Structure Therapeutics

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the three months ended March 31, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Transition Period FromTo

Commission file number: 001-41608

Structure Therapeutics Inc.

(Exact name of registrant as specified in its charter)

Cayman Islands		98-1480821
(State of Other Jurisdiction of incorporation or Organization)		(I.R.S. Employer Identification No.)
611 Gateway Blvd., Suite 223 South San Francisco, California		94080
(Address of principal executive offices)		(Zip code)

Registrant's telephone number, including area code: (628) 229-9277

Securities registered pursuant to Section 12(b) of the Act:

Name Of Each Exchange

Title of Each Class

Trading Symbol(s)

On Which Registered

American Depositary Shares (ADSs), each representing three ordinary shares, par value $0.0001 per ordinary share

Ordinary shares, par value $0.0001 per share*

GPCR

Nasdaq Global Market

Nasdaq Global Market*

* Not for trading, but only in connection with the registration of the American Depositary Shares

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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically; every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.0405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐		Accelerated filer ☐		Non-accelerated filer ☒		Smaller reporting company ☒		Emerging growth company ☒

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate number of outstanding ordinary shares of the registrant, each with par value $0.0001 per share, as of May 10, 2023 was 114,798,193, comprised of 107,387,675 ordinary shares and 7,410,518 non-voting ordinary shares. 37,053,000 ordinary shares were held in the form of ADSs.

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		Page
	Part I
Item 1.	Financial Statements (Unaudited)	7
	Condensed Consolidated Balance Sheets	7
	Condensed Consolidated Statements of Operations and Comprehensive Loss	8
	Condensed Consolidated Statements of Redeemable Convertible Preferred Shares and Shareholders’ Equity (Deficit)	9
	Condensed Consolidated Statements of Cash Flows	10
	Notes to Unaudited Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	34
Item 4.	Controls and Procedures	34
	Part II
Item 1.	Legal Proceedings	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	117
Item 3.	Defaults Upon Senior Securities	118
Item 4.	Mine Safety Disclosures	118
Item 5.	Other Information	118
Item 6.	Exhibits	120
	Signatures	122

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”), contains forward-looking statements. 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 terms such as “may,” "can," “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. All statements other than statements of historical facts contained in this Quarterly Report, including without limitation statements regarding:

●

the timing, progress and results of preclinical studies and clinical trials for our product candidates, including our product development plans and strategies;

●

the timing, scope and likelihood of regulatory filings and approvals, including final regulatory approval of our product candidates;

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the potential benefits and market opportunity for our product candidates and discovery platform;

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expectations regarding the size, scope and design of clinical trials;

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our plans and strategy with respect to our drug discovery efforts and potential benefits of our discovery platform;

●

our manufacturing, commercialization, and marketing plans and strategies;

●

our plans to hire additional personnel and our ability to attract and retain such personnel;

●

our estimates of the number of patients who suffer from the diseases we are targeting and potential growth in our target markets;

●

our expectations regarding the approval and use of our product candidates;

●

our competitive position and the development and impact of competing therapies that are or may become available;

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expectations regarding future events under collaboration and licensing agreements, including potential future payments, as well as our plans and strategies for entering into further collaboration and licensing agreements;

●

our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering product candidates we may develop, including the extensions of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;

●

the rate and degree of market acceptance and clinical utility of product candidates we may develop;

●

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

●

our future financial performance;

●

the period over which we estimate our existing cash, cash equivalents and short-term investments will be sufficient to fund our future operating expenses and capital expenditure requirements;

●

the impact of laws and regulations; and

●

the ongoing impact of geopolitical and macroeconomic factors.

The forward-looking statements in this Quarterly Report are only predictions and are based largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and

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objectives, and financial needs. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of known and unknown risks, uncertainties, and assumptions, including those described under Part I. Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II. Item 1A. “Risk Factors” elsewhere in this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely upon these forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. The forward-looking statements made in this Quarterly report relate only to events or information as of the date on which the statements are made in this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. We intend the forward-looking statements contained in this Quarterly Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those described in Part II. Item 1A. “Risk Factors” in this Quarterly Report. You should carefully consider these risks and uncertainties when investing in our American Depositary Shares (“ADSs”). The principal risks and uncertainties affecting our business include the following:

◾

We have a limited operating history and have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future.

◾

We will require substantial additional capital to finance our operations, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate certain of our product development programs, commercialization efforts or other operations.

◾

Our approach to the discovery of product candidates based on our technology platform is unproven, and we do not know whether we will be able to develop any products of commercial value.

◾

We are early in our development efforts and only have two product candidates, GSBR-1290 and ANPA-0073, in early clinical development. All of our other development programs are in the preclinical or discovery stage. If we are unable to advance our product candidates in clinical development, obtain regulatory approval and ultimately commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.

◾

Clinical and preclinical drug development involves a lengthy and expensive process with uncertain timelines and outcomes. The results of prior clinical trials and preclinical studies are not necessarily predictive of future results, and may not be favorable, or receive regulatory approval on a timely basis, if at all.

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◾

Any difficulties or delays in the commencement or completion, or termination or suspension, of our planned clinical trials could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.

◾

Serious adverse events, undesirable side effects or other unexpected properties of our product candidates may be identified during development or after approval, which could lead to the discontinuation of our clinical development programs, refusal by regulatory authorities to approve our product candidates or, if discovered following marketing approval, revocation of marketing authorizations or limitations on the use of our product candidates, any of which would limit the commercial potential of such product candidate.

◾

As an organization, we have never conducted later-stage clinical trials or submitted a New Drug Application (“NDA”), and may be unable to do so for any of our product candidates.

◾

The marketing approval processes of the U.S. Food and Drug Administration (“FDA”) and applicable foreign authorities are lengthy, time consuming, expensive and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for our product candidates, our business will be substantially harmed.

◾

We have conducted, or plan to conduct, our initial clinical studies for GSBR-1290, ANPA-0073, LTSE-2578, and our other product candidates outside of the United States. However, the FDA and other foreign equivalents may not accept data from such trials, in which case our development plans will be delayed, which could materially harm our business.

◾

We rely on third parties for the manufacture of our product candidates for preclinical and clinical development and expect to continue to do so for the foreseeable future. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

◾

Our current and anticipated future dependence upon others for the manufacture of our product candidates or drugs may adversely affect our future profit margins and our ability to commercialize any product candidates that receive marketing approval on a timely and competitive basis.

◾

We intend to rely on third parties to conduct, supervise and monitor our discovery research, preclinical studies and clinical trials. If those third parties do not satisfactorily carry out their contractual duties or fail to meet expected deadlines, our development programs may be delayed or subject to increased costs, each of which may have an adverse effect on our business and prospects.

◾

We have entered into, and may in the future enter into, collaboration agreements and strategic alliances to maximize the potential of our structure-based drug discovery platform and product candidates, and we may not realize the anticipated benefits of such collaborations or alliances. We expect to continue to form collaborations in the future with respect to our product candidates, but may be unable to do so or to realize the potential benefits of such transactions, which may cause us to alter or delay our development and commercialization plans.

◾

Our existing discovery collaboration with Schrödinger, Inc. (“Schrödinger”) is important to our business. If we are unable to maintain this collaboration, or if this collaboration is not successful, our business could be adversely affected.

◾

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than us.

◾

We currently have no marketing and sales organization and have no experience as a company in commercializing products, and we may invest significant resources to develop these capabilities. If

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we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate product revenue.

◾

Our business and the business or operations of third parties with whom we conduct business has been and could continue to be adversely affected by the effects of health epidemics, including the ongoing COVID-19 pandemic, in regions where we or third parties on which we rely have business operations.

◾

We conduct certain research and development operations through our Australian wholly-owned subsidiaries. If we lose our ability to operate in Australia, or if any of our subsidiaries are unable to receive the research and development tax credit allowed by Australian regulations, our business and results of operations could suffer.

◾

Changes in the political and economic policies of the Chinese government or in relations between China and the United States may affect our business, financial condition, results of operations and the market price of our ADSs.

◾

If we are unable to obtain and maintain sufficient intellectual property protection for our platform technologies and product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be adversely affected.

◾

We may rely on one or more in-licenses from third parties. If we lose these rights, our business may be materially adversely affected, and if disputes arise with one or more licensors, we may be subjected to future litigation as well as the potential loss of or limitations on our ability to develop and commercialize products and technologies covered by these license agreements.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

STRUCTURE THERAPEUTICS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)



	MARCH 31,		DECEMBER 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	126,493	$	26,091
Short-term investments		114,369		64,750
Prepaid expenses and other current assets		5,293		2,248
Total current assets		246,155		93,089
Property and equipment, net		961		1,031
Operating right-of-use assets		178		262
Other non-current assets		59		3,463
Total assets	$	247,353	$	97,845
Liabilities, redeemable convertible preferred shares and shareholders’ equity (deficit)
Current liabilities:
Accounts payable	$	4,945	$	6,009
Accrued expenses and other current liabilities		5,889		6,741
Operating lease liabilities, current portion		168		260
Total current liabilities		11,002		13,010
Total liabilities		11,002		13,010
Commitments and contingencies (Note 5)
Series A redeemable convertible preferred shares – $0.0001 par value, 0 and 19,200 shares authorized, issued and outstanding as of March 31, 2023 and December 31, 2022, respectively (liquidation preference of $0 and $32,001 as of March 31, 2023 and December 31, 2022, respectively)		—		32,001
Series A+ redeemable convertible preferred shares – $0.0001 par value, 0 and 12,800 shares authorized, issued and outstanding as of March 31, 2023 and December 31, 2022, respectively (liquidation preference of $0 and $26,000 as of March 31, 2023 and December 31, 2022, respectively )		—		26,000
Series B redeemable convertible preferred stock – $0.0001 par value, 0 and 32,857 shares authorized, issued and outstanding as of March 31, 2023 and December 31, 2022, respectively (liquidation preference of $0 and $133,015 as of March 31, 2023 and December 31, 2022, respectively)		—		133,015
Series B‑1 redeemable convertible preferred stock – $0.0001 par value, 0 and 2,161 shares authorized, issued and outstanding as of March 31, 2023 and December 31, 2022, respectively (liquidation preference of $0 and $7,000 as of March 31, 2023 and December 31, 2022, respectively)		—		8,959
Shareholders’ equity (deficit):
Undesignated shares – $0.0001 par value; 100,000 and 0 shares authorized as of March 31, 2023 and December 31, 2022, respectively; no shares issued and outstanding as of March 31, 2023 and December 31, 2022		—		—
Ordinary shares – $0.0001 par value; 500,000 and 432,982 shares authorized as of March 31, 2023 and December 31, 2022, respectively; 114,730 and 10,527 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		11		1
Additional paid-in capital		371,120		1,921
Accumulated other comprehensive income (loss)		147		(110)
Accumulated deficit		(134,927)		(116,952)
Total shareholders’ equity (deficit)		236,351		(115,140)
Total liabilities, redeemable convertible preferred shares and shareholders’ equity (deficit)	$	247,353	$	97,845

The accompanying notes are an integral part of these condensed consolidated financial statements.

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STRUCTURE THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)



	THREE MONTHS ENDED
	MARCH 31,
		2023	2022
Operating expenses:
Research and development	$	13,135	$	8,492
General and administrative		6,514		4,460
Total operating expenses		19,649		12,952
Loss from operations		(19,649)		(12,952)
Interest and other income (expense), net		1,699		(69)
Loss before provision for income taxes		(17,950)		(13,021)
Provision for income taxes		25		60
Net loss attributable to ordinary shareholders	$	(17,975)	$	(13,081)
Net loss per share attributable to ordinary shareholders, basic and diluted	$	(0.25)	$	(1.44)
Weighted-average ordinary shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted		71,655		9,063
Other comprehensive loss:
Unrealized gain (loss) on investments, net		257		(35)
Total other comprehensive gain (loss)		257		(35)
Comprehensive loss	$	(17,718)	$	(13,116)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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STRUCTURE THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (DEFICIT)

(IN THOUSANDS)

(UNAUDITED)



																		ACCUMULATED
	REDEEMABLE CONVERTIBLE PREFERRED SHARES												ORDINARY			ADDITIONAL		OTHER				TOTAL
	SERIES A			SERIES A+			SERIES B			SERIES B-1			SHARES			PAID-IN		COMPREHENSIVE		ACCUMULATED		SHAREHOLDERS’
	SHARES	AMOUNT		SHARES	AMOUNT		SHARES	AMOUNT		SHARES	AMOUNT		SHARES	AMOUNT		CAPITAL		INCOME (LOSS)		DEFICIT		EQUITY (DEFICIT)
Balance at December 31, 2022	19,200	$	32,001	12,800	$	26,000	32,857	$	133,015	2,161	$	8,959	10,527	$	1	$	1,921	$	(110)	$	(116,952)	$	(115,140)
Conversion of redeemable convertible preferred shares into ordinary shares upon initial public offering	(19,200)		(32,001)	(12,800)		(26,000)	(32,857)		(133,015)	(2,161)		(8,959)	67,018		7		199,968		—		—		199,975
Issuance of ordinary shares upon initial public offering, net of issuance costs and underwriting discount of $18,586	—		—	—		—	—		—	—		—	37,053		3		166,667		—		—		166,670
Net exercise of ordinary share warrants	—		—	—		—	—		—	—		—	106		—		—		—		—		—
Issuance of ordinary share upon exercise of vested share options	—		—	—		—	—		—	—		—	26		—		31		—		—		31
Share-based compensation expense	—		—	—		—	—		—	—		—	—		—		2,533		—		—		2,533
Unrealized gain on investments, net	—		—	—		—	—		—	—		—	—		—		—		257		—		257
Net loss	—		—	—		—	—		—	—		—	—		—		—		—		(17,975)		(17,975)
Balance at March 31, 2023	—	$	—	—	$	—	—	$	—	—	$	—	114,730	$	11	$	371,120	$	147	$	(134,927)	$	236,351



																		ACCUMULATED
	REDEEMABLE CONVERTIBLE PREFERRED SHARES												ORDINARY			ADDITIONAL		OTHER				TOTAL
	SERIES A			SERIES A+			SERIES B			SERIES B-1			SHARES			PAID-IN		COMPREHENSIVE		ACCUMULATED		SHAREHOLDERS’
	SHARES	AMOUNT		SHARES	AMOUNT		SHARES	AMOUNT		SHARES	AMOUNT		SHARES	AMOUNT		CAPITAL		LOSS		DEFICIT		DEFICIT
Balance at December 31, 2021	19,200	$	32,001	12,800	$	26,000	24,702	$	100,000	2,161	$	8,959	10,894	$	1	$	—	$	—	$	(64,736)	$	(64,735)
Share-based compensation expense	—		—	—		—	—		—	—		—	—		—		620		—		—		620
Unrealized loss on investments, net	—		—	—		—	—		—	—		—	—		—		—		(35)		—		(35)
Net loss	—		—	—		—	—		—	—		—	—		—		—		—		(13,081)		(13,081)
Balance at March 31, 2022	19,200	$	32,001	12,800	$	26,000	24,702	$	100,000	2,161	$	8,959	10,894	$	1	$	620	$	(35)	$	(77,817)	$	(77,231)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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STRUCTURE THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)



	THREE MONTHS ENDED
	MARCH 31,
	2023		2022
Cash flows from operating activities
Net loss	$	(17,975)	$	(13,081)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense		2,533		620
Depreciation		70		70
Non-cash lease expense		84		82
Accretion of net investment premium (discount)		(346)		(17)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(3,045)		(97)
Other non-current assets		(59)		—
Accounts payable		(923)		(1,563)
Accrued expenses and other current liabilities		(555)		536
Operating lease liabilities		(92)		(74)
Deferred tax liability		—		6
Net cash used in operating activities		(20,308)		(13,518)
Cash flows from investing activities
Purchases of short-term investments		(190,096)		(41,653)
Maturities of short-term investments		141,080		2,000
Purchases of property and equipment		—		(65)
Net cash used in investing activities		(49,016)		(39,718)
Cash flows from financing activities
Proceeds from issuance of common stock in initial public offering, net of underwriter discount and commissions		172,296		—
Payments of deferred offering costs		(2,601)		(1,448)
Proceeds from exercise of share options		31		—
Net cash provided by (used in) financing activities		169,726		(1,448)
Net change in cash and cash equivalents		100,402		(54,684)
Cash and cash equivalents
Beginning of the period		26,091		105,305
End of the period	$	126,493	$	50,621
Supplemental disclosures of noncash investing and financing activities
Conversion of redeemable convertible preferred shares into ordinary shares upon initial public offering	$	199,975	$	—
Deferred offering costs included in accounts payable and accrued expenses and other current liabilities	$	416	$	396

The accompanying notes are an integral part of these condensed consolidated financial statements.

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STRUCTURE THERAPEUTICS INC.

NOTES TO UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS

1. Organization and Nature of the Business

Structure Therapeutics Inc. (the “Company”) is a clinical stage global biopharmaceutical company aiming to develop and deliver novel oral therapeutics to treat a wide range of chronic diseases with unmet medical needs. The Company was incorporated in February 2019 in the Cayman Islands, with operating subsidiaries in the United States and China. In June 2022, the Company changed its name from ShouTi Inc. to Structure Therapeutics Inc.

Initial Public Offering

On February 7, 2023, the Company closed its initial public offering (“IPO”) of American Depositary Shares (“ADSs”). Each ADS represents three ordinary shares. The net proceeds from the IPO were approximately $166.7 million after deducting underwriting discounts and commissions and estimated offering costs.

Upon the closing of the IPO, all outstanding shares of the Company’s redeemable convertible preferred shares converted into 67,018,087 ordinary shares. In connection with the completion of its IPO, the Company’s memorandum of association was amended and restated to provide for 500,000,000 authorized ordinary shares with a par value of $0.0001 per share and 100,000,000 authorized shares with a par value of $0.0001 per share, of such class or classes as may be designated by the Company’s board of directors in accordance with the Company’s articles of association.

Liquidity and Capital Resources

The Company has incurred significant net operating losses and negative cash flows from operations since inception and had an accumulated deficit of $134.9 million as of March 31, 2023. Historically, the Company has financed its operations primarily through the private placement of equity securities. On February 7, 2023, the Company completed its IPO for net proceeds of approximately $166.7 million, after deducting underwriting discounts and estimated offering costs. As of March 31, 2023, the Company had cash, cash equivalents and short-term investments of $240.9 million.

The Company’s condensed consolidated financial statements have been prepared on the basis of the Company continuing as a going concern for the next 12 months. Based on its current business plan, the Company believes that its current cash, cash equivalents and short-term investments will be sufficient to fund its projected operations for at least 12 months from the date of the issuance of these condensed consolidated financial statements.

Impact of Geopolitical and Macroeconomic Factors

There may be significant uncertainty resulting from the impact of other geopolitical and macroeconomic factors, including the ongoing COVID-19 (coronavirus) pandemic, inflation, supply chain issues, rising interest rates, future bank failures and the impact of the Russia/Ukraine conflict.

2. Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements and related disclosures have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The functional and reporting

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STRUCTURE THERAPEUTICS INC.

NOTES TO UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS (CONTINUED)

currency of the Company and its subsidiaries is the U.S. dollar. The aggregate foreign currency transaction loss included in determining net loss was not material for the periods presented.

Unaudited Interim Financial Information

The condensed consolidated balance sheet as of December 31, 2022 was derived from the Company’s audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022, have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. Accordingly, these financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2022 and notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 30, 2023. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s condensed consolidated financial position as of March 31, 2023 and condensed consolidated results of operations and cash flows for the three months ended March 31, 2023 and 2022 have been made. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2023.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of expenses during the reporting periods. Such estimates include lease liability, accruals for research and development activities, ordinary share valuation and related share-based compensation and certain other accrued liabilities. Actual results could differ from those estimates.

Concentration of Credit Risk

The Company is exposed to credit risk from its deposits of cash, cash equivalents and short-term investments in excess of the amount of insurance provided on such deposits. The Company invests its cash, cash equivalents and short-term investments in money market funds, corporate debt securities, U.S. government bonds and U.S. government agency bonds. The Company limits its credit risk associated with cash, cash equivalents and short-term investments by investing in investment-grade securities and using banks and institutions it believes are creditworthy. The Company has not experienced any losses on its deposits of cash, cash equivalents and short-term investments to date. The Company has no off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies, clinical trials and regulatory approval prior to commercialization. These efforts require

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significant amounts of additional resources, adequate personnel, infrastructure and extensive compliance and reporting.

The Company’s product candidates are still in development and, to date, none of the Company’s product candidates have been approved for sale and, therefore, the Company has not generated any revenue from any of its products.

There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate any revenue from any of its products. The Company operates in an environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies.

The Company relies and expects to continue to rely on a small number of vendors to manufacture supplies and materials for its use in the clinical trial programs. These programs could be adversely affected by a significant interruption in these manufacturing services.

Credit Losses - Short-Term Investments

For short-term investments in an unrealized loss position, the Company periodically assesses its portfolio for impairment. The assessment first considers the intent or requirement to sell the short-term investments. If either of these criteria are met, the amortized cost basis will be written down to fair value through earnings.

If not met, the Company evaluates whether the decline resulted from credit losses or other factors by considering the extent to which fair value is less than amortized cost, any changes to the rating of the short-term investments by a rating agency, and any adverse conditions specifically related to the short-term investments, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the short-term investments is compared to the amortized cost basis of the short-term investments. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive loss.

Fair Value of Financial Instruments

The Company establishes the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and established a fair value hierarchy based on the inputs used to measure fair value.

The carrying value of cash and cash equivalents, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. The Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy which establishes three levels of inputs that may be used to measure fair value (see Note 4. Fair Value Measurements).

Deferred Offering Costs

The Company capitalizes, within other non-current assets, certain legal, accounting and other third-party fees that are directly related to the Company’s in-process equity financings, including its IPO, until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the

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proceeds received as a result of the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs will be immediately written off to general and administrative expenses. Upon closing the IPO, all deferred offering costs were charged against the proceeds from the IPO and recorded in shareholders equity (deficit) as a reduction of additional paid-in capital. As of March 31, 2023, there were no deferred offering costs recorded on the condensed consolidated balance sheets.

Net Loss Per Share Attributable to Ordinary Shareholders

Basic net loss per ordinary share is calculated by dividing the net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period, without consideration of potentially dilutive securities. Net loss attributable to ordinary shareholders is computed as net loss less accretion of redeemable convertible preferred shares and less any excess of the fair value of the consideration paid over the carrying value of noncontrolling interest. Diluted net loss per share is computed by dividing the net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, the redeemable convertible preferred shares, ordinary share warrants, unvested restricted ordinary shares subject to repurchase and share options are considered to be potentially dilutive securities. Basic and diluted net loss per share attributable to ordinary shareholders is presented in conformity with the two-class method required for participating securities as the redeemable convertible preferred shares are considered a participating security because they participate in dividends with ordinary shares. The holders of redeemable convertible preferred shares do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to ordinary shareholders. Because the Company has reported a net loss for all periods presented, diluted net loss per ordinary share is the same as basic net loss per ordinary share for those periods.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Account Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This ASU replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. The amendments in this Update are effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 as of January 1, 2023 and the adoption did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements and related disclosures.

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3.Composition of Certain Consolidated Financial Statement Line Items

Property and equipment, net consists of the following (in thousands):



	MARCH 31,		DECEMBER 31,
	2023		2022
Laboratory equipment	$	1,098	$	1,098
Furniture and fixtures		115		115
Computer equipment and software		58		58
Leasehold improvements		109		109
	$	1,380	$	1,380
Less: Accumulated depreciation		(419)		(349)
Property and equipment, net	$	961	$	1,031

Accrued expenses and other current liabilities consisted of the following (in thousands):



	MARCH 31,		DECEMBER 31,
	2023		2022
Accrued compensation	$	1,279	$	3,544
Accrued research and development expenses		1,898		1,818
Accrued clinical expenses		1,146		438
Accrued professional services		804		313
Income tax and VAT payable		104		174
Accrued other liabilities		658		454
Total accrued expenses and other current liabilities	$	5,889	$	6,741

4. Fair Value Measurements

The Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy which establishes three level of inputs that may be used to measure fair value, as follows:

Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a

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particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

The following tables present information about the Company’s financial assets 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):



	MARCH 31,								DECEMBER 31,
	2023								2022
	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL		LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
Money market funds	$	120,330	$	—	$	—	$	120,330	$	18,994	$	—	$	—	$	18,994
Cash equivalents		120,330		—		—		120,330		18,994		—		—		18,994

U.S. government bonds		25,568		—		—		25,568		11,763		—		—		11,763
U.S. government agency bonds		—		22,256		—		22,256		—		1,794		—		1,794
Corporate debt securities		—		66,545		—		66,545		—		51,193		—		51,193
Short-term investments		25,568		88,801		—		114,369		11,763		52,987		—		64,750
Total fair value of financial assets	$	145,898	$	88,801	$	—	$	234,699	$	30,757	$	52,987	$	—	$	83,744



	MARCH 31,								DECEMBER 31,
	2023								2022
		AMORTIZED					FAIR			AMORTIZED					FAIR
	COST		LOSSES		GAINS		VALUE		COST		LOSSES		GAINS		VALUE
Money market funds	$	120,330	$	—	$	—	$	120,330	$	18,994	$	—	$	—	$	18,994
Cash equivalents		120,330		—		—		120,330		18,994		—		—		18,994

U.S. government bonds		25,510		(35)		93		25,568		11,820		(57)		—		11,763
U.S. government agency bonds		22,092		—		164		22,256		1,801		(7)		—		1,794
Corporate debt securities		66,620		(113)		38		66,545		51,239		(49)		3		51,193
Short-term investments		114,222		(148)		295		114,369		64,860		(113)		3		64,750
Total fair value of financial assets	$	234,552	$	(148)	$	295	$	234,699	$	83,854	$	(113)	$	3	$	83,744