11. Restructuring and Related Costs

As discussed in Note 1, in connection with the Restructuring Plans, the Company reported the following costs in restructuring, impairments and other costs of deprioritized program:

The Company expects the Restructuring Plans to be substantially completed by the first quarter of 2026.

Clinical trial expense and other third-party costs for the deprioritization of luvelta, including contract termination costs

The clinical costs associated with deprioritization of the luvelta program primarily include third-party costs with the Company's CROs and CMOs who support the clinical trial and other development expenses to transition patients from the Company-led trials to standard of care or, in limited cases, post-trial access, as well as direct employee costs supporting these efforts. The Company also incurred termination costs with CMOs who support certain manufacturing services of luvelta that were cancelled as part of the restructuring. Payments for third party and internal costs incurred during the year ended December 31, 2025 were $23.4 million. As of December 31, 2025, the aggregated accruals of $12.6 million associated with these costs are reported within accrued expenses and other current liabilities.

Severance and Benefit Expense

Employees affected by the reduction in force under the Restructuring Plans are entitled to receive severance payments and certain Company-funded benefits. The following table provides details regarding the severance and other termination benefit expense and a reconciliation of such liability for the year ended December 31, 2025, which is reported within accrued compensation on the Balance Sheet:

The remaining expense expected to be incurred in connection with severance payments and certain Company-funded benefits is zero for the March 2025 Restructuring Plan and $0.2 million for the September 2025 Restructuring Plan.

Further, under the Company's Severance and Change in Control Plan (the “CIC Plan”), eligible employees terminated in connection with the March 2025 Restructuring Plan are entitled to acceleration of their unvested equity awards. During the year ended December 31, 2025, these expenses amounted to $3.0 million and were recorded under ASC 718, Compensation—Stock Compensation ("ASC-718"). No future amounts are expected to be incurred in connection with acceleration of unvested equity.

Impairment of Long-Lived Assets

In connection with the 2025 Restructuring Plans, the Company ceased its manufacturing and other operating activities in the San Carlos facility during December 2025 and determined an impairment indicator was present. The Company reassessed its asset grouping and newly identified an asset group, encompassing property and equipment and ROU assets at the San Carlos facility (the "San Carlos Asset Group"), for the purpose of long-lived asset impairment assessment. As a result of the impairment assessment on the San Carlos Asset Group, during the year ended December 31, 2025, the Company recognized $1.1 million of impairment charges on its property and equipment and ROU assets, which are included in restructuring and related costs on the Statement of Operations.

Assets Held for Sale

In December 2025, the Company conducted an auction, with the assistance of a third party, of certain of its property and equipment at the San Carlos facility. The assets auctioned remain at the San Carlos Facility as of December 31, 2025, and the transfer of the assets to successful bidders will happen in 2026. The Company classified such assets as held-for-sale assets on December 31, 2025 and remeasured them to the fair value minus costs to sell of $0.4 million, which is included in prepaid expenses and other current assets on the Balance Sheet. The related loss on assets held for sale of $0.5 million are included in restructuring and related costs on the Statement of Operations for the year ended December 31, 2025.