Pipeline and Programs - Relay Therapeutics' pipeline includes RLY-4008 (selective FGFR2 inhibitor) with encouraging efficacy in FGFR2-fusion+ cholangiocarcinoma (CCA) without prior FGFRi [59] - RLY-2608 (PI3KαPAN inhibitor) is in development, with initial clinical data expected in the first half of 2023 [53, 137] - The company is also developing a selective CDK2 inhibitor, with clinical start expected in Q4 2023 or Q1 2024 [53, 157] - An ERα degrader program is underway, with a development candidate nomination expected in 2023 [53, 166] RLY-4008 (Selective FGFR2 Inhibitor) - A pivotal study is aligned with the FDA for FGFR2-fusion+ cholangiocarcinoma (CCA) without prior FGFRi, with a target enrollment of 100 patients [59, 98] - Preliminary data as of April 19, 2022, showed promising radiographic tumor regression in FGFRi-naïve cholangiocarcinoma QD patients [60, 92] - The company has enrolled 115 patients across 39 sites and 11 countries over 19 months for RLY-4008 [101] Financial Status - As of the end of Q2 2022, Relay Therapeutics had $838 million in cash, cash equivalents, and investments [53] - The company's current cash position is expected to fund the current operating plan into 2025 [53, 180]

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Net loss decreased to $138.8 million in H1 2022 due to the absence of a 2021 in-process R&D expense [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $889.4 million as of June 30, 2022, primarily due to a reduction in cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $107,736 | $280,119 | | Investments | $730,254 | $677,954 | | **Total Assets** | **$889,421** | **$1,008,443** | | Total current liabilities | $43,902 | $24,321 | | **Total Liabilities** | **$109,784** | **$110,635** | | **Total Stockholders' Equity** | **$779,637** | **$897,808** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss significantly decreased in Q2 2022 to $76.8 million, primarily due to the non-recurrence of 2021 one-time expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2022 | Q2 2021 | H1 2022 | H1 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $365 | $844 | $784 | $1,796 | | Research and development expenses | $60,511 | $45,147 | $112,178 | $75,769 | | In-process R&D expenses | $0 | $123,000 | $0 | $123,000 | | General and administrative expenses | $17,465 | $14,422 | $33,533 | $27,156 | | **Net loss** | **$(76,788)** | **$(193,399)** | **$(138,834)** | **$(235,582)** | | Net loss per share, basic and diluted | $(0.71) | $(2.10) | $(1.28) | $(2.58) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $106.3 million in H1 2022, a significant shift from cash provided in 2021 Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(106,266) | $18,500 | | Net cash used in investing activities | $(68,996) | $(207,553) | | Net cash provided by financing activities | $2,879 | $3,176 | | **Net decrease in cash, cash equivalents and restricted cash** | **$(172,383)** | **$(185,877)** | - The significant decrease in cash from operating activities in H1 2022 compared to H1 2021 is largely due to a **$74.8 million** positive change in accounts receivable in 2021 that did not recur, related to payments from the Genentech collaboration[31](index=31&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the clinical pipeline, increased R&D expenses, and cash reserves sufficient to fund operations into at least 2025 - The company is advancing its pipeline, with RLY-4008 moving towards a potential accelerated approval path in CCA, RLY-2608 in a first-in-human trial, and RLY-1971 being developed in collaboration with Genentech[77](index=77&type=chunk) R&D and G&A Expense Comparison (in millions) | Expense Category | H1 2022 | H1 2021 | Change | | :--- | :--- | :--- | :--- | | Research & Development | $112.2 | $75.8 | +$36.4 | | General & Administrative | $33.5 | $27.2 | +$6.3 | - The company believes its cash, cash equivalents, and investments of **$838.0 million** as of June 30, 2022, will be sufficient to fund operating expenses and capital expenditure requirements into at least 2025[90](index=90&type=chunk)[134](index=134&type=chunk) - The decrease in net loss for H1 2022 compared to H1 2021 was primarily due to the non-recurrence of a **$123.0 million** in-process R&D expense and an **$11.9 million** loss on consolidation of a VIE, both related to the acquisition of ZebiAI in Q2 2021[115](index=115&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces minimal market risk from interest rate changes on investments and negligible foreign currency exchange risk due to U.S.-centric operations - The primary market risk is interest rate sensitivity on the company's investment portfolio; a hypothetical 100 basis point adverse movement is not expected to materially impact results[144](index=144&type=chunk) - Foreign currency exchange risk is not considered material as operations are mainly in the U.S. and expenses are denominated in U.S. dollars[146](index=146&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal controls - The CEO and CFO concluded that as of June 30, 2022, the company's disclosure controls and procedures were effective[149](index=149&type=chunk) - No material changes to the internal control over financial reporting occurred during the fiscal quarter ended June 30, 2022[150](index=150&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) As of June 30, 2022, the company was not party to any legal proceedings expected to have a material adverse effect on its business - The company is not currently involved in any litigation or legal proceedings expected to have a material adverse effect on its business[153](index=153&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) The company outlines extensive risks including clinical development, third-party reliance, funding needs, competition, and intellectual property protection [Risks Related to Product Candidates](index=29&type=section&id=Risks%20Related%20to%20Our%20Product%20Candidates) Risks include the company's lack of completed clinical trials, unpredictability of early-stage data, and intense competition in product development - The company has never successfully completed any clinical trials and may be unable to do so for its product candidates (RLY-1971, RLY-4008, RLY-2608)[155](index=155&type=chunk) - Positive data from preclinical or early clinical studies are not necessarily predictive of the results of later clinical trials[167](index=167&type=chunk) - The company faces substantial competition, which may result in others developing or commercializing products more successfully[194](index=194&type=chunk) [Risks Related to Reliance on Third Parties](index=37&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) The company heavily relies on third parties for its Dynamo™ platform, clinical trials (CROs), and manufacturing (CMOs), posing significant operational risks - The company's collaboration with D. E. Shaw Research, utilizing the proprietary Anton 2 supercomputer, is critical to its Dynamo platform, and termination could materially harm the business[204](index=204&type=chunk)[207](index=207&type=chunk) - The company relies on third parties (CROs) to conduct all its clinical trials and is dependent on them for execution and regulatory compliance[212](index=212&type=chunk) - The company contracts with third-party manufacturers (CMOs) for all its product candidates and does not own any manufacturing facilities, creating risks in supply, quality, and cost[222](index=222&type=chunk) [Risks Related to Financial Position and Capital](index=43&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Ability%20to%20Raise%20Additional%20Capital) The company has a limited operating history, significant accumulated losses, and will require substantial additional funding to continue development programs - The company has a limited operating history, has incurred significant operating losses since inception, and anticipates continued losses, with an accumulated deficit of **$906.9 million** as of June 30, 2022[242](index=242&type=chunk) - The company will need to raise substantial additional funding, and failure to do so may force delays or elimination of product development programs[250](index=250&type=chunk) [Risks Related to Intellectual Property](index=48&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Success depends on patent protection and trade secrets, facing uncertainties in biotech IP, complex collaboration terms, and potential infringement claims - The company's ability to protect its proprietary technology and obtain patent protection is crucial, but the patent position of biotech companies is highly uncertain and involves complex legal questions[265](index=265&type=chunk)[271](index=271&type=chunk) - Much of the company's R&D is performed under the DESRES Agreement, which involves joint ownership of work product and complex IP rights that could lead to disputes[268](index=268&type=chunk)[270](index=270&type=chunk) - The company may face legal proceedings from third parties alleging infringement of their IP rights, which could be uncertain, expensive, and have a material adverse effect on the business[286](index=286&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=73&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the reporting period - None[394](index=394&type=chunk) [Item 5. Other Information](index=73&type=section&id=Item%205.%20Other%20Information) The board of directors decided to hold an annual advisory vote on executive compensation based on stockholder preference - The company will hold an annual advisory 'say-on-pay' vote for executive compensation, based on stockholder preference[395](index=395&type=chunk) [Item 6. Exhibits](index=74&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and required certifications - The exhibits filed include corporate governance documents and required certifications under the Sarbanes-Oxley Act[397](index=397&type=chunk)

Company Overview - Relay Therapeutics is a patient-driven, growth-oriented biotech company focused on validated targets and therapeutic areas [7, 8, 9] - The company utilizes the Dynamo™ Platform, integrating experimentation and computation to improve drug discovery efficiency [15, 14] - Relay Therapeutics has 3 clinical assets: RLY-2608 (PI3KαPAN), RLY-4008 (FGFR2), and RLY-1971 (SHP2), with more programs in the pipeline [33, 10] RLY-4008 (FGFR2 Inhibitor) - RLY-4008 is a highly selective and irreversible FGFR2 inhibitor [80] - Early clinical data shows tumor regressions across several tumor and alteration types, with 3 out of 6 FGFR-inhibitor naïve cholangiocarcinoma patients exhibiting confirmed partial responses (PRs) [58] - In FGFR inhibitor-naïve FGFR2-fusion+ cholangiocarcinoma, 3 out of 6 patients exhibited a confirmed PR [92] RLY-2608 (PI3KαPAN Inhibitor) - The PI3Kα opportunity represents a large market in precision oncology, with approximately 156,000 US patients with solid tumors [108] - RLY-2608 has shown mutant and isoform biochemical selectivity [120] - Preclinical studies show in vivo tumor regressions across both H1047R and E545K mutation hotspots [123] Pipeline and Future Expectations - Initial clinical data update for RLY-2608 is expected in the first half of 2023 [51] - A GDC-6036 (KRAS G12C) combo trial with RLY-1971 (SHP2) was initiated in July 2021 [51] - Relay Therapeutics reported $898 million in cash, cash equivalents, and investments as of the end of Q1 2022 [51]

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 March 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: 001-39385 RELAY THERAPEUTICS, INC. (Exact Name of Registrant as Specified in its Charter) (State or other jurisdiction of incorporati ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 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 (State or other jurisdicti ...

Company Presentation February 2022 Confidential | © 2022 Relay Therapeutics 1 Disclaimer 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, obje ...

January 2022 RELAY® THERAPE U TI C S 40th Annual J.P. Morgan Healthcare Conference Company Presentation Confidential | © 2022 Relay Therapeutics 1 Disclaimer 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 ...

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, 2021 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) (State or other jurisdiction of incorpo ...

PART I. FINANCIAL INFORMATION Presents unaudited financial statements and management's analysis of financial condition and operations [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details assets, liabilities, and equity, showing a decrease in cash and an increase in contingent consideration liability Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $260,069 | $447,646 | | Investments | $411,151 | $230,415 | | Total current assets | $681,276 | $770,100 | | Total assets | $714,401 | $799,829 | | **Liabilities & Equity** | | | | Total current liabilities | $25,385 | $13,632 | | Contingent consideration liability | $48,465 | $0 | | Total liabilities | $95,872 | $36,536 | | Total stockholders' equity | $618,529 | $763,293 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Reports increased net loss for Q2 and H1 2021, driven by ZebiAI acquisition expenses and rising R&D Statement of Operations Summary (in thousands) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Collaboration revenue | $844 | $0 | $1,796 | $0 | | Research and development expenses | $45,147 | $21,666 | $75,769 | $43,363 | | In-process R&D expenses | $123,000 | $0 | $123,000 | $0 | | General and administrative expenses | $14,422 | $6,053 | $27,156 | $10,814 | | Loss from operations | ($193,580) | ($27,719) | ($235,984) | ($54,177) | | **Net loss** | **($193,399)** | **($26,724)** | **($235,582)** | **($51,610)** | | Net loss per share, basic and diluted | ($2.10) | ($6.06) | ($2.58) | ($12.06) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Shows positive operating cash flow for H1 2021 due to a large receivable payment, with significant investing activities Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $18,500 | ($43,178) | | Net cash provided by (used in) investing activities | ($207,553) | $138,019 | | Net cash provided by financing activities | $3,176 | $258 | | **Net (decrease) increase in cash** | **($185,877)** | **$95,099** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides details on accounting policies, the ZebiAI acquisition, revenue recognition, and commitments - The company is a clinical-stage precision medicines company focused on oncology and genetic diseases, with lead candidates RLY-4008, RLY-2608, and RLY-1971[31](index=31&type=chunk) - On April 22, 2021, the company acquired ZebiAI for upfront consideration of **~$20 million in cash** and **1.88 million shares** of common stock, plus up to **$85 million** in milestone payments and up to **$100 million** in earnout payments[52](index=52&type=chunk) - The ZebiAI acquisition was accounted for as an asset acquisition, resulting in a **$123.0 million** charge for acquired in-process research and development (IPR&D) and an **$11.9 million** loss on initial consolidation of a variable interest entity[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - Under the Genentech agreement for RLY-1971, the company received a **$75 million** upfront payment in January 2021 and a **$5 million** milestone payment in May 2021, recognizing **$1.74 million** in revenue for H1 2021[58](index=58&type=chunk)[69](index=69&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses financial condition, operational results, pipeline, and ZebiAI acquisition, confirming capital sufficiency into 2024 - The company is advancing its pipeline, with RLY-4008 (FGFR2 inhibitor) and RLY-1971 (SHP2 inhibitor) in clinical trials, and IND-enabling studies initiated for RLY-2608 (PI3Kα inhibitor)[87](index=87&type=chunk) - Key corporate developments include the global collaboration with Genentech for RLY-1971, the acquisition of ZebiAI, and a new discovery collaboration with EQRx[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk) - The company believes its cash, cash equivalents, and investments of **$671.2 million** as of June 30, 2021, will fund operating expenses and capital expenditure requirements into **2024**[99](index=99&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Compares operating results for Q2 and H1 2021 vs. 2020, detailing increased net loss due to ZebiAI acquisition and R&D Comparison of Operating Results for the Three Months Ended June 30 (in thousands) | Item | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Revenue | $844 | $0 | $844 | | Research and development | $45,147 | $21,666 | $23,481 | | In-process research and development | $123,000 | $0 | $123,000 | | Loss on initial consolidation of VIE | $11,855 | $0 | $11,855 | | General and administrative | $14,422 | $6,053 | $8,369 | | **Net loss** | **($193,399)** | **($26,724)** | **($166,675)** | Comparison of Operating Results for the Six Months Ended June 30 (in thousands) | Item | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Revenue | $1,796 | $0 | $1,796 | | Research and development | $75,769 | $43,363 | $32,406 | | In-process research and development | $123,000 | $0 | $123,000 | | Loss on initial consolidation of VIE | $11,855 | $0 | $11,855 | | General and administrative | $27,156 | $10,814 | $16,342 | | **Net loss** | **($235,582)** | **($51,610)** | **($183,972)** | [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Details cash position, operating cash flow drivers, and investing activities, confirming capital sufficiency into 2024 - The company had cash, cash equivalents, and investments totaling **$671.2 million** as of June 30, 2021[126](index=126&type=chunk) - Cash from operations was positive for H1 2021 due to the **$75.0 million** upfront payment from Genentech, received in January 2021[126](index=126&type=chunk)[128](index=128&type=chunk) - The company expects its current capital to fund operations and capital expenditures into **2024**[134](index=134&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Assesses market risk from interest rates and foreign currency, concluding no material impact from hypothetical changes - Primary market risk is interest income sensitivity on cash equivalents and investments; a hypothetical **100 basis point** adverse change is not expected to have a material impact[148](index=148&type=chunk) - Foreign currency exchange risk is limited and not considered material, with no formal hedging program implemented[150](index=150&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2021, with no material changes - Management concluded that as of June 30, 2021, the company's disclosure controls and procedures were effective[153](index=153&type=chunk) - No material changes occurred during the quarter affecting internal control over financial reporting[154](index=154&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other required disclosures [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material litigation or legal proceedings as of June 30, 2021 - The company reports no material legal proceedings as of June 30, 2021[157](index=157&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) Outlines material risks: clinical trial uncertainty, third-party reliance, funding needs, and intellectual property challenges [Risks Related to Product Candidates](index=30&type=section&id=Risks%20Related%20to%20Our%20Product%20Candidates) Highlights risks of clinical trial failure, patient enrollment difficulties, and the uncertainty of novel mechanisms of action - The company has never successfully completed any clinical trials and may be unable to do so, potentially delaying or preventing marketing approval[159](index=159&type=chunk) - Difficulties in enrolling patients in clinical trials, especially for targeted populations, could delay or prevent necessary regulatory approvals[166](index=166&type=chunk) - Market opportunities for product candidates may be smaller than estimated, adversely affecting potential revenue and profitability[187](index=187&type=chunk) [Risks Related to Reliance on Third Parties](index=38&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) Details dependence on D. E. Shaw Research, CROs for trials, and single-source CMOs for manufacturing - The company's drug discovery depends heavily on its collaboration with D. E. Shaw Research and their proprietary supercomputer, Anton 2; termination could be materially adverse[200](index=200&type=chunk)[201](index=201&type=chunk) - Reliance on third-party CROs for clinical trials poses risks if they fail to perform or comply with regulations, harming regulatory approval prospects[207](index=207&type=chunk) - Contracting with single-source suppliers for manufacturing product candidates increases risks of insufficient quantities, unacceptable costs, or development delays[215](index=215&type=chunk)[220](index=220&type=chunk) [Risks Related to Financial Position and Capital Needs](index=43&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Ability%20to%20Raise%20Additional%20Capital) Highlights limited operating history, significant losses, and need for substantial funding to avoid program delays - The company has a limited operating history, incurred significant losses since inception, and anticipates continued losses for the foreseeable future[233](index=233&type=chunk)[234](index=234&type=chunk) - Substantial additional funding is required to continue operations; failure to raise capital could force delays, reductions, or elimination of product development programs[239](index=239&type=chunk) [Risks Related to Intellectual Property](index=47&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Focuses on challenges in patent protection, potential infringement claims, and co-ownership disputes with DESRES - Commercialization success depends on obtaining and maintaining sufficient patent protection for technology and products, which may be impaired if unsuccessful[253](index=253&type=chunk) - Third parties may initiate legal proceedings alleging intellectual property infringement, with uncertain and potentially materially adverse outcomes[270](index=270&type=chunk) - Co-owned intellectual property with D. E. Shaw Research under the DESRES Agreement could lead to disputes over rights and control[255](index=255&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports the issuance of 1.88 million common shares in a private offering for the ZebiAI acquisition on April 22, 2021 - On April 22, 2021, the company issued **1,883,487 shares** of common stock to former ZebiAI security holders as part of the acquisition consideration[378](index=378&type=chunk) [Other Information](index=69&type=section&id=Item%205.%20Other%20Information) This section indicates no other information to report - None[379](index=379&type=chunk) [Exhibits](index=70&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including agreements, corporate documents, and officer certifications

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Q1 2021 and 2020, including balance sheets, operations, cash flows, and key accounting notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$771.3 million** as of March 31, 2021, primarily due to a reduction in cash offset by increased investments Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $262,720 | $447,646 | | Investments | $463,355 | $230,415 | | Total current assets | $742,434 | $770,100 | | **Total assets** | **$771,346** | **$799,829** | | **Liabilities & Equity** | | | | Total current liabilities | $16,083 | $13,632 | | **Total liabilities** | **$38,560** | **$36,536** | | **Total stockholders' equity** | **$732,786** | **$763,293** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company recognized its first collaboration revenue while operating expenses significantly increased, widening the net loss to **$42.2 million** for Q1 2021 Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Collaboration revenue | $952 | $0 | | Research and development expenses | $30,622 | $21,700 | | General and administrative expenses | $12,735 | $4,758 | | Loss from operations | ($42,405) | ($26,458) | | **Net loss** | **($42,184)** | **($24,886)** | | **Net loss per share, basic and diluted** | **($0.47)** | **($5.99)** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly improved to **$46.6 million** in Q1 2021, driven by Genentech receivable collection, while investing activities used **$233.6 million** Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $46,640 | ($22,334) | | Net cash provided by (used in) investing activities | ($233,621) | $50,371 | | Net cash provided by financing activities | $2,055 | $351 | | **Net (decrease) increase in cash** | **($184,926)** | **$28,388** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the Genentech collaboration, the subsequent acquisition of ZebiAI Therapeutics, and commitments under the D.E. Shaw Research agreement - In December 2020, the company entered into a collaboration and license agreement with Genentech for RLY-1971, receiving a **$75 million** upfront payment in January 2021. The company is eligible for up to **$695 million** in additional milestones plus tiered royalties[49](index=49&type=chunk)[50](index=50&type=chunk) - As a subsequent event, on April 15, 2021, the company acquired ZebiAI Therapeutics, Inc. for approximately **$85 million** in upfront consideration (**$20 million** cash, **$65 million** stock) plus potential future milestone payments[70](index=70&type=chunk) - The collaboration agreement with D. E. Shaw Research was amended to increase the annual fee from **$7.9 million** to **$9.875 million**, commencing August 16, 2021[66](index=66&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Research and development | $4,151 | $897 | | General and administrative | $5,520 | $558 | | **Total** | **$9,671** | **$1,455** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the clinical pipeline, increased operating expenses, **$1.0 million** in collaboration revenue, and the company's liquidity position expected to fund operations into 2024 - The company's cash, cash equivalents, and investments of **$726.1 million** as of March 31, 2021, are expected to fund operating expenses and capital expenditure requirements into 2024[85](index=85&type=chunk)[111](index=111&type=chunk) Comparison of Results of Operations (in thousands) | Metric | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Revenue | $952 | $0 | | Research and development | $30,622 | $21,700 | | General and administrative | $12,735 | $4,758 | | **Loss from operations** | **($42,405)** | **($26,458)** | - R&D expenses increased by **$8.9 million** year-over-year, primarily due to a **$5.5 million** increase in employee-related costs (including **$3.3 million** in stock-based compensation) and a **$1.7 million** increase in clinical trial expenses for RLY-1971 and RLY-4008[100](index=100&type=chunk) - G&A expenses increased by **$8.0 million** year-over-year, mainly due to a **$6.2 million** increase in personnel costs (including **$5.0 million** in stock-based compensation) and a **$1.7 million** increase in other expenses like insurance[101](index=101&type=chunk) - In April 2021, the company acquired ZebiAI Therapeutics for upfront consideration of approximately **$85.0 million** (**$20.0 million** in cash and **$65.0 million** in common stock), with potential for additional milestone payments[86](index=86&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate sensitivity on its investment portfolio, with minimal foreign currency exchange risk due to U.S.-denominated operations - The company's main market risk is interest rate sensitivity on its cash and investment portfolio. A hypothetical **100 basis point** adverse movement is not expected to have a material impact[123](index=123&type=chunk) - Foreign currency exchange risk is not significant as operations are located in the United States and expenses are generally denominated in U.S. dollars[125](index=125&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[127](index=127&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[128](index=128&type=chunk) [PART II. OTHER INFORMATION](index=26&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business - The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business[132](index=132&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including limited operating history, reliance on third parties for clinical development, need for substantial funding, and challenges related to competition and regulatory hurdles - The company has a limited operating history, has never successfully completed any clinical trials, and has incurred significant operating losses since inception, with an accumulated deficit of **$446.4 million** as of March 31, 2021[134](index=134&type=chunk)[207](index=207&type=chunk) - The business is highly dependent on its collaboration with D. E. Shaw Research and its proprietary supercomputer, Anton 2, for the Dynamo™ platform. Termination of this agreement could materially harm the business[174](index=174&type=chunk)[175](index=175&type=chunk) - The company relies on third parties to conduct clinical trials and manufacture product candidates, increasing risks related to quality, compliance, and supply chain disruptions[181](index=181&type=chunk)[188](index=188&type=chunk) - Substantial additional funding will be required to continue operations. Failure to raise capital when needed could force the company to delay, reduce, or eliminate development programs[212](index=212&type=chunk) - The COVID-19 pandemic poses a risk of material adverse effects on the business, including potential disruptions to clinical trials, supply chains, and employee productivity[221](index=221&type=chunk) - The company is an "emerging growth company" and a "smaller reporting company," which allows for reduced disclosure requirements that could make its common stock less attractive to investors[327](index=327&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of its equity securities during the period covered by this Form 10-Q - There were no unregistered sales of equity securities during the quarter[352](index=352&type=chunk) [Other Information](index=65&type=section&id=Item%205.%20Other%20Information) This section discloses significant agreements, including an amended collaboration with D. E. Shaw Research and a retention agreement with a key executive - On May 12, 2021, the company amended its agreement with D. E. Shaw Research (DESRES), increasing the annual fee from **$7.9 million** to approximately **$9.9 million**, effective August 16, 2021[353](index=353&type=chunk) - On May 10, 2021, the company entered into a retention agreement with Donald Bergstrom, M.D., Ph.D., providing for two potential cash retention payments of **$600,000** each on May 31, 2023, and May 31, 2024, contingent on his continued employment[355](index=355&type=chunk)[356](index=356&type=chunk) [Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report, including the ZebiAI merger agreement, D. E. Shaw Research amendment, and executive retention agreement - Key exhibits filed include the merger agreement for ZebiAI, amendments to the D. E. Shaw Research collaboration, and an executive retention agreement[358](index=358&type=chunk) [Signatures](index=67&type=section&id=Signatures) - The report was duly signed on May 13, 2021, by Sanjiv K. Patel, M.D., President and Chief Executive Officer, and Thomas Catinazzo, Senior Vice President, Finance[364](index=364&type=chunk)