Financial Analysis

"14. Commitments and Contingencies Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to its vendors, lessors, contract research organizations, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its Board that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. The Company has not incurred any material costs as a result of such indemnifications and is not currently aware of any indemnification claims. Legal Proceedings The Company, from time to time, may be party to litigation arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the six months ended June 30, 2026 and 2025 and, to the best of its knowledge, no material legal proceedings are currently pending or threatened. Payments Upon Termination The Company enters into contracts in the normal course of business with contract research organizations (""CROs""), contract development an …

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10. Stock-Based Compensation Equity Plans The Company grants stock-based awards under its 2021 Stock Option and Incentive Plan (the 2021 Plan), which was approved by its stockholders in February 2021 and amended and restated in January 2023. The Company also has outstanding stock option awards under its 2017 Stock Option and Grant Plan (the Private Disc Plan) but is no longer granting awards under this plan or its 2021 Inducement Plan. The Company also grants awards under its 2021 Employee Stock Purchase Plan (the 2021 ESPP), which was approved by the Company's stockholders in July 2021 and amended and restated in January 2023. Out-of-Plan Inducement Grants From time to time, the Company grants equity awards to newly hired executives as a material inducement to enter into employment with the Company. These grants are made in accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules and are issued outside the 2021 Plan, the 2021 Inducement Plan and each of the other stock incentive plans described above. Stock-Based Compensation Expense Total stock-based compensation expense recorded as research and development and selling, general and administrative expenses, respectively, for employees, directors and non-employees is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Research and development $ 6,995 $ 3,862 $ 12,786 $ 6,821 Selling, general and administrative 6,953 4,558 13,108 7,962 Total stock-based compensation expense $ …

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5. Fair Value Measurements The following tables present information about the Companys assets and liabilities that are measured and carried at fair value on a recurring basis and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value, which is described further within Note 2 - Summary of Significant Accounting Policies to the consolidated financial statements in the Companys Annual Report on Form 10-K for the year ended December 31, 2025. Financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 are summarized as follows (in thousands): June 30, 2026 Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 89,133 $ $ Total cash equivalents 89,133 Marketable securities: U.S. treasury securities 440,035 Corporate debt securities 89,404 U.S. government agency securities 89,631 Total marketable securities 619,070 Total assets $ 89,133 $ 619,070 $ Financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 are summarized as follows (in thousands): December 31, 2025 Level 1 Level 2 Level 3 Assets Cash equivalents: Money market funds $ 72,932 $ $ Corporate debt securities 9,981 Total cash equivalents 72,932 9,981 Marketable securities: U.S. treasury securities 485,529 Corporate debt securities 132,941 U.S. government agency securities 81,537 Total marketable securities 700,007 Total assets $ 72,932 $ 709,988 $ The fair …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

11. Income Taxes The Company did no t record a provision or benefit for federal income taxes during the three and six months ended June 30, 2026 and 2025. The Company recorded state income tax expense of $ 0.1 million and $ 0.2 million for the six months ended June 30, 2026 and 2025, respectively, due to interest income. 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 and has considered its history of cumulative net losses incurred since inception and its lack of any commercially ready 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. The Company has never been examined by the Internal Revenue Service or any other jurisdiction for any tax years and, as such, all years within the applicable statutes of limitations are potentially subject to audit.

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"8. Long-Term Debt In November 2024, the Company entered into a Loan and Security Agreement (the Hercules Loan Agreement), with the lenders party thereto (the Lenders) and Hercules Capital, Inc., as administrative agent and collateral agent (the Agent). The Hercules Loan Agreement provides for up to $ 200.0 million of senior secured term loans available to the Company in multiple tranches (the Term Loan Facility). Upon execution, the Company borrowed an initial amount of $ 30.0 million. In June 2026, the Company entered into the first amendment to the Hercules Loan Agreement (the Hercules First Amendment) which modified certain terms of the agreement, including, among other things, extending the availability period for the remaining undrawn tranches and revising the minimum cash covenant requirements. Upon execution of the Hercules First Amendment, the Company drew an additional principal amount of $ 30.0 million, increasing the cumulative amount drawn to $ 60.0 million. The Company may, at its sole discretion, draw an additional $ 50.0 million on or prior to April 30, 2027. The Company may also access additional term loan advances in an aggregate principal amount of up to $ 65.0 million during the term of the Term Loan Facility subject to achievement of specified performance milestones, and one additional term loan advance up to an aggregate principal amount of $ 25.0 million subject to certain terms and conditions. The Company intends to use the proceeds of the Term Loan Fa …

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Recently Issued Accounting Pronouncements Not Yet Adopted Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Companys condensed consolidated financial statements upon adoption. …

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15. Related Party Transactions In October 2025 and January 2025, certain existing investors participated in the Company's underwritten offerings (see Note 9 - Stockholders' Equity ).

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"13. Segment Information The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions, resulting in a single reportable segment. The Company has determined that its Chief Operating Decision Maker (""CODM"") is its Chief Executive Officer . The Companys CODM reviews the Companys financial information on a consolidated basis for the purpose of allocating resources and assessing financial performance. The key measure of segment profit or loss that the CODM uses to allocate resources and assess performance is the Companys consolidated net loss, as reported on the condensed consolidated statements of operations and comprehensive loss. In addition, the CODM is regularly provided the significant segment expense categories included in the table below (in thousands), which are reviewed against budgeted expectations to assist in resource allocation decision-making. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Bitopertin program external expense $ ( 8,666 ) $ ( 23,686 ) $ ( 18,006 ) $ ( 32,121 ) Selcodebart (DISC-0974) program external expense ( 12,354 ) ( 4,615 ) ( 20,463 ) ( 10,736 ) DISC-3405 program external expense ( 4,960 ) ( 1,908 ) ( 14,147 ) ( 3,576 ) Other external research and development expense ( 2,697 ) ( 3,103 ) ( 4,862 ) ( 4,935 ) Internal and other research and development expense ( 11,261 ) ( 9,145 ) ( 22,573 ) ( 15,893 ) Commercial expense $ ( 3,083 ) $ ( 2,660 ) …

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"2. Summary of Significant Accounting Policies Summary of Significant Accounting Policies The significant accounting policies used in preparation of the condensed consolidated financial statements are described in the Companys audited consolidated financial statements as of and for the year ended December 31, 2025 and the notes thereto, which are included in the Companys Annual Report on Form 10-K. There have been no material changes to the significant accounting policies previously disclosed in the Companys Annual Report on Form 10-K for the year ended December 31, 2025 . Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Companys condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative accounting principles generally accepted in the United States as found in the Accounting Standard Codification (ASC) and Accounting Standards Updates (ASU) of th e Financial Accounting Standards Board (FASB). Unaudited Interim Condensed Consolidated Financial Information The accompanying condensed consolidated financial statements as of June 30, 2026 and for the three and six months ended June 30, 2026 and 2025 are …

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"9. Stockholders' Equity Preferred Stock The Company was authorized to issue up to 10,000,000 shares of preferred stock, $ 0.0001 par value per share . As of June 30, 2026, no shares of preferred stock were issued or outstanding. Common Stock The Company was auth orized to issue up to 100,000,000 shares of common stock, $ 0.0001 par value per share. As of June 30, 2026 , 38,345,666 shares of common stock were issued and outstanding. Underwritten Offerings October 2025 Offering In October 2025, in connection with an underwriting agreement with Jefferies LLC, Leerink Partners LLC, Morgan Stanley & Co. LLC, and Cantor Fitzgerald & Co., the Company sold 2,619,049 shares of its common stock, at a public offering price of $ 84.00 per share. The Company also sold pre-funded warrants to purchase an aggregate of 59,523 shares of common stock at a price of $ 83.9999 per pre-funded warrant. The Company received aggregate net proceeds of $ 211.0 million, after deducting offering expenses of $ 14.0 million. As of June 30, 2026 , none of the 59,523 pre-funded warrants had been exercised. January 2025 Offering In January 2025, in connection with an underwriting agreement with Jeffries LLC, Leerink Partners LLC, Stifel, Nicolaus & Company, Incorporated and Cantor Fitzgerald & Co., the Company sold 4,533,182 shares of its common stock, which included the exercise in full by the underwriters of their option to purchase up to 615,000 additional shares of common stock, at a publi …

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