Organization and Basis of Presentation

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

1. ORGANIZATION AND BASIS OF PRESENTATION

Description of Business

Crinetics Pharmaceuticals, Inc. (the “Company”) is a clinical-stage pharmaceutical company incorporated in Delaware on November 18, 2008 and based in San Diego, California. The Company is focused on the discovery, development and commercialization of novel therapeutics for rare endocrine diseases and endocrine-related tumors. In January 2017, the Company established a wholly-owned Australian subsidiary, Crinetics Australia Pty Ltd (“CAPL”), in order to conduct various preclinical and clinical activities for its development candidates.

Principles of Consolidation and Foreign Currency Transactions

The consolidated financial statements include the accounts of the Company and CAPL. All intercompany accounts and transactions have been eliminated in consolidation. The functional currency of both the Company and CAPL is the U.S. dollar. Assets and liabilities that are not denominated in the functional currency are remeasured into U.S. dollars at foreign currency exchange rates in effect at the balance sheet date except for nonmonetary assets, which are remeasured at historical foreign currency exchange rates in effect at the date of transaction. Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in other income (expense), in the accompanying consolidated statements of operations and comprehensive loss and were not material for all periods presented.

Segment Reporting

Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment.

Liquidity

From inception, the Company has devoted substantially all of its efforts to drug discovery and development and conducting preclinical studies and clinical trials. The Company has a limited operating history and the sales and income potential of the Company’s business and market are unproven. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support the Company’s cost structure. The Company has experienced net losses and negative cash flows from operating activities since its inception and has an accumulated deficit of $439.2 million as of December 31, 2022.

As of December 31, 2022, the Company had $334.4 million in unrestricted cash, cash equivalents and investment securities. To date, the Company has been funded primarily through equity offerings. On August 13, 2019, the Company entered into a sales agreement and prospectus supplement filed on August 12, 2022, whereby the Company may offer and sell shares of its common stock from time to time up to $150.0 million through the sales agents (the “ATM Offering”). As of December 31, 2022, 275,764 shares had been sold through the ATM Offering, for net proceeds of $6.4 million, after deducting commissions of $0.2 million, (see Note 9).

The Company expects to continue to incur net losses for the foreseeable future and believes it will need to raise substantial additional capital to accomplish its business plan over the next several years. The Company plans to continue to fund its losses from operations and capital funding needs through a combination of equity offerings, debt financings or other sources, including potential collaborations, licenses and other similar arrangements. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations and future prospects. There can be no assurance as to the availability or terms upon which such financing and capital might be available in the future.

COVID-19

The extent of the impact of COVID-19 on the Company's operational and financial performance will depend on certain developments, which are highly uncertain and cannot be predicted with confidence. The Company continues to actively monitor COVID-19 and may take further actions that alter its operations, including those that may be required by federal, state or local authorities, or that the Company determines are in the best interests of its employees and other third parties with whom the Company does business. For example, the recent lifting of COVID-19 restrictions and subsequent COVID-19 outbreaks in China have delayed the Company's planned recruitment of patients in our PATHFNDR-2 study. While COVID-19 has not had a material effect on the Company’s financial results, the degree to which COVID-19 or an outbreak of another highly infectious or contagious disease may impact the Company's future financial condition or results of operations is

uncertain, and the Company may continue to experience disruptions that could impact its business, drug manufacturing, nonclinical activities, and clinical trials.