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 together with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion and analysis contains forward-looking statements based upon current beliefs, plans, and expectations related to future events and our future performance that involves risks, uncertainties, and assumptions, such as statements regarding our intentions, plans, objectives, and expectations for our business. Our actual results and the timing of selected events could differ materially from those discussed in the forward-looking statements as a result of several factors including those set forth in the section titled “Risk Factors.” See also the section titled “Special Note Regarding Forward-Looking Statements”.
Overview
We are a clinical-stage biopharmaceutical company founded to confront the greatest medical challenges of our generation by bringing forward the next generation of novel therapies with brain-penetrant chemistry that offer improved treatment outcomes and quality of life for patients. Our therapeutic pipeline currently consists of programs that target novel mechanisms of action for a broad range of underserved, prevalent diseases. We are advancing a Phase 3 program for navacaprant, a novel once-daily oral kappa opioid receptor (“KOR”) antagonist that is being developed for the treatment of major depressive disorder (“MDD”), which we believe has the potential to provide significant advantages relative to the standard of care, if approved. We are also advancing NMRA-511, a highly selective, novel antagonist of the vasopressin 1a receptor (“V1aR”) being developed for the treatment of agitation associated with dementia due to Alzheimer’s disease (“AD”). Beyond navacaprant and NMRA-511, Neumora is advancing NMRA-898, a novel M4 PAM with potential best in class pharmacology for the treatment of schizophrenia. Additionally, Neumora is developing NMRA-215, a, highly brain-penetrant, oral NLRP3 inhibitor for the treatment of obesity. We expect several updates from these programs throughout 2026, including to report Phase 3 KOASTAL-2 and -3 topline data in the second quarter of 2026, report MAD extension data with NMRA-511 in the second half of 2026, and to report multiple ascending dose (“MAD”) data with NMRA-898 in the second half of 2026.
We were incorporated in November 2019 and commenced operations thereafter. To date, we have focused primarily on building our organization, acquiring technologies and companies, developing our precision neuroscience approach, identifying and developing potential product candidates, executing clinical and preclinical studies, organizing and staffing our company, business planning, establishing our intellectual property portfolio, raising capital and providing general and administrative support for these operations. We do not have any products approved for sale, we have not generated any revenue from the sale of products, and we do not expect to generate revenue from the sale of our product candidates until we complete clinical development, submit regulatory filings, and receive approvals from the applicable regulatory bodies for such product candidates, if ever.
As of December 31, 2025, we had $182.5 million in cash and cash equivalents. Based upon our current operating plan, we believe that our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements through at least the next 12 months following the issuance of the consolidated financial statements.
Since our inception, we have incurred significant operating losses and we expect to continue to incur significant losses for the foreseeable future as we continue to advance the development of our product candidates and approach, and incur additional costs associated with being a public company. Our net losses were $236.9 million and $243.8 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $1,184.1 million. Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, and in-licensing our precision neuroscience approach and product candidates, and conducting preclinical studies and clinical trials, and to a lesser extent, general and administrative expenditures. Our net losses may fluctuate significantly from period to period, depending on the timing of our clinical trials and our expenditures on research and development activities.
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We will need substantial additional funding to support our continuing operations and pursue our long-term business plan, including to complete the development and commercialization of our product candidates, if approved. Until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our operations through public or private equity offerings or debt financings or other capital sources, which may include strategic collaborations or other arrangements with third parties, or other sources of financing. We may not be able to raise additional capital on terms acceptable to us or at all. If we are unable to raise additional capital on acceptable terms when needed, our business, results of operations, and financial condition would be adversely affected. The amount and timing of our future funding requirements will depend on many factors including the successful advancement of our precision neuroscience approach, programs, and product candidates. Our ability to raise additional funds may also be adversely impacted by potential worsening global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide.
Acquisitions of Assets
We have completed various acquisitions. For details regarding our acquisitions, see Note 7 – Acquisitions of Assets to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Strategic License and Research and Collaboration Agreements
We have assumed license arrangements with certain third parties as a result of our acquisitions and have entered into several additional agreements with various parties. For details regarding these agreements, see Note 9 – Strategic License and Research and Collaboration Agreementsto our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Contingent Consideration
BlackThorn Contingent Consideration
Pursuant to the terms of the BlackThorn Merger Agreement, we are required to pay the former stockholders of BlackThorn contingent consideration (i) with respect to navacaprant, in the form of development and regulatory approval milestones of up to an aggregate amount of $365.0 million, which includes a milestone payment that became due and was paid in the fourth quarter of 2023 upon dosing the first patient in the Phase 3 clinical trial for navacaprant, and sales-based milestones of up to an aggregate amount of $450.0 million and (ii) with respect to NMRA-511, in the form of development and regulatory approval milestones of up to an aggregate amount of $100.0 million, and sales-based milestones of up to an aggregate amount of $100.0 million (“BlackThorn Milestones”). At the Company’s sole discretion, the BlackThorn Milestone payments may be settled in cash or shares of the Company, or a combination of both, subject to the provisions of the BlackThorn Merger Agreement, other than one development milestone in the amount of $10.0 million, which must be settled in cash. In December 2023, we issued 6,072,445 shares of common stock based on the volume weighted average price per share prior to the date the milestone was met and paid $2.3 million in cash in satisfaction of the Phase 3 navacaprant milestone to the former stockholders of BlackThorn and participants in the carveout plan. As of December 31, 2025, none of the other BlackThorn Milestones have been achieved and no such related amounts were deemed due or payable.
Vanderbilt Contingent Consideration
Pursuant to the terms of the Vanderbilt License Agreement, we are required to pay Vanderbilt contingent consideration payable in cash up to an aggregate of $42.0 million upon the achievement of specified development milestones and up to an aggregate of $380.0 million upon the achievement of commercial milestone events as well as tiered royalties at mid-single digit percentages on potential future net sales. We achieved a $2.0 million development milestone in October 2023, which was paid in cash in November 2023. Additionally, in July 2025, we achieved and settled in cash a $5.0 million development milestone. As of December 31, 2025, none of the other Vanderbilt milestones have been achieved and no such related amounts were deemed due or payable.
Components of Operating Results
Operating Expenses
Research and Development
Research and development expenses consist of external and internal expenses, and primarily relate to our discovery efforts and development of our precision neuroscience approach, programs, and product candidates. We account for acquired in-process research and development (“IPR&D”) expenses from our strategic acquisitions separately from research and development expenses.
External research and development expenses include, among others, amounts incurred with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), preclinical testing organizations and other vendors that conduct research and
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development activities on our behalf. Internal research and development expenses include, among others, personnel-related costs, including salaries, benefits and stock-based compensation for employees engaged in research and development functions, laboratory supplies and other non-capital equipment utilized for in-house research, software development costs and allocated expenses including facilities costs and depreciation and amortization.
Because we are working on multiple research and development programs at any one time, we track our external expenses by the stage of program, clinical or preclinical. However, our internal expenses, including unallocated costs, employees and infrastructure are not directly tied to any one program and are deployed across multiple programs. As such, we do not track internal expenses on a specific program basis.
We expense research and development costs as incurred. Amounts recorded for external goods or services incurred for research and development activities that have not yet been invoiced are included in accrued liabilities in our consolidated balance sheets and often represent estimates. We estimate accrued expenses and the related research and development expense based on the level of services performed but not yet invoiced pursuant to agreements established with our service providers, according to the progress of preclinical studies, clinical trials or related activities, and discussions with applicable personnel and service providers as to the progress or state of consummation of goods and service. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our consolidated financial statements as prepaid expenses or other current assets or accrued liabilities. Nonrefundable advance payments that we make for goods or services to be received in the future for use in research and developmentactivities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered.
We expect to continue to incur significant research and development expenses for the foreseeable future as we further develop our precision neuroscience approach and advance our programs and product candidates through clinical development and pursue regulatory approval of our product candidates. The process of conducting the necessary clinical and preclinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result of the uncertainties discussed below, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates.
Our research and development expenses may vary significantly based on factors such as:
•
per patient trial costs;
•
the number of trials required for approval;
•
the number of sites included in the trials;
•
change to trials;
•
the countries in which the trials are conducted;
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the length of time required to enroll eligible patients;
•
the number of patients that participate in the trials;
•
the drop-out or discontinuation rates of patients;
•
potential additional safety monitoring requested by regulatory agencies;
•
the duration of patient participation in the trials and follow-up;
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the cost and timing of manufacturing our product candidates;
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the phase of development of our product candidates;
•
the efficacy and safety profile of our product candidates;
•
the number and scope of preclinical and IND-enabling studies;
•
the effectiveness of our precision neuroscience approach at identifying target patient populations and utilizing the approach to enrich our patient population in our clinical trials;
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•
employee-related costs for personnel engaged in the design, development, testing and enhancement of our precision neuroscience related technology;
•
the extent to which we establish additional collaboration or license agreements;
•
whether we choose to partner any of our product candidates and the terms of such partnership; and
•
the impact of general economic conditions, such as inflation. tariffs, and interest rates.
A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any of our product candidates. We may obtain unexpected results from our preclinical studies and future clinical trials.
Acquired In-Process Research and Development
Acquired in-process research and development expenses consist of existing research and development projects at the time of the acquisition. Projects that qualify as IPR&D assets represent those that have not yet reached technological feasibility and have no alternative future use. Our acquisitions of assets have all included IPR&D assets that had not yet reached technological feasibility and had no alternative future use, which resulted in a write-off of these IPR&D assets to acquired in-process research and development expenses in our consolidated statement of operations and comprehensive loss.
General and Administrative
General and administrative expenses include, among others, personnel-related costs, including salaries, benefits, and stock-based compensation for our employees in executive, finance, and other administrative functions, legal fees, professional fees incurred for accounting, audit, and tax services, recruiting costs, and other allocated expenses, including facilities costs and depreciation and amortization not included in research and development expenses. Legal fees are included within general and administrative expenses and are related to corporate and intellectual property related matters.
We expect our general and administrative expenses to increase substantially in the foreseeable future as we continue to support our research and development activities, grow our business and, if any of our product candidates receive marketing approval, commence commercialization activities. We will also continue to incur additional expenses associated with operating as a public company, including increased expenses related to audit, legal, regulatory, and tax-related services associated with maintaining compliance with the rules and regulations of the SEC and standards applicable to public companies, additional insurance expenses, investor relations activities and other administrative and professional services.
Other Income (Expense)
Interest Income
Interest income consists of interest earned on our cash equivalents and marketable securities.
Interest Expense
Interest expense consists of interest expense related to our Loan Agreement, as well as amortization of debt discount and debt issuance costs.
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Results of Operations
For the Years Ended December 31, 2025 and 2024
The following table summarizes our result of operations for the periods presented:
Year Ended December 31,
(in thousands)
Operating expenses:
Acquired in-process research and development 5,000 — 5,000
Other income (expense):
Other income (expense), net (767 ) (78 ) (689 )
Research and Development Expenses
The following table summarizes our research and development expenses by program for the periods presented:
Year Ended December 31,
(in thousands)
Direct external program expenses:
Internal and unallocated expenses:
Research and development expenses decreased by $24.9 million, or 12%, to $176.1 million for the year ended December 31, 2025 from $200.9 million for the year ended December 31, 2024.
Direct external program expenses decreased by $4.9 million primarily driven by:
•
a $12.2 million reduction in navacaprant program expenses following the completion of the KOASTAL-1 Phase-3 trial in 2024, and
•
partially offset by a $5.2 million increase in preclinical research and manufacturing, and increased clinical trial related costs to both the M4 PAM and NMRA-511 programs of $1.2 million and $0.9 million, respectively.
Internal and unallocated expenses decreased by $19.9 million, which were primarily due to:
•
lower personnel-related costs of $11.0 million due to a reduction in stock based compensation expense primarily driven by one time stock option modification expense of $3.6 million recorded in 2024 that did not recur, as well as departures of certain key executive, and lower overall headcount, and
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•
a decrease in other costs of $8.9 million primarily due to a reduction in expense incurred under our research and collaboration agreements with Amgen of $6.3 million. The Amgen Collaboration Agreement automatically terminated upon its third anniversary in September 2024 and a final payment was made to Amgen in May 2025. Additionally, facilities-related expenses decreased by $2.2 million, reflecting the Company’s relocation from a combined office and laboratory facility to a smaller office-only footprint.
Acquired In-Process Research and Development Expenses
Acquired in-process research and development expenses of $5.0 million for the year ended December 31, 2025 was related to the achievement of a Phase 1 development milestone under the Vanderbilt License Agreement.
General and Administrative Expenses
General and administrative (“G&A”) expenses decreased by $2.4 million, or 4%, to $60.1 million for the year ended December 31, 2025 from $62.5 million for the year ended December 31, 2024. The decrease was primarily attributable to reduced consulting and personnel related costs.
Interest Income
Interest income decreased by $11.6 million to $8.3 million for the year ended December 31, 2025 from $19.9 million for the year ended December 31, 2024, which was attributable to less interest earned on our lower balances in cash equivalents and marketable securities.
Interest Expense
Interest expense of $3.2 million for the year ended December 31, 2025 consisted of interest expense related to our Loan Agreement, amortization of debt issuance costs and accretion of the final payment fee.
Liquidity and Capital Resources
Sources of Liquidity
Since our inception, we have not generated any revenue from the sale of products and we have incurred significant net losses and negative cash flows from operations. Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, and in-licensing our precision neuroscience approach, programs, and product candidates, and conducting preclinical studies and clinical trials, and to a lesser extent, general and administrative expenditures. We have not yet commercialized any products and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever.
As of December 31, 2025, we had $182.5 million of cash and cash equivalents.
Prior to our Initial Public Offering (“IPO”) we primarily funded our operations with the net proceeds from the sale and issuance of our convertible preferred stock and convertible promissory notes. In September, 2023, we completed our IPO pursuant to which we issued and sold an aggregate of 14,710,000 shares of common stock at a price to the public of $17.00 per share. We received aggregate net proceeds of $226.5 million after deducting underwriting discounts and commissions of $17.5 million and other offering expenses of $6.0 million.
In October 2024 we entered into a sales agreement with Leerink to sell shares of our common stock, from time to time, with aggregate gross sales proceeds of up to $300.0 million, through an at-the-market equity offering program (“ATM”) with Leerink as the sales agent. During the years ended December 31, 2025 and 2024, we received aggregate net proceeds of $19.7 million and $13.7 million, respectively, through sales of shares of our common stock under the ATM after deducting commissions and offering expenses.
In May 2025, we entered into a loan and security agreement, (as amended, the “Loan Agreement”) with K2 HealthVentures LLC (“K2HV”). The Loan Agreement provides us with a term loan facility in the aggregate principal amount of up to $125.0 million, of which we have borrowed $60.0 million. The remaining $65.0 million is available for borrowing upon our request, subject to certain clinical and regulatory milestones or discretionary approval by the lenders. The term loan facility matures on May 1, 2029 and can be extended to May 1, 2029, subject to our achievement of certain clinical milestones.
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Future Funding Requirements
We expect our expenses and operating losses will increase substantially over the foreseeable future as we continue our research and development efforts, advance our product candidates through clinical and preclinical development, enhance our precision neuroscience approach and programs, expand our product pipeline, seek regulatory approval, prepare for commercialization, as well as hire additional personnel and protect our intellectual property. Furthermore, we have incurred and will continue to incur additional costs associated with being a public company. We also expect to increase the size of our administrative function to support the growth of our business. Our net losses may fluctuate significantly from period to period, depending on the factors described below. We are subject to the risks typically related to the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business. The expected increase in expenses will be driven in large part by our ongoing activities, and our future capital requirements will depend on many factors, including:
•
the scope, timing, progress, costs and results of discovery, preclinical development and clinical trials for our current or future product candidates;
•
the number of clinical trials required for regulatory approval of our current or future product candidates;
•
the costs, timing and outcome of regulatory review of any of our current or future product candidates;
•
the costs associated with acquiring or licensing additional product candidates, technologies or assets, including the timing and amount of any milestones, royalties or other payments due in connection with our acquisitions and licenses;
•
the cost of manufacturing clinical and commercial supplies of our current or future product candidates;
•
the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights;
•
the effectiveness of our precision neuroscience approach at identifying target patient populations and utilizing our approach to enrich our patient population in our clinical trials;
•
our ability to maintain existing, and establish new, strategic collaborations or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement;
•
our ability to access additional multimodal patient datasets;
•
the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;
•
the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;
•
expenses to attract, hire and retain skilled personnel;
•
the costs of operating as a public company;
•
our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payers;
•
the effect of macroeconomic trends including inflation, tariffs, and interest rates;
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addressing any potential supply chain interruptions or delays, including those related to geopolitical issues;
•
the effect of competing technological and market developments; and
•
the extent to which we acquire or invest in business, products and technologies.
Based upon our current operating plan, we believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements through at least the next 12 months following the issuance of the consolidated financial statements. However, we anticipate that we will need to raise additional financing in the future to fund our operations, including the commercialization of any approved product candidates. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We may also raise additional financing on an opportunistic basis in the future. We expect to continue to expend significant resources for the foreseeable future.
To complete the development and commercialization of our product candidates, if approved, we will require substantial additional funding. Until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our
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operations through public or private equity offerings or debt financings or other capital sources, which may include strategic collaborations or other arrangements with third parties, or other sources of financing.
Cash Flows
The following table summarizes our cash flows for the periods presented:
Year Ended December 31,
(in thousands)
Net cash (used in) provided by:
Operating Activities
Net cash used in operating activities for the twelve months ended December 31, 2025 was $206.4 million, which consisted of a net loss of $236.9 million, partially offset by non cash charges of $30.9 million and a change in our net operating assets and liabilities of $0.4 million. The noncash charges primarily consisted of $29.9 million of stock-based compensation and $1.9 million of noncash operating lease expense, partially offset by $2.9 million of net accretion of discounts on marketable securities. The change in our net operating assets and liabilities primarily resulted from an increase accrued liabilities of $4.2 million primarily related to our clinical programs, partially offset by an increase in prepaid assets and other current assets of $2.8 million due to the timing of payments related to clinical trials and a decrease in operating lease liabilities of $1.9 million due to the Company’s move to a smaller office footprint.
Net cash used in operating activities for the twelve months ended December 31, 2024 was $182.9 million, which consisted of a net loss of $243.8 million, partially offset by a change in our net operating assets and liabilities of $22.6 million and noncash charges of $38.2 million. The change in our net operating assets and liabilities primarily resulted from a decrease of $15.9 million in prepaid expenses and other current assets related to our clinical programs and the Amgen Collaboration Agreement and an increase of $7.2 million and $2.9 million in accrued liabilities and accounts payable, respectively, primarily related to our clinical programs and timing of our accounts payable, partially offset by a decrease in operating lease liabilities of $3.4 million. The noncash charges primarily consisted of $40.0 million of stock-based compensation and $3.3 million of noncash operating lease expense, partially offset by $5.7 million of net accretion of discounts on marketable securities.
Investing Activities
Net cash used in investing activities for the twelve months ended December 31, 2025 was $168.5 million, which primarily consisted of $82.9 million in purchases of marketable securities, partially offset by $251.2 million in proceeds from sales and maturities of marketable securities.
Net cash used in investing activities for the twelve months ended December 31, 2024 was $70.6 million, which primarily consisted of $312.2 million in purchases of marketable securities, partially offset by $242.4 million in proceeds from sales and maturities of marketable securities.
Financing Activities
Net cash provided by financing activities for the twelve months ended December 31, 2025 was $77.1 million, which primarily consisted of net proceeds from our term loan with K2HV of $57.2 million and net proceeds from the ATM offering of $19.7 million
Net cash provided by financing activities for the twelve months ended December 31, 2024 was $21.6 million, which primarily consisted of proceeds from the exercise of stock options of $7.5 million and net proceeds from the ATM offering of $13.7 million.
Contractual Obligations and Other Commitments
Our contractual obligations and commitments relate primarily to our operating lease forour office and laboratory facilities located in Massachusetts with a noncancelable lease term expiring in August 2027. As of December 31, 2025, undiscounted future minimum lease
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payments of $0.5 million remain on our operating lease. See Note 8 – Commitments and Contingenciesto our consolidated financial statements for further information.
We have entered into a number of acquisitions of assets that are summarized in Note 7 – Acquisitions of Assets to our consolidated financial statements. As part of these acquisitions of assets, we are obligated to pay cash and/or stock for future contingent payments that are dependent upon future events, and in some cases, vesting by the recipient of the contingent payment, such as our achievement of certain development, regulatory, and commercial milestones. We have also assumed license arrangements with various third parties, primarily as a result of our acquisitions, and have entered into additional agreements that are summarized in Note 8 –Strategic License and Research and Collaboration Agreementsto our consolidated financial statements. In accordance with these agreements, we are obligated to pay, among other items, future contingent payments that are uncertain and dependent upon future events such as our achievement of certain development, regulatory, and commercial milestones royalties, and sublicensing revenue in the future, as applicable.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of the financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with the U.S. generally accepted accounting principles, or GAAP. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses, and related disclosures. Our estimates are based on historical experience and on various other factors that 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.
Our significant accounting policies are described in Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Certain of these significant accounting policies are important to understanding and evaluating our reported financial results.
Research and Development Expenses and Related Accrued Expenses
We record research and development expenses to operations as incurred. Research and development expenses represent costs incurred by us for the discovery and development of our product candidates and the development of our precision neuroscience technology and include: internal research and development expense, including personnel-related expenses (such as salaries, benefits and noncash stock-based compensation) and other expenses, including laboratory supplies and other non-capital equipment utilized for in-house research, research and consulting expenses, software development costs, license fees and allocated expenses, including facilities costs and depreciation and amortization; external research and development expenses incurred under arrangements with vendors conducting research and development services on our behalf, such as CROs, preclinical testing organizations, or CMOs. Costs to develop our technologies are recorded as research and development expense unless the criteria to be capitalized as internal-use software costs is met.
We have entered into various agreements with CROs and other vendors for clinical, non-clinical and manufacturing services. Payments made prior to the receipt of goods or services to be used in research and development are capitalized and recognized as expense in the period in which the related goods are received or services are realized or consumed. If the costs have been prepaid, this expense reduces the prepaid expenses in the consolidated balance sheets, and if not yet invoiced, the costs are included in accrued liabilities in the consolidated balance sheets. These costs are a significant component of our research and development expenses. We record amortization of prepaid expenses for these costs based on the estimated amount of work completed and in accordance with agreements established with these third parties. Such payments are evaluated for current or noncurrent classification based on when they will be realized. We estimate and record accrued research and development expenses based on the level of services performed but not yet invoiced pursuant to agreements established with our service providers, according to the progress of preclinical studies, clinical trials or related activities, and discussions with applicable personnel and service providers as to the progress or state of consummation of goods and services.
During the course of a clinical trial, the rate of expense recognition is adjusted if actual results differ from our estimates. We make judgments and estimates of accrued expenses as of each balance sheet date in our consolidated financial statements based on the facts and circumstances known at that time. The clinical trial accrual is dependent in part upon the timely and accurate reporting of CROs, CMOs and other third-party vendors. Although we do not expect our estimates to be materially different from amounts actually incurred, our estimates may vary from the actual results. To date, we have not experienced material differences between our accrued expenses and actual expenses.
We have and may continue to enter into license agreements to access and utilize certain technology. We evaluate if the license agreement is an acquisition of an asset or a business. To date, none of our license agreements have been considered to be an acquisition of a
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business. For acquisitions of assets, the upfront payments to acquire such licenses, as well as any future milestone payments made before product approval, are immediately recognized as acquired in-process research and development expense when due, provided there is no alternative future use of the rights in other research and development projects. These license agreements may also include contingent consideration in the form of cash. We assess whether such contingent consideration is subject to liability classification and fair value measurement or meets the definition of a derivative. Contingent consideration payments not required to be classified as a liability are accounted for as derivatives that qualify for a scope exception from derivative accounting, and are recognized when the contingency is resolved and the consideration is paid or becomes payable.
Smaller Reporting Company Elections
We are a smaller reporting company, which allows us to take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including not being required to comply with the auditor attestation requirements of Section 404 of Sarbanes-Oxley, reduced disclosure obligations regarding executive compensation in our Annual Report and our periodic reports and proxy statements and providing only two years of audited financial statements in our Annual Report and our periodic reports. We will remain a smaller reporting company so long as (a) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day our most recently completed second fiscal quarter is less than $250 million or (b) (1) we have less than $100 million in annual revenues during our most recently completed fiscal year and (2) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day our most recently completed second fiscal quarter is less than $700 million.
Recent Accounting Pronouncements
See Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information.
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ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial condition due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates.
Foreign Currency Exchange Risk
Operating in international markets involves exposure to possible volatile movements in currency exchange rates. A majority of our expenses are transacted in U.S. dollars and our assets and liabilities together with our cash holdings are predominately denominated in U.S. dollars reducing the exposure to currency fluctuations.
If the volume of our international operations increases and foreign currency exchange rates change, the impact to our consolidated statements of operations could be significant and may affect the comparability of operating results. We do not believe a 10% increase or decrease in foreign exchange rates would have resulted in a material impact to our operating results.
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ITEM 8. Financial Statements and Supplementary Data.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Audited Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 89
Consolidated Balance Sheets 91
Consolidated Statements of Operations and Comprehensive Loss 92
Consolidated Statements of Stockholders' Equity 93
Consolidated Statements of Cash Flows 94
Notes to the Consolidated Financial Statements 95
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Neumora Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Neumora Therapeutics, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
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: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated 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.
Accrued clinical trial and preclinical costs
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/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2020.
San Jose, California
March 30, 2026
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NEUMORA Therapeutics, Inc.
Consolidated Balance Sheets
(in thousands, except par values)
December 31,
Assets
Current assets:
Restricted cash — 1,213
Short-term marketable securities — 165,430
Prepaid expenses and other current assets 8,007 5,264
Property and equipment, net 40 1,140
Operating lease right-of-use assets 417 1,777
Other assets 53 —
Liabilities and Stockholders’ Equity
Current liabilities:
Early exercise liability, current portion — 133
Operating lease liabilities, current portion 284 1,853
Long term debt, net 54,532 —
Operating lease liabilities, noncurrent 193 —
Early exercise liability, net of current portion — 22
Commitments and contingencies (Note 8)
Stockholders’ equity:
Accumulated other comprehensive income — 62
Total liabilities and stockholders’ equity $ 191,047 $ 316,972
The accompanying notes are an integral part of these consolidated financial statements.
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Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share amounts)
Year Ended December 31,
Operating expenses:
Acquired in-process research and development 5,000 —
Other income (expense):
Interest expense (3,219 ) —
Other expense, net (767 ) (78 )
Provision for income taxes 130 178
Other comprehensive loss:
Unrealized gain (loss) on marketable securities (62 ) 138
Net loss per share, basic and diluted $ (1.45 ) $ (1.53 )
Weighted-average shares outstanding, basic and diluted 163,391 159,377
The accompanying notes are an integral part of these consolidated financial statements
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NEUMORA Therapeutics, Inc.
Consolidated Statements of Stockholders’ Equity
(in thousands)
Shares Amount Capital Gain / (Loss) Deficit Equity
Issuance of common stock upon exercise of stock options 1,957 — 7,482 — — 7,482
Issuance of common stock under employee stock purchase plan 52 — 427 — — 427
Forfeiture of restricted stock subject to repurchase (99 ) — — — — —
Vesting of restricted common stock 88 — — — — —
Vesting of common stock subject to repurchase — — 140 — — 140
Repurchase of unvested early exercised stock options (5 ) — — — — —
Unrealized gain on marketable debt securities — — — 138 — 138
Forfeiture of unvested restricted common stock (231 ) — — — — —
Issuance of common stock under employee stock purchase plan 434 — 275 — — 275
Vesting of restricted stock units 370 — — — — —
Vesting of common stock subject to repurchase — — 155 — — 155
Unrealized loss on marketable debt securities — — — (62 ) — (62 )
The accompanying notes are an integral part of these consolidated financial statements.
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NEUMORA Therapeutics, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
Operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash operating lease expense 1,892 3,290
Depreciation and amortization 208 631
Net accretion of investments in marketable securities (2,934 ) (5,719 )
Impairment of held for sale assets 595 —
Loss on disposal of property and equipment 47 —
Amortization of debt issuance costs and accretion of final payment fee 492 —
Amortization and write-off of deferred debt issuance costs 717 —
Other noncash expenses 32 23
Changes in operating assets and liabilities:
Prepaid expenses and other current assets (2,770 ) 15,905
Operating lease liabilities (1,880 ) (3,378 )
Other assets (53 ) —
Investing activities:
Cash paid for acquisition of assets — (775 )
Proceeds from maturities of marketable securities 251,170 242,441
Proceeds from sale of property and equipment 218 —
Net cash provided by (used in) investing activities 168,520 (70,557 )
Financing activities:
Proceeds from term loan, net 57,161 —
Proceeds from exercise of stock options — 7,482
Proceeds from employee stock purchase plan purchases 275 427
Net cash provided by financing activities 77,089 21,603
Net change in cash and cash equivalents and restricted cash 39,169 (231,890 )
Components of cash and restricted cash:
Restricted cash — 1,213
Total cash and cash equivalents and restricted cash $ 182,530 $ 143,361
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,501 $ —
Cash paid for income taxes $ 323 $ 473
Supplemental disclosure of noncash investing and financing activities:
Right-of-use-asset in connection with new operating lease agreement $ 532 $ —
Operating lease liability in connection with new lease agreement $ 505 $ —
The accompanying notes are an integral part of these consolidated financial statements.
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NEUMORA Therapeutics, Inc.
Notes to Consolidated Financial Statements
1. Organization and Liquidity
Description of Business
Neumora Therapeutics, Inc. (the “Company”), was originally incorporated in the State of Delaware in November 2019, and is headquartered in Watertown, Massachusetts. The Company is a clinical-stage biopharmaceutical company founded to confront the greatest medical challenges of our generation by bringing forward the next generation of novel therapies with brain-penetrant chemistry that offer improved treatment outcomes and quality of life for patients. The Company’s therapeutic pipeline currently consists of programs that target novel mechanisms of action for a broad range of underserved, prevalent diseases. The Company is advancing a Phase 3 program for navacaprant, a novel once-daily oral kappa opioid receptor (“KOR”) antagonist that is being developed for the treatment of major depressive disorder (“MDD”), which the Company believes has the potential to provide significant advantages relative to the standard of care, if approved. The Company is also advancing NMRA-511, a highly selective, novel antagonist of the vasopressin 1a receptor (“V1aR”) being developed for the treatment of agitation associated with dementia due to Alzheimer’s disease (“AD”). Beyond navacaprant and NMRA-511, Neumora is advancing a Phase 1 multiple-ascending dose (“MAD”) study of NMRA-898, a novel M4 PAM with potential best-in-class pharmacology. Additionally, Neumora is developing NMRA-215, a highly brain-penetrant, oral NLRP3 inhibitor for the treatment of obesity.
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NEUMORA Therapeutics, Inc.
Notes to Consolidated Financial Statements
2. Summary of Significant Accounting Policies and Basis of Presentation
Basis of Presentation and Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding annual financial reporting. The consolidated financial statements include all accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
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 in the consolidated financial statements and accompanying notes. These estimates form the basis for judgments the Company makes about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company bases its estimates and judgments on historical experience and on various other assumptions that the Company believes are reasonable under the circumstances. These estimates are based on management’s knowledge about current events and expectations about actions the Company may undertake in the future. These judgments, estimates and assumptions are used for, but not limited to, accrued research and development expenses, accounting for acquisitions of assets, fair value of certain assets and liabilities, stock-based compensation, the measurement of right-of-use assets and lease liabilities and related incremental borrowing rate, and uncertain tax positions and the valuation allowance for net deferred tax assets. Actual results may differ from the Company’s estimates.
Liquidity
As of December 31, 2025, the Company had cash and cash equivalents of $182.5 million, which are available to fund future operations. The Company believes that its existing cash and cash equivalents as of December 31, 2025 will be sufficient to support operations for at least the next 12 months from the date these consolidated financial statements were available to be issued.
The Company expects to incur additional losses in the future as it continues its research and development efforts, advances its product candidates through preclinical and clinical development, enhances its precisionneuroscience approach and programs, expands its product pipeline, seeks regulatory approval, prepares for commercialization, as well as hires additional personnel, protects its intellectual property and grows its business. The Company will need to raise additional capital to support its continuing operations and pursue its long-term business plan, including to complete the development and commercialization of its product candidates, if approved. Such activities are subject to significant risks and uncertainties, including clinical failure which can impact the Company’s ability to secure additional funding. The Company expects to finance its cash needs through a combination of public or private equity offerings or debt financings or other capital sources, which may include strategic collaborations or other arrangements with third parties, or other sources of financing. However, there is no guarantee that any of these financing or opportunities will be executed or realized on favorable terms, if at all, and some could be dilutive to existing stockholders.
Risks and Uncertainties
The Company is subject to certain risks and uncertainties, including, but not limited to, changes in any of the following areas that the Company believes could have a material adverse effect on future financial position or results of operations: successfully develop, manufacture, and market any approved products; obtain regulatory approval from the U.S. Food and Drug Administration or foreign regulatory agencies prior to commercial sales; new technological innovations; dependence on key personnel, protection of intellectual property; compliance with governmental regulations; uncertainty of market acceptance of any approved products; product liability; and the need to obtain additional financing.
Cash and Cash Equivalents
All highly liquid investments, including money market funds, with original maturities of three months or less at the time of purchase are considered to be cash equivalents. All of the Company’s cash equivalents have liquid markets and high credit ratings. The Company maintains its cash in bank deposits and other accounts.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents deposited in accounts at several financial institutions that may exceed the Federal Deposit Insurance Corporation’s insurance
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NEUMORA Therapeutics, Inc.
Notes to Consolidated Financial Statements
limit. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash and cash equivalents to the extent recorded in the consolidated balance sheets. The Company believes it is not exposed to significant credit risk due to the financial position of the financial institutions in which those deposits are held.
Marketable Securities
The Company invests its excess cash in marketable debt securities with high credit ratings including but not limited to money market funds, securities issued by the U.S. government and its agencies, commercial paper and corporate debt securities that are accounted for as available-for-sale and carried at fair value. Marketable securities are classified as short-term or long-term based on the maturity date and their availability to meet current operating requirements. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income in the consolidated statements of operations and comprehensive loss. Realized gains and losses on marketable securities, if any, are included in other income (expense), net. The cost of securities sold is determined based on the trade date using the specific identification method.
The Company periodically assesses its available-for-sale debt securities for impairment. For debt securities in an unrealized loss position, this assessment first considers the Company’s intent to sell, or whether it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of these criteria are met, the debt security’s amortized cost basis is written down to fair value within other income (expense), net. For debt securities in an unrealized loss position that do not meet the aforementioned criteria, the Company assesses whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security is considered, among other factors. If this assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded in other income (expense), net, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive income (loss). Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the un-collectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. These changes are recorded in other income (expense), net.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company measures fair value by maximizing the use of observable inputs, where available, and minimizing the use of unobservable inputs when measuring fair value. Financial assets and liabilities recorded at fair value in the consolidated balance sheets are categorized in the fair value hierarchy based upon the lowest level of input that is significant to the fair value as follows:
Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value of the instrument.
Impairment of Long-Lived Assets
The Company reviews the carrying amount of its long-lived assets, including property and equipment and right-of-use assets, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully
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Notes to Consolidated Financial Statements
recoverable. If indicators of impairment exist, an impairment loss is recognized when the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. The impairment charge is determined based upon the excess of the carrying value of the asset over its estimated fair value, with estimated fair value determined based upon an estimate of discounted future cash flows or other appropriate measures of estimated fair value. Estimating discounted cash flows requires the Company to make significant judgments and assumptions. Actual results may vary from the Company’s estimates as of the date of impairment testing and adjustments may occur in future periods.
Debt and Debt Issuance Costs
Debt issuance costs are presented on the consolidated balance sheet as a direct deduction from the related debt liability. Debt issuance costs represent fees paid to the lender and legal and other direct costs incurred in connection with the Company's term loan under the Loan Agreement (defined below). Debt issuance costs are amortized to interest expense using the effective interest method over the term of the loan and are presented as a reduction to the carrying value of the loan. Final payment fees are accreted as additional interest expense using the effective interest method over the term of the loan. To the extent the Company has incurred debt issuance costs associated with undrawn tranches under the Loan Agreement that are not probable of being drawn, such costs are expensed as incurred.
Leases
The Company determines if an arrangement is or contains a lease at inception by assessing whether it conveys the right to control the use of an identified asset in exchange for consideration. If a lease is identified, classification is determined at lease commencement. To date, all of the Company’s leases have been determined to be operating leases. Operating lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company’s leases do not provide an implicit interest rate and therefore the Company estimates its incremental borrowing rate to discount lease payments. The incremental borrowing rate reflects the estimated interest rate that the Company would have to pay to borrow on a collateralized basis, an amount equal to the lease payments in a similar economic environment over a similar term. Operating lease right-of-use (“ROU”) assets are determined based on the corresponding lease liability adjusted for any lease payments made at or before commencement, initial direct costs, and lease incentives. The operating lease ROU asset also includes impairment charges if the Company determines the ROU asset is impaired. The Company considers a lease term to be the noncancelable period that it has the right to use the underlying asset, including any periods where it is reasonably assured the Company will exercise the option to extend the contract. Periods covered by an option to extend are included in the lease term if the lessor controls the exercise of that option. Operating lease expenses are recognized, and the ROU assets are amortized on a straight-line basis over the lease term. The Company has elected to not separate lease and non-lease components for its leased assets and accounts for all lease and non-lease components of its agreements as a single lease component. The Company has elected not to recognize on the consolidated balance sheets leases with terms of one year or less.
Acquisitions
The Company evaluates mergers, acquisitions, and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or an acquisition of assets. The Company first identifies who is the acquiring entity by determining if the target is a legal entity or a group of assets or liabilities. If control over a legal entity is being evaluated, the Company also evaluates if the target is a variable interest or voting interest entity. For acquisitions of voting interest entities, the Company applies a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen test is met, the transaction is accounted for as an acquisition of assets. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets.
For an acquisition of assets, a cost accumulation model is used to determine the cost of the acquisition. Common stock and convertible preferred stock issued as consideration in an acquisition of assets are generally measured based on the acquisition date fair value of the equity interests issued. Direct transaction costs are recognized as part of the cost of an acquisition of assets. The Company also evaluates which elements of a transaction should be accounted for as a part of an acquisition of assets and which should be accounted for separately.
The cost of an acquisition of assets, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an acquisition of assets. Any difference between the cost of an acquisition of assets and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair
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NEUMORA Therapeutics, Inc.
Notes to Consolidated Financial Statements
values. Assets acquired as part of an acquisition of assets that are considered to be in-process research and development intangible assets (“IPR&D”) are immediately expensed and recorded as a component of acquired in-process research and development expense in the consolidated statements of operations and comprehensive loss unless there is an alternative future use in other research and development projects.
In addition to upfront consideration, the Company’s acquisitions of assets may also include contingent consideration payments to be made for future milestone events or royalties on net sales of future products. The Company assesses whether such contingent consideration is subject to liability classification and fair value measurement or meets the definition of a derivative. Contingent consideration payments in an acquisition of assets not required to be classified as a liability at fair value, or are accounted for as derivatives that qualify for a scope exception from derivative accounting, are recognized when the contingency is resolved, and the consideration is paid or becomes payable. Contingent consideration payments required to be classified as a liability, or are accounted for as derivatives and do not qualify for a scope exception from derivative accounting, are recorded at fair value on the date of the acquisition and are subsequently remeasured to fair value at each reporting date. Contingent consideration payments made prior to regulatory approval are expensed as incurred. Any future payments that are contingent upon continued services to the Company are treated as compensation and recognized when it is probable such amounts will become payable.
If the target legal entity is determined to be a variable interest entity (“VIE”) and not a business, all tangible and intangible assets acquired, including any IPR&D assets but excluding goodwill, and liabilities assumed, including contingent consideration, are recorded at their fair values. If the acquisition is determined to be a business combination, all tangible and intangible assets acquired, including any IPR&D assets, and liabilities assumed, including contingent consideration, are recorded at their fair values. Goodwill is recognized for any difference between the consideration transferred and fair value determination. In addition, direct transaction costs in connection with business combinations are expensed as incurred, rather than capitalized.
The tax basis of assets acquired in either a business combination or acquisition of assets are compared to the book basis of such assets resulting in the recognition of deferred tax assets and liabilities.
Research and Development Expenses and Related Prepaid Assets and Accrued Liabilities
Research and development costs are expensed as incurred. Research and development expenses primarily consist of internal research and development expense, including personnel-related expenses (such as salaries, benefits and noncash stock-based compensation) and other expenses, including laboratory supplies and other non-capital equipment utilized for in-house research, research and consulting expenses, software development costs, license fees and allocated expenses, including facilities costs and depreciation and amortization; external research and development expenses incurred under arrangements with service providers conducting research and development services on its behalf, such as contract research organizations (“CROs”), preclinical testing organizations and contract manufacturing organizations (“CMOs”). Payments made prior to the receipt of goods or services to be used in research and development are capitalized, evaluated for current or long-term classification, and included in prepaid expenses and other current assets or other assets in the consolidated balance sheets based on when the goods are received or the services are expected to be received or consumed, and recognized in research and development expenses when they are realized.
The Company is required to estimate expenses resulting from its obligations under contracts with service providers in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations which vary from contract to contract and may result in cash flows that do not match the periods over which materials or services are provided. The Company estimates and records accrued expenses for the related research and development activities based on the level of services performed but not yet invoiced pursuant to agreements established with its service providers, according to the progress of preclinical studies, clinical trials or related activities, and discussions with applicable personnel and service providers as to the progress or state of consummation of goods and services.
During the course of a clinical trial, the rate of expense recognition is adjusted if actual results differ from the Company’s estimates. The Company estimates accrued expenses as of each balance sheet date in its consolidated financial statements based on the facts and circumstances known at that time. The clinical trial accrual is dependent in part upon the timely and accurate reporting of CROs, CMOs and other service providers. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its estimate may vary from the actual results. To date, the Company has not experienced material differences between its accrued expenses and actual expenses.
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NEUMORA Therapeutics, Inc.
Notes to Consolidated Financial Statements
Stock-Based Compensation
The Company maintains equity incentive plans as a long-term incentive for employees, directors, and service providers. The Company accounts for all stock-based awards based on their fair value on the date of the grant. For stock-based awards with service only vesting conditions, the Company recognizes expense on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. For awards with performance vesting conditions, the Company evaluates the probability of achieving the performance vesting condition at each reporting date. The Company begins to recognize expense for awards with performance-based vesting conditions using an accelerated attribution method when it is deemed probable that the performance condition will be met. For awards with both market and service vesting conditions, the Company recognizes expense using the accelerated attribution method over the derived requisite service period. Stock-based compensation is classified in the consolidated statements of operations and comprehensive loss based on the function to which the related services are provided. Forfeitures are accounted for as they occur.
The fair value of stock option awards with only service conditions and/or performance-based vesting conditions are estimated on the date of grant using the Black-Scholes option pricing model, which requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the expected dividend yield. The fair value of stock options awards with market-based vesting conditions is estimated on the grant date using the Monte Carlo simulation model, which utilizes subjective assumptions, including volatility and the derived service periods, that determine the probability of satisfying the market condition stipulated in the award to estimate the fair value of the award. The fair value of restricted stock is based on the estimated fair value of the Company’s common stock on the grant date.
Income Taxes
The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the Company’s consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely-than-not that these assets may not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences representing net future deductible amounts become deductible.
The Company recognizes and measures uncertain tax positions using a two-step approach. The Company determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely-than-not that a position will be sustained, none of the benefit attributable to the position is recognized. The tax benefit to be recognized for any tax position that meets the more-likely-than-not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. Judgment is required to evaluate uncertain tax positions. The Company evaluates uncertain tax positions on a regular basis. The evaluations are based on a number of factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of the audit, and effective settlement of audit issues.
The Company’s policy is to include penalties and interest expense related to income taxes as a component of its provision for income taxes. The Company has not reported any interest or penalties associated with income tax for any period presented.
Net Loss Per Share
Basic net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are antidilutive given the net loss for each period presented.
Comprehensive Loss
Comprehensive loss includes net loss and certain changes in stockholders’ equity that are excluded from net loss, such as unrealized losses on the Company’s available-for-sale marketable securities.
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NEUMORA Therapeutics, Inc.
Notes to Consolidated Financial Statements
Recent Accounting Pronouncements
In December 2023, the Financial Standards Accounting Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (ASU 2023-09), which requires issuers to make additional discloses on an annual basis related to specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold on an annual basis, disclose additional information about income taxes paid as well as other disaggregated disclosures. The Company adopted the guidance prospectively in the annual period ended December 31, 2025. The required disclosures have been included in Note 14 - Income Taxes.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which is intended to improve disclosures by requiring additional information about specific expense categories in the notes to the financial statements on an annual and interim basis. The standard will be effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The standard updates may be applied on either a prospective or retrospective basis. We are currently evaluating the disclosure requirements related to ASU 2024-03.
3. Cash Equivalents and Marketable Securities
The following tables summarize the amortized cost and fair value of the Company’s cash equivalents and marketable securities by major investment category for the periods indicated:
AmortizedCost GrossUnrealizedGain GrossUnrealizedLoss EstimatedFair Value
(in thousands)
Cash equivalents:
AmortizedCost GrossUnrealizedGain GrossUnrealizedLoss EstimatedFair Value
(in thousands)
Cash equivalents:
Marketable securities:
Total cash equivalents and marketable securities $ 290,660 $ 70 $ (8 ) $ 290,722
As of December 31, 2025, the Company does not hold any marketable securities and the Company’s cash equivalents consist of money market funds, which are highly liquid investments with original maturities of three months or less. The Company has not realized any material gains or losses on its marketable securities, including any impairment charges on its securities related to expected credit losses.
4. Fair Value Measurements
The carrying amounts of the Company’s financial instruments, including prepaid expenses and other current assets, accounts payable, accrued liabilities and the current portion of operating lease liabilities approximate fair value due to the short-term nature of those instruments.
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NEUMORA Therapeutics, Inc.
Notes to Consolidated Financial Statements
The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis by level within the valuation hierarchy:
Level 1 Level 2 Level 3 Total
(in thousands)
Assets:
Cash equivalents:
Total assets measured at fair value $ 74,364 $ — $ — $ 74,364
Level 1 Level 2 Level 3 Total
(in thousands)
Assets:
Cash equivalents:
Marketable securities:
Money market funds are highly liquid and actively traded marketable securities that generally transact at a stable $1.00 net asset value representing its estimated fair value. The Company estimates the fair value of its U.S. government and agency debt securities, commercial paper and corporate debt securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data, and other observable inputs.
5. Debt
Term Loan
On May 9, 2025 (the “Closing Date”), the Company entered into a loan and security agreement (as amended, the “Loan Agreement”) with K2 HealthVentures LLC (“K2HV”) that provides up to $125.0 million principal in term loans (the “Term Loans”) over four tranches. The first tranche consisted of up to $40.0 million with $20.0 million funded on the Closing Date and an option for an additional $20.0 million at the Company’s request through December 31, 2025. The second tranche commitment of $20.0 million is available to be drawn at the Company’s option through September 30, 2026, subject to the achievement of certain clinical and regulatory milestones and receipt of not less than $175.0 million in net cash proceeds from certain financing activities, with at least $150.0 million from an equity financing. A third tranche commitment of $15.0 million is available to be drawn at the Company’s option from December 1, 2027 through December 31, 2027, subject to certain regulatory approvals. A fourth and final tranche commitment of up to $50.0 million is available subject to K2HV’s review of certain information from the Company and discretionary approval by K2HV.
On November 4, 2025, the Company entered into a first amendment to the Loan Agreement with K2HV (the “First Amendment to the Loan Agreement”), pursuant to which the Company borrowed an additional $40.0 million in gross proceeds, consisting of $20.0 million from the remaining first tranche option and $20.0 million from the fourth tranche. As of December 31, 2025, total gross proceeds of $60.0 million had been drawn under the Loan Agreement. On December 10, 2025, the Company entered into a second amendment to the Loan Agreement with K2HV (the “Second Amendment to the Loan Agreement”), pursuant to which the Company restructured its obligations and timelines to conduct equity funding obligations.
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Notes to Consolidated Financial Statements
The Term Loan matures on May 1, 2029, and the Company is obligated to make interest only payments for the first 36 months, or 48 months if the second tranche is funded, and then interest and principal payments for the next 12 months. The Term Loan bears a variable interest rate equal to the greater of (i) 10.45%, and (ii) the sum of (A) the prime rate as quoted in The Wall Street Journal and (B) 2.95%.
The Amended Loan Agreement deferred the start date of the minimum liquidity covenant from January 1, 2026 to July 1, 2026. The applicable minimum liquidity requirement will depend on the Company’s achievement of specified operational milestones and/or its market capitalization and will be equal to (i) 50% of the outstanding obligations under the Loan Agreement, (ii) 105% of the outstanding obligations under the Loan Agreement, or (iii) waived in full (i.e., zero).
The Company may prepay, at its option, all, but not less than all, of the Term Loan then outstanding plus the accrued and unpaid interest on the portion of principal so repaid, subject to a prepayment premium and end of term fee. Prior to full repayment of the Term Loan, K2HV may elect to convert up to $10.0 million of outstanding principal into shares of the Company’s common stock at a conversion price equal to the lesser of $0.8774 per share and the lowest effective price per share of the Company’s next equity financing. Pursuant to the Amended Loan Agreement, K2HV was granted the option to convert an additional $2.5 million of outstanding principal into shares of the Company’s common stock at a conversion price equal to the lesser of $2.3906 per share and the lowest effective price per share in the Company’s next equity financing. No prepayment penalty applies to any principal amount converted into common stock.
In November 2025, K2HV delivered a conversion notice pursuant to which $2.5 million of outstanding principal under the Term Loan was converted into common stock of the Company at the applicable conversion price, resulting in the issuance of 2,849,327 shares of common stock to K2HV.
Additionally, in December 2025, K2HV delivered a conversion notice pursuant to which $1.5 million of outstanding principal under the Term Loan was converted into common stock of the Company at the applicable conversion price, resulting in the issuance of 1,652,609 shares of common stock to K2HV.
The Company granted K2HV the right, prior to repayment of the term loans, to invest up to $5.0 million in the aggregate in future offerings of the Company’s capital stock subject to certain exceptions and conditions.
The Company’s obligations under the Loan Agreement are secured by a security interest in substantially all of its assets, other than certain intellectual property assets. The Loan Agreement includes customary affirmative and negative covenants, as well as standard events of default, including an event of default based on the occurrence of a material adverse event. The negative covenants include, among others, restrictions on the Company transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying cash dividends or making other distributions, making investments, creating liens, selling assets and making any payment on subordinated debt, in each case subject to certain exceptions.
The Company analyzed the draw of proceeds under the First Amendment to the Loan Agreement to determine the appropriate accounting treatment under ASC 470. The First Amendment to the Loan Agreement provided for two tranches of borrowings: (i) a $20.0 million from the first tranche which was available to the Company at its election through December 31, 2025 per the terms of the Loan Agreement, and (ii) a discretionary tranche of $20.0 million from the fourth tranche, for which borrowings required discretionary approval by K2HV and were conditioned upon the issuance of a new $2.5 million conversion option.
With respect to the $20.0 million draw under the first, the Company determined that the borrowing did not constitute a troubled debt restructuring under ASC 470-60 or a modification of existing debt under ASC 470-50, as the terms of such borrowings were contemplated and approved at the inception of the Loan Agreement and the draw represented an exercise of a pre-existing contractual right. Accordingly, the Company recorded the $20.0 million as additional debt at face value net of debt issuance costs in accordance with the original terms of the Loan Agreement.
With respect to the $20.0 million draw under the discretionary fourth tranche, the Company determined that, because the borrowing required K2HV approval and was accompanied by the issuance of a new conversion option, the transaction did not represent a draw under a pre-existing facility but rather the issuance of new debt for accounting purposes. The Company therefore accounted for the $20.0 million borrowing as new debt.
The Company incurred debt issuance costs of $1.7 million in connection with the original Loan Agreement and an additional $1.1 million of debt issuance costs in connection with the First Amendment to the Loan Agreement. The Company is also required to make a final payment fee of $4.2 million upon maturity, equal to 6.95% of total principal drawn under the Loan Agreement.
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Notes to Consolidated Financial Statements
Outstanding debt consisted of the following:
(in thousands)
Conversion of term loan principal to common stock (3,950 )
Unamortized debt issuance costs (1,854 )
Accreted final payment fee 336
Total debt, long-term $ 54,532
The following table provides the components of interest expense (in thousands):
(in thousands)
Cash interest expense $ 2,010
Write-off of deferred debt issuance costs 447
Accretion of final payment fee 336
Amortization of deferred debt issuance costs 270
Amortization of debt issuance costs 156
Total interest expense related to debt $ 3,219
For the year ended December 31, 2025, the effective interest rate for the Term Loan was 13.0%.
Future principal payments, which include the final payment fee of $4.2 million, in connection with the Loan Agreement as of December 31, 2025 are as follows:
(in thousands)
Year ended December 31, 2026 $ —
Total principal payments including final fee $ 60,220
6. Balance Sheet Components
Property and Equipment, Net
Property and equipment, net, consisted of the following:
December 31,
(in thousands)
Laboratory equipment $ - $ 2,844
Furniture and fixtures 30 58
Construction in progress — -
Total property and equipment 227 3,189
Less: accumulated depreciation and amortization (187 ) (2,049 )
Total property and equipment $ 40 $ 1,140
During the year ended December 31, 2025, the Company sold or disposed of lab and other equipment with a gross book value of $2.8
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million and accumulated depreciation of $2.0 million. The Company received proceeds of $0.2 million and recorded an impairment on assets held for sale of $0.6 million and an immaterial loss on disposal.
Depreciation expense for the years ended December 31, 2025 and 2024 was $0.2 million and $0.6 million, respectively.
Accrued Liabilities
Accrued liabilities consisted of the following:
December 31,
(in thousands)
Accrued clinical trial and preclinical costs 15,956 $ 11,606
7. Acquisitions of Assets
BlackThorn Therapeutics, Inc.
In June 2020, the Company entered into an agreement and plan of merger (the “BlackThorn Merger Agreement”) to acquire all of the equity interests of BlackThorn Therapeutics, Inc. (“BlackThorn”), which became effective in September 2020. The Company acquired BlackThorn for its in-process research and development programs, including an antagonist of the kappa opioid receptor (“navacaprant” or “NMRA-140”) for the treatment of MDD and an antagonist of the vasopressin 1a receptor (“NMRA-511”) for the treatment of agitation in AD. The Company also gained access to a cloud-based computational psychiatry and data platform that was being developed to support drug target identification, patient stratification and objective clinical trial endpoints. Both navacaprant and NMRA-511 were exclusively licensed to BlackThorn by The Scripps Research Institute (“TSRI”). The acquisition was accounted for as an acquisition of assets.
The BlackThorn Merger Agreement requires the Company to pay the former stockholders of BlackThorn contingent consideration (i) with respect to navacaprant, in the form of development and regulatory approval milestones of up to an aggregate amount of $365.0 million, which includes a milestone payment that became due in October 2023 upon dosing the first patient in the Phase 3 clinical trial for navacaprant, and sales-based milestones of up to an aggregate amount of $450.0 million and (ii) with respect to NMRA-511, in the form of development and regulatory approval milestones of up to an aggregate amount of $100.0 million, and sales-based milestones of up to an aggregate amount of $100.0 million (the “BlackThorn Milestones”). At the Company’s sole discretion, the BlackThorn Milestone payments may be settled in cash or shares of the Company, or a combination of both, subject to the provisions of the BlackThorn Merger Agreement, other than one development milestone in the amount of $10.0 million, which must be settled in cash. None of the BlackThorn Milestones were subject to liability classification and/or derivative accounting and any such contingent consideration will be recognized when the contingency is resolved, and the consideration becomes payable. The Company settled the Phase 3 navacaprant dosing milestone in December 2023 by issuing 6,072,445 shares of its common stock based on the volume weighted average price per share prior to the date the milestone was met and paying cash of $2.3 million to the former stockholders of BlackThorn and participants in the carveout plan (discussed below). As a result, the Company recognized $60.8 million in acquired in-process research and developed expenses in the fourth quarter of 2023 related to the BlackThorn Milestones. None of the other Blackthorn Milestones have been achieved and no such amounts were deemed due or payable as of December 31, 2025.
BlackThorn Carveout Plan
The BlackThorn Merger Agreement required that the Company establish a carveout plan (the “BlackThorn Carveout Plan”), pursuant to which each BlackThorn stock option holder as of immediately prior to the closing date was allocated a certain number of units (the
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“BlackThorn Carveout Units”) based on the number of shares underlying the outstanding options held by each participant at that time. Each BlackThorn Carveout Unit represents a right to receive a portion of the BlackThorn Milestone payment (the “BlackThorn Carveout Payments”) upon the later of (i) the achievement of a BlackThorn Milestone and (ii) the vesting of the BlackThorn Carveout Unit.
The BlackThorn Carveout Units vest based on time-based schedules that mirror the vesting schedules for the original option awards held by each participant. As of the closing date in September 2020, a portion of the BlackThorn Carveout Units corresponding to the pre-acquisition service periods were fully vested (“Vested Carveout Units”). The remainder of the BlackThorn Carveout Units had vesting subject to the continued service of the participants, the last of which became fully vested in May 2024.
The Vested Carveout Units represent contingent consideration for the acquisition as they are attributable to pre-acquisition services rendered by the participants and continuing service is not required for the participants to receive future payments upon a BlackThorn Milestone being achieved. The Company recognizes the contingent consideration obligation for the Vested Carveout Units when the contingency is resolved, and the consideration becomes payable. The BlackThorn Carveout Units that were unvested as of the closing date are dependent on the continued service of participants and were deemed to be a compensation arrangement. The Company recognizes compensation starting from the time payment becomes probable over each participant’s service period.
The Company settled the Phase 3 navacaprant dosing milestone in December 2023. The Company recognized contingent consideration related to Vested Carveout Units, which was included in acquired in-process research and developed expenses in the fourth quarter of 2023 related to the BlackThorn Milestones as described above. In addition, the Company recognized and paid $1.8 million in compensation related to the BlackThorn Carveout Units that were a compensatory arrangement in 2023. None of the other BlackThorn Milestones had been achieved and no such amounts were deemed due or payable as of December 31, 2025.
Amgen Inc. Licenses
In September 2021, the Company entered into two license agreements with Amgen Inc. (“Amgen”) pursuant to which it obtained exclusive, worldwide licenses to develop, manufacture, use, commercialize and distribute products containing compounds that are directed to, in one case, CK1δ, and in the other case, glucocerebrosidase (“GCase”), both for the treatment of neurodegenerative diseases (the Amgen License Agreements) and related know-how and clinical material (collectively, the “Amgen IPR&D Assets”). The Company accounted for these transactions as acquisitions of assets. Concurrently, the Company also executed a research collaboration agreement as well as a stock purchase agreement with Amgen. Both agreements were deemed to be separate transactions and not accounted for as part of the acquisition of assets.
The total upfront consideration transferred to Amgen of 20.0 million shares of the Company’s Series A-2 convertible preferred stock, with an acquisition date fair value of $157.0 million was allocated to the Amgen IPR&D Assets and expensed in 2021.
Under these two license agreements, Amgen is eligible to receive contingent consideration up to an aggregate of $360.0 million in commercial milestone payments per product payable in cash with a compound directed to CK1δ and up to an aggregate of $360.0 million in commercial milestone payments per product payable in cash with a compound directed to GCase, in each case, upon the achievement of certain sales thresholds and single digit royalties on potential future net sales, related to CK1δ or GCase (the “Amgen Milestones”). Such contingent consideration was not subject to liability classification and/or derivative accounting and will be recognized when the contingency is resolved, and the consideration becomes payable. As of December 31, 2025, none of the Amgen Milestones had been achieved and no such amounts were deemed due or payable.
In addition, until a specified period of time following the achievement of the first successful Phase 2 clinical trial for any licensed product, if the Company chooses to sell, transfer, sublicense or divest rights to a licensed product in certain major markets, Amgen has a period of time to enter into an agreement with the Company for such rights. The Company determined that these rights of first negotiation were not freestanding instruments from the Amgen License Agreements and did not meet the definition of a derivative.
Vanderbilt License
In February 2022, the Company and Vanderbilt University (“Vanderbilt”) entered into a license agreement (the “Vanderbilt License Agreement”). Pursuant to the Vanderbilt License Agreement, as amended, the Company obtained an exclusive, worldwide royalty-bearing, sublicensable (subject to certain restrictions) license under certain patent rights and a non-exclusive, worldwide, royalty-bearing, sublicensable (subject to certain restrictions) license under certain know-how covering small molecule positive allosteric modulators (“PAMs”) predominantly of the muscarinic acetylcholine receptor subtype 4 (“M4”) to develop, manufacture, and commercialize products, processes and services covered by such patent rights or that incorporate or use such know-how, for any and
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Notes to Consolidated Financial Statements
uses (the “Vanderbilt IPR&D Assets”). Concurrently, the Company also executed a sponsored research agreement (see Note 8) with Vanderbilt. The sponsored research agreement was deemed to be a separate transaction and not accounted for as part of the acquisition of assets. The acquisition of Vanderbilt IPR&D Assets became effective in February 2022. In May 2024, the Company and Vanderbilt entered into a second sponsored research agreement with Vanderbilt and concurrently entered into an amendment to the Vanderbilt License Agreement (the “Second Amendment to the Vanderbilt License Agreement”), to extend the rights granted to the Company under the Vanderbilt License Agreement to the data and patent rights conceived or developed by Vanderbilt in the course of carrying out the sponsored research pursuant to the second sponsored research agreement.
The licensed patent rights are subject to Vanderbilt’s right to use the patent rights for research, internal non-commercial use, and educational purposes. The Company intends to develop the PAMs for the treatment of schizophrenia and other neuropsychiatric disorders. The Company has agreed to use commercially reasonable efforts to develop and commercialize licensed products, and to achieve certain development milestones.
The Company paid Vanderbilt a non-refundable, non-creditable upfront cash payment of $13.0 million for the Vanderbilt IPR&D Assets, which was immediately recognized as acquired in-process research and development expense in the consolidated statement of operations and comprehensive loss as it was determined to have no alternative future use as of the acquisition date. Under the Vanderbilt License Agreement, Vanderbilt is eligible to receive contingent consideration payable in cash up to an aggregate of $42.0 million upon the achievement of specified development milestones and up to an aggregate of $380.0 million upon the achievement of commercial milestone events as well as tiered royalties at mid-single digit percentages on potential future net sales, subject to specified reductions for the lack of patent coverage, generic entry and payment obligations for third-party licenses (the “Vanderbilt Milestones”). Such contingent consideration was not subject to liability classification and/or derivative accounting and will be recognized when the contingency is resolved, and the consideration becomes payable. In October 2023 and July 2025, Vanderbilt Milestones of $2.0 million and $5.0 million, respectively, were achieved. The milestones were settled in cash in November 2023 and July 2025, respectively, and recognized as in acquired in-process research and developed expenses in 2023 and 2025, respectively. None of the other Vanderbilt Milestones had been achieved and no such amounts were deemed due or payable as of December 31, 2025.
In addition, the Company also had an exclusive option, exercisable for a specified period of time, to negotiate an exclusive license to certain patent rights conceived or developed by Vanderbilt in the course of carrying out the sponsored research pursuant to the sponsored research agreements between the Company and Vanderbilt, the first of which was entered into at the same time as the Vanderbilt License Agreement and the second of which was executed in May 2024. The Company determined that the right to negotiate was not a freestanding instrument from the Vanderbilt License Agreement and did not meet the definition of a derivative. The Company exercised the above disclosed exclusive option under the first sponsored research agreement and the parties executed an agreement in December 2023 pursuant to which the Company licensed certain patent rights in return for a payment of $0.8 million that was recognized in acquired in-process research and developed expenses in 2023.
8. Commitments and Contingencies
Indemnification
In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance.
Other Commitments
The Company has various manufacturing, clinical, research and other contracts with vendors in the conduct of the normal course of its business. Such contracts are generally terminable with advanced written notice and payment for any products or services received by the Company through the effective time of termination and any non-cancelable and non-refundable obligations incurred by the vendor at the effective time of the termination. In the case of terminating a clinical trial agreement at a particular site, the Company would also be obligated to provide continued support for appropriate medical procedures at that site until completion or termination.
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9. Strategic License and Research and Collaboration Agreements
2015 TSRI License Agreement
In connection with the acquisition of BlackThorn (see Note 7), the Company gained certain exclusive rights to intellectual property related to Kappa Opioid Receptor and V1aR Receptor Antagonist programs as well as an oxytocin receptors positive allosteric modulator program (collectively, the “TSRI Programs”) under a license agreement between BlackThorn and TSRI originally entered into in November 2015 (as amended, the “2015 TSRI License Agreement”). The technology licensed under the 2015 TSRI License Agreement is used in the Company’s navacaprant and NMRA-511 research and development programs.
Pursuant to the 2015 TSRI License Agreement, the Company is obligated, among other things, to pay TSRI (i) a nominal annual license fee due and payable on the first day of each calendar year and after the fourth anniversary creditable against any royalties due for such calendar year, (ii) development and regulatory milestone payments of up to $1.5 million in aggregate for the first product from each TSRI Program, which are contingent upon achieving specific development and regulatory milestone events, (iii) commercial milestone payments of up to $3.5 million in aggregate for each occurrence, which are contingent upon achieving specified commercialization milestone events, (iv) tiered low-single digit royalties on future net sales of each royalty-bearing product and (v) a percentage in the mid-single digits of any sublicensing revenues the Company receives. In October 2023, the Phase 3 navacaprant dosing milestone was met and the Company paid $0.3 million to TSRI, which was recognized in acquired in-process research and developed expenses in the fourth quarter of 2023. None of the other milestones have been achieved and no royalties were due under the 2015 TSRI License Agreement as of December 31, 2025.
Research and Collaboration Agreement with Amgen
In September 2021, and concurrently with the Amgen License Agreements (see Note 7), the Company entered into a research collaboration agreement with Amgen (the “Amgen Collaboration Agreement”) to collectively discover drug targets, biomarkers, and other insights associated with central nervous system (“CNS”) diseases utilizing Amgen’s deCODE genetics and human data research capabilities.
The Amgen Collaboration Agreement automatically terminated upon its third anniversary in September 2024. In May 2025, the Company made a final payment of $6.3 million to Amgen under the Amgen Collaboration Agreement for research and development activities. The parties agreed that this was the final amount due under the agreement.
As of December 31, 2025 and December 31, 2024, the Company was obligated to pay Amgen $0 and $6.3 million under the Amgen Collaboration Agreement, which was recorded within current liabilities on the consolidated balance sheet. Research and development expenses related to the Amgen Collaboration Agreement were $6.3 million and $12.5 million for the year ended December 31, 2025 and 2024, respectively.
The Amgen Collaboration Agreement automatically terminated upon its third anniversary in September 2024.
Sponsored Research Agreement with Vanderbilt
In February 2022, concurrently with the Vanderbilt License Agreement (see Note 7), the Company entered into a sponsored research agreement with Vanderbilt (“Vanderbilt Research Agreement”), pursuant to which Vanderbilt agreed to provide the Company research services to develop a M4 PAM back-up program.
In return for Vanderbilt performing research and development activities under the agreement, the Company agreed to make quarterly payments for research up to a total of $1.7 million on an annual basis. The term of the agreement ended in September 2023. In addition, the Company also had an exclusive option to negotiate an exclusive license to certain patent rights conceived or developed by Vanderbilt in the course of carrying out the sponsored research (see Note 7).
In May 2024, concurrently with the Second Amendment to the Vanderbilt License Agreement (see Note 7), the Company entered into a second sponsored research agreement with Vanderbilt (“Second Vanderbilt Research Agreement”), pursuant to which Vanderbilt agreed to provide the Company additional research and development activities on the M4 PAM back-up program.
In return for Vanderbilt performing research and development activities under the agreement, the Company agreed to make payments for research up to a total of $0.6 million. The term of the agreement ended in November 2024. In addition, the Company also has an exclusive option to negotiate an exclusive license to certain patent rights conceived or developed by Vanderbilt in the course of carrying out the sponsored research (see Note 7).
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Notes to Consolidated Financial Statements
Parkinson's Research Ventures Funding Agreement
In March 2024, the Company entered into a research funding agreement with Parkinson’s Research Ventures Limited (“PRV”), pursuant to which PRV agreed to provide the Company funding up to a total of $2.6 million in two tranches to carry out preclinical research and development activities related to the Company’s NLPR3 program.
The first tranche was due upon execution of the agreement and was received in March 2024, for $1.1 million. The Company notified PRV of a successful drug candidate nomination, the trigger for the second tranche of funding, in December 2024 and received payment of $1.5 million in January 2025.
The Company concluded the funding arrangement was an obligation to perform services and the funding received is recognized as a contra-R&D expense as project costs are incurred. The Company incurred costs of $1.6 million and $0.8 million during the year ended December 31, 2025 and 2024, respectively. Upon achievement of certain development, regulatory or commercial trigger events, the Company agreed to pay PRV in aggregate an amount equal to no more than four times the funding provided by PRV, i.e., a maximum repayment amount of up to £8.4 million. The trigger event payments meet the derivative scope exception under ASC 815 Derivatives and Hedging, and therefore do not need to be bifurcated and separately accounted for.
The Michael J. Fox Foundation for Parkinson’s Research Funding Agreement
In October 2025, the Company entered into a research funding agreement with The Michael J. Fox Foundation for Parkinson's Research ("MJFF"), pursuant to which MJFF agreed to provide the Company up to $3.3 million in funding, payable in two tranches, to support preclinical research and development activities advancing the Company's GCase program for the treatment of Parkinson's disease. The first tranche of $1.7 million was received in November 2025, with the second tranche expected to be received in May 2026.
The Company evaluated the nature of the funding arrangement and concluded it represents an obligation to perform services rather than a contribution or loan. Accordingly, funding received is deferred until project costs are incurred, at which point it is recognized as a reduction of research and development expense. As of December 31, 2025, the Company had not yet begun incurring expenses under the agreement, and the $1.7 million received is reflected as deferred funding within the consolidated balance sheet.
Pursuant to the agreement, upon achievement of certain development, regulatory, or commercial milestone events, the Company is obligated to make payments to MJFF in an aggregate amount not to exceed two times the total funding provided, representing a maximum repayment obligation of $6.6 million. The Company assessed whether these contingent payment obligations represent embedded derivatives requiring bifurcation under ASC 815, Derivatives and Hedging. The Company concluded that the obligations qualify for the derivative scope exception under ASC 815 and therefore are not required to be bifurcated and accounted for separately.
10. Stockholders’ Equity
Preferred Stock
The Company's board of directors has the authority to issue up to 50,000,000 shares of preferred stock in one or more series with rights, preferences and privileges to be determined. There are no shares of preferred stock issued and outstanding as of December 31, 2025.
Common Stock
Common stock outstanding in the consolidated balance sheet and consolidated statement of convertible preferred stock and stockholders’ equity as of December 31, 2025 includes 75,586 shares of restricted stock that vest based on service conditions and are subject to the Company’s right of repurchase upon termination of services. Common stock reserved for future issuance consisted of the following:
(in thousands)
Shares reserved for future issuance under the equity plans 18,923