C4 Therapeutics Inc.

08/11/2026 | Press release | Distributed by Public on 08/11/2026 05:30

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited condensed consolidated financial statements and notes and Management's Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026. As discussed in the section titled "Special Note Regarding Forward-Looking Statements," the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025.
Business Overview
We are a clinical-stage biopharmaceutical company dedicated to delivering on the promise of targeted protein degradation, or TPD, science to create a new generation of small-molecule medicines that transform patients' lives. Leveraging our proprietary TORPEDO platform, we efficiently design and optimize small-molecule protein degraders that are highly active against their desired targets by harnessing the body's natural process for destroying unwanted proteins. Our strategy is to develop degraders that modulate clinically validated disease pathways with best-in-class or first-in-class potential to address significant unmet patient needs. To date, our degraders have demonstrated oral bioavailability and catalytic activity, and we have also leveraged our capability to design compounds that are brain penetrant.
Our most advanced product candidate, cemsidomide, is an orally bioavailable MonoDAC degrader of protein targets called IKZF1 and IKZF3. The United States Food and Drug Administration, or the FDA, has granted orphan drug designation to cemsidomide for the treatment of multiple myeloma, or MM. In June 2026, at the European Hematology Association, or EHA, 2026 Congress, we presented updated data from the Phase 1 trial of cemsidomide in combination with dexamethasone in MM. Consistent with previously disclosed data, this analysis demonstrated cemsidomide's generally well-tolerated safety profile and compelling anti-myeloma activity, supporting its development as a potential best-in-class IKZF1/3 degrader. Cemsidomide is currently being studied in the Phase 2 MOMENTUM clinical trial evaluating the efficacy of cemsidomide in combination with dexamethasone in patients with relapsed/refractory MM. Enrollment for the Phase 2 MOMENTUM trial is expected to be complete in the first quarter of 2027 with initial investigator-assessed overall response rate data expected in the second half of 2027.
We are also conducting a Phase 1b trial evaluating cemsidomide in combination with dexamethasone and elranatamab, pursuant to the Pfizer Agreement, for earlier lines of MM treatment. Enrollment in the trial is ongoing and we expect to provide an update on the dose escalation progress in the second half of 2026 and report data from all cohorts in mid-2027. In addition, we plan to initiate an additional Phase 1b trial in the first half of 2027 that will evaluate cemsidomide in two combination cohorts, (1) cemsidomide, dexamethasone, and daratumumab, an anti-CD38 antibody, or (2) cemsidomide, dexamethasone,and carfilzomib, a proteasome inhibitor. The goal of the trial is to characterize cemsidomide's dose and safety with approved standard of care MM therapies. We believe our clinical development strategy provides an efficient path toward bringing cemsidomide to the growing myeloma patient population across multiple lines of therapy.
Our other clinical oncology product candidate is CFT8919, an orally bioavailable, allosteric, mutant-selective BiDAC degrader of epidermal growth factor receptor, or EGFR, with an L858R mutation in non-small cell lung cancer, or NSCLC. In May 2023, we entered into a license and collaboration agreement with Betta Pharma to collaborate on the development and commercialization of CFT8919 in mainland China, Hong Kong SAR, Macau SAR and Taiwan, with us retaining rights to develop and commercialize CFT8919 in the rest of the world. In November 2024, Betta Pharma initiated a Phase 1 clinical trial in NSCLC patients with the EGFR L858R mutation in Greater China. Based on the evolving treatment landscape for EGFR mutated NSCLC, capital priorities, and available clinical data to date, we will not advance CFT8919 into the next phase of clinical development outside of Greater China at this time.
We are also advancing an internal discovery pipeline focused on developing new degraders for the treatment of inflammation, neuroinflammation, and neurodegeneration. We have engineered degraders that have successfully achieved blood-brain barrier penetration in preclinical studies. A key part of our strategy is selecting targets where there is a strong degrader rationale over other therapeutic modalities. In addition, we are advancing a discovery pipeline in collaboration with MKDG and Roche. Our partnership strategy allows us to potentially further expand our reach in both oncology and non-oncology indications.
Financial Operations Overview
Revenues
To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for the foreseeable future. Our revenues to date have been generated through research collaboration and license agreements. We recognize revenue over the expected performance period under each agreement. We expect that our revenue for the next several years will be derived primarily from our current collaboration agreements and any additional collaborations that we may enter into in the future. To date, we have not received any royalties under any of our existing collaboration agreements.
For a description of our collaboration agreements with Roche, Biogen, Betta Pharma, and MKDG, please see Note 8, Collaboration and license agreements, to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Research and development expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, and include:
•salaries, benefits, and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions;
•expenses incurred under agreements with third parties, including contract research organizations, or CROs, and other third parties that conduct research, preclinical, and clinical activities on our behalf as well as contract manufacturing organizations, or CMOs, that manufacture our product candidates for use in our preclinical and clinical trials;
•cost of outside consultants, including their fees and related travel expenses;
•costs of laboratory supplies and acquiring materials for preclinical studies and clinical trials;
•facility-related expenses, which include direct depreciation costs of equipment and allocated expenses for rent and maintenance of facilities and other operating costs; and
•third-party licensing fees.
We expense research and development costs as incurred. Costs for external development activities are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our condensed consolidated financial statements as prepaid or accrued research and development expenses. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses and expensed as the related goods are delivered or the services are performed.
We expect that our research and development expenses will continue to increase substantially in connection with our planned preclinical and clinical development activities.
General and administrative expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, legal, business development, and administrative functions. General and administrative expenses also include legal fees relating to corporate matters; professional fees for accounting, auditing, tax, and consulting services; insurance costs; travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
We expect that our general and administrative expenses will potentially increase in the future to support increased research and development activities. These increases will likely include higher costs related to the hiring of additional personnel; fees to outside consultants, lawyers and accountants; and investor and public relations costs.
Other income, net
Other income, net primarily consists of the following:
•interest income earned on our cash, cash equivalents, and marketable securities and accretion of discount on marketable securities.
Results of operations
Comparison of the three and six months ended June 30, 2026 and 2025
Revenue
Revenue from our collaboration and license agreements consisted of the following for the three and six months ended June 30, 2026 and 2025 (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Revenue from collaboration agreements:
Roche DAC Agreement $ 2,666 $ - $ 2,666 $ -
MKDG Agreement
1,833 3,428 3,595 6,581
Betta Agreements 15 54 20 514
Roche Agreement 2,127 1,932 4,512 4,428
Biogen Agreement - - 2,000 -
Merck Agreement
- 1,049 - 2,178
Total revenue from collaboration agreements $ 6,641 $ 6,463 $ 12,793 $ 13,701
The $0.2 million increase in revenue in the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, is primarily driven by $2.7 million of revenue recognized under the Roche DAC Agreement, which commenced in April 2026. This was partially offset by:
•a $1.6 million decrease in revenue related to the MKDG collaboration from the decision in 2025 to prioritize one KRAS project; and
•a $1.0 million decrease related to our Merck collaboration terminating in 2025.
The $0.9 million decrease in revenue in the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, is primarily driven by:
•a $3.0 million decrease in revenue related to the MKDG collaboration from the decision in 2025 to prioritize one KRAS project; and
•a $2.2 million decrease related to our Merck collaboration terminating in 2025.
This is partially offset by:
•$2.7 million of revenue recognized under the Roche DAC Agreement, which commenced in April 2026; and
•a $2.0 million milestone achieved under the Biogen collaboration.
Research and development expenses
The following table summarizes our research and development expenses for the three and six months ended June 30, 2026 and 2025 (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Research and development expenses:
Personnel expenses $ 6,875 $ 8,851 $ 15,781 $ 18,494
Preclinical development and discovery expenses 7,068 6,466 12,561 13,743
Clinical expenses 4,600 4,728 9,079 9,437
Facilities and supplies 3,209 3,709 6,623 6,839
Professional fees 1,188 1,275 2,426 2,586
Intellectual property and other expenses 1,531 1,168 2,607 2,170
Total research and development expenses $ 24,471 $ 26,197 $ 49,077 $ 53,269
The $1.7 million decrease in research and development expenses in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 is primarily driven by a $2.0 million decrease in personnel expenses as a result of lower stock-based compensation expense and a reduction in research and development headcount, which was partially
offset by a $0.6 million increase in preclinical development and discovery expenses as a result of progress made on our collaboration programs and internal programs.
The $4.2 million decrease in research and development expenses in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 is primarily driven by:
•a $2.7 million decrease in personnel expenses as a result of lower stock-based compensation expense and a reduction in research and development headcount; and
•a $1.2 million decrease in preclinical development and discovery expenses as a result of the termination of the Merck collaboration in 2025 and the decision to prioritize one project under the MKDG collaboration in 2025.
General and administrative expenses
The following table summarizes our general and administrative expenses for the three and six months ended June 30, 2026 and 2025 (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
General and administrative expenses:
Personnel expenses $ 5,362 $ 6,260 $ 11,658 $ 13,084
Professional fees 2,053 1,475 3,965 2,943
Facilities and other expenses 1,178 1,032 2,301 2,070
Total general and administrative expenses $ 8,593 $ 8,767 $ 17,924 $ 18,097
The $0.2 million decrease in general and administrative expenses in the three months ended June 30, 2026, as compared to the three months ended June 30, 2025 is primarily driven by a $0.9 million decrease in personnel expenses related to lower stock-based compensation expense. This was partially offset by a $0.6 million increase in professional fees.
The $0.2 million decrease in general and administrative expenses in the six months ended June 30, 2026, as compared to the six months ended June 30, 2025 is primarily driven by a $1.4 million decrease in personnel expenses related to lower stock-based compensation expense. This was partially offset by a $1.0 million increase in professional fees.
Other income, net
The $0.3 million increase in other income, net in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 is primarily driven by a $0.3 million increase in interest and other income resulting from increased invested balances as we generated cash from financing activities.
The change in other income, net in the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was not significant.
Liquidity and capital resources
Sources of liquidity
Since inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical programs and our product candidates through clinical development. We do not currently have any approved products and have never generated any revenue from product sales. To date, we have financed our operations primarily through the sale of preferred stock, public offerings of our common stock, private placements of our common stock, and through payments from collaboration partners. As of June 30, 2026, we had cash, cash equivalents and marketable securities of approximately $300.4 million.
Cash flows
The following table summarizes our sources and uses of cash for the periods presented (in thousands):
Six Months Ended June 30,
2026 2025
Net change in cash, cash equivalents and restricted cash:
Net cash used in operating activities $ (31,518) $ (45,342)
Net cash provided by investing activities 1,338 68,046
Net cash provided by (used in) financing activities 34,187 (46)
Total net change in cash, cash equivalents and restricted cash $ 4,007 $ 22,658
Operating activities
Net cash used in operating activities for the six months ended June 30, 2026 was $31.5 million, and was driven primarily by the following uses of cash:
•net loss of $48.8 million;
•$3.1 million decrease in our operating lease liability; and
•$1.5 million increase in prepaid expenses and other current and long-term assets.
These were offset by an increase in deferred revenue of $12.0 million, primarily a result of the April 2026 Roche DAC Agreement, non-cash expenses of $8.1 million, which primarily consisted of stock-based compensation expense of $5.7 million, and a decrease in accounts receivable of $1.1 million.
Investing activities
Net cash provided by investing activities for the six months ended June 30, 2026 was $1.3 million, and was driven primarily by the sales and maturities of marketable securities, net of purchases.
Financing activities
Net cash provided by financing activities for the six months ended June 30, 2026 was $34.2 million, and was driven primarily by proceeds from issuance of common stock from the ATM Program, as defined below.
Funding requirements
Since our inception, we have incurred significant operating losses, and we expect to continue to incur significant expenses and increasing operating losses for the foreseeable future as we advance the preclinical programs and our product candidates through clinical development. In addition, we expect to continue to incur costs associated with operating as a public company.
Specifically, we anticipate that our expenses will increase substantially in the future, if and as we:
•continue our ongoing Phase 1 and Phase 2 trials;
•initiate later-stage development and potential registrational trials for our product candidates;
•advance additional product candidates into preclinical and clinical development;
•continue to invest in our proprietary TORPEDO platform;
•advance, expand, maintain and protect our intellectual property portfolio;
•hire additional clinical, regulatory, quality and scientific personnel;
•add operational, financial and management information systems and personnel to support our ongoing research, product development, potential future commercialization efforts, operations as a public company and general and administrative roles;
•seek marketing approvals for any product candidates that successfully complete clinical trials; and
•ultimately establish a sales, marketing, and distribution infrastructure and scale up external manufacturing capabilities to commercialize any products for which we may obtain marketing approval.
Because of the numerous risks and uncertainties associated with development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital and operating costs associated with our current and anticipated preclinical and clinical development. Our future capital requirements will depend on many factors, including:
•the progress, costs, and results of ongoing and planned first-in-human Phase 1 and Phase 2 trials for our lead product candidate and any future clinical development of our lead product candidate;
•the scope, progress, costs and results of preclinical and clinical development for our other product candidates and development programs;
•the number and development requirements of other product candidates that we pursue;
•the progress and success of our existing and any future collaborations with third-party partners, including whether or not we receive additional research support or milestone payments from our existing collaboration partners upon the achievement of milestones;
•the costs, timing, and outcome of regulatory review of our product candidates;
•the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;
•our willingness and ability to establish additional collaboration arrangements with other biotechnology or pharmaceutical companies on favorable terms, if at all, for the development or commercialization of current or additional future product candidates;
•the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; and
•the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval.
As a result of the anticipated expenditures described above, we will need to obtain substantial additional financing to support our continuing operations and pursue our long-term business plan. Until such time, if ever, that we can generate substantial revenue from product sales, we expect to finance our cash needs through a combination of equity offerings, private placements of equity securities, debt offerings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements. Although we may receive potential future milestone and royalty payments under our collaborations with Roche, Biogen, Betta Pharma, and MKDG, we do not have any committed external sources of funds as of June 30, 2026.
Adequate additional funds may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
If we raise additional capital through the sale of equity securities, each investor's ownership interest will be diluted, and the terms of any securities we may issue could include liquidation or other preferences that adversely affect the rights of holders of our common stock. Preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as making acquisitions or capital expenditures or declaring dividends.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.
At-the-market equity program
In October 2024, we filed a registration statement on Form S-3, or the 2024 Registration Statement, with the SEC that became effective on November 13, 2024 and registered the offering, issuance and sale of an unspecified amount of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof. Simultaneously, we entered into a sales agreement with TD Securities (USA) LLC, as sales agent, to provide for the issuance and sale by us of up to $200.0 million of common stock from time to time in "at-the-market" offerings under the 2024 Registration Statement and related prospectus filed with the 2024 Registration Statement, or the ATM Program. On October 16, 2025, we terminated the sales agreement prospectus related to the ATM Program. A total of 3,769,483 shares of our common stock at an average purchase price of $2.55 had been sold through the ATM Program as of October 16, 2025, which sales resulted in net proceeds of $9.4 million.
In November 2025, the Company filed a registration statement on Form S-3, or the 2025 Registration Statement, with the SEC that became effective on December 10, 2025 and registered the offering, issuance and sale of up to $400.0 million of common stock, preferred stock, debt securities, warrants and/or units or any combination thereof, together with a sales agreement prospectus for the offer and sale of up to $125.0 million of common stock from time to time in "at-the-market" offerings under the ATM Program. For the three and six months ended June 30, 2026, a total of 9,273,620 shares of our common stock had been sold at an average price of $3.71 under the ATM Program, which resulted in net proceeds of $33.5 million. Please see Note 9, Stockholders' equity, to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Underwritten offering
In October 2025, we entered into an underwriting agreement with Jefferies LLC, TD Securities (USA) LLC and Evercore Group L.L.C., or collectively, the Underwriters, related to an underwritten offering, or the 2025 Offering, of (i) 21,895,000 shares, or the Shares, of our common stock; (ii) in lieu of common stock to certain investors, pre-funded warrants to purchase an aggregate of 28,713,500 shares of common stock, or the Pre-Funded Warrants; (iii) accompanying Class A warrants to purchase an aggregate of 50,608,500 shares of common stock (or pre-funded warrants in lieu thereof), or the Class A Warrants, and together with the Class B Warrants (as defined below), the Class A and Class B Warrants; and (iv) accompanying Class B warrants to purchase an aggregate of 50,608,500 shares of common stock (or pre-funded warrants in lieu thereof), or the Class B Warrants, and together with the Pre-Funded Warrants and the Class A Warrants, the Warrants. Each Share was offered and sold together with accompanying Class A and Class B Warrants each exercisable for one share of common stock at a combined offering price of $2.47 per Share and accompanying Class A and Class B Warrants, and each Pre-Funded Warrant was offered and sold together with accompanying Class A and Class B Warrants at a combined offering price of $2.4699 per Pre-Funded Warrant and accompanying Class A and Class B Warrants. We received net proceeds from the 2025 Offering, after deducting the underwriting discount and commissions and other estimated offering expenses, of approximately $116.9 million. If all Warrants are exercised, the aggregate net proceeds to us from the 2025 Offering, after deducting underwriting discounts and commissions and estimated offering expenses, are expected to be $341.7 million. As of June 30, 2026, a total of 15,695,500 Pre-Funded Warrants have been exercised for shares of common stock at a price of $0.0001 per share. No Class A or Class B Warrants have been exercised.
Contractual obligations
We enter into contracts in the normal course of business with contract manufacturing organizations, contract research organizations, and other vendors to assist in the performance of our research and development activities and other services and products for operating purposes. These contracts generally provide for termination on notice, and therefore are cancellable contracts and not included in the table of contractual obligations and commitments.
During the six months ended June 30, 2026, except for the minimum rental commitments disclosed in Note 6, Leases, to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there were no significant changes to our contractual obligations and commitments described under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2025.
Critical accounting policies and use of estimates
Our critical accounting policies are those policies that require the most significant judgments and estimates in the preparation of our unaudited condensed consolidated financial statements. We have determined that our most critical accounting policies are those relating to revenue recognition from collaborations, research and development expense recognition, lease liability measurement, and stock-based compensation. There have been no significant changes to our existing critical accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 26, 2026.
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