Company Presentation January 2021 Confidential | © 2021 Relay Therapeutics 1 Disclaimer 2 This presentation contains forward-looking statements and information about our current and future prospects and our operations and financial results, which are based on currently available information. All statements other than statements of historical facts contained in this presentation, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, obj ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 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: 001-39385 RELAY THERAPEUTICS, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 47-3923475 ( ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Relay Therapeutics, Inc.'s unaudited consolidated financial statements, including balance sheets, operations, and cash flows, highlighting net losses - The company is a **clinical-stage precision medicines company** focused on targeted oncology, with lead product candidates **RLY-4008** and **RLY-1971**, both in **Phase 1 clinical trials**[32](index=32&type=chunk) - The company closed its **Initial Public Offering (IPO)** on **July 20, 2020**, issuing **23,000,000 shares** for net proceeds of approximately **$424.8 million**, converting **61,992,534 shares** of preferred stock[37](index=37&type=chunk)[53](index=53&type=chunk) [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$348.0 million** by June 30, 2020, from **$393.1 million** at December 31, 2019, primarily due to reduced investments Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $137,053 | $41,954 | | Investments | $175,153 | $313,862 | | Total current assets | $315,865 | $360,536 | | **Total assets** | **$348,035** | **$393,068** | | **Liabilities & Stockholders' Deficit** | | | | Total current liabilities | $12,765 | $11,986 | | **Total liabilities** | **$35,646** | **$35,725** | | Convertible preferred stock | $537,781 | $537,781 | | Total stockholders' deficit | ($225,392) | ($180,438) | | **Total liabilities, convertible preferred stock, and stockholders' deficit** | **$348,035** | **$393,068** | [Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss for the six months ended June 30, 2020, increased to **$51.6 million** from **$31.7 million** in 2019, due to higher operating expenses Consolidated Statements of Operations (in thousands) | Line Item | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Research and development expenses | $21,666 | $16,397 | $43,363 | $29,643 | | General and administrative expenses | $6,053 | $3,508 | $10,814 | $6,664 | | **Total operating expenses** | **$27,719** | **$19,905** | **$54,177** | **$36,307** | | Loss from operations | ($27,719) | ($19,905) | ($54,177) | ($36,307) | | Interest income | $998 | $2,368 | $2,570 | $4,645 | | **Net loss** | **($26,724)** | **($17,537)** | **($51,610)** | **($31,719)** | | Net loss per share, basic and diluted | ($6.06) | ($5.28) | ($12.06) | ($9.90) | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$43.2 million**, while investing activities provided **$138.0 million**, leading to a **$95.1 million** net cash increase Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | ($43,178) | ($25,869) | | Net cash provided by (used in) investing activities | $138,019 | ($361,997) | | Net cash provided by financing activities | $258 | $5,717 | | **Net increase (decrease) in cash, cash equivalents and restricted cash** | **$95,099** | **($382,149)** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, IPO, share-based payments, and commitments, including an amended **D.E. Shaw Research** agreement and a reverse stock split - On **June 15, 2020**, the company amended its Collaboration and License Agreement with **D.E. Shaw Research**, extending the term to **August 16, 2025**, and increasing the annual fee from **$1.0 million** to **$7.9 million**[63](index=63&type=chunk)[128](index=128&type=chunk) - In the first quarter of 2020, the company issued performance-based stock options to purchase **1,960,547 shares** of common stock, recognizing **$2.6 million** in stock-based compensation expense in Q2 2020[60](index=60&type=chunk) - On **July 8, 2020**, the company effected a **one-for-3.55092 reverse stock split** of its common stock, with all share and per-share amounts retroactively adjusted[73](index=73&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and operations, covering business overview, COVID-19 impact, performance, liquidity, and capital resources, highlighting **$424.8 million** IPO proceeds - The company is a **clinical-stage precision medicines company** using its **Dynamo platform** to focus on targeted oncology, with lead candidates **RLY-1971** and **RLY-4008** in **Phase 1 clinical trials**[77](index=77&type=chunk)[78](index=78&type=chunk) - The company closed its **IPO** on **July 20, 2020**, raising net proceeds of **$424.8 million**, with management believing existing capital is sufficient to fund operations into **2023**[80](index=80&type=chunk)[85](index=85&type=chunk)[119](index=119&type=chunk) - The **COVID-19 pandemic** has presented challenges, but the company initiated the **Phase 1 trial for RLY-4008** and continued enrollment for **RLY-1971** without anticipated interruptions[81](index=81&type=chunk)[82](index=82&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Operating losses increased significantly year-over-year for both three and six-month periods ended June 30, 2020, due to higher R&D and G&A expenses Comparison of Results of Operations (in thousands) | Period | Research and Development | General and Administrative | Net Loss | | :--- | :--- | :--- | :--- | | **Three Months Ended June 30, 2020** | $21,666 | $6,053 | ($26,724) | | **Three Months Ended June 30, 2019** | $16,397 | $3,508 | ($17,537) | | **Six Months Ended June 30, 2020** | $43,363 | $10,814 | ($51,610) | | **Six Months Ended June 30, 2019** | $29,643 | $6,664 | ($31,719) | - The increase in **R&D expenses** for the six months ended June 30, 2020, was driven by a **$5.4 million** increase in employee-related costs (including **$1.6 million** in stock-based compensation), a **$5.3 million** increase in outside services, and **$2.7 million** in clinical trial expenses for **RLY-1971**[106](index=106&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$312.2 million** in cash and investments as of June 30, 2020, funded by preferred stock and a **$424.8 million** IPO, with capital expected to fund operations into **2023** Summary of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Cash used in operating activities | ($43,178) | ($25,869) | | Cash provided by (used in) investing activities | $138,019 | ($361,997) | | Cash provided by financing activities | $258 | $5,717 | - The company expects expenses to increase substantially due to clinical trials for **RLY-1971** and **RLY-4008**, development of the **RLY-PI3K1047 program**, and costs associated with operating as a public company[118](index=118&type=chunk)[121](index=121&type=chunk) [Contractual Obligations and Commitments](index=27&type=section&id=Contractual%20Obligations%20and%20Commitments) Material contractual obligations remain largely unchanged, except for an amended **D.E. Shaw Research** agreement, extending its term to **August 2025** and increasing the annual fee to **$7.9 million** - The Amended and Restated Collaboration and License Agreement with **D.E. Shaw Research** extended the term to **August 16, 2025**, and increased the annual fee from **$1.0 million** to **$7.9 million**[128](index=128&type=chunk) - Under the **D.E. Shaw Research** agreement, the company is obligated to pay potential development and regulatory milestone payments up to **$7.3 million** per target for the first three products, plus sales milestones and royalties[127](index=127&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate sensitivity on investments, with a **100 basis point** change not expected to be material; foreign currency risk is not material - The company's primary market risk is interest rate sensitivity on its cash equivalents and investments, with a hypothetical **100 basis point** adverse movement not expected to have a material impact[135](index=135&type=chunk) - Foreign currency exchange risk is **not considered material** as operations are primarily in the United States and expenses are generally denominated in U.S. dollars, with no hedging engaged[137](index=137&type=chunk)[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2020, with no material changes in internal control over financial reporting, despite remote work - The CEO and CFO concluded that as of June 30, 2020, the company's disclosure controls and procedures were **effective** at a reasonable assurance level[141](index=141&type=chunk) - There were **no changes** in internal control over financial reporting during the quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, internal controls[142](index=142&type=chunk) - The transition to a remote work environment due to the COVID-19 pandemic has **not materially changed** the company's internal control over financial reporting[143](index=143&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) As of June 30, 2020, the company was not a party to any material litigation or legal proceedings - The company was **not a party to any material litigation or legal proceedings** as of June 30, 2020[144](index=144&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant investment risks, including limited operating history, funding needs, clinical and regulatory uncertainties, third-party reliance, IP, and stock-related factors [Risks Related to Financial Position, Business, and Industry](index=30&type=section&id=Risks%20Related%20to%20Financial%20Position%2C%20Business%2C%20and%20Industry) Risks include limited operating history, **$241.1 million** accumulated net losses, need for substantial additional funding, and challenges from its novel drug discovery platform - The company has a **limited operating history**, has incurred **net losses** each year since inception, and had an accumulated deficit of **$241.1 million** as of June 30, 2020[146](index=146&type=chunk) - The company will require **substantial additional funding** for its development and commercialization efforts, and failure to raise capital could force delays or elimination of programs[153](index=153&type=chunk) - The company's **novel mechanism of action** may result in **greater R&D expenses**, **regulatory delays**, and the discovery of unanticipated adverse effects[182](index=182&type=chunk)[183](index=183&type=chunk) [Risks Related to Reliance on Third Parties](index=42&type=section&id=Risks%20Related%20to%20Reliance%20on%20Third%20Parties) High dependence on third parties, including **D. E. Shaw Research** for its computational platform, CROs for clinical trials, and single-source manufacturers for APIs, poses significant risks - The company collaborates with **D. E. Shaw Research (DESRES)** for its computational protein modeling, which depends on DESRES's proprietary supercomputer, **Anton 2**, and termination of this agreement could materially harm the business[210](index=210&type=chunk) - The company relies on **third-party CROs** to conduct its clinical trials (including Phase 1 for **RLY-1971** and **RLY-4008**) and is responsible for ensuring their compliance with regulations[216](index=216&type=chunk)[218](index=218&type=chunk) - The company relies on **third-party contract manufacturers** for its product candidates, with APIs supplied by **single-source suppliers**, posing significant supply chain risk[224](index=224&type=chunk)[232](index=232&type=chunk) [Risks Related to Intellectual Property](index=46&type=section&id=Risks%20Related%20to%20Intellectual%20Property) Success depends on patent protection and trade secrets, but the company lacks issued patents for key programs, co-owns applications with **D. E. Shaw Research**, and faces infringement risks - The company co-owns its pending patent applications for **RLY-1971** and **RLY-4008** with **D. E. Shaw Research**, and **does not currently own or in-license any issued patents** relating to its key programs[242](index=242&type=chunk)[247](index=247&type=chunk) - The company may face legal proceedings from third parties alleging **infringement of their intellectual property rights**, which could be uncertain, expensive, and potentially halt commercialization[261](index=261&type=chunk)[262](index=262&type=chunk) - The company relies on **trade secrets and know-how**, particularly for its **proprietary compound library**, and seeks to protect them via confidentiality agreements, though effectiveness is not guaranteed[258](index=258&type=chunk) [Risks Related to Government Regulation](index=53&type=section&id=Risks%20Related%20to%20Government%20Regulation) Extensive government regulation poses risks, including ongoing product review, need for companion diagnostics for **RLY-4008**, and adverse impacts from healthcare reforms and drug pricing - Even if a product is approved, the company will be subject to **extensive ongoing regulatory requirements**, and non-compliance could result in fines, product withdrawal, or other penalties[287](index=287&type=chunk)[290](index=290&type=chunk) - The FDA has indicated that a **companion diagnostic device** will be required for **RLY-4008** if advanced in a specific biomarker-defined population, adding regulatory risk and reliance on third-party developers[297](index=297&type=chunk) - **Healthcare legislative reforms**, including potential changes to the ACA and increasing pressure on **drug pricing**, could limit reimbursement and adversely affect the company's ability to profitably sell its products[316](index=316&type=chunk)[321](index=321&type=chunk) [Risks Related to Our Common Stock](index=63&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) Risks include reduced disclosure as an **emerging growth company**, potential stock price volatility from lock-up expirations, and significant control by principal stockholders (**52.8%**) - The company is an **"emerging growth company"** and a **"smaller reporting company,"** allowing it to rely on **reduced disclosure requirements**, potentially making its common stock less attractive to some investors[347](index=347&type=chunk)[348](index=348&type=chunk)[352](index=352&type=chunk) - Executive officers, directors, and their affiliates beneficially own approximately **52.8%** of the outstanding common stock, giving them **significant control** over corporate matters[358](index=358&type=chunk) - A substantial number of shares are subject to a **180-day lock-up agreement** from the IPO, and their potential sale after expiration in **January 2021** could cause the market price to drop[357](index=357&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports on unregistered equity sales, including **223,881** stock options, and the use of **$424.8 million** net proceeds from the **July 15, 2020** IPO, with no material change in planned use - From April 1 to June 30, 2020, the company issued options to purchase an aggregate of **223,881 shares** of common stock to employees, directors, and consultants[373](index=373&type=chunk) - The company's IPO registration statement was declared effective on **July 15, 2020**, resulting in net proceeds of approximately **$424.8 million** after deducting underwriting discounts and expenses[374](index=374&type=chunk)[376](index=376&type=chunk) - There has been **no material change** in the planned use of IPO proceeds as described in the final prospectus[377](index=377&type=chunk) [Item 3. Defaults Upon Senior Securities](index=68&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable; the company reports no defaults upon senior securities [Item 4. Mine Safety Disclosures](index=68&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable; the company has no mine safety disclosures to report [Item 5. Other Information](index=68&type=section&id=Item%205.%20Other%20Information) None; the company reports no other information for this period [Item 6. Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, stock plans, agreements, and officer certifications - Exhibits filed include **corporate governance documents**, **stock and incentive plans**, the **Amended and Restated Collaboration and License Agreement with D.E. Shaw Research**, and required **officer certifications**[383](index=383&type=chunk)