Crinetics Pharmaceuticals, Inc. (CRNX)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Report and with our audited financial statements and notes thereto included in our FY 2025 Form 10-K . Unless otherwise indicated, all dollar amounts are presented in thousands, with the exception of per share amounts.

Forward-Looking Statements

The following discussion and other parts of this Report contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical facts contained in this Report, including statements regarding our future results of operations and financial position, business strategy, commercialization efforts, prospective products, product approvals, research and development costs, timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated products, are forward-looking statements. These statements are often identified by the use of words such as “may,” “will,” "should," “expect,” "plan," “anticipate,” “intend,” “target,” “goal,” “aspire,” “project,” “lead to,” “contemplates,” “believes,” “estimates,” “predicts,” “forecast,” “potential,”or “continue,” and similar expressions or variations. In particular, forward-looking statements in this Report relate to, among other things: our ability to successfully commercialize PALSONIFY for the treatment of acromegaly; expected insurance coverage for PALSONIFY; the commercial potential of PALSONIFY and the anticipated potential of atumelnant and our other pipeline assets; our expectations regarding the timing, duration and costs of advancing our pipeline and conducting ongoing and planned clinical and preclinical studies, including future product launches and geographic expansion; anticipated future results and expenses; our expectations regarding our ability to raise additional capital as needed, and our ability to achieve or maintain profitability; our expectations regarding the impact of general economic, industry and market conditions globally that may affect us; the expected timing and completion of the Merger and the Transactions; the satisfaction or waiver of the conditions to completion of the Merger, including receipt of the Company Shareholder Approval, expiration or termination of the applicable waiting period under the HSR Act and receipt of any required foreign regulatory clearances; the occurrence of any event or circumstance that could give rise to the right of the Company or Vertex to terminate the Merger Agreement, including circumstances requiring payment of a termination fee pursuant to the Merger Agreement; the risk that the Transactions may not close in the anticipated timeframe or at all due to one or more closing conditions not being satisfied or waived; the possibility that competing offers will be made; the risk that there may be unexpected costs, charges or expenses resulting from the Transactions; risks related to the ability of the Company and Vertex to successfully integrate the businesses and the possibility that integration may be more difficult, time consuming or costly than expected; the risk that the Transactions disrupt the Company’s current plans and operations; the risk that certain restrictions during the pendency of the Transactions may impact the Company’s ability to pursue certain business opportunities or strategic transactions; risks related to disruption of the Company’s management’s time and attention from ongoing business operations due to the Transactions; the risk that any announcements relating to the Transactions could have adverse effects on the market price of the Company’s common stock, credit ratings or operating results; the risk of litigation that could be instituted against the parties or their respective directors, managers or officers and/or regulatory actions related to the Transactions, including the effects of any outcomes related thereto; the effects of the Transactions on relationships with employees, other business partners or governmental entities; the difficulty of predicting the timing or outcome of regulatory approvals or actions, if any; the impact of competitive products and pricing; actual or contingent liabilities related to the Transactions; and any assumptions underlying any of the foregoing. The forward-looking statements in this 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 financial condition, operating results, business strategy, short-term and long-term business operations and objectives. These forward-looking statements speak only as of the date of this Report and are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A, “Risk Factors,” in this Report and Part I, Item 1A, “Risk Factors,” in our FY 2025 Form 10-K . 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. 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.

Overview

We are a pharmaceutical company committed to transforming the treatment of endocrine diseases and endocrine-related tumors through science rooted in patient needs. We are focused on discovering, developing, and commercializing novel therapies, with a core expertise in targeting GPCRs with small molecules that have specifically tailored pharmacology and properties.

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Recent Developments

Merger with Vertex Pharmaceuticals Incorporated

On July 6, 2026, we entered into the Merger Agreement with Vertex and Merger Sub. Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Merger Sub will merge with and into the Company, with the Company surviving the Merger as a wholly owned subsidiary of Vertex. At the Effective Time, each share of our common stock issued and outstanding immediately prior to the Effective Time, other than certain excluded shares and shares held by shareholders who are entitled to demand, and have properly demanded appraisal rights in respect of their shares under Delaware law, will be canceled and converted into the right to receive the Merger Consideration. The Merger is currently expected to close in the third quarter of 2026, subject to customary closing conditions, including receipt of the Company Shareholder Approval, expiration or termination of the waiting period under the HSR Act and receipt of any required foreign regulatory clearances. The Merger is not subject to a financing condition. See Note 13 to our unaudited condensed consolidated financial statements and Part II, Item 1A, “Risk Factors,” in this Report for additional information.

PALSONIFY

•Key metrics for the second quarter 2026 reflect broad and deep uptake from patients and healthcare providers as well as favorable feedback from payers.

•Received 245 Enrollment Forms during the second quarter of 2026. Breadth and depth of PALSONIFY prescribers continued to grow, with 385 unique HCPs having prescribed PALSONIFY within the first three quarters of launch. Over 70% of patients treated with PALSONIFY at the end of the second quarter of 2026 were on reimbursed therapy.

Paltusotine

•In February 2026, the CHMP of the EMA adopted a positive opinion and in April 2026, the EC approved PALSONIFY for the medical treatment of adults with acromegaly.

•In March 2026, we submitted a MAA to Brazil’s ANVISA for PALSONIFY for the treatment of acromegaly in adults.

•Paltusotine is also in development for acromegaly in Japan through our licensing agreement with SKK. In April 2026, SKK submitted an NDA in Japan for paltusotine for the treatment of acromegaly.

Atumelnant

•In January 2026, we provided an update, including data on the fourth cohort of the Phase 2 TouCAHn study and data from the separate OLE study. Participants in all four cohorts were eligible to enroll in the OLE.

•In January 2026, the first participant in the BALANCE-CAH study was dosed.

•In February 2026, we announced the design of our Phase 2/3 EQUILIBRIUM study of atumelnant in ADCS. We expect the first participant in the EQUILIBRIUM study to be randomized in the second half of 2026.

•The FDA granted atumelnant a Rare Pediatric Disease Designation for the treatment of classic CAH.

Financial operations overview

During the three and six months ended June 30, 2026, our financial results continued to reflect the commercialization of PALSONIFY following the FDA approval in September 2025 and the launch of PALSONIFY in the fourth quarter of 2025. As a result, our results of operations for the three and six months ended June 30, 2026 include product revenue, alongside collaboration and license revenue that historically represented our primary sources of revenue.

Following the PALSONIFY launch in late 2025, we continued to incur cost of product revenue and invested in commercial infrastructure to support ongoing commercial operations. These changes resulted in increased operating expenses, including commercialization-related selling, general and administrative expenses, while we also maintained investments in manufacturing readiness and supply chain activities.

Research and development expenses increased as we progressed clinical development programs and supported earlier-stage research initiatives to advance our pipeline of product candidates.

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Following the execution of the Merger Agreement, our results of operations and liquidity may be affected by transaction-related expenses and by operating restrictions and other covenants under the Merger Agreement during the pendency of the Merger. Transaction-related costs are reflected in our results of operations in the periods in which those costs are incurred.

Critical Accounting Estimates

There have been no material changes in our critical accounting policies and estimates compared to those disclosed in Item 7 in our FY 2025 Form 10-K.

Results of Operations

Beginning in the first quarter of 2026, we compare our results of operations for the current quarter to the immediately preceding fiscal quarter and the same period from the previous fiscal year, rather than only the same period from the previous fiscal year. We believe this presentation provides investors with a more meaningful analysis of changes in our results of operations over time following our transition from a clinical-stage company to a commercial company in late 2025, which impacted the comparability of quarter-to-quarter results.

Comparison of the three months ended June 30, 2026, March 31, 2026, and June 30, 2025 and six months ended June 30, 2026 and June 30, 2025.

The following table summarizes our results of operations for the three months ended June 30, 2026, March 31, 2026, and June 30, 2025 and six months ended June 30, 2026 and June 30, 2025:

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with all of the other information included in this Annual Report on Form 10-K, including the consolidated financial statements and the related notes thereto and “Risk Factors”. This section of this Annual Report on Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Overview

During 2025, we transitioned from a clinical-stage company to a commercial-stage company following the FDA approval and launch of PALSONIFY for the treatment of acromegaly in September 2025. As a result, our results of operations for the year ended December 31, 2025 reflect our initial period of commercial activity, including the generation of product revenue, commercialization-related costs, and continued investment in our research and development programs.

This management’s discussion and analysis of financial condition and results of operations focuses on the key factors affecting our financial performance during this transition period, including initial product revenue net of gross-to-net adjustments, commercialization and operating expenses, collaboration and license revenue, and changes in liquidity and capital resources. Comparisons of our results for the year ended December 31, 2025 to prior periods should be viewed in the context of this shift to commercial operations.

We ended 2025 with a strong liquidity position, further strengthened by an underwritten public offering completed in January 2026, which provides capital to support our ongoing commercialization and development activities. See “Liquidity and Capital Resources” below.

As a newly commercial-stage company, we expect product revenue to increase as we continue to expand commercialization efforts for PALSONIFY. However, given the early stage of commercialization, we do not expect product revenue to be sufficient to offset operating expenses in the near term. We also expect operating expenses to increase as we continue to invest in commercialization, clinical development, and other research and development activities. Accordingly, we expect to continue to incur net losses for the foreseeable future.

Recent Developments

PALSONIFY

•On September 25, 2025, the FDA approved PALSONIFY as the first and only once-daily oral somatostatin receptor ligand for the treatment of adults with acromegaly who had an inadequate response to surgery and/or for whom surgery is not an option. We generated net product revenue of $5.4 million related to the PALSONIFY sales during the three months ended December 31, 2025.

•2025 key metrics reflecting uptake from patients and healthcare providers, as well as payer feedback:

•More than 200 enrollment forms received, including 22 from U.S.-based open-label extension participants.

•Over 125 unique PALSONIFY prescribers, 50% of whom are from the community setting and 50% are from the pituitary treatment center setting.

•Approximately half of newly filled bottles were reimbursed without need for Quickstart bridge supplies.

•12-month duration of most prior authorizations with approximately half of newly filled bottles reimbursed.

Paltusotine

•The first patient was enrolled in the Phase 3 study of paltusotine for CS in November 2025.

•In February 2026, the CHMP of the EMA adopted a positive opinion, recommending the marketing authorization of PALSONIFY for the medical treatment of adult patients with acromegaly. The CHMP opinion will be reviewed by the EC, consistent with a timeline for a potential decision in the first half of 2026.

Atumelnant

•In January 2025, we reported positive results from the first three cohorts of the Phase 2 TouCAHn open-label study of atumelnant in CAH. In January 2026, we provided an update, including data on the fourth cohort of the

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Phase 2 TouCAHn study and data from the separate OLE study. Participants in all four cohorts were eligible to enroll in the OLE.

•In May 2025, we announced the design of our Phase 3 CALM-CAH study. The first participant in the CALM-CAH study was randomized in December 2025.

•In August 2025, we announced our pediatric trial design in CAH, BALANCE-CAH. BALANCE-CAH is designed as an operationally seamless Phase 2/3 study. The first participant in the BALANCE-CAH study was dosed in January 2026.

•We expect to initiate an operationally seamless Phase 2/3 study of atumelnant in ADCS (EQUILIBRIUM-ADCS) in the first half of 2026.

CRN09682

•In April 2025, we received IND clearance for CRN09682, the first candidate from the NDC platform. In November 2025, the first patient received CRN09682 in the dose escalation phase of a Phase 1/2 study.

For other product candidate updates, see “Business Overview.”

Equity Offerings

On January 8, 2026, the Company completed an underwritten public offering of 8,763,000 shares of its common stock at a price to the public of $45.95 per share, which included 1,143,000 shares of common stock issued pursuant to the underwriters' option to purchase additional shares. Net proceeds from the offering were approximately $380.0 million, after underwriting discounts and commissions and other offering costs. After the completion of this public offering, the Company had approximately $1.4 billion in cash, cash equivalents, and investment securities.

Financial Operations Overview

During the year ended December 31, 2025, our financial results changed as we commercialized PALSONIFY following the FDA approval in September 2025 and the launch of PALSONIFY in the fourth quarter of 2025. As a result, our results now include product revenue for the first time, alongside collaboration and license revenue that historically represented our primary sources of revenue. Product revenue during 2025 reflects a partial year of commercialization and is subject to gross-to-net adjustments customary in the U.S. pharmaceutical market.

Our cost structure also evolved during 2025 as we incurred cost of product revenue and expanded our commercial infrastructure to support the launch of PALSONIFY. These changes resulted in increased operating expenses, including commercialization-related selling, general and administrative expenses, while we continued to invest in manufacturing readiness and supply chain activities necessary to support ongoing commercial operations.

While commercialization efforts expanded during 2025, research and development expenses increased as we progressed clinical development programs and supported earlier-stage research initiatives to advance our pipeline of product candidates.

Critical Accounting Estimates

This management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and expenses and the disclosure of contingent assets and liabilities at the date of our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those listed below. We base our estimates on historical experience, known trends and events, information received from third parties and various other factors that we believe are reasonable under the circumstances at the time the estimates are made, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There were no material differences between estimates and actual results for the years presented in the accompanying consolidated financial statements.

Our significant accounting policies are described in more detail in Note 2 to the consolidated financial statements. We believe the following accounting estimates to be most critical to the preparation of our consolidated financial statements.

Accrued research and development expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued expenses as of each balance sheet date. This process involves reviewing open contracts and purchase orders, communicating with

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our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. We make estimates of our accrued expenses as of each balance sheet date based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. The significant estimates in our accrued research and development expenses include the costs incurred for services performed by our vendors in connection with research and development activities for which we have not yet been invoiced.

We base our expenses related to research and development activities on our estimates of the services received and efforts expended pursuant to quotes and contracts with vendors that conduct research and development on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the research and development expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid expense accordingly. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made.

Costs incurred under contracts with CROs that conduct and manage our clinical trials are also included in research and development expenses. The financial terms and activities of these agreements vary from contract to contract and may result in uneven expense levels. Clinical trial activities are accrued and expensed based on estimates of the period in which services and efforts are expended by CROs and other third parties. Estimates are determined by reviewing cost information provided by CROs, other third-party vendors and internal clinical personnel, and contractual arrangements with CROs and the scope of work to be performed. If the amounts that we are obligated to pay under our clinical trial agreements are modified (for instance, because of changes in the clinical trial protocol or scope of work to be performed), we adjust our accruals accordingly on a prospective basis. Revisions to contractual payment obligations are charged to expense in the period in which the facts that give rise to the revision become reasonably certain.

Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from the actual status and timing of services performed, it could result in us reporting

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