MLYS Filings — Mineralys Therapeutics, Inc.

MLYS Filings — Mineralys Therapeutics, Inc. - FilingSpy

10-Q · Quarter ended Jun 30, 2026 · SEC filing ↗

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Original filing text

Management's Discussion and Analysis

The following discussion and analysis and the unaudited interim financial statements included in this Quarterly Report on Form 10-Q (Quarterly Report) should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the Annual Report on Form 10-K for the year ended December 31, 2025. Special Note Regarding Forward-Looking Statements This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, research and development plans, the anticipated timing, costs, design, and conduct of our ongoing and planned preclinical studies and planned clinical trials for lorundrostat and any future product candidates, the timing and likelihood of regulatory filings and approvals for lorundrostat (including the anticipated timing of any U.S. Food and Drug Administration’s (FDA) approval of our new drug application (NDA) that was submitted to the FDA for lorundrostat for the treatment of hypertension when used in combination with other antihypertensive drugs in December 2025) and any future product candidates, our ability to commercialize our product candidates, if approved, the potential to develop future product candidates, the potential benefits of strategic collaborations and our intent to enter into any strategic arrangements, the timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated product development efforts, and the sufficiency of our cash, cash equivalents, and investments to fund our operations and satisfy our debt obligations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements, including the timing, volume, and nature of feedback or requests from the FDA in connection with our NDA submission, macroeconomic trends and uncertainty with regard to high interest rates, elevated inflation, tariffs and other trade policies, geopolitical conflict, and the potential for a local and/or global economic recession. This Quarterly Report also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions, and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties, and assumptions, including, without limitation, the risk factors described in Part II, Item 1A, “Risk Factors” in this Quarterly Report, in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, and under a similar heading in any other periodic or current report we may file with the U.S. Securities and Exchange Commission (the SEC) in the future. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances, or otherwise. All forward-looking statements are qualified in their entirety by this cautionary 17 Table of Contents statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This Quarterly Report includes trademarks, trade names, and service marks that are the property of other organizations. Solely for convenience, trademarks and trade names referred to in this Quarterly Report appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or that the applicable owner will not assert its rights, to these trademarks and trade names. 18 Table of Contents Overview We are a biopharmaceutical company focused on developing medicines to target diseases driven by dysregulated aldosterone. Our initial product candidate, lorundrostat, is an investigational, proprietary, orally administered, highly selective aldosterone synthase inhibitor that we are developing for the treatment of uncontrolled hypertension (uHTN) or resistant hypertension (rHTN), as well as related comorbidities, such as chronic kidney disease (CKD), obstructive sleep apnea (OSA), and other diseases driven by dysregulated aldosterone. We have completed six clinical trials of lorundrostat supporting its efficacy and safety profile while also validating aldosterone as an integral therapeutic target in uHTN and rHTN. The clinical program includes two pivotal, registrational trials, the Phase 3 Launch-HTN trial and Phase 2 Advance-HTN trial, which support the robust, durable, and clinically meaningful reductions in systolic blood pressure (BP) by lorundrostat. Lorundrostat was well tolerated in both trials with a favorable safety profile. We submitted our NDA to the FDA in December 2025 for lorundrostat for the treatment of hypertension in combination with other antihypertensive drugs. The FDA accepted the NDA submission and provided us with a Prescription Drug User Fee Act (PDUFA) target date of December 22, 2026 for lorundrostat. In the United States, there are approximately 120 million patients with sustained elevated BP, or hypertension. Approximately 60 million patients are treated and over 30 million do not achieve their BP goal, with approximately 20 million having systolic BP levels greater than 140 mmHg. Patients with hypertension that persists despite taking two or more medications have 1.8 and 2.5 times greater mortality risk due to either cardiovascular disease or stroke, respectively. Dysregulated aldosterone levels are a key factor in uHTN or rHTN in approximately 30% of patients. The image below summarizes the status of recently completed and ongoing clinical trials. Detailed results of our trials are set forth in Part I, Item 1, “Business” in our Annual Report on Form 10-K for the year ended December 31, 2025. Transform-HTN is an open-label extension trial that is ongoing and enables participants to continue to receive lorundrostat and allows us to gather additional long-term safety and efficacy data. All participants in the pivotal hypertension program, including the Launch-HTN and Advance-HTN trials, as well as the Explore-CKD trial, were given the opportunity to participate in the extension trial. On March 9, 2026, we announced topline data from our exploratory Phase 2 Explore-OSA trial that evaluated the effect of lorundrostat in the treatment of overweight and obese participants with moderate-to-severe OSA and hypertension. After four weeks of treatment, lorundrostat 50 mg dosed in the evening did not demonstrate a clinically meaningful difference relative to placebo on the apnea-hypopnea index, the primary 19 Table of Contents endpoint. The trial demonstrated a clinically meaningful reduction in BP at week four, with an 11.1 mmHg (p < 0.0001) and a 1.0 mmHg (p = NS) BP reduction with lorundrostat and placebo, respectively, in the pre-planned parallel arm analysis of the first period. There was a 6.2 mmHg placebo-adjusted reduction (p < 0.0003) in BP in the crossover analysis. Lorundrostat demonstrated a favorable safety profile and was well tolerated, with no serum potassium excursions above 5.5 mmol/L. Analysis is ongoing for other endpoints in the trial and may be reported in future publications or medical meetings. Detailed results of our trials are set forth in Part I, Item 1, “Business” in our Annual Report on Form 10-K for the year ended December 31, 2025. Financial Overview We commenced our operations in May 2019 and have devoted substantially all of our resources to date to fund research and development activities, business planning, establishing and maintaining our intellectual property portfolio, advancing regulatory activities, staffing our company, initiating commercial-readiness activities, raising capital, and providing general and administrative support for our operations. As of June 30, 2026, we had cash, cash equivalents, and investments of $661.4 million. Since inception, we have raised aggregate gross proceeds of approximately $1.4 billion from sales of common stock, convertible preferred stock, pre-funded warrants, and convertible notes, as well as borrowings under the Loan Agreement (as defined and further described below). Our net losses for the six months ended June 30, 2026 and 2025 were $280.4 million and $85.5 million, respectively. As of June 30, 2026 and December 31, 2025, we had an accumulated deficit of $737.6 million and $457.2 million, respectively. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical development activities and other research and development activities, the timing and outcome of the regulatory review of our NDA for lorundrostat by the FDA, and the extent of our commercial-readiness activities in anticipation of potential FDA approval. We anticipate that certain expenses will increase substantially as we prepare for a potential approval and launch of lorundrostat, including the following: •conducting ongoing regulatory activities, including responding to FDA information requests, supporting a potential advisory committee meeting (not anticipated currently), preparing for potential approval and post-marketing commitments, and potential commercial launch of lorundrostat; •continuing to expand our pre-commercial organization, including building out our sales, medical affairs, market access, health economics and outcomes research, regulatory, quality, manufacturing, and other commercial functions; •obtaining, maintaining, protecting, and enforcing our intellectual property; •continuing the Transform-HTN open-label extension trial and conducting any required post-approval studies; •attracting and retaining experienced scientific, regulatory, medical, commercial, and operational talent; and •operating as a public company with expanding SEC compliance, legal, and finance obligations. We have never generated any revenue and do not expect to generate any revenue from product sales unless and until we obtain regulatory approval for lorundrostat, if ever. Accordingly, until such time as we can generate significant revenue from sales of lorundrostat, if ever, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to 20 Table of Contents develop and market product candidates that we would otherwise prefer to develop and market ourselves. For more information, see “Liquidity and Capital Resources.” Tanabe License Agreement In July 2020, we entered into an exclusive license agreement (as amended, the Tanabe License) with Tanabe Pharma Corporation (Tanabe) (formerly Mitsubishi Tanabe Pharma Corporation), pursuant to which Tanabe granted us an exclusive, worldwide, royalty-bearing, sublicensable license under Tanabe’s patent and other intellectual property rights to exploit products incorporating lorundrostat (formerly MT-4129) (Lorundrostat Product) for the prevention, treatment, diagnosis, detection, monitoring, or predisposition testing with respect to indications, diseases, and conditions in humans. Pursuant to the Tanabe License, we previously paid Tanabe a $1.0 million upfront fee and development milestone payments of $9.0 million in the aggregate. On June 2, 2026, we entered into a fourth amendment to the Tanabe License (the Fourth Amendment), pursuant to which our obligation to pay Tanabe royalties on net sales of Lorundrostat Products was terminated, the license was amended and restated to grant us an exclusive, worldwide, royalty-free, sublicensable, perpetual, irrevocable license, and our diligence obligations with respect to the ongoing development and commercialization of lorundrostat were eliminated. As consideration, we made an upfront cash payment to Tanabe of $200.0 million and agreed to pay additional commercial milestone payments of up to $100.0 million in the aggregate (the New Milestones). As a result of the Fourth Amendment, we have remaining obligations to pay Tanabe commercial milestone payments, including the New Milestones, of up to $255.0 million in the aggregate upon first commercial sale and upon meeting certain annual sales targets, as well as up to $10.0 million related to commercialization for a potential second indication. The New Milestones become immediately due and payable by us upon certain change-of-control transactions. Within a specified period following execution of the Fourth Amendment, the parties agreed to enter into an agreement to terminate the Tanabe License, pursuant to which, among other things, Tanabe will assign to us all of Tanabe’s rights in the licensed intellectual property. Senior Secured Term Loan On June 2, 2026, we entered into a senior secured term loan agreement (the Loan Agreement) with BioPharma Credit PLC, as collateral agent, and each of BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon Advisors, LP, as lenders. The Loan Agreement provides for a five‑year senior secured term loan of up to $500.0 million, maturing on June 3, 2031 (the Maturity Date), consisting of the following tranches (collectively, the Term Loans): (i) a Tranche A Loan of $100.0 million, which was drawn on June 2, 2026; (ii) a Tranche B Loan of $150.0 million, which is required to be drawn no later than April 30, 2027, subject to approval by the FDA of the lorundrostat NDA (the Tranche B Approval Condition); (iii) a Tranche C Loan of $150.0 million, which is available at our election until December 14, 2028, subject to the occurrence of the Tranche B Approval Condition and the achievement of certain net sales milestones; and (iv) a Tranche D Loan of $100.0 million, which is available at our election until June 14, 2029, subject to the draw of the Tranche C Loan and the achievement of certain net sales milestones. As of June 30, 2026, we had drawn the $100.0 million Tranche A Loan, and the Tranche B Loan, Tranche C Loan, and Tranche D Loan were undrawn. The Maturity Date is subject to acceleration to June 30, 2028 if the Tranche B Approval Condition is not satisfied on or before September 30, 2027. The Term Loans bear interest at a rate per annum equal to the three‑month secured overnight financing rate (SOFR) (subject to a 3.25% floor) plus 5.50%, payable quarterly in arrears. At inception of the Tranche A Loan, the applicable interest rate was 9.15%. We are required to pay a funding fee equal to 2.00% of the funding amount on the funding date of each Term Loan, and paid a funding fee of $2.0 million in connection with the Tranche A Loan. We may elect to prepay the Term Loans in whole or, subject to certain conditions, in part prior to the Maturity Date, subject to certain prepayment, make‑whole, and exit fees. The Term Loans are subject to certain mandatory prepayments, including a repayment of all Term Loans in four equal installments commencing on September 30, 2027 to the extent the Tranche B Approval Condition is not met on or prior to September 30, 2027. Each Term Loan requires us to pay a final fee equal to 1.5% of the original principal 21 Table of Contents amount of such Term Loan (the Final Fee), due upon the earlier of the Maturity Date or prepayment of the applicable Term Loan. The Final Fee associated with the Tranche A Loan is fixed at $1.5 million and will not increase. However, the aggregate Final Fee payable under the Loan Agreement will increase if additional Term Loan tranches are drawn, as each additional tranche would be subject to its own Final Fee. Borrowings under the Term Loans are secured by substantially all of our assets, subject to certain exceptions. The Loan Agreement contains financial covenants, including a minimum liquidity requirement and, with respect to the fiscal year ending December 31, 2028 and then tested quarterly commencing with the fiscal quarter ending March 31, 2029, a minimum trailing twelve-month consolidated net product revenue covenant. As of June 30, 2026, we were in compliance with all covenants under the Loan Agreement. Upon the occurrence of an event of default under the Loan Agreement, the lenders may, among other things, accelerate our obligations under the Loan Agreement, and upon an event of default relating to certain insolvency, liquidation, bankruptcy, or similar events, all outstanding obligations under the Loan Agreement will be automatically accelerated. In connection with the Tranche A Loan, we received gross proceeds of $100.0 million. We recognized a debt discount of $2.0 million and incurred $2.1 million in debt issuance costs, which were comprised of amounts paid to third parties and lenders. We allocated a portion of the debt issuance costs to the undrawn future Term Loans and recognized a long-term deferred asset in the amount of $1.7 million, which will be amortized to interest expense on a straight-line basis over the period to which the related borrowing capacity is available. As of June 30, 2026, the unamortized debt discounts and debt issuance costs of approximately $2.0 million and $0.4 million, respectively, were recorded as a reduction of the carrying amount of the Tranche A Loan and are being amortized to interest expense over the term of the Tranche A Loan using the effective interest method. The effective interest rate on the Tranche A Loan was 9.91% as of June 30, 2026. Public Offerings On June 3, 2026, we entered into an underwriting agreement with BofA Securities, Inc., Goldman Sachs & Co. LLC, and Evercore Group L.L.C., relating to the issuance and sale of 5,660,378 shares of our common stock at a price of $26.50 per share for net proceeds of approximately $143.6 million after deducting underwriting discounts and offering expenses. The offering was made pursuant to our shelf registration statement on Form S-3 (Registration Statement No. 333-291435), filed with the SEC on November 10, 2025, and a prospectus supplement and accompanying prospectus filed with the SEC on June 3, 2026. We used the net proceeds from the offering to fund a portion of the $200.0 million upfront payment made on June 2, 2026 to Tanabe upon execution of the Fourth Amendment (as further described above). On March 11, 2025, we entered into an underwriting agreement relating to the issuance and sale of 14,907,406 shares of our common stock at a price of $13.50 per share for net proceeds of approximately $188.7 million after deducting underwriting discounts and offering expenses. The offering was made pursuant to our shelf registration statement on Form S-3 (Registration Statement No. 333-278122) previously filed with and declared effective by the SEC, and a prospectus supplement and accompanying prospectus filed with the SEC. We are using the net proceeds from this offering to fund the clinical development of lorundrostat, including research and development, manufacturing, and pre-commercialization activities, as well as for working capital and general corporate purposes. At-the-Market Equity Offering Sales Agreements On November 10, 2025, we entered into an ATM Equity Offering Sales Agreement (the ATM Agreement) with BofA Securities, Inc., Evercore Group L.L.C., and Goldman Sachs & Co. LLC, pursuant to which we may sell shares of our common stock having an aggregate offering price of up to $300.0 million from time to time. During the six months ended June 30, 2026, we sold pursuant to the ATM Agreement an aggregate 22 Table of Contents of 568,320 shares of common stock at a weighted-average price of $35.66 per share for aggregate net proceeds of approximately $20.2 million after deducting commissions and offering expenses. No shares of common stock were sold pursuant to the ATM Agreement during the three months ended June 30, 2026, or during the three and six months ended June 30, 2025. From inception of the ATM Agreement and through June 30, 2026, we sold an aggregate of 2,720,508 shares of common stock at a weighted-average price of $41.45 per share for aggregate net proceeds of approximately $112.4 million after deducting commissions and offering expenses. As of June 30, 2026, approximately $187.2 million of shares remained available for sale pursuant to the ATM Agreement. On March 21, 2024, we entered into an ATM Equity Offering Sales Agreement (the Prior ATM Agreement) with BofA Securities, Inc. and Evercore Group L.L.C. Effective November 9, 2025, the Prior ATM Agreement was terminated in connection with the execution of the ATM Agreement. There were no sales of common stock pursuant to the Prior ATM Agreement during each of the three and six months ended June 30, 2026. During the three and six months ended June 30, 2025, we sold pursuant to the Prior ATM Agreement an aggregate of 674,518 shares of common stock at a weighted-average price of $14.15 per share for aggregate net proceeds of approximately $9.5 million after deducting commissions and offering expenses. From inception of the Prior ATM Agreement and through its termination effective November 9, 2025, we sold an aggregate of 1,914,040 shares of common stock at a weighted-average price of $14.32 per share for aggregate net proceeds of approximately $27.3 million after deducting commissions and offering expenses. Key Components of Results of Operations Research and Development Research and development expenses consist primarily of external and internal costs related to the development of lorundrostat. Research and development expenses are recognized as incurred, and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods are received or the services are performed. Research and development expenses include: •compensation costs, including salaries, benefits, and stock-based compensation for our research and development personnel; •external research and development expenses incurred under agreements with contract research organizations and consultants to conduct and support our clinical trials of lorundrostat; •costs related to clinical supply, manufacturing, and regulatory activities; •costs related to advancing our commercial-readiness activities in preparation for a potential launch of lorundrostat for patients with hypertension, if approved by the FDA; •fees incurred under the Tanabe License; and •allocated overhead. Our research and development expenses have been primarily driven by the timing and phase of our clinical trials, including the initiation and completion of studies, the number of trials in progress, and the size and complexity of each trial. We expect certain research and development expenses related to our clinical trial activities to decline in the upcoming periods as most trials have been completed relative to prior periods. However, we anticipate that certain other expenses will increase substantially as we: •conduct ongoing regulatory activities, including responding to FDA information requests, supporting a potential advisory committee meeting (not anticipated currently), preparing for 23 Table of Contents potential approval and post-marketing commitments, and potential commercial launch of lorundrostat; •continue the Transform-HTN open-label extension trial and conduct any required post-approval studies; and •attract and retain experienced scientific, regulatory, medical, commercial, and operational talent. We cannot determine with certainty the timing of initiation, the duration, or the completion costs of current or future clinical trials and preclinical studies of lorundrostat or any future product candidates due to the inherently unpredictable nature of clinical and preclinical development. Clinical and preclinical development timelines, the probability of success, and development costs can differ materially from expectations. In addition, we cannot forecast whether lorundrostat or any future product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements. Our future development costs may vary significantly based on factors such as: •the initiation, type, number, scope, development phase, progress, duration, expansions, results, costs, and timing of clinical trials and preclinical studies of lorundrostat and any future product candidates we may choose to pursue, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; •our ability and strategic decision to develop future product candidates other than lorundrostat, and the timing of such development, if any; •our ability to receive timely regulatory approvals for lorundrostat, any future product candidates, and any additional indications of lorundrostat and any future product candidates, in the jurisdictions in which we or any future partners apply for such approvals; •the costs and timing of manufacturing lorundrostat to support a potential commercial launch or any future product candidates for use in our trials, including as a result of inflation, changes in international trade policies and tariffs, any supply chain issues, or component shortages; •any additional jurisdictions in which we may seek approval for lorundrostat and any future product candidates and the timing of seeking approval in such jurisdictions; and •the extent to which we establish strategic collaborations or other arrangements. General and Administrative Expenses General and administrative expenses consist primarily of (i) compensation costs, including salaries, benefits, and stock-based compensation, for executive and administrative personnel; (ii) professional fees for legal, audit, tax, and other consulting or advisory services; (iii) costs associated with building our pre-commercial organization, including sales, medical affairs, market access, and health economics; (iv) fees relating to intellectual property and corporate matters; and (v) allocated overhead. We expect general and administrative expenses to increase as we build out our pre-commercial and commercial capabilities in preparation for the potential approval and launch of lorundrostat; obtain, maintain, protect, and enforce our intellectual property; and attract and retain scientific, regulatory, medical, commercial, and operational talent, and as we incur higher costs associated with being a more mature public company. 24 Table of Contents Other Income, Net Interest Income, Net Interest income reported in each period is associated with our investments in money market funds and U.S. treasuries, net of fees, or other related expenses. Following the disbursement of the Tranche A Loan on June 2, 2026, we also began recording interest expense and amortization of debt discounts and issuance costs associated with our Term Loans. Results of Operations Comparison of the Three Months Ended June 30, 2026 and 2025 Three Months Ended, June 30, 2026 2025 Change (in thousands) Research and development expenses $ (221,377) $ (38,278) $ (183,099) General and administrative expenses (24,663) (8,468) (16,195) Total other income, net 4,969 3,472 1,497 Net loss $ (241,071) $ (43,274) $ (197,797) Research and Development Expenses Research and development expenses increased by $183.1 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily due to the $200.0 million upfront payment to Tanabe in June 2026 in connection with the Fourth Amendment. The increase was also due to $0.6 million of increased personnel-related expenses resulting from headcount growth and increased compensation and $0.2 million of increased clinical supply, manufacturing, regulatory, and other costs. These increases were partially offset by $17.8 million of lower preclinical and clinical costs, primarily due to the conclusion of the lorundrostat pivotal program in the second quarter of 2025. General and Administrative Expenses General and administrative expenses increased by $16.2 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily due to $8.0 million in higher professional fees, $8.0 million of increased personnel-related expenses resulting from headcount growth and increased compensation, and $0.2 million of increased other administrative expenses. Total Other Income, Net Total other income, net increased by $1.5 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, which was primarily attributable to $2.3 million of increased interest earned on our investments as a result of higher average cash balances during the three months ended June 30, 2026, partially offset by $0.8 million of interest and amortization expense related to the Loan Agreement entered into during the three months ended June 30, 2026. 25 Table of Contents Comparison of the Six Months Ended June 30, 2026 and 2025 Six Months Ended, June 30, 2026 2025 Change (in thousands) Research and development expenses $ (245,742) $ (76,157) $ (169,585) General and administrative expenses (45,638) (15,036) (30,602) Total other income, net 10,970 5,708 5,262 Net loss $ (280,410) $ (85,485) $ (194,925) Research and Development Expenses Research and development expenses increased by $169.6 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily due to the $200.0 million upfront payment to Tanabe in June 2026 in connection with the Fourth Amendment. The increase was also due to $1.5 million of increased personnel-related expenses resulting from headcount growth and increased compensation and $1.4 million of increased clinical supply, manufacturing, regulatory, and other costs. These increases were partially offset by $33.3 million of lower preclinical and clinical costs, primarily due to the conclusion of the lorundrostat pivotal program in the six months ended June 30, 2025. General and Administrative Expenses General and administrative expenses increased by $30.6 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily due to $15.9 million in higher professional fees, $14.1 million of increased personnel-related expenses resulting from headcount growth and increased compensation, and $0.6 million of increased other administrative expenses. Total Other Income, Net Total other income, net increased by $5.3 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, which was primarily attributable to $6.1 million of increased interest earned on our investments as a result of higher average cash balances during the six months ended June 30, 2026, partially offset by $0.8 million of interest and amortization expense related to the Loan Agreement entered into during the six months ended June 30, 2026. Liquidity and Capital Resources Since inception, we have incurred net losses and negative cash flows from operations. We expect to continue to incur significant expenses and, until we begin generating substantial product revenue from product sales, we anticipate continuing to incur operating losses for the foreseeable future. Since inception, we have raised aggregate gross proceeds of approximately $1.4 billion from sales of common stock, convertible preferred stock, pre-funded warrants, and convertible notes, as well as borrowings under the Loan Agreement. Our primary uses of cash to date have been to fund our research and development activities, business planning, establishing and maintaining our intellectual property portfolio, advancing regulatory activities, staffing our company, initiating commercial-readiness activities, raising capital, and providing general and administrative support for these operations. As of June 30, 2026, we had cash, cash equivalents, and investments of $661.4 million and an accumulated deficit of $737.6 million. During the six months ended June 30, 2026: •we sold 5,660,378 shares of our common stock at a price of $26.50 per share for net proceeds of approximately $143.6 million after deducting underwriting discounts and offering expenses; 26 Table of Contents •we borrowed $100.0 million under the Loan Agreement; and •we sold an aggregate of 568,320 shares of common stock under the ATM Agreement at a weighted-average price of $35.66 per share for aggregate net proceeds of approximately $20.2 million after deducting commissions and offering expenses. As of June 30, 2026, approximately $187.2 million of shares remained available for sale pursuant to the ATM Agreement, subject to the terms and conditions of the ATM Agreement and applicable securities laws, and up to $400.0 million of Term Loans remained available under the Loan Agreement, subject to certain conditions. Funding Requirements Based on our current operating plan, we believe that our cash, cash equivalents, and investments as of June 30, 2026 will be sufficient to allow us to fund our planned operations, including the commercial launch of lorundrostat, for at least twelve months. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain. Our future capital requirements will depend on many factors, including, but not limited to: •the initiation, type, number, scope, development phase, progress, duration, expansions, results, costs, and timing of clinical trials and preclinical studies of lorundrostat and any future product candidates we may choose to pursue, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; •our ability and strategic decision to develop future product candidates other than lorundrostat, and the timing of such development, if any; •our ability to receive timely regulatory approvals for lorundrostat, any future product candidates, and additional indications of lorundrostat and any future product candidates, in the jurisdictions in which we or any future partners apply for such approvals; •the costs and timing of manufacturing for lorundrostat, or any future product candidate, including commercial manufacture at sufficient scale, if any product candidate is approved, including as a result of inflation, changes in international trade policies and tariffs, any supply chain issues, or component shortages; •any additional jurisdictions in which we may seek approval for lorundrostat and any future product candidates and timing of seeking approval in such jurisdictions; •the costs, timing, and outcome of regulatory approval of lorundrostat or any future product candidates; •the costs of obtaining, maintaining, enforcing, and protecting our patents and other intellectual property and proprietary rights; •our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal control over financial reporting; •the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, manufacturing, quality, and commercial personnel; 27 Table of Contents •the timing and amount of the milestone or other payments we must make to Tanabe, from whom we have in-licensed lorundrostat, or any future licensors; •the costs and timing of establishing or securing sales and marketing capabilities if lorundrostat or any future product candidate is approved; •our ability to achieve sufficient market acceptance, coverage, and adequate reimbursement from third-party payors, and adequate market share and revenue for any approved products; •patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payors; •the terms and timing of establishing and maintaining collaborations, licenses, and other similar arrangements; •costs associated with any products or technologies that we may in-license or acquire; •any delays and cost increases that may result from any pandemic or other healthcare emergency; and •the other risks and uncertainties described under the heading “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” and elsewhere in this Quarterly Report. Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from factors that include, but are not limited to, geopolitical conflict in and around Ukraine, Israel, Iran, Venezuela, and other areas of the world, inflation, changes in international trade policies and tariffs, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive. If we raise additional funds through future collaborations, licenses, or other similar arrangements with third parties, we may have to relinquish valuable rights to our future revenue streams, product candidates, research programs, intellectual property or proprietary technology, or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed or on terms acceptable to us, we may be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves, or on less favorable terms than we would otherwise choose. 28 Table of Contents Cash Flows Comparison of the Six Months Ended June 30, 2026 and 2025 Since our inception, we have primarily used our available cash to fund expenditures related to the in-license and development of lorundrostat. The following table sets forth a summary of cash flows for the periods presented (in thousands): Six Months Ended June 30, 2026 2025 Change Net cash provided by (used in): Operating activities $ (72,027) $ (75,656) $ 3,629 Investing activities (230,162) (135,757) (94,405) Financing activities 267,536 199,110 68,426 Net $ (34,653) $ (12,303) $ (22,350) Operating Activities Net cash used in operating activities was $72.0 million during the six months ended June 30, 2026, compared to $75.7 million during the six months ended June 30, 2025. The $3.6 million decrease in net cash used was primarily due to a $4.9 million decrease in net loss adjusted for non-cash items, partially offset by $1.3 million of net changes in working capital. Cash used in operating activities continued to reflect expenditures related to the development of lorundrostat, including clinical trial expenses, personnel related costs, legal and professional fees, and general working capital requirements. Investing Activities Net cash used in investing activities was $230.2 million for the six months ended June 30, 2026, compared to $135.8 million for the six months ended June 30, 2025. The increase in net cash used in investing activities was primarily attributable to the $200.0 million payment made pursuant to the Tanabe License during the six months ended June 30, 2026, for which there was no comparable payment in the prior-year period. This increase was partially offset by the timing and volume of purchases and maturities of marketable securities. Compared to the six months ended June 30, 2025, maturities of previously purchased marketable securities increased by $517.5 million and purchases of marketable securities increased by $411.9 million during the six months ended June 30, 2026. Financing Activities Net cash provided by financing activities was $267.5 million during the six months ended June 30, 2026, compared to $199.1 million during the six months ended June 30, 2025. During the six months ended June 30, 2026, financing proceeds consisted primarily of $143.9 million of net proceeds from a public offering of common stock, $96.5 million of net proceeds borrowed under the Loan Agreement, and $20.2 million of net proceeds from sales of common stock under the ATM Agreement. During the six months ended June 30, 2025, financing proceeds consisted primarily of $188.9 million of net proceeds from a public offering of common stock and $8.9 million of net proceeds from sales of common stock under the Prior ATM Agreement. In addition, during the six months ended June 30, 2026, proceeds from stock option exercises increased by $5.5 million and proceeds from issuances of common stock under the 2023 Employee Stock Purchase Plan increased by $0.2 million, compared to the prior year period. Contractual Obligations and Commitments Under the Tanabe License, we have commercial milestone payment obligations that are contingent upon the achievement of specified levels of product sales in connection with the sale of products developed 29 Table of Contents under the agreement. We are currently unable to estimate the timing or likelihood of achieving other future milestones or making future product sales. See above and Note 5, “Commitments and Contingencies” to our condensed financial statements included elsewhere in this Quarterly Report for additional information regarding the Tanabe License. In June 2026, we borrowed $100.0 million related to the Tranche A Loan under the Loan Agreement. The Loan Agreement provides for a five‑year senior secured term loan of up to $500.0 million, maturing on June 3, 2031, consisting of the following additional tranches: (i) a Tranche B Loan of $150.0 million, which is required to be drawn no later than April 30, 2027, subject to approval by the FDA of the lorundrostat NDA; (ii) a Tranche C Loan of $150.0 million, which is available at our election until December 14, 2028, subject to the occurrence of the Tranche B Approval Condition and the achievement of certain net sales milestones; and (iii) a Tranche D Loan of $100.0 million, which is available at our election until June 14, 2029, subject to the draw of the Tranche C Loan and the achievement of certain net sales milestones. We enter into contracts in the normal course of business for contract research services, contract manufacturing services, professional services, and other services and products for operating purposes. These contracts generally provide for termination after a notice period, and, therefore, are cancelable contracts. Critical Accounting Estimates We have prepared the condensed financial statements in accordance with accounting principles generally accepted in the United States. The preparation of these condensed financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosures at the date of the condensed financial statements, and the reported amounts of expenses during the reporting period. On an ongoing basis, management evaluates its critical estimates, including those related to prepaid and accrued research and development expenses. We base our estimates on our historical experience and on assumptions that we believe are reasonable; however, actual results may differ materially from these estimates under different assumptions or conditions. There were no changes during the six months ended June 30, 2026 to our critical accounting estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. For information on our significant accounting policies, please refer to Note 2, “Summary of Significant Accounting Policies” within our Annual Report on Form 10-K for the year ended December 31, 2025. JOBS Act and Smaller Reporting Company Status As an emerging growth company under the Jumpstart Our Business Startups Act of 2012, as amended (the JOBS Act), we can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for complying with new or revised accounting standards, and as a result of this election, our financial statements may not be comparable to the information that is available for other public companies. We intend to rely on other exemptions provided by the JOBS Act, including, without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of our initial public offering in February 2023, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if, among other factors, the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year (subject to certain conditions), or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. 30 Table of Contents We are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter. Recently Issued Accounting Pronouncements We have reviewed all recently issued accounting pronouncements and have determined that, other than as disclosed elsewhere in this Quarterly Report, such standards do not have a material impact on our condensed financial statements or do not otherwise apply to our operations.

Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk We are exposed to market risk related to changes in interest rates of our investment portfolio of cash equivalents and investments and our variable-rate indebtedness under the Loan Agreement. As of June 30, 2026, our cash equivalents and investments consisted of money market funds and U.S. Treasury securities. Our primary exposure to market risk from these assets is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. The fair value of our short-term cash equivalents and investments is subject to change as a result of potential changes in market interest rates. Due to the nature of our cash equivalents and investments, we believe an immediate hypothetical 10% change in interest rates would not have had a material effect on our results of operations during the periods presented. On June 2, 2026, we entered into the Loan Agreement and borrowed $100.0 million under the Tranche A Loan. Borrowings under the Loan Agreement bear interest at a variable rate equal to three-month SOFR (subject to a 3.25% floor) plus 5.50%. The effective interest rate on the Tranche A Loan was 9.91% as of June 30, 2026. Because the Term Loans bear interest at a variable rate, changes in market interest rates could increase or decrease our interest expense. Based on the $100.0 million principal balance outstanding as of June 30, 2026, a hypothetical 1% increase or decrease in the applicable interest rate would result in a corresponding change in annual interest expense of approximately $1.0 million. Foreign Currency Exchange Risk We are exposed to market risk related to changes in foreign currency exchange rates. We contract with vendors that are located outside the United States and certain invoices are denominated in foreign currencies. We are subject to fluctuations in foreign currency rates in connection with these arrangements. To date, these fluctuations have not been significant, and we have not had a formal hedging program with respect to foreign currency. We believe an immediate hypothetical 10% change in exchange rates would not have had a material effect on our results of operations during the periods presented. Effects of Inflation Inflation generally affects us by increasing our cost of labor and research and development contract costs. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience some effect in the future due to an impact on the costs to conduct clinical trials, labor costs we incur to attract and retain qualified personnel, and other operational costs. Inflationary costs could adversely affect our business, financial condition, and results of operations. 31 Table of Contents

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Risk Factors

Our business, financial condition, and operating results may be affected by a number of factors, whether currently known or unknown, including, but not limited to, those described in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025. Any one or more of such factors could directly or indirectly cause our actual results of operations and financial condition to vary materially from past or anticipated future results of operations and financial condition. Any of these factors, in whole or in part, alone or combined with any of the other factors, could materially and adversely affect our business, financial condition, results of operations, and stock price. Except as set forth below, there have been no material changes to our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2025. The following risk factors are new as a result of entering into the Loan Agreement in June 2026: Risks Related to our Indebtedness Servicing the Loan Agreement will require a significant amount of cash, and we may not have sufficient cash flow to pay our indebtedness. Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness associated with the Loan Agreement depends on our future performance, which is subject to many factors, including economic, financial, competitive, and others, that are beyond our control. We do not expect our business to be able to generate cash flow from operations and expect to continue to incur significant losses in the foreseeable future until and if we begin generating substantial product revenue from product sales that would be sufficient to service our debt and make necessary capital expenditures. Without sufficient resources, we may therefore be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance the Loan Agreement, which matures in 2031, will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations and limit our flexibility in planning for and reacting to changes in our business. Our indebtedness and liabilities could have significant negative consequences for our security holders and our business, results of operations, and financial condition by, among other things: •increasing our vulnerability to adverse economic and industry conditions; •limiting our ability to obtain additional financing on acceptable terms or at all; •requiring the dedication of a substantial portion of any cash flow from operations to service our indebtedness, which would reduce the amount of cash available for other purposes; •limiting our flexibility to plan for, or react to, changes in our business; •diluting the interests of our existing stockholders as a result of issuing shares of our common stock; and 33 Table of Contents •placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital. Any of these factors could harm our business, prospects, operating results, and financial condition. In addition, if we incur additional indebtedness, the risks related to our business and our ability to service or repay our indebtedness and secured obligations will increase. We have entered into the Loan Agreement, pursuant to which we have granted the lenders a security interest in substantially all of our assets, including our intellectual property. If we default on our obligations under the Loan Agreement, the lenders could foreclose on our assets, which could materially adversely affect our business, financial condition, results of operations, and prospects. The Loan Agreement contains customary affirmative and negative covenants, representations, and warranties, including certain restrictive covenants setting forth actions that are not permitted to be taken during the term of the Loan Agreement, including, without limitation, selling or disposing of assets, incurring additional indebtedness or non-permitted liens or encumbrances on our assets, making payments on subordinated indebtedness, and making investments other than permitted acquisitions and permitted investments, in each case, subject to specified exceptions, including, in the case of restrictions on incurrence of additional indebtedness, the ability to incur certain convertible indebtedness and enter into certain permitted royalty financing agreements. These covenants may limit our ability to engage in certain transactions that may be in our long-term best interest. The Loan Agreement also contains financial covenants, including a minimum liquidity requirement and, with respect to the fiscal year ending December 31, 2028 and then tested quarterly commencing with the fiscal quarter ending March 31, 2029, a minimum trailing twelve-month consolidated net product revenue covenant. As of June 30, 2026, we were in compliance with the covenants contained in the Loan Agreement; however, we may breach these covenants in the future. Our ability to comply with these covenants may be affected by events and factors beyond our control. In the event that we breach one or more covenants, the collateral agent may choose to declare an event of default and require that we immediately repay all amounts outstanding under the Loan Agreement, terminate any commitment to extend further credit, and foreclose on the collateral. The Loan Agreement also contains certain events of default, including failure to pay principal, interest, and other amounts when due, the breach of the covenants under the Loan Agreement, the occurrence of a material adverse change or a withdrawal event in respect of lorundrostat or any other pharmaceutical product from time to time manufactured or developed by us, certain attachments of our assets and restraints on our business, certain insolvency, liquidation, bankruptcy, or similar events, certain cross-defaults of third-party indebtedness and royalty revenue contracts, the failure to pay certain judgments, material misrepresentations, the loan documents ceasing to create a valid security interest in a material portion of the collateral, and the occurrence of a default under any intercreditor agreement, in each case subject to the grace periods, cure periods, and thresholds as specified in the Loan Agreement. Upon the occurrence of an event of default, the lenders may, among other things, accelerate our obligations under the Loan Agreement (including all obligations for principal, interest, and any applicable make-whole and prepayment premiums). We and the lenders also entered into a Guarantee and Security Agreement wherein we agreed to secure the Loan Agreement with all of our assets. The occurrence of any of these events could have a material adverse effect on our business, financial condition, results of operations, and prospects. If we default on any of our obligations under the Loan Agreement, the lenders could foreclose on their security interest and liquidate some or all of the collateral, including our intellectual property assets, which would harm our business, financial condition, results of operations, and prospects, and could require us to reduce or cease operations.