Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described, in or implied, by these forward-looking statements. Please also see the section of this Annual Report on Form 10-K titled “Note Regarding Forward-Looking Statements.”
Overview
We are a precision medicine oncology company committed to the discovery, development and commercialization of transformative therapies for cancer. Our approach integrates expertise in small-molecule drug discovery, structural biology and bioinformatics with robust internal capabilities in identifying and validating translational biomarkers to develop tailored, potentially first-in-class targeted therapies aligned to the genetic drivers of disease. We have built a deep pipeline of product candidates focused on synthetic lethality and antibody-drug conjugates (ADCs), for molecularly defined solid tumor indications. Our clinical development strategy is to evaluate our product candidates in rational combinations, where appropriate, and earlier in the course of disease in the adjuvant and neoadjuvant settings, which we believe has the potential to maximize their impact. Our mission is to bring forth the next wave of precision oncology therapies that are more selective, more effective, and deeply personalized with the goal of altering the course of disease and improving clinical outcomes for patients with cancer.
Our current clinical pipeline consists of nine potential first-in-class product candidates across four clinical focus areas, as described below.
Darovasertib for Uveal Melanoma
Darovasertib is an oral, potent and selective small molecule inhibitor of protein kinase C (PKC) and our most advanced clinical program. We are developing darovasertib for uveal melanoma (UM), a rare, aggressive form of ocular cancer in both the metastatic and pre-metastatic settings of UM, as described below.
•
Metastatic UM (mUM). We are evaluating darovasertib in combination with crizotinib, Pfizer’s oral c-MET inhibitor, in a potentially registration-enabling, Phase 2/3 trial (OptimUM-02) for human leukocyte antigen-A*02:01 negative (HLA*A2(-)), patients with first line (1L) mUM. We expect to report topline data, including progression free survival (PFS) data, from this trial in the first quarter of 2026. The data from OptimUM-02 may enable an accelerated approval filing in the United States. In December 2025, we completed full enrollment of 437 patients in OptimUM-02, and plan to submit overall survival (OS) data from these patients, when available, to support a full approval filing in this indication.
We are also evaluating the combination of darovasertib and crizotinib in HLA*A2:01 positive (HLA*A2(+)), mUM patients in our ongoing, single-arm Phase 2 OptimUM-01 trial. We expect to complete enrollment of approximately 100 patients in this trial by the second quarter of 2026 with data used to support a potential future submission to the FDA to expand the labeled use for darovasertib and/or a national comprehensive cancer network (NCCN) compendia listing to enable use of the combination in these patients.
•
Neoadjuvant UM.We are also evaluating darovasertib as a monotherapy in the neoadjuvant setting of primary UM, where the goal of treatment is to prevent enucleation (surgical eye removal), preserve vision prior to and post-plaque brachytherapy and potentially delay or prevent progression to metastatic disease. In 2025, we initiated a randomized Phase 3 trial of darovasertib in the neoadjuvant setting (OptimUM-10), which will enroll approximately 450 patients across two cohorts of plaque brachytherapy-eligible (PB) and enucleation-eligible (EN) patients. We plan to complete enrollment in this trial by the first half of 2027.
•
Adjuvant UM. We plan to initiate a global Phase 3 combination trial (OptimUM-11) of darovasertib and crizotinib in the adjuvant setting of primary UM in the first half of 2026. The trial is expected to enroll approximately 450 patients with high to medium-high risk of metastasis, randomized 1:1 to the combination of darovasertib and crizotinib or placebo. The primary endpoint of this trial is relapse-free survival (RFS).
96
In August 2025, we entered into an exclusive license agreement with Les Laboratoires Servier (Servier), for the development and commercialization of darovasertib outside of the United States. We received an upfront payment of $210.0 million and are eligible to receive up to $320.0 million in milestone payments, clinical trial cost sharing and clinical trial cost reimbursement, as well as double-digit royalties on net sales in all territories outside of the United States.
Antibody-Drug Conjugates (ADC) / DNA Damage Response (DDR) Combinations
•
IDE849is a potential first-in-class, DLL3 TOP1 ADC being evaluated by our partner, Hengrui Pharma, in a multi-site, open label Phase 1 clinical trial in China in patients with small-cell lung cancer (SCLC) and neuroendocrine carcinomas (NEC). We are currently conducting a global Phase 1 trial of IDE849 in SCLC, with the goal of initiating a monotherapy registrational trial in the second line/refractory setting (2L+) of SCLC and/or NEC by the end of 2026.
•
IDE034 is a potential first-in-class, B7H3/PTK7 bispecific TOP1 ADC. We received investigational new drug (IND) clearance from the FDA in the fourth quarter of 2025 and expect to achieve first-patient-in (FPI) in our Phase 1 dose escalation trial in the first quarter of 2026. Dosing of the first patient with IDE034 will trigger a $5.0 million milestone payment to Biocytogen, pursuant to our Option and License Agreement.
•
IDE161 is a potential first-in-class, oral small molecule poly (ADP-ribose) glycohydrolase (PARG) inhibitor in a Phase 1 dose optimization trial to inform future combination studies with IDE849 and other TOP1-based ADCs where PARG inhibition may synergize with the payload to deepen responses. We plan to initiate a Phase 1 clinical combination trial of IDE161 with IDE849 in SCLC, NEC, and potentially other DLL3-overexpressing solid tumors in the second quarter of 2026. We may also evaluate clinical combinations of IDE161 with IDE034 (B7H3/PTK7) and potentially other TOP1 ADCs in collaboration with third parties.
•
IDE705 is a potential first-in-class, oral small molecule inhibitor of the helicase domain of Pol Theta that had been in a Phase 1 combination trial with niraparib, GSK’s small molecule inhibitor of PARP, in patients with BRCA+ or other HRD-positive tumors. In December 2025, GSK notified us of its intention to terminate the Agreement, which will be effective March 9, 2026. We plan to begin preclinical studies evaluating the potential of IDE705 to enhance the efficacy of TOP1 ADCs in solid tumors, as we are doing with IDE161, within our focus area of ADC/DDR combinations.
MTAP Pathway
•
IDE397 is a potential first-in-class, oral small molecule inhibitor of methionine adenosyltransferase 2a (MAT2A), which we are developing for patients with solid tumors with methylthioadenosine phosphorylase (MTAP) gene deletion. We are conducting a Phase 1/2 clinical trial pursuant to a Clinical Study Collaboration and Supply Agreement (CSCSA) with Gilead to evaluate IDE397 in combination with Trodelvy (sacituzumab govitecan-hziy), Gilead’s Trop-2 directed TOP1 ADC, in patients with MTAP-deletion urothelial cancer (UC), and non-small cell lung cancer (NSCLC). We are targeting to provide the next clinical data update from the combination trial in UC at a medical conference in 2026.
•
IDE892 is a potential first-in-class, oral small molecule MTA-cooperative inhibitor of PRMT5 being developed for patients with MTAP-deleted lung cancer and other high priority MTAP-deleted solid tumor indications. We expect to begin conducting a Phase 1 dose escalation trial with IDE892 monotherapy in the first quarter of 2026 with the goal of advancing into combination trials with IDE397 in MTAP-deleted NSCLC in the second quarter of 2026.
Next Generation Therapies
•
IDE574 is a potential first-in-class, oral small molecule equipotent dual inhibitor of the lysine acetyltransferase (KAT) 6 and 7, both of which have been shown to support cancer cell survival. In January 2026, we received IND clearance from the FDA and are targeting to begin a Phase 1 dose escalation trial in patients with breast, lung, prostate and colorectal cancers in the first quarter of 2026.
•
IDE275is a potential first-in-class, oral small molecule inhibitor of the helicase domain of the Werner protein (WRN), a RecQ enzyme involved in the maintenance of genome integrity. In December 2025, GSK notified us of its intention to terminate the Agreement, which will be effective March 9, 2026. Once complete, we intend to continue the dose expansion phase of the Phase 1 trial to inform the next phase of clinical development.
Corporate Update
97
We do not have any products approved for sale and have not generated any product revenue since inception. We have funded our operations primarily through the sale and issuance of common stock and the upfront payment and certain milestone payments received from GSK and Servier. As of December 31, 2025, we had cash, cash equivalents and marketable securities of approximately $1.05 billion, consisting primarily of money market funds, U.S. government securities, commercial paper and corporate bonds.
Since our inception in June 2015, we have devoted substantially all of our resources to discovering and developing our product candidates. We have incurred significant operating losses to date and expect that our operating expenses will increase significantly as we advance our product candidates through preclinical and clinical development; seek regulatory approval, and prepare for, and, if approved, proceed to commercialization; acquire, discover, validate and develop additional product candidates; obtain, maintain, protect and enforce our intellectual property portfolio; and hire additional personnel. For information about our specific program costs and expenses, see Note 10. Significant Agreements.
Our net losses were $113.7 million and $274.5 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $736.5 million.
Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of our product candidates, ourselves, or for some programs, in collaboration with our strategic partners.
Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates.
As of December 31, 2025, we had cash, cash equivalents and short-term and long-term marketable securities of approximately $1.05 billion.
We believe that our cash, cash equivalents, and short-term and long-term marketable securities will be sufficient to fund our planned operations for at least twelve months from the date of the issuance of our Annual Report on Form 10-K filed on February 17, 2026.
These funds will support our efforts through potential achievement of multiple preclinical and clinical milestones across multiple programs.
Components of Operating Results
Collaboration Revenues
To date, we have not generated any revenue from product sales, and we do not expect to generate any revenue from product sales unless and until we are able to obtain regulatory approval and commercialize one of our product candidates in the future. Our revenue consists exclusively of collaboration revenue under the Servier License Agreement for the year ended December 31, 2025 and the GSK Collaboration Agreement for the year ended December 31, 2024, including amounts that are recognized related to previously received upfront payments, development and regulatory milestone payments and amounts due and payable to us for research and development services.
When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract asset or contract liability is recorded. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met. Contract assets are recorded when revenue has been recognized for services performed that are not yet billable to a customer.
In August 2025, we entered into the Servier License Agreement for development and commercial rights to darovasertib in all countries worldwide except for the United States. We recognized revenue related to the development and commercialization (D&C) license performance obligation at a point in time upon execution of the contract. We recognize revenue related to amounts allocated to research and development services over time, as the underlying services are performed over the period through the completion of program development activities. The timing of revenue recognition, billings, and cash collections results in accounts receivable, contract assets, and contract liabilities on the balance sheets. We will also recognize revenue from regulatory milestones as they are achieved. Future net product sales may also result in royalty payments.
98
We have recognized revenue from our GSK Collaboration Agreement during the year ended December 31, 2024 and in prior years, related to both development and regulatory milestones as they were achieved and the performance obligations associated with the Agreement were completed. We completed all performance obligations under the GSK Collaboration Agreement as of December 31, 2023 for the Pol Theta and WRN programs. In December 2025, GSK notified us of its intention to terminate the Collaboration, Option and License Agreement, dated June 15, 2020, which will be effective 90 days following the date of GSK’s notice, or March 9, 2026.
Operating Expenses
Research and Development Expenses
Substantially all of our research and development expenses consist of expenses incurred in connection with the discovery and development of our product candidates. These expenses include certain payroll and personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expenses for our research and product development employees, fees to third parties to conduct certain research and development activities on our behalf including fees to CMOs and CROs in support of manufacturing and clinical activity for darovasertib, IDE397, IDE849, IDE161, IDE275, IDE705, IDE892, IDE034, and IDE574 and consulting costs, costs for laboratory supplies, costs for product licenses and allocated overhead, including rent, equipment, depreciation, information technology costs and utilities. We expense both internal and external research and development expenses as they are incurred.
We have entered into various agreements with CMOs and CROs. Our research and development accruals are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced, are included in accrued liabilities on our balance sheet. If the actual timing of the performance of services or the level of effort varies from the original estimates, we will adjust the accrual accordingly. Payments made to CMOs and CROs under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered.
Costs of certain activities, such as preclinical studies, are generally recognized based on an evaluation of the progress to completion of specific tasks. Nonrefundable payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses and other current assets on our balance sheet. The capitalized amounts are recognized as expense as the goods are delivered or the related services are performed.
We do not allocate our internal costs by product candidate, including internal costs, such as payroll and other personnel expenses, laboratory supplies and allocated overhead. With respect to internal costs, several of our departments support multiple product candidate research and development programs, and therefore the costs cannot be allocated to a particular product candidate or development program. The following table summarizes our external clinical development expenses by program:
Year Ended December 31,
External clinical development expenses (1):
Personnel related and stock-based compensation 67,192 54,543
(1)
External clinical development expenses include manufacturing and clinical trial costs. These expenses are primarily for services provided by external consultants, CMOs and CROs.
(2)
Other research and development expenses include manufacturing and clinical trial costs for preclinical and earlier clinical stage programs. These expenses are primarily for services provided by external consultants, CMOs and CROs.
We are focusing substantially all of our resources on the development of our product candidates. We expect our research and development expenses to increase substantially during the next few years, as we seek to initiate and/or advance clinical trials for our product candidates, complete our clinical program, pursue regulatory approval of our product candidates and prepare for a possible commercial launch. Predicting the timing or the cost to complete our clinical program or validation of our commercial manufacturing and supply processes is difficult and delays may occur because of many factors, including factors outside of our control. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we
99
could be required to expend significant additional financial resources and time on the completion of clinical development. Furthermore, we are unable to predict when or if our product candidates will receive regulatory approval with any certainty.
General and Administrative Expenses
General and administrative expenses consist primarily of payroll and personnel-related expenses, including salaries, employee benefit costs and stock-based compensation expense, professional fees for legal, patent, consulting, accounting and tax services, allocated overhead, including rent, equipment, depreciation, information technology costs and utilities, and other general operating expenses not otherwise classified as research and development expenses.
We anticipate that our general and administrative expenses will increase, as a result of increased personnel costs, including salaries, benefits and stock-based compensation expense, patent costs for our product candidates, expanded infrastructure and higher consulting, legal and accounting services associated with maintaining compliance with our Nasdaq stock exchange listing and requirements of the SEC, investor relations costs and director and officer insurance policy premiums associated with being a public company.
Other Income
Interest Income and Other Income, Net
Interest income and other income, net consists primarily of interest income earned on our cash, cash equivalents and marketable securities.
Results of Operations
A discussion regarding our financial condition and results of operations for fiscal year 2025 compared to fiscal year 2024 is presented below. A discussion regarding our financial condition and results of operations for fiscal year 2024 compared to fiscal year 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on February 18, 2025.
Comparison of the Years Ended December 31, 2025 and December 31, 2024
The following table summarizes our results of operations for the periods indicated (in thousands):
Year Ended December 31,
Revenue
Operating expenses
Other income
Collaboration Revenue
Collaboration revenue increased by $211.7 million, or 3,024%, during the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was related to collaboration revenue recognized in connection with the Servier License Agreement.
During the year ended December 31, 2025, in connection with the Servier License Agreement, we recognized revenue related to the D&C license performance obligation at a point in time upon execution of the contract. We also recognized revenue related to amounts allocated to the two research and development service milestones over time, as the underlying services are performed over the period through the completion of program development activities.
100
Pursuant to the GSK Collaboration Agreement, in October 2024, we earned a $7.0 million milestone payment for the IND clearance of IDE275 (GSK 959), a potential first-in-class WRN inhibitor.
Research and Development Expenses
Research and development expenses increased by $20.0 million, or 7%, during the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase in research and development expenses was primarily due to increases of $74.1 million in fees paid to CROs, CMOs and consultants related to the advancement of our lead product candidates through preclinical and clinical studies, $12.7 million in personnel-related expenses, including salaries, benefits and stock-based compensation, to support our growth, and $8.2 million in costs for laboratory supplies, facilities and information technology costs to support our research and development programs. These increases were offset by the $75.0 million upfront payment under the Hengrui Pharma License Agreement for IDE849 in December 2024.
General and Administrative Expenses
General and administrative expenses increased by $24.0 million, or 61%, during the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase in general and administrative expenses was primarily due to increases of $11.3 million in personnel-related expenses, including salaries, benefits and stock-based compensation and $12.7 million in consulting and legal services related to company growth.
Interest Income and Other Income, Net
Interest income decreased by $6.9 million, or 13%, during the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to lower interest rates.
Liquidity and Capital Resources; Plan of Operations
Sources of Liquidity
We have funded our operations primarily through the sale and issuance of common stock and the upfront payment and certain milestone payments received from GSK and Servier. As of December 31, 2025, we had cash, cash equivalents and marketable securities of approximately $1.05 billion, consisting primarily of money market funds, U.S. government securities, commercial paper, and corporate bonds.
Prospectus Supplement - At-the-Market Facility
On June 26, 2023, we filed a Registration Statement on Form S-3 (File No. 333- 272936) under the Securities Act as an automatic shelf registration statement as a “well-known seasoned issuer,” as defined in Rule 405 under the Securities Act. On June 26, 2023, we also entered into an Open Market Sales Agreement (the June 2023 Sales Agreement) with Jefferies LLC (Jefferies) relating to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, shares of our common stock, par value $0.0001 per share, having aggregate gross proceeds of up to $250.0 million through Jefferies as sales agent.
From January 1, 2024 through January 17, 2024, pursuant to the June 2023 Sales Agreement, we sold an aggregate of 6,115,516 shares of our common stock for aggregate net proceeds of $215.9 million at a weighted average sales price of approximately $36.39 per share under the at-the-market offering pursuant to the June 2023 Sales Agreement with Jefferies as sales agent.
On January 19, 2024, we entered into a new Open Market Sales Agreement (the January 2024 Sales Agreement) with Jefferies, relating to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, shares of common stock having aggregate gross proceeds of up to $350.0 million through Jefferies as sales agent.
During the year ended December 31, 2024, pursuant to the January 2024 Sales Agreement, we sold an aggregate of 4,066,866 shares of our common stock for aggregate net proceeds of $164.0 million at a weighted average sales price of approximately $41.28 per share under the at-the-market offering pursuant to the January 2024 Sales Agreement with Jefferies as sales agent.
101
During the year ended December 31, 2025, we sold an aggregate of 984,000 shares of our common stock for aggregate net proceeds of $25.0 million at a weighted average sales price of approximately $26.00 per share under the at-the-market offering pursuant to the January 2024 Sales Agreement with Jefferies as sales agent. As of December 31, 2025, approximately $156.6 million of common stock remained available to be sold pursuant to the January 2024 Sales Agreement.
We may cancel our at-the-market program at any time upon written notice, pursuant to its terms.
2024 July Public Offering and Sale of IDEAYA Common Stock
On July 11, 2024, we completed an underwritten public follow-on offering. The offering consisted of 8,355,714 shares of common stock at an offering price to the public of $35.00 per share, including 1,127,142 shares of common stock upon the exercise in full of the overallotment option by the underwriters, as well as pre-funded warrants to purchase 285,715 shares of common stock at a public offering price of $34.9999 per underlying share, in each case before underwriting discounts and commissions. Pursuant to the offering, we received aggregate gross proceeds of approximately $302.4 million, before deducting underwriting discounts and commissions and other offering expenses, resulting in net proceeds of approximately $283.8 million, after deducting underwriting discounts and commissions and other offering expenses.
Material Cash Requirements
We have primarily incurred net losses since our inception. For the years ended December 31, 2025 and 2024, we had net losses of $113.7 million and $274.5 million, respectively, and we expect to incur substantial additional losses in future periods. As of December 31, 2025, we had an accumulated deficit of $736.5 million. Based on our current business plan, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our planned operations for at least the next 12 months from the issuance date of this Annual Report on Form 10-K.
To date, we have not generated any product revenue. We do not expect to generate any meaningful product revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates, and we do not know when, or if, it will occur. We expect to continue to incur significant losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for our product candidates, and begin to commercialize any approved products. We are subject to all of the risks typically related to the development of new product candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. Moreover, we expect to incur additional costs associated with operating as a public company.
We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We may seek to raise capital through private or public equity or debt financings, collaboration or other arrangements with corporate sources, or through other sources of financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategies. We anticipate that we will need to raise substantial additional capital, the requirements for which will depend on many factors, including:
•
the scope, timing, rate of progress and costs of our drug discovery, preclinical development activities, laboratory testing and clinical trials for our product candidates;
•
the number and scope of clinical programs we decide to pursue;
•
the scope and costs of manufacturing development and commercial manufacturing activities;
•
the extent to which we acquire or in-license other product candidates and technologies;
•
the cost, timing and outcome of regulatory review of our product candidates;
•
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
•
our ability to establish and maintain collaborations on favorable terms, if at all;
•
our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates;
•
the costs associated with being a public company; and
•
the cost and timing associated with commercializing our product candidates if they receive marketing approval.
A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our
102
operating plans may change in the future, and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation or asset sale transactions.
Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to others rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.
We enter into contracts in the normal course of business with third-party contract organizations for preclinical and clinical studies and testing, manufacture and supply of our preclinical and clinical materials and providing other services and products for operating purposes. These contracts generally provide for termination following a certain period after notice, and therefore, we believe that our non-cancelable obligations under these agreements are not material.
For more information, see Note 5. Operating Leases, Note 6. Commitments and Contingencies, Note 7. Income Taxes and Note 10. Significant Agreements, each in the financial statements appearing elsewhere in this Annual Report on Form 10-K.
Adequate additional funding may not be available to us on acceptable terms or at all.
See the section of this Annual Report on Form 10-K titled “Part I, Item 1A. – Risk Factors” for additional risks associated with our substantial capital requirements.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements as defined in the rules and regulations of the SEC.
Summary Statement of Cash Flows
The following table sets forth the primary sources and uses of cash, cash equivalents, and restricted cash for each of the periods presented below (in thousands):
Year Ended December 31,
Net cash (used in) provided by:
Cash Flows from Operating Activities
Net cash used in operating activities was $71.1 million for the year ended December 31, 2025. Cash used in operating activities was primarily due to the use of funds in our operations to develop our product candidates resulting in a net loss of $113.7 million, adjusted for net non-cash charges of $40.7 million and changes in net operating assets and liabilities of $1.9 million. Our non-cash charges consisted of $46.1 million in stock-based compensation, $2.7 million in depreciation and $1.9 million of the amortization of right of use assets, partially offset by $10.0 million accretion of discounts on marketable securities. The net change in our operating assets and liabilities consisted primarily of cash inflows resulting from a $2.6 million increase in lease liabilities, $2.7 million increase in accounts payable and $10.4 million increase in accrued and other liabilities due to fees paid to CROs, CMOs and consultants in support of research and manufacturing activities, partially offset by cash outflows resulting from a $7.8 million increase in prepaid and other assets and $6.0 million increase in contract assets related to the Servier License Agreement.
Net cash used in operating activities was $247.6 million for the year ended December 31, 2024. Cash used in operating activities was primarily due to the use of funds in our operations to develop our product candidates resulting in a net loss of $274.5 million, adjusted for net non-cash charges of $15.3 million and changes in net operating assets and liabilities of $11.5 million. Our non-cash charges consisted of $34.7 million in stock-based compensation, $2.4 million in depreciation and $1.4
103
million of the amortization of right of use assets, partially offset by $23.2 million accretion of discounts on marketable securities. The net change in our operating assets and liabilities consisted primarily of cash inflows from $8.3 million in accounts payable and $10.8 million in accrued and other liabilities due to CRO fees in support of research and manufacturing activities, partially offset by cash outflows of $6.2 million in prepaid and other assets and $1.4 million in lease liabilities.
Cash Flows from Investing Activities
Net cash provided by investing activities was $70.0 million for the year ended December 31, 2025, which consisted primarily of $680.2 million provided by maturities of marketable securities, offset by $607.9 billion used to purchase marketable securities and $2.4 million used to purchase property and equipment.
Net cash used in investing activities was $502.6 million for the year ended December 31, 2024, which consisted primarily of $1.2 billion used to purchase marketable securities and $3.9 million used to purchase property and equipment, partially offset by $692.6 million provided by maturities of marketable securities.
Cash Flows from Financing Activities
Net cash provided by financing activities was $29.8 million for the year ended December 31, 2025, which consisted primarily of $24.9 million of proceeds from ATM offering, $3.4 million of proceeds from exercise of common stock options and $1.5 million of proceeds from ESPP purchases.
Net cash provided by financing activities was $677.6 million for the year ended December 31, 2024, which consisted primarily of $274.4 million of net proceeds from our follow-on offering, $9.4 million of proceeds from issuance of pre-funded warrants, $379.9 million of proceeds from ATM offering, $12.5 million of proceeds from exercise of common stock options and $1.4 million of proceeds from ESPP purchases.
Critical Accounting Policies and Estimates
Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue recognized and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
For more detail on our critical accounting policies, refer to Note 2 to the financial statements appearing elsewhere in this Annual Report on Form 10-K.
Recent Accounting Pronouncements
See the section titled “Summary of Significant Accounting Policies—Recent Accounting Pronouncements” in Note 2 to the financial statements included elsewhere in this Annual Report on Form 10-K for a description of recent accounting pronouncements that are applicable to our business and may potentially have an impact on our financial position and results of operations.
104
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Interest Rate Sensitivity
The market risk inherent in our financial instruments and in our financial position represents the potential loss arising from adverse changes in interest rates or exchange rates. As of December 31, 2025, we had cash, cash equivalents and marketable securities of approximately $1.05 billion, consisting of bank deposits, interest-bearing money market funds, investments in U.S. government securities, commercial paper and corporate bonds, for which the fair value would be affected by changes in the general level of U.S. interest rates. Even if the fair value of certain government securities, commercial paper, and corporate bonds is affected by changes in U.S. interest rates, the principal of such instruments will be due to us upon maturity.
The primary objective of our investment activities is to preserve capital to fund our operations. We also seek to maximize income from our investments without assuming significant risk. Because our investments are primarily short-term in duration and our holdings in U.S. government treasury bonds mature prior to our expected need for liquidity, we believe that our exposure to interest rate risk is not significant.
While we have seen higher inflation in the past few years, we do not believe that inflation, or exchange rate fluctuations have had a significant impact on our results of operations for any periods presented herein.
Item 8. Financial Statements and Supplementary Data
The financial statements required to be filed pursuant to this Item 8 are appended to this report. An index of those financial statements is found in Item 15 of Part IV of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
105
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Management necessarily applies its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.
Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2025.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(e) and 15d-15(e) of the Exchange Act that occurred during the period covered by this Annual Report on Form 10-K that has materially affected, or are reasonably likely to materially effect, our internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Under the supervision of and with the participation of our principal executive officer and principal financial and accounting officer, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control—Integrated Framework” (2013). Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2025.
The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which is included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Item 9B. Other Information
Trading Plans
During the three months ended December 31, 2025, our Section 16 officers and directors adopted or terminated contracts, instructions or written plans for the purchase or sale of our securities as noted below:
106
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
107
Part III
Item 10. Directors, Executive Officers and Corporate Governance.
We have adopted insider trading policies and procedures applicable to our directors, officers and employees, that we believe are reasonably designed to promote compliance with insider trading laws and regulations and the Nasdaq stock exchange listing standards. A copy of our policy is included with this Annual Report on Form 10-K as Exhibit 19.1.
The other information required by this item will be contained in our definitive proxy statement to be filed with the SEC in connection with our 2026 Annual Meeting of Stockholders within 120 days after December 31, 2025 (the Proxy Statement) and is incorporated in this Annual Report on Form 10-K by reference.
Item 11. Executive Compensation.
The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
Item 14. Principal Accounting Fees and Services.
The information required by this item will be contained in the Proxy Statement and is incorporated in this Annual Report on Form 10-K by reference.
108
Part IV
Item 15. Exhibits, Financial Statement Schedules.
(a)
The following documents are filed as part of this report:
(1)
FINANCIAL STATEMENTS
The following documents are included on pages F-1 through F-31 attached hereto and are filed as part of this Annual Report on Form 10-K.
Report of Independent Registered Public Accounting Firm (PCAOB ID 238) F-
Audited Financial Statements:
Balance Sheets F-4
Statements of Operations and Comprehensive Loss F-5
Statements of Stockholders’ Equity F-6
Statements of Cash Flows F-7
Notes to Financial Statements F-8
(2)
FINANCIAL STATEMENT SCHEDULES
All schedules to the financial statements are omitted as the required information is either inapplicable or presented in the financial statements.
(3)
EXHIBITS
The exhibits listed in the accompanying Exhibit Index are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K.
109
Exhibit Index
(a) Exhibits.
ExhibitNumber Exhibit Description Incorporated by Reference FiledHerewith
Form Date Number
3.1 Amended and Restated Certificate of Incorporation. 8-K 5/28/2019 3.1
4.1 Reference is made to Exhibits 3.1 through 3.2.
4.3 Description of Common Stock. X
110
10.15# Non-Employee Director Compensation Program. X
111
112
23.1 Consent of Independent Registered Public Accounting Firm. X
113
97 Policy for Recovery of Erroneously Awarded Compensation. 10-K 2/20/2024 97
101.INS Inline XBRL Instance Document. X
104 Cover Page Interactive Data File (embedded with the Inline XBRL document). X
† Portions of the exhibit, marked by brackets, have been omitted because the omitted information (i) is not material and (ii) is the type of information that the registrant both customarily and actually treats as private and confidential.
# Indicates management contract or compensatory plan.
* The certification attached as Exhibit 32.1 that accompanies this Annual Report on Form 10-K is not deemed filed with the SEC and is not to be incorporated by reference into any filing of IDEAYA Biosciences, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-K, irrespective of any general incorporation language contained in such filing.
Item 16. Form 10-K Summary.
None.
114
INDEX TO THE FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 238) F-
Balance Sheets F-4
Statements of Operations and Comprehensive Loss F-5
Statements of Stockholders’ Equity F-6
Statements of Cash Flows F-7
Notes to Financial Statements F-8
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of IDEAYA Biosciences, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying balance sheets of IDEAYA Biosciences, Inc. (the "Company") as of December 31, 2025 and 2024, and the related statements of operations and comprehensive loss, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s financial statements and on the Company's internal control over financial reporting 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements 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. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
F-2
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.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Collaboration Revenue Recognition – Certain Servier Performance Obligation
As described in Notes 10 and 11 to the financial statements, in August 2025, the Company entered into an exclusive license agreement with Les Laboratoires Servier (Servier) pursuant to which the Company granted to Servier an exclusive license under certain intellectual property rights controlled by the Company relating to darovasertib to develop and commercialize products. The Company identified performance obligations associated with the license agreement related to a development and commercialization license for regulatory and commercial rights to darovasertib outside the United States and two research and development services for the development of the darovasertib program. The Company recognized revenue related to the development and commercialization license performance obligation at a point in time upon execution of the contract and recognizes revenue related to the research and development services over time as the underlying services are performed over the period through the completion of program development activities. The Company recognized $218.7 million in collaboration revenue during the year ended December 31, 2025, of which a majority related to a certain performance obligation.
The principal considerations for our determination that performing procedures relating to collaboration revenue recognition - certain Servier performance obligation is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to the Company’s accounting for the collaboration revenue.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included testing the effectiveness of controls relating to the collaboration revenue recognition process. These procedures also included, among others (i) obtaining and evaluating the license agreement; (ii) evaluating management’s assessment of the accounting treatment relating to the development and commercialization license performance obligation under the license agreement; (iii) recalculating the allocation of the transaction price to the development and commercialization license performance obligation and the collaboration revenue recognized; and (iv) evaluating the sufficiency of the disclosures in the financial statements.
/s/ PricewaterhouseCoopers LLP
San Jose, California
February 17, 2026
We have served as the Company’s auditor since 2017.
F-3
IDEAYA Biosciences, Inc.
Balance Sheets
(in thousands, except share and per share amounts)
December 31,
Assets
Current assets
Prepaid expenses and other current assets 21,366 13,394
Contract assets 5,973 —
Liabilities and Stockholders’ Equity
Current liabilities
Operating lease liabilities, current 339 298
Long-term operating lease liabilities 27,575 18,873
Commitments and contingencies (Note 6)
Stockholders’ equity
Accumulated other comprehensive income 2,267 812
The accompanying notes are an integral part of these financial statements.
F-4
IDEAYA Biosciences, Inc.
Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
Year Ended December 31,
Operating expenses
Other income
Unrealized gains on marketable securities 1,455 250 3,433
Net loss per common share, basic and diluted $ (1.28 ) $ (3.36 ) $ (1.96 )
The accompanying notes are an integral part of these financial statements.
F-5
IDEAYA Biosciences, Inc.
Statements of Stockholders’ Equity
(in thousands, except share amounts)
Accumulated
Additional Other Total
Common Stock Paid-In Comprehensive Accumulated Stockholders'
Shares Amount Capital Income (Loss) Deficit Equity
Employee stock purchase plan (ESPP) purchase 70,480 — 1,213 — — 1,213
Other comprehensive income — — — 3,433 — 3,433
Exercise of pre-funded warrants 1,749,993 — — — — —
Employee stock purchase plan (ESPP) purchase 57,356 — 1,439 — — 1,439
Other comprehensive income — — — 250 — 250
Employee stock purchase plan (ESPP) purchase 88,287 — 1,493 — — 1,493
Other comprehensive income — — — 1,455 — 1,455
The accompanying notes are an integral part of these financial statements.
F-6
IDEAYA Biosciences, Inc.
Statements of Cash Flows
(in thousands)
Year Ended December 31,
Cash flows from operating activities
Adjustments to reconcile net loss to net cash used in operating activities
Changes in assets and liabilities
Accounts receivable — — 193
Contract assets and liabilities (5,973 ) — (13,753 )
Cash flows from investing activities
Purchases of property and equipment, net (2,368 ) (3,857 ) (2,368 )
Cash flows from financing activities
Proceeds from issuances of pre-funded warrants — 9,400 42,182
Cash, cash equivalents and restricted cash
Reconciliation of cash, cash equivalents and restricted cash
Supplemental disclosure of cash flow information:
Cash paid for interest $ — $ 25 $ 69
Supplemental non-cash investing and financing activities:
Unpaid offering costs — — 43
The accompanying notes are an integral part of these financial statements.
F-7
IDEAYA Biosciences, Inc.
Notes to Financial Statements
1. Organization
Description of the Business
IDEAYA Biosciences, Inc. (the “Company”) is a precision medicine oncology company committed to the discovery, development and commercialization of transformative therapies to address unmet medical needs in cancer. The Company is headquartered in South San Francisco, California and was incorporated in the State of Delaware in June 2015.
Follow-On Offering
On July 11, 2024, the Company completed an underwritten public follow-on offering. The offering consisted of 8,355,714 shares of the Company's common stock, par value $0.0001 per share (“common stock”), at an offering price to the public of $35.00 per share, including 1,127,142 shares of common stock upon the exercise in full of the overallotment option by the underwriters, as well as pre-funded warrants to purchase 285,715 shares of common stock at a public offering price of $34.9999 per underlying share, in each case before underwriting discounts and commissions. Pursuant to the offering, the Company received aggregate gross proceeds of approximately $302.4 million, before deducting underwriting discounts and commissions and other offering expenses, resulting in net proceeds of approximately $283.8 million, after deducting underwriting discounts and commissions and other offering expenses.
At-the-Market Offering
On June 26, 2023, the Company filed a new Registration Statement on Form S-3 (File No. 333- 272936) under the Securities Act as an automatic shelf registration statement as a “well-known seasoned issuer,” as defined in Rule 405 under the Securities Act. On June 26, 2023, the Company also entered into an Open Market Sales Agreement (the “June 2023 Sales Agreement”), with Jefferies LLC (“Jefferies”), relating to an at-the-market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of the Company’s common stock, having aggregate gross proceeds of up to $250.0 million through Jefferies as sales agent.
From January 1, 2024 through January 17, 2024, the Company sold an aggregate of 6,115,516 shares of its common stock for aggregate net proceeds of $215.9 million at a weighted average sales price of approximately $36.39 per share under the at-the-market offering pursuant to the June 2023 Sales Agreement with Jefferies as sales agent.
On January 19, 2024, the Company entered into a new Open Market Sales Agreement (the “January 2024 Sales Agreement”), with Jefferies, relating to an at-the-market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of common stock having aggregate gross proceeds of up to $350.0 million through Jefferies as sales agent.
During the year ended December 31, 2024, pursuant to the January 2024 Sales Agreement, the Company sold an aggregate of 4,066,866 shares of its common stock for aggregate net proceeds of $164.0 million at a weighted average sales price of approximately $41.28 per share under the at-the-market offering pursuant to the January 2024 Sales Agreement with Jefferies as sales agent.
During the year ended December 31, 2025 , the Company sold an aggregate of 984,000 shares of its common stock for aggregate net proceeds of $25.0 million at a weighted average sales price of approximately $26.00 per share under the at-the-market offering program pursuant to the January 2024 Sales Agreement with Jefferies as sales agent. As of December 31, 2025, approximately $156.6 million of common stock remained available to be sold pursuant to the January 2024 Sales Agreement.
The Company may cancel its at-the-market program at any time upon written notice, pursuant to its terms.
F-8
Liquidity
The Company has primarily incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $736.5 million as of December 31, 2025.
The Company has financed its operations primarily through the sale and issuance of common stock, the upfront payment and certain milestone payments received from GSK and the upfront payment received from Les Laboratoires Servier.
To date, none of the Company’s product candidates have been approved for sale, and the Company has not generated any revenue from commercial products since inception. Management expects operating losses to continue and increase for the foreseeable future, as the Company progresses clinical development activities for its lead product candidates. The Company’s prospects are subject to risks, expenses and uncertainties frequently encountered by companies in the biotechnology industry as discussed under Risks and Uncertainties in Note 2. While the Company has been able to raise multiple rounds of financing, there can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending would have a material adverse effect on the Company’s ability to achieve its intended business objectives.
As of December 31, 2025, the Company had cash, cash equivalents and marketable securities of approximately $1.05 billion. Management believes that the Company’s current cash, cash equivalents and marketable securities will be sufficient to fund its planned operations for at least 12 months from the date of the issuance of these financial statements.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”).
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include useful lives of property and equipment, determination of the discount rate for operating leases, accruals for research and development activities, revenue recognition, stock-based compensation and income taxes. On an ongoing basis, management reviews these estimates and assumptions. Changes in facts and circumstances may alter such estimates and actual results could differ from those estimates.
Segments
The Company has one reportable and operating segment. Financial information about the Company’s operating segment and geographic areas is presented in Note 13 of the financial statements.
Risks and Uncertainties
The Company operates in a dynamic and highly competitive industry and is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, contract manufacturers, contract research organizations and collaboration partners, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. The Company believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows: ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials and collaboration activities; regulatory approval and market acceptance of the Company’s products; development of sales channels; certain strategic relationships; litigation or claims against the Company based on intellectual property, patent, product, regulatory or other factors; and the Company’s ability to attract and retain employees necessary to support its growth.
F-9
Products developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that the products will receive the necessary approvals, or that any approved products will be commercially viable. If the Company was denied approval, approval was delayed or the Company was unable to maintain approval, it could have a materially adverse impact on the Company. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties.
The Company has expended and will continue to expend substantial funds to complete the research, development and clinical testing of product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company may require additional funds to commercialize its products. The Company is unable to entirely fund these efforts with its current financial resources. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs which would materially and adversely affect its business, financial condition and operations.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and marketable securities. Substantially all the Company’s cash, cash equivalents and marketable securities are held by three financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits.
The Company’s investment policy addresses credit ratings, diversification, and maturity dates.
The Company invests its cash equivalents and marketable securities in money market funds, U.S. government securities, commercial paper, and corporate bonds. The Company limits its credit risk associated with cash equivalents and marketable securities by placing them with banks and institutions it believes are creditworthy and in highly rated investments and, by policy, limits the amount of credit exposure with any one commercial issuer. The Company has not experienced any credit losses on its deposits of cash, cash equivalents or marketable securities.
Cash Equivalents
Cash equivalents that are readily convertible to cash are stated at cost, which approximates fair value. The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents.
Restricted Cash
Restricted cash as of December 31, 2025 and December 31, 2024 consisted of cash balances held as security in connection with the Company’s facility lease agreements in South San Francisco, California and San Diego, California and for the Company’s credit card collateral. The balances are classified as long-term assets on the Company’s balance sheet.
Marketable Securities
Marketable securities are investments in marketable securities with maturities greater than three months at the time of purchase. The Company determines the appropriate classification of its investments in marketable securities at the time of purchase and reevaluates such designation at each balance sheet date. The Company has classified and accounted for its marketable securities as available-for-sale. After consideration of the Company’s risk versus reward objectives and liquidity requirements, the Company may sell these securities prior to their stated maturities. The Company classifies highly liquid securities with maturities beyond 12 months as long-term marketable securities in the balance sheet. These securities are carried at fair value as determined based upon quoted market prices or pricing models for similar securities. Unrealized gains and losses, if any, are excluded from earnings and are reported as a component of accumulated other comprehensive income (loss). The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income and other income (expense), net on the statements of operations and comprehensive loss. Realized gains and losses, if any, on available-for-sale securities are included in interest income and other income (expense), net. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income.
F-10
Fair Value of Financial Instruments
The carrying amounts of the Company’s certain financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities and market interest rates if applicable. Refer to Note 3 for details on the fair value of marketable securities.
Property and Equipment, Net
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally between three and five years. Leasehold improvements are stated at cost and amortized over the shorter of the useful lives of the assets or the lease term. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in the statements of operations and comprehensive loss in the period realized.
Impairment of Long-Lived Assets
The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability is measured by comparison of the carrying amount of the asset or asset group to the future net cash flows which the asset or asset group is expected to generate. If such asset or asset group is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. There have been no such impairments of long-lived assets for the years ended December 31, 2025 and December 31, 2024.
Leases
The Company determines if an arrangement is a lease, or contains a lease, at its inception. Operating leases are included in right-of-use (“ROU”) assets, lease liabilities, and long-term lease liabilities on the Company’s balance sheet.
ROU assets and lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The ROU asset also includes any lease payments made to the lessor at or before the commencement date, minus lease incentives received, and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company combines lease and nonlease components.
Cloud Computing Arrangements
The Company capitalizes certain implementation costs incurred under a cloud computing arrangement that is a service contract. Costs incurred during the application development stage related to the implementation of the hosting arrangement are capitalized and included within prepaid expenses and other current assets, and other non-current assets on the accompanying balance sheets. Amortization of capitalized implementation costs is recognized on a straight-line basis over the term of the associated hosting arrangement when it is ready for its intended use. Costs related to preliminary project activities and post-implementation activities are expensed as incurred.
Revenue Recognition
The Company follows Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.
The Company applies the five-step model to contracts when (1) parties have approved the contract and are committed to performing respective obligations, (2) the Company can identify each party’s rights regarding the goods or services to be transferred, (3) the Company can identify the payment terms for the goods or services to be transferred, (4) the contract has commercial substance, and (5) it is probable that the Company will collect the consideration it is entitled to in exchange for
F-11
the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract and determines the performance obligations by assessing whether each promised good or service is distinct. Goods or services that are not distinct are bundled with other goods or services in the contract until a bundle of goods or services that is distinct is created. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligations when (or as) the performance obligations are satisfied. The Company constrains its estimate of the transaction price up to the amount (the “variable consideration constraint”) that a significant reversal of recognized revenue is not probable.
Licenses of intellectual property: If a license to the Company’s intellectual property is determined to be distinct from the other promised goods or services identified in an arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license at the point in time when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other goods or services, the Company applies judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress toward satisfying the performance obligation for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of progress and related revenue recognition.
Customer options for additional goods or services: If a contract contains customer options that allow the customer to acquire additional goods or services, including a license to the Company’s intellectual property, the goods and services underlying the customer options are evaluated to determine whether they are deemed to represent a material right. In determining whether the customer option has a material right, the Company assesses whether there is an option to acquire additional goods or services at a discount. If the customer option is determined not to represent a material right, the option is not considered to be a performance obligation. If the customer option is determined to represent a material right, the material right is recognized as a separate performance obligation. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until the option is exercised.
Milestone payments: At the inception of each arrangement or amendment that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 prescribes two methods to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. The Company uses the expected value method to estimate the amount of variable consideration related to the reimbursement of costs which is consistently applied throughout the life of the contract: however, it is not necessary for the Company to use the same approach for all contracts. If it is probable that a significant revenue reversal would not occur when the uncertainty associated with the milestone is resolved, the associated milestone value is included in the transaction price. Milestone payments that are highly susceptible to factors outside the Company’s influence, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. If there is more than one performance obligation, the transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.
Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
Upfront payments and fees are recorded as contract liabilities upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Contract assets are recorded when revenue has been recognized for services performed that are not yet billable to a customer. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.
Contractual cost sharing payments received from a customer or collaboration partner are accounted for as variable consideration. The Company includes an expected value in the transaction price. Contractual cost sharing payments made to a customer or collaboration partner are accounted for as a reduction to the transaction price if such payments are not related to distinct goods or services received from the customer or collaboration partner.
F-12
Contracts may be amended to account for changes in contract specifications and requirements. Contract modifications exist when the amendment either creates new, or changes existing, enforceable rights and obligations. When contract modifications create new performance obligations and the increase in consideration approximates the standalone selling price for goods and services related to such new performance obligations as adjusted for specific facts and circumstances of the contract, the modification is accounted for as a separate contract. If a contract modification is not accounted for as a separate contract, the Company accounts for the promised goods or services not yet transferred at the date of the contract modification (the remaining promised goods or services) prospectively, as if it were a termination of the existing contract and the creation of a new contract, if the remaining goods or services are distinct from the goods or services transferred on or before the date of the contract modification. The Company accounts for a contract modification as if it were a part of the existing contract if the remaining goods or services are not distinct and, therefore, form part of a single performance obligation that is partially satisfied at the date of the contract modification. In such case, the effect that the contract modification has on the transaction price, and on the entity’s measure of progress toward complete satisfaction of the performance obligation, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification (the adjustment to revenue is made on a cumulative catch-up basis).
Upfront payment contract liabilities resulting from the Company’s license and collaboration agreements do not represent a financing component as the payment is not financing the transfer of goods and services, and the technology underlying the licenses granted reflects research and development expenses already incurred by the Company. As such, the Company does not adjust its revenues for the effects of a significant financing component. Amounts received prior to satisfying the revenue recognition criteria are recorded as contract liability in the Company’s balance sheets. If the related performance obligation is expected to be satisfied within the next twelve (12) months, this will be classified and included within current contract liability. Contract assets are recorded when revenue has been recognized for services performed that are not yet billable to a customer. This will be classified and included within current contract assets if the payment is expected to be received within 12 months.
Research and Development Expenses
Research and development expenses consist of compensation costs, employee benefit costs, costs for contract manufacturing organizations (“CMOs”), costs for contract research organizations (“CROs”), costs for clinical trials, costs for sponsored research, consulting costs, costs for laboratory supplies, costs for product licenses, facility-related expenses and depreciation. All research and development costs are charged to research and development expenses as incurred and included within the statements of operations and comprehensive loss. Payments associated with licensing agreements to acquire exclusive licenses to develop, use, manufacture and commercialize products that have not reached technological feasibility and do not have alternate commercial use are also expensed as incurred. Payments made to third parties under these arrangements in advance of the performance of the related services by the third parties are recorded as prepaid expenses until the services are rendered.
Accrued Research and Development Expenses
The Company has entered into various agreements with CMOs and CROs. The Company’s research and development accruals are estimated based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs. The estimated costs of research and development provided, but not yet invoiced, are included in accrued liabilities on the balance sheet. If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the accrual accordingly. Payments made to CMOs and CROs under these arrangements in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered. Management’s process involves reviewing open contracts and purchase orders, communicating with applicable personnel to identify services that have been performed, and estimating the level of service performed and the associated costs incurred based on vendor estimates for the services when the Company has not yet been invoiced or otherwise notified of actual costs.
Stock-Based Compensation
The Company accounts for stock-based compensation arrangements with employees and non-employees in accordance with ASC 718, Stock Compensation. The Company accounts for stock-based compensation arrangements using a fair value method which requires the recognition of compensation expense related to all stock-based awards. The fair value method requires the Company to estimate the fair value of stock option awards on the date of grant using an option pricing model. The Company uses the Black-Scholes option pricing model to determine the fair value of options granted, which is expensed on a straight-line basis over the vesting period. Generally, the stock options granted by the Company to its employees have a 10-year term and vest over a 4-year period with 1-year cliff vesting.
F-13
Income Taxes
The Company accounts for income taxes using the asset and liability method whereby deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are currently in effect unless such rate is expected to be different when the deferred item reverses. Valuation allowances are established where necessary to reduce deferred tax assets to the amounts expected to be realized. Deferred tax assets and liabilities are classified as noncurrent on the balance sheet.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in interest expense and other expense, respectively.
Comprehensive Income and Loss
Comprehensive income and loss include net loss and certain changes in stockholders’ equity that are excluded from net loss, primarily unrealized gains and losses from the Company’s marketable securities.
Net Loss per Share Attributable to Common Stockholders
Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. Pre-funded warrants are included in the calculation of basic and diluted earnings per share. For purposes of the diluted net loss per share calculation, stock options, restricted stock and restricted stock that is subject to repurchase at the original purchase price are considered to be potentially dilutive securities. The Company considers the shares issued upon the early exercise of stock options subject to repurchase to be participating securities, because holders of such shares have non-forfeitable dividend rights in the event a dividend is paid on common stock. The holders of early exercised shares subject to repurchase do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders. Because the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) under its accounting standard codifications (“ASC”) or other standard setting bodies and adopted by the Company as of the specified effective date, unless otherwise discussed below.
New Accounting Pronouncements Adopted
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) under its accounting standard codifications (“ASC”) or other standard setting bodies and adopted by the Company as of the specified effective date, unless otherwise discussed below.
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which amends the guidance in ASC 740, Income Taxes. The ASU is intended to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The ASU’s amendments are effective for public business entities for annual periods beginning after December 15, 2024. The Company adopted this ASU on a retrospective basis for the annual report for the fiscal year beginning January 1, 2025, and evaluated the impact of the adoption of the ASU. This ASU resulted in expanded disclosures in the Income Taxes footnote in this Form 10-K. See Note 7. Income Taxes.
New Accounting Pronouncements, Not yet Adopted
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which modifies the disclosure or presentation requirements related to a variety of FASB Accounting Standard Codification topics. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K is effective. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the
F-14
associated amendment will be removed from the Codification and will not become effective for any entities. The Company is currently evaluating the effect of adopting this ASU.
In November 2024, the FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires more detailed disclosures about the types of expenses in commonly presented expense captions such as cost of sales, selling, general and administrative expenses and research and development expenses. This includes separate footnote disclosure for expenses such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization. Public business entities are required to apply the guidance prospectively and may apply it retrospectively. The FASB additionally issued ASU 2025-01 to clarify that the ASU's amendments are effective for public business entities for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Public business entities are required to apply the guidance prospectively and may apply it retrospectively. The Company is currently evaluating the effect of adopting this ASU.
In July 2025, the FASB issued ASU 2025-05 - Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets to simplify the estimation of credit losses on current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The amendments allow all entities to apply a practical expedient and entities other than public business entities to make an accounting policy election to simplify the estimation of credit losses on these assets. The amendments in this ASU are effective for all entities for annual reporting periods beginning after 15 December 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued (or made available for issuance). The Company is currently evaluating the impact of the ASU, but does not expect any material impact upon adoption.
In September 2025, the FASB issued ASU 2025-06 — Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software to clarify and modernize the accounting for costs related to internal-use software. The ASU removes all references to project stages in ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs. The ASU specifies that the property, plant and equipment disclosure requirements under ASC 360-10 apply to capitalized software costs accounted for under ASC 350-40, regardless of how those costs are presented in the financial statements. The amendments in this ASU are effective for all entities for annual reporting periods beginning after 15 December 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued. The Company is currently evaluating the effect of adopting this ASU.
In December 2025, the FASB issued ASU 2025-11 — Interim Reporting (Topic 270): Narrow-Scope Improvements to clarify interim disclosure requirements, the applicability of ASC 270 and the form and content of interim financial statements in accordance with US GAAP. The guidance creates a comprehensive list of interim disclosures required under US GAAP and incorporates a disclosure principle that requires disclosures at interim periods when an event or change that has a material effect on an entity has occurred since the previous year end. For public business entities, the amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after 15 December 2027. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued. The Company is currently evaluating the effect of adopting this ASU.
In December 2025, the FASB issued ASU 2025-12 — Codification Improvements to clarify, correct errors in or make other minor improvements to a broad range of topics in the Accounting Standards Codification (ASC) that is intended to make it easier to understand and apply, including ASC 260, Earnings Per Share, ASC 325, Investments – Other, and ASC 958, Not-for-Profit Entities. The amendments in this ASU are effective for all entities for annual reporting periods beginning after 15 December 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued. The Company is currently evaluating the effect of adopting this ASU.
3. Fair Value Measurement and Marketable Securities
The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is 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, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:
Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities at the measurement date.
F-15
Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in its assessment of fair value.
As of December 31, 2025, financial assets measured and recorded at fair value are as follows (in thousands):
AmortizedCost GrossUnrealizedGains GrossUnrealizedLosses EstimatedFair Value
Assets
(1)
$8.8 million of commercial paper was included in cash and cash equivalents on the balance sheet due to securities with purchase dates within 90 days of maturity dates.
(2)
The Company’s short-term marketable securities mature in one year or less.
(3)
The Company’s long-term marketable securities mature between one and two years.
As of December 31, 2024, financial assets measured and recognized at fair value are as follows (in thousands):
F-16
AmortizedCost GrossUnrealizedGains GrossUnrealizedLosses EstimatedFair Value
Assets
Included in cash and cash equivalents(1) 84,379 — (1 ) 84,378
(1)
$7.4 million of commercial paper were included in cash and cash equivalents on the balance sheet due to securities with purchase dates within 90 days of maturity dates
(2)
The Company’s short-term marketable securities mature in one year or less.
(3)
The Company’s long-term marketable securities mature between one and three years
As of December 31, 2025 and December 31, 2024, all marketable securities had a remaining maturity of two years or less. There were no financial liabilities measured and recognized at fair value as of December 31, 2025 and December 31, 2024.
As of December 31, 2025 and December 31, 2024, certain securities were held in an unrealized loss position. Based on review of the portfolio of marketable securities and the creditworthiness of the underlying issuer, the Company determined that the decline in fair value below cost did not result from credit-related factors. Additionally, the Company does not intend to sell these securities, nor will it be required to sell before recovery of the amortized cost basis at maturity. As a result, no credit-related losses have been recognized for any of the periods presented.
4. Balance Sheet Components
Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
Useful Life As of December 31,
Leasehold improvements Shorter of usefullife or lease term 5,124 4,913
Less: Accumulated depreciation and amortization (14,256 ) (11,711 )
Property and equipment, net $ 8,217 $ 8,966
Depreciation and amortization expense was $2.7 million, $2.4 million and $2.5 million for the years ended December 31, 2025, 2024 and 2023, respectively.
F-17
Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):
As of December 31,
Accrued research and development expenses $ 26,508 $ 19,956
5. Operating Leases
In June 2023, the Company entered into a lease agreement for approximately 44,000 square feet of laboratory and office facilities at 5000 Shoreline Court, South San Francisco, California. The lease term is 120 months, and the Company has an option to extend the lease term for a total of two consecutive five-year periods. This lease agreement commenced in August 2024.
In May 2024, the Company amended its 5000 Shoreline Court facility lease agreement to expand the size of the original premises by adding approximately 11,321 rentable square feet of additional space. The amendment to the lease term commenced in January 2025.
The Company's lease at 7000 Shoreline Court, South San Francisco, California, expired in September 2024.
In November 2023, the Company entered into a lease agreement for approximately 5,700 square feet of space at 11710 El Camino Real, San Diego, California for corporate office space. The lease term commenced in December 2023 and expires in March 2028. The Company has an option to renew the lease for three years.
Future minimum lease payments under operating leases included on the Company's balance sheet are as follows:
As of
(in thousands) December 31, 2025
Total future minimum lease payments 46,358
Less: imputed interest (18,444 )
Total operating lease liabilities $ 27,914
The following table summarizes other information about the Company's operating leases:
As of December 31,
Weighted-average remaining lease term 8.6 9.4
Weighted-average discount rate 11.5% 12.6%
Operating lease costs were $5.0 million, $1.9 million and $1.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. Variable lease costs were $2.2 million, $1.1 million, and $1.4 million for the years ended December 31, 2025, 2024, and 2023, respectively. Variable lease costs represent additional costs incurred, related to administration, maintenance and property tax costs incurred, which are billed based on both usage and as a percentage of the Company's share of total square footage.
F-18
During the years ended December 31, 2025, 2024 and 2023, cash paid for amounts included in the measurement of lease liabilities was $0.4 million, $1.7 million and $2.0 million, respectively.
6. Commitments and Contingencies
Contingencies
From time to time, the Company may be involved in litigation related to claims that arise in the ordinary course of its business activities. The Company accrues for these matters when it is probable that future expenditures will be made and these expenditures can be reasonably estimated. As of December 31, 2025, the Company does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows.
Indemnification
The Company enters into standard indemnification arrangements in the ordinary course of business with vendors, clinical trial sites and other parties. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. Accordingly, the Company has not recorded a liability related to such indemnification agreements as of December 31, 2025.
7. Income Taxes
The Company did not record a federal or state income tax provision due to its net losses for the years ended December 31, 2025, December 31, 2024 and December 31, 2023. In addition, the Company continues to maintain a full valuation allowance against its net deferred tax assets as the Company believes it is not more likely than not that the benefit will be realized.
The provision for income taxes differs from the amount expected by applying the federal statutory rate to the loss before taxes as follows (in thousands):
Year Ended December 31,
Amount % Amount % Amount %
Tax Credits:
Nondeductible Items:
Provision for income taxes $ - 0.0 % $ - 0.0 % $ - 0.0 %
(1) The Company has elected to present unrecognized tax benefits and the related tax positions recorded in the current annual reporting period on a net basis within the category in which the tax position is presented in the rate reconciliation. Changes related to tax positions taken in prior annual reporting periods are reflected in the “Changes in unrecognized tax benefits” category.
F-19
The tax effects of temporary differences and carryforwards of the deferred tax assets are presented below (in thousands):
As of December 31,
Deferred tax assets:
Research and development credit carryforwards 46,654 30,868
Capitalized research & development expenditures 83,140 69,271
Deferred tax assets, net of valuation allowance 4,936 4,095
Deferred tax liabilities:
Property and equipment (62 ) (105 )
Net deferred tax assets $ — $ —
The Company has established a full valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets.
ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. The valuation allowance increased by $31.5 million during the year-ended December 31, 2025 and $69.0 million and during the year ended December 31, 2024.
The Company had net operating loss carryforwards of $145.8 million and $147.5 million available to reduce future taxable income, if any, for federal income tax purposes as of December 31, 2025 and December 31, 2024, respectively. The Company had net operating loss carryforwards of $93.9 million and $93.5 million available to reduce future taxable income, if any, for state income tax purposes. If not utilized, the federal carryforwards of $11.6 million and the state carryforwards of $93.9 million will begin to expire in 2037 and 2036, respectively. The federal net operating loss carryforwards of $134.2million arising after December 31, 2017 do not expire.
The Company also had federal and state research and development credit carryforwards of $17.1million and $13.6 million as of December 31, 2025 and $19.8 million and $10.8 million as of December 31, 2024, respectively. The Company had Orphan Drug Credits (“ODC”), related to the orphan drug designation of darovasertib in 2022, of $27.3 million and $8.1 million as of December 31, 2025 and December 31, 2024, respectively. The federal credits will expire starting in 2037 if not utilized, and the state research credit can be carried forward indefinitely.
The Tax Reform Act of 1986 limits the use of net operating loss carryforwards in certain situations where changes occur in the stock ownership of a company. The annual limitation may result in the expiration of net operating losses and credits before utilization. The Company performed a Section 382 analysis through December 31, 2025. The Company has not experienced ownership changes in the current year. Subsequent ownership changes may affect the limitation in future years.
Related to unrecognized tax benefits noted below, the Company accrued no penalties or interest during the years ended December 31, 2025, December 31, 2024 and December 31, 2023.
The Company had $8.8 million and $5.9 million of unrecognized tax benefits as of December 31, 2025 and December 31, 2024, respectively.
F-20
The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands).
Decrease related to prior year tax positions (185 )
Increase related to current year tax positions 2,290
Increase related to prior year tax positions 169
Increase related to current year tax positions 2,737
The Company files income tax returns in the U.S. federal jurisdiction and in the states of Arizona, California, New Jersey, North Carolina, Pennsylvania, Texas, Utah and Wisconsin. For jurisdictions in which tax filings have been filed, all tax years remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating losses or credits. The Company’s federal and state income taxes paid, net of refunds, were nil during the years ended December 31, 2025, 2024, and 2023.
In July 2025, Congress passed and the President signed into law H.R. 1, the One Big Beautiful Bill Act (“Tax Act”) which modified certain business tax provisions enacted as a part of the 2017 Tax Cuts and Jobs Act including restoration of 100% bonus depreciation and the ability to expense domestic research and development costs. The Tax Act did not result in a material impact to the Company’s income tax provision or effective tax rate.
8. Common Stock
As of December 31, 2025 and December 31, 2024, the Company’s certificate of incorporation authorized the Company to issue 300,000,000 shares of common stock at a par value of $0.0001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Company’s board of directors. As of December 31, 2025, no dividends have been declared to date.
On July 11, 2024, the Company completed an underwritten public follow-on offering. The offering consisted of 8,355,714 shares of common stock at an offering price to the public of $35.00 per share, including 1,127,142 shares of common stock upon the exercise in full of the overallotment option by the underwriters, as well as pre-funded warrants to purchase 285,715 shares of common stock at a public offering price of $34.9999 per underlying share, in each case before underwriting discounts and commissions. Pursuant to the offering, the Company received aggregate gross proceeds of approximately $302.4 million, before deducting underwriting discounts and commissions and other offering expenses, resulting in net proceeds of approximately $283.8 million, after deducting underwriting discounts and commissions and other offering expenses.
As of December 31, 2025, the following aggregate warrants to purchase shares of the Company’s common stock were issued and outstanding:
F-21
(1) In September 2024, 1,750,000 shares of common stock subject to outstanding pre-funded warrants were cashless exercised and 1,749,993 shares of common stock were issued.
The warrants are classified as a component of Stockholders’ Equity within Additional Paid-in-Capital. The warrants are classified as equity because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, are indexed to the Company’s common stock and meet the equity classification criteria. The warrants will not expire until they are fully exercised.
The Company had reserved common stock for future issuance as follows:
As of December 31,
Shares available under the Employee Stock Purchase Plan 2,687,759 1,911,011
9. Stock-Based Compensation
2023 Inducement Plan
On February 24, 2023, the Company adopted the IDEAYA Biosciences, Inc. 2023 Employment Inducement Award Plan (the “2023 Inducement Plan”), pursuant to which the Company reserved 1,000,000 shares of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The 2023 Inducement Plan was approved by the Company’s board of directors without stockholder approval in accordance with such rule. Options granted under the 2023 Inducement Plan have a term of 10 years and generally vest over a 4-year period with 1-year cliff vesting.
In June 2024, the Company amended the 2023 Employment Inducement Award Plan, increasing the number of shares available for issuance by 1,000,000.
In May 2025, the Company further amended the 2023 Employment Inducement Award Plan, increasing the number of shares available for issuance by 2,000,000.
As of December 31, 2025, the number of shares available for issuance under the 2023 Inducement Plan was 1,516,767.
2019 Incentive Award Plan
In May 2019, the Company’s board of directors adopted and the Company’s stockholders approved the 2019 Incentive Award Plan (the “2019 Plan”), under which the Company may grant cash and equity-based incentive awards to the Company’s employees, consultants and directors. Following the effectiveness of the 2019 Plan, the Company will not make any further grants under the 2015 Equity Incentive Plan (the “2015 Plan”). However, the 2015 Plan continues to govern the terms and conditions of the outstanding awards granted under it. Shares of common stock subject to awards granted under the 2015 Plan that are forfeited or lapse unexercised and which following the effective date of the 2019 Plan are not issued under the 2015 Plan will be available for issuance under the 2019 Plan.
Options granted under the 2019 Plan may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees, directors and consultants.
The 2019 Plan is subject to an annual increase on the first day of each year beginning in 2020 and ending in 2029, equal to the lesser of 4% of the shares outstanding on the last day of the immediately preceding fiscal year, and such smaller number of shares as determined by the Company’s board of directors. Options granted under the 2019 Plan have a term of 10 years (or five years if granted to a 10% stockholder) and generally vest over a 4-year period with 1-year cliff vesting.
As of December 31, 2025, the number of shares available for issuance under the 2019 Plan was 2,833,979.
F-22
2015 Equity Incentive Plan
In 2015, the Company established its 2015 Plan which provides for the granting of stock options to employees, directors and consultants of the Company. Options granted under the 2015 Plan may be either ISOs or NSOs.
2019 Employee Stock Purchase Plan
In May 2019, the Company’s board of directors adopted and the Company’s stockholders approved the 2019 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides eligible employees with the opportunity to acquire an ownership interest in the Company through periodic payroll deductions up to 15% of eligible compensation. The offering period is determined by the Company in its discretion but may not exceed 27 months. The per-share purchase price on the applicable exercise date for an offering period is equal to the lesser of 85% of the fair market value of the common stock at either the first business day or last business day of the offering period, provided that no more than 4,000 shares of common stock may be purchased by any one employee during each offering period.
The ESPP is intended to constitute an “employee stock purchase plan” under Section 423(b) of the Internal Revenue Code of 1986, as amended. A total of 195,000 shares of common stock were initially reserved for issuance under the ESPP, subject to an annual increase on January 1 of each year, beginning on January 1, 2020, equal to the lesser of 1% of the shares outstanding on the last day of the immediately preceding fiscal year and such smaller number of shares as may be determined by the Company’s board of directors, provided, however, that no more than 2,500,000 shares may be issued under the ESPP.
As of December 31, 2025, the number of shares available for issuance under the ESPP was 2,687,759. For the years ended December 31, 2025, 2024, and 2023 the Company recorded $0.8 million, $0.6 million and $0.6 million respectively, of compensation expense related to employee participation in the ESPP.
Stock-Based Compensation Expense
Total stock-based compensation expense recorded related to awards granted to employees and non-employees was as follows (in thousands):
Year Ended December 31,
Stock Options
Activity under the Company’s 2015 and 2019 Plans and 2023 Inducement Plan is set forth below:
Outstanding Options
F-23
The weighted-average grant-date fair value of options granted during the years ended December 31, 2025, 2024 and 2023 was $14.38, $29.93 and $13.98 per share, respectively. The aggregate intrinsic value of options exercised for the years ended December 31, 2025, 2024, 2023 was $2.5 million, $32.0 million and $16.9 million, respectively. Intrinsic values are calculated as the difference between the exercise price of the underlying options and the fair value of the common stock on the date of exercise.
As of December 31, 2025 and December 31, 2024, total unrecognized stock-based compensation expense for stock options was $96.2 million and $90.2 million, which is expected to be recognized over a weighted-average period of 2.56 years and 2.63 years, respectively.
Black-Scholes Assumptions
The fair values of options were calculated using the assumptions set forth below:
Year Ended December 31,
Expected term 5.5 - 6.1 years 5.5 - 6.1 years 6.1 years
Dividend yield 0% 0% 0%
Expected term. The expected term represents the weighted-average period the stock options are expected to remain outstanding and is based on the options’ vesting terms and contractual terms.
Expected Volatility. The expected volatility is based on the Company’s historical stock price volatility. The historical stock price volatility is calculated based on a period of time commensurate with the expected term assumption for each grant.
Risk-Free Interest Rate. The risk-free rate assumption is based on U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options.
Expected Dividend Rate. The Company has not paid and does not anticipate paying any dividends in the near future. Accordingly, the Company has estimated the dividend yield to be zero.
The Company accounts for forfeitures as they occur.
Fair Value of Common Stock
The fair value of the Company’s common stock is determined based on the market price on the date of grant.
10. Significant Agreements
Novartis License Agreement
In September 2018, the Company entered into a License Agreement with Novartis to develop and commercialize Novartis’ LXS196 (also known as IDE196), a Phase 1 protein kinase C (“PKC”) inhibitor, for the treatment of cancers with GNAQ and GNA11 mutations. The Company renamed Novartis’ LXS196 oncology as IDE196, and which has a non-proprietary name of darovasertib. Under the license agreement, Novartis granted to the Company a worldwide, exclusive, sublicensable license to research, develop, manufacture, and commercialize certain defined compounds and products, including IDE196 and certain other PKC inhibitors, as well as companion diagnostic products, collectively referred to as the licensed products, for any purpose. The Company paid Novartis an upfront payment of $2.5 million and issued 263,615 shares of its Series B redeemable convertible preferred stock concurrently with the execution of the license agreement.
In March 2025, the FDA granted Breakthrough Therapy designation (“BTD”) for darovasertib, a potential first-in-class PKC inhibitor, for the neoadjuvant treatment of adult patients with primary uveal melanoma (“UM”) for whom enucleation has been recommended. Under the license agreement with Novartis, the Company paid Novartis a $1.0 million milestone payment in April 2025.
F-24
Subject to completion of certain clinical and regulatory development milestones, the Company agreed to make additional milestone payments in the aggregate of up to $8.0 million, and subject to achievement of certain commercial sales milestones, the Company agreed to make milestone payments in the aggregate of up to $20.0 million. The Company also agreed to pay mid to high single-digit tiered royalty payments based on annual worldwide net sales of licensed products, payable on a licensed product-by-licensed product and country by country basis until the latest of the expiration of the last to expire exclusively licensed patent, the expiration of regulatory exclusivity, and the ten year anniversary of the first commercial sale of such product in such country. The royalty payments are subject to reductions for lack of patent coverage, loss of market exclusivity, and payment obligations for third-party licenses.
The Company owns or controls all commercial rights in its darovasertib program in UM, including in mUM and in primary UM, subject to certain economic obligations pursuant to its exclusive, worldwide license to darovasertib with Novartis.
Servier License Agreement
In August 2025, we entered into an exclusive license agreement with Les Laboratoires Servier (“Servier”) pursuant to which we granted to Servier an exclusive license under certain intellectual property rights controlled by the Company relating to darovasertib to develop and commercialize products in all countries worldwide except for the United States for all diagnostic, prophylactic and therapeutic uses in humans. We received an upfront payment of $210.0 million and are eligible to receive development and regulatory milestone payments of up to an aggregate of $100.0 million, commercial milestone payments of up to an aggregate of $220.0 million, clinical trial cost sharing and clinical trial cost reimbursement, and royalties on net sales of products outside of the United States ranging from mid-teens to low-twenties percentages. Servier will be responsible for the regulatory and commercial activities for darovasertib outside the United States. We and Servier will collaborate on the development of darovasertib and share the associated costs. We retain all rights to darovasertib in the United States. The Servier license agreement will remain in effect on a product-by-product and country-by-country basis until expiration of royalty obligations.
Pfizer Clinical Trial Collaboration and Supply Agreements
In March 2020, the Company entered into a Clinical Trial Collaboration and Supply Agreement with Pfizer, Inc. (as amended in September 2020, April 2021, September 2021 and May 2023, the “Pfizer Agreement”). Pursuant to the Pfizer Agreement, Pfizer supplies the Company with their MEK inhibitor, binimetinib, and their cMET inhibitor, crizotinib, to evaluate combinations of darovasertib independently with each of the Pfizer compounds, in patients with tumors harboring activating GNAQ or GNA11 mutations. Under the Pfizer Agreement, the Company is the sponsor of the combination studies and will provide darovasertib and pay for the costs of the combination studies. Pfizer will provide binimetinib and crizotinib for use in the clinical trial at no cost to the Company. The Pfizer Agreement provides that the Company and Pfizer will jointly own clinical data generated from the clinical trial and will also jointly own inventions, if any, relating to the combined use of darovasertib and binimetinib, or independently, to the combined use of darovasertib and crizotinib. The Company and Pfizer have formed a joint development committee responsible for coordinating all regulatory and other activities under the agreement.
In March 2022, the Company and Pfizer entered into a Second Clinical Trial Collaboration and Supply Agreement, as amended in May 2023 (the “Second Pfizer Agreement”), pursuant to which the Company is evaluating darovasertib and crizotinib as a combination therapy in mUM in a planned Phase 2/3 potential registration-enabling clinical trial. Pursuant to the Second Pfizer Agreement, the Company is the sponsor of the combination trial and the Company will provide darovasertib and pay for the costs of the combination trial, and Pfizer will provide crizotinib for the planned combination trial at no cost to the Company for up to an agreed-upon number of mUM patients. The Company and Pfizer will jointly own clinical data from the planned combination trial and all inventions relating to the combined use of darovasertib and crizotinib. The Company and Pfizer have formed a joint development committee responsible for coordinating all regulatory and other activities under the Second Pfizer Agreement.
Separately, in March 2022, the Company and Pfizer also entered into a Third Clinical Trial Collaboration and Supply Agreement (the “Third Pfizer Agreement”), pursuant to which the Company could, subject to preclinical validation and FDA feedback and guidance, evaluate darovasertib and crizotinib, as a combination therapy in cMET-driven tumors such as NSCLC and/or HCC in a Phase 1 clinical trial. Pursuant to the Third Pfizer Agreement, the Company was the sponsor of the planned combination trial, and the Company would provide darovasertib and pay for the costs of the combination trial. Pfizer would provide crizotinib for the planned combination trial at no cost to the Company. Pursuant to Amendment No. 1 to the Second Pfizer Agreement, as described below, the Company and Pfizer terminated the Third Pfizer Agreement.
F-25
In May 2023, the Company continued its relationship with Pfizer by entering into Amendment No. 4 to the Pfizer Agreement relating to the supply of crizotinib in support of this Phase 2 clinical trial, pursuant to which Pfizer will continue to provide the Company with an additional defined quantity of crizotinib at no cost.