Monte Rosa (NASDAQ: GLUE) swings to Q1 loss but extends cash runway into 2029
Monte Rosa Therapeutics reported a net loss of $44.5 million for the three months ended March 31, 2026, compared with net income of $46.9 million a year earlier. Collaboration revenue fell to $4.2 million from $84.9 million as prior-period payments were not repeated.
Research and development expense rose to $44.1 million, reflecting broader pipeline activity, while general and administrative costs increased modestly to $10.2 million. The company ended the quarter with $666.2 million in cash, cash equivalents and marketable securities and $671.2 million including restricted cash, and expects this to fund operations into 2029.
Positive
- None.
Negative
- None.
Insights
Revenue normalized after prior upfronts while cash runway extended into 2029.
Monte Rosa Therapeutics shifted from $46.9 million net income in Q1 2025 to a $44.5 million net loss in Q1 2026 as collaboration revenue declined to $4.2 million from $84.9 million, reflecting the absence of large upfront and milestone payments.
At the same time, research and development spending increased to $44.1 million, driven by multiple clinical and preclinical programs and discovery work under the Roche and Novartis agreements. These collaborations generated deferred revenue balances that will be recognized as services are delivered rather than in one-time lumps.
The company strengthened its balance sheet with a $345.0 million underwritten equity offering, ending March 31, 2026 with $666.2 million in cash, cash equivalents and marketable securities and stating a cash runway into 2029. This provides substantial funding for ongoing trials and platform investment, while future period results will depend on the pace of R&D and any additional collaboration milestones.
Key Figures
Key Terms
molecular glue degraders financial
collaboration revenue financial
deferred revenue financial
at-the-market offerings financial
stock-based compensation expense financial
defined benefit plan financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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As of May 1, 2026, the registrant had
Special note regarding forward-looking statements
This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, or the or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, “continue” or the negative of these terms or other comparable terminology. These statements are not guarantees of future results or performance and involve substantial risks and uncertainties. Forward-looking statements in this Quarterly Report include, but are not limited to, statements about:
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Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events and with respect to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those described under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
All of our forward-looking statements are as of the date of this Quarterly Report only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the SEC could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report that modify or impact any of the forward-looking statements contained in this Quarterly Report will be deemed to modify or supersede such statements in this Quarterly Report.
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ii
Table of Contents
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PART I. |
FINANCIAL INFORMATION |
1 |
Item 1. |
Financial Statements (Unaudited) |
1 |
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Condensed Consolidated Balance Sheets (Unaudited) |
1 |
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Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited) |
2 |
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Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) |
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Condensed Consolidated Statements of Cash Flows (Unaudited) |
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Notes to the Condensed Consolidated Financial Statements (Unaudited) |
5 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
28 |
Item 4. |
Controls and Procedures |
28 |
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PART II. |
OTHER INFORMATION |
29 |
Item 1. |
Legal Proceedings |
29 |
Item 1A. |
Risk Factors |
29 |
Item 2. |
Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
31 |
Item 3. |
Defaults Upon Senior Securities |
31 |
Item 4. |
Mine Safety Disclosures |
31 |
Item 5 |
Other Information |
31 |
Item 6. |
Exhibits |
32 |
Signatures |
33 |
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iii
Part I ─ Financial Information
Item 1. Financial Statements
Monte Rosa Therapeutics, Inc.
Condensed consolidated balance sheets (unaudited)
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March 31, |
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December 31, |
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(in thousands, except share and per share amounts) |
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2026 |
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2025 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Collaboration receivable |
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Other receivables |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Restricted cash |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other current liabilities |
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Current deferred revenue |
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Current portion of operating lease liability |
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Total current liabilities |
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Deferred revenue, net of current |
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Defined benefit plan liability |
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Operating lease liability, net of current |
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Total liabilities |
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Commitments and contingencies (Note 8) |
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Stockholders’ equity |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes to the condensed consolidated financial statements.
1
Monte Rosa Therapeutics, Inc.
Condensed consolidated statements of operations and comprehensive (loss) income (unaudited)
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Three months ended |
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(in thousands, except share and per share amounts) |
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2026 |
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2025 |
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Collaboration revenue |
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$ |
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$ |
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Operating expenses: |
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Research and development |
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General and administrative |
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Total operating expenses |
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(Loss) income from operations |
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Other income: |
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Interest income |
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Foreign currency exchange (loss) gain |
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Gain on disposal of property and equipment |
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Total other income |
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Net (loss) income before income taxes |
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Income tax provision |
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( |
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Net (loss) income |
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$ |
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$ |
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Comprehensive loss (income): |
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Provision for pension benefit obligation |
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Unrealized loss on available-for-sale securities |
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( |
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( |
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Comprehensive (loss) income |
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$ |
( |
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$ |
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(Loss) earnings per share: |
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Basic |
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$ |
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$ |
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Diluted |
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$ |
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Weighted average number of shares outstanding: |
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Basic |
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Diluted |
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See accompanying notes to the condensed consolidated financial statements.
2
Monte Rosa Therapeutics, Inc.
Condensed consolidated statements of stockholders’ equity (unaudited)
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Common stock |
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(in thousands, except share amounts) |
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Shares |
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Amount |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Balance—January 1, 2026 |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Issuance of common stock and pre-funded warrants pursuant to underwritten public offering, net of issuance cost of $ |
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— |
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— |
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Exercise of pre-funded warrants |
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— |
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— |
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— |
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— |
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— |
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Restricted common stock vesting |
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— |
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— |
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— |
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— |
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— |
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Exercise of common stock options |
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— |
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— |
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— |
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Provision for pension benefit obligation |
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— |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Unrealized loss on available-for-sale securities |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Net Loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance—March 31, 2026 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Common stock |
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(in thousands, except share amounts) |
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Shares |
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Amount |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Balance—January 1, 2025 |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Exercise of common stock options |
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— |
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— |
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— |
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Provision for pension benefit obligation |
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— |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Unrealized loss on available-for-sale securities |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Net income |
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— |
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— |
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— |
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— |
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Balance—March 31, 2025 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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||||
See accompanying notes to the condensed consolidated financial statements
3
Monte Rosa Therapeutics, Inc.
Condensed consolidated statements of cash flows (unaudited)
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Three months ended |
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(in thousands) |
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2026 |
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2025 |
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Cash flows from operating activities: |
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Net loss (income) |
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$ |
( |
) |
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$ |
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Adjustments to reconcile net loss to net cash used in operating activities |
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Stock-based compensation expense |
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Depreciation |
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Net accretion of discounts/premiums on marketable securities |
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( |
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( |
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Gain on disposal of property and equipment |
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( |
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Changes in operating assets and liabilities |
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Collaboration receivable |
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Other receivables |
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( |
) |
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( |
) |
Prepaid expenses and other assets |
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( |
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( |
) |
Accounts payable |
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( |
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Accrued expenses and other current liabilities |
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( |
) |
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( |
) |
Defined benefit plan liability |
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Right-of-use assets and operating lease liabilities |
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( |
) |
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( |
) |
Deferred revenue |
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( |
) |
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( |
) |
Net cash used in operating activities |
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$ |
( |
) |
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$ |
( |
) |
Cash flows from investing activities: |
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Purchases of property and equipment |
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( |
) |
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( |
) |
Purchases of marketable securities |
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( |
) |
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( |
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Proceeds from maturities of marketable securities |
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Net cash used in investing activities |
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$ |
( |
) |
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$ |
( |
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Cash flows from financing activities: |
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Proceeds from exercise of employee stock options |
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Proceeds from underwritten public offering, net of underwriter's commission of $ |
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Payment of offering costs |
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( |
) |
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Net cash provided by financing activities |
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$ |
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$ |
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Net increase (decrease) in cash, cash equivalents and restricted cash |
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$ |
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$ |
( |
) |
|
Cash, cash equivalents and restricted cash—beginning of period |
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Cash, cash equivalents and restricted cash—end of period |
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$ |
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$ |
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Reconciliation of cash, cash equivalents and restricted cash |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Total cash, cash equivalents and restricted cash |
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$ |
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$ |
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||
Supplemental disclosure of noncash items |
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Purchases of property and equipment in accounts payable and accrued expenses |
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$ |
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$ |
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||
See accompanying notes to the condensed consolidated financial statements.
4
Monte Rosa Therapeutics, Inc.
Notes to the condensed consolidated financial statements
(unaudited)
1. Description of business and liquidity
Business
Monte Rosa Therapeutics, Inc. is a biotechnology company developing a portfolio of novel small molecule precision medicines that employ the body’s natural mechanisms to selectively degrade therapeutically-relevant proteins. As used in these condensed consolidated financial statements, unless the context otherwise requires, references to the Company or Monte Rosa refer to Monte Rosa Therapeutics, Inc. and its wholly owned subsidiaries Monte Rosa Therapeutics AG and Monte Rosa Therapeutics Securities Corporation. Monte Rosa Therapeutics AG, a Swiss operating company, was incorporated under the laws of Switzerland in April 2018. Monte Rosa Therapeutics, Inc. was incorporated in Delaware in November 2019. The Company is headquartered in Boston, Massachusetts with research operations in both Boston and Basel, Switzerland.
Liquidity considerations
Since inception, the Company has devoted substantially all its efforts to business planning, research and development, recruiting management and technical staff, and raising capital and has financed its operations primarily through issuance and sale of convertible promissory notes, convertible preferred stock, public offerings of common stock or warrants to purchase common stock, registered direct offerings, and through its collaborations with F. Hoffman-La Roche Ltd. and Hoffman-La Roche Inc., or Roche, and with Novartis AG, or Novartis.
The Company’s continued discovery and development of its product candidates will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.
As of March 31, 2026, the Company had an accumulated deficit of $
2. Summary of significant accounting policies
Basis of presentation
The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S., or GAAP, and are stated in U.S. dollars. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification and Accounting Standards Updates, or ASUs, of the Financial Accounting Standards Board, or FASB. All intercompany balances and transactions have been eliminated in consolidation.
Unaudited financial information
The Company’s condensed consolidated financial statements included herein have been prepared in conformity with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC. In the Company’s opinion, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the financial position and results of operations for the reported interim periods. The
5
Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.
Recently issued accounting pronouncements
The Company has elected to use the extended transition period for complying with new or revised accounting standards as available under the Jumpstart Our Business Startups Act, or the JOBS Act.
In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 requires disclosure of, in a tabular presentation, each relevant expense caption on the face of the income statement that includes any of the following natural expenses: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization (DD&A) recognized as part of oil- and gas-producing activities or other types of depletion expenses. The tabular disclosure would also include certain other expenses, when applicable. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements and related disclosures.
\\\
3. Fair value measurements
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):
|
|
As of March 31, 2026 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Pension plan assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S Treasury securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets measured at fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
As of December 31, 2025 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Pension plan assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S Treasury securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets measured at fair value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Money market funds are highly liquid investments and are actively traded. The pricing information on the Company’s money market funds is based on quoted prices in active markets for identical securities. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.
The fair value of pension plan assets has been determined as the surrender value of the portfolio of active insured members held within the Columna Collective Foundation Group investment fund and is classified within Level 2 of the fair value hierarchy.
Marketable securities consist of corporate debt securities and U.S. Treasury securities which are classified as available-for-sale pursuant to ASC 320, Investments—Debt and Equity Securities. Marketable securities are classified within Level 2 of the fair value hierarchy because pricing inputs are other than quoted prices in active markets. The fair values of these investments are estimated by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities based on historical data and other observable inputs.
There were
6
4. Marketable securities
Marketable securities as of March 31, 2026 consisted of the following (in thousands):
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
|
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
||||
Description |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|||
U.S Treasury securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Marketable securities as of December 31, 2025 consisted of the following (in thousands):
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
|
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
||||
Description |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
||||
U.S Treasury securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
As of March 31, 2026, unrealized gain and losses on marketable securities are recorded in accumulated other comprehensive loss in equity on the accompanying condensed consolidated balance sheet. There were
The Company holds debt securities of companies with high credit quality and has determined that there was no material change in the credit risk of any of its debt securities. The Company also believes that it will be able to collect both principal and interest amounts due to it at maturity.
5. Property and equipment, net
Property and equipment, net, consist of the following (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
Laboratory equipment |
|
$ |
|
|
$ |
|
||
Computer hardware and software |
|
|
|
|
|
|
||
Furniture and fixtures |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Construction in process |
|
|
|
|
|
|
||
Total property and equipment, at cost |
|
$ |
|
|
$ |
|
||
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense for each of the three months ended March 31, 2026 and 2025 was $
6. Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Accrued compensation and benefits |
|
$ |
|
|
$ |
|
||
Accrued research and development |
|
|
|
|
|
|
||
Accrued fixed asset purchase |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued expenses and other current liabilities |
|
$ |
|
|
$ |
|
||
7
7. Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use, or ROU, assets and operating lease liabilities in the condensed consolidated balance sheets. The Company has
ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, management estimated the incremental borrowing rate based on the rate of interest the Company would have to pay to borrow a similar amount on a collateralized basis over a similar term. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
Klybeckstrasse Lease
In March 2021, the Company entered into an operating lease agreement, or the Klybeckstrasse Lease, for office and laboratory space with Wincasa AG, or the Basel Landlord, that occupies approximately
Harrison Avenue Lease
In December 2021, the Company entered into a non-cancelable lease agreement, or the Harrison Avenue Lease, for
The components of lease expense for the three months ended March 31, 2026 and 2025 are as follows (in thousands):
|
|
Three months ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Operating lease expense |
|
$ |
|
|
$ |
|
||
Variable lease expense |
|
|
|
|
|
|
||
Total lease expense |
|
$ |
|
|
$ |
|
||
The variable lease expenses generally include common area maintenance and property taxes.
The following table summarizes lease expense incurred (in thousands):
|
|
Three months ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Research and development |
|
$ |
|
|
$ |
|
||
General and administrative |
|
|
|
|
|
|
||
Total lease expense |
|
$ |
|
|
$ |
|
||
Short-term lease costs for the three months ended March 31, 2026 and 2025 were immaterial.
The weighted average remaining lease term and discount rate related to the Company's leases are as follows:
|
|
March 31, |
|
|
December 31, |
|
||
Weighted average remaining lease term (years) |
|
|
|
|
|
|
||
Weighted average discount rate |
|
|
% |
|
|
% |
||
8
Supplemental cash flow information and other information relating to the Company's leases for the three months ended March 31, 2026 and 2025 is as follows (in thousands):
|
|
Three months ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash paid for amounts included in the measurement of lease liabilities |
|
$ |
|
|
$ |
|
||
Amortization of ROU assets |
|
$ |
|
|
$ |
|
||
Future minimum lease payments under non-cancelable leases as of March 31, 2026 for each of the years ending December 31 are as follows (in thousands):
Undiscounted lease payments |
|
|
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted minimum lease payments |
|
|
|
|
Less: Imputed interest |
|
|
( |
) |
Total operating lease liability |
|
$ |
|
|
8. Commitments and contingencies
Legal proceedings
From time to time, the Company may be subject to legal proceedings, claims and disputes that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. As of March 31, 2026, the Company is not a party to any litigation and does not have a contingency reserve established for any litigation liabilities.
9. Collaboration and license agreements
Roche collaboration and license agreement
Description
In October 2023, Monte Rosa Therapeutics AG, a wholly-owned subsidiary of Monte Rosa Therapeutics, Inc, or the Company, entered into a collaboration and license agreement, or the Roche Agreement, with Roche. Pursuant to the Roche Agreement, the parties will seek to identify and develop molecular glue degraders, or MGDs, against cancer or neurological disease targets using the Company’s proprietary drug discovery engine for an initial set of targets in oncology and neuroscience selected by Roche, wherein a certain number of targets selected by Roche are for a limited time subject to replacement rights owned by Roche. The Company will lead preclinical discovery and research activities with Roche leading late preclinical and clinical development activities.
Under the Roche Agreement, Roche will have a worldwide, exclusive license under patents and know-how controlled by the Company to develop and commercialize products directed to applicable targets. The license exclusivity is subject to the Company’s retained rights solely to fulfill its obligations under the arrangement.
The research collaboration activities governed by the Roche Agreement are overseen by a joint research committee.
Unless earlier terminated, the Roche Agreement will remain in effect for each product licensed under the Roche Agreement until expiration of the royalty term for the applicable product. The parties have included termination provisions in the Roche Agreement, allowing termination of the Roche Agreement in its entirety, on a country-by-country or a target-by-target basis.
Pricing
In November 2023, the Company received a $
9
To date through March 31, 2026, the Company has received $
Accounting
This agreement represents a transaction with a customer and therefore is accounted for under ASC 606, Revenue From Contracts With Customers.
The Company determined that the development and commercialization licenses for each of the collaboration targets is neither capable of being distinct nor distinct within the context from the promised initial research services. In addition, the Company has determined that each target in the agreement is distinct from other targets because: (i) Roche can benefit from the license and research services for a given target on their own since the results related thereto can be evaluated discretely and (ii) the results of the research and development of each target does not affect either the Company’s ability to perform or Roche’s ability to assess the results for any other target. As such, the Company has identified certain performance obligations within the agreement as follows:
The total transaction price of the Roche Agreement is allocated to the performance obligations based on their relative standalone selling price. The Company developed the standalone selling price for the performance obligations included in the Roche Agreement by determining the total estimated costs to fulfill each performance obligation identified with the objective of determining the price at which it would sell such an item if it were to be sold regularly on a standalone basis. The allocated transaction price is recognized as revenue from collaboration agreements in one of two ways:
To date through March 31, 2026, $
The following table summarizes the deferred revenue amounts allocated to the Roche Agreement performance obligations (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Roche Agreement performance obligations |
|
|
|
|
|
|
||
Research and development of initial targets |
|
$ |
|
|
$ |
|
||
Research and development for replacement targets |
|
|
|
|
|
|
||
Total Roche Agreement deferred revenue |
|
$ |
|
|
$ |
|
||
10
to recognize revenue related to the performance obligations for the initial and replacement targets. Any amounts remaining in deferred revenue will be recognized at the conclusion of the Roche Agreement in October 2028.
As of March 31, 2026, potential research, development and regulatory milestone payments that the Company is eligible to receive were excluded from the transaction price as they were fully constrained by uncertain events. The Company will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and if necessary, the Company will adjust its estimate of the transaction price. Any additions to the transaction price would be reflected in the period as a cumulative revenue catch-up based on the ratio of costs incurred to the total estimated costs expected applied to the revised transaction price. Sales-based royalties and milestone payments, which predominantly relate to the license, will be recognized if and when the related sales occur.
2024 Novartis License Agreement
Description
In October 2024, Monte Rosa Therapeutics AG, a wholly-owned subsidiary of the Company, entered into a license agreement with Novartis, or the 2024 Novartis Agreement. Pursuant to the 2024 Novartis Agreement, the Company granted to Novartis an exclusive, royalty-bearing, sublicensable and transferable license to develop, manufacture, and commercialize VAV1 MGDs, including MRT-6160, which is currently in Phase 1 clinical development for immune-mediated conditions. The Company was responsible for completing the Phase 1 clinical study and Novartis is responsible for all subsequent development and commercial activities starting at Phase 2.
Pricing
In December 2024, the Company received a $
Accounting
The goods and services that the Company was obligated to deliver and perform (the License and Licensor Clinical Trial) were accounted for under ASC 606 as they represented a transaction with a customer.
The Company has concluded that the License and the completion of the Licensor Clinical Trial promises are treated as a single, combined performance obligation. The Company has determined the total transaction price to be $
The revenue the Company recognized associated with the combined performance obligation was recognized over time using a cost-based input methodology. The transfer of control occurred over the course of the Licensor Clinical Trial promise and, in management’s judgment, was the best measure of progress towards satisfying the combined performance obligation.
As of September 30, 2025, the total transaction price of $
2025 Novartis License Agreement
Description
In September 2025, Monte Rosa Therapeutics AG, a wholly-owned subsidiary of the Company, entered into a collaboration, option, and license agreement with Novartis, or the 2025 Novartis Agreement. Pursuant to the 2025
11
Novartis Agreement, the Company granted to Novartis an exclusive, royalty-bearing, sublicensable and transferable license to degraders for one immunology and inflammation, or I&I program, or the First Licensed Program, and the option to obtain exclusive, royalty-bearing, sublicensable and transferable licenses with respect to two additional programs from the Company’s growing preclinical immunology portfolio, or the Options, and the programs, or the Optioned I&I Programs. Such Options are individually exercisable at Novartis’ discretion until a program meets criteria for investigational new drug application-filing-readiness. On a program-by-program basis, if Novartis does not exercise an Option, all rights with respect to such program are retained by the Company; if Novartis does exercise its Option, such program becomes a Licensed Program, or together, with the First Licensed Program, the Licensed Programs. Under the 2025 Novartis Agreement, the Company will apply its proprietary AI/ML-enabled QuEEN™ engine for the discovery and development of degraders for the First Licensed Program and the Optioned I&I Programs. The Licensed Programs will be further developed and commercialized by Novartis, unless otherwise agreed to by the parties in accordance with the 2025 Novartis Agreement. Research activities for the Licensed Programs governed by the Agreement will be overseen by a Joint Research Committee.
Pricing
In September 2025, the Company received a $
Accounting
The goods and services that the Company is obligated to deliver and perform under the 2025 Novartis Agreement will be accounted for under ASC 606 as they represent a transaction with a customer.
The Company has concluded that the transaction price at inception is $
The total transaction price of the 2025 Novartis Agreement is allocated to the performance obligations based on their relative standalone selling prices, or the price at which it would sell such an item if it were to be sold regularly on a standalone basis. The standalone selling price of performance obligations related to license and research services were determined using a cost-plus margin approach. The standalone selling price related to material rights for immunology license options were determined by benchmarking to comparable transactions, probability adjusted for the likelihood of exercise.
The allocated transaction price is recognized as revenue from collaboration agreements in one of two ways:
12
To date through March 31, 2026, $
The following table summarizes the unearned amount of the 2025 Novartis Agreement transaction price allocated to the performance obligations (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
2025 Novartis Agreement performance obligations |
|
|
|
|
|
|
||
License and research services for named immunology target |
|
$ |
|
|
$ |
|
||
Research services to support immunology license options |
|
|
|
|
|
|
||
Material right - first immunology license option |
|
|
|
|
|
|
||
Material right - second immunology license option |
|
|
|
|
|
|
||
Total unearned amount of transaction price |
|
$ |
|
|
$ |
|
||
10. Equity
Undesignated preferred stock
The Company had
Common stock
The Company had
Additionally, as of March 31, 2026, the Company has
The Company has assessed the pre-funded warrants for appropriate equity or liability classification. During this assessment, the Company determined the pre-funded warrants are a freestanding instrument that does not meet the definition of a liability pursuant to ASC 480 and does not meet the definition of a derivative pursuant to ASC 815. The pre-funded warrants are indexed to the Company’s common stock and meet all other conditions for equity classification under ASC 480 and ASC 815. Based on the results of this assessment, the Company concluded that the pre-funded warrants are a freestanding equity-linked financial instrument that meets the criteria for equity classification under ASC 480 and ASC 815. Accordingly, the pre-funded warrants are classified as equity and are accounted for as a component of additional paid-in capital at the time of issuance. The Company also determined that the pre-funded warrants should be included in the determination of basic and diluted earnings per share in accordance with ASC 260, Earnings per Share.
The holders of common stock are entitled to dividends when and if declared by the Company's board of directors, subject to the preferences applicable to any outstanding shares of preferred stock. The Company's board of directors has
The holders of common stock are entitled to
13
During the three months ended March 31, 2026,
As of March 31, 2026 and December 31, 2025, the Company has reserved the following shares of common stock for the exercise of stock options, vesting of restricted stock and pre-funded warrants:
|
|
March 31, |
|
|
December 31, |
|
||
Options to purchase common stock |
|
|
|
|
|
|
||
Unvested restricted common stock units |
|
|
|
|
|
|
||
Pre-funded warrants |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
At-the-market offerings
In July 2022, the Company entered into a sales agreement, or the 2022 Sales Agreement, with Jefferies LLC, or Jefferies, as amended on March 20, 2025, pursuant to which the Company could offer and sell shares of its common stock pursuant to the then-effective prospectus from time to time in “at-the-market” offerings through Jefferies, as the Company’s sales agent. Effective January 7, 2026, the Company terminated the prospectus pursuant to which it had been able to sell shares from time to time in at-the-market offerings under the 2022 Sales Agreement.
On February 11, 2026, the Company filed a registration statement on Form S-3ASR (File No. 333-293389) with the SEC, or the 2026 Automatic Shelf Registration Statement, in relation to the registration of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof for the purposes of selling, from time to time, our common stock, debt securities or other equity securities in one or more offerings. In connection with the ATM Program and pursuant to the 2026 Automatic Shelf Registration Statement, the Company filed a new prospectus supplement with the SEC on February 11, 2026, for the offer and sale of up to $
The Company agreed to pay Jefferies a commission of up to
Underwritten public offerings
In May 2024, the Company entered into an underwriting agreement with TD Securities (USA) LLC, as representative of the several underwriters, related to an underwritten public offering, or the 2024 Offering, of
In January 2026, the Company entered into an underwriting agreement with Jefferies LLC, TD Securities (USA) LLC, and Piper Sandler & Co. as representatives of the several underwriters, related to an underwritten public offering, or the 2026 Offering, of
14
11. Stock-based compensation
2020 Stock incentive plan
The Company’s 2020 Stock Option and Grant Plan, or the 2020 Plan, provided for the Company to grant stock options, restricted stock and other stock awards, to employees, non-employee directors, and consultants. Upon the effectiveness of the 2021 Plan (as defined below), no further issuances were made under the 2020 Plan.
2021 Stock Option and Incentive Plan
The Company’s 2021 Stock Option and Incentive Plan, or the 2021 Plan, was approved by the Company’s board of directors on May 28, 2021 and the Company’s stockholders on June 17, 2021 and became effective on the date immediately prior to the date on which the registration statement for the Company’s initial public offering, or IPO, was declared effective. The 2021 Plan provides for the grant of incentive stock options; non-qualified stock options; stock appreciation rights; restricted stock units, or RSUs; restricted stock awards; unrestricted stock awards; cash-based awards and dividend equivalent rights to the Company’s officers, employees, directors and consultants. The number of shares initially reserved for issuance under the 2021 Plan was
2021 Employee Stock Purchase Plan
The Company’s 2021 Employee Stock Purchase Plan, or the 2021 ESPP, was approved by the Company’s board of directors on May 28, 2021 and the Company’s stockholders on June 17, 2021 and became effective on the date immediately prior to the date on which the registration statement for the Company’s IPO was declared effective. A total of
2026 Inducement Plan
The Company’s 2026 Inducement Plan, or the 2026 Plan, was approved by the Company’s board of directors on March 16, 2026 and became effective on the same date. The 2026 Plan provides for the grant of non-qualified stock options, stock appreciation rights, RSUs, restricted stock awards, unrestricted stock awards, and dividend equivalent rights exclusively to individuals who were not previously employees or directors of the Company, as an inducement material to the individuals' entry into employment with the Company and in accordance with the requirements of Nasdaq Stock Market Rule 5635(c)(4). The number of shares reserved for issuance under the 2026 Plan was
15
Stock option activity
The Company has granted stock options to employees, non-employee directors, and others under the 2021 Plan.
The following summarizes stock option activity:
|
|
Number of |
|
|
Weighted |
|
|
Weighted |
|
|
Aggregate |
|
||||
Outstanding—December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Forfeited |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Outstanding—March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Vested or expected to vest—March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercisable—March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
The aggregate intrinsic value of options granted is calculated as the difference between the exercise price of the options and the estimated fair value of the Company’s common stock.
Restricted stock unit activity
The Company has granted RSUs to employees under the 2021 Plan. Each of the RSUs represents the right to receive one share of the Company’s common stock upon vesting. The RSUs will typically vest over two or four years provided the individual remains in continuous service of the Company. Accordingly, stock-based compensation expense for each RSU is recognized on a straight-line basis over the vesting term. The fair value of each RSU is based on the closing price of the Company’s common stock on the date of grant.
The following summarizes RSU activity:
|
|
Number |
|
|
Weighted |
|
||
Unvested restricted stock units as of December 31, 2025 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Vested |
|
|
( |
) |
|
$ |
|
|
Forfeited |
|
|
( |
) |
|
$ |
|
|
Unvested restricted stock units as of March 31, 2026 |
|
|
|
|
$ |
|
||
The aggregate fair value of RSUs that vested during three months ended March 31, 2026 was $
Stock-based compensation expense
Stock-based compensation expense is classified as follows (in thousands):
|
|
Three months ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Research and development |
|
$ |
|
|
$ |
|
||
General and administrative |
|
|
|
|
|
|
||
Total stock-based compensation expense |
|
$ |
|
|
$ |
|
||
As of March 31, 2026 total unrecognized stock-based compensation cost related to unvested stock options and restricted stock units was $
12. Income taxes
For the three months ended March 31, 2026 and 2025, the Company recorded an income tax provision of $
16
interest income on marketable securities in Massachusetts. For the three months ended March 31, 2025, the income tax provision was primarily related to interest income on marketable securities in Massachusetts and income generated from the capitalization of research and development expenses, which, prior to the enactment of the One Big Beautiful Bill Act, were taxable in the U.S.
The Company continues to maintain a full valuation allowance against all of its deferred tax assets. The Company has evaluated the positive and negative evidence involving its ability to realize its deferred tax assets. The Company has considered its history of cumulative net losses incurred since inception and its lack of any commercial products. The Company has concluded that it is more likely than not that it will not realize the benefits of its deferred tax assets. The Company reevaluates the positive and negative evidence at each reporting period.
13. Net (loss) earnings per common share
Basic and diluted net (loss) earnings per share is calculated based upon the weighted-average number of shares of common stock outstanding during the period. Shares of the Company's common stock underlying pre-funded warrants are included in the calculation of the basic and diluted earnings per share.
Basic and diluted net (loss) earnings per share are as follows (in thousands except share and per share amounts):
|
|
Three months ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Basic weighted average shares outstanding |
|
|
|
|
|
|
||
Effect of potentially dilutive securities: |
|
|
|
|
|
|
||
Stock options to purchase common stock |
|
|
|
|
|
|
||
Restricted stock units |
|
|
|
|
|
|
||
Diluted weighted average shares outstanding |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Basic net (loss) earnings per share |
|
$ |
( |
) |
|
$ |
|
|
Diluted net (loss) earnings per share |
|
$ |
( |
) |
|
$ |
|
|
The following outstanding potentially dilutive securities have been excluded from the calculation of diluted net (loss) earnings per common share, as their effect is anti-dilutive:
|
|
Three months ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Stock options to purchase common stock |
|
|
|
|
|
|
||
Restricted stock units |
|
|
|
|
|
|
||
14. Employee retirement plans
The Company, in compliance with Swiss Law, is contracted with the AXA Leben AG, or AXA, for the provision of pension benefits in a defined benefit plan. All benefits are organized in a semi-autonomous collective foundation within the framework of the contract with AXA. Insurance benefits due are paid directly to the entitled persons by AXA in the name of and for the account of the collective foundation. The pension plan is financed by contributions of both employees and the Company. The contract between the Company and the collective foundation can be terminated by either side. In the event of a termination, the Company would have an obligation to find alternative pension arrangements for its employees. Because there is no guarantee that the employee pension arrangements would be continued under the same conditions, there is a risk, albeit remote, that a pension obligation may fall on the Company. The pension assets are pooled for all affiliated companies; the investment of assets is done by the governing bodies of the collective foundation.
The following table summarizes pension expense incurred (in thousands):
|
|
Three months ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Pension expense |
|
$ |
|
|
$ |
|
||
In February 2021, the Company adopted a defined contribution plan intended to qualify under Section 401(k) of the Internal Revenue Code covering all eligible U.S. based employees of the Company. All employees are eligible to become participants of the plan immediately upon hire. Each active employee may elect, voluntarily, to contribute a percentage of
17
their compensation to the plan each year, subject to certain limitations. The Company reserves the right, but is not obligated, to make additional contributions to this plan. The Company makes safe-harbor match contributions of
The following table summarizes defined contribution expenses incurred (in thousands):
|
|
Three months ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Defined contribution expense |
|
$ |
|
|
$ |
|
||
15. Segment data
The Company defines its segments based on the way in which internally reported financial information is regularly reviewed by the chief operating decision maker, or CODM, to analyze financial performance, make decisions, and allocate resources. The Company manages its operations as a single operating and reportable segment committed to developing a portfolio of novel and proprietary MGDs. MGDs are small molecule drugs that employ the body’s natural protein destruction mechanisms to selectively degrade therapeutically-relevant proteins. As the internal reporting is based on the consolidated results, the Company has identified
The accounting policies used in the segment reporting are the same as those described in the summary of significant accounting policies. (See Note 2 in our annual report on Form 10-K for the year ended December 31, 2025.) The Company’s CODM is the Chief Executive Officer.
The Company's reportable segment net revenues and (loss) income for the three months ended March 31, 2026 and 2025 consisted of the following (in thousands):
|
|
Three months ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Revenue: |
|
|
|
|
|
|
||
Collaboration revenue |
|
$ |
|
|
$ |
|
||
Operating expense: |
|
|
|
|
|
|
||
Research and development: |
|
|
|
|
|
|
||
External research and development expenses: |
|
|
|
|
|
|
||
MRT-2359 |
|
|
|
|
|
|
||
MRT-6160 |
|
|
|
|
|
|
||
MRT-8102 |
|
|
|
|
|
|
||
CCNE1 |
|
|
|
|
|
|
||
Other development and discovery programs |
|
|
|
|
|
|
||
Personnel expense |
|
|
|
|
|
|
||
Overhead and administrative expense |
|
|
|
|
|
|
||
General and administrative expenses: |
|
|
|
|
|
|
||
Personnel expense |
|
|
|
|
|
|
||
Professional services |
|
|
|
|
|
|
||
Facility costs and other expense |
|
|
|
|
|
|
||
Interest and other income, net |
|
|
|
|
|
|
||
Income tax provision |
|
|
( |
) |
|
|
( |
) |
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Other development and discovery expenses are related to the development of our QuEENTM discovery engine and our disclosed and undisclosed programs, including CDK2. The Company's tangible assets are held in the U.S. and Switzerland with
18
Item 2. Management’s discussion and analysis of financial condition and results of operations
The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. This discussion and analysis and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth in “Part I, Item 1A, Risk Factors” in our 2025 Annual Report and under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report. You should carefully read the “Risk Factors” section of this Quarterly Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled “Special note regarding forward-looking statements.”
Overview
We are a biotechnology company developing a portfolio of novel and proprietary MGDs. MGDs are small molecule drugs that employ the body’s natural protein destruction mechanisms to selectively degrade therapeutically-relevant proteins. MGDs work by inducing the engagement of defined surfaces identified on target proteins by an E3 ligase, such as cereblon. We have developed a proprietary and industry-leading protein degradation discovery engine, called QuEENTM to enable our unique, and target-centric, MGD discovery and development and our rational design of MGD products. We believe our small molecule MGDs may give us significant advantages over existing therapeutic modalities, including other protein degradation approaches. We prioritize our product development on therapeutic targets backed by strong biological and genetic rationale with the goal of discovering and developing novel medicines.
Monte Rosa Therapeutics AG, a Swiss operating company, was incorporated under the laws of Switzerland in April 2018. Monte Rosa Therapeutics, Inc. was incorporated in Delaware in November 2019. In 2020, through a common control reorganization, Monte Rosa Therapeutics, Inc. acquired the net assets and shareholding of Monte Rosa Therapeutics AG. Monte Rosa Therapeutics, Inc. includes wholly owned subsidiaries Monte Rosa Therapeutics AG and Monte Rosa Securities Corporation. We are headquartered in Boston, Massachusetts with research operations in both Boston and Basel, Switzerland.
Liquidity
To date, we have financed our operations primarily through the issuance and sale of convertible promissory notes, convertible preferred stock, public offerings of our common stock or warrants to purchase common stock, registered direct offerings, and through our collaboration agreements. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures and, to a lesser extent, general and administrative expenditures. From our inception through the date hereof, we raised an aggregate of $1.3 billion of gross proceeds from such transactions. Since inception, we have had significant operating losses. For the three months ended March 31, 2026, we reported a net loss of $44.5 million and for the year ended December 31, 2025, we reported a net loss of $38.6 million. As of March 31, 2026, we had an accumulated deficit of $521.7 million and had $671.2 million in cash, cash equivalents, restricted cash and marketable securities. We anticipate that our existing cash and cash equivalents and marketable securities support our cash runway into 2029.
Impact of global economic and political developments
The development of our product candidates could be disrupted and materially adversely affected in the future by global economic or political developments. In addition, economic uncertainty in global markets caused by political instability and conflict, and economic challenges caused by global pandemics or other public health events, may lead to market disruptions, including significant volatility in commodity prices, credit and capital market instability and supply chain interruptions. Our business, financial condition and results of operations could be materially and adversely affected by negative impacts on the global economy and capital markets resulting from these global economic conditions, particularly if such conditions are prolonged or worsen.
19
Components of operating results
Collaboration revenue
Collaboration revenue represents amounts earned from our collaboration and license agreements with Roche and Novartis. We expect that our revenue for the next several years will be derived primarily through our current collaboration and license agreements and any additional collaborations that we may enter into in the future.
Roche collaboration and license agreement
In October 2023, Monte Rosa AG entered into a collaboration and license agreement, or the Roche Agreement, with Roche Basel and Roche US, and together with Roche Basel, Roche. Pursuant to the Roche Agreement, the parties will seek to identify MGDs against targets in cancer and neurological diseases selected by Roche using our proprietary drug discovery engine, where a certain number of targets selected by Roche are for a limited time subject to replacement rights owned by Roche. We will lead preclinical discovery and research activities with Roche leading late preclinical and clinical development activities.
Under the Roche Agreement, Roche will have a worldwide, exclusive license under patents and know-how controlled by us to develop and commercialize products directed to applicable targets. The license exclusivity is subject to our retained rights solely to fulfill our obligations under the arrangement.
The research collaboration activities governed by the Roche Agreement are overseen by a joint research committee.
In November 2023, we received a $50.0 million non-refundable upfront payment for the initial set of targets. Pursuant to the terms of the Roche Agreement, we expect to be entitled to receive from Roche certain variable consideration including potential preclinical milestones up to $172 million, and potential clinical, commercial and sales milestones exceeding $2 billion. We are also eligible to receive tiered royalties ranging from high-single-digit percent to low-teens percent on any products that are commercialized by Roche as a result of the collaboration.
Unless earlier terminated, the Roche Agreement will remain in effect for each product licensed under the Roche Agreement until expiration of the royalty term for the applicable product. The parties have included termination provisions in the Roche Agreement, allowing termination of the Roche Agreement in its entirety, on a country-by-country or a target-by-target basis.
2024 Novartis license agreement
In October 2024, Monte Rosa AG and Novartis entered into a license agreement with Novartis, or the 2024 Novartis Agreement. Pursuant to the 2024 Novartis Agreement, we granted to Novartis an exclusive, royalty-bearing, sublicensable and transferable license to develop, manufacture, and commercialize VAV1 MGDs, including MRT-6160. We were responsible for completing the Phase 1 clinical study and Novartis is responsible for all subsequent development and commercial activities starting at Phase 2. Development and commercial activities governed by the Novartis Agreement will be overseen by a Development Committee and a Commercialization Committee.
In December 2024, we received a $150 million non-refundable upfront payment. Pursuant to the 2024 Novartis Agreement, we are eligible to receive from Novartis up to $2.1 billion in development, regulatory, and sales milestones, beginning upon initiation of Phase 2 studies including (a) potential development and regulatory milestone payments, exceeding $1.5 billion if multiple indications achieve regulatory approval in multiple territories, (b) potential sales milestone payments in connection with sales outside of the U.S., and tiered royalties on sales outside of the U.S. Novartis will be responsible for costs associated with Phase 2 clinical studies. We and Novartis also agreed to a net profit and loss sharing arrangement prior to the initiation of Phase 3 clinical trials, pursuant to which we could co-fund any global clinical development from Phase 3 onwards and will share 30% of any profits and losses associated with the manufacturing and commercialization of the licensed products in the U.S. We have defined opportunities to opt out of the net profit and loss sharing arrangement. In such case, sales in the U.S. would be entitled to the potential sales milestone payments and tiered royalties as sales outside of the U.S. Any costs for any co-funded development and commercialization activities are subject to budgets reviewed by us and Novartis.
2025 Novartis license agreement
In September 2025, Monte Rosa AG entered into a collaboration, option, and license agreement with Novartis, or the 2025 Novartis Agreement. Pursuant to the 2025 Novartis Agreement, we granted to Novartis an exclusive, royalty-bearing, sublicensable and transferable license to degraders for one I&I program, or the First Licensed Program, and the exclusive option to obtain exclusive, royalty-bearing, sublicensable and transferable licenses with respect to two programs from our growing preclinical immunology portfolio, or the Options, and the programs, or the Optioned I&I Programs. Such Options are individually exercisable at Novartis’ discretion until a program meets criteria for investigational new drug application-filing-readiness. On a program-by-program basis, if Novartis does not exercise an Option, all rights with
20
respect to such program are retained by us; if Novartis does exercise its Option, such program becomes a Licensed Program, or together with the First Licensed Program, the Licensed Programs. Under the 2025 Novartis Agreement, we will apply our proprietary AI/ML-enabled QuEEN™ engine for the discovery and development of degraders for the First Licensed Program and the Optioned I&I Programs. The Licensed Programs will be further developed and commercialized by Novartis, unless otherwise agreed to by the parties in accordance with the 2025 Novartis Agreement. Research activities for the Licensed Programs governed by the Agreement will be overseen by a Joint Research Committee.
In September 2025, the Company received a $120.0 million non-refundable upfront payment from Novartis. Pursuant to the 2025 Novartis Agreement, the Company is entitled to receive from Novartis payments to maintain the Options totaling up to $60.0 million, and is eligible to receive from Novartis (1) preclinical milestone payments relating to the First Licensed Program and option exercise payments related to the Options of up to $180.0 million, (2) up to $5.4 billion in clinical development, regulatory, and sales milestones relating to the First Licensed Program and the two Optioned I&I Programs, beginning upon initiation of Phase 1 studies, including (a) potential development and regulatory milestone payments up to $2.2 billion if regulatory approval is achieved for multiple indications in multiple territories and (b) potential sales milestone payments up to $3.2 billion, allocated across licensed products, and (3) tiered royalties on global net sales in the high-single to low double-digit range for the First Licensed Program and in the low double-digit range for the two Optioned I&I Programs. The Company will be responsible for costs related to research activities, while Novartis will be responsible for costs related to development and commercialization activities.
Research and development expenses
Our research and development expenses include:
Most of our research and development expenses have been related to the development of our QuEENTM discovery engine and advancement of our GSPT1, NEK7, and VAV1 programs, and advancement of our disclosed and undisclosed programs including for CDK2 and CCNE1.
We expense all research and development costs in the periods in which they are incurred. Costs for certain research and development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and third-party service providers.
We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, including investments in manufacturing, as we advance our programs and conduct clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects, the costs of related clinical development costs or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates.
General and administrative expenses
Our general and administrative expenses consist primarily of personnel costs and other expenses for outside professional services, including legal fees relating to patent and corporate matters, professional fees for accounting, auditing, tax and administrative consulting services, insurance costs and other operating costs. We expect our general and administrative expenses to increase over the next several years to support our continued research and development activities, manufacturing activities, and the potential commercialization of our product candidates and development of commercial infrastructure.
Non-operating income and (expense)
Our non-operating income and (expense) includes (i) interest earned on our investments, including principally U.S. government-backed money-market funds and marketable securities; (ii) gains and losses on transactions of our Swiss subsidiary denominated in currencies other than the U.S. Dollar; and (iii) proceeds from the sale of fixed assets.
21
Results of operations for the three months ended March 31, 2026 and 2025
The following sets forth our results of operations (in thousands):
|
|
Three months ended |
|
|
|
|
||||||
|
|
2026 |
|
|
2025 |
|
|
Dollar change |
|
|||
Collaboration revenue |
|
$ |
4,210 |
|
|
$ |
84,929 |
|
|
$ |
(80,719 |
) |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Research and development |
|
$ |
44,069 |
|
|
$ |
32,190 |
|
|
$ |
11,879 |
|
General and administrative |
|
|
10,175 |
|
|
|
8,703 |
|
|
|
1,472 |
|
Total operating expenses |
|
|
54,244 |
|
|
|
40,893 |
|
|
|
13,351 |
|
(Loss) income from operations |
|
|
(50,034 |
) |
|
|
44,036 |
|
|
|
(94,070 |
) |
Other income |
|
|
5,583 |
|
|
|
3,671 |
|
|
|
1,912 |
|
Net (loss) income before income taxes |
|
|
(44,451 |
) |
|
|
47,707 |
|
|
|
(92,158 |
) |
Income tax provision |
|
|
(52 |
) |
|
|
(822 |
) |
|
|
770 |
|
Net (loss) income |
|
$ |
(44,503 |
) |
|
$ |
46,885 |
|
|
$ |
(91,388 |
) |
Collaboration revenue
Collaboration revenue of $4.2 million and $84.9 million for the three months ended March 31, 2026 and 2025, respectively, represents revenue recorded under our collaboration and license agreements with Roche and Novartis.
Research and development expenses
We use our personnel and infrastructure resources across the breadth of our research and development activities, which are directed toward identifying and developing product candidates. As such, we do not track all of our internal research and development expenses on a program-by-program basis.
The following table summarizes our research and development expense (in thousands):
|
|
Three months ended |
|
|
|
|
||||||
|
|
2026 |
|
|
2025 |
|
|
Dollar change |
|
|||
External research and development expense: |
|
|
|
|
|
|
|
|
|
|||
MRT-2359 |
|
$ |
2,381 |
|
|
$ |
1,945 |
|
|
$ |
436 |
|
MRT-6160 |
|
|
11 |
|
|
|
3,981 |
|
|
|
(3,970 |
) |
MRT-8102 |
|
|
6,781 |
|
|
|
1,882 |
|
|
|
4,899 |
|
CCNE1 |
|
|
1,703 |
|
|
|
762 |
|
|
|
941 |
|
Other development and discovery programs |
|
|
9,589 |
|
|
|
4,040 |
|
|
|
5,549 |
|
Personnel expense |
|
|
13,493 |
|
|
|
11,352 |
|
|
|
2,141 |
|
Overhead and administrative expense |
|
|
10,111 |
|
|
|
8,228 |
|
|
|
1,883 |
|
Total research and development expense |
|
$ |
44,069 |
|
|
$ |
32,190 |
|
|
$ |
11,879 |
|
As of March 31, 2026 and 2025, respectively, we had 129 and 112 employees engaged in research and development activities in our facilities in the U.S. and Switzerland.
Most of our research and development expenses were driven by the successful achievement of key research milestones in our research and development organization, including the continuation of the MRT-2359 and MRT-8102 clinical studies, the progression of our preclinical pipeline including research performed for our collaborations with Roche and Novartis, and the continued development of our QuEEN™ discovery engine, and reflect increased personnel expense and external R&D costs to achieve these milestones. Research and development expenses for the three months ended March 31, 2026 and 2025 included non-cash stock-based compensation expense of $3.4 million and $3.1 million, respectively.
General and administrative expenses
General and administrative expenses to support our business activities were comprised of (in thousands):
|
|
Three months ended |
|
|
|
|
||||||
|
|
2026 |
|
|
2025 |
|
|
Dollar change |
|
|||
Personnel costs |
|
$ |
6,420 |
|
|
$ |
5,679 |
|
|
$ |
741 |
|
Professional services |
|
|
2,143 |
|
|
|
1,478 |
|
|
|
665 |
|
Facility costs and other expenses |
|
|
1,612 |
|
|
|
1,546 |
|
|
|
66 |
|
Total general and administrative expenses |
|
$ |
10,175 |
|
|
$ |
8,703 |
|
|
$ |
1,472 |
|
22
As of March 31, 2026 and 2025, respectively, we had 32 and 30 employees engaged in general and administrative activities. Personnel and professional service costs increased in the year ended December 31, 2025, as compared to 2024, as a result of increased expenses in support of our growth and operations as a public company. General and administrative expenses included non-cash stock-based compensation of $2.6 million and $2.2 million for the three months ended March 31, 2026 and 2025, respectively.
Other income
Other income was comprised of (in thousands):
|
|
Three months ended |
|
|
|
|
||||||
|
|
2026 |
|
|
2025 |
|
|
Dollar change |
|
|||
Interest income |
|
$ |
5,591 |
|
|
$ |
3,439 |
|
|
$ |
2,152 |
|
Foreign currency exchange (loss) gain |
|
|
(8 |
) |
|
|
173 |
|
|
|
(181 |
) |
Gain on disposal of fixed assets |
|
|
— |
|
|
|
59 |
|
|
|
(59 |
) |
Other income |
|
$ |
5,583 |
|
|
$ |
3,671 |
|
|
$ |
1,912 |
|
Other income for the three months ended March 31, 2026 was primarily attributable to interest earned on marketable securities. The increase in interest income for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was principally attributable to higher average balances in marketable securities.
Income tax provision
For the three months ended March 31, 2026, the income tax provision was primarily related to interest income on marketable securities in Massachusetts. As of March 31, 2026, we did not capitalize any research and development expenditures.
For the three months ended March 31, 2025, the income tax provision was primarily driven by the current federal and state taxes related to the $150.0 million upfront payment for the Novartis License Agreement, which were expected to be recognized as taxable Global Intangible Low Tax Income, or GILTI.
Liquidity and capital resources
Overview
Due to our significant research and development expenditures, we have generated operating losses since our inception. We have funded our operations primarily through the issuance and sale of convertible promissory notes, convertible preferred stock, public offerings of our common stock or warrants to purchase common stock, registered direct offerings, and through our collaboration agreements. As of March 31, 2026, we had $671.2 million in cash, cash equivalents, restricted cash and marketable securities. We have incurred losses since our inception and, as of March 31, 2026, we had an accumulated deficit of $521.7 million. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
At-the-market offerings
On July 1, 2022, we filed a registration statement on Form S-3 (File No. 333-266003) with the SEC, which was declared effective on July 13, 2022, or the 2022 Shelf Registration Statement, in relation to the registration of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof for the purposes of selling, from time to time, our common stock, debt securities or other equity securities in one or more offerings. We also simultaneously entered into the Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $100.0 million of our common stock from time to time in “at-the-market” offerings, or the ATM Program, through July 2025 under the 2022 Shelf Registration Statement and subject to the limitations thereof.
On March 20, 2025, we filed a registration statement on Form S-3 (File No. 333-285942) with the SEC, which was declared effective on March 31, 2025, or the 2025 Shelf Registration Statement, in relation to the registration of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof for the purposes of selling, from time to time, our common stock, debt securities or other equity securities in one or more offerings. We also simultaneously entered into the Amendment No. 1 to the Sales Agreement, or the Amendment, with Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $150.0 million of our common stock from time to time under the ATM Program, pursuant to a prospectus supplement, dated March 20, 2025, under 2025 Shelf Registration Statement, or the
23
Original Prospectus Supplement, and subject to the limitations thereof. Under the Original Prospectus Supplement, we sold 2,955,082 shares of our common stock for aggregate gross proceeds of $25.0 million, or aggregate net proceeds of $23.9 million, pursuant to the Sales Agreement. As disclosed in a Current Report on Form 8-K filed on January 7, 2026, the Original Prospectus Supplement was terminated, effective as of January 7, 2026, and we did not issue any additional shares under the ATM Program following such termination.
On February 11, 2026, we filed a registration statement on Form S-3ASR (File No. 333-293389) with the SEC, or the 2026 Automatic Shelf Registration Statement, in relation to the registration of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof for the purposes of selling, from time to time, our common stock, debt securities or other equity securities in one or more offerings. In connection with the ATM Program and pursuant to the 2026 Automatic Shelf Registration Statement, we filed a new prospectus supplement with the SEC on February 11, 2026, for the offer and sale of up to $100.0 million of shares of common stock from time to time through Jefferies. As of March 31, 2026, we have sold no shares pursuant to our ATM program under the new prospectus supplement.
We will pay to Jefferies cash commissions of up to 3.0% of the aggregate gross proceeds of sales of common stock under the Sales Agreement, as amended.
Underwritten public offerings
In May 2024, we entered into an underwriting agreement with TD Securities (USA) LLC, as representative of the several underwriters, related to an underwritten public offering, or the 2024 Offering, of 10,638,476 shares of common stock at a price of $4.70 per share, and, in lieu of common stock to certain investors, pre-funded warrants to purchase 10,638,524 shares of common stock at a price of $4.6999 per pre-funded warrant, which represents the price per share at which shares of common stock were sold in the 2024 Offering, minus $0.0001, which is the exercise price of each pre-funded warrant. The pre-funded warrants are immediately exercisable and may be exercised at any time until the pre-funded warrants are exercised in full. Aggregate gross proceeds from the 2024 Offering were $100 million. Aggregate net proceeds from the 2024 Offering were $96.4 million after deducting the underwriter discounts, commissions, and other offering costs.
In January 2026, we entered into an underwriting agreement with Jefferies LLC, or Jefferies, TD Securities (USA) LLC, and Piper Sandler & Co. as representative of the several underwriters, related to the underwritten public offering, or the 2026 Offering, of 13,000,000 shares of common stock at a price of $24.00 per share, and, in lieu of common stock to certain investors, pre-funded warrants to purchase 1,375,000 shares of common stock at a price of $23.9999 per pre-funded warrant, which represents the price per share at which shares of common stock were sold in the 2026 Offering, minus $0.0001, which is the exercise price of each pre-funded warrant. The 13,000,000 shares of common stock includes the full exercise by the underwriters of their option to purchase an additional 1,875,000 shares of common stock at the public offering price. The pre-funded warrants are immediately exercisable and may be exercised at any time until the pre-funded warrants are exercised in full. Aggregate gross proceeds from the 2026 Offering were $345.0 million. Aggregate net proceeds from the 2026 Offering were $323.8 million after deducting the underwriter discounts, commissions, and other offering costs.
During the three months ended March 31, 2026, 5,016,658 pre-funded warrants were exercised and, net of cashless exercises, 5,016,628 shares of common stock were issued as a result. During the three months ended March 31, 2025, no pre-funded warrants were exercised.
Cash flows
The following table summarizes our cash flows for the periods indicated (in thousands):
|
|
Three months ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net cash (used in) provided by: |
|
|
|
|
|
|
||
Operating activities |
|
$ |
(37,369 |
) |
|
$ |
(45,492 |
) |
Investing activities |
|
|
(260,997 |
) |
|
|
(100,229 |
) |
Financing activities |
|
|
328,335 |
|
|
|
14 |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
$ |
29,969 |
|
|
$ |
(145,707 |
) |
Operating activities
Net cash used in operating activities of $37.4 million during the three months ended March 31, 2026, was attributable to our net loss of $44.5 million and a decrease in deferred revenue of $4.2 million, partially offset by increases in our working
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capital of $4.4 million and by non-cash charges of $7.0 million, principally with respect to depreciation expense and stock-based compensation.
Net cash used in operating activities of $45.5 million during the three months ended March 31, 2025 was attributable to our net income of $46.9 million, offset by decreases in our working capital of $14.7 million, and a decrease in deferred revenue of $83.9 million. The decreases in working capital accounts and deferred revenue were partially off-set by non-cash charges of $6.3 million, principally with respect to depreciation expense and stock-based compensation.
Investing activities
Cash used in investing activities of $261.0 million during the three months ended March 31, 2026 was primarily attributable to purchases of marketable securities of $332.0 million and purchases of property and equipment of $1.9 million, partially offset by proceeds from the maturity of marketable securities of $72.9 million.
Cash used in investing activities of $100.2 million during the three months ended March 31, 2025 was primarily attributable to proceeds from the maturity of marketable securities of $39.4 million, offset by purchases of marketable securities of $138.0 million and purchases of property and equipment of $1.6 million.
Financing activities
Cash provided by financing activities of $328.3 million for the three months ended March 31, 2026 was primarily due to the proceeds from the 2026 Offering and to the exercise of employee stock options.
Funding requirements
Any product candidates we may develop may never achieve commercialization and we anticipate that we will continue to incur losses for the foreseeable future. We expect that our research and development expenses, general and administrative expenses and capital expenditures will continue to increase. As a result, until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research, manufacturing and development services, license payments or milestone obligations that may arise, laboratory and related supplies, clinical costs, manufacturing costs, legal and other regulatory expenses and general overhead costs.
Based upon our current operating plan, we believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements for at least the next twelve months. We base this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.
We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs.
Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:
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Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development activities. We currently have no credit facility or committed sources of capital. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated product development programs.
Critical accounting policies and significant judgments and estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our unaudited interim condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no significant changes to our critical accounting policies from those described in “Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report.
For a complete discussion of our significant accounting policies and recent accounting pronouncements, see Note 2 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report and Note 2 to our 2025 Annual Report.
Recently issued and adopted accounting pronouncements
Refer to Note 2, “Summary of significant accounting policies,” in the accompanying notes to our and condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.
Contractual obligations and commitments
During the three months ended March 31, 2026, there have been no material changes to our contractual obligations and commitments from those described under “Part II, Item 7, 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 Securities and Exchange Commission on March 17, 2026.
Emerging growth and smaller reporting company status
In April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Therefore, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we may adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-public companies instead of the dates required for other public companies. However, we may early adopt these standards.
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We will cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, (ii) the last day of our fiscal year following the fifth anniversary of the date of the closing of our initial public offering, or our IPO, (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years or (iv) the date on which we are deemed to be a large, accelerated filer under the rules of the SEC.
We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates plus the aggregate amount of gross proceeds to us as a result of our IPO is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after our IPO if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our annual reports on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
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Item 3. Quantitative and qualitative disclosures about market risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this Item 3.
Item 4. Controls and procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of March 31, 2026. The term “disclosure controls and procedures,” as defined in the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Based on the evaluation of our disclosure controls and procedures as of March 31, 2026, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date are effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during three months ended March 31, 2026 that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.
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Part II ─ Other Information
Item 1. Legal proceedings
From time to time, we may become subject to various legal proceedings and claims that arise in the ordinary course of our business activities. Although the results of litigation and claims cannot be predicted with certainty, as of March 31, 2026, we do not believe we are party to any claim or litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk factors
Investing in our common stock involves a high degree of risk. You should carefully consider the following risks and uncertainties, those risks and uncertainties discussed in “Part I, Item 1A, Risk Factors” in our 2025 Annual Report, as amended and supplemented by the information in our subsequent Quarterly Reports on Form 10-Q, together with all of the other information contained in this Quarterly Report, including our unaudited condensed consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report. The risk factor disclosure in our 2025 Annual Report and subsequent Quarterly Reports on Form 10-Q is qualified by the information that is described in this Quarterly Report. If any of the risks described below or in our 2025 Annual Report actually occur, our business, prospects, operating results and financial condition could suffer materially. In such event, the trading price of our common stock could decline and you might lose all or part of your investment.
Other than as set forth below, there have been no material changes to the risk factors set forth in our 2025 Annual Report.
We have incurred significant operating losses since our inception and anticipate that we will incur continued losses for the foreseeable future.
Since our inception, we have focused substantially all of our efforts and financial resources on developing our proprietary QuEENTM discovery engine, our proprietary MGD library and our initial pipeline of product candidates. To date, we have financed our operations primarily through the issuance and sale of convertible promissory notes, and our convertible preferred stock to outside investors in private equity financings, public offerings of our common stock or warrants to purchase common stock, registered direct offerings, and our collaboration agreements with Roche and Novartis. From our inception through the date hereof, we raised an aggregate of $1.3 billion of gross proceeds from such transactions. As of March 31, 2026, our cash, cash equivalents, restricted cash and marketable securities were $671.2 million. We have incurred net losses in each year since our inception, and we had an accumulated deficit of $521.7 million as of March 31, 2026. For the three months ended March 31, 2026, we reported a net loss of $44.5 million. For the year ended December 31, 2025, we reported a net losses of $38.6 million. Substantially all of our operating losses have resulted from costs incurred in connection with our research and initial pipeline programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over the next several years and for the foreseeable future. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ deficit and working capital. We expect our expenses to significantly increase in connection with our ongoing activities, as we:
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In addition, if we obtain marketing approval for our current or future product candidates, we will incur significant expenses relating to our commercialization of such product candidates via our sales, marketing, product manufacturing and distribution efforts. Because of the numerous risks and uncertainties associated with developing pharmaceutical drugs, including in light of any economic fluctuations, we are unable to predict the extent of any future losses or when we will become profitable, if at all.
Even if we achieve profitability, we may not be able to sustain or increase our profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our development efforts, obtain product approvals, diversify our offerings or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.
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Item 2. Unregistered sales of equity securities, use of proceeds and issuer purchases of equity securities
Recent sales of unregistered equity securities
None.
Issuer purchases of equity securities
None.
Item 3. Defaults upon senior securities
None.
Item 4. Mine safety disclosures
Not Applicable.
Item 5. Other information
Rule 10b5-1 Trading Plans
During the fiscal quarter ended on March 31, 2026, none of our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act)
Name and Title |
Action |
Action Date |
Duration of Trading Arrangements |
Rule 10b5-1 Trading Arrangement? (Y/N)* |
Aggregate Number of Securities Subject to Trading Arrangement |
May 22, 2026 - December 15, 2026 |
Y |
Up to |
|||
May 29 2026 - January 29, 2027 |
Y |
Up to |
|||
June 3, 2026 - February 5, 2027 |
Y |
Up to |
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Item 6. Exhibits
Exhibit Number |
|
Description |
|
|
|
3.1 |
|
Fourth Amended and Restated Certificate of Incorporation of Registrant, as currently in effect (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K (File No. 001-40522) filed on June 28, 2021). |
3.2 |
|
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation of Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (File No. 001-40522) filed on June 14, 2023). |
3.3 |
|
Second Amended and Restated By-laws of the Registrant, as currently in effect (incorporated by reference to Exhibit 3.3 of the Registrant's Quarterly Report on Form 10-Q (File No. 001-40522) filed on May 9, 2024) |
31.1* |
|
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1** |
|
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
101.INS* |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
101.SCH* |
|
Inline XBRL Taxonomy Extension Schema Document |
104* |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
** Deemed to be furnished with this Quarterly Report on Form 10-Q and will not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Monte Rosa Therapeutics, Inc. |
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|
Date: May 7, 2026 |
|
By: |
/s/ Markus Warmuth |
|
|
|
Markus Warmuth |
|
|
|
Chief Executive Officer |
|
|
|
(Principal Executive Officer and Principal Financial Officer) |
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