Collaborative and Other Relationships	6 Months Ended
Jun. 30, 2026
Collaborative and Other Relationships [Abstract]
Collaborative and Other Relationships	Note 7. Collaborative and Other Relationships Novartis In November 2009, we entered into a Collaboration and License Agreement with Novartis. Under the terms of the agreement, Novartis received exclusive development and commercialization rights outside of the United States to our JAK inhibitor ruxolitinib and certain back-up compounds for hematologic and oncology indications, including all hematological malignancies, solid tumors and myeloproliferative diseases. We retained exclusive development and commercialization rights to JAKAFI (ruxolitinib) in the United States and in certain other indications. Novartis also received worldwide exclusive development and commercialization rights to our MET inhibitor compound capmatinib and certain back-up compounds in all indications. Under this agreement, each company is responsible for costs relating to the development and commercialization of ruxolitinib in its respective territories, with costs of collaborative studies shared equally. Novartis is also responsible for all costs relating to the development and commercialization of capmatinib. We were initially eligible to receive up to $174.0 million for the achievement of development milestones, up to $495.0 million for the achievement of regulatory milestones and up to $500.0 million for the achievement of sales milestones. In addition, we were initially eligible to receive up to $75.0 million of additional potential development and regulatory milestones relating to graft-versus-host-disease (“GVHD”). Since the inception of the agreement through June 30, 2026, we have recognized and received, in the aggregate, $157.0 million for the achievement of development milestones, $345.0 million for the achievement of regulatory milestones, and $200.0 million for the achievement of sales milestones. We are obligated to pay to Novartis tiered royalties in the low single-digits on future JAKAFI net sales within the United States. On May 11, 2025, we and Novartis entered into a settlement agreement (the “Settlement Agreement”) with respect to litigation initiated by Novartis relating to the duration of royalty payments owed by us to Novartis under the Collaboration and License Agreement. As of March 31, 2025, we had approximately $537.1 million of accrued royalties relating to the dispute with Novartis included in accrued and other current liabilities on our condensed consolidated balance sheet. Under the Settlement Agreement, we paid Novartis $280.0 million as the settlement of disputed royalties on net sales of JAKAFI in the United States through December 31, 2024, and agreed to reduce by 50% the royalty rate payable by us on future net sales of JAKAFI in the United States beginning January 1, 2025 for a period defined in the Settlement Agreement. The reduced royalty paid for the quarter ended March 31, 2025, was approximately $14.9 million. The difference of $242.2 million between the total accrued royalties and the total amount paid by us to Novartis as disclosed above was recorded in Contract dispute settlement on our condensed consolidated statement of operations for three and six months ended June 30, 2025. During the three and six months ended June 30, 2026, such royalties on net sales within the United States totaled $20.0 million and $36.1 million, respectively, and were reflected in cost of sales on the condensed consolidated statements of operations. During the three and six months ended June 30, 2025, such royalties on net sales within the United States totaled $18.7 million and $48.5 million, respectively, and were reflected in cost of sales on the condensed consolidated statements of operations. At June 30, 2026 and December 31, 2025, approximately $20.0 million and $20.3 million, respectively, of accrued royalties were included in accrued and other current liabilities on the condensed consolidated balance sheets. We also are eligible to receive tiered, double-digit royalties ranging from the upper-teens to the mid-twenties on future JAKAVI (the trade name used by Novartis for ruxolitinib sales outside of the United States) net sales outside of the United States, and tiered, worldwide royalties on TABRECTA net sales that range from 12% to 14%. Product royalty revenue related to Novartis’ net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2026, was $124.2 million and $229.7 million, respectively. Product royalty revenue related to Novartis’ net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2025, was $109.7 million and $201.9 million, respectively. Product royalty revenue related to Novartis’ net sales of TABRECTA worldwide for the three and six months ended June 30, 2026, was $6.7 million and $12.7 million, respectively. Product royalty revenue related to Novartis’ net sales of TABRECTA worldwide for the three and six months ended June 30, 2025, was $6.6 million and $13.0 million, respectively. Lilly – Baricitinib In December 2009, we entered into a License, Development and Commercialization Agreement with Lilly. Under the terms of the agreement, Lilly received exclusive worldwide development and commercialization rights to our JAK inhibitor baricitinib, and certain back-up compounds for inflammatory and autoimmune diseases. Under this agreement, we were initially eligible to receive up to $150.0 million for the achievement of development milestones, up to $365.0 million for the achievement of regulatory milestones and up to $150.0 million for the achievement of sales milestones. In October 2025, the parties amended the agreement to enable Lilly to commercialize baricitinib for the treatment of Type 1 diabetes mellitus and to restructure the royalty obligations on net sales of baricitinib, certain developmental and regulatory milestones associated with baricitinib, and the marketing and sales support obligations of Lilly. Beginning in October 2025, we are now eligible to receive either a fixed royalty amount or tiered royalties based on defined levels of quarterly global net sales, with the tiered royalties up to a rate in the mid-teens. Since the inception of the agreement through June 30, 2026, we recognized and received, in aggregate, $149.0 million for the achievement of development milestones, $335.0 million for the achievement of regulatory milestones, $50.0 million for the achievement of sales milestones, and $100.0 million for the functional intellectual property transfer related to Type 1 diabetes mellitus. Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and six months ended June 30, 2026 was $38.5 million and $74.9 million, respectively. Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and six months ended June 30, 2025 was $33.5 million and $64.3 million, respectively. MacroGenics In October 2017, we entered into a Global Collaboration and License Agreement with MacroGenics, Inc. (“MacroGenics”). Under this agreement, we received exclusive development and commercialization rights worldwide to MacroGenics’ INCMGA0012 (formerly MGA012), an investigational monoclonal antibody that inhibits PD-1. Except as set forth in the succeeding sentence, we have sole authority over and bear all costs and expenses in connection with the development and commercialization of INCMGA0012 in all indications, whether as a monotherapy or as part of a combination regimen. MacroGenics has retained the right to develop and commercialize, at its cost and expense, its pipeline assets in combination with INCMGA0012. In addition, MacroGenics has the right to manufacture a portion of both companies’ global clinical and commercial supply needs of INCMGA0012. Since the inception of the agreement, inclusive of amendments to the agreement, through June 30, 2026, we have paid MacroGenics developmental and regulatory milestones totaling $215.0 million. After these amendments and subsequent payments, MacroGenics will be eligible to receive up to an additional $210.0 million in future contingent development and regulatory milestones, and up to $330.0 million in sales milestones as well as tiered royalties ranging from 15% to 24% of global net sales. In June 2025, MacroGenics sold certain of its rights to such future tiered royalties on and after June 30, 2025 to Sagard Healthcare Partners (Delaware) II LP. Syndax In September 2021, we entered into a Collaboration and License Agreement with Syndax Pharmaceuticals, Inc. (“Syndax”), covering the worldwide development and commercialization of SNDX-6352 (“axatilimab”). Under the terms of our agreement, we received exclusive commercialization rights to axatilimab outside of the United States and share commercialization rights in the United States with Syndax. We are responsible for leading the commercialization strategy and booking all revenue from sales of axatilimab globally. Incyte and Syndax share equally the profits and losses from the co-commercialization efforts in the United States. Sales of axatilimab outside the United States are subject to our royalty payment obligations to Syndax, as set forth below. We and Syndax have agreed to co-develop axatilimab and to share development costs associated with global and U.S.-specific clinical trials, with Incyte responsible for 55% of such costs and Syndax responsible for 45% of such costs. Each company is responsible for funding any independent development activities. Inclusive of an upfront, non-refundable payment, since the inception of the agreement through June 30, 2026, we have made payments of $129.5 million to Syndax, which were previously recorded in research and development expense or in other intangible assets, as discussed above. Syndax is eligible to receive up to $207.5 million in future contingent development and regulatory milestones and up to $225.0 million in sales milestones as well as tiered royalties ranging in the mid-teens on net sales in Europe and Japan and low double digit percentage on net sales in the rest of the world outside of the United States. Syndax’s right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising axatilimab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country. As of June 30, 2026, we held an investment of approximately 1.4 million shares of Syndax common stock. The fair market value of our long term investment in Syndax as of June 30, 2026 and December 31, 2025 was $31.1 million and $29.9 million, respectively. For the three and six months ended June 30, 2026, we recorded an unrealized loss of $2.1 million and an unrealized gain of $1.2 million, respectively, based on the change in fair value of Syndax’s common stock during the respective periods. For the three and six months ended June 30, 2025, we recorded an unrealized loss of $4.2 million and $5.5 million, respectively, based on the change in fair value of Syndax’s common stock during the respective periods. Research and development expenses for the three and six months ended June 30, 2026, includes $4.9 million and $10.3 million, respectively, related to our 55% share of the co-development costs for axatilimab. Research and development expenses for the three and six months ended June 30, 2025, includes $5.3 million and $10.0 million, respectively, related to our 55% share of the co-development costs for axatilimab. At June 30, 2026 and December 31, 2025, $1.4 million and $2.4 million, respectively, was included in accrued and other liabilities on the condensed consolidated balance sheet for amounts due to Syndax under the agreement. In connection with the United States co-commercialization efforts, Syndax’s 50% share of profit for the three and six months ended June 30, 2026 was $20.2 million and $34.6 million, respectively, which is reflected in cost of sales on the condensed consolidated statement of operations. At June 30, 2026 and December 31, 2025, $26.5 million and $27.6 million, respectively, was included in accrued and other liability on the consolidated balance sheet for amounts due to Syndax related to United States co-commercialization activities. Prelude In November 2025, we entered into an exclusive purchase option agreement with Prelude Therapeutics Incorporated (“Prelude”). Under the terms of the agreement, we secured an exclusive option to acquire Prelude’s mutant selective JAK2V617F JH2 inhibitor program, including Prelude’s library of preclinical candidates. We paid Prelude a total of $60.0 million, comprised of an upfront payment of $35.0 million, plus a $25.0 million equity investment in Prelude. The $35.0 million upfront payment was recorded in research and development expense during the fourth quarter of 2025. We purchased 6.25 million shares of Prelude non-voting common stock at a price of $4.00 per share. Of this $25.0 million equity investment, approximately $17.1 million was expensed in research and development during the fourth quarter of 2025 as a premium above fair value of the stock purchase. The remaining $7.9 million is the initial fair value of our investment in Prelude. We are accounting for our shares held in Prelude at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets. For the three and six months ended June 30, 2026, we recorded an unrealized gain of $11.9 million and $15.2 million, respectively based on the change in fair value of Prelude’s common stock during the period. The fair market value of our total long term investment in Prelude as of June 30, 2026 and December 31, 2025 was $33.3 million and $18.1 million, respectively. Prelude expects to advance the JAK2V617F program to pre-defined milestones. We may elect to exercise our exclusive option during the option period to acquire the program and associated assets from Prelude for $100.0 million. In addition, if we exercise our option, Prelude would be eligible to receive up to $775.0 million in additional clinical and regulatory milestones, and single digit royalties on global net sales. If we elect to not exercise our option to acquire the program, all JAK2V617F global program rights and interests would remain in the sole ownership and control of Prelude. Genesis In May 2026, we entered into a License, Research and Collaboration Agreement with Genesis Molecular AI, Inc. (“Genesis”), covering the building and deployment of artificial intelligence to accelerate the discovery of novel molecules for collaboration targets. Under the terms of the agreement, we will identify targets and Genesis will subsequently use the Genesis Exploration of Molecular Space artificial intelligence platform to identify molecular structures directed at each target. All preclinical costs related to the collaboration are subject to joint research plans. We will be responsible for leading the clinical development and global commercialization efforts. Based on the terms of the agreement, we paid Genesis a total of $120.0 million, comprised of an upfront non-refundable payment of $80.0 million plus a $40.0 million equity investment in Genesis. In addition, Genesis is eligible to receive up to $135.0 million for the achievement of development milestones, up to $475.0 million for the achievement of regulatory milestones and up to $550.0 million for the achievement of sales milestones on the initial target programs. The $80.0 million upfront payment was determined to be a prepayment for future research and development services and thus will be amortized over the five-year term of the agreement. Research and development expenses during the three and six months ended June 30, 2026, includes $2.7 million relating to the amortization of this upfront payment. Additionally, as of June 30, 2026, $16.0 million and $61.3 million were recorded in prepaid expenses and other current assets and other assets, net, respectively, on the condensed consolidated balance sheet relating to this upfront payment. We purchased approximately 4.3 million shares of Genesis Series B-3 Preferred Stock for $40.0 million, at a price of $9.332 per share. As there is no readily determinable fair value for the shares we hold in Genesis, we have elected to account for our investment using the measurement alternative under ASC 321 whereby our investment is measured at cost, less any impairment, and adjusted for observable price changes in orderly transactions for identical or similar securities of Genesis. We monitor the investment for any observable price changes or impairment indicators. Any subsequent changes in fair value of our investment will be recognized within gain (loss) on equity investments on our condensed consolidated statements of operations. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term equity investments on the accompanying condensed consolidated balance sheets. For the three months ended June 30, 2026, we did not identify any impairment or observable price changes related to our investment in Genesis. Other Agreements In addition to the license and collaboration agreements discussed above, we have various other license and collaboration agreements that are not individually material to our operating results or financial condition at this time. Pursuant to the terms of those agreements, we may be required to pay, or we may receive, additional amounts contingent upon the occurrence of various future events such as future discovery, development, regulatory or commercial milestones, which in the aggregate could be material. In addition, if any products related to these collaborations are approved for sale, we may be required to pay, or we may receive, royalties on future sales. The payment or receipt of these amounts, however, is contingent upon the occurrence of various future events, the likelihood of which cannot presently be determined.

In November 2009, we entered into a Collaboration and License Agreement with Novartis. Under the terms of the agreement, Novartis received exclusive development and commercialization rights outside of the United States to our JAK inhibitor ruxolitinib and certain back-up compounds for hematologic and oncology indications, including all hematological malignancies, solid tumors and myeloproliferative diseases. We retained exclusive development and commercialization rights to JAKAFI (ruxolitinib) in the United States and in certain other indications. Novartis also received worldwide exclusive development and commercialization rights to our MET inhibitor compound capmatinib and certain back-up compounds in all indications.

We were initially eligible to receive up to $174.0 million for the achievement of development milestones, up to $495.0 million for the achievement of regulatory milestones and up to $500.0 million for the achievement of sales milestones. In addition, we were initially eligible to receive up to $75.0 million of additional potential development and regulatory milestones relating to graft-versus-host-disease (“GVHD”). Since the inception of the agreement through June 30, 2026, we have recognized and received, in the aggregate, $157.0 million for the achievement of development milestones, $345.0 million for the achievement of regulatory milestones, and $200.0 million for the achievement of sales milestones.

We are obligated to pay to Novartis tiered royalties in the low single-digits on future JAKAFI net sales within the United States. On May 11, 2025, we and Novartis entered into a settlement agreement (the “Settlement Agreement”) with respect to litigation initiated by Novartis relating to the duration of royalty payments owed by us to Novartis under the Collaboration and License Agreement. As of March 31, 2025, we had approximately $537.1 million of accrued royalties relating to the dispute with Novartis included in accrued and other current liabilities on our condensed consolidated balance sheet. Under the Settlement Agreement, we paid Novartis $280.0 million as the settlement of disputed royalties on net sales of JAKAFI in the United States through December 31, 2024, and agreed to reduce by 50% the royalty rate payable by us on future net sales of JAKAFI in the United States beginning January 1, 2025 for a period defined in the Settlement Agreement. The reduced royalty paid for the quarter ended March 31, 2025, was approximately $14.9 million. The difference of $242.2 million between the total accrued royalties and the total amount paid by us to Novartis as disclosed above was recorded in Contract dispute settlement on our condensed consolidated statement of operations for three and six months ended June 30, 2025.

During the three and six months ended June 30, 2026, such royalties on net sales within the United States totaled $20.0 million and $36.1 million, respectively, and were reflected in cost of sales on the condensed consolidated statements of operations. During the three and six months ended June 30, 2025, such royalties on net sales within the United States totaled $18.7 million and $48.5 million, respectively, and were reflected in cost of sales on the condensed consolidated statements of operations. At June 30, 2026 and December 31, 2025, approximately $20.0 million and $20.3 million, respectively, of accrued royalties were included in accrued and other current liabilities on the condensed consolidated balance sheets.

We also are eligible to receive tiered, double-digit royalties ranging from the upper-teens to the mid-twenties on future JAKAVI (the trade name used by Novartis for ruxolitinib sales outside of the United States) net sales outside of the United States, and tiered, worldwide royalties on TABRECTA net sales that range from 12% to 14%. Product royalty revenue related to Novartis’ net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2026, was $124.2 million and $229.7 million, respectively. Product royalty revenue related to Novartis’ net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2025, was $109.7 million and $201.9 million, respectively. Product royalty revenue related to Novartis’ net sales of TABRECTA worldwide for the three and six months ended June 30, 2026, was $6.7 million and $12.7 million, respectively. Product royalty revenue related to Novartis’ net sales of TABRECTA worldwide for the three and six months ended June 30, 2025, was $6.6 million and $13.0 million, respectively.

Under this agreement, we were initially eligible to receive up to $150.0 million for the achievement of development milestones, up to $365.0 million for the achievement of regulatory milestones and up to $150.0 million for the achievement of sales milestones. In October 2025, the parties amended the agreement to enable Lilly to commercialize baricitinib for the treatment of Type 1 diabetes mellitus and to restructure the royalty obligations on net sales of baricitinib, certain developmental and regulatory milestones associated with baricitinib, and the marketing and sales support obligations of Lilly. Beginning in October 2025, we are now eligible to receive either a fixed royalty amount or tiered royalties based on defined levels of quarterly global net sales, with the tiered royalties up to a rate in the mid-teens. Since the inception of the agreement through June 30, 2026, we recognized and received, in aggregate, $149.0 million for the achievement of development milestones, $335.0 million for the achievement of regulatory milestones, $50.0 million for the achievement of sales milestones, and $100.0 million for the functional intellectual property transfer related to Type 1 diabetes mellitus.

Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and six months ended June 30, 2026 was $38.5 million and $74.9 million, respectively. Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and six months ended June 30, 2025 was $33.5 million and $64.3 million, respectively.

In October 2017, we entered into a Global Collaboration and License Agreement with MacroGenics, Inc. (“MacroGenics”). Under this agreement, we received exclusive development and commercialization rights worldwide to MacroGenics’ INCMGA0012 (formerly MGA012), an investigational monoclonal antibody that inhibits PD-1. Except as set forth in the succeeding sentence, we have sole authority over and bear all costs and expenses in connection with the development and commercialization of INCMGA0012 in all indications, whether as a monotherapy or as part of a combination regimen. MacroGenics has retained the right to develop and commercialize, at its cost and expense, its pipeline assets in combination with INCMGA0012. In addition, MacroGenics has the right to manufacture a portion of both companies’ global clinical and commercial supply needs of INCMGA0012.

Since the inception of the agreement, inclusive of amendments to the agreement, through June 30, 2026, we have paid MacroGenics developmental and regulatory milestones totaling $215.0 million. After these amendments and subsequent payments, MacroGenics will be eligible to receive up to an additional $210.0 million in future contingent development and regulatory milestones, and up to $330.0 million in sales milestones as well as tiered royalties ranging from 15% to 24% of global net sales. In June 2025, MacroGenics sold certain of its rights to such future tiered royalties on and after June 30, 2025 to Sagard Healthcare Partners (Delaware) II LP.

In September 2021, we entered into a Collaboration and License Agreement with Syndax Pharmaceuticals, Inc. (“Syndax”), covering the worldwide development and commercialization of SNDX-6352 (“axatilimab”). Under the terms of our agreement, we received exclusive commercialization rights to axatilimab outside of the United States and share commercialization rights in the United States with Syndax. We are responsible for leading the commercialization strategy and booking all revenue from sales of axatilimab globally. Incyte and Syndax share equally the profits and losses from the co-commercialization efforts in the United States. Sales of axatilimab outside the United States are subject to our royalty payment obligations to Syndax, as set forth below. We and Syndax have agreed to co-develop axatilimab and to share development costs associated with global and U.S.-specific clinical trials, with Incyte responsible for 55% of such costs and Syndax responsible for 45% of such costs. Each company is responsible for funding any independent development activities.

Inclusive of an upfront, non-refundable payment, since the inception of the agreement through June 30, 2026, we have made payments of $129.5 million to Syndax, which were previously recorded in research and development expense or in other intangible assets, as discussed above. Syndax is eligible to receive up to $207.5 million in future contingent development and regulatory milestones and up to $225.0 million in sales milestones as well as tiered royalties ranging in the mid-teens on net sales in Europe and Japan and low double digit percentage on net sales in the rest of the world outside of the United States. Syndax’s right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising axatilimab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country.

As of June 30, 2026, we held an investment of approximately 1.4 million shares of Syndax common stock. The fair market value of our long term investment in Syndax as of June 30, 2026 and December 31, 2025 was $31.1 million and $29.9 million, respectively. For the three and six months ended June 30, 2026, we recorded an unrealized loss of $2.1 million and an unrealized gain of $1.2 million, respectively, based on the change in fair value of Syndax’s common stock during the respective periods. For the three and six months ended June 30, 2025, we recorded an unrealized loss of $4.2 million and $5.5 million, respectively, based on the change in fair value of Syndax’s common stock during the respective periods.

Research and development expenses for the three and six months ended June 30, 2026, includes $4.9 million and $10.3 million, respectively, related to our 55% share of the co-development costs for axatilimab. Research and development expenses for the three and six months ended June 30, 2025, includes $5.3 million and $10.0 million, respectively, related to our 55% share of the co-development costs for axatilimab. At June 30, 2026 and December 31, 2025, $1.4 million and $2.4 million, respectively, was included in accrued and other liabilities on the condensed consolidated balance sheet for amounts due to Syndax under the agreement.

In connection with the United States co-commercialization efforts, Syndax’s 50% share of profit for the three and six months ended June 30, 2026 was $20.2 million and $34.6 million, respectively, which is reflected in cost of sales on the condensed consolidated statement of operations. At June 30, 2026 and December 31, 2025, $26.5 million and $27.6 million, respectively, was included in accrued and other liability on the consolidated balance sheet for amounts due to Syndax related to United States co-commercialization activities.

In November 2025, we entered into an exclusive purchase option agreement with Prelude Therapeutics Incorporated (“Prelude”). Under the terms of the agreement, we secured an exclusive option to acquire Prelude’s mutant selective JAK2V617F JH2 inhibitor program, including Prelude’s library of preclinical candidates. We paid Prelude a total of $60.0 million, comprised of an upfront payment of $35.0 million, plus a $25.0 million equity investment in Prelude. The $35.0 million upfront payment was recorded in research and development expense during the fourth quarter of 2025. We purchased 6.25 million shares of Prelude non-voting common stock at a price of $4.00 per share. Of this $25.0 million equity investment, approximately $17.1 million was expensed in research and development during the fourth quarter of 2025 as a premium above fair value of the stock purchase. The remaining $7.9 million is the initial fair value of our investment in Prelude. We are accounting for our shares held in Prelude at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying condensed consolidated balance sheets. For the three and six months ended June 30, 2026, we recorded an unrealized gain of $11.9 million and $15.2 million, respectively based on the change in fair value of Prelude’s common stock during the period. The fair market value of our total long term investment in Prelude as of June 30, 2026 and December 31, 2025 was $33.3 million and $18.1 million, respectively.

Prelude expects to advance the JAK2V617F program to pre-defined milestones. We may elect to exercise our exclusive option during the option period to acquire the program and associated assets from Prelude for $100.0 million. In addition, if we exercise our option, Prelude would be eligible to receive up to $775.0 million in additional clinical and regulatory milestones, and single digit royalties on global net sales.

In May 2026, we entered into a License, Research and Collaboration Agreement with Genesis Molecular AI, Inc. (“Genesis”), covering the building and deployment of artificial intelligence to accelerate the discovery of novel molecules for collaboration targets. Under the terms of the agreement, we will identify targets and Genesis will subsequently use the Genesis Exploration of Molecular Space artificial intelligence platform to identify molecular structures directed at each target. All preclinical costs related to the collaboration are subject to joint research plans. We will be responsible for leading the clinical development and global commercialization efforts.

Based on the terms of the agreement, we paid Genesis a total of $120.0 million, comprised of an upfront non-refundable payment of $80.0 million plus a $40.0 million equity investment in Genesis. In addition, Genesis is eligible to receive up to $135.0 million for the achievement of development milestones, up to $475.0 million for the achievement of regulatory milestones and up to $550.0 million for the achievement of sales milestones on the initial target programs.

The $80.0 million upfront payment was determined to be a prepayment for future research and development services and thus will be amortized over the five-year term of the agreement. Research and development expenses during the three and six months ended June 30, 2026, includes $2.7 million relating to the amortization of this upfront payment. Additionally, as of June 30, 2026, $16.0 million and $61.3 million were recorded in prepaid expenses and other current assets and other assets, net, respectively, on the condensed consolidated balance sheet relating to this upfront payment.

We purchased approximately 4.3 million shares of Genesis Series B-3 Preferred Stock for $40.0 million, at a price of $9.332 per share. As there is no readily determinable fair value for the shares we hold in Genesis, we have elected to account for our investment using the measurement alternative under ASC 321 whereby our investment is measured at cost, less any impairment, and adjusted for observable price changes in orderly transactions for identical or similar securities of Genesis. We monitor the investment for any observable price changes or impairment indicators. Any subsequent changes in fair value of our investment will be recognized within gain (loss) on equity investments on our condensed consolidated statements of operations. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term equity investments on the accompanying condensed consolidated balance sheets. For the three months ended June 30, 2026, we did not identify any impairment or observable price changes related to our investment in Genesis.

In addition to the license and collaboration agreements discussed above, we have various other license and collaboration agreements that are not individually material to our operating results or financial condition at this time. Pursuant to the terms of those agreements, we may be required to pay, or we may receive, additional amounts contingent upon the occurrence of various future events such as future discovery, development, regulatory or commercial milestones, which in the aggregate could be material. In addition, if any products related to these collaborations are approved for sale, we may be required to pay, or we may receive, royalties on future sales. The payment or receipt of these amounts, however, is contingent upon the occurrence of various future events, the likelihood of which cannot presently be determined.