Relay Therapeutics, Inc. (RLAY)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. As a result of many factors, including those factors set forth in the "Risk Factors" section of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a clinical-stage, small molecule precision medicine company developing potentially life-changing therapies for patients living with cancer and genetic disease. Our Dynamo® platform integrates an array of leading-edge computational and experimental approaches designed to drug protein targets that have previously been intractable or inadequately addressed.

We have deployed our technology platform to build a pipeline of product candidates to address targets in precision medicine where there is clear evidence linking target proteins to disease and where molecular diagnostics can unambiguously identify relevant patients for treatment. We believe this approach will increase the likelihood of successfully translating a specific pharmacological mechanism into clinical benefit.

We are advancing a pipeline of medicine candidates to address targets in precision oncology and genetic disease, including zovegalisib (RLY-2608), our lead product candidate discussed below.

Zovegalisib (RLY-2608). Zovegalisib is the first known allosteric, pan-mutant and isoform-selective phosphoinositide 3 kinase alpha, or PI3Kα, inhibitor in clinical development. It is the lead program in our efforts to discover and develop mutant selective inhibitors of PI3Kα.

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Breast Cancer and Solid Tumors

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ReDiscover Trials. In December 2021, we dosed the first patient in a first-in-human clinical trial for zovegalisib, or the ReDiscover Trial. Since then, we have predominantly focused on evaluating zovegalisib in combination with other therapies for patients with HR+, HER2–, PI3Kα-mutated, locally advanced or metastatic breast cancer. In the second quarter of 2025, we initiated a global Phase 3 registrational study, or the ReDiscover-2 Trial, which is designed to evaluate the safety and efficacy of zovegalisib plus fulvestrant in PI3Kα-mutated, HR+/HER2- advanced breast cancer patients previously treated with a cyclin dependent kinase 4/6, or CDK4/6, inhibitor. The comparator arm in the ReDiscover-2 Trial is capivasertib plus fulvestrant. In February 2026, we announced that the FDA granted Breakthrough Therapy designation to zovegalisib in combination with fulvestrant for the treatment of adults with PIK3CA mutant HR+/HER2- locally advanced or metastatic breast cancer following recurrence or progression on or after treatment with a CDK4/6 inhibitor. We are also advancing triplet combination arms with zovegalisib, fulvestrant and CDK 4/6 inhibitors, or atirmociclib, the investigative selective-CDK4 inhibitor from Pfizer Inc., or Pfizer, to support a potential future trial in frontline breast cancer. In April 2026, we announced that we selected atirmociclib as our go-forward triplet combination partner.

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Clinical Data. In June 2025, we announced updated interim clinical data for the zovegalisib plus fulvestrant arm of the ReDiscover Trial from patients receiving the 600mg twice daily, or BID, fasted dose and in December 2025, we announced an efficacy subset analysis of interim clinical data for zovegalisib at the same dose. In March 2026, we announced interim clinical data from the ReDiscover Trial of zovegalisib in combination with fulvestrant at the 400mg BID fed dose, which is the recommended Phase 3 dose in the ReDiscover-2 Trial. In April 2026, we announced interim clinical data for the zovegalisib plus atirmociclib triplet combination. We believe that while the clinical data from the ReDiscover Trial disclosed to date are preliminary, the data suggest differentiated interim efficacy signals in the specified patient population and support selective target engagement across doses and mutation types with an encouraging interim safety and tolerability profile.

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Vascular Anomalies

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ReInspire Trial. In the first quarter of 2025, we initiated the global Phase 1/2 clinical trial for zovegalisib in patients with PIK3CA-related overgrowth spectrum, or PROS, and vascular anomalies driven by PIK3CA mutations, or the ReInspire Trial. Enrollment is continuing in this clinical trial.

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Clinical Data. In May 2026, we announced initial clinical data from the ReInspire Trial, which we believe demonstrate that zovegalisib has potential for differentiated safety and efficacy in patients with PIK3CA-driven vascular anomalies.

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In addition to the programs mentioned above, we have initiated a clinical trial studying RLY-8161, our NRAS-selective inhibitor, in patients with NRAS-mutant melanoma and other NRAS-mutant solid tumors. In our research pipeline, we are advancing our non-inhibitory chaperone for Fabry disease, as well as early-stage discovery programs across both precision oncology and genetic diseases.

We were incorporated in May 2015. We have devoted substantially all of our resources to developing our product candidates, developing our innovative computational and experimental approaches on protein motion, building our intellectual property portfolio, business planning, raising capital, and providing general and administrative support for these operations. To date, we have principally financed our operations through private placements of preferred stock and common stock, convertible debt, and proceeds from public offerings of our common stock.

In May 2026, we completed a public offering, or the May 2026 Offering, of 26,354,167 shares of common stock, which share amount includes the exercise in full of the underwriters' option to purchase an additional 3,437,500 shares, at an offering price of $12.00 per share. We received proceeds of $296.8 million, which was net of $19.4 million in underwriting discounts and other offering expenses.

In December 2024, we and Elevar Therapeutics, Inc., or Elevar, entered into an exclusive global licensing agreement, or the Elevar Agreement, pursuant to which Elevar was granted global development and commercialization rights for lirafugratinib. Under the terms of the Elevar Agreement, we received $5.0 million upon execution, $3.7 million upon transfer of active pharmaceutical ingredient and other materials, and $10.0 million in milestone payments as of June 30, 2026. We are eligible to receive up to $485.0 million in regulatory and commercial milestone payments, as well as tiered royalties.

In September 2024, we completed a public offering, or the September 2024 Offering, of 32,857,143 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 4,285,714 shares, at an offering price of $7.00 per share. We received proceeds of $218.2 million, which was net of $11.8 million in underwriting discounts and other offering expenses.

In August 2024, we entered into a sales agreement, or the 2024 Sales Agreement, with TD Securities (USA) LLC, or TD Securities, pursuant to which we may offer and sell shares of our common stock having aggregate gross proceeds of up to $250.0 million from time to time in “at-the-market” offerings through TD Securities, as our sales agent. As of June 30, 2026, we sold 16,006,569 shares of common stock under the 2024 Sales Agreement, from which we received $163.0 million in gross proceeds. In connection therewith, we paid $3.8 million in commissions to TD Securities, yielding $159.2 million in net proceeds.

Inflation generally affects us by increasing our employee-related costs and clinical trial expenses, as well as other operating expenses. Our financial condition and results of operations may also be impacted by other factors we may not be able to control, such as public health crises, global supply chain disruptions, uncertain global economic conditions, global trade disputes or political instability as further discussed in the section "Risk Factors" in this Quarterly Report on Form 10-Q. We do not believe that such factors had a material adverse impact on our results of operations during the three and six months ended June 30, 2026.

Since our inception, we have incurred significant operating losses on an aggregate basis. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future product candidates. Our net losses were $157.0 million and $147.4 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026 we had an accumulated deficit of $2.2 billion. These losses have resulted primarily from costs incurred in connection with research and development activities, licensing and patent investment, and general and administrative costs associated with our operations. We expect to continue to incur significant expenses, including the costs of operating as a public company, and generate significant operating losses for at least the next several years.

We anticipate that our expenses will increase substantially if and as we:

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conduct our current and future clinical trials of our lead product candidate;

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conduct additional preclinical research and development of our early-stage programs;

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initiate and continue research and preclinical and clinical development of our other product candidates;

•
seek to identify additional product candidates;

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pursue marketing approvals for any of our product candidates that successfully complete clinical trials, if any;

•
establish a sales, marketing, and distribution infrastructure to commercialize any products for which we may obtain marketing approval;

•
require the manufacture of larger quantities of our product candidates for clinical development and potentially commercialization;

•
obtain, maintain, expand, and protect our intellectual property portfolio;

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acquire or in-license other drugs and technologies;

•
hire and retain additional clinical, regulatory, quality, and scientific personnel;

•
build out new facilities or expand existing facilities to support our ongoing development activity; and

•
add operational, financial, and management information systems and personnel, including personnel to support our drug development, any future commercialization efforts, and our operations as a public company.

In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution.

As a result, we will need additional financing to support our continuing operations. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity or debt financings or other sources, which may include collaborations with third parties. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed, on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back, or discontinue the development or commercialization of one or more of our product candidates.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or am

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Overview

We are a clinical-stage, small molecule precision medicine company developing potentially life-changing therapies for patients living with cancer and genetic disease. Our Dynamo® platform integrates an array of leading-edge computational and experimental approaches designed to drug protein targets that have previously been intractable or inadequately addressed.

We have deployed our technology platform to build a pipeline of product candidates to address targets in precision medicine where there is clear evidence linking target proteins to disease and where molecular diagnostics can unambiguously identify relevant patients for treatment. We believe this approach will increase the likelihood of successfully translating a specific pharmacological mechanism into clinical benefit.

We are advancing a pipeline of medicine candidates to address targets in precision oncology and genetic disease, including zovegalisib (RLY-2608), our lead product candidate discussed below.

Zovegalisib (RLY-2608). Zovegalisib is the first known allosteric, pan-mutant and isoform-selective phosphoinostide 3 kinase alpha, or PI3Kα, inhibitor in clinical development. It is the lead program in our efforts to discover and develop mutant selective inhibitors of PI3Kα.

•
Breast Cancer and Solid Tumors

•
ReDiscover Trial. In December 2021, we dosed the first patient in a first-in-human clinical trial for zovegalisib, or the ReDiscover Trial. Since then, we have predominantly focused on evaluating zovegalisib in combination with fulvestrant for patients with HR+, HER2–, PI3Kα-mutated, locally advanced or metastatic breast cancer. We are also advancing triplet combination arms with zovegalisib, fulvestrant and cyclin dependent kinase 4/6, or CDK 4/6, inhibitors, or atirmociclib, the investigative selective-CDK4 inhibitor from Pfizer Inc., or Pfizer. In the second quarter of 2025, we initiated a global Phase 3 registrational study, or the ReDiscover-2 Trial, which is designed to evaluate the safety and efficacy of zovegalisib plus fulvestrant in PI3Kα-mutated, HR+/HER2- advanced breast cancer patients previously treated with a CDK4/6 inhibitor. The comparator arm in the ReDiscover-2 Trial is capivasertib plus fulvestrant. In February 2026, we announced that the FDA granted Breakthrough Therapy designation to zovegalisib in combination with fulvestrant for the treatment of adults with PIK3CA mutant HR+/HER2- locally advanced or metastatic breast cancer following recurrence or progression on or after treatment with a CDK4/6 inhibitor.

o
Clinical Data. In June 2025, we announced updated interim clinical data for the zovegalisib plus fulvestrant arm of the ReDiscover Trial with a data cut-off date of March 26, 2025, and in December 2025, we announced an efficacy subset analysis of interim clinical data for zovegalisib at the San Antonio Breast Cancer Symposium 2025 with a data cut-off date of October 15, 2025. We believe that while the clinical data from the ReDiscover Trial disclosed to date are preliminary, the data suggest differentiated interim efficacy signals in the specified patient population and support selective target engagement across doses and mutation types with an encouraging interim safety and tolerability profile.

•
Vascular Anomalies

o
ReInspire Trial. In the first quarter of 2025, we initiated the global Phase 1/2 clinical trial for zovegalisib in patients with PIK3CA-related overgrowth spectrum, or PROS, and vascular anomalies driven by PIK3CA mutations, or the ReInspire Trial. Enrollment is continuing in this clinical trial.

In addition to the programs mentioned above, we are progressing our NRAS-selective inhibitor, RLY-8161, to address NRAS-mutated solid tumors as well as our non-inhibitory chaperone for Fabry disease. We are also advancing early-stage discovery programs across both precision oncology and genetic diseases.

We were incorporated in May 2015. We have devoted substantially all of our resources to developing our product candidates, developing our innovative computational and experimental approaches on protein motion, building our intellectual property portfolio, business planning, raising capital, and providing general and administrative support for these operations. To date, we have principally financed our operations through private placements of preferred stock and common stock, convertible debt, and proceeds from public offerings of our common stock.

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In December 2024, we and Elevar Therapeutics, Inc., or Elevar, entered into an exclusive global licensing agreement, or the Elevar Agreement, pursuant to which Elevar was granted global development and commercialization rights for lirafugratinib. Under the terms of the Elevar Agreement, we received $5.0 million upon execution, $3.4 million upon transfer of active pharmaceutical ingredient and other materials, and $7.0 million in milestone payments as of December 31, 2025. We are eligible to receive up to $488.0 million in regulatory and commercial milestone payments, as well as tiered royalties.

In September 2024, we completed a public offering, or the September 2024 Offering, of 32,857,143 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 4,285,714 shares, at an offering price of $7.00 per share. We received proceeds of $218.2 million, which was net of $11.8 million in underwriting discounts and other offering expenses.

In August 2024, we entered into a sales agreement, or the 2024 Sales Agreement, with TD Securities (USA) LLC, or TD Securities, pursuant to which we may offer and sell shares of our common stock having aggregate gross proceeds of up to $250.0 million from time to time in “at-the-market” offerings through TD Securities, as our sales agent. As of December 31, 2025, we have not sold any shares under the 2024 Sales Agreement.

In January 2024, we entered into a securities purchase agreement with Nextech Crossover I SCP for the private placement of 2,500,000 shares of common stock at $12.00 per share, or the Private Placement. We received $29.8 million in proceeds from the Private Placement, which were net of $0.2 million in offering expenses.

In December 2020, we entered into a global collaboration and license agreement with Genentech, Inc., a member of the Roche Group, or Genentech, for the development and commercialization of RLY-1971 (now referred to as migoprotafib, or GDC-1971), or the Genentech Agreement. Under the terms of the Genentech Agreement, we received $75.0 million in an upfront payment in 2021, as well as $45.0 million in milestone payments. Genentech elected to terminate the Genentech Agreement without cause, effective as of January 7, 2025, or the Termination Date. As of the Termination Date, we are no longer entitled to receive any further milestones or other payments due after the Termination Date. The parties also ceased to have any development or commercialization obligations as of the Termination Date and the licenses that we granted to Genentech pursuant to the Genentech Agreement ceased to be in effect as of the Termination Date. We will not continue development of migoprotafib.

Inflation generally affects us by increasing our employee-related costs and clinical trial expenses, as well as other operating expenses. Our financial condition and results of operations may also be impacted by other factors we may not be able to control, such as public health crises, global supply chain disruptions, uncertain global economic conditions, global trade disputes or political instability as further discussed in the section "Risk Factors" in this Annual Report on Form 10-K. We do not believe that such factors had a material adverse impact on our results of operations during the years ended December 31, 2025, 2024, and 2023.

Since our inception, we have incurred significant operating losses on an aggregate basis. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future product candidates. Our net losses were $276.5 million, $337.7 million, and $342.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. As of December 31, 2025, we had an accumulated deficit of $2.0 billion. These losses have resulted primarily from costs incurred in connection with research and development activities, licensing and patent investment, and general and administrative costs associated with our operations. We expect to continue to incur significant expenses, including the costs of operating as a public company, and generate significant operating losses for at least the next several years.

We anticipate that our expenses will increase substantially if and as we:

•
conduct our current and future clinical trials of our lead product candidate;

•
conduct additional preclinical research and development of our early-stage programs;

•
initiate and continue research and preclinical and clinical development of our other product candidates;

•
seek to identify additional product candidates;

•
pursue marketing approvals for any of our product candidates that successfully complete clinical trials, if any;

•
establish a sales, marketing, and distribution infrastructure to commercialize any products for which we may obtain marketing approval;

•
require the manufacture of larger quantities of our product candidates for clinical development and potentially commercialization;

•
obtain, maintain, expand, and protect our intellectual property portfolio;

•
acquire or in-license other drugs and technologies;

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•
hire and retain additional clinical, regulatory, quality, and scientific personnel;

•
build out new facilities or expand existing facilities to support our ongoing development activity; and

•
add operational, financial, and management information systems and personnel, including personnel to support our drug development, any future commercialization efforts, and our operations as a public company.

In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution.

As a result, we will need additional financing to support our continuing operations. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity or debt financings or other sources, which may include collaborations with third parties. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed, on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back, or discontinue the development or commercialization of one or more of our product candidates.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenue from product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and may be forced to reduce or terminate our operations.

We believe our cash, cash equivalents, and investments of $554.5 million as of December 31, 2025 will enable us to fund our operating expenses and capital expenditure requirements into 2029. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. We will need to raise additional capital in the future to continue developing the drugs in our pipeline and to commercialize any approved drug.

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