10-K: Relay Therapeutics Advances Zovegalisib with FDA Breakthrough Status

Relay Therapeutics' 2025 annual report highlights significant clinical progress for its lead candidate zovegalisib, including FDA Breakthrough Therapy designation, alongside strategic financial adjustments.

Summary

• Relay Therapeutics is a clinical-stage precision medicine company focused on cancer and genetic diseases, leveraging its Dynamo platform for drug discovery.
• Zovegalisib (RLY-2608), the lead product candidate, is an allosteric, pan-mutant, and isoform-selective PI3K inhibitor in clinical development.
• In February 2026, zovegalisib in combination with fulvestrant received FDA Breakthrough Therapy designation for PIK3CA mutant HR+/HER2locally advanced or metastatic breast cancer following CDK4/6 inhibitor treatment.
• A global Phase 3 registrational study, the ReDiscover-2 Trial, was initiated in Q2 2025 to evaluate zovegalisib plus fulvestrant in PI3K-mutated, HR+/HER2advanced breast cancer patients previously treated with a CDK4/6 inhibitor (n=540).
• Interim clinical data from the ReDiscover Trial (June 2025 data cut-off March 26, 2025; December 2025 data cut-off October 15, 2025) for zovegalisib plus fulvestrant showed a median progression-free survival (PFS) of 10.3 months for all patients and 11 months for second-line (2L) patients.
• For 2L patients with kinase mutations, median PFS was 18.4 months, and for those with non-kinase mutations, it was 8.5 months.
• The confirmed objective response rate (ORR) was 39% among patients with measurable disease, rising to 67% for those with kinase mutations.
• Zovegalisib demonstrated a generally well-tolerated safety profile with mostly low-grade treatment-related adverse events (TRAEs) and a 92% median dose intensity.
• In Q1 2025, the global Phase 1/2 ReInspire Trial for zovegalisib in patients with PIK3CA-related overgrowth spectrum (PROS) and vascular anomalies was initiated.
• The company is also advancing RLY-8161, an NRAS-selective inhibitor for NRAS-mutated solid tumors, and a non-inhibitory chaperone for Fabry disease.
• In December 2024, Relay Therapeutics entered into an exclusive global licensing agreement with Elevar Therapeutics, Inc. for lirafugratinib (RLY-4008), receiving $15.4 million in upfront and milestone payments by December 31, 2025, with potential for up to $488.0 million in future milestones and tiered royalties.
• The collaboration and license agreement with Genentech for migoprotafib (GDC-1971) was terminated by Genentech, effective January 7, 2025, resulting in no further payments from Genentech.
• Net loss for the year ended December 31, 2025, was $276.5 million, an improvement from $337.7 million in 2024 and $342.0 million in 2023.
• Research and development expenses decreased by $57.7 million to $261.4 million in 2025, primarily due to organizational streamlining and reduced costs for lirafugratinib post-licensing.
• As of December 31, 2025, cash, cash equivalents, and investments totaled $554.5 million, projected to fund operations into 2029.
• A lawsuit (Hayes v. Borisy, et al.) was filed in December 2024 against certain directors and officers, alleging excessive compensation, with the case currently in discovery.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to the significant clinical advancement of zovegalisib, marked by FDA Breakthrough Therapy designation and Phase 3 initiation, coupled with a reduction in net losses. While future funding needs remain, the strategic licensing deal and pipeline progress indicate strong operational momentum.

Positives

• Zovegalisib received FDA Breakthrough Therapy designation in February 2026 for PIK3CA mutant HR+/HER2locally advanced or metastatic breast cancer, indicating potential for substantial improvement over existing therapies.
• Initiation of the global Phase 3 ReDiscover-2 Trial in Q2 2025 for zovegalisib in advanced breast cancer, marking a significant step towards potential registrational approval.
• Interim clinical data from the ReDiscover Trial for zovegalisib plus fulvestrant showed encouraging efficacy signals, including a median PFS of 10.3 months for all patients and 18.4 months for 2L patients with kinase mutations.
• Zovegalisib demonstrated a differentiated interim efficacy signal and an encouraging interim safety and tolerability profile, with a low rate of TRAE-related dose modifications (92% median dose intensity) and manageable low-grade hyperglycemia.
• Expansion of zovegalisib's development into genetic diseases with the initiation of the ReInspire Trial for PIK3CA-related overgrowth spectrum (PROS) and vascular anomalies in Q1 2025.
• Successful global licensing agreement with Elevar Therapeutics for lirafugratinib, generating $15.4 million in upfront and milestone payments by December 31, 2025, with potential for up to $488.0 million in future milestones and tiered royalties.
• Net loss decreased to $276.5 million in 2025 from $337.7 million in 2024, reflecting improved financial performance.
• Research and development expenses decreased by $57.7 million in 2025, attributed to strategic streamlining and reduced lirafugratinib development costs.
• Strong liquidity position with $554.5 million in cash, cash equivalents, and investments as of December 31, 2025, expected to fund operations into 2029.

Negatives

• Continued significant operating losses, with a net loss of $276.5 million in 2025 and an accumulated deficit of $2.0 billion as of December 31, 2025.
• Termination of the collaboration and license agreement with Genentech for migoprotafib, effective January 7, 2025, resulting in no further milestone or other payments from Genentech and discontinuation of migoprotafib development.
• Reliance on substantial additional funding to support ongoing operations and commercialization efforts, with no committed external source of funds.
• Exposure to a securities class action lawsuit (Hayes v. Borisy, et al.) alleging excessive director compensation, which could incur substantial costs and divert management attention.
• The company has never successfully completed any large-scale, pivotal clinical trials, and clinical product development is lengthy, expensive, and uncertain.
• Reliance on third parties for manufacturing and clinical trials increases risks related to supply, quality, regulatory compliance, and meeting deadlines.
• The incidence and prevalence for target patient populations of product candidates have not been established with precision, potentially limiting market opportunities.
• The novel mechanism of action for product candidates may lead to greater R&D expenses, regulatory issues, or discovery of unknown adverse effects.

Risks

• Inability to successfully complete large-scale, pivotal clinical trials, obtain regulatory approvals, or commercialize product candidates.
• Delays or difficulties in patient enrollment for clinical trials, which could delay or prevent regulatory approvals.
• Positive data from preclinical or early clinical studies may not be predictive of later clinical study results, leading to development failure.
• Potential for significant adverse events or safety profiles in current or future clinical trials that could inhibit regulatory approval or market acceptance.
• Failure to identify viable new product candidates for clinical development, materially harming business.
• Market opportunities for product candidates may be smaller than estimated, or approvals may be based on narrower patient populations, adversely affecting revenue and profitability.
• Substantial competition from major pharmaceutical and biotechnology companies, academic institutions, and research organizations.
• Delays or inability to obtain required regulatory approvals for product candidates, materially impairing revenue generation.
• Reliance on third parties to conduct clinical trials and investigator-sponsored trials, with risks of non-compliance, missed deadlines, or inadequate data.
• Reliance on third parties for manufacturing product candidates, increasing risks of insufficient quantities, unacceptable cost/quality, or supply chain disruptions.
• Dependence on single-source suppliers for active pharmaceutical ingredients, drug product, and starting materials, with risks of supply interruption.
• Unsuccessful licenses or collaborations with third parties, leading to limited control, non-performance, or termination of agreements.
• Need to raise substantial additional funding, with risks of dilution, restrictive debt covenants, or relinquishing intellectual property rights.
• Inability to adequately protect proprietary technology or obtain and maintain broad patent protection, allowing competitors to develop similar products.
• Third parties initiating legal proceedings alleging infringement of their intellectual property rights, leading to uncertain outcomes, monetary damages, or injunctions.
• Inability to protect the confidentiality of trade secrets, harming business and competitive position.
• Ongoing regulatory obligations and continued regulatory review post-approval, with risks of post-market study requirements, marketing/labeling restrictions, or product recall.
• Potential for improper promotion of off-label uses, leading to significant liability.
• Compliance with restrictive regulations governing personal data processing and cross-border transfers (e.g., GDPR, UK GDPR, CCPA, CPRA, MHMDA), leading to fines, litigation, or reputational harm.
• Risks and challenges associated with the use of new and evolving technologies, such as artificial intelligence, including intellectual property risks and increased regulation.
• Disruptions at regulatory agencies (FDA, SEC) due to funding shortages, global health concerns, or policy changes, hindering timely review and approval.
• Inability to retain key executives and experienced scientific/clinical personnel, or to attract and motivate qualified personnel.
• Misconduct or improper activities by employees, principal investigators, CROs, and consultants, including non-compliance with regulatory standards and insider trading.
• Increasing use of social media platforms presenting risks of non-compliance with guidelines, loss of trade secrets, or reputational damage.
• Environmental, social, and governance (ESG) matters impacting business and reputation, including increased expenses and scrutiny.
• Difficulties in managing growth as development and regulatory capabilities expand, and potential implementation of sales, marketing, and distribution capabilities.
• Risks associated with acquiring additional businesses or products, forming strategic alliances, or creating joint ventures.
• Disruptions to internal information technology systems or those of third-party collaborators due to cybersecurity breaches, data loss, or other events.
• Failure to comply with applicable environmental, health, and safety laws and regulations, leading to fines or penalties.
• Adverse effects from natural disasters or other unplanned events on operations or third-party facilities.
• Volatility in the trading price of common stock and potential for securities class action litigation.
• Limitations on the ability to utilize net operating loss carryforwards and other tax attributes due to ownership changes.
• Future changes in tax laws adversely affecting business and financial condition.
• Significant costs and management time devoted to operating as a public company and compliance initiatives (e.g., Sarbanes-Oxley Act Section 404).
• Anti-takeover provisions in charter documents and Delaware law making acquisitions more difficult and limiting stockholder influence.
• Bylaws designating exclusive forums for certain litigation, potentially limiting stockholders' ability to obtain a favorable judicial forum.

Future Outlook

The company expects to continue incurring significant expenses and operating losses for the foreseeable future as it advances its clinical trials and preclinical programs. Substantial additional funding will be required to support continuing operations and potential commercialization, which is not expected for several years. The company believes its current cash, cash equivalents, and investments will fund operations into 2029, but this estimate is based on assumptions that may prove incorrect.

Management Comments

• We believe that zovegalisib has the potential to address a significant portion of patients globally with HR+, HER2breast cancer with a PI3K mutation, one of the largest patient populations for a precision oncology medicine.
• We believe that while the clinical data from the ReDiscover Trial disclosed to date are preliminary, the data suggest differentiated interim efficacy signals in the specified patient population and support selective target engagement across doses and mutation types with an encouraging interim safety and tolerability profile.
• We are committed to deploying our Dynamo platform against genetically validated targets, taking on some of the toughest technical drug discovery challenges and creating novel medicines against those targets that can rapidly attain clinical proof-of-concept and address significant unmet medical needs.

Industry Context

StockSavvy.ai notes that Relay Therapeutics operates in the highly competitive biopharmaceutical industry, specifically within precision oncology and genetic diseases. The company's Dynamo platform, which focuses on Motion-Based Drug Design, aims to address previously intractable protein targets, a key trend in personalized medicine. The FDA Breakthrough Therapy designation for zovegalisib positions it favorably against competitors in the PI3K inhibitor space for breast cancer, such as Novartis's Piqray and Vijoice, AstraZeneca's Truqap, and Roche/Genentech's Itovebi. The termination of the Genentech collaboration highlights the inherent risks and shifting priorities in strategic partnerships within the industry. The Elevar licensing deal for lirafugratinib demonstrates a strategy of monetizing certain assets while focusing internal resources on core programs like zovegalisib, a common practice for clinical-stage companies managing capital and pipeline breadth.

Comparison to Industry Standards

• Zovegalisib's median PFS of 10.3 months (all patients) and 11 months (2L patients) in the ReDiscover Trial for PI3K-mutated, HR+/HER2advanced breast cancer compares to existing therapies like Piqray (alpelisib) and Truqap (capivasertib). While direct cross-trial comparisons are not made in the filing, the data suggests a differentiated efficacy signal.
• For 2L patients with kinase mutations, zovegalisib showed a median PFS of 18.4 months and 67% confirmed ORR, which could be a strong competitive point against current standards of care.
• In vascular anomalies, zovegalisib is positioned against Novartis's Vijoice (alpelisib), the only approved systemic therapy for PROS, and other therapies in development from Kaken Pharmaceutical Company and Palvella Therapeutics.
• RLY-8161, the NRAS-selective inhibitor, aims to address liabilities of current pan-RAS inhibitors and compete with existing approaches targeting the RAS/MAPK pathway, such as Pfizer's Braftovi (encorafenib) and Mektovi (binimetinib) combination, and Revolution Medicines' clinical-stage pan-RAS molecule RMC-6236.
• The non-inhibitory chaperone for Fabry disease will compete with Amicus Therapeutics' Galafold (migalastat) and enzyme replacement therapies like Sanofi's Fabrazyme, Takeda's Replagal, and Protalix Biotherapeutics' Elfabrio.

Corporate Governance

Legal Proceedings

• On December 18, 2024, a derivative complaint (Hayes v. Borisy, et al.) was filed in the Court of Chancery of the State of Delaware against certain directors and officers, alleging excessive compensation awarded in 2021, 2022, and 2023. The complaint asserts claims for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and breach of fiduciary duty of disclosure. The company and defendants answered the complaint on January 24, 2025, and the case is currently in discovery. The outcome and potential loss are unpredictable.

Related Party Transactions

• The company has a Collaboration and License Agreement (DESRES Agreement) with D. E. Shaw Research, LLC, which is a principal stockholder. The initial research term ended on August 16, 2025, but the agreement continues on a target-by-target basis with ongoing payment obligations including milestone payments (up to $7.3 million for the first three products, $6.3 million thereafter) and low single-digit royalties on worldwide net sales. The company also shares a percentage of proceeds from third-party transactions involving Category 1 Targets with D. E. Shaw Research.

Stakeholder Impact

• **Shareholders**: Potential for increased value due to FDA Breakthrough Therapy designation and Phase 3 trial initiation for zovegalisib. However, continued operating losses and the need for future capital raises could lead to dilution. The ongoing lawsuit regarding director compensation could also impact shareholder confidence and potentially lead to financial liabilities.
• **Employees**: The company's strategic choices to streamline the research organization in 2024 and 2025 led to a decrease in employee-related expenses, including the involuntary termination of over 70 employees in 2025, indicating workforce adjustments. The company emphasizes its commitment to attracting and retaining talent, but competition is intense.
• **Customers/Patients**: Positive clinical data and FDA Breakthrough Therapy designation for zovegalisib offer hope for new, potentially life-changing therapies for patients with PIK3CA mutant HR+/HER2breast cancer and vascular anomalies. The company's focus on precision medicine aims to provide targeted treatments for significant unmet medical needs.
• **Suppliers/Creditors**: Reliance on third-party CROs and CMOs for clinical trials and manufacturing means their performance and compliance are critical. Any disruptions or failures by these third parties could impact the company's development timelines and financial stability. The company's strong cash position into 2029 provides some assurance to creditors.
• **Regulatory Authorities**: The company is subject to extensive regulation by the FDA, EMA, and other global authorities. Breakthrough Therapy designation indicates strong engagement with the FDA, but ongoing compliance with cGMP, GCP, and data privacy regulations (GDPR, UK GDPR, state laws) is crucial to avoid sanctions and delays.

Next Steps

• Rapidly advance the PI3K franchise (zovegalisib) and other programs through clinical development, aiming to reach more patients.
• Continue to prioritize development of zovegalisib doublet and triplet combinations for breast cancer patients.
• Conduct clinical studies in genetically-defined patient populations.
• Meet with regulatory authorities to discuss potential approval pathways if clinically meaningful and differentiated data are generated.
• Harness insights and data from the Dynamo platform against intractable or inadequately addressed precision medicine targets, focusing on oncology and genetic diseases.
• Selectively enter into strategic partnerships to maximize the value of the platform and pipeline.
• Identify and qualify additional manufacturers for active pharmaceutical ingredients, drug product, and starting materials prior to or after NDA/MAA submission.
• Continue to implement and improve managerial, operational, and financial systems to manage anticipated future growth.
• Continue to recruit and train additional qualified personnel, particularly in pharmaceutical and clinical development, regulatory affairs, and potentially sales, marketing, and distribution.

Key Dates

Recommendation

Relay Therapeutics presents a mixed but cautiously optimistic outlook. The FDA Breakthrough Therapy designation for zovegalisib and the initiation of a Phase 3 trial are significant positive catalysts, indicating strong clinical progress and potential for future market entry. The interim clinical data for zovegalisib also appears promising. However, the company continues to incur substantial operating losses and has an accumulated deficit of $2.0 billion, necessitating significant future capital raises. While current liquidity is sufficient into 2029, the long and uncertain path of drug development, coupled with intense competition and regulatory risks, suggests a 'hold' recommendation. Investors should monitor further clinical trial results, regulatory milestones, and the company's ability to secure additional funding without excessive dilution.

Keywords

Precision Medicine, Oncology, Genetic Disease, Zovegalisib, RLY-2608, PI3K Inhibitor, Breast Cancer, Vascular Anomalies, FDA Breakthrough Therapy, Clinical Trials, Phase 3, ReDiscover Trial, ReInspire Trial, Dynamo Platform, Drug Discovery, Biopharmaceutical, NRAS Inhibitor, Fabry Disease, Lirafugratinib, RLY-4008, FGFR2 Inhibitor, Elevar Therapeutics, SEC Filing, 10-K, Financial Performance, Research and Development, Intellectual Property, Regulatory Approval, Capital Raise