2021 Stock Plan

In February 2021, the Company adopted the 2021 Stock Plan (the “2021 Plan”), which provided for stock awards to eligible employees, directors and consultants of the Company. Awards issuable under the 2021 Plan included incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), RSUs and stock grants. Subsequent to the adoption of the 2024 Equity Incentive Plan (the “2024 EIP”) in June 2024, described below, no additional shares were available for issuance under the 2021 Plan, and any stock options granted under the 2021 Plan that were subsequently forfeited would be made available for issuance under the 2024 EIP.

The terms of the 2021 Plan permit option holders to exercise stock options before their stock options are vested. The shares of common stock granted upon early exercise that have not yet vested are subject to repurchase by the Company in the event of termination of the holder’s continuous status as a service provider, at the price paid by the holder.

2024 Performance Option Plan

In May 2024, the Company’s board of directors adopted, and its stockholders approved, the 2024 Performance Option Plan (the “2024 POP”). The Company reserved 1,880,680 shares of common stock issuable under the 2024 POP. The 2024 POP permits grants of ISOs, NSOs and restricted stock awards to the Company’s employees, directors and consultants.

In May 2024, the Company granted NSOs to employees to purchase 1,880,680 shares of common stock at an exercise price of $10.19 under the 2024 POP. Stock options generally vest on the date when the Company meets certain common stock public market price specified targets after the end of the IPO lock-up period, subject to continuous service through each respective vest date. The price targets are calculated based on the volume weighted average price per share over 30 consecutive trading dates, in accordance with the grant terms. The unvested awards will expire if it is determined that the vesting conditions have not been met during the applicable six-year performance period. The service condition includes monthly vesting over 36 months from the vesting commencement date and the employee’s continuous service with the Company through each such monthly vesting date. The terms of the 2024 POP permit option holders to exercise stock options before their stock options are vested, if the market condition has been met.

2024 Equity Incentive Plan

In June 2024, the Company’s board of directors adopted, and its stockholders approved, the 2024 EIP, which became effective on June 27, 2024, upon execution of the underwriting agreement related to the Company’s IPO. The Company reserved 7,800,000 new shares of common stock for issuance under the 2024 EIP. In addition, up to 6,829,339 shares subject to awards under the 2021 Plan that terminate, expire, or lapse for any reason without the delivery of shares, or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price, were authorized to be added to the 2024 EIP. The 2024 EIP also provides that the number of shares initially reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2025 through January 1, 2034,

by an amount equal to 5% of the outstanding number of shares of the Company’s common stock as of the last day of the immediately preceding fiscal year, or such lesser number of shares as determined by the board of directors prior to the applicable January 1. Pursuant to this evergreen provision, the Company increased the number of shares reserved under the 2024 EIP by 5,235,338 on January 1, 2026. No more than 43,888,017 shares of common stock may be issued under the 2024 EIP.

The 2024 EIP allows the Company to grant equity awards to its officers, employees, directors and consultants. The 2024 EIP provides for the grant of ISOs, NSOs, restricted stock awards, RSUs, stock appreciation rights, performance awards and other stock-based awards. Stock options under the 2024 EIP may be granted for periods of up to 10 years at exercise prices no less than the fair market value of common stock on the date of grant; provided, however, that the exercise price of an ISO granted to a 10% stockholder may not be less than 110% of the fair market value of the shares on the date of grant and such option may not be exercisable after the expiration of five years from the date of grant. Stock options and RSUs granted under the 2024 EIP generally vest over four years. The grant date fair market value of all awards made under the 2024 EIP and all cash compensation paid by the Company to any non-employee director for services as a director in any fiscal year may not exceed $750,000, increased to $1,000,000 in the fiscal year of their initial service as a non-employee director. The terms of the 2024 EIP do not permit option holders to exercise stock options before their stock options are vested.

ACELYRIN Plans

Pursuant to the Merger Agreement, the Company assumed certain stock options, RSUs and performance RSUs outstanding under the ACELYRIN, Inc. 2020 Stock Option and Grant Plan, as amended (the “ACELYRIN 2020 Plan”), the ValenzaBio, Inc. Stock Plan (the “ValenzaBio Plan”) and the ACELYRIN, Inc. 2023 Equity Incentive Plan (the “ACELYRIN 2023 Plan” and, together with the ACELYRIN 2020 Plan and the ValenzaBio Plan, the “ACELYRIN Plans”). In connection with the closing of the ACELYRIN Merger, the Company also assumed the ACELYRIN 2023 Plan, which, as modified in connection with such assumption, permits equity awards to be issued to the extent permissible under applicable law and Nasdaq listing rules.

Stock options that were outstanding under the ACELYRIN Plans immediately prior to the Closing Date were assumed by the Company and converted into stock options to purchase the Company’s common stock. RSUs that were outstanding and unvested immediately prior to the Closing Date were assumed by the Company and converted into the Company’s RSU awards. Performance RSUs outstanding and unvested immediately prior to the Closing Date were converted into the Company’s RSU awards subject only to a service vesting condition.

Stock Option Activity

The following table summarizes the Company’s stock option activity, excluding under the 2024 POP, for the six months ended June 30, 2026 and includes early exercised shares as part of stock options exercised:

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Total exercisable shares of 9,104,174 as of June 30, 2026 included 1,422,383 unvested shares that were early exercisable under the 2021 Plan. The total fair value of stock options vested during the six months ended June 30, 2026 and 2025 was $13.1 million and $15.6 million, respectively.

The following table summarizes the Company’s stock option activity under the 2024 POP for the six months ended June 30, 2026:

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Valuation of Stock Options Granted

The weighted-average grant date fair value of stock options granted for the six months ended June 30, 2026 and 2025 was $20.60 and $4.02 per stock option, respectively.

The fair value of stock options granted for the six months ended June 30, 2026 and 2025 was estimated using the Black-Scholes option pricing model with the following assumptions:

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Expected Term

The expected term represents the weighted-average period the stock options are expected to remain outstanding and is based on the stock options’ vesting terms and contractual terms, as the Company did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.

Expected Volatility

The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company did not have sufficient trading history of its common stock. The Company will continue to use industry peers in determining historical stock price volatility until sufficient historical data of its common stock becomes available.

Risk-Free Interest Rate

The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options.

Dividends

The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used.

Valuation of Stock Options Granted under the 2024 POP

Stock options granted under the 2024 POP vest based on service, market and performance conditions (the occurrence of the IPO or a change of control) and are classified as equity financial instruments. At the grant date, the fair value of stock options granted under the 2024 POP was estimated using a Monte Carlo simulation model, which uses a distribution of potential outcomes on a monthly basis over the vesting period prioritizing the most reliable information available. The assumptions utilized in the calculation were based on the achievement of certain stock price thresholds, including the Company’s expected common stock price, expected volatility, risk-free rate and expected term. The Company used the following assumptions to estimate the fair value at the grant date in May 2024: common stock fair value of $12.06, vesting term of 6.0 years, volatility of 122.00%, and risk-free rate of 4.38%. The estimates of fair value are uncertain and changes in any of the estimated inputs could have resulted in significant adjustments to the fair value.

The Company’s estimated fair value of stock options issued under the 2024 POP of $18.0 million is recognized using graded vesting from July 1, 2024, the closing of the IPO, when the performance condition was met, over the longer of (i) the explicit service period of the service condition of 36 months or (ii) the derived service period between 1.4 years to 2.1 years, as determined for each graded vesting tranche.

Early Exercise of Employee Stock Options

Proceeds from the early exercise of stock options are recorded as share repurchase liability, and as shares vest are recognized to additional paid-in capital in the consolidated balance sheets. As of June 30, 2026 and December 31, 2025, share repurchase liability related to unvested shares was $0.1 million and $0.1 million, respectively, and was classified as share repurchase liability in the condensed consolidated balance sheets.

The following table summarizes the Company’s early exercised shares activity for the six months ended June 30, 2026:

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2024 Employee Stock Purchase Plan

In June 2024, the Company’s board of directors adopted, and its stockholders approved, the 2024 Employee Stock Purchase Plan (the “2024 ESPP”), which became effective on June 28, 2024, upon execution of the underwriting agreement related to the Company’s IPO. The Company initially reserved 650,000 shares of common stock for issuance under the 2024 ESPP. The number of shares of common stock reserved for issuance under the 2024 ESPP will be automatically increased each year for ten calendar years beginning on January 1, 2025 through January 1, 2034, by the lesser of (i) 1% of the total number of shares of the Company’s common stock outstanding on the last day of the calendar month before the date of the automatic increase, and (ii) 1,950,000 shares; provided that before the date of any such increase, the board of directors may determine that such increase will be less than the amount in (i) and (ii) above. Pursuant to this evergreen provision, the Company increased the number of shares reserved under the 2024 ESPP by 1,047,067 on January 1, 2026. The 2024 ESPP allows an eligible employee to purchase shares of common stock at an amount equal to 85% of the lower of the fair market value of the Company’s common stock at the beginning of the offering period or at each applicable purchase date during an offering period as established by the board of directors. The first purchase period commenced on January 24, 2025 and ended on May 20, 2025. During the six months ended June 30, 2026 and 2025, 253,150 and 184,633 shares of common stock were purchased under the 2024 ESPP, respectively.

The following table summarizes the Black-Scholes option pricing model used in estimating the fair value of the stock purchase rights under the 2024 ESPP for the six months ended June 30, 2026:

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Restricted Stock Units

The following table summarizes the Company’s unvested RSUs activity for the six months ended June 30, 2026:

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Stock-Based Compensation Expense

The following table summarizes the stock-based compensation expense recognized in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2026 and 2025 (in thousands):

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The following table summarizes stock-based compensation expense recognized in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss) by award type for the three and six months ended June 30, 2026 and 2025 (in thousands):

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Stock-based compensation expense related to non-employee awards was $0.4 million and $0.1 million for the three months ended June 30, 2026 and 2025, respectively, and was $0.7 million and $0.3 million for the six months ended June 30, 2026 and 2025, respectively. Stock-based compensation expense related to the 2024 POP was $0.9 million and $2.1 million for the three months ended June 30, 2026 and 2025, respectively, and $2.2 million and $4.3 million for the six months ended June 30, 2026 and 2025, respectively. Stock-based compensation expense for the three and six months ended June 30, 2025 included $10.8 million in severance costs related to the ACELYRIN Merger. See Note 3 for additional information.

As of June 30, 2026, unrecognized stock-based compensation expense for all stock awards was $152.3 million, which the Company expects to recognize over a weighted-average period of 2.9 years.