[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section highlights that the report contains forward-looking statements, which are subject to significant risks and uncertainties, potentially causing actual results to differ materially - This Quarterly Report contains forward-looking statements, which are predictions based on current expectations and projections about future events and trends. These statements are subject to known and unknown risks, uncertainties, and assumptions, and actual results may differ materially[5](index=5&type=chunk)[7](index=7&type=chunk) - Forward-looking statements cover various aspects including timing and results of preclinical/clinical trials, regulatory approvals, market opportunity, manufacturing, commercialization, personnel, market size, competitive position, collaboration agreements, intellectual property, financial performance, capital requirements, and the impact of laws and geopolitical/macroeconomic factors[6](index=6&type=chunk) [Summary Risk Factors](index=4&type=section&id=SUMMARY%20RISK%20FACTORS) The company faces substantial risks including a limited operating history, expected future losses, significant capital needs, and challenges in drug discovery and clinical development - The company faces numerous risks, including a limited operating history, significant and expected future losses, and the need for substantial additional capital which may not be available[10](index=10&type=chunk) - Key development risks include an unproven discovery platform, early clinical development stage for product candidates (GSBR-1290, ANPA-0073), lengthy and expensive drug development processes with uncertain outcomes, and potential difficulties or delays in clinical trials[10](index=10&type=chunk)[12](index=12&type=chunk) - Other significant risks involve potential serious adverse events, lack of experience in later-stage clinical trials or NDA submissions, reliance on third parties for manufacturing and clinical trials, competition, and the absence of a marketing and sales organization[12](index=12&type=chunk)[14](index=14&type=chunk) [Part I. Financial Information](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements for Structure Therapeutics Inc., along with detailed notes explaining the company's organization, accounting policies, financial instrument composition, commitments, equity changes, net loss per share, and related party transactions [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for Structure Therapeutics Inc., including the balance sheets, statements of operations and comprehensive loss, statements of redeemable convertible preferred shares and shareholders' equity (deficit), and statements of cash flows, along with detailed notes explaining the company's organization, accounting policies, financial instrument composition, commitments, equity changes, net loss per share, and related party transactions [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and shareholders' equity as of March 31, 2024, and December 31, 2023 Condensed Consolidated Balance Sheets (in thousands) | Assets/Liabilities/Equity | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------ | :----------------------------- | :------------------------------- | | **Assets** | | | | Cash and cash equivalents | $97,832 | $129,792 | | Short-term investments | $338,617 | $337,531 | | Total current assets | $449,360 | $473,608 | | Total assets | $457,225 | $482,017 | | **Liabilities** | | | | Accounts payable | $6,538 | $4,742 | | Accrued expenses and other current liabilities | $15,448 | $18,558 | | Total current liabilities | $23,586 | $24,740 | | Total liabilities | $27,407 | $29,051 | | **Shareholders' Equity** | | | | Additional paid-in capital| $662,502 | $659,003 | | Accumulated deficit | $(232,608) | $(206,572) | | Total shareholders' equity| $429,818 | $452,966 | | Total liabilities and shareholders' equity | $457,225 | $482,017 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section outlines the company's financial performance, including operating expenses, interest income, and net loss for the three months ended March 31, 2024 and 2023 Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Operating Expenses/Income/Loss | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Research and development | $20,679 | $13,135 | | General and administrative | $11,336 | $6,514 | | Total operating expenses | $32,015 | $19,649 | | Loss from operations | $(32,015) | $(19,649) | | Interest and other income (expense), net | $6,008 | $1,699 | | Net loss attributable to ordinary shareholders | $(26,036) | $(17,975) | | Net loss per share, basic and diluted | $(0.19) | $(0.25) | | Weighted-average ordinary shares | 139,710 | 71,655 | - Net loss increased to **$26.0 million** for the three months ended March 31, 2024, from **$18.0 million** in the prior year period, primarily due to higher operating expenses[21](index=21&type=chunk) [Condensed Consolidated Statements of Redeemable Convertible Preferred Shares and Shareholders' Equity (Deficit)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Redeemable%20Convertible%20Preferred%20Shares%20and%20Shareholders%27%20Equity%20%28Deficit%29) This section details changes in the company's redeemable convertible preferred shares and shareholders' equity for the three months ended March 31, 2024 Condensed Consolidated Statements of Redeemable Convertible Preferred Shares and Shareholders' Equity (Deficit) (in thousands) | Item | Balance at Dec 31, 2023 (in thousands) | Issuance of ordinary shares | Share-based compensation expense | Unrealized loss on investments, net | Net loss | Balance at Mar 31, 2024 (in thousands) | | :--- | :----------------------------------- | :-------------------------- | :------------------------------- | :---------------------------------- | :------- | :----------------------------------- | | Ordinary Shares (Amount) | $14 | — | — | — | — | $14 | | Additional Paid-in Capital | $659,003 | $755 | $2,744 | — | — | $662,502 | | Accumulated Other Comprehensive Income (Loss) | $521 | — | — | $(611) | — | $(90) | | Accumulated Deficit | $(206,572) | — | — | — | $(26,036) | $(232,608) | | Total Shareholders' Equity | $452,966 | $755 | $2,744 | $(611) | $(26,036) | $429,818 | - Total shareholders' equity decreased from **$452.97 million** at December 31, 2023, to **$429.82 million** at March 31, 2024, primarily due to a net loss of **$26.04 million** and an unrealized loss on investments[24](index=24&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2024 and 2023 Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------- | :----------------------------------------------- | :----------------------------------------------- | | Operating activities | $(34,080) | $(20,308) | | Investing activities | $1,418 | $(49,016) | | Financing activities | $702 | $169,726 | | Net change in cash and cash equivalents | $(31,960) | $100,402 | | Cash and cash equivalents, end of period | $97,832 | $126,493 | - Net cash used in operating activities increased to **$34.1 million** in Q1 2024 from **$20.3 million** in Q1 2023, driven by increased net loss and operating assets[26](index=26&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - Investing activities provided **$1.4 million** in Q1 2024, a significant change from **$49.0 million** used in Q1 2023, primarily due to net maturities of short-term investments[26](index=26&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - Financing activities provided **$0.7 million** in Q1 2024, a substantial decrease from **$169.7 million** in Q1 2023, which included proceeds from the IPO[26](index=26&type=chunk)[138](index=138&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Structure Therapeutics Inc., including the balance sheets, statements of operations and comprehensive loss, statements of redeemable convertible preferred shares and shareholders' equity (deficit), and statements of cash flows, along with detailed notes explaining the company's organization, accounting policies, financial instrument composition, commitments, equity changes, net loss per share, and related party transactions [1. Organization and Nature of the Business](index=11&type=section&id=1.%20Organization%20and%20Nature%20of%20the%20Business) This note describes Structure Therapeutics Inc.'s formation, business focus on novel oral therapeutics, and recent financing activities including its IPO and Private Placement - Structure Therapeutics Inc. is a clinical-stage global biopharmaceutical company focused on developing novel oral therapeutics for chronic diseases, incorporated in February 2019 in the Cayman Islands with subsidiaries in the U.S. and China[28](index=28&type=chunk) - The company completed its IPO in February 2023, raising approximately **$166.7 million** in net proceeds, and a Private Placement in October 2023, raising approximately **$281.5 million** in net proceeds[29](index=29&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) Financial Metric (in millions) | Financial Metric | As of March 31, 2024 (in millions) | | :--------------- | :--------------------------------- | | Cash, cash equivalents and short-term investments | $436.4 | | Accumulated deficit | $232.6 | - The company believes its current cash, cash equivalents, and short-term investments are sufficient to fund projected operations for at least **12 months** from the financial statement issuance date[33](index=33&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's accounting principles, including U.S. GAAP conformity, key estimates, credit risk management, and evaluation of new accounting pronouncements - The condensed consolidated financial statements are prepared in conformity with U.S. GAAP, including accounts of the Company and its wholly-owned subsidiaries, with all intercompany accounts and transactions eliminated[35](index=35&type=chunk) - Key estimates and assumptions include lease liability, accruals for R&D activities, ordinary share valuation, and share-based compensation[37](index=37&type=chunk) - The company is exposed to credit risk from cash, cash equivalents, and short-term investments, which are invested in investment-grade securities with creditworthy institutions[38](index=38&type=chunk)[39](index=39&type=chunk) - The company is evaluating the impact of new FASB ASUs 2023-09 (Income Tax Disclosures) and 2023-07 (Segment Reporting), with no material impact expected from ASU 2023-07[49](index=49&type=chunk)[50](index=50&type=chunk) [3. Composition of Certain Consolidated Financial Statement Line Items](index=15&type=section&id=3.%20Composition%20of%20Certain%20Consolidated%20Financial%20Statement%20Line%20Items) This note provides a detailed breakdown of specific balance sheet items, including property and equipment, and accrued expenses and other current liabilities Property and Equipment, Net (in thousands) | Property and Equipment, Net (in thousands) | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | Laboratory equipment | $2,023 | $1,960 | | Furniture and fixtures | $249 | $243 | | Computer equipment and software | $354 | $309 | | Leasehold improvements | $1,360 | $1,360 | | Total | $3,986 | $3,872 | | Less: Accumulated depreciation | $(866) | $(644) | | Property and equipment, net | $3,120 | $3,228 | Accrued Expenses and Other Current Liabilities (in thousands) | Accrued Expenses and Other Current Liabilities (in thousands) | March 31, 2024 | December 31, 2023 | | :---------------------------------------------------- | :------------- | :---------------- | | Accrued compensation | $2,045 | $4,325 | | Accrued research and development expenses | $3,285 | $4,719 | | Accrued clinical expenses | $4,971 | $5,412 | | Accrued professional services | $3,698 | $2,633 | | Income tax and VAT payable | $297 | $356 | | Accrued other liabilities | $1,152 | $1,113 | | Total accrued expenses and other current liabilities | $15,448 | $18,558 | [4. Fair Value Measurements](index=15&type=section&id=4.%20Fair%20Value%20Measurements) This note explains the company's methodology for classifying and measuring financial assets at fair value using a three-level hierarchy based on input observability - The company classifies financial assets measured at fair value into a three-level hierarchy based on input observability: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1 prices), and Level 3 (unobservable inputs)[52](index=52&type=chunk) Financial Assets (in thousands) | Financial Assets (in thousands) | March 31, 2024 (Level 1) | March 31, 2024 (Level 2) | March 31, 2024 (Total) | December 31, 2023 (Level 1) | December 31, 2023 (Level 2) | December 31, 2023 (Total) | | :------------------------------ | :----------------------- | :----------------------- | :--------------------- | :-------------------------- | :-------------------------- | :------------------------ | | Money market funds | $88,625 | — | $88,625 | $124,443 | — | $124,443 | | U.S. government bonds | $71,029 | — | $71,029 | $84,935 | — | $84,935 | | U.S. government agency bonds | — | $78,587 | $78,587 | — | $82,340 | $82,340 | | Corporate debt securities | — | $189,001 | $189,001 | — | $170,256 | $170,256 | | Total fair value of financial assets | $159,654 | $267,588 | $427,242 | $209,378 | $252,596 | $461,974 | Financial Assets (in thousands) | Financial Assets (in thousands) | March 31, 2024 (Amortized Cost) | March 31, 2024 (Gross Unrealized Losses) | March 31, 2024 (Gross Unrealized Gains) | March 31, 2024 (Fair Value) | December 31, 2023 (Amortized Cost) | December 31, 2023 (Gross Unrealized Losses) | December 31, 2023 (Gross Unrealized Gains) | December 31, 2023 (Fair Value) | | :------------------------------ | :------------------------------ | :--------------------------------------- | :-------------------------------------- | :-------------------------- | :--------------------------------- | :------------------------------------------ | :----------------------------------------- | :----------------------------- | | Money market funds | $88,625 | — | — | $88,625 | $124,443 | — | — | $124,443 | | U.S. government bonds | $71,055 | $(43) | $17 | $71,029 | $84,783 | $(35) | $187 | $84,935 | | U.S. government agency bonds | $78,597 | $(30) | $20 | $78,587 | $82,185 | $(16) | $171 | $82,340 | | Corporate debt securities | $189,055 | $(99) | $45 | $189,001 | $170,042 | $(39) | $253 | $170,256 | | Total fair value of financial assets | $427,332 | $(172) | $82 | $427,242 | $461,453 | $(90) | $611 | $461,974 | [5. Commitments and Contingencies](index=17&type=section&id=5.%20Commitments%20and%20Contingencies) This note details the company's operating lease obligations for office and laboratory spaces and confirms the absence of material legal proceedings - The company has operating lease agreements for office and laboratory spaces in Shanghai, China, and South San Francisco, California, with maturities extending to **2027**[56](index=56&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) Operating Lease Liabilities (in thousands) | Operating Lease Liabilities (in thousands) | March 31, 2024 | | :--------------------------------------- | :------------- | | 2024 (remaining nine months) | $1,436 | | 2025 | $1,968 | | 2026 | $1,921 | | 2027 | $382 | | Total undiscounted lease payments | $5,707 | | Less: imputed interest | $(582) | | Total operating lease liability | $5,125 | | Less: current portion | $(1,600) | | Operating lease liability, net of current portion | $3,525 | - Operating lease cost was **$0.6 million** for the three months ended March 31, 2024, with a weighted average remaining lease term of **3.0 years** and a weighted average discount rate of **7.5%**[61](index=61&type=chunk) - The company is not aware of any material legal proceedings or indemnification claims that would adversely affect its financial position[62](index=62&type=chunk)[63](index=63&type=chunk) [6. Redeemable Convertible Preferred Shares](index=18&type=section&id=6.%20Redeemable%20Convertible%20Preferred%20Shares) This note clarifies the conversion of all outstanding redeemable convertible preferred shares into ordinary shares following the company's IPO - Upon the closing of the IPO in February 2023, all outstanding redeemable convertible preferred shares automatically converted into **67,018,087 ordinary shares**[30](index=30&type=chunk)[64](index=64&type=chunk) - As of March 31, 2024, there were no issued and outstanding redeemable convertible preferred shares[65](index=65&type=chunk) [7. Shareholders' Equity](index=19&type=section&id=7.%20Shareholders%27%20Equity) This note describes the company's authorized share capital, share option activity, and share-based compensation expenses, including the Employee Share Purchase Plan - As of March 31, 2024, the company is authorized to issue **500,000,000 ordinary shares** and **100,000,000 undesignated shares**, with **9,812,438** designated as non-voting ordinary shares[66](index=66&type=chunk) - All outstanding non-voting ordinary shares (**9,812,438**) were converted into ordinary shares as of December 31, 2023[69](index=69&type=chunk)[91](index=91&type=chunk) Share Option Activity (in thousands, except per share amounts) | Share Option Activity (in thousands, except per share amounts) | As of Dec 31, 2023 | Granted | Exercised | Forfeited | As of Mar 31, 2024 | | :--------------------------------------------------- | :----------------- | :------ | :-------- | :-------- | :----------------- | | Number of Shares Underlying Outstanding Options | 11,899 | 2,055 | (635) | (1,258) | 12,061 | | Weighted-Average Exercise Price | $3.94 | $12.36 | $1.19 | $5.21 | $5.38 | | Weighted-Average Remaining Contractual Term (in years) | 8.27 | | | | 8.30 | | Aggregate Intrinsic Value | $117,093 | | | | $109,571 | - The total fair value of options that vested during Q1 2024 was **$5.8 million**, compared to **$1.3 million** in Q1 2023[71](index=71&type=chunk) - The 2023 Employee Share Purchase Plan (ESPP) was adopted in February 2023, with **2,392,210 shares** remaining available for purchase as of March 31, 2024[72](index=72&type=chunk)[73](index=73&type=chunk) Share-Based Compensation (in thousands) | Share-Based Compensation (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $1,223 | $1,592 | | General and administrative | $1,521 | $941 | | Total share-based compensation | $2,744 | $2,533 | | Share options and restricted share units| $2,587 | $2,533 | | ESPP | $157 | — | - Total unrecognized share-based compensation expense was **$51.6 million** for unvested share options and restricted share units, expected to be recognized over **3.4 years**, and **$0.4 million** for ESPP, over **1.6 years**[75](index=75&type=chunk)[76](index=76&type=chunk) [8. Net Loss Per Share](index=22&type=section&id=8.%20Net%20Loss%20Per%20Share) This note presents the calculation of basic and diluted net loss per share, identifying potentially dilutive securities that were excluded due to their antidilutive effect Net Loss Per Share | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----- | :-------------------------------- | :-------------------------------- | | Net loss attributable to ordinary shareholders (in thousands) | $(26,036) | $(17,975) | | Weighted-average ordinary shares outstanding (in thousands) | 139,710 | 71,894 | | Net loss per share, basic and diluted | $(0.19) | $(0.25) | - Potentially dilutive securities, including options, unvested restricted share units, and ESPP shares, were excluded from diluted net loss per share calculation for both periods as their inclusion would have been antidilutive[48](index=48&type=chunk)[80](index=80&type=chunk) [9. Related Party Transactions](index=23&type=section&id=9.%20Related%20Party%20Transactions) This note details collaboration agreements with Schrödinger, LLC, a shareholder, for computational modeling and design support in drug discovery programs - The company has collaboration agreements with Schrödinger, LLC, a shareholder, for computational modeling and design support[81](index=81&type=chunk)[82](index=82&type=chunk)[86](index=86&type=chunk) - Under the Lhotse-Schrödinger Agreement (October 2020) for LPA1R inhibitors, Lhotse pays quarterly program payments and is obligated for up to **$17.0 million** in development/regulatory milestones and low single-digit tiered royalties on net sales[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - Under the Aconcagua-Schrödinger Agreement (November 2023) for small molecule modulators, Aconcagua pays monthly program payments and is obligated for up to **$89.0 million** in development/regulatory/commercialization milestones and low single-digit tiered royalties on net sales[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - As of March 31, 2024, the company paid **$1.0 million** to Schrödinger for services and had a payable balance of **$0.3 million**[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting its status as a clinical-stage biopharmaceutical company, recent financing activities (IPO and Private Placement), and the development progress of its lead product candidates. It also discusses the impact of macroeconomic factors, collaboration agreements, and the components and trends of operating expenses, liquidity, and cash flows [Overview](index=26&type=section&id=Overview) This section provides an overview of Structure Therapeutics Inc.'s clinical-stage biopharmaceutical focus, lead product candidate progress, and recent financing activities - Structure Therapeutics Inc. is a clinical-stage biopharmaceutical company leveraging structure-based drug discovery and computational chemistry to develop oral small molecule therapeutics for chronic diseases, initially focusing on GPCRs[94](index=94&type=chunk)[95](index=95&type=chunk) - The lead product candidate, GSBR-1290 (GLP-1R agonist for T2DM and obesity), showed encouraging safety and significant weight loss (up to **4.9% placebo-adjusted**) in Phase 1b MAD and Phase 2a T2DM/obesity cohorts, supporting once-daily dosing[95](index=95&type=chunk) - Full **12-week** Phase 2a obesity data and high-level PK study results for a tablet formulation of GSBR-1290 are expected in **June 2024**, with global Phase 2b for obesity and Phase 2 for T2DM planned for **Q4 2024** and **H2 2024**, respectively[95](index=95&type=chunk)[96](index=96&type=chunk) - The company completed an IPO in February 2023, raising **$166.7 million** net, and a Private Placement in October 2023, raising **$281.5 million** net[94](index=94&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) - As of March 31, 2024, cash, cash equivalents, and short-term investments totaled **$436.4 million**, projected to fund operations through at least **2026**[100](index=100&type=chunk) [Impact of Geopolitical and Macroeconomic Factors](index=28&type=section&id=Impact%20of%20Geopolitical%20and%20Macroeconomic%20Factors) This section discusses the potential, though currently unobserved, risks that geopolitical and macroeconomic factors pose to the company's funding, operations, and clinical trials - While no significant financial impact was observed in Q1 2024, future geopolitical and macroeconomic factors (e.g., bank failures, U.S.-China tensions, inflation, supply chain disruptions) pose highly uncertain risks to funding, operations, and clinical trials[102](index=102&type=chunk) [Lhotse Collaboration Agreement with Schrödinger, LLC](index=29&type=section&id=Lhotse%20Collaboration%20Agreement%20with%20Schr%C3%B6dinger%2C%20LLC) This section details the collaboration between Lhotse Bio, Inc. and Schrödinger, LLC for the discovery and development of oral small molecule LPA1R inhibitors - Lhotse Bio, Inc. (a wholly-owned subsidiary) entered a collaboration with Schrödinger, LLC in October 2020 to discover and develop oral small molecule LPA1R inhibitors[103](index=103&type=chunk) - Schrödinger provides computational modeling and design support, while Lhotse provides chemistry and biology support, with Lhotse solely owning the intellectual property generated[103](index=103&type=chunk) - Lhotse is obligated to pay Schrödinger quarterly program payments, up to **$17.0 million** in development and regulatory milestones, and low single-digit tiered royalties on worldwide net sales of Lhotse Collaboration Products[104](index=104&type=chunk) [Aconcagua Collaboration Agreement with Schrödinger](index=29&type=section&id=Aconcagua%20Collaboration%20Agreement%20with%20Schr%C3%B6dinger) This section outlines the collaboration between Aconcagua Bio, Inc. and Schrödinger for the discovery and development of novel small molecule modulators for a specific target - Aconcagua Bio, Inc. (a wholly-owned subsidiary) entered a collaboration with Schrödinger in November 2023 to discover and develop novel small molecule modulators of a specific target[106](index=106&type=chunk) - Schrödinger provides computational modeling and design support, and Aconcagua provides chemistry and biology support, with Aconcagua solely owning the intellectual property generated (excluding improvements to Schrödinger's background IP)[106](index=106&type=chunk)[107](index=107&type=chunk) - Aconcagua is obligated to pay Schrödinger monthly program payments, up to **$89.0 million** in development, regulatory, and commercialization milestones, and low single-digit tiered royalties on worldwide net sales of Aconcagua Collaboration Products[108](index=108&type=chunk) [Components of Our Results of Operations](index=30&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section explains the primary components of the company's operating expenses, specifically research and development and general and administrative costs, and their expected trends - Research and development (R&D) expenses primarily cover discovery, engineering, preclinical and clinical studies, including personnel, consulting, clinical trial, and regulatory costs[110](index=110&type=chunk) - R&D expenses are expected to increase substantially as the company advances product candidates, initiates clinical trials, expands its pipeline, and seeks regulatory approvals[115](index=115&type=chunk) - General and administrative (G&A) expenses include personnel costs for executive, legal, finance, and administrative functions, professional fees, and other operating expenses[116](index=116&type=chunk) - G&A expenses are expected to increase due to headcount expansion, infrastructure growth, and costs associated with operating as a public company[117](index=117&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance for the three months ended March 31, 2024 and 2023, highlighting changes in operating expenses and net loss Operating Expenses/Income/Loss (in thousands) | Operating Expenses/Income/Loss | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (in thousands) | Percentage Change | | :----------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :---------------- | | Research and development | $20,679 | $13,135 | $7,544 | 57% | | General and administrative | $11,336 | $6,514 | $4,822 | 74% | | Total operating expenses | $32,015 | $19,649 | $12,366 | 63% | | Loss from operations | $(32,015) | $(19,649) | $(12,366) | 63% | | Interest and other income (expense), net | $6,008 | $1,699 | $4,309 | 254% | | Net loss | $(26,036) | $(17,975) | $(8,061) | 45% | - Research and development expenses increased by **$7.6 million (57%)** due to advancement of GLP-1R franchise and other programs, clinical study activities, and increased personnel[120](index=120&type=chunk) - General and administrative expenses increased by **$4.8 million (74%)** due to higher professional services and employee expenses as the company expanded as a public entity[122](index=122&type=chunk) - Interest and other income (expense), net, increased by **$4.3 million**, primarily due to higher interest rates and increased cash, cash equivalents, and short-term investment balances[123](index=123&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's historical financing, current capital position, and future funding requirements for ongoing operations and product development - The company has historically financed operations through equity private placements, raising **$198.0 million** gross proceeds prior to IPO[124](index=124&type=chunk)[125](index=125&type=chunk) - Net proceeds from the February 2023 IPO were **$166.7 million**, and from the October 2023 Private Placement were **$281.5 million**[124](index=124&type=chunk)[125](index=125&type=chunk) Financial Metric (in millions) | Financial Metric | As of March 31, 2024 (in millions) | | :--------------- | :--------------------------------- | | Cash, cash equivalents and short-term investments | $436.4 | | Accumulated deficit | $232.6 | - Existing capital is estimated to fund projected operations for at least **12 months** from the financial statement issuance date, but substantial additional capital will be needed for future development and commercialization[126](index=126&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk) [Summary Statements of Cash Flows](index=35&type=section&id=Summary%20Statements%20of%20Cash%20Flows) This section provides a summary of the company's cash flow activities from operations, investing, and financing for the three months ended March 31, 2024 and 2023 Summary Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------- | :----------------------------------------------- | :----------------------------------------------- | | Operating activities | $(34,080) | $(20,308) | | Investing activities | $1,418 | $(49,016) | | Financing activities | $702 | $169,726 | | Net (decrease) increase in cash and cash equivalents | $(31,960) | $100,402 | - Net cash used in operating activities increased to **$34.1 million** in Q1 2024 from **$20.3 million** in Q1 2023, primarily due to increased net loss and operating assets[134](index=134&type=chunk)[135](index=135&type=chunk) - Net cash provided by investing activities was **$1.4 million** in Q1 2024, compared to **$49.0 million** used in Q1 2023, mainly due to net maturities of short-term investments[136](index=136&type=chunk)[137](index=137&type=chunk) - Net cash provided by financing activities was **$0.7 million** in Q1 2024, significantly lower than **$169.7 million** in Q1 2023, which included IPO proceeds[138](index=138&type=chunk) [Contractual Obligations](index=36&type=section&id=Contractual%20Obligations) This section outlines the company's significant contractual obligations, primarily consisting of facilities lease payments - As of March 31, 2024, contractual obligations consist of **$5.7 million** in facilities lease payments, with **$2.0 million** expected within the next **12 months**[139](index=139&type=chunk) [Critical Accounting Policies](index=36&type=section&id=Critical%20Accounting%20Policies) This section confirms that there were no material changes to the company's critical accounting policies during the first quarter of 2024 - There were no material changes to the critical accounting policies during the three months ended March 31, 2024, as described in the Annual Report on Form 10-K[141](index=141&type=chunk) [JOBS Act Accounting Election and Smaller Reporting Company Status](index=36&type=section&id=JOBS%20Act%20Accounting%20Election%20and%20Smaller%20Reporting%20Company%20Status) This section describes the company's status as an "emerging growth company" and "smaller reporting company," which allows for reduced reporting requirements - The company is an 'emerging growth company' and 'smaller reporting company,' allowing it to delay adopting new accounting standards and take advantage of scaled disclosures[142](index=142&type=chunk)[143](index=143&type=chunk) [Recent Accounting Pronouncements](index=37&type=section&id=Recent%20Accounting%20Pronouncements) This section directs readers to Note 2 for additional information regarding recent accounting pronouncements - Refer to Note 2 of the unaudited interim condensed consolidated financial statements for additional information on recent accounting pronouncements[144](index=144&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Structure Therapeutics Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[145](index=145&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2024, concluding they were not effective due to a material weakness in internal control over financial reporting. The company is actively remediating this weakness by hiring additional accounting personnel [Evaluation of Disclosure Controls and Procedures](index=37&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section states management's conclusion that the company's disclosure controls and procedures were not effective as of March 31, 2024 - As of March 31, 2024, management concluded that the company's disclosure controls and procedures were not effective at the reasonable assurance level[147](index=147&type=chunk) [Material Weakness in Internal Controls Over Financial Reporting](index=37&type=section&id=Material%20Weakness%20in%20Internal%20Controls%20Over%20Financial%20Reporting) This section identifies a continuing material weakness in internal control over financial reporting due to insufficient professional staff, though without material misstatements - A material weakness in internal control over financial reporting continues to exist as of March 31, 2024, due to a lack of sufficient professionals commensurate with financial reporting requirements[149](index=149&type=chunk) - This material weakness did not result in any material misstatements to the consolidated financial statements[149](index=149&type=chunk) [Management's Plan to Remediate the Material Weakness](index=37&type=section&id=Management%27s%20Plan%20to%20Remediate%20the%20Material%20Weakness) This section outlines management's plan to address the material weakness by hiring additional accounting personnel and implementing new controls - Management is remediating the material weakness by hiring additional accounting personnel, including senior directors for SEC reporting, financial planning and analysis, accounting, internal controls, and controller roles[150](index=150&type=chunk) - Remediation will be considered complete only after the design and implementation of these measures are finalized, and controls operate effectively for a sufficient period, as confirmed by testing[150](index=150&type=chunk) [Changes in Internal Controls Over Financial Reporting](index=37&type=section&id=Changes%20in%20Internal%20Controls%20Over%20Financial%20Reporting) This section confirms that no material changes in internal controls over financial reporting occurred during the first quarter ended March 31, 2024 - No changes in internal controls over financial reporting materially affected, or are reasonably likely to materially affect, internal control during the first quarter ended March 31, 2024[151](index=151&type=chunk) [Part II. Other Information](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information not covered in Part I, including legal proceedings, detailed risk factors, equity sales, defaults, mine safety, other disclosures, and a list of exhibits [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings.) The company is not currently subject to any material governmental investigations, private lawsuits, or other legal proceedings, though it may be involved in ordinary course claims - The company is not currently subject to any material governmental investigation, private lawsuit, or other legal proceeding[156](index=156&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors.) This section details the significant risks and uncertainties that could materially and adversely affect the company's business, prospects, operating results, and financial condition. These risks span across its limited operating history, product development, reliance on third parties, commercialization, business operations, international operations, intellectual property, and the trading of its ADSs [Risks Related to Our Limited Operating History, Financial Position and Capital Requirements](index=39&type=section&id=Risks%20Related%20to%20Our%20Limited%20Operating%20History%2C%20Financial%20Position%20and%20Capital%20Requirements) This section details risks associated with the company's short operating history, significant accumulated deficit, and ongoing need for substantial additional capital - The company has a limited operating history since its inception in **2016**, has incurred significant operating losses (**$232.6 million** accumulated deficit as of March 31, 2024), and expects to incur significant losses for the foreseeable future[158](index=158&type=chunk)[159](index=159&type=chunk) - Substantial additional capital will be required to finance operations, particularly for ongoing and planned preclinical studies and clinical trials, and may not be available on acceptable terms, leading to potential delays or termination of development programs[162](index=162&type=chunk) - Raising additional capital may cause dilution to shareholders, restrict operations through debt covenants, or require relinquishing rights to technologies or product candidates through collaborations[167](index=167&type=chunk)[168](index=168&type=chunk) [Risks Related to the Discovery, Development and Regulatory Approval of Product Candidates](index=42&type=section&id=Risks%20Related%20to%20the%20Discovery%2C%20Development%20and%20Regulatory%20Approval%20of%20Product%20Candidates) This section outlines the inherent uncertainties, lengthy processes, and potential failures in drug discovery, preclinical studies, clinical trials, and regulatory approval - The company's structure-based drug discovery platform is unproven, and there is no guarantee of developing commercially valuable products or demonstrating efficacy and safety in clinical trials[169](index=169&type=chunk) - Product candidates GSBR-1290 and ANPA-0073 are in early clinical development, and all other programs are preclinical or discovery stage, posing risks of delays, failure to obtain regulatory approval, or commercialization issues[171](index=171&type=chunk)[172](index=172&type=chunk) - Clinical drug development is lengthy, expensive, and uncertain; prior preclinical/clinical results are not predictive of future outcomes, and product candidates can fail at any stage[174](index=174&type=chunk) - Difficulties or delays in clinical trials (e.g., data collection omissions, patient enrollment, manufacturing issues, adverse events) could increase costs, delay revenue generation, and adversely affect commercial prospects[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk) - Serious adverse events or unexpected properties of product candidates identified during development or after approval could lead to discontinuation, refusal of approval, or revocation of marketing authorizations[190](index=190&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) - The company lacks experience in conducting later-stage clinical trials or submitting New Drug Applications (NDAs), which could hinder successful regulatory approval[195](index=195&type=chunk)[196](index=196&type=chunk) - The FDA and foreign marketing approval processes are lengthy, expensive, unpredictable, and may require additional trials or lead to denial of approval[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk) - Misallocation of limited resources to less profitable or less likely product candidates or indications could occur, especially given the breadth of potential opportunities[201](index=201&type=chunk) - Inability to obtain or maintain orphan drug designations or exclusivity could limit the potential profitability of product candidates[203](index=203&type=chunk)[204](index=204&type=chunk) - Data from clinical trials conducted outside the United States may not be accepted by the FDA or other foreign equivalents, leading to delays and increased costs[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - Preliminary, topline, and interim clinical trial data are subject to change upon comprehensive review and audit, and final data may differ materially, potentially harming business prospects[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) - Obtaining marketing approval in one jurisdiction does not guarantee approval in others, and foreign regulatory processes can be complex and costly[211](index=211&type=chunk)[212](index=212&type=chunk) - Disruptions at the FDA and other government agencies due to funding shortages or global health concerns could delay product development, approval, or commercialization[213](index=213&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) [Risks Related to Our Reliance on Third Parties](index=55&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) This section addresses risks stemming from the company's dependence on third parties for manufacturing, research, clinical trials, and collaboration agreements - The company relies on third parties for manufacturing product candidates and raw materials, increasing the risk of insufficient quantities, unacceptable costs, or quality issues, potentially delaying development or commercialization[217](index=217&type=chunk)[218](index=218&type=chunk) - Dependence on third-party manufacturers for cGMP compliance and supply chain stability may adversely affect future profit margins and timely commercialization[219](index=219&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - Reliance on third parties for discovery research, preclinical studies, and clinical trials (CROs) poses risks of delays, increased costs, and compromised data quality if they fail to meet contractual duties or deadlines[225](index=225&type=chunk)[226](index=226&type=chunk)[228](index=228&type=chunk) - Collaboration agreements and strategic alliances, including those with Schrödinger, may not realize anticipated benefits, and termination or failure of these collaborations could adversely affect the business[231](index=231&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk)[238](index=238&type=chunk)[240](index=240&type=chunk) - Sharing trade secrets with third parties increases the risk of misappropriation or unauthorized disclosure, potentially harming the company's competitive position[241](index=241&type=chunk)[243](index=243&type=chunk)[245](index=245&type=chunk) - The adoption and deployment of AI in R&D efforts may not be effective, could lead to flawed results, and exposes the company to competitive, reputational, and cybersecurity risks[246](index=246&type=chunk)[247](index=247&type=chunk) [Risks Related to Commercialization of Our Product Candidates](index=63&type=section&id=Risks%20Related%20to%20Commercialization%20of%20Our%20Product%20Candidates) This section covers risks associated with achieving market acceptance, securing reimbursement, facing intense competition, and establishing a marketing and sales infrastructure - Even if regulatory approval is received, product candidates will be subject to ongoing regulatory obligations, review, and potential restrictions on marketing or withdrawal from the market, incurring significant additional expense[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk)[251](index=251&type=chunk) - Failure to achieve market acceptance by physicians, patients, and third-party payors for any approved product candidate could prevent significant product revenue generation and profitability[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) - Lack of coverage and adequate reimbursement from third-party payors could make it difficult to sell products profitably, impacting demand and pricing[257](index=257&type=chunk)[258](index=258&type=chunk) - The company faces substantial competition from major pharmaceutical and biotechnology companies, as well as other AI-driven drug discovery firms, potentially leading to others commercializing products more successfully[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk)[265](index=265&type=chunk) - Underestimating market opportunities for product candidates could adversely affect revenue and business, as patient population estimates may be incorrect[266](index=266&type=chunk)[267](index=267&type=chunk) - The company currently lacks a marketing and sales organization and experience in commercializing products, requiring significant investment or reliance on third parties, which may not generate sufficient product revenue[268](index=268&type=chunk) - Commercializing products in foreign markets exposes the company to additional regulatory burdens, economic, political, and other risks[269](index=269&type=chunk) [Risks Related to Our Business Operations and Industry](index=68&type=section&id=Risks%20Related%20to%20Our%20Business%20Operations%20and%20Industry) This section discusses risks related to fluctuating operating results, dependence on key personnel, managing organizational growth, and compliance with healthcare laws and reforms - Quarterly and annual operating results may fluctuate significantly due to factors like R&D costs, regulatory approvals, competition, and macroeconomic conditions, making future results difficult to predict[271](index=271&type=chunk)[273](index=273&type=chunk) - High dependence on senior management and the ability to recruit and retain additional qualified personnel is critical; loss of key personnel or inability to attract new talent could harm the business[275](index=275&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk) - The need to expand the organization to support R&D programs and public company operations may lead to difficulties in managing growth and diverting management resources[278](index=278&type=chunk)[279](index=279&type=chunk) - Operating R&D through Australian subsidiaries exposes the company to risks of losing operational ability or being unable to receive R&D tax credits, which could adversely affect business and results[280](index=280&type=chunk)[281](index=281&type=chunk) - Relationships with healthcare providers and payors are subject to federal and state healthcare fraud and abuse laws (e.g., Anti-Kickback Statute, False Claims Act, HIPAA, Sunshine Act), and non-compliance could lead to substantial penalties[282](index=282&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk) - Healthcare legislative reforms, such as the ACA and IRA, may negatively impact the business by imposing price controls, limiting reimbursement, or increasing regulatory scrutiny on drug pricing[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk) - Use of hazardous and biological materials by third-party manufacturers could lead to liability for damages, fines, or operational disruptions if not handled in compliance with environmental, health, and safety laws[295](index=295&type=chunk) [Risks Related to Our Information Technology and Data](index=73&type=section&id=Risks%20Related%20to%20Our%20Information%20Technology%20and%20Data) This section highlights risks concerning product liability, cybersecurity breaches, employee misconduct, and compliance with stringent data security and privacy laws - Product liability lawsuits related to clinical trials or commercialized products could result in substantial liabilities, product recalls, loss of revenue, and reputational harm[296](index=296&type=chunk)[297](index=297&type=chunk) - Compromises or disruptions of IT systems or data, including cyberattacks, could lead to financial, legal, regulatory, business, and reputational harm, and loss of sensitive information[298](index=298&type=chunk)[299](index=299&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk) - Misconduct by employees, principal investigators, consultants, or commercial partners, including non-compliance with regulatory standards or insider trading, could result in regulatory sanctions and reputational damage[304](index=304&type=chunk) - Governments outside the U.S. may impose strict price controls on pharmaceuticals, potentially adversely affecting revenues[305](index=305&type=chunk) - The company is subject to stringent and evolving U.S. and foreign data security and privacy laws (e.g., HIPAA, CCPA, GDPR, China's Data Security Law, PIPL), and non-compliance could lead to enforcement actions, litigation, fines, and business disruptions[306](index=306&type=chunk)[307](index=307&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk)[315](index=315&type=chunk)[316](index=316&type=chunk)[317](index=317&type=chunk)[319](index=319&type=chunk) - Cross-border data transfer limitations, particularly from Europe to the U.S., could interrupt operations or require costly relocation of data processing activities[313](index=313&type=chunk)[314](index=314&type=chunk) [Risks Related to Our International Tax and Regulatory Environment](index=79&type=section&id=Risks%20Related%20to%20Our%20International%20Tax%20and%20Regulatory%20Environment) This section addresses risks from cross-border tax arrangements, changes in tax laws, geopolitical tensions, and complex regulatory compliance in international operations, particularly in China - Tax risks are associated with cross-border arrangements and activities between the company and its subsidiaries, as tax authorities may challenge transfer prices or assert taxability in new jurisdictions, potentially increasing tax liabilities[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk)[325](index=325&type=chunk) - Changes in tax laws or regulations (e.g., IRA, TCJA, BEPS 2.0) could adversely affect the company's business, cash flow, financial condition, or results of operations[326](index=326&type=chunk) - Changes in political and economic policies or relations between China and the United States may affect the company's business, financial condition, results of operations, and ADS market price due to its operations in China[327](index=327&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk)[330](index=330&type=chunk) - Compliance with China's Data Security Law, Cyber Security Law, Cybersecurity Review Measures, Personal Information Protection Law, and HGR Regulation may entail significant expenses, affect business operations, and potentially require cybersecurity reviews for overseas listings[331](index=331&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk)[339](index=339&type=chunk) - The approval, filing, or other procedures with the CSRC or other Chinese regulatory authorities may be required for issuing securities to foreign investors, and delays or inability to obtain such approvals could adversely affect the business and ADS trading price[340](index=340&type=chunk)[342](index=342&type=chunk)[344](index=344&type=chunk) - Operating in China requires compliance with extensive regulations and permits, and future government regulation may place additional burdens on operations[345](index=345&type=chunk)[346](index=346&type=chunk) - International operations expose the company to economic, political, regulatory, and other risks, including differing regulatory requirements, reduced IP protection, and foreign exchange fluctuations[347](index=347&type=chunk)[348](index=348&type=chunk) - Failure to comply with Chinese environmental, health, and safety laws could lead to fines, penalties, or costs, materially affecting business success[349](index=349&type=chunk)[350](index=350&type=chunk) - Developments in the Chinese legal system, which is civil law based and evolving, could materially and adversely affect the company[351](index=351&type=chunk) - Exposure to the U.S. FCPA and similar anti-corruption laws in China and other countries, as well as export controls and trade sanctions, could limit foreign market competition and result in penalties[352](index=352&type=chunk)[353](index=353&type=chunk) - Chinese currency exchange regulations may limit the ability to receive and effectively use foreign currency financing for Chinese subsidiaries, impacting funding and business expansion[354](index=354&type=chunk)[355](index=355&type=chunk) - Chinese regulations (e.g., SAFE Circular 37) regarding offshore special purpose companies by residents in China may subject beneficial owners or subsidiaries to liability, limit capital injection, or restrict profit distribution[356](index=356&type=chunk)[357](index=357&type=chunk)[358](index=358&type=chunk) - Classification as a China resident enterprise for tax purposes could result in unfavorable tax consequences, including a **25% EIT** on global income and withholding taxes on dividends and gains for non-Chinese shareholders[359](index=359&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk) - Uncertainties exist regarding Chinese regulations on indirect transfers of equity interests in China resident enterprises, potentially leading to income tax liabilities and significant compliance costs[362](index=362&type=chunk)[364](index=364&type=chunk) - Failure to comply with Chinese regulations regarding employee equity incentive plans (e.g., Stock Option Rules) may lead to fines, sanctions, and limitations on dividend distribution from Chinese subsidiaries[365](index=365&type=chunk) [Risks Related to Our Intellectual Property](index=91&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section details risks concerning the ability to obtain, mai

Exhibit 99.1 Structure Therapeutics Reports First Quarter 2024 Financial Results and Recent Highlights Topline GSBR-1290 Phase 2a 12-week obesity data on track for June 2024 Phase 2b study in obesity expected to begin as planned in the fourth quarter 2024 Plan to initiate dosing in first-in-human Phase 1 clinical trial of oral small molecule LPA1R Antagonist, LTSE-2578, for idiopathic pulmonary fibrosis in June 2024 SAN FRANCISCO – May 9, 2024 – Structure Therapeutics Inc. (NASDAQ: GPCR), a clinical-stage g ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Structure Therapeutics is a clinical-stage biopharmaceutical company focused on developing novel oral small molecule therapeutics for chronic diseases, primarily targeting GPCRs - The company is a clinical-stage biopharmaceutical firm developing oral small molecule therapeutics for chronic diseases, primarily targeting GPCRs[24](index=24&type=chunk)[25](index=25&type=chunk) - Completed its Initial Public Offering (IPO) in February 2023, raising net proceeds of approximately **$166.7 million**[24](index=24&type=chunk) - Completed a Private Placement in September 2023, raising net proceeds of approximately **$281.5 million**[24](index=24&type=chunk) Product Candidate Pipeline Summary | Program/Candidate | Target | Indication | Discovery | Preclinical | Phase 1 | Phase 2 | Phase 3 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Metabolic Diseases** | | | | | | | | | GSBR-1290 | GLP-1R | T2DM & Obesity | ✔ | ✔ | ✔ | **Ongoing** | | | Next-Gen GLP-1R | GLP-1R/GIPR, Amylin | T2DM & Obesity | **Ongoing** | | | | | | **Pulmonary & Cardiovascular** | | | | | | | | | LTSE-2578 | LPA1R | IPF & PPF | ✔ | **Ongoing** | | | | | ANPA-0073 | APJR | IPF & Cardiometabolic | ✔ | ✔ | ✔ | | | [Our Strategy](index=9&type=section&id=Our%20Strategy) The company's strategy focuses on leveraging its structure-based drug discovery platform to advance its GLP-1R franchise and explore new therapeutic areas through strategic partnerships - Leverage its next-generation structure-based drug discovery platform to innovate in GPCR targeted therapies and beyond[39](index=39&type=chunk) - Advance the GLP-1R franchise for metabolic diseases, with lead candidate GSBR-1290 for T2DM and obesity, and develop next-generation combinations (e.g., with GIPR, amylin)[39](index=39&type=chunk) - Pursue opportunities in other chronic diseases, including pulmonary (IPF with LTSE-2578) and cardiovascular conditions (ANPA-0073)[39](index=39&type=chunk) - Maximize platform potential through strategic partnerships, building on the existing collaboration with Schrödinger[40](index=40&type=chunk) [Our Lead GPCR Programs](index=18&type=section&id=Our%20Lead%20GPCR%20Programs) The company's lead programs utilize its GPCR platform to develop treatments for chronic metabolic, cardiovascular, and pulmonary diseases, including the GLP-1R, LPA1R, and APJR franchises - The company's lead programs focus on chronic metabolic, cardiovascular, and pulmonary diseases by leveraging its GPCR platform[85](index=85&type=chunk) - The GLP-1R franchise, led by GSBR-1290, targets T2DM and obesity. GSBR-1290 is an oral, biased agonist of the GLP-1R[86](index=86&type=chunk)[87](index=87&type=chunk) - The LPA1R and APJR programs target Idiopathic Pulmonary Fibrosis (IPF). LTSE-2578 is an LPA1R antagonist, and ANPA-0073 is an APJR agonist[176](index=176&type=chunk)[179](index=179&type=chunk) [Intellectual Property](index=42&type=section&id=Intellectual%20Property) The company protects its GLP-1R, APJR, and LPA1R programs through a portfolio of granted U.S. patents and pending applications, supplemented by trade secrets and confidentiality agreements - For the GLP-1R program (including GSBR-1290), the company owns one granted U.S. patent, 11 pending U.S. applications, and 94 pending foreign applications, with expected expiration between 2041 and 2044[228](index=228&type=chunk) - For the APJR program (including ANPA-0073), the company owns two granted U.S. patents, three pending U.S. applications, and 24 pending foreign applications, with expected expiration between 2039 and 2043[229](index=229&type=chunk) - For the LPA1R program (including LTSE-2578), the company owns three pending U.S. applications and seven pending foreign applications, with expected expiration between 2041 and 2044[230](index=230&type=chunk) - The company also relies on trade secrets, know-how, and confidentiality agreements to protect its competitive position[232](index=232&type=chunk) [Collaborations](index=44&type=section&id=Collaborations) The company has strategic collaborations with Schrödinger for small molecule discovery, involving potential milestone payments and low single-digit royalties for both LPA1R and a specific undisclosed target - In October 2020, subsidiary Lhotse entered a collaboration with Schrödinger to discover small molecule inhibitors of LPA1R. Lhotse retains sole ownership of IP generated under the agreement[234](index=234&type=chunk) - Under the Lhotse-Schrödinger agreement, Lhotse is obligated to pay potential development and regulatory milestone payments up to **$17.0 million** and tiered low single-digit royalties on net sales[235](index=235&type=chunk) - In November 2023, subsidiary Aconcagua entered a collaboration with Schrödinger to discover small molecule modulators of a specific target. Aconcagua retains sole ownership of IP generated under the agreement[237](index=237&type=chunk) - Under the Aconcagua-Schrödinger agreement, Aconcagua is obligated to pay potential development, regulatory, and commercialization milestone payments up to **$89.0 million** and tiered low single-digit royalties on net sales[239](index=239&type=chunk) [Competition](index=45&type=section&id=Competition) The company faces intense competition from major pharmaceutical and biotechnology firms across its GLP-1R, APJR, and LPA1R programs in a rapidly evolving technological landscape - The company faces competition from major pharmaceutical and biotechnology companies in a rapidly evolving technological landscape[242](index=242&type=chunk) - In the GLP-1R space for diabetes and obesity, competitors include Eccogene (Astrazeneca), Carmot Therapeutics (Roche), Terns, Pfizer, and Eli Lilly with small molecules, and Novo Nordisk, Eli Lilly, AstraZeneca, and Sanofi with approved peptides[245](index=245&type=chunk) - In the APJR space, competitors include CohBar, Apie Therapeutics, BioAge Labs, Amgen, and Bristol Myers Squibb[246](index=246&type=chunk) - In the LPA1R space for IPF, competitors include Bristol Myers Squibb, Horizon Therapeutics (Amgen), and DJS Antibodies Ltd[247](index=247&type=chunk) [Regulation](index=47&type=section&id=Regulation) The company's operations are subject to extensive regulatory oversight by the FDA in the U.S. and NMPA in China, encompassing drug approval processes, healthcare laws, and data privacy regulations - The company's operations are subject to extensive regulation by the FDA in the United States, the NMPA in China, and other foreign regulatory bodies[253](index=253&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk) - The U.S. drug approval process involves preclinical studies, an IND submission, and three phases of clinical trials (Phase I, II, III) before an NDA can be submitted for FDA review[255](index=255&type=chunk)[260](index=260&type=chunk) - In China, recent reforms aim to encourage innovation, and the regulatory framework is governed by the PRC Drug Administration Law and its implementing regulations[297](index=297&type=chunk)[298](index=298&type=chunk) - The company is also subject to healthcare laws concerning fraud and abuse (e.g., Anti-Kickback Statute), data privacy (e.g., GDPR, HIPAA), and pricing/reimbursement regulations[301](index=301&type=chunk)[252](index=252&type=chunk) [Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks including limited operating history, significant losses, reliance on an unproven platform, and complex regulatory and operational challenges - The company has a limited operating history, has incurred significant losses since inception (**$89.6M in 2023**), and expects these losses to continue for the foreseeable future[369](index=369&type=chunk)[370](index=370&type=chunk) - The company's drug discovery platform is unproven, and its two lead candidates, GSBR-1290 and ANPA-0073, are in early clinical development, with all other programs in preclinical or discovery stages[381](index=381&type=chunk)[385](index=385&type=chunk) - Reliance on third parties for manufacturing and conducting clinical trials increases risks related to supply, cost, quality, and timelines. A data collection omission at a clinical site has already caused a delay in the Phase 2a obesity study for GSBR-1290[439](index=439&type=chunk)[446](index=446&type=chunk)[396](index=396&type=chunk) - Significant risks are associated with operating in China, including changes in political/economic policies, U.S.-China relations, and complex data security and regulatory laws (e.g., CSRC filing requirements)[561](index=561&type=chunk)[565](index=565&type=chunk)[578](index=578&type=chunk) - A material weakness in internal control over financial reporting related to lacking a sufficient complement of finance professionals continues to exist as of December 31, 2023[687](index=687&type=chunk)[688](index=688&type=chunk) [Unresolved Staff Comments](index=147&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[749](index=749&type=chunk) [Cybersecurity](index=147&type=section&id=Item%201C.%20Cybersecurity) The company has implemented information security processes to manage cybersecurity risks, overseen by its cybersecurity function and integrated into its overall risk management - The company has processes to identify, assess, and manage material risks from cybersecurity threats, which are integrated into its overall risk management[750](index=750&type=chunk)[752](index=752&type=chunk) - The Audit Committee of the Board of Directors oversees the company's cybersecurity risk management processes[757](index=757&type=chunk) - Management, including the Senior Director of Internal Controls, Director of IT Security, and CFO, are responsible for implementing and maintaining cybersecurity processes[758](index=758&type=chunk) - The company has not identified any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect its operations, business strategy, or financial condition[761](index=761&type=chunk) [Properties](index=148&type=section&id=Item%202.%20Properties) The company leases approximately 11,800 sq ft for its principal executive office in South San Francisco, California, and additional office and lab space in Shanghai, China - Leases approximately **11,800 sq. ft.** in South San Francisco, CA for its principal executive office (lease expires Aug 2027)[762](index=762&type=chunk) - Leases approximately **22,500 sq. ft.** of office space and **8,400 sq. ft.** of lab space in Shanghai, China (leases expire Dec 2026 and Jan 2027, respectively)[762](index=762&type=chunk) [Legal Proceedings](index=148&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings, though it may be involved in ordinary course legal matters in the future - The company is not currently the subject of any material governmental investigation, private lawsuit, or other legal proceeding[763](index=763&type=chunk) [Mine Safety Disclosures](index=149&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports that this item is not applicable - None[765](index=765&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=149&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's ADSs began trading on Nasdaq in February 2023, has never paid dividends, and completed significant private placement and IPO financings in 2023 - The company's ADSs have been listed on the Nasdaq Global Market under the symbol "GPCR" since February 3, 2023[767](index=767&type=chunk) - The company has never declared or paid dividends and does not intend to in the foreseeable future, expecting to retain earnings for business operations[769](index=769&type=chunk) - In October 2023, the company closed a private placement, issuing 21,617,295 ordinary shares and 2,401,920 non-voting ordinary shares for aggregate gross proceeds of approximately **$300 million**[770](index=770&type=chunk) - Net proceeds from the February 2023 IPO were approximately **$166.7 million** after deducting underwriting discounts and offering costs[775](index=775&type=chunk) [Reserved](index=158&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=159&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company's net loss increased significantly in 2023 due to higher R&D and G&A expenses, but liquidity was strengthened by substantial capital raises Consolidated Results of Operations (in thousands) | | Year Ended December 31, 2023 | Year Ended December 31, 2022 | | :--- | :--- | :--- | | Research and development | $70,103 | $36,193 | | General and administrative | $32,672 | $16,368 | | **Total operating expenses** | **$102,775** | **$52,561** | | Loss from operations | ($102,775) | ($52,561) | | Interest and other income (expense), net | $13,391 | $1,257 | | **Net loss** | **($89,620)** | **($51,321)** | - Research and development expenses increased by **$33.9 million (94%)** in 2023, primarily due to the advancement of the GLP-1R franchise (GSBR-1290 expenses grew from **$18.8M to $44.8M**) and increased personnel costs[856](index=856&type=chunk)[857](index=857&type=chunk) - General and administrative expenses increased by **$16.3 million (100%)** in 2023, mainly due to higher professional services and employee-related costs associated with operating as a public company[858](index=858&type=chunk) - As of December 31, 2023, the company had **$467.3 million** in cash, cash equivalents, and short-term investments, which is expected to fund operations through at least **2026**[861](index=861&type=chunk)[833](index=833&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=170&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate sensitivity on its cash and investments, foreign currency fluctuations, and credit risk, none of which are currently considered material - The company's primary market risk is interest rate sensitivity on its **$467.3 million** in cash, cash equivalents, and short-term investments. However, due to short maturities, the impact of a **10%** rate change is not considered material[884](index=884&type=chunk) - Foreign currency risk exists due to operating expenses in foreign currencies but is not expected to have a material effect on financial results[885](index=885&type=chunk) - Credit risk is managed by holding funds in several financial institutions and investing in investment-grade securities. The company has not experienced any losses on its deposits[886](index=886&type=chunk) [Financial Statements and Supplementary Data](index=171&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2023 and 2022, including balance sheets, statements of operations, equity, and cash flows Key Balance Sheet Data (in thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $129,792 | $26,091 | | Short-term investments | $337,531 | $64,750 | | **Total Assets** | **$482,017** | **$97,845** | | Total Liabilities | $29,051 | $13,010 | | Total redeemable convertible preferred shares | $0 | $199,975 | | **Total shareholders' equity (deficit)** | **$452,966** | **($115,140)** | Key Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Total operating expenses | $102,775 | $52,561 | | Loss from operations | ($102,775) | ($52,561) | | **Net loss** | **($89,620)** | **($51,321)** | | Net loss per share | ($0.81) | ($5.51) | Key Cash Flow Data (in thousands) | | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($79,488) | ($46,120) | | Net cash used in investing activities | ($268,342) | ($62,108) | | Net cash provided by financing activities | $451,531 | $29,014 | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=205&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[1055](index=1055&type=chunk) [Controls and Procedures](index=205&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of December 31, 2023, due to a material weakness in internal control over financial reporting, currently under remediation - Management concluded that disclosure controls and procedures were not effective as of **December 31, 2023**[1057](index=1057&type=chunk) - A material weakness in internal control over financial reporting continues to exist: the company lacked a sufficient complement of professionals for its financial reporting requirements[1061](index=1061&type=chunk) - The company is remediating the weakness by hiring additional accounting personnel, including a senior director of SEC reporting and a senior director of internal controls[1063](index=1063&type=chunk) - Two previously reported material weaknesses related to segregation of duties and IT general controls were remediated as of December 31, 2023[1064](index=1064&type=chunk)[1065](index=1065&type=chunk)[1066](index=1066&type=chunk) [Other Information](index=207&type=section&id=Item%209B.%20Other%20Information) The company's Chief Scientific Officer adopted a Rule 10b5-1 trading plan in December 2023 to sell up to 106,666 ADSs - On December 28, 2023, Chief Scientific Officer Xichen Lin, Ph.D., adopted a Rule 10b5-1 trading plan to sell up to **106,666 ADSs**, with an expiration date of **December 15, 2024**[1070](index=1070&type=chunk)[1071](index=1071&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=207&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company reports that this item is not applicable - None[1072](index=1072&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Accountant Fees](index=208&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) Information for these items is incorporated by reference from the company's forthcoming 2024 Annual General Meeting Proxy Statement - Information for Items 10 (Directors, Executive Officers and Corporate Governance), 11 (Executive Compensation), 12 (Security Ownership), 13 (Certain Relationships and Related Transactions), and 14 (Principal Accountant Fees and Services) is incorporated by reference from the company's forthcoming 2024 Proxy Statement[1075](index=1075&type=chunk)[1076](index=1076&type=chunk)[1078](index=1078&type=chunk)[1079](index=1079&type=chunk)[1080](index=1080&type=chunk)[1081](index=1081&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=209&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and provides an index of all exhibits filed with the Form 10-K, with financial statement schedules omitted as not applicable - This section contains the list of financial statements, notes that financial statement schedules are omitted, and provides an index of all exhibits filed with the Form 10-K[1084](index=1084&type=chunk)[1085](index=1085&type=chunk)[1086](index=1086&type=chunk) [Form 10–K Summary](index=214&type=section&id=Item%2016.%20Form%2010%E2%80%93K%20Summary) The company reports that this item is not applicable - None[1096](index=1096&type=chunk)

Exhibit 99.1 Structure Therapeutics Reports Fourth Quarter and Full Year 2023 Financial Results and Recent Highlights Topline GSBR-1290 Phase 2a 12-week obesity data, as well as data from formulation bridging and titration optimization study, on track for latter half of the second quarter 2024 Phase 2b study in obesity expected to begin as planned in the fourth quarter 2024 Year-end cash balance of $467.3 million expected to fund operations and key clinical milestones through 2026 SAN FRANCISCO – March 8, 2 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Transition Period From To Commission file number: 001-41608 Structure Therapeutics Inc. (Exact name of registrant as specified in its charter) Cayman Islands 98-1480821 ( ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Transition Period From To Commission file number: 001-41608 Structure Therapeutics Inc. (Exact name of registrant as specified in its charter) Cayman Islands 98-1480821 (State ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the three months ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Transition Period From To Commission file number: 001-41608 Structure Therapeutics Inc. (Exact name of registrant as specified in its charter) Cayman Islands 98-1480821 (State of ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Transition Period From To Commission file number: 001-41608 Structure Therapeutics Inc. Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if ...