Summary of Significant Accounting Policies and Basis of Presentation (Policies)	9 Months Ended
Sep. 30, 2025
Summary of Significant Accounting Policies and Basis of Presentation
Basis of Presentation	Basis of Presentation The condensed consolidated financial statements and accompanying notes are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting and do not contain all information that is included in the annual financial statements and notes thereto of the Company. The Company’s unaudited condensed consolidated financial statements include the accounts of its subsidiaries, and all intercompany transactions were eliminated. The Company’s unaudited condensed consolidated financial statements include the accounts of its subsidiaries ACELYRIN and WH2, LLC after the closing of the ACELYRIN Merger, and the accounts of Merger Sub from its incorporation in January 2025 until the ACELYRIN Merger. WH2, LLC has not had any operations or any balances from its inception. FronThera U.S. Holdings, Inc. and FronThera U.S. Pharmaceuticals LLC, two wholly owned subsidiaries, were dissolved on April 8, 2024 and March 14, 2024, respectively. The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of September 30, 2025, its results of operations for the three and nine months ended September 30, 2025 and 2024 and its cash flows for the nine months ended September 30, 2025 and 2024. The condensed balance sheet as of December 31, 2024, included in this filing, was derived from audited annual consolidated financial statements but does not include all disclosures required by U.S. GAAP. The results of operations for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of the results of operations to be expected for the full year or for any other subsequent interim period. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, the Company evaluates estimates and assumptions, including but not limited to those related to revenue recognition, accruals for research and development expenses, stock-based compensation expense, impairment of the IPR&D intangible assets, and the provision for income tax expense. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those estimates.
Segment and Geographical Information	Segment and Geographical Information The Company operates and manages its business as one reportable and operating segment, which is the business of researching and developing medicines for autoimmune disorders. The chief executive officer, who is the chief operating decision maker (“CODM”), reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. See Note 15 for additional information. All of the Company’s long-lived assets are located in the United States.
Concentration of Credit Risk	Concentration of Credit Risk Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, investments in marketable securities, accounts receivable and restricted cash. The Company maintains bank deposits in federally insured financial institutions and certain of these deposits exceed federally insured limits. To date, the Company has not experienced any losses on its deposits of cash and periodically evaluates the creditworthiness of the financial institutions at which its bank deposits are maintained. The Company also invests in money market funds, U.S. Treasury obligations, commercial paper, corporate debt obligations, supranational debt obligations, government development bank obligations and Federal agency obligations, which can be subject to certain credit risks. The Company mitigates the risks by investing in high-grade instruments, limiting its exposure to any one issuer and monitoring the ongoing creditworthiness of the financial institutions and issuers. The Company has not experienced any loss of principal on its financial instruments.
Risks and Uncertainties	Risks and Uncertainties The Company is subject to certain risks and uncertainties, including, but not limited to, changes in any of the following areas that the Company believes could have a material adverse effect on the future financial position or results of operations: the Company’s ability to advance the development of its proprietary precision data analytics platform, timing and ability to advance its product candidates through preclinical and clinical development; costs and timelines associated with the manufacturing of clinical supplies; regulatory approval, market acceptance of, and reimbursement for, any product candidates the Company may develop; performance of third-party vendors; competition from pharmaceutical or other biotechnology companies with greater financial resources or expertise; protection of intellectual property; litigation or claims against the Company based on intellectual property or other factors; and its ability to attract and retain employees necessary to support its growth. The Company’s business and results of operations may be affected by worldwide economic conditions, which may continue to be impacted by global macroeconomic challenges and uncertainty in the markets, including international trade policies and tariffs, severely diminished liquidity and credit availability, rising inflation and monetary supply shifts, rising interest rates, labor shortages, declines in consumer confidence, declines in economic growth, increases in unemployment rates, recession risks and uncertainty about economic and geopolitical stability (for example, related to the ongoing conflicts in Ukraine and the evolving U.S and ex-U.S. tariff landscape). These worldwide economic conditions have continued throughout 2025 and may negatively impact the Company’s business, financial position and results of operations.
Business Acquisitions, Including Intangible Assets, Goodwill and Contingent Consideration	Business Acquisitions, Including Intangible Assets, Goodwill and Contingent Consideration The Company accounts for business combinations, as defined in ASC Topic 805, Business Combinations, using the acquisition method of accounting, which generally requires that assets acquired, including IPR&D intangible assets, and liabilities assumed, be recorded at fair value on the consolidated balance sheets as of the acquisition date. The excess of the fair value of the purchase consideration over the fair value of net assets acquired, if any, is recorded as goodwill on the consolidated balance sheet. The excess of the fair value of net assets acquired over the fair value of the purchase consideration, if any, represents negative goodwill, or a gain on bargain purchase, which is recognized in the consolidated statement of operations as of the date of the acquisition. Calculating the fair value of assets acquired and liabilities assumed requires the Company to make significant estimates and assumptions. As a result, the Company may record adjustments to the fair values within the measurement period, which may be up to one year from the acquisition date, with the corresponding offset to goodwill or a gain on bargain purchase. Transaction costs associated with business combinations are expensed as they are incurred. Intangible assets related to IPR&D projects acquired are considered to be indefinite-lived until abandonment or completion of the associated R&D efforts, which generally occurs when regulatory approval is obtained. Goodwill and indefinite-lived intangible assets are not amortized and, instead, are tested for impairment annually, in the fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired. Development costs incurred after an acquisition are expensed as incurred. Intangible assets with finite useful lives, which include completed IPR&D projects, are amortized over their estimated useful lives, primarily on a straight-line basis, and are also periodically reviewed for changes in facts or circumstances that may result in an impairment or in a reduction to the estimated useful life of the asset. In determining the initial fair value of an intangible asset, or when quantitative analysis is required to determine any impairment, the Company usually uses an income approach that discounts expected future cash flows to present value using a discount rate that is based on the estimated weighted-average cost of capital for comparable companies and represents the rate that market participants would use to value the intangible asset. These cash flow models require the use of Level 3 fair value measurements and inputs, including estimated revenues, costs and probabilities of technical and regulatory milestones, among other factors. If the Company is required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events, then the estimated fair value of contingent consideration liabilities is recognized in the consolidated balance sheet as of the date of the acquisition. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value on the consolidated statements of operations until such time that the payment is made or obligations expire.
Collaboration Arrangements and Revenue Recognition	Collaboration Arrangements and Revenue Recognition The Company earns revenue from collaboration agreements that allow collaborators to develop, manufacture and commercialize product candidates. Arrangements with collaborators may include intellectual property licenses, research and development services, manufacturing services for clinical and commercial supply and participation in joint steering committees. At the inception of an agreement, the Company evaluates if an agreement is a collaborative arrangement within the scope of ASC 808, Collaborative Arrangements (“ASC 808”). For collaborative arrangements that fall within the scope of ASC 808, the Company first determines which elements of the collaboration are deemed to be a performance obligation with a customer within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). For elements of collaboration arrangements that are accounted for pursuant to ASC 808 and are not subject to the guidance in ASC 606, the Company applies the revenue recognition model under ASC 606 or other guidance, as deemed appropriate. Under ASC 606, the Company recognizes revenue in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services when its collaborator, or customer, obtains control of promised goods or services. The Company follows a five-step approach: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when (or as) the customer obtains control of the product or service. The Company assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources and (ii) are separately identifiable from other promises in the contract. Goods or services that are not individually distinct performance obligations are combined with other promised goods or services until such combined group of promises meet the requirements of a performance obligation. The Company determines the transaction price based on the amount of consideration the Company is entitled to receive in exchange for the transfer of control of a product or a service to the customer. Consideration may be fixed, variable, or a combination of both. Payments to the Company under these arrangements typically include one or more of the following: non-refundable upfront payments, reimbursement for research services, payments for clinical supplies, research, development or regulatory milestone payments, profit-sharing arrangements, and royalty and commercial sales milestone payments. Variable consideration, such as performance-based milestones, are included in the total consideration if the Company expects to receive such consideration and if it is probable that the inclusion of the variable consideration will not result in a significant reversal in the cumulative amount of revenue recognized under the arrangement. The Company accounts for cost reimbursements included in the transaction price using the expected value method. The Company excludes sales-based royalty and milestone payments from the total consideration it expects to receive until the underlying sales occur because the license to its intellectual property is deemed to be the predominant item to which the royalties or milestones relate as it is the primary driver of value in the collaboration arrangements. The Company then allocates the transaction price to each distinct performance obligation based on the relative standalone selling price. Key assumptions to determine the standalone selling price may include forecasted revenues, development timelines, probabilities of technical and regulatory success, and the expected level of effort for research and development services. The Company recognizes revenue associated with each performance obligation as the control over the promised goods or services transfer to its collaborators which occurs either at a point in time or over time. If control transfers over time, revenue is recognized by using a method of measuring progress that best depicts the transfer of goods or services. The Company evaluates the measure of progress and related inputs each reporting period and any resulting adjustments to revenue are recorded on a cumulative catch-up basis. Consideration allocated to options that include material rights is deferred until the options are exercised or expire. The Company records amounts as accounts receivable when the right to consideration is deemed unconditional. Consideration received that does not meet the requirements to satisfy ASC 606 revenue recognition criteria is recorded as deferred revenue in the consolidated balance sheets, classified as either current (less than 12 months) or non-current (more than 12 months) deferred revenue based on the Company’s best estimate of when such revenue will be recognized. See Note 7 for additional information.
Stock-Based Compensation Expense	Stock-Based Compensation Expense The Company grants stock-based awards to employees, directors and non-employee consultants in the form of stock options and restricted stock units (“RSUs”) to purchase shares of its common stock. The Company measures stock options granted with service-based vesting based on the fair value of the award on the grant date using the Black-Scholes option-pricing model. The model requires management to make a number of assumptions, including common stock fair value, expected volatility, expected term, risk-free interest rate and expected dividend yield. The Company expenses the fair value of its stock-based compensation awards on a straight-line basis over the requisite service period, which is the period in which the related services are received. The Company has also granted stock options with graded vesting based on market, service and performance conditions. At the grant date, the fair value of these stock options was estimated using a Monte Carlo simulation model, which uses a distribution of potential outcomes over the vesting period. The assumptions utilized in the calculation included the Company’s expected common stock price, expected volatility, risk-free rate and expected term. Stock-based compensation expense for these awards is recognized on a straight-line basis over the requisite service period, which is the longer of the explicit service period of the service condition and the derived service period of the market condition, as determined for each separately vesting portion of the awards as if each award was, in substance, multiple awards. Stock-based compensation expense related to stock purchase rights under the Company’s 2024 Employee Stock Purchase Plan (the “2024 ESPP”) is measured based on grant date at fair value using the Black-Scholes option-pricing model. The model requires management to make a number of assumptions, including common stock fair value, expected volatility, expected term, risk-free interest rate and expected dividend yield. Stock-based compensation expense is recognized on a straight-line basis over the offering period. The Company accounts for award forfeitures as they occur and classifies stock-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s salary or services costs are classified.
Provision for Income Tax Expense	Provision for Income Tax Expense Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and their respective tax bases. Deferred taxes and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. The Company records a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not. Due to the Company’s historical operating performance and the recorded cumulative net losses in prior fiscal periods, the net deferred tax assets have been fully offset by a valuation allowance. The Company recognizes the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the merits of the position. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties incurred in relation to unrecognized tax benefits. The Company recognized a benefit from income taxes of zero and $8.6 million for the three and nine months ended September 30, 2025, respectively, and zero for the three and nine months ended September 30, 2024. The income tax benefit is primarily related to the realization of deferred tax assets and valuation allowance release as a result of the ACELYRIN Merger. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, including, but not limited to, modifications of capitalization of research and development expenses and accelerated fixed asset depreciation. The Company does not expect that the OBBBA will have a material impact on its consolidated financial statements for the fiscal year ending December 31, 2025.
Recoverable Value-Added Tax	Recoverable Value-Added Tax The Company conducts clinical trials in several European and Asian countries which can result in VAT assessments based on the transfer of products across borders including production, packaging and distribution of clinical materials. VAT is a national tax that is levied at each stage of production and can vary by jurisdiction. When a company is not VAT-registered in a country, VAT is due when goods enter a country and is not considered reclaimable. When the Company becomes VAT-registered and establishes a pattern of VAT recoverability from taxing authorities in a certain country, the Company will record aggregate balances recoverable in other prepaid expenses and current assets in the consolidated balance sheets. The Company reviews these balances on a regular basis and records valuation allowances on the amounts that are not expected to be recovered.
Recent Accounting Pronouncements	Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the JOBS Act, and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and private companies, the Company will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. Recently Issued and Not Yet Adopted Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires the disclosure of specific categories in the rate reconciliation and greater disaggregation for income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 for public entities and for fiscal years beginning after December 15, 2025 for all other entities, with early application permitted. ASU 2023-09 should be adopted prospectively with the option to be adopted retrospectively. The Company is currently evaluating the impact of this standard on its disclosure in its consolidated financial statements for the year ending December 31, 2025. In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Topic 220) (“ASU 2024-03”), requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments of ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual periods beginning after December 15, 2027. The requirements of ASU 2024-03 may be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements and disclosures.

Summary of Significant Accounting Policies and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2025

Summary of Significant Accounting Policies and Basis of Presentation

The condensed consolidated financial statements and accompanying notes are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting and do not contain all information that is included in the annual financial statements and notes thereto of the Company.

The Company’s unaudited condensed consolidated financial statements include the accounts of its subsidiaries, and all intercompany transactions were eliminated. The Company’s unaudited condensed consolidated financial statements include the accounts of its subsidiaries ACELYRIN and WH2, LLC after the closing of the ACELYRIN Merger, and the accounts of Merger Sub from its incorporation in January 2025 until the ACELYRIN Merger. WH2, LLC has not had any operations or any balances from its inception. FronThera U.S. Holdings, Inc. and FronThera U.S. Pharmaceuticals LLC, two wholly owned subsidiaries, were dissolved on April 8, 2024 and March 14, 2024, respectively.

The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of September 30, 2025, its results of operations for the three and nine months ended September 30, 2025 and 2024 and its cash flows for the nine months ended September 30, 2025 and 2024. The condensed balance sheet as of December 31, 2024, included in this filing, was derived from audited annual consolidated financial statements but does not include all disclosures required by U.S. GAAP. The results of operations for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of the results of operations to be expected for the full year or for any other subsequent interim period.

Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

On an ongoing basis, the Company evaluates estimates and assumptions, including but not limited to those related to revenue recognition, accruals for research and development expenses, stock-based compensation expense, impairment of the IPR&D intangible assets, and the provision for income tax expense. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those estimates.

Segment and Geographical Information

The Company operates and manages its business as one reportable and operating segment, which is the business of researching and developing medicines for autoimmune disorders. The chief executive officer, who is the chief operating decision maker (“CODM”), reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. See Note 15 for additional information. All of the Company’s long-lived assets are located in the United States.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, investments in marketable securities, accounts receivable and restricted cash. The Company maintains bank deposits in federally insured financial institutions and certain of these deposits exceed federally insured limits. To date, the Company has not experienced any losses on its deposits of cash and periodically evaluates the creditworthiness of the financial institutions at which its bank deposits are maintained.

The Company also invests in money market funds, U.S. Treasury obligations, commercial paper, corporate debt obligations, supranational debt obligations, government development bank obligations and Federal agency obligations,

which can be subject to certain credit risks. The Company mitigates the risks by investing in high-grade instruments, limiting its exposure to any one issuer and monitoring the ongoing creditworthiness of the financial institutions and issuers. The Company has not experienced any loss of principal on its financial instruments.

Risks and Uncertainties

The Company is subject to certain risks and uncertainties, including, but not limited to, changes in any of the following areas that the Company believes could have a material adverse effect on the future financial position or results of operations: the Company’s ability to advance the development of its proprietary precision data analytics platform, timing and ability to advance its product candidates through preclinical and clinical development; costs and timelines associated with the manufacturing of clinical supplies; regulatory approval, market acceptance of, and reimbursement for, any product candidates the Company may develop; performance of third-party vendors; competition from pharmaceutical or other biotechnology companies with greater financial resources or expertise; protection of intellectual property; litigation or claims against the Company based on intellectual property or other factors; and its ability to attract and retain employees necessary to support its growth.

The Company’s business and results of operations may be affected by worldwide economic conditions, which may continue to be impacted by global macroeconomic challenges and uncertainty in the markets, including international trade policies and tariffs, severely diminished liquidity and credit availability, rising inflation and monetary supply shifts, rising interest rates, labor shortages, declines in consumer confidence, declines in economic growth, increases in unemployment rates, recession risks and uncertainty about economic and geopolitical stability (for example, related to the ongoing conflicts in Ukraine and the evolving U.S and ex-U.S. tariff landscape). These worldwide economic conditions have continued throughout 2025 and may negatively impact the Company’s business, financial position and results of operations.

Business Acquisitions, Including Intangible Assets, Goodwill and Contingent Consideration

The Company accounts for business combinations, as defined in ASC Topic 805, Business Combinations, using the acquisition method of accounting, which generally requires that assets acquired, including IPR&D intangible assets, and liabilities assumed, be recorded at fair value on the consolidated balance sheets as of the acquisition date. The excess of the fair value of the purchase consideration over the fair value of net assets acquired, if any, is recorded as goodwill on the consolidated balance sheet. The excess of the fair value of net assets acquired over the fair value of the purchase consideration, if any, represents negative goodwill, or a gain on bargain purchase, which is recognized in the consolidated statement of operations as of the date of the acquisition.

Calculating the fair value of assets acquired and liabilities assumed requires the Company to make significant estimates and assumptions. As a result, the Company may record adjustments to the fair values within the measurement period, which may be up to one year from the acquisition date, with the corresponding offset to goodwill or a gain on bargain purchase.

Transaction costs associated with business combinations are expensed as they are incurred.

Intangible assets related to IPR&D projects acquired are considered to be indefinite-lived until abandonment or completion of the associated R&D efforts, which generally occurs when regulatory approval is obtained. Goodwill and indefinite-lived intangible assets are not amortized and, instead, are tested for impairment annually, in the fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired. Development costs incurred after an acquisition are expensed as incurred.

Intangible assets with finite useful lives, which include completed IPR&D projects, are amortized over their estimated useful lives, primarily on a straight-line basis, and are also periodically reviewed for changes in facts or circumstances that may result in an impairment or in a reduction to the estimated useful life of the asset.

In determining the initial fair value of an intangible asset, or when quantitative analysis is required to determine any impairment, the Company usually uses an income approach that discounts expected future cash flows to present value using a discount rate that is based on the estimated weighted-average cost of capital for comparable companies and represents the rate that market participants would use to value the intangible asset. These cash flow models require the use of Level 3 fair value measurements and inputs, including estimated revenues, costs and probabilities of technical and regulatory milestones, among other factors.

If the Company is required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events, then the estimated fair value of contingent consideration liabilities is recognized in the consolidated balance sheet as of the date of the acquisition. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value on the consolidated statements of operations until such time that the payment is made or obligations expire.

Collaboration Arrangements and Revenue Recognition

The Company earns revenue from collaboration agreements that allow collaborators to develop, manufacture and commercialize product candidates. Arrangements with collaborators may include intellectual property licenses, research and development services, manufacturing services for clinical and commercial supply and participation in joint steering committees. At the inception of an agreement, the Company evaluates if an agreement is a collaborative arrangement within the scope of ASC 808, Collaborative Arrangements (“ASC 808”). For collaborative arrangements that fall within the scope of ASC 808, the Company first determines which elements of the collaboration are deemed to be a performance obligation with a customer within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). For elements of collaboration arrangements that are accounted for pursuant to ASC 808 and are not subject to the guidance in ASC 606, the Company applies the revenue recognition model under ASC 606 or other guidance, as deemed appropriate.

Under ASC 606, the Company recognizes revenue in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services when its collaborator, or customer, obtains control of promised goods or services. The Company follows a five-step approach: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when (or as) the customer obtains control of the product or service.

The Company assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources and (ii) are separately identifiable from other promises in the contract. Goods or services that are not individually distinct performance obligations are combined with other promised goods or services until such combined group of promises meet the requirements of a performance obligation.

The Company determines the transaction price based on the amount of consideration the Company is entitled to receive in exchange for the transfer of control of a product or a service to the customer. Consideration may be fixed, variable, or a combination of both. Payments to the Company under these arrangements typically include one or more of the following: non-refundable upfront payments, reimbursement for research services, payments for clinical supplies, research, development or regulatory milestone payments, profit-sharing arrangements, and royalty and commercial sales milestone payments. Variable consideration, such as performance-based milestones, are included in the total consideration if the Company expects to receive such consideration and if it is probable that the inclusion of the variable consideration will not result in a significant reversal in the cumulative amount of revenue recognized under the arrangement. The Company accounts for cost reimbursements included in the transaction price using the expected value method. The Company excludes sales-based royalty and milestone payments from the total consideration it expects to receive until the underlying sales occur because the license to its intellectual property is deemed to be the predominant item to which the royalties or milestones relate as it is the primary driver of value in the collaboration arrangements.

The Company then allocates the transaction price to each distinct performance obligation based on the relative standalone selling price. Key assumptions to determine the standalone selling price may include forecasted revenues, development timelines, probabilities of technical and regulatory success, and the expected level of effort for research and development services. The Company recognizes revenue associated with each performance obligation as the control over the promised goods or services transfer to its collaborators which occurs either at a point in time or over time. If control transfers over time, revenue is recognized by using a method of measuring progress that best depicts the transfer of goods or services. The Company evaluates the measure of progress and related inputs each reporting period and any resulting adjustments to revenue are recorded on a cumulative catch-up basis. Consideration allocated to options that include material rights is deferred until the options are exercised or expire.

The Company records amounts as accounts receivable when the right to consideration is deemed unconditional. Consideration received that does not meet the requirements to satisfy ASC 606 revenue recognition criteria is recorded as deferred revenue in the consolidated balance sheets, classified as either current (less than 12 months) or non-current (more than 12 months) deferred revenue based on the Company’s best estimate of when such revenue will be recognized. See Note 7 for additional information.

Stock-Based Compensation Expense

The Company grants stock-based awards to employees, directors and non-employee consultants in the form of stock options and restricted stock units (“RSUs”) to purchase shares of its common stock. The Company measures stock options granted with service-based vesting based on the fair value of the award on the grant date using the Black-Scholes option-pricing model. The model requires management to make a number of assumptions, including common stock fair value, expected volatility, expected term, risk-free interest rate and expected dividend yield. The Company expenses the fair value of its stock-based compensation awards on a straight-line basis over the requisite service period, which is the period in which the related services are received.

The Company has also granted stock options with graded vesting based on market, service and performance conditions. At the grant date, the fair value of these stock options was estimated using a Monte Carlo simulation model, which uses a distribution of potential outcomes over the vesting period. The assumptions utilized in the calculation included the Company’s expected common stock price, expected volatility, risk-free rate and expected term. Stock-based compensation expense for these awards is recognized on a straight-line basis over the requisite service period, which is the longer of the explicit service period of the service condition and the derived service period of the market condition, as determined for each separately vesting portion of the awards as if each award was, in substance, multiple awards.

Stock-based compensation expense related to stock purchase rights under the Company’s 2024 Employee Stock Purchase Plan (the “2024 ESPP”) is measured based on grant date at fair value using the Black-Scholes option-pricing model. The model requires management to make a number of assumptions, including common stock fair value, expected volatility, expected term, risk-free interest rate and expected dividend yield. Stock-based compensation expense is recognized on a straight-line basis over the offering period.

The Company accounts for award forfeitures as they occur and classifies stock-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s salary or services costs are classified.

Provision for Income Tax Expense

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and their respective tax bases. Deferred taxes and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. The Company

records a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not. Due to the Company’s historical operating performance and the recorded cumulative net losses in prior fiscal periods, the net deferred tax assets have been fully offset by a valuation allowance.

The Company recognizes the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based on the merits of the position. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties incurred in relation to unrecognized tax benefits.

The Company recognized a benefit from income taxes of zero and $8.6 million for the three and nine months ended September 30, 2025, respectively, and zero for the three and nine months ended September 30, 2024. The income tax benefit is primarily related to the realization of deferred tax assets and valuation allowance release as a result of the ACELYRIN Merger.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, including, but not limited to, modifications of capitalization of research and development expenses and accelerated fixed asset depreciation. The Company does not expect that the OBBBA will have a material impact on its consolidated financial statements for the fiscal year ending December 31, 2025.

Recoverable Value-Added Tax

The Company conducts clinical trials in several European and Asian countries which can result in VAT assessments based on the transfer of products across borders including production, packaging and distribution of clinical materials. VAT is a national tax that is levied at each stage of production and can vary by jurisdiction. When a company is not VAT-registered in a country, VAT is due when goods enter a country and is not considered reclaimable. When the Company becomes VAT-registered and establishes a pattern of VAT recoverability from taxing authorities in a certain country, the Company will record aggregate balances recoverable in other prepaid expenses and current assets in the consolidated balance sheets. The Company reviews these balances on a regular basis and records valuation allowances on the amounts that are not expected to be recovered.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the JOBS Act, and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and private companies, the Company will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

Recently Issued and Not Yet Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires the disclosure of specific categories in the rate reconciliation and greater disaggregation for income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 for public entities and for fiscal years beginning after December 15, 2025 for all other entities, with early application permitted. ASU 2023-09 should be adopted prospectively with the option to be adopted retrospectively. The Company is currently evaluating the impact of this standard on its disclosure in its consolidated financial statements for the year ending December 31, 2025.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Topic 220) (“ASU 2024-03”), requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments of ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual periods beginning after December 15, 2027. The requirements of ASU 2024-03 may be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements and disclosures.