Summary of Crinetics Pharmaceuticals Conference Call Company and Industry - **Company**: Crinetics Pharmaceuticals (NasdaqGS:CRNX) - **Industry**: Pharmaceuticals, specifically focusing on endocrine disorders, particularly acromegaly Key Points and Arguments 1. **FDA Approval of Palsonify**: Palsonify has been approved by the FDA for treating adults with acromegaly, marking a significant advancement in patient care [5][16][42] 2. **Patient-Centric Approach**: The company engaged with the acromegaly community early in the development process to shape their therapeutic strategies based on patient insights [6][13] 3. **Disease Overview**: Acromegaly is a chronic endocrine disorder caused by excess growth hormone, leading to severe health complications and a significant impact on patients' quality of life [7][8][10] 4. **Current Treatment Limitations**: Existing treatments, such as injectable somatostatin receptor analogues, have limitations including painful administration and inconsistent symptom control [10][11][20] 5. **Broad Label for Palsonify**: The approval includes a broad label allowing its use as a first-line treatment for patients who have not responded adequately to surgery or other therapies [16][17] 6. **Clinical Data**: Clinical trials demonstrated that 57% of patients who were uncontrolled on prior therapy achieved biochemical control at week 24 with Palsonify [18] 7. **Symptom Management**: Palsonify is the only treatment with a label that includes symptom control as a prespecified endpoint, showing significant improvements in key symptoms [19][20] 8. **Safety Profile**: The safety data from clinical trials indicated that Palsonify was well tolerated, with a low discontinuation rate due to adverse events [21][22] 9. **Launch Strategy**: The company has a comprehensive launch strategy focusing on patient activation, healthcare provider education, and ensuring broad access to the treatment [22][26][30] 10. **Market Opportunity**: There are approximately 11,500 addressable acromegaly patients in the U.S., with a significant portion being treatment naive or currently on suboptimal therapies [29][31] 11. **Pricing Strategy**: The annual price for Palsonify is set at approximately $290,000, which is competitive within the market for acromegaly treatments [36][68] 12. **Patient Support Programs**: The company has implemented programs to ensure quick access to Palsonify, including a Quick Start program for immediate treatment initiation [37][113] Other Important Content 1. **Unmet Needs**: There is a high level of unmet needs among acromegaly patients, with many not receiving adequate treatment or having discontinued therapy altogether [12][54] 2. **Awareness Campaigns**: The company plans to run awareness campaigns targeting both healthcare providers and patients to improve diagnosis and treatment rates [48][49] 3. **Real-World Data**: Ongoing open-label extension studies will provide real-world data to support the efficacy and safety of Palsonify over time [95][96] 4. **Adoption Patterns**: The adoption of Palsonify is expected to vary, with both experienced centers and community practitioners likely to trial the drug based on patient responses [88][90] 5. **Insurance Coverage**: The company anticipates that most payers will require prior authorization but expects a smooth transition to formulary inclusion within six to nine months post-launch [70][84] This summary encapsulates the critical insights from the conference call regarding Crinetics Pharmaceuticals' recent FDA approval and the strategic direction for Palsonify in the acromegaly treatment landscape.

PALSONIFY FDA Approval and Clinical Data - PALSONIFY (paltusotine) has received FDA approval for acromegaly treatment[1] - In Phase 3 studies, 83% of patients switching from standard-of-care maintained IGF-1 control with PALSONIFY compared to 4% on placebo (p<00001)[24] - In Phase 3 studies with non-pharmacologically-treated patients, 56% achieved IGF-1 ≤ 10xULN with PALSONIFY versus 5% with placebo (p<0001)[26] - Symptom exacerbation rate declined from prior SRL screening to 0-3 months, 3-6 months, and 6-9 months of PALSONIFY treatment[35] - Less than 4% of patients taking PALSONIFY discontinued due to adverse events (AEs)[37] Commercial Launch Strategy - The company has four pillars to optimize the launch of PALSONIFY: ACTIVATE, ADOPT, ACCESS, and ADHERE[42] - The company has an experienced team in place, including 36 sales team members, 14 Medical Science Liaisons, 5 Nurse Educators, 6 CrinetiCARE Specialists, 4 Field Reimbursement Liaisons, and 4 Payer National Account Directors[44] - The company is targeting approximately 3,600 community HCPs and 45 core pituitary treatment centers (PTCs), totaling around 1,800 PTC + Academic HCP targets[44] - In the US, there are an estimated 36,000 people living with acromegaly, with 11,500 actively managed and addressable in the short term[45] Pipeline and Future Development - The company is building a foundation for its pipeline beyond Palsonify, with programs in various stages of development for indications such as hyperparathyroidism, ADPKD, ACTH-dependent Cushing's syndrome, and congenital adrenal hyperplasia[58, 59]

Core Insights - Crinetics Pharmaceuticals Inc. is awaiting a pivotal FDA decision on its New Drug Application for paltusotine, a treatment for acromegaly, expected on September 25, 2025 [1] - If approved, paltusotine will be the first oral nonpeptide SST2 agonist, providing a significant alternative to current injectable treatments [2] - The drug's efficacy is supported by strong Phase 3 trial results, showing effective IGF-1 control and symptom relief [3] Company Positioning - The FDA decision represents a critical juncture for Crinetics, with approval potentially validating years of development and introducing a new treatment option for acromegaly [4] - The company is proactively preparing for a potential launch by enhancing its sales and medical teams and engaging with healthcare providers [4] - A negative outcome could adversely affect Crinetics' pipeline and market perception, as the company's valuation is closely tied to paltusotine's success [5] Financial Standing - As of June 30, 2025, Crinetics holds $1.2 billion in cash and equivalents, providing financial stability to pursue multiple programs regardless of the FDA's decision [6] - The company's financial position allows it to maintain operational momentum into 2029, independent of the outcome of the paltusotine application [6]

Company Overview - Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) is focused on developing and commercializing treatments for skin diseases, with its lead product candidate, VP-102, targeting molluscum contagiosum [1] Financial Performance - VRCA has a Return on Invested Capital (ROIC) of -166.93%, significantly lower than its Weighted Average Cost of Capital (WACC) of 17.69%, indicating inefficiencies in capital utilization [2][6] - The ROIC to WACC ratio for VRCA is -9.44, further emphasizing the challenge in generating sufficient returns to cover its cost of capital [2] Comparative Analysis - Y-mAbs Therapeutics (YMAB) has a ROIC of -27.64% and a WACC of 6.11%, resulting in a ROIC to WACC ratio of -4.53, making it the least inefficient among its peers [3][5] - Scholar Rock Holding Corporation (SRRK) shows a ROIC of -109.48% against a WACC of 5.32%, leading to a ROIC to WACC ratio of -20.57, indicating similar inefficiencies as VRCA [4] - Crinetics Pharmaceuticals (CRNX) and Kezar Life Sciences (KZR) also exhibit negative ROIC to WACC ratios of -6.99 and -10.94, respectively, highlighting broader challenges within the sector [4][5] Sector Insights - All companies analyzed, including VRCA, are currently operating at a loss relative to their cost of capital, with Y-mAbs Therapeutics managing its capital more effectively than its peers [5][6]

Core Points - Crinetics Pharmaceuticals granted stock options and RSUs to 20 new non-executive employees as part of its 2021 Inducement Plan to attract talent [1][2] - The stock options have an exercise price of $35.00 per share, equal to the closing price on September 10, 2025, and will vest over four years [2] - Crinetics is a clinical-stage pharmaceutical company focused on developing therapeutics for endocrine diseases and related tumors, with its lead candidate being PALSONIFY™ for acromegaly [3] Summary by Category Stock Options and RSUs - The Compensation Committee granted a total of 62,475 stock options and 43,800 RSUs under the 2021 Inducement Plan [1] - Stock options will vest over four years, with 25% vesting after one year and the remainder in 36 equal monthly installments [2] - RSUs will also vest over four years in equal annual installments starting from the one-year anniversary of the vesting commencement date [2] Company Overview - Crinetics Pharmaceuticals specializes in discovering and developing novel therapeutics for endocrine diseases and tumors [3] - The company’s lead candidate, PALSONIFY™, is in clinical development for acromegaly and carcinoid syndrome associated with neuroendocrine tumors [3] - Other development programs include treatments for congenital adrenal hyperplasia, Cushing's syndrome, and various endocrine conditions [3]

Core Insights - Crinetics Pharmaceuticals received Orphan Drug Designation from the FDA for atumelnant, a novel oral ACTH receptor antagonist aimed at treating classic congenital adrenal hyperplasia (CAH) [1][4] - Atumelnant is the first and only small molecule ACTH receptor antagonist in clinical development, highlighting its potential significance in addressing unmet medical needs in CAH [1][5] Company Overview - Crinetics Pharmaceuticals is a clinical-stage pharmaceutical company focused on developing novel therapeutics for endocrine diseases and related tumors, with all drug candidates being small molecules from in-house discovery efforts [6] - The company's lead candidate, PALSONIFY™ (paltusotine), is in clinical development for acromegaly and carcinoid syndrome associated with neuroendocrine tumors, while atumelnant targets congenital adrenal hyperplasia and ACTH-dependent Cushing's syndrome [6] Clinical Development - The Phase 2 TouCAHn trial of atumelnant showed robust positive topline results, including up to an 80% mean reduction in androstenedione and significant improvements in clinical signs and symptoms of CAH [2][3] - Crinetics plans to initiate the CALM-CAH Phase 3 study in adults and the BALANCE-CAH Phase 2/3 study in pediatrics in the second half of 2025 [2] Mechanism of Action - Atumelnant acts selectively at the melanocortin type 2 receptor (MC2R) on the adrenal gland, demonstrating strong binding affinity and suppression of glucocorticoids and androgens controlled by ACTH [5] - The innovative mechanism aims to restore normal levels of adrenal androgens and reduce glucocorticoid supplementation to physiological levels, improving the quality of life for patients [2][3]

Core Points - Crinetics Pharmaceuticals granted stock options and restricted stock units (RSUs) to new non-executive employees as part of its 2021 Employment Inducement Incentive Award Plan [1][2] - A total of 75,850 stock options and 53,400 RSUs were awarded, aimed at attracting talent to the company [1] - The stock options have an exercise price of $26.85 per share, equal to the closing price on August 8, 2025, and will vest over four years [2] Company Overview - Crinetics Pharmaceuticals is a clinical-stage pharmaceutical company focused on developing therapeutics for endocrine diseases and related tumors [3] - The lead candidate, PALSONIFY (paltusotine), is in clinical development for acromegaly and carcinoid syndrome associated with neuroendocrine tumors [3] - Other drug candidates include Atumelnant, targeting congenital adrenal hyperplasia and ACTH-dependent Cushing's syndrome, with a focus on orally delivered small molecules [3]

Core Insights - Crinetics Pharmaceuticals reported a GAAP revenue of $1.0 million for Q2 2025, exceeding the consensus estimate of $0.61 million, but the GAAP net loss per share widened to $(1.23), larger than the anticipated $(1.08) per share, due to increased R&D and administrative expenses [1][5][6] Financial Performance - GAAP revenue for Q2 2025 was $1.0 million, a 150% increase from $0.4 million in Q2 2024 [2] - GAAP net loss per share was $(1.23), a 30.9% increase from $(0.94) in Q2 2024 [2] - Research and Development expenses rose to $80.3 million, up 37.8% from $58.3 million in Q2 2024 [2] - Selling, General & Administrative expenses doubled to $49.8 million from $24.8 million in Q2 2024 [2] - The company reported a net loss of $(115.6) million for the quarter, compared to $(74.1) million in Q2 2024 [1][6] Product Pipeline and Development - The company focuses on developing oral therapies for rare endocrine diseases, with lead products including paltusotine for acromegaly and carcinoid syndrome, and atumelnant for congenital adrenal hyperplasia and Cushing's disease [3][11] - Paltusotine's New Drug Application (NDA) review is on track, with a target FDA decision date of September 25, 2025 [7] - Atumelnant is in Phase 2 trials for CAH, with Phase 3 studies planned for both adult and pediatric populations [8] Strategic Initiatives - The company is preparing for its first commercial drug launch, focusing on regulatory approvals, clinical trial effectiveness, and building relationships with healthcare professionals [4][10] - The CrinetiCare platform is being established to support patient outreach and education ahead of the potential launch of paltusotine [10] Cash Position and Future Outlook - As of June 30, 2025, the company had $1.2 billion in cash, cash equivalents, and investments, expected to fund operations into 2029 [15] - Full-year cash use for 2025 is estimated between $340 to $370 million, reflecting readiness for commercial launch and ongoing late-stage trials [15] - Management did not provide formal guidance for future revenue or earnings, focusing instead on the upcoming FDA decision for paltusotine [14]

Financial Data and Key Metrics Changes - The company recognized $1 million in revenue from licensing and supply agreements with its Japanese partner SKK for the second quarter [33] - Research and development expenses increased to $80.3 million in Q2 from $76.2 million in Q1, reflecting continued investment in clinical programs [33] - Selling, general and administrative expenses rose to $49.8 million in Q2 from $35.5 million in Q1, primarily due to investments in commercial capabilities [33] - The company ended the quarter with $1.2 billion in cash, cash equivalents, and investments [34] - The high end of the guidance for net cash used in operations in 2025 was lowered to $370 million from $380 million, reflecting greater precision on clinical timelines [35] Business Line Data and Key Metrics Changes - The company is preparing for the launch of Palsonify, its treatment for acromegaly, with a strong focus on building a commercial team and engaging with healthcare professionals [13][16] - Market research indicates that healthcare professionals view Palsonify as the preferred therapy among newly diagnosed patients due to its rapid reduction of IGF-1 levels [17] - There are approximately 500 newly diagnosed patients per year who are candidates for pharmaceutical therapy, and 11,000 currently diagnosed patients with high unmet needs [17] Market Data and Key Metrics Changes - The company is actively engaging with the patient community and healthcare professionals to shape its commercial strategy for Palsonify [8][20] - There is a significant opportunity to activate patients who have discontinued therapy or are dissatisfied with current treatment options, as nearly 80% of patients on injectable SRLs did not persist with treatment [19] - The company believes there are at least 17,000 undiagnosed patients who could benefit from treatment [20] Company Strategy and Development Direction - The company aims to transform the lives of patients with acromegaly through the anticipated launch of Palsonify and is focused on expanding the market by bringing in previously untreated patients [20] - The company is also advancing multiple pivotal programs, including trials for carcinoid syndrome and congenital adrenal hyperplasia [10][27] - The commercial strategy includes a disease state education campaign and patient support hub to increase awareness and empower patients [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the NDA review process for paltusotine, anticipating approval in September [6][25] - The company is optimistic about the potential of Palsonify to become the preferred treatment for the acromegaly community, supported by positive feedback from healthcare professionals [22] - Management acknowledged that patient engagement and education will be crucial for driving adoption post-launch [20][105] Other Important Information - The company is preparing for a potential launch in Europe in 2026 and is actively working with payers to ensure access pathways for Palsonify [23][22] - The company has made significant progress in its clinical pipeline, including ongoing studies for adamelin in congenital adrenal hyperplasia [29][30] Q&A Session Summary Question: How does the launch of Neurocrine's product affect enrollment for Phase III studies? - Management believes the launch raises awareness of the unmet need and positively impacts enrollment, particularly as most enrollment occurs outside the U.S. [40][42] Question: What is the timeline for IND submissions for TSH and SST3 agonists? - The company is targeting the end of the year for IND submissions for both molecules [46][47] Question: What is the comfort level with current consensus numbers for the paltusotine launch? - Management refrained from commenting on consensus numbers but expressed confidence in launch preparations [50][52] Question: What are the expectations around placebo response in the global CAH Phase III study? - Management does not expect a high placebo response rate and believes the trial is well-powered [55][56] Question: Will pricing for Palsonify be discussed at the time of approval? - Management indicated that pricing discussions will occur at the appropriate time post-approval, emphasizing the positive reception of the value proposition by payers [59][62] Question: How many patients are currently in the open-label extension for Palsonify? - Management noted that the open-label extension is ongoing in multiple countries, and decisions regarding patient transitions to commercial treatment will depend on regulatory outcomes [69][74] Question: What are the potential endpoints for Cushing's disease trials? - The primary endpoint will be normalization of 24-hour urine free cortisol excretion, with rapid normalization observed in initial trials [99][100] Question: How does the company plan to manage the progression towards NDA submission for atomelanit? - The company plans to treat each study as a distinct submission and will not hold one until the other is completed [121][123] Question: Is there a market for surgically naive patients for paltusotine? - While there is an unmet need, the company is not actively considering that segment at this time [127]

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the company's accounting policies, financial instruments, lease obligations, revenue recognition, equity activities, and investments [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------- | :-------------------------- | :------------------ | | Cash and cash equivalents | $53,726 | $264,545 | | Investment securities | $1,142,634 | $1,089,524 | | Total current assets | $1,217,264 | $1,375,388 | | Total assets | $1,289,574 | $1,434,592 | | Total current liabilities | $68,396 | $59,684 | | Total liabilities | $118,048 | $109,787 | | Total stockholders' equity | $1,171,526 | $1,324,805 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This statement reports the company's revenues, expenses, and net loss over specific periods, along with comprehensive loss Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share data) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $1,031 | $399 | $1,392 | $1,039 | | Research and development | $80,301 | $58,344 | $156,541 | $111,685 | | Selling, general and administrative | $49,842 | $24,838 | $85,368 | $45,666 | | Total operating expenses | $130,143 | $83,182 | $241,909 | $157,351 | | Loss from operations | $(129,112) | $(82,783) | $(240,517) | $(156,312) | | Interest income | $13,455 | $8,741 | $28,289 | $16,061 | | Net loss | $(115,637) | $(74,055) | $(212,411) | $(140,985) | | Net loss per share — basic and diluted | $(1.23) | $(0.94) | $(2.27) | $(1.86) | | Comprehensive loss | $(116,018) | $(74,395) | $(211,753) | $(142,152) | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement details changes in the company's equity accounts, including common stock, paid-in capital, and accumulated deficit - Accumulated deficit increased from **$(952,110)K** at January 1, 2025, to **$(1,164,521)K** at June 30, 2025, primarily due to the net loss of **$(212,411)K**[16](index=16&type=chunk) - Common stock and paid-in capital increased by **$58,586K** from January 1, 2025, to June 30, 2025, driven by stock-based compensation (**$46,602K**) and exercise of stock options (**$8,981K**)[16](index=16&type=chunk) - Total stockholders' equity decreased from **$1,324,805K** at January 1, 2025, to **$1,171,526K** at June 30, 2025[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(174,303) | $(100,500) | | Net cash used in investing activities | $(48,008) | $(53,332) | | Net cash provided by financing activities | $11,492 | $401,097 | | Net change in cash, cash equivalents and restricted cash | $(210,819) | $247,265 | | Cash, cash equivalents and restricted cash at end of period | $55,026 | $303,462 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, financial instruments, lease obligations, revenue recognition, equity activities, and investments [Note 1. Organization and Basis of Presentation](index=7&type=section&id=Note%201.%20Organization%20and%20Basis%20of%20Presentation) This note outlines the company's business, financial condition, and future funding expectations - Crinetics Pharmaceuticals is a clinical-stage company focused on novel therapeutics for endocrine diseases and endocrine-related tumors, with lead product candidates paltusotine and atumelnant[22](index=22&type=chunk) - The company has an accumulated deficit of **$1.2 billion** as of June 30, 2025, but believes its **$1.2 billion** in cash, cash equivalents, and investment securities are sufficient to meet funding requirements for at least the next 12 months[27](index=27&type=chunk)[28](index=28&type=chunk) - The company expects to incur net losses for the foreseeable future and anticipates needing to raise substantial additional capital through equity offerings, debt financings, or collaborations[29](index=29&type=chunk) [Note 2. Investment Securities](index=9&type=section&id=Note%202.%20Investment%20Securities) This note details the company's available-for-sale investment securities, including fair values and unrealized gains/losses Available-for-Sale Investment Securities (in thousands) | Metric | June 30, 2025 Fair Market Value | December 31, 2024 Fair Market Value | | :-------------------------------- | :------------------------------ | :-------------------------------- | | U.S. government obligations | $592,615 | $543,344 | | Agency obligations | $51,450 | $57,931 | | Corporate debt securities | $498,569 | $488,249 | | Total | $1,142,634 | $1,089,524 | - As of June 30, 2025, total gross unrealized gains were **$1,784K** and total gross unrealized losses were **$(135)K**[36](index=36&type=chunk) - The company determined that decreases in fair value are attributable to changes in interest rates, not credit quality, and does not intend to sell before recovery of amortized cost basis, resulting in no allowances for credit losses[38](index=38&type=chunk) [Note 3. Fair Value Measurements](index=10&type=section&id=Note%203.%20Fair%20Value%20Measurements) This note describes the valuation methodologies and inputs used for financial assets measured at fair value Financial Assets Measured at Fair Value (in thousands) | Category | June 30, 2025 Total | December 31, 2024 Total | | :-------------------------------- | :------------------ | :------------------ | | Cash equivalents | $45,022 | $254,430 | | Investment securities | $1,142,634 | $1,089,524 | | Other non-current assets (Deferred compensation plan) | $2,345 | $829 | | Total assets measured at fair value | $1,190,001 | $1,344,783 | - Fair value measurements primarily utilize Level 1 (e.g., money market funds, U.S. government obligations) and Level 2 inputs (e.g., agency obligations, corporate debt securities), with no Level 3 assets[40](index=40&type=chunk) [Note 4. Balance Sheet Details](index=10&type=section&id=Note%204.%20Balance%20Sheet%20Details) This note provides a breakdown of specific balance sheet accounts, including prepaid expenses and accrued liabilities Prepaid Expenses and Other Assets (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Prepaid clinical costs | $12,208 | $6,842 | | Interest receivable | $8,381 | $8,310 | | Prepaid subscriptions | $5,043 | $2,561 | | Deferred compensation plan | $2,345 | $829 | | Total prepaid expenses and other assets | $35,342 | $23,648 | Accounts Payable and Accrued Expenses (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Accounts payable | $11,325 | $5,853 | | Accrued outside services and professional fees | $11,615 | $5,572 | | Accrued clinical trial costs | $7,939 | $3,076 | | Total | $38,086 | $21,469 | [Note 5. Operating Leases](index=11&type=section&id=Note%205.%20Operating%20Leases) This note outlines the company's operating lease obligations, costs, and key lease terms Future Minimum Payments Under Non-Cancellable Operating Leases (in thousands) | Year ending December 31, | Minimum Payments | | :----------------------- | :--------------- | | 2025 (six months) | $3,524 | | 2026 | $6,795 | | 2027 | $6,999 | | 2028 | $7,209 | | 2029 | $7,425 | | Thereafter | $43,550 | | Total future minimum lease payments | $75,502 | | Total operating lease liabilities | $49,936 | - Operating lease cost was **$4.4 million** for the six months ended June 30, 2025, compared to **$4.3 million** for the same period in 2024[46](index=46&type=chunk) - As of June 30, 2025, the weighted-average remaining lease term was **9.8 years** and the weighted-average discount rate was **8.6%**[47](index=47&type=chunk) [Note 6. Commitments and Contingencies](index=12&type=section&id=Note%206.%20Commitments%20and%20Contingencies) This note discusses the company's legal claims and other commitments, assessing their potential financial impact - The company does not expect that the resolution of ordinary course legal claims and suits will have a material adverse effect on its financial position or results of operations[49](index=49&type=chunk) [Note 7. Revenue Recognition](index=12&type=section&id=Note%207.%20Revenue%20Recognition) This note details the sources and recognition of the company's revenues from license and supply agreements - Revenues for the three and six months ended June 30, 2025, were **$0.6 million** and **$1.0 million**, respectively, recognized from the Sanwa License[53](index=53&type=chunk) - An additional **$0.4 million** and **$0.1 million** in revenues were recognized from the Sanwa Clinical Supply Agreement for the three and six months ended June 30, 2025, respectively[54](index=54&type=chunk) - The company granted Loyal an exclusive license for CRN01941 for veterinary use, receiving a **$0.1 million** upfront payment and Loyal preferred stock valued at **$2.0 million**, with no revenue recognized to date from this agreement[55](index=55&type=chunk)[56](index=56&type=chunk) [Note 8. Stockholders' Equity](index=13&type=section&id=Note%208.%20Stockholders'%20Equity) This note describes significant changes in stockholders' equity, including capital raises and share issuances - In March 2024, the company completed a private placement of **8,333,334 common shares**, generating approximately **$335.5 million** in net proceeds[57](index=57&type=chunk) - In October 2024, a public offering of **11,500,000 common shares** generated approximately **$542.8 million** in net proceeds[58](index=58&type=chunk) - The 2024 ATM Offering allows for the sale of up to **$350.0 million** of common stock, but no shares have been issued under it during the three and six months ended June 30, 2025[60](index=60&type=chunk) [Note 9. Equity Incentive Plans](index=13&type=section&id=Note%209.%20Equity%20Incentive%20Plans) This note provides details on the company's equity incentive plans, available shares, and stock-based compensation expense - As of June 30, 2025, **2,379,126 shares** were available for future issuance under the 2021 Inducement Plan, **5,232,485 shares** under the 2018 Incentive Award Plan, and **2,865,513 shares** under the ESPP[61](index=61&type=chunk)[62](index=62&type=chunk)[64](index=64&type=chunk) - Stock-based compensation expense totaled **$46,602K** for the six months ended June 30, 2025, an increase from **$32,394K** in the prior year period[69](index=69&type=chunk) Unrecognized Stock-Based Compensation Expense (in thousands) | Award Type | Unrecognized Stock-Based Compensation Expense | | :----------------------- | :------------------------------------------ | | Stock option awards | $153,517 | | RSU awards | $67,952 | | ESPP | $6,839 | [Note 10. Investment in Radionetics](index=15&type=section&id=Note%2010.%20Investment%20in%20Radionetics) This note describes the company's equity investment in Radionetics Oncology, including its valuation and strategic developments - The company holds a **25% equity ownership** in Radionetics Oncology, Inc. as of June 30, 2025, accounted for under the equity method, with the investment asset previously written down to zero[73](index=73&type=chunk) - Radionetics formed a strategic partnership with Eli Lilly and Company in July 2024, receiving a **$140 million** upfront payment and granting Lilly an exclusive option to acquire Radionetics for **$1.0 billion**[72](index=72&type=chunk) - No equity method losses were recorded for the three and six months ended June 30, 2025, compared to **$0.5 million** in losses during the same period in 2024[73](index=73&type=chunk) [Note 11. Segment Reporting](index=15&type=section&id=Note%2011.%20Segment%20Reporting) This note clarifies that the company operates in a single reportable segment and provides a breakdown of segment expenses - The company operates in a single reportable segment, with performance assessed based on condensed consolidated net loss[75](index=75&type=chunk) Segment Expenses (Six months ended June 30, 2025, in thousands) | Category | Amount | | :-------------------------------- | :------- | | Paltusotine R&D expenses | $(30,653) | | Atumelnant R&D expenses | $(18,194) | | Early research and development programs | $(16,643) | | Research and development personnel expenses | $(53,673) | | Selling, general and administrative expenses | $(85,368) | | Segment and consolidated net loss | $(212,411) | [Note 12. Net Loss Per Share](index=16&type=section&id=Note%2012.%20Net%20Loss%20Per%20Share) This note explains the calculation of basic and diluted net loss per share, including anti-dilutive securities - Basic and diluted net loss per share were both **$(2.27)** for the six months ended June 30, 2025, as potentially dilutive securities were anti-dilutive[12](index=12&type=chunk)[77](index=77&type=chunk) - Potentially dilutive securities not included in diluted EPS calculation totaled **17,623K common stock equivalent shares** as of June 30, 2025, comprising stock options, unvested RSUs, and estimated ESPP shares[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results, highlighting key pipeline updates for paltusotine and atumelnant, progress in early-stage research, and an in-depth analysis of revenues, operating expenses, and liquidity [Forward Looking Statements](index=17&type=section&id=Forward%20Looking%20Statements) This section discusses statements regarding future results, business strategy, product approvals, and R&D costs, which are subject to risks and uncertainties - The report contains forward-looking statements regarding future results, business strategy, product approvals, and R&D costs, which are subject to risks and uncertainties[80](index=80&type=chunk) [Overview](index=17&type=section&id=Overview) This section provides an overview of Crinetics Pharmaceuticals, a clinical-stage company focused on endocrine diseases and tumors - Crinetics Pharmaceuticals is a clinical-stage company focused on discovering, developing, and commercializing novel therapeutics for endocrine diseases and endocrine-related tumors[81](index=81&type=chunk) - Lead product candidate, paltusotine, is under FDA and European regulatory review for acromegaly and in clinical development for carcinoid syndrome[81](index=81&type=chunk) - Second product candidate, atumelnant, is in clinical development for congenital adrenal hyperplasia (CAH) and ACTH-Dependent Cushing's Syndrome (ADCS)[81](index=81&type=chunk) [Key Pipeline Updates](index=17&type=section&id=Key%20Pipeline%20Updates) This section highlights significant developments in the company's product pipeline, including paltusotine and atumelnant - Paltusotine's U.S. FDA review for PALSONIFY™ in acromegaly continues, with an estimated **11,000 addressable patients** and **500 newly diagnosed annually** in the U.S[84](index=84&type=chunk) - Atumelnant's Phase 2 TouCAHn study in CAH reported positive results, showing rapid, substantial, and sustained statistically significant reduction in A4 levels, with a Phase 3 CALM-CAH study designed to normalize A4 levels[84](index=84&type=chunk) - IND clearance was received for CRN09682, the first candidate from the nonpeptide drug conjugate (NDC) platform, with a Phase 1/2 dose escalation study planned for SST2-positive neuroendocrine tumors[87](index=87&type=chunk) [Financial operations overview](index=19&type=section&id=Financial%20operations%20overview) This section summarizes the company's financial operations, including resource allocation, cumulative losses, and future funding needs - The company has devoted substantially all resources to drug discovery, preclinical/clinical trials, and intellectual property, and has not generated any product sales to date[86](index=86&type=chunk) - Cumulative net losses and negative cash flows from operations have been incurred since inception, with an accumulated deficit of **$1.2 billion** as of June 30, 2025[88](index=88&type=chunk) - Expenses and operating losses are expected to increase substantially, necessitating future financing through equity offerings, debt, or collaborations[88](index=88&type=chunk)[89](index=89&type=chunk) [Revenues](index=21&type=section&id=Revenues) This section details the company's revenue sources, primarily from research grants and license agreements - Revenues are primarily derived from research grants and license agreements, specifically the Sanwa License and Sanwa Clinical Supply Agreement[90](index=90&type=chunk) Revenues (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :----------------------- | :----- | :----- | :--------- | :--------- | | Three months ended June 30 | $1,031 | $399 | $632 | 158% | | Six months ended June 30 | $1,392 | $1,039 | $353 | 34% | - The New Drug Application (NDA) for PALSONIFY™ for acromegaly was accepted by the FDA, with a Prescription Drug User Fee Act (PDUFA) Target Action Date of September 25, 2025[90](index=90&type=chunk) [Research and development](index=21&type=section&id=Research%20and%20development) This section analyzes the company's research and development expenses, driven by clinical program advancements and portfolio expansion - Research and development expenses increased by **$44.9 million (40%)** to **$156.5 million** for the six months ended June 30, 2025, compared to the prior year period[98](index=98&type=chunk)[99](index=99&type=chunk) - The increase was primarily due to higher headcount, increased manufacturing activities, and rising clinical costs driven by the advancement of clinical programs (paltusotine, atumelnant) and expansion of the preclinical portfolio[99](index=99&type=chunk)[102](index=102&type=chunk) Research and Development Expenses by Program (Six months ended June 30, in thousands) | Program | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :------- | :------- | :--------- | :--------- | | Paltusotine | $30,653 | $25,419 | $5,234 | 21% | | Atumelnant | $18,194 | $8,962 | $9,232 | 103% | | Early research and development programs | $16,643 | $11,873 | $4,770 | 40% | | Personnel expenses | $53,673 | $36,586 | $17,087 | 47% | | Stock-based compensation | $24,918 | $19,056 | $5,862 | 31% | [Selling, general and administrative](index=23&type=section&id=Selling,%20general%20and%20administrative) This section examines the company's selling, general and administrative expenses, influenced by personnel and pre-commercialization costs - Selling, general and administrative expenses increased by **$39.7 million (87%)** to **$85.4 million** for the six months ended June 30, 2025, compared to the prior year period[98](index=98&type=chunk)[103](index=103&type=chunk) - This increase was primarily driven by higher personnel expenses (**$20.0 million** increase, including **$8.3 million** in stock-based compensation) and increased outside services (**$16.0 million** increase) to support overall growth and the planned commercial launch of PALSONIFY™[103](index=103&type=chunk) [Critical Accounting Estimates](index=23&type=section&id=Critical%20Accounting%20Estimates) This section confirms no material changes to the company's critical accounting estimates since the prior annual report - There have been no material changes to the company's critical accounting estimates since the Annual Report on Form 10-K for the year ended December 31, 2024[97](index=97&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section summarizes the company's financial performance, including revenues, operating expenses, and net loss over specified periods Summary of Results of Operations (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $1,031 | $399 | $1,392 | $1,039 | | Total operating expenses | $130,143 | $83,182 | $241,909 | $157,351 | | Loss from operations | $(129,112) | $(82,783) | $(240,517) | $(156,312) | | Other income, net | $13,475 | $8,728 | $28,106 | $15,797 | | Net loss | $(115,637) | $(74,055) | $(212,411) | $(140,985) | - Net loss increased by **56%** for the three months and **51%** for the six months ended June 30, 2025, compared to the prior year periods[98](index=98&type=chunk) - Other income, net, increased by **54%** and **78%** for the three and six months ended June 30, 2025, respectively, primarily due to increased income from investment securities[98](index=98&type=chunk)[104](index=104&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's financial liquidity and capital resources, including cash, investments, and future funding requirements Financial Condition Summary (in thousands) | Metric | June 30, 2025 | December 31, 2024 | $ Change | % Change | | :------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Cash and cash equivalents | $53,726 | $264,545 | $(210,819) | (80)% | | Investment securities | $1,142,634 | $1,089,524 | $53,110 | 5% | | Cash, cash equivalents and investment securities | $1,196,360 | $1,354,069 | $(157,709) | (12)% | | Working capital | $1,148,868 | $1,315,704 | $(166,836) | (13)% | | Accumulated deficit | $(1,164,521) | $(952,110) | $(212,411) | 22% | - Existing capital resources, including **$1.2 billion** in cash, cash equivalents, and investment securities, are believed sufficient to satisfy funding requirements for at least the next twelve months[105](index=105&type=chunk) - Net cash used in operating activities increased by **73%** to **$(174.3) million** for the six months ended June 30, 2025, primarily due to higher net loss, personnel costs, R&D expenses, and pre-commercialization costs[111](index=111&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the company's Annual Report on Form 10-K for a detailed discussion of market risks, noting no material changes since December 31, 2024 - No material changes to market risks have occurred since December 31, 2024[113](index=113&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they were effective at a reasonable assurance level - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025, at the reasonable assurance level[115](index=115&type=chunk) - No material change in internal control over financial reporting occurred during the most recent fiscal quarter[116](index=116&type=chunk) [PART II — OTHER INFORMATION](index=31&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides additional disclosures on legal proceedings, risk factors, equity sales, and other relevant corporate information [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, though it may be subject to ordinary course claims, which are not expected to have a material adverse effect - The company is not currently involved in any material legal proceedings[119](index=119&type=chunk) - Claims incident to the ordinary course of business are not expected to have a material adverse effect on financial position or results of operations[119](index=119&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors set forth in Part I, Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2024[120](index=120&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[121](index=121&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[122](index=122&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Mine Safety Disclosures are not applicable to the registrant[123](index=123&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) This section details Rule 10b5-1 trading plan activities by company directors and officers, including terminations and adoptions of plans with specified share amounts and durations Rule 10b5-1 Trading Plan Activities (May-June 2025) | Name | Title of Director or Officer | Action | Date of Action | Duration of Plan | Total Shares of Common Stock to be Sold | | :--- | :--- | :--- | :--- | :--- | :--- | | Dana Pizzuti | Chief Medical and Development Officer | Termination of 10b5-1 plan | May 20, 2025 | January 3, 2025 - December 31, 2025 | Up to 70,000 shares | | Dana Pizzuti | Chief Medical and Development Officer | Adoption of 10b5-1 plan | May 21, 2025 | August 20, 2025 - September 2, 2026 | Up to 96,492 shares | | Isabel Kalofonos | Chief Commercial Officer | Adoption of 10b5-1 plan | June 7, 2025 | January 1, 2026 - December 19, 2026 | Up to 12,500 shares | [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents, certifications, and XBRL-related files - The report includes certifications from the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1) and Inline XBRL documents (Exhibits 101.INS, 101.SCH, 104)[127](index=127&type=chunk)