected dividend yield of zero.
2021 Employee Stock Purchase Plan
The Company's ESPP permits eligible employees who elect to participate in an offering under the ESPP to have up to 15% of their eligible earnings withheld, subject to certain limitations, to purchase shares of common stock pursuant to the ESPP. The price of common stock purchased under the ESPP is equal to 85% of the lower of the fair market value of the common stock at the commencement date of each offering period or the relevant date of purchase.
As of December 31, 2025, the Company had issued 697,652 shares of the Company's common stock under the ESPP and had 2,150,876 shares available for future issuance. In addition, the number of shares of common stock available for issuance under the ESPP automatically increases on January 1 of each calendar year through January 1, 2031 in an amount equal to the lesser of (i) 1% of the total number of shares outstanding of the Company’s common stock on the last day of the calendar month before the date of each automatic increase and (ii) 1,200,000 shares; provided that before the date of any such increase, the Company’s board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii). Effective January 1, 2026, the number of shares available for issuance was increased by603,980 shares so that the total available for future issuance as of January 1, 2026 was 2,754,856 shares.
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In determining the grant date fair value of shares to be issued under the ESPP, the Company uses the Black-Scholes option pricing model. The Black-Scholes inputs are determined in the same manner as for stock option awards. The weighted average inputs used for the ESPP for the year ended December 31, 2025, were as follows:
Year EndedDecember 31,
Expected term (years) 1.35 1.39
Expected volatility 89.7 % 88.9 %
Risk-free interest rate 3.71 % 4.82 %
Expected dividend yield 0.0 % 0.0 %
Stock-based compensation expense for all equity awards has been reported in the statements of operations and comprehensive loss as follows (in thousands):
Year EndedDecember 31,
As of December 31, 2025, unrecognized compensation expense related to unvested stock option awards was $20.7 million, which is expected to be recognized in expense over a weighted-average period of 1.3 years. As of December 31, 2025, unrecognized compensation expense related to ESPP rights was $0.6 million, which is expected to be recognized over a remaining period of 1.9 years.
10. Income Taxes
The Company is subject to taxation in the United States and various state jurisdictions. All of the Company’s tax years are subject to examination by federal and state tax authorities due to the carryforward of unutilized net operating losses and research and development credits. The Company’s policy is to recognize interest and penalties related to income tax matters as tax expense. The Company had no accrued interest or penalties related to income tax matters on its balance sheets at December 31, 2025 or 2024, and has not recognized interest or penalties in its statements of operations and comprehensive loss for the years ended December 31, 2025 and 2024, respectively. Further, the Company is not currently under examination by any federal, state or local tax authority.
At December 31, 2025, the Company had federal and state net operating loss (“NOL”) carryforwards of $145.5 million and $13.1 million, respectively. Federal NOL carryforwards totaling $0.1 million begin to expire in 2037, unless previously utilized. The federal and certain state NOL carryforwards of $145.5 million and $1.5 million, respectively, generated after 2017, may be carried forward indefinitely but can only be utilized to offset 80% of future taxable income. The remaining state NOL carryforwards totaling $11.6 million begin to expire in 2037, unless previously utilized. In addition, the Company has federal and state research and development (“R&D”) credit carryforwards totaling $11.0 million and $4.2 million, respectively. The federal R&D credit carryforwards will begin to expire in 2038 unless previously utilized. The state R&D credit carryforwards do not expire.
Utilization of the Company’s NOL and R&D credit carryforwards may be subject to substantial annual limitations in the event a cumulative ownership change has occurred, or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). In general, an “ownership change,” as defined by Section 382 of the Code, results from a transaction, or series of transactions over a three-year period, resulting in an ownership change of more than 50% of the outstanding common stock of a company by certain stockholders or public groups. Such an ownership change may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. The Company completed a study to assess whether an ownership change had occurred from the Company's formation through December 31, 2021. Based upon the study, the Company determined that it had experienced multiple ownership changes during 2020, causing the annual utilization of the NOL and credit carryforwards to be limited. The
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Company does not believe any of the NOL and credit carryforwards generated through December 31, 2021 would expire solely as a result of annual limitations on the utilization of those attributes. If ownership changes occurred after December 31, 2021 or occur in the future, the amount of remaining tax attribute carryforwards available to offset taxable income and income tax expense in future years may be restricted or eliminated. If eliminated, the related asset would be removed from deferred tax assets with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company’s effective tax rate.
The Company has not recorded a current or deferred tax expense or benefit nor has it paid cash taxes to any jurisdiction for the years ended December 31, 2025 or 2024. The net losses for the years ended December 31, 2025 and 2024 were generated solely in the United States.
Significant components of the Company's net deferred tax assets at December 31, 2025 and 2024 were as follows (in thousands):
Deferred tax assets:
Total deferred tax assets 546 836
Deferred tax liabilities:
Right of use asset (305 ) (467 )
Total deferred tax liabilities (546 ) (836 )
Net deferred tax assets $ — $ —
A reconciliation of the Company's income tax expense (benefit) to the amount computed by applying the federal statutory income tax rate for the periods presented were as follows (in thousands):
Year ended December 31,
Tax credits:
Nontaxable or nondeductible items:
Changes in Unrecognized Tax Benefits: 474 (0.68 ) % 452 (0.91 ) %
* State taxes in California comprise the majority (greater than 50 percent) of the tax effect in this category.
The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination by tax authorities. The Company does not expect that there will be a
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significant change in the unrecognized tax benefits over the next twelve months. Further, due to the existence of the valuation allowance, future changes in the Company's unrecognized tax benefits will not impact the effective tax rate.
The following table summarizes the changes to the Company's unrecognized tax benefits for the periods presented (in thousands):
Balance at beginning of period $ 2,289 $ 1,799
Increases (decreases) related to prior year tax positions — (3 )
Increases to current year tax positions 523 493
11. Commitments and Contingencies
Contingencies
From time to time, the Company may become subject to claims or suits arising in the ordinary course of business. The Company accrues a liability for such matters when it is probable that the future expenditures will be made and such expenditures can be reasonably estimated. The Company had no such contingent liabilities as of December 31, 2025 or December 31, 2024.
12. License Agreements
In May 2024, the Company entered into a license agreement pursuant to which it received exclusive, worldwide, royalty-bearing, sublicensable rights to certain patents and technology to be used in the development and commercialization of certain products. The Company paid $0.2 million in license fees during the year ended December 31, 2024, which was expensed to research and development as there is no alternative future use for the license.
During the year ended December 31, 2025, the Company recorded $0.1 million to research and development expenses related to regulatory milestones, which is included in accrued expenses and other current liabilities as of December 31, 2025. There were no additional payments or royalties recorded through December 31, 2025. The Company may be obligated to make aggregate regulatory milestone payments of up to $0.8 million for each product incorporating licensed patent rights and pay a royalty on worldwide net sales on a product-by-product basis. The Company will recognize these milestone payments and royalties when paid or payable.
The Company may terminate the license agreement with 60 days’ written notice and each party may terminate the license agreement upon 30 days’ written notice for certain breaches of the agreement that remain uncured following 60 days’ notice to the other party of such breach. Unless terminated earlier by the parties, the term of the license agreement will continue until the last valid patent claim expires.
In February 2019, the Company entered into a Human Therapeutics Exclusive License Agreement (the “License Agreement”) with the Wisconsin Alumni Research Foundation (“WARF”). Under the License Agreement, the Company licensed the exclusive, worldwide, royalty-bearing, sublicensable rights to certain WARF patents and the nonexclusive worldwide rights to certain know-how to develop and commercialize products for the prevention, diagnosis and treatment of disease. As consideration for the license, the Company agreed to pay an upfront fee of $0.3 million, which the Company immediately expensed as research and development expense in its statements of operations as there was no alternative future use for the license.
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In 2022, pursuant to the License Agreement, the Company paid $0.1 million upon the acceptance of an Investigational New Drug Application (“IND”) in the United States. The Company will be required to make further aggregate milestone payments of up to $17.5 million upon achievement of certain other regulatory and commercial milestones. The Company may also be required to pay royalties based on annual net product sales in the low single digits on its or its sublicensees’ net product sales on a country-by-country and product-by-product basis, and is subject to a minimum royalty of $0.1 million per calendar year upon first commercial product sale. Further, the Company may be required to pay sublicense fees in the mid-single digits percentage for fees, royalties or other payments earned from the granting of sublicenses to the WARF patents and know-how. The Company will recognize these milestone payments and royalties when paid or payable. There were no additional payments or royalties recorded through December 31, 2025.
The Company is responsible for reimbursing WARF for costs incurred in connection with prosecuting and maintaining patent rights that are specific to the License Agreement. Expenses recognized in connection with legal patent fees under this License Agreement were immaterial for the years ended December 31, 2025 and 2024.
The Company may terminate the License Agreement with 90 days written notice or for certain breaches of the agreement. WARF may terminate the License Agreement with 90 days written notice if first commercial sale does not occur before December 31, 2031. Unless terminated earlier by the parties, the term of the License Agreement will continue until the last licensed patent expires in all countries.
13. Related Party Transactions
Lease Agreement
In February 2021, the Company entered into the Lease with Crossing Holdings, LLC to rent laboratory and office space. Dr. Pratik Shah and entities that he controls are the sole members of Crossing Holdings, LLC. In March 2022, the Company entered into the Lease Amendment with Crossing Holdings, LLC amending the Lease for additional space in the same building. In January 2026, the Lease was further amended via the Second Lease Amendment which was approved by the Audit Committee of the Board of Directors of the Company in accordance with the Company’s Related Persons Transactions Policy, upon the sale of the leased premises to TREF V Hidden Valley Owner LLC. Following the effectiveness of the Second Lease Amendment, neither Crossing Holdings, LLC nor Dr. Pratik Shah has any personal interest in the Lease.
Rent and related operating expenses recognized by the Company under the Lease and Lease Amendment during the periods presented were as follows (in thousands):
Year EndedDecember 31,
Research and development $ 872 $ 848
General and administrative 288 297
Consulting Agreements
In January 2019, the Company entered into an agreement with the Marlinspike Group, LLC (“Marlinspike Group”) for research support, management, and business consulting services (the “2019 Consulting Agreement”). Further, Marlinspike Group provides the use of its office space in Carlsbad, California to the Company on an as-available basis from time to time pursuant to the agreement. The Company’s Chief Executive Officer and Chairperson of its board of directors is an executive officer of Marlinspike Group.
In March 2020, the 2019 Consulting Agreement was terminated and replaced with an amended consulting agreement (the “2020 Consulting Agreement”), which provides for the similar services and use of office space for a monthly fee of $20,000. Pursuant to the terms of the 2020 Consulting Agreement, it shall remain in effect until otherwise terminated. Termination may occur at any time upon mutual agreement or unilaterally upon 30 days’ written notice. If the Company unilaterally terminates the 2020 Consulting Agreement for any reason other than
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cause, it would be subject to a $240,000 termination fee. There has been no termination and the Company cannot determine when, or if, such a termination will occur and hence has not recorded a liability for the fee.
Expenses recognized by the Company under the 2020 Consulting Agreement during the periods presented were as follows (in thousands):
Year EndedDecember 31,
General and administrative $ 240 $ 240
14. Segment Information
The Company manages the business activities at the consolidated level and operates in one operating and reportable segment. The Company’s CODM is its chief executive officer. The CODM primarily utilizes long-range financial projections and cash runway in order to allocate resources and to assess performance. As of December 31, 2025, the Company has no revenue and all the Company’s long-lived assets were located within the United States. The CODM is regularly provided with the following significant segment expenses:
Year ended December 31,
Less:
(a) Other segment items included in Segment net loss includes professional services, consulting and other outside services expenses, depreciation expense, insurance, facilities, and other overhead items.
15. Employee Benefit Plans
The Company maintains a retirement plan, which is qualified under section 401(k) of the Code. The plan allows eligible employees to defer, at the employee's discretion, pretax compensation up to the IRS annual limits. The Company elected to make matching contributions of $0.5 million and $0.4 million to the plan for the years ended December 31, 2025 and 2024, respectively.
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management with the participation of our Chief Executive Officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and our principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is designed by, or under the supervision of, our Chief Executive Officer and principal financial officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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.
Management has assessed the effectiveness of our internal control over financial reporting based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013 framework). Based on our evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2025.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this item and not set forth below will be set forth in the sections headed Election of Directors, Executive Officers and Information Regarding the Board of Directors and Corporate Governance contained in the Proxy Statement for our 2026 annual meeting of stockholders, to be filed with the Securities and Exchange Commission on or before April 30, 2026 (the “Proxy Statement”).
We have adopted a Code of Business Conduct and Ethics that applies to all officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or person performing similar functions. A current copy of the Code of Business Conduct and Ethics is available on the Corporate Governance section of our website at www.designtx.com. If we make any substantive amendments to the Code of Business Conduct and Ethics or grants any waiver from a provision of the Code of Business Conduct and Ethics to any executive officer or director that are required to be disclosed pursuant to SEC rules, we intend to promptly disclose the nature of the amendment or waiver on our website.
Item 11. Executive Compensation.
The information required by this item will be set forth in the section headed Executive and Director Compensation contained in the Proxy Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item will be set forth in the sections headed Security Ownership of Certain Beneficial Owners and Management and Executive and Director Compensation contained in the Proxy Statement and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Information required by this item will be set forth in the sections headed Transactionswith Related Persons and Indemnification and Information Regarding the Board of Directors and Corporate Governance contained in the Proxy Statement and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services.
The information required by this item will be set forth in the sections headed Ratification of Selection of Independent Registered Public Accounting Firm contained in the Proxy Statement and is incorporated herein by reference.
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PART IV
Item 15. Exhibits, Financial Statement Schedules
The following documents are filed as a part of this Annual Report on Form 10-K:
(1)
Financial Statements:
Our Financial Statements are listed in “Index to Financial Statements” under Part II, Item 8 of this Annual Report on Form 10-K.
(2)
Financial Statement Schedules:
Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes herein.
(3)
Exhibits:
The following exhibits, as required by Item 601 of Regulation S-K are attached or incorporated by reference as stated below.
Exhibit Index
ExhibitNumber Description
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23.1 Consent of Independent Registered Public Accounting Firm
24.1 Power of Attorney (see signature page hereto).
101.SCH Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Indicates management contract or compensatory plan.
† Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.
‡ Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Design Therapeutics, Inc.
Date: March 9, 2026 By: /s/ Pratik Shah, Ph.D.
Pratik Shah, Ph.D.
President, Chief Executive Officer and Chairperson
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Pratik Shah, Ph.D., as his or her true and lawful attorney-in-fact and agents, with the full power of substitution, for him or her and in his or her name, place or stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Name Title Date
Pratik Shah, Ph.D.
Julie Burgess
/s/ Simeon George, M.D. Director March 9, 2026
Simeon George, M.D.
/s/ Rodney Lappe, Ph.D. Director March 9, 2026
Rodney Lappe, Ph.D.
/s/ John Schmid Director March 9, 2026
John Schmid
/s/ Justin Gover Director March 9, 2026
Justin Gover
/s/ Heather Berger, Ph.D. Director March 9, 2026
Heather Berger, Ph.D.
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