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, 2024

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: 001-38682

KODIAK SCIENCES INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	27-0476525
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1200 Page Mill Road Palo Alto, CA	94304
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 281-0850

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001	KOD	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 31, 2024, the registrant had 52,623,774 shares of common stock, $0.0001 par value per share, outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith beliefs as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “anticipate,” “project,” “target,” “design,” “estimate,” “predict,” “potential,” “plan”, “hope” or the negative of these terms, or similar expressions and comparable terminology intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties, including those set forth under the section of this Quarterly Report on Form 10-Q titled “Part II, Item 1A — Risk Factors” and elsewhere in this Quarterly Report. Forward-looking statements include, but are not limited to, statements about:

•the success, cost and timing of our development activities, preclinical studies, clinical trials and regulatory filings;

•the translation of our preclinical results and data and early clinical trial results in particular relating to safety, efficacy and durability into future clinical trials in humans;

•the continued durability, efficacy and safety of our product candidates;

•the portfolio of clinical trials planned for submission in our Biologics License Application, or BLA, of tarcocimab tedromer (formerly KSI-301, also known as tarcocimab);

•the scope, progress, results and costs of developing any product candidates we have or may develop, and conducting preclinical studies and clinical trials;

•our and Lonza’s ability to successfully execute on our manufacturing development plan;

•the number, size and design of clinical trials that regulatory authorities may require to obtain marketing approval, including the order and number of clinical studies required to support a BLA in retinal vein occlusion, or RVO, diabetic retinopathy, or DR, and wet age-related macular degeneration, or wet AMD, or any of our current or future product candidates, including the sufficiency of a single additional pivotal study of tarcocimab tedromer and a single BLA for wet AMD, RVO and DR together;

•our expectations regarding chemistry manufacturing and controls, or CMC, requirements of the United States Food and Drug Administration, or FDA, and other regulatory bodies to support any BLA submission and potential commercial launch;

•our expectations regarding enhancements and benefits of new formulations of tarcocimab, KSI-501 and KSI-101 or other ABC Platform derived molecules;

•the timing or likelihood of regulatory filings and approvals, including the potential to achieve FDA approval of any product candidates;

•our ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations and/or warnings in the label of any approved product candidate;

•our ability to obtain funding for our operations, including funding necessary to develop, manufacture and commercialize our product candidates;

•the rate and degree of market acceptance of our product candidates;

•the success of competing products or platform technologies that are or may become available;

•our plans and ability to establish sales, marketing and distribution infrastructure to commercialize any product candidates for which we obtain approval;

•our expectation as to the concentration of retinal specialists in the United States and its impact on our sales and marketing plans;

•our expectations regarding our ability to enter into manufacturing-related commitments, and the timing thereof;

•future agreements with third parties in connection with the commercialization of our product candidates;

i

•the size and growth potential of the markets for our product candidates, if approved for commercial use, and our ability to serve those markets;

•existing regulations and regulatory developments in the United States and foreign countries;

•the expected potential benefits of strategic collaboration agreements and our ability to attract collaborators with development, regulatory and commercialization expertise;

•the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;

•potential claims relating to our intellectual property and third-party intellectual property;

•our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•the pricing and reimbursement of our product candidates, if approved;

•the impact of the unfavorable U.S. and global economic conditions on our business and operations, the business and operations of our collaborators, and on the global economy;

•our aspirational goals and objectives related to our human capital resources and workforce objectives;

•our ability to attract and retain key managerial, scientific and medical personnel;

•the accuracy of our estimates regarding the sufficiency of our cash resources, expenses, future revenue, capital requirements and needs for additional financing; and

•our financial performance.

All forward-looking statements are based on information available to us on the date of this Quarterly Report on Form 10-Q and we will not update any of the forward-looking statements after the date of this Quarterly Report on Form 10-Q, except as required by law. Our actual results could differ materially from those discussed in this Quarterly Report on Form 10-Q. The forward-looking statements contained in this Quarterly Report on Form 10-Q, and other written and oral forward-looking statements made by us from time to time, are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements, and you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. Factors that might cause such a difference include, but are not limited to, those discussed in the following discussion and within the section of this Quarterly Report on Form 10-Q titled “Part II, Item 1A — Risk Factors”.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

All brand names or trademarks appearing in this Quarterly Report are the property of their respective holders. Unless the context requires otherwise, references in this Quarterly Report to “Kodiak” the “Company,” “we,” “us,” and “our” refer to Kodiak Sciences Inc. and its subsidiaries.

ii

SELECTED RISKS AFFECTING OUR BUSINESS

Investing in our common stock involves numerous risks, including the risks described in “Part II—Other Information, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects. These risks include, among others, the following:

•We are in the clinical stage of drug development and have a very limited operating history and no products approved for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability.

•We have incurred significant net losses in each period since our inception and anticipate that we will continue to incur significant and increasing net losses for the foreseeable future.

•Drug development is a highly uncertain undertaking and involves a substantial degree of risk. We have never generated any revenue from product sales, and we may never generate revenue or be profitable.

•Our prospects are heavily dependent on our tarcocimab, KSI-501 and KSI-101 product candidates, which are currently in clinical development for multiple indications.

•The failure of pivotal studies of tarcocimab to meet their primary efficacy endpoints may lead us to pause, change or discontinue development of other product candidates based on our ABC Platform.

•Research and development of biopharmaceutical products is inherently risky. We cannot give any assurance that any of our product candidates will receive regulatory, including marketing, approval, which is necessary before they can be commercialized.

•Due to the significant resources required for the development of our product candidates, and depending on our ability to access capital, we must prioritize development of certain product candidates. Moreover, we may expend our limited resources on product candidates that do not yield a successful product and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

•Our plan for the development of tarcocimab, KSI-501 or KSI-101 may be unsuccessful.

•We may encounter substantial delays in our clinical trials, or may not be able to conduct or complete our clinical trials on the timelines we expect, if at all.

•Our clinical trials may fail to demonstrate substantial evidence of the durability, efficacy and safety of our product candidates, which would prevent, delay or limit the scope of regulatory approval and commercialization.

•We face significant competition in an environment of rapid technological and scientific change, and there is a possibility that our competitors may retain their market share with existing drugs, or achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours, which may negatively impact our ability to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.

•The regulatory approval processes of the FDA, EMA and comparable foreign regulatory authorities are lengthy, time consuming, and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our product candidates, we will be unable to generate product revenue and our business will be substantially harmed.

•We expect to rely on third parties to conduct many aspects of our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research or testing.

•We contract with third parties for the manufacture of materials for our product candidates and preclinical studies and clinical trials and for commercialization of any product candidates that we may develop. This reliance on third parties carries and may increase the risk that we will not have sufficient quantities of such materials, product candidates or any medicines that we may develop and commercialize, or that such supply will not be available to us at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

•If we are unable to obtain and maintain patent protection for any product candidates we develop or for our ABC Platform, our competitors could develop and commercialize products or technology similar or identical to ours, and our ability to successfully commercialize any product candidates we may develop, and our technology may be adversely affected.

•We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

•If we fail to obtain additional financing, we may be unable to complete the development and, if approved, commercialization of our product candidates.

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Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	18
PART II.	OTHER INFORMATION	19
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 3.	Defaults Upon Senior Securities	63
Item 4.	Mine Safety Disclosures	63
Item 5.	Other Information	63
Item 6.	Exhibits	64
	Signatures	65

iv

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

Kodiak Sciences Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(Unaudited)

	September 30, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	197,864		$	285,507
Prepaid expenses and other current assets		4,629			3,802
Total current assets		202,493			289,309
Restricted cash		6,184			6,324
Property and equipment, net		106,688			120,482
Operating lease right-of-use asset		48,564			54,541
Other assets		8,740			8,716
Total assets	$	372,669		$	479,372
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	3,292		$	13,608
Accrued and other current liabilities		10,572			18,351
Operating lease liability		10,196			9,770
Total current liabilities		24,060			41,729
Operating lease liability, net of current portion		63,239			71,862
Liability related to sale of future royalties		100,000			100,000
Total liabilities		187,299			213,591
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized;    0 shares issued and outstanding at September 30, 2024 and    December 31, 2023, respectively		—			—
Common stock, $0.0001 par value, 490,000,000 shares authorized    at September 30, 2024 and December 31, 2023; 52,623,087 and    52,508,602 shares issued and outstanding at September 30, 2024 and    December 31, 2023, respectively		5			5
Additional paid-in capital		1,469,998			1,418,307
Accumulated deficit		(1,284,633	)		(1,152,531	)
Total stockholders’ equity		185,370			265,781
Total liabilities and stockholders’ equity	$	372,669		$	479,372

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Kodiak Sciences Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2024			2023			2024			2023
Operating expenses
Research and development	$	31,878		$	36,188		$	94,323		$	159,669
General and administrative		14,754			18,312			46,347			54,278
Total operating expenses		46,632			54,500			140,670			213,947
Loss from operations		(46,632	)		(54,500	)		(140,670	)		(213,947	)
Interest income		2,711			4,536			9,018			12,836
Interest expense		—			(5	)		—			(13	)
Other income (expense), net		(25	)		(38	)		(450	)		149
Net loss	$	(43,946	)	$	(50,007	)	$	(132,102	)	$	(200,975	)
Net loss per common share, basic and diluted	$	(0.84	)	$	(0.95	)	$	(2.51	)	$	(3.84	)
Weighted-average shares of common stock outstanding used    in computing net loss per common share, basic and diluted		52,616,183			52,455,620			52,560,489			52,391,083
Other comprehensive income (loss)
Change in unrealized gains (losses) related to available-for-sale    debt securities, net of tax		—			—			—			1,307
Total other comprehensive income (loss)		—			—			—			1,307
Comprehensive loss	$	(43,946	)	$	(50,007	)	$	(132,102	)	$	(199,668	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Kodiak Sciences Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share and per share amounts)

(Unaudited)

	Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Income (Loss)			Deficit			Equity
Balances at December 31, 2023		52,508,602	$	5	$	1,418,307	$	—		$	(1,152,531	)	$	265,781
Issuance of common stock upon    exercise of stock options		8,333		—		38		—			—			38
Issuance of common stock upon    vesting of restricted stock units		6,512		—		—		—			—			—
Stock-based compensation    expense		—		—		18,409		—			—			18,409
Net loss		—		—		—		—			(43,039	)		(43,039	)
Balances at March 31, 2024		52,523,447		5		1,436,754		—			(1,195,570	)		241,189
Issuance of common stock upon    vesting of restricted stock units		64,476		—		—		—			—			—
Issuance of common stock    pursuant to employee stock    purchase plan		26,806		—		59		—			—			59
Stock-based compensation    expense		—		—		18,375		—			—			18,375
Net loss		—		—		—		—			(45,117	)		(45,117	)
Balances at June 30, 2024		52,614,729		5		1,455,188		—			(1,240,687	)		214,506
Issuance of common stock upon    vesting of restricted stock units		8,358		—		—		—			—			—
Stock-based compensation    expense		—		—		14,810		—			—			14,810
Net loss		—		—		—		—			(43,946	)		(43,946	)
Balances at September 30, 2024		52,623,087	$	5	$	1,469,998	$	—		$	(1,284,633	)	$	185,370
	Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital		Income (Loss)			Deficit			Equity
Balances at December 31, 2022		52,333,850	$	5	$	1,329,509	$	(1,307	)	$	(892,040	)	$	436,167
Issuance of common stock upon    exercise of stock options		1,098		—		9		—			—			9
Issuance of common stock upon    vesting of restricted stock units		9,793		—		—		—			—			—
Stock-based compensation    expense		—		—		25,980		—			—			25,980
Other comprehensive income		—		—		—		1,211			—			1,211
Net loss		—		—		—		—			(70,780	)		(70,780	)
Balances at March 31, 2023		52,344,741		5		1,355,498		(96	)		(962,820	)		392,587
Issuance of common stock upon    exercise of stock options		6,430		—		51		—			—			51
Issuance of common stock upon    vesting of restricted stock units		76,152		—		—		—			—			—
Issuance of common stock    pursuant to employee stock    purchase plan		25,840		—		131		—			—			131
Stock-based compensation    expense		—		—		25,801		—			—			25,801
Other comprehensive income		—		—		—		96			—			96
Net loss		—		—		—		—			(80,188	)		(80,188	)
Balances at June 30, 2023		52,453,163		5		1,381,481		—			(1,043,008	)		338,478
Issuance of common stock upon    vesting of restricted stock units		14,128		—		—		—			—			—
Stock-based compensation    expense		—		—		13,946		—			—			13,946
Net loss		—		—		—		—			(50,007	)		(50,007	)
Balances at September 30, 2023		52,467,291	$	5	$	1,395,427	$	—		$	(1,093,015	)	$	302,417

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Kodiak Sciences Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2024			2023
Cash flows from operating activities
Net loss	$	(132,102	)	$	(200,975	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		14,084			13,572
Stock-based compensation		51,594			65,727
Net amortization (accretion) of premium (discount) on marketable securities		—			(846	)
Settlement of derivative contracts		355			(314	)
Amortization of operating lease right-of-use asset		5,940			5,711
Amortization of issuance costs		—			4
Changes in assets and liabilities:
Prepaid expenses and other current assets		(827	)		6,994
Other assets		(24	)		410
Accounts payable		(10,330	)		3,114
Accrued and other current liabilities		(7,779	)		(8,263	)
Operating lease liability		(8,160	)		(7,078	)
Net cash provided by (used in) operating activities		(87,249	)		(121,944	)
Cash flows from investing activities
Purchase of property and equipment		(251	)		(13,866	)
Deposits on property and equipment		(25	)		(77	)
Purchase of marketable securities		—			(49,347	)
Maturities of marketable securities		—			340,000
Settlement of derivative contracts		(355	)		314
Net cash provided by (used in) investing activities		(631	)		277,024
Cash flows from financing activities
Proceeds from issuance of common stock upon options exercise		38			60
Proceeds from issuance of common stock pursuant to employee stock purchase plan		59			131
Principal payments of tenant improvement allowance payable		—			(36	)
Net cash provided by (used in) financing activities		97			155
Net increase (decrease) in cash, cash equivalents and restricted cash		(87,783	)		155,235
Cash, cash equivalents and restricted cash, at beginning of period		291,831			196,757
Cash, cash equivalents and restricted cash, at end of period	$	204,048		$	351,992
Reconciliation of cash, cash equivalents and restricted cash to consolidated balance sheets
Cash and cash equivalents	$	197,864		$	345,668
Restricted cash		6,184			6,324
Total cash, cash equivalents and restricted cash in consolidated balance sheets	$	204,048		$	351,992
Supplemental disclosures of non-cash investing and financing information:
Operating lease right-of-use asset obtained in exchange for operating lease liability	$	(49	)	$	2,668
Purchase of property and equipment under accounts payable and accruals	$	14		$	27,465

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Kodiak Sciences Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. The Company

Kodiak Sciences Inc. (the “Company”) is a clinical stage biopharmaceutical company committed to researching, developing and commercializing transformative therapeutics to treat a broad spectrum of retinal diseases. The Company devotes substantially all of its resources to the research and development of its product platforms and product candidates including activities to conduct clinical studies of its product candidates, manufacture product candidates and provide general and administrative support for these operations.

Liquidity

As of September 30, 2024, the Company had cash and cash equivalents of $197.9 million. Although the Company has incurred significant operating losses since inception and expects to continue to incur operating losses and negative operating cash flows for the foreseeable future, the Company believes that the cash and cash equivalents will be sufficient to meet the anticipated operating and capital expenditure requirements for the 12 months following the date of this Quarterly Report on Form 10-Q.

The Company plans to raise additional funding based on the status of its clinical trials and projected cash flows. While the Company has been able to raise multiple rounds of financing, there can be no assurance that such financing will be available on terms which are favorable or at all.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to interim periods. The condensed consolidated financial statements, in the opinion of management, include all normal and recurring adjustments necessary to state fairly the Company's financial position and results of operations for the reported periods.

These condensed consolidated financial statements have been prepared on a basis substantially consistent with, and should be read in conjunction with the audited financial statements for the year ended December 31, 2023 and notes thereto, including the Company’s critical accounting policies for accrued research and development, stock-based compensation, and impairment of long-lived assets, the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 28, 2024. Certain information and note disclosures normally included in the audited financial statements prepared in accordance with GAAP have been condensed or omitted from this report. The results of operations for any interim period are not necessarily indicative of the results for the year ending December 31, 2024, or for any future period.

The accompanying condensed consolidated financial statements reflect the operations of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and expenses during the reporting period. Such estimates include, but are not limited to, accrued research and development, stock-based compensation and impairment of long-lived assets. Actual results could differ from those estimates.

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Kodiak Sciences Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

Risks and Uncertainties

Global economic and business activities continue to face widespread macroeconomic uncertainties, including health epidemics, labor shortages, bank failures, inflation and monetary supply shifts, recession risks and potential disruptions from the geopolitical conflicts. The Company continues to actively monitor the impact of these macroeconomic factors on its financial condition, liquidity, operations, and workforce. The extent of the impact of these factors on the Company’s operational and financial performance, including its ability to execute its business strategies and initiatives in the expected timeframe, will depend on future developments, which are uncertain and cannot be predicted; however, any continued or renewed disruption resulting from these factors could negatively impact the Company’s business.

The Company’s future results of operations involve a number of risks and uncertainties common to clinical stage companies in the biotechnology industry. The Company’s product candidates are in development and the Company operates in an environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s potential drug candidates, uncertainty of market acceptance of any of the Company’s product candidates that receive regulatory approval, competition from new technological innovations, substitute products and larger companies, securing and protecting proprietary technology, strategic relationships and dependence on key individuals, contract manufacturer and research organizations, and other suppliers.

Products developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance that any of the Company’s product candidates will receive the necessary approvals. If the Company is denied approval, approval is delayed or the Company is unable to maintain approvals, it could have a materially adverse impact on the Company. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales.

The Company expects to incur substantial operating losses for the next several years and will need to obtain additional financing in order to complete clinical trials, launch and commercialize any product candidates for which it receives regulatory approval. There can be no assurance that such financing will be available or will be on terms acceptable by the Company.

Summary of Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended September 30, 2024, are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, except as noted below within the “Recent Accounting Pronouncements” section.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB"), under its Accounting Standards Codification ("ASC") or other standard setting bodies and adopted by the Company as of the specified effective date.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), which requires disclosure of incremental segment information on an annual and interim basis, including enhanced disclosures for companies that have a single reportable segment. The amendment is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024, and early adoption is permitted. The Company is currently assessing the impact of this amendment on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), which enhances the disclosures required for income taxes in annual consolidated financial statements. The amendment is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company is currently assessing the impact of this amendment on its consolidated financial statements and related disclosures.

6

Kodiak Sciences Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

3. Accrued and Other Current Liabilities

Accrued and other current liabilities consist of the following (in thousands):

	September 30, 2024		December 31, 2023
Accrued salaries and benefits	$	5,037	$	6,078
Accrued manufacturing and research & development costs		2,626		8,662
Accrued clinical trial and related costs		2,137		2,701
Accrued legal fees and professional fees		429		196
Accrued other liabilities		343		714
Total accrued and other current liabilities	$	10,572	$	18,351

4. Fair Value Measurements

The following tables present the Company’s fair value hierarchy for assets measured at fair value on a recurring basis (in thousands):

	Fair Value Measurements at September 30, 2024
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	194,728	$	—	$	—	$	194,728
Total	$	194,728	$	—	$	—	$	194,728
	Fair Value Measurements at December 31, 2023
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	274,466	$	—	$	—	$	274,466
Total	$	274,466	$	—	$	—	$	274,466

As of September 30, 2024, the fair value of the liability related to sale of future royalties is based on the Company's current estimates of future royalties expected to be paid to Baker Bros. Advisors, LP (“BBA”), which are considered Level 3 inputs.

5. Commitments and Contingencies

Leases

Palo Alto, California Leases

In June 2020, the Company entered into lease agreements for two buildings at 1200 and 1250 Page Mill Road in Palo Alto, California, which are now the Company’s U.S. corporate offices. Under ASC 842, the Company classified these leases as operating leases and recorded right-of-use assets and lease liabilities on the lease commencement date.

Switzerland Lease

In April 2020, the Company entered into a lease agreement for office and laboratory space at Rottenstrasse 5 in Visp, Switzerland. Under ASC 842, the Company classified this lease as an operating lease and recorded a right-of-use asset and lease liability on the lease commencement date.

Ursus Facility

In August 2020, the Company and its wholly owned subsidiary Kodiak Sciences GmbH entered into a manufacturing agreement with Lonza Ltd (“Lonza”) for the clinical and commercial supply of the Company’s antibody biopolymer conjugate drug substance which included a custom-built manufacturing facility. In April 2021, the agreement was amended to provide for greater manufacturing flexibility, to define a comprehensive mandate as an antibody biopolymer conjugates manufacturing facility to be used for the Company’s antibody biopolymer conjugates pipeline, at clinical as well as commercial scales, across a broad capacity range under the tight quality controls required for ophthalmology and retinal medicines, and to allow for future process and equipment changes as needed. The Company concluded that this agreement contained an embedded lease as the custom-built manufacturing suite would be dedicated for the Company’s use. Under ASC 842, the Company classified the lease portion as an operating lease and recorded a right-of-use asset and lease liability on the lease commencement date.

7

Kodiak Sciences Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

Manufacturing Agreements

The Company has entered into service and equipment purchase agreements and manufacturing agreements in the normal course of business with various providers, pursuant to which such providers agreed to perform activities in connection with the manufacturing process of certain materials. These agreements, and any related amendments, state that planned activities and purchases that are included in the signed work orders are, in some cases, binding and, hence, obligate the Company to pay the full price of the work order upon satisfactory delivery of products and services or obligate the Company to the binding amount regardless of whether such planned activities are in fact performed. Per the terms of the agreements, the Company has the option to cancel signed orders at any time upon written notice, which may or may not be subject to payment of a cancellation fee. The level of cancellation fees may be dependent on the timing of the written notice in relation to the commencement date of the work, with the maximum cancellation amount dependent on the agreement or the work order.

Other Funding Commitments

In the normal course of business, the Company enters into agreements with third-parties for services to be provided to the Company. Generally, these agreements provide for termination upon notice, with specified amounts due upon termination based on the timing of termination and the terms of the agreement. The actual amounts and timing of payments under these agreements are uncertain and contingent upon the initiation and completion of services to be provided to the Company.

The Company has also entered into various cancellable license agreements for certain technology. The Company may be obligated to make payments on future sales of specified products associated with such license agreements. Such payments are dependent on future product sales and are not estimable.

Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising from the ordinary course of its business. Management is currently not aware of any matters that could have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company records a legal liability when it believes that it is both probable that a liability may be imputed, and the amount of the liability can be reasonably estimated. Significant judgment by the Company is required to determine both probability and the estimated amount.

Indemnification

To the extent permitted under Delaware law, the Company has agreed to indemnify its directors and officers for certain events or occurrences while the director or officer is, or was serving, at the Company’s request in such capacity. The indemnification period covers all pertinent events and occurrences during the director’s or officer’s service. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not specified in the agreements; however, the Company has director and officer insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.

8

Kodiak Sciences Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

6. Stock-Based Compensation

In January 2024 and 2023, the number of shares of common stock available for issuance under the 2018 Equity Incentive Plan (the "2018 Plan") was increased by approximately 2.1 million shares in each period, as a result of the automatic increase provision in the 2018 Plan.

Stock Options

Stock option activity, including stock options and performance-based stock options under the 2021 Long-Term Performance Incentive Plan (“2021 LTPIP”), 2018 Plan and 2015 Plan is summarized as follows:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2023		17,601,466		$	43.86		7.29	$	933
Granted		4,173,150		$	2.56
Exercised		(8,333	)	$	4.54
Forfeited or canceled		(1,105,760	)	$	31.29
Outstanding at September 30, 2024		20,660,523		$	36.21		7.10	$	1,190

Restricted Shares

Restricted share activity, including restricted stock awards, restricted stock units, and performance-based restricted stock units, under the 2018 Plan is summarized as follows:

	Number of Restricted Shares			Weighted Average Grant Date Fair Value
Unvested at December 31, 2023		164,817		$	49.87
Granted		64,200		$	3.02
Vested		(79,346	)	$	60.15
Canceled		(27,322	)	$	44.73
Unvested at September 30, 2024		122,349		$	19.77

Stock-Based Compensation Expense

Stock-based compensation is classified in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2024		2023		2024		2023
Research and development	$	6,295	$	2,733	$	23,936	$	32,093
General and administrative		8,515		11,213		27,658		33,634
Total stock-based compensation	$	14,810	$	13,946	$	51,594	$	65,727

9

Kodiak Sciences Inc.

Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

7. Net Loss per Common Share

The following common share equivalents were excluded from the computation of diluted net loss per common share for the periods presented because their inclusion would have been antidilutive:

	As of September 30,
	2024		2023
Outstanding stock options		20,660,523		18,629,117
Unvested restricted shares		122,349		186,267
Total		20,782,872		18,815,384

10

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

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this report and with our audited financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2023, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on March 28, 2024. This discussion and analysis and other parts of this report contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives, expectations, forecasts and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under the section of this report titled “Part II, Item 1A — Risk Factors” and elsewhere in this report.

Overview

Kodiak Sciences (“we”, the “Company” or “Kodiak”) is a biopharmaceutical company committed to researching, developing, and commercializing transformative therapeutics to treat a broad spectrum of retinal diseases. We are focused on bringing new science to the design and manufacture of next generation retinal medicines to prevent and treat the leading causes of blindness globally. Our ABC Platform™ uses molecular engineering to merge the fields of protein-based and chemistry-based therapies and has been at the core of Kodiak's discovery engine. We are developing a portfolio of three clinical programs, two of which are late-stage today and derived from our ABC Platform and one which is platform-independent and which we believe can progress rapidly into pivotal studies.

Kodiak's lead investigational medicine, tarcocimab, is a novel anti-VEGF antibody biopolymer conjugate under development for the treatment of high prevalence retinal vascular diseases. Tarcocimab is currently being studied in two Phase 3 clinical trials, GLOW2 in patients with diabetic retinopathy and DAYBREAK in patients with wet AMD. Both studies are actively enrolling patients.

KSI-501 is our second investigational medicine, a first-in-class anti-IL-6, VEGF-trap bispecific antibody biopolymer conjugate designed to inhibit both IL-6 mediated inflammation and VEGF-mediated angiogenesis and vascular permeability. KSI-501 is being developed for the treatment of high prevalence retinal vascular diseases to address the unmet needs of extended durability and targeting disease biology beyond VEGF for differentiated efficacy. The Phase 3 DAYBREAK study of KSI-501 in wet AMD is actively enrolling patients.

KSI-101, our third product candidate, is a novel anti-IL-6, VEGF-trap bispecific protein. Kodiak is developing KSI-101 for the treatment of retinal inflammatory diseases, as currently there are no available intravitreal biologic therapies addressing the spectrum of inflammatory conditions of the retina. The Phase 1b APEX study of KSI-101 is actively enrolling patients, as a precursor to activating the Phase 2b/3 PEAK and PINNACLE studies in patients with macular edema secondary to inflammation (“MESI”).

Kodiak is advancing its platform technology to embed small molecules and other active pharmaceutical ingredients ("APIs") into Kodiak's proprietary biopolymer backbone to enable high drug-antibody-ratio ("DAR") medicines. The diverse APIs are designed to be released over time to achieve targeted, multi-specific and tailored modulation of biological pathways. The unique combination of high DAR and tailored therapeutic benefit offers potential for broad application to multifactorial diseases and builds directly from our Antibody Biopolymer Conjugate technology and its 15 years of design, development and manufacturing experience. We call this platform extension our Antibody Biopolymer Conjugate Drug (“ABCD”) Platform because we are extending our platform capabilities to include the conjugation of small molecule drugs whereas historically we conjugated biologics such as antibodies.

Recent Updates

•Investor R&D Day: We hosted an Investor R&D Day with financial analysts and institutional investors on September 23, 2024, in New York City, with a webcast available for virtual attendees. The event featured presentations and roundtable discussions on Kodiak’s science of durability, including (i) first-time presentation of human ocular half-life data of tarcocimab, (ii) science of the enhanced formulation for the Antibody Biopolymer Conjugate (“ABC”) Platform, including how the enhanced formulations of tarcocimab and KSI-501 are designed to provide strong immediacy while preserving their signature 6-month durability profile, (iii) updates on our clinical programs including rationale on how our pivotal Phase 3 studies GLOW2 and DAYBREAK are designed to maximize probability of success, and (iv) new progress on our preclinical pipeline including new glaucoma and geographic atrophy programs built from our ABCD Platform.

Leading retina specialist key opinion leaders Dr. David Brown and Dr. Charles Wykoff joined us at the event as guest speakers and shared their perspectives. The event was well-attended by financial analysts and invited institutional investors.

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•Tarcocimab Clinical Program: In the third quarter of 2024 we continued enrollment for the ongoing Phase 3 GLOW2 study of tarcocimab in diabetic retinopathy (“DR”).

GLOW2 is a prospective, randomized, double-masked, multi-center pivotal superiority study designed to evaluate the efficacy and safety of tarcocimab tedromer in treatment-naïve patients with DR. Patients are randomized 1:1 to receive either sham injections or tarcocimab via intravitreal injection at baseline, Week 4, Week 8, Week 20 and Week 44. The primary endpoint is the proportion of eyes improving ≥2 steps on Diabetic Retinopathy Severity Scale (“DRSS”) from baseline at Week 48. Additional outcome measures include the proportion of eyes developing a sight threatening complication of diabetic retinopathy and the proportion of eyes improving ≥3 steps on DRSS from baseline at Week 48.

GLOW2 is the second Phase 3 study of tarcocimab in DR in which all patients randomized to investigational therapy will receive tarcocimab on extended, 6-month dosing. The GLOW2 study design mirrors that of the successful GLOW1 Phase 3 study with the benefit of an additional, third monthly loading dose (baseline, Week 4, Week 8). If successful, GLOW2 could serve as one of the two successful pivotal studies in one foundational indication, diabetic retinopathy, to support the marketing authorization application for tarcocimab.

In the third quarter of 2024, we continued site activations and patient enrollment for the Phase 3 DAYBREAK study in wet age-related macular degeneration (“AMD”). The DAYBREAK study includes tarcocimab in a second investigational arm against active comparator aflibercept and incorporates learnings from prior pivotal trials of tarcocimab to maximize the probability of meeting the primary endpoint of non-inferiority in visual acuity gains. Patients randomized to tarcocimab will receive individualized dosing every 4 to 24 weeks on an as needed basis following four monthly loading doses. Patients randomized to aflibercept will be dosed per its label. The individualized dosing of tarcocimab is determined by a treat-to-dryness proactive approach using presence of retinal fluid as a disease activity marker which (i) is the way retina specialists actually treat patients in the real world, (ii) results in a treatment every time it is needed, (iii) prevents undertreatment, and (iv) enhances the probability of meeting the primary endpoint. The objectives for tarcocimab in DAYBREAK are to assess its 6-month durability potential, strengthen its competitive position in wet AMD, and bolster the regulatory application package for the program.

Both GLOW2 and DAYBREAK use tarcocimab’s enhanced 50 mg/mL formulation containing both conjugated and unconjugated antibody that is intended to balance immediacy and durability.

•KSI-501 Clinical Program: The objective for KSI-501 in DAYBREAK is to explore the efficacy potential of bispecific VEGF and IL-6 inhibition in a broad treatment-naïve wet AMD population. In preclinical models, KSI-501 was shown to be a potent inhibitor of VEGF and IL-6 and, further, was shown to normalize the blood retinal barrier opening the possibility that KSI-501 may be a disease-modifying therapy for retinal vascular diseases.

In the third quarter of 2024, we continued site activations and patient enrollment for the Phase 3 DAYBREAK study in wet AMD. DAYBREAK is a non-inferiority study including parallel investigational arms of KSI-501 and tarcocimab against active comparator aflibercept. Patients randomized to KSI-501 will receive fixed every 8-week dosing with additional individualized dosing (up to monthly dosing) on an as needed basis after four monthly loading doses. Patients randomized to aflibercept will be dosed per its label. Using the same treat-to-dryness approach as tarcocimab, coupled with fixed intensive proactive dosing, maximizes both the probability of meeting the primary endpoint as well as the probability of demonstrating additional efficacy benefits.

DAYBREAK uses KSI-501’s enhanced 50 mg/mL formulation containing both conjugated and unconjugated antibody that is intended to balance immediacy and durability.

•KSI-101 Clinical Program: We continued site activation and patient enrollment in the third quarter of 2024 for the Phase 1b APEX study of KSI-101. KSI-101 is a novel, potent and high-strength (100 mg/mL) bispecific protein targeting IL-6 and VEGF, which is a “traditional” (unconjugated) intravitreal biologic. The APEX study evaluates KSI-101 in two cohorts, Cohort 1 in patients with diabetic macular edema (“DME”) and Cohort 2 in patients with macular edema secondary to inflammation (“MESI”). The goal of the APEX study is to evaluate the safety and tolerability of KSI-101 and to identify two dose levels to progress into dual Phase 2b/3 studies (PEAK and PINNACLE) in MESI.

•ABCD Platform™: We are expanding our research pipeline of duets and triplets built from our modular ABCD Platform that embeds diverse active pharmaceutical ingredients ("API") including small molecules, proteins, peptides, macrocycles, and oligonucleotides in the biopolymer backbone to enable high drug antibody ratio ("DAR") medicines with targeted, multi-specific, tailored modulation of biological pathways for ophthalmic and systemic diseases. We recently shared at the Investor R&D Day that we are advancing two preclinical programs built on the ABCD Platform.

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One program is for the treatment of glaucoma, embedding in the biopolymer backbone (i) an NLRP3 small molecule inhibitor, and (ii) a second small molecule that lowers intraocular pressure (“IOP”). The NLRP3 inflammasome is an intracellular complex that drives inflammation and cell death and is known to play a key role in glaucoma progression. The goal of this program is to create an intravitreally injected therapy that delivers two mechanisms of action (“MOA”) in a sustained release fashion, to fulfill the unmet needs in the glaucoma field for non-topical, long-durability therapy that delivers MOAs beyond IOP lowering.

The second program is for the treatment of dry AMD. Currently there are no approved therapies for early or intermediate-stage dry AMD. There are two approved therapies, both complement inhibitors, for geographic atrophy (“GA”), the advanced stage of dry AMD. These therapies require monthly or every other month intravitreal injections and neither sufficiently halts disease progression. This program at Kodiak explores the potential of embedding in the biopolymer backbone (i) a macrocyclic peptide inhibitor of the complement pathway, and (ii) an NLRP3 small molecule inhibitor. The NLRP3 inflammasome is known to play a key role in AMD disease etiology. The objective of this program is to create an intravitreally injected ABCD platform-enabled therapy with a dual mechanism of action to achieve better efficacy and extended durability as compared to currently approved therapies for GA.

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Components of Operating Results

Research and Development Expenses

Substantially all of our research and development expenses consist of expenses incurred in connection with the development of our product candidates and ABC Platform. These expenses include certain payroll and personnel expenses, including stock-based compensation, for our research and product development employees; laboratory supplies and facility costs; consulting costs; contract manufacturing and fees paid to CROs to conduct certain research and development activities on our behalf; and allocated overhead, including rent, equipment, depreciation and utilities. We expense both internal and external research and development expenses as they are incurred. Costs of certain activities, such as manufacturing and preclinical and clinical studies, are generally recognized based on an evaluation of the progress to completion of specific tasks. Nonrefundable payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized. The capitalized amounts are recognized as expense as the goods are delivered or the related services are performed.

We are focusing substantially all of our resources and development efforts on the development of our product candidates. Predicting the timing or the final cost to complete our clinical program or validation of our commercial manufacturing and supply processes is difficult and delays may occur because of many factors, including factors outside of our control. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. Furthermore, we are unable to predict when or if our drug candidates will receive regulatory approval with any certainty.

General and Administrative Expenses

General and administrative expenses consist principally of payroll and personnel expenses, including stock-based compensation; professional fees for legal, consulting, accounting and tax services; compliance costs associated with being a public company; allocated overhead, including rent, equipment, depreciation and utilities; and other general operating expenses not otherwise classified as research and development expenses.

Interest Income

Interest income consists primarily of interest income earned on our cash and cash equivalents.

Other Income (Expense), Net

Other income (expense), net consists primarily of the change in fair value and settlement of derivative contracts and tax expense.

Results of Operations

The following table summarizes the results of our operations for the periods indicated, in thousands:

	Three Months Ended   September 30,									Nine Months Ended   September 30,
	2024			2023			Change			2024			2023			Change
Operating expenses
Research and development	$	31,878		$	36,188		$	(4,310	)	$	94,323		$	159,669		$	(65,346	)
General and administrative		14,754			18,312			(3,558	)		46,347			54,278			(7,931	)
Loss from operations		(46,632	)		(54,500	)		7,868			(140,670	)		(213,947	)		73,277
Interest income		2,711			4,536			(1,825	)		9,018			12,836			(3,818	)
Interest expense		—			(5	)		5			—			(13	)		13
Other income (expense), net		(25	)		(38	)		13			(450	)		149			(599	)
Net loss	$	(43,946	)	$	(50,007	)	$	6,061		$	(132,102	)	$	(200,975	)	$	68,873

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Research and Development Expenses

The following table summarizes our research and development expenses for the periods indicated, in thousands:

	Three Months Ended   September 30,							Nine Months Ended   September 30,
	2024		2023		Change			2024		2023		Change
Tarcocimab program expenses	$	9,361	$	17,175	$	(7,814	)	$	24,487	$	77,971	$	(53,484	)
KSI-501 and KSI-101 program    expenses		2,285		1,427		858			5,586		3,171		2,415
ABC Platform and other    program expenses		3,083		4,191		(1,108	)		8,784		13,380		(4,596	)
Payroll and personnel expenses		11,563		7,684		3,879			40,414		47,867		(7,453	)
Facilities and other research and    development expenses		5,586		5,711		(125	)		15,052		17,280		(2,228	)
Total research and development    expenses	$	31,878	$	36,188	$	(4,310	)	$	94,323	$	159,669	$	(65,346	)

Tarcocimab program expenses decreased $7.8 million and $53.5 million during the three and nine months ended September 30, 2024 as compared to the same periods in 2023, primarily driven by reduced manufacturing activities and decreased clinical activities for completed trials, partially offset by costs from active clinical trials for the tarcocimab development program.

KSI-501 and KSI-101 program expenses increased $0.9 million during the three months ended September 30, 2024 as compared to the same period in 2023, due to increased clinical activities of KSI-501 and KSI-101. KSI-501 and KSI-101 program expenses increased $2.4 million during the nine months ended September 30, 2024 as compared to the same period in 2023, stemming from manufacturing activities in the first half of 2024 as well as expanding clinical activities.

ABC Platform and other program expenses decreased $1.1 million and $4.6 million during the three and nine months ended September 30, 2024 as compared to the same periods in 2023, due to reduced manufacturing activities.

Payroll and personnel expenses increased $3.9 million and decreased $7.5 million during the three and nine months ended September 30, 2024 as compared to the same periods in 2023. The fluctuations in payroll and personnel expenses were primarily driven by timing of forfeitures of equity awards.

Facilities and other research and development expenses decreased $0.1 million and $2.2 million during the three and nine months ended September 30, 2024 as compared to the same periods in 2023, primarily driven by reduced costs for digital transformation activities as well as currency fluctuations in the revaluation of our lease and capital obligations.

General and Administrative Expenses

General and administrative expenses decreased $3.6 million and $7.9 million during the three and nine months ended September 30, 2024 as compared to the same periods in 2023. The decrease was primarily driven by stock-based compensation expense related to previously issued higher value awards becoming fully vested.

Liquidity and Capital Resources; Plan of Operations

Sources of Liquidity

We have funded our operations primarily through the issuance of common stock and the sale of future royalties. As of September 30, 2024, we had cash and cash equivalents of $197.9 million. We believe that our current cash and cash equivalents will be sufficient to support our current and planned operations into 2026.

Future Funding Requirements

We have incurred net losses since our inception. For the three and nine months ended September 30, 2024, we had net loss of $43.9 million and $132.1 million, of which $14.8 million and $51.6 million related to non-cash stock-based compensation expense, respectively. We expect to continue to incur additional losses in future periods. As of September 30, 2024, we had an accumulated deficit of $1,284.6 million. We believe that the cash and cash equivalents will be sufficient to meet our anticipated operating and capital expenditure requirements at least 12 months following the date of this Quarterly Report on Form 10-Q.

We have based these estimates on assumptions that may prove to be wrong, and we could deplete our available capital resources sooner than we expect. Because of the risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of many factors.

15

To date, we have not generated any product revenue. We do not expect to generate any product revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates or enter into collaborative agreements with third parties, and we do not know when, or if, either will occur. We expect to continue to incur significant losses for the foreseeable future, and we expect our losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to all of the risks typically related to the development of new product candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.

We have based these estimates on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. The timing and amount of our operating expenditures and capital requirements will depend on many factors, including:

•the scope, timing, rate of progress and costs of our drug discovery, preclinical development activities, laboratory testing and clinical trials for our product candidates;

•the number and scope of clinical programs we decide to pursue;

•the scope and costs of manufacturing development and commercial manufacturing activities;

•the extent to which we acquire or in-license other product candidates and technologies;

•the cost, timing and outcome of regulatory review of our product candidates;

•the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

•our ability to establish and maintain collaborations on favorable terms, if at all;