Exclusive License and Option Agreement with Roche

9 Months Ended

Sep. 30, 2026

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Exclusive License and Option Agreement with Roche

Exclusive License and Option Agreement with Roche

In November 2025, the Company entered into an exclusive license and option agreement with Roche Sequencing Solutions, Inc. (“Roche Sequencing”) and a promissory note agreement with Roche Holdings, Inc. (“Roche Holdings”) (the “Roche Promissory Note Agreement”) for a $75.0 million convertible promissory note (the “Roche Convertible Note”). The Company received total proceeds of $75.0 million under these agreements (collectively, the “Roche Agreements”) (see Note 8).

The exclusive license and option agreement with Roche Sequencing (the “Roche License and Option Agreement”) grants Roche Sequencing two rights: (a) an exclusive option (the “Option”) to obtain an exclusive, royalty-bearing, sublicensable (subject to certain restrictions) license to certain of the Company’s intellectual property rights for the manufacture and sale of kitted assays for cancer screening, including for colorectal cancer and lung cancer (the “Licensed Products”), outside the U.S.; and (b) in the event that the Company seeks to enter into a partnering transaction to offer centralized testing services for cancer screening outside the U.S., a preferred partner right to negotiate with the Company a definitive agreement for such partnering transaction. In addition, the Company agreed to conduct an evaluation of the Company’s cancer detection assays using Roche Sequencing’s sequencer (the “SBX Platform”) for no more than two years (the “Evaluation Period”).

Under the Roche License and Option Agreement, Roche Sequencing is obligated to pay the Company a $10.0 million option exercise fee within thirty (30) days of its written notice to exercise the Option.

If Roche Sequencing exercises the Option, the Company may receive up to $100.0 million in milestone payments as well as royalties on non-U.S. test sales that range from low single-digits to mid-teens, depending on sales of the Licensed Products.

The Option can be exercised anytime from November 14, 2025 (date of the Roche License and Option Agreement) through and until one year after the earlier of (i) Licensed Products for at least five separate indications, including CRC and lung cancer as two of such five separate indications, have been approved or cleared by the FDA, or (ii) (x) Licensed Products for CRC and lung cancer have been approved or cleared by the FDA, and (y) the Company has launched Licensed Products as laboratory developed tests under applicable regulatory requirements in the U.S., or Licensed Products have been approved or cleared by the FDA, for three additional separate indications other than CRC and lung cancer (such period, the “Option Term”). The agreement terminates upon the earlier of (i) the expiration of the royalty term for all Licensed Products outside the U.S. if Roche Sequencing exercises the Option, or (ii) if Roche Sequencing does not exercise the Option, three years after the Company has made all commercial assays of the Company available on the SBX Platform or the termination of the SBX evaluation and implementation plans. The Roche License and Option Agreement is subject to termination by either party for the other party’s uncured material breach. Additionally, both the Company and Roche Sequencing have certain specific termination rights, upon sufficient prior written notice. The Company may terminate if, following the exercise of the Option, Roche Sequencing engages in any patent challenge with respect to any licensed patent. The Company also has termination rights if, following receipt of regulatory approval for a licensed product, Roche Sequencing (i) does not initiate commercialization activities for at least one licensed product during the twelve (12) month period following the date of such regulatory approval, or (ii) ceases all commercialization activities for all licensed products for a continuous period of twelve (12) months. Conversely, Roche Sequencing may terminate the agreement if there is a Change of Control at the Company.

The Company evaluated the Roche Agreements together as a single arrangement because they were negotiated at the same time to achieve a single commercial objective. It allocated the $75.0 million of total proceeds first to the Roche Convertible Note at its

initial fair value of $60.0 million (see Note 8), with the residual $15.0 million allocated to the Roche License and Option Agreement. The Company recorded the $15.0 million in other long-term liabilities on the condensed consolidated balance sheet at December 31, 2025.

Upon delivery of the SBX Platform, the Company concluded that the agreement met the criteria for a contract under ASC 606. The $15.0 million of proceeds allocated to the Roche License and Option Agreement was recorded in other long-term liabilities as of December 31, 2025 and was reclassified to deferred revenue upon delivery of the SBX Platform on September 29, 2026.

The Company accounts for the Option under ASC 606 and applies ASC 606 by analogy to the SBX evaluation services. Roche Sequencing had not exercised the Option as of September 30, 2026, or through the date these condensed consolidated financial statements were issued.

The Company identified two distinct performance obligations: (i) the SBX evaluation services and (ii) a material right associated with the Option. Upon exercise of the Option, the material right would entitle Roche Sequencing to the underlying research and development services, preferred partner right, and technology transfer and development plan. The SBX implementation plan is not a performance obligation because the parties must mutually agree to proceed with it after the evaluation.

At the date of SBX Platform delivery, the transaction price of $35.0 million, consisted of $15.0 million of residual proceeds allocated to the Roche License and Option Agreement, and $20.0 million of both fixed and variable consideration for certain milestones and noncash consideration. The noncash consideration of $4.0 million comprised both a sample cohort and reagents that Roche Sequencing provided at no charge. The sample cohort was measured at fair value, based on negotiated pricing for similar samples and sample providers, and the reagents were measured at list price. The Company controls the reagents and samples and may use them in its own research and development beyond the SBX evaluation. The cost of the sample cohort was recorded as an asset upon receipt, as the samples may be used in research and development activities beyond the SBX evaluation, and was expensed to research and development as the samples were consumed. The sample cohort was fully consumed as of September 30, 2026.

Milestone #2 and Milestone #3 are variable consideration payable upon Roche Sequencing’s acceptance of reports on the SBX evaluation. The Company included Milestone #2 in the transaction price because acceptance depends on completing specified evaluation activities, not on the evaluation’s results, so it is probable that a significant reversal of cumulative revenue will not occur. The Company fully constrained and excluded Milestone #3 because it depends on favorable evaluation results that are subject to Roche Sequencing’s review and acceptance and are outside the Company’s control, and because the evaluation has only just begun. Milestone #3 is also payable only if Roche Sequencing does not terminate the SBX implementation plan after Milestone #2. The Company allocated Milestone #2 entirely to the SBX evaluation, and will allocate Milestone #3 to the material right and recognize the related revenue as it performs the SBX implementation plan. The Company applied the variable consideration allocation exception because the milestones relate specifically to its efforts to perform the evaluation, and the allocation is consistent with the allocation objective in ASC 606.

The Company allocated the fixed consideration to the SBX evaluation and the material right on a relative SSP basis.

Consideration allocated to the SBX evaluation is recorded as other current liabilities and recognized over time using a cost-to-cost input method, based on costs incurred relative to total estimated costs, over an expected period of approximately 24 months. Because the evaluation services are not outputs of the Company’s ordinary activities, related amounts are presented in other income. Evaluation activities began in October 2026, after delivery of the SBX Platform on September 29, 2026. Accordingly, the Company did not recognize any amounts in other income for the evaluation during the three or nine months ended September 30, 2026. The amount allocated to the material right remains in deferred revenue until Roche Sequencing exercises the Option or the Option Term expires. If the Option expires unexercised, the Company will recognize the remaining balance at that time.

On September 29, 2026, the Company recorded $8.0 million receivable from Roche Sequencing, a related party, and the Company received $3.4 million non-cash consideration. As of September 30, 2026, the Company had $24.6 million of related-party deferred revenue related to the material right, and $2.3 million of related-party other liabilities related to the SBX evaluation, of which $1.2 million was classified as current and $1.1 million was classified as noncurrent. Roche Sequencing is a related party because it is an affiliate of Roche Holdings. Roche Holdings and an affiliate held an approximately 17% ownership interest in the Company as of September 30, 2026. As of September 30, 2026, the transaction price allocated to unsatisfied performance obligations under the Roche License and Option Agreement was $35.0 million. The Company expects to recognize the amount allocated to the SBX evaluation over approximately 24 months. The Company will recognize the amount allocated to the material right only if Roche Sequencing exercises the Option or when the Option Term expires. The timing is not currently estimable.

As of September 30, 2026, the transaction price allocated to unsatisfied performance obligations under the Roche License and Option Agreement was $34.9 million, of which $24.6 million relates to the material right and $10.3 million to the SBX evaluation, including $8.0 million for Milestone #2. The Company expects to recognize the amount allocated to the SBX evaluation over approximately 24 months. The Company will recognize the amount allocated to the material right only if Roche Sequencing exercises the Option or when the Option Term expires. The timing is not currently estimable.