11. Revenue Recognition

The Company recognizes revenue in accordance with ASC 606 for the Servier License Agreement (see Note 10. Significant Agreements).

Servier License Agreement:

In connection with the Servier License Agreement entered into in August 2025 (see Note. 10 Significant Agreements), the Company recognized $6.6 million in collaboration revenue for the three months ended March 31, 2026.

The Company identified the following performance obligations associated with the Servier License Agreement:

The Company has determined the above performance obligations to be distinct due to the advanced clinical stage of darovasertib and availability of clinical data from multiple clinical trials.

The Company recognized revenue related to the D&C license performance obligation at a point in time upon execution of the contract. The Company recognizes revenue related to amounts allocated to research and development services over time, as the underlying services are performed over the period through the completion of program development activities. The timing of revenue recognition, billings, and cash collections results in accounts receivable, contract assets, and contract liabilities on the balance sheets. Contract assets are recorded when revenue has been recognized for services performed that are not yet billable to a customer.

Contract Balances

Transaction price allocated to the remaining performance obligations

At inception of the Servier License Agreement, the Company determined that the transaction price included the upfront payment and the estimated reimbursable program costs. The remaining aggregated performance obligation as of March 31, 2026 was $155.3 million, $31.5 million of which is expected to be satisfied over the next 12 months. The following table presents the transaction price allocated to the remaining performance obligations as of March 31, 2026 (in thousands):

The Company will also recognize revenue from regulatory milestones as they are achieved.

The Company applies the sales-based royalty exception to the commercial milestones and tiered royalties for all programs. The Company will be entitled to receive the commercial milestones when the predefined net sales in a calendar year are achieved, upon which the variability will be resolved. Also, the Company will be entitled to receive the tiered royalties during a calendar year when global net sales of each product occur, upon which the variability will be resolved.

Significant Judgments

In applying ASC 606 to the Servier License Agreement, the Company made the following judgments that significantly affect the timing and amount of revenue recognition:

(i) Determination of the transaction price, including whether any variable consideration is included at inception of the contract

The transaction price is the amount of consideration that the Company expects to be entitled to in exchange for transferring promised goods or services to the customer. The transaction price is determined at inception of the contract and may include amounts of variable consideration. However, there is a constraint on inclusion of variable consideration in the transaction price if there is uncertainty at inception of the contract as to whether such consideration will be recognized in the future.

The decision as to whether or not it is probable that a significant reversal of revenue will occur in the future depends on the likelihood and magnitude of the reversal and is highly susceptible to factors outside the Company’s influence

(for example, the Company cannot determine the outcome of clinical trials; the Company cannot determine if or when the counterparty will initiate or complete clinical trials; and the Company cannot determine if or when a regulatory agency provides any approval). In addition, the uncertainty is not expected to be resolved for a long period and the Company has limited experience in the field. Therefore, upon inception of the Servier License Agreement, development, regulatory and commercial milestones were fully constrained and were not included in the transaction price based on the factors noted above.

(ii) Determination of the standalone selling price of performance obligations

The Company allocates the transaction price to the performance obligations based upon their standalone selling prices. The standalone selling price is allocated to each performance obligation by the amount that the entity expects to receive for transferring the goods or services. Since evidence based on observable prices is not available for the performance obligations, the Company considered internally developed estimates, including those contemplated in negotiating the agreements, market conditions and entity-specific factors, in determining the standalone selling price using a discounted cash flow model adjusted for the probability of technical success where appropriate.

(iii) Determination of the method of allocation of the transaction price to the distinct performance obligations

The Company allocates the transaction price among performance obligations based on their relative selling prices, which are determined via the methodology described above.

(iv) Determination of the timing of satisfaction of performance obligations

The Company recognized revenue related to the D&C license performance obligation at the point in time when the license was delivered to Servier upon execution of the Servier License Agreement. The Company recognizes revenue from the research and development services for the development of the darovasertib program over time, as Servier simultaneously receives and consumes the benefits provided by the Company's performance. The Company measures its progress towards satisfaction of the research and development services based on the costs incurred as a percentage of the estimated total costs to be incurred to complete the performance obligations.

As the Company performs, it shares the results of its research and development studies with Servier through the joint development committee. Accordingly, the cost incurred method depicts the Company’s performance of the research and development services for the darovasertib program.