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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2025



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

For the transition period from to

Commission File No. 001-38944

Akero Therapeutics, Inc.

(Exact name of registrant as specified in its charter)


Delaware		81-5266573
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

601 Gateway Boulevard, Suite 350

South San Francisco, CA 94080

(650) 487-6488

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

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



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	AKRO	The Nasdaq Global Select Market

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 (§ 232.405 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, 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 ☒

As of May 1, 2025, the registrant had 79,717,570 shares of common stock, $0.0001 par value per share, outstanding.

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SUMMARY OF THE MATERIAL RISKS ASSOCIATED WITH OUR BUSINESS

Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. The principal risks and uncertainties affecting our business includes:

•

Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, including difficulties in identifying patients with metabolic dysfunction-associated steatohepatitis (“MASH,” formerly known as nonalcoholic steatohepatitis), significant competition for recruiting such patients in clinical trials, and restrictions on patients and investigators related to outbreaks of infectious diseases or public health crises.

•

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

•

Failures or delays in the commencement or completion of, or ambiguous or negative results from our planned clinical trials of our product candidates could result in increased costs to us and could delay, prevent, or limit our ability to generate revenue and continue our business.

•

Clinical development is uncertain and our clinical trials for efruxifermin (“EFX”) and any future product candidates may experience delays, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all, which would have an adverse effect on our business.

•

We rely and will continue to rely on third parties to conduct our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines or comply with regulatory requirements, we may not be able to obtain regulatory approval of or commercialize any potential product candidates.

•

The manufacture of our product candidates is complex and we may encounter difficulties in production. If we or any of our third-party manufacturers encounter such difficulties, or fail to meet rigorously enforced regulatory standards, our ability to provide supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or stopped, or we may be unable to maintain a commercially viable cost structure.

•

We are heavily dependent on the success of EFX, our only product candidate.

•

If we fail to develop and successfully commercialize other product candidates, our business and future prospects may be harmed and our business will be more vulnerable to any problems that we encounter in developing and commercializing our product candidate.

•

We may develop EFX, and potentially future product candidates, in combination with other therapies, which exposes us to additional risks.

•

If we are not successful in discovering, developing, receiving regulatory approval for and commercializing EFX and any future product candidates, our ability to expand our business and achieve our strategic objectives would be impaired.

•

We may be required to make significant payments under our license agreement for EFX.

•

The regulatory approval processes of the U.S. Food and Drug Administration (the “FDA”) and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable. Our inability to obtain regulatory approval for EFX or any future product candidate would substantially harm our business.

•

Even if we are able to obtain regulatory approvals for our product candidate or any future product candidates, if they exhibit harmful side effects after approval, our regulatory approvals could be revoked or otherwise negatively impacted, and we could be subject to costly and damaging product liability claims.

•

Our relationships with customers and third-party payors will be subject to applicable anti-kickback, fraud and abuse, transparency and other healthcare laws and regulations, which, if violated, could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.

•

We have incurred significant losses since our inception and we expect to incur losses for the foreseeable future.

Table of Contents

•

We currently have a limited operating history, have not generated any revenue to date, and may never become profitable.

•

We will require additional capital to finance our operations, which may not be available to us on acceptable terms, or at all. As a result, we may not complete the development and commercialization of our product candidate or develop any future product candidates.

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PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	7
	Condensed Consolidated Balance Sheets (Unaudited)	7
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	8
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited)	9
	Condensed Consolidated Statements of Cash Flows (Unaudited)	10
	Notes to Unaudited Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	93
Item 3.	Defaults Upon Senior Securities	93
Item 4.	Mine Safety Disclosures	93
Item 5.	Other Information	93
Item 6.	Exhibits	94
Signatures		95

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements include, among other things, statements about:

•

the success, cost and timing of our product development activities and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs;

•

our ability to successfully enroll, conduct and complete the three parallel, randomized, placebo-controlled, global clinical trials of our Phase 3 SYNCHRONY program, including our ability to reach agreement with the FDA and other regulatory authorities on clinical trial designs

•

the impact of geopolitical tensions, such as the increasing conflict in the Middle East, including between India and Pakistan, on clinical trial sites, such as those in India, Israel and Turkey where clinical sites have been activated to participate in our Phase 3 SYNCHRONY program;

•

our ability to maintain our expected timeline for reporting primary endpoint results of the Phase 3 program called SYNCHRONY, which is comprised of three ongoing clinical trials (Outcomes, Histology, and Real-World);

•

the potential for another pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, to disrupt our business plans, product development activities, ongoing clinical trials, including the timing and enrollment of patients, the health of our employees and the strength of our supply chain;

•

our ability to advance any product candidate into or successfully complete any clinical trial;

•

our ability to successfully manufacture our product candidates for future clinical trials or for commercial use, if approved;

•

the potential for our identified research priorities to advance our technologies;

•

our ability to obtain and, if obtained, maintain regulatory approval of EFX or any future product candidates, and any related restrictions, limitations and/or warnings in the label of an approved product candidate;

•

the ability to license additional intellectual property relating to any future product candidates and to comply with our existing license agreement;

•

our ability to commercialize our products in light of the intellectual property rights of others;

•

the success of competing therapies that are or become available;

•

our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates;

•

the commercialization of our product candidates, if approved;

•

our plans to research, develop and commercialize our product candidates;

•

our ability to attract collaborators with development, regulatory and commercialization expertise;

•

future agreements with third parties in connection with the commercialization of our product candidates and any other approved product;

•

the size and growth potential of the markets for our product candidates, and our ability to serve those markets;

•

the rate and degree of market acceptance of our product candidates, if approved;

•

regulatory developments in the United States and foreign countries;

•

our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•

our ability to attract and retain key scientific or management personnel;

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•

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

•

the impact of unstable global economic and geopolitical conditions, including trade restrictions such as sanctions, tariffs, reciprocal and retaliatory tariffs, and other tariff-related measures; regulatory requirements, legal actions, or enforcement; and inflation rates on our business, financial condition and results of operation;

•

the impact of laws and regulations; and

•

our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or into which we may enter.

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed or incorporated by reference as exhibits hereto completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

NOTE REGARDING TRADEMARKS

Akero Therapeutics, Inc. is the owner of the AKERO trademark, as well as certain other trademarks, including design versions of some of these trademarks. The symbols ™ and ® are not used in connection with the presentation of these trademarks in this report and their absence does not indicate a lack of trademark rights. Certain other trademarks used in this report are the property of third-party trademark owners and may be presented with or without trademark references.

All brand names or trademarks appearing in this report are the property of their respective owners. Unless the context requires otherwise, references in this report to “Akero,” the “Company,” “we,” “us,” and “our” refer to Akero Therapeutics, Inc. and its subsidiary.

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PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Akero Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)


	March 31, 2025			December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	185,922		$	340,238
Short-term marketable securities		500,371			402,840
Prepaid expenses and other current assets		26,858			27,302
Total current assets		713,151			770,380
Long-term marketable securities		442,003			54,751
Right of use asset		689			755
Total assets	$	1,155,843		$	825,886
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	10,831		$	9,027
Accrued expenses and other current liabilities		24,944			30,727
Loan payable, current		6,664			—
Total current liabilities		42,439			39,754
Loan payable, noncurrent		28,811			35,297
Warrant liability		296			194
Operating lease liability, noncurrent		451			529
Total liabilities		71,997			75,774
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.0001 par value, 150,000,000 shares authorized as of March 31, 2025 and December 31, 2024; 79,669,920 and 72,383,013 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		8			7
Additional paid-in capital		1,979,634			1,575,313
Accumulated other comprehensive income		1,085			948
Accumulated deficit		(896,881	)		(826,156	)
Total stockholders’ equity		1,083,846			750,112
Total liabilities and stockholders’ equity	$	1,155,843		$	825,886

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

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Akero Therapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2025			2024
Operating expenses:
Research and development	$	69,567		$	50,650
General and administrative		11,315			9,304
Total operating expenses		80,882			59,954
Loss from operations		(80,882	)		(59,954	)
Interest expense		(1,154	)		(991	)
Interest and other income, net		11,311			7,601
Net loss		(70,725	)		(53,344	)
Net unrealized gain (loss) on marketable securities		137			(349	)
Comprehensive loss	$	(70,588	)	$	(53,693	)
Net loss per common share, basic and diluted	$	(0.90	)	$	(0.90	)
Weighted-average number of shares used in computing net loss per common share, basic and diluted		78,656,629			59,307,759

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

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Akero Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands, except share amounts)

(Unaudited)


					Additional		Accumulated Other						Total
	Common Stock				Paid-In-		Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital		Gain (Loss)			Deficit			Equity (Deficit)
Balances at December 31, 2023		55,754,445	$	6	$	1,109,126	$	270		$	(574,096	)	$	535,306
Exercise of stock options		233,321		—		1,769		—			—			1,769
Common stock issued for vested restricted stock units		10,663		—		—		—			—			—
Vested warrants issued pursuant to loan agreement		—		—		431		—			—			431
Issuance of common stock pursuant to At-The-Market (“ATM”) offering, net of issuance costs		500,000		—		10,604		—			—			10,604
Issuance of common stock pursuant to a follow-on offering, net of issuance costs		12,650,000		1		344,437		—			—			344,438
Stock-based compensation expense		—		—		7,398		—			—			7,398
Net unrealized loss on marketable securities		—		—		—		(349	)		—			(349	)
Net loss		—		—		—		—			(53,344	)		(53,344	)
Balances at March 31, 2024		69,148,429	$	7	$	1,473,765	$	(79	)	$	(627,440	)	$	846,253

Balances at December 31, 2024		72,383,013	$	7	$	1,575,313	$	948		$	(826,156	)	$	750,112
Exercise of stock options		438,460		—		7,396		—			—			7,396
Common stock issued for vested restricted stock units		40,789		—		—		—			—			—
Issuance of common stock and accompanying pre-funded warrants in a follow-on offering, net of issuance costs		6,427,170		1		377,780		—			—			377,781
Issuance of common stock pursuant to ATM offering, net of issuance costs		380,488		—		10,361		—			—			10,361
Stock-based compensation expense		—		—		8,784		—			—			8,784
Net unrealized gain on marketable securities		—		—		—		137			—			137
Net loss		—		—		—		—			(70,725	)		(70,725	)
Balances at March 31, 2025		79,669,920	$	8	$	1,979,634	$	1,085		$	(896,881	)	$	1,083,846

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

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Akero Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(70,725	)	$	(53,344	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		8,784			7,398
Depreciation		—			1
Non-cash lease expense		66			62
Net amortization of premiums and discounts on marketable securities		(2,463	)		(2,922	)
Amortization of debt issuance costs and discount		178			112
Fair value change in warrant liability		102			500
Unrealized foreign exchange gain and loss		—			(22	)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		444			2,337
Accounts payable		1,811			6,456
Accrued expenses and other current liabilities		(5,791	)		4,344
Operating lease liability		(70	)		(62	)
Net cash used in operating activities		(67,664	)		(35,140	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of short-term and long-term marketable securities		(583,301	)		(38,976	)
Proceeds from maturities of short-term marketable securities		101,118			96,825
Net (cash used in) provided by investing activities		(482,183	)		57,849
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the exercise of stock options		7,396			1,769
Proceeds from the issuance of common stock and pre-funded warrants in a follow-on public offering		378,350			—
Proceeds from the issuance of common stock in a follow-on public offering		—			344,839
Proceeds from the issuance of common stock pursuant to the ATM offering		10,361			10,604
Proceeds from loan payable		—			10,000
Payment of debt and equity issuance costs		(576	)		(274	)
Net cash provided by financing activities		395,531			366,938
Net (decrease) increase in cash and cash equivalents		(154,316	)		389,647
Cash and cash equivalents at the beginning of the period		340,238			234,207
Cash and cash equivalents at the end of the period	$	185,922		$	623,854

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$	980		$	768

NON-CASH INVESTING AND FINANCING INFORMATION:
Change in net unrealizable gain (loss) on marketable securities	$	137		$	(349	)
Warrant liability costs reclassified to additional paid-in equity on vested warrants issued	$	—		$	431
Debt and equity issuance costs included in accounts payable and accrued expenses and other current liabilities	$	—		$	480

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

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

1. Nature of the business and basis of presentation

Akero Therapeutics, Inc., together with its wholly owned subsidiary Akero Securities Corporation (“Akero” or the “Company”), is a clinical-stage company dedicated to developing transformational treatments for patients with serious metabolic diseases marked by high unmet medical need, including metabolic dysfunction-associated steatohepatitis, or MASH, formerly known as non-alcoholic steatohepatitis, or NASH. MASH is a severe form of metabolic dysfunction-associated steatotic liver disease, or MASLD, formerly known as nonalcoholic fatty liver disease, or NAFLD, characterized by inflammation and fibrosis in the liver that can progress to cirrhosis, liver failure, cancer and death. The Company’s lead product candidate, efruxifermin, or EFX, is an analog of fibroblast growth factor 21, or FGF21, which is an endogenously expressed hormone that protects against cellular stress and regulates metabolism of lipids, carbohydrates and proteins throughout the body. The Company has an ongoing, global Phase 3 program called SYNCHRONY, which is comprised of three clinical trials (Outcomes, Histology, and Real-World) with an expected total enrollment of about 3,500 patients, which is designed to support applications for marketing approval for patients with pre-cirrhotic MASH (F2-F3) and compensated cirrhosis (F4) due to MASH. The SYNCHRONY program builds on two biopsy-based Phase 2b trials in corresponding patient populations, with a combined total of over 300 patients treated for up to 96 weeks. Based on statistically significant fibrosis regression and MASH resolution among patients with either biopsy-confirmed pre-cirrhotic MASH (F2-F3) or compensated cirrhosis (F4) due to MASH, the Company believes EFX has the potential, if approved, to be an important medicine for treating MASH.

The Company is subject to risks and uncertainties common to mid-stage companies in the biotechnology industry, including, but not limited to, completion and success of clinical testing, preparation for a potential commercial launch of EFX, if approved, development by competitors of new technological innovations, compliance with governmental regulations, dependence on key personnel and protection of proprietary technology and the ability to secure additional capital to fund operations. EFX will require extensive clinical testing prior to regulatory approval and commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

Basis of presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company after elimination of all intercompany accounts and transactions. All adjustments necessary for the fair presentation of the Company’s condensed consolidated financial statements for the periods presented have been reflected.

Liquidity

In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.

Since its initial public offering (“IPO”) in June 2019, the Company has raised capital primarily through the sale of its common stock in follow-on public offerings, registered direct offerings and At-the-Market (“ATM”) offerings. The Company has incurred recurring losses since its inception, including net losses of $70,725 and $53,344 for the three months ended March 31, 2025 and 2024, respectively, and net losses of $252,060 and $151,759 for the years ended December 31, 2024 and 2023, respectively. In addition, as of March 31, 2025, the Company had an accumulated deficit of $896,881. The Company expects to continue to generate operating losses for the foreseeable future. As of May 12, 2025, the issuance date of these condensed consolidated financial statements, the Company expects that its existing cash,

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

cash equivalents, short-term and long-term marketable securities of $1,128,296 as of March 31, 2025, will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of these condensed consolidated financial statements. The Company expects that it will require additional funding to complete the clinical development of EFX, commercialize EFX, if it receives regulatory approval, and pursue in-licenses or acquisitions of other product candidates.

If the Company is unable to obtain additional funding, the Company will be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all.

2. Summary of significant accounting policies

Unaudited interim financial statements

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with GAAP for interim financial reporting and as required by Regulation S-X, Rule 10-01. The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated balance sheet as of March 31, 2025 and 2024, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025 and 2024, the condensed consolidated statement of stockholders’ equity (deficit) as of March 31, 2025 and the condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024. The financial data and other information disclosed in these notes related to the three months ended March 31, 2025 and 2024 are unaudited. The results for the three months ended March 31, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim periods, or any future year or period.

Operating segment information

Operating segments are defined as components of an enterprise for which separate and discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance. The Company has one operating and reporting segment, the development of EFX for the treatment of MASH. The Company’s focus is the research and development of treatments for patients with serious metabolic diseases marked by high unmet medical need, including MASH. The Company’s chief operating decision maker, its chief executive officer, manages the Company’s operations on a consolidated basis for the purpose of allocating resources.

Use of estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the recognition of research and development expenses, stock-based compensation expense, warrant liabilities and the valuation allowance for deferred tax assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

Cash and cash equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market accounts. The fair value of cash equivalents approximate their carrying values due to the short-term nature of such financial instruments.

Short and long-term marketable securities

The Company invests in short-term and long-term marketable securities, primarily money market funds, commercial paper, U.S. treasury securities and corporate debt securities. The Company continually evaluates the credit ratings of its investment portfolio and underlying securities. The Company invests in accordance with its investment policy and invests at the date of purchase in securities with high ratings from top rating agencies. The Company classifies its short and long-term marketable securities as available-for-sale securities and reports them at fair value in short-term and long-term marketable securities on the condensed consolidated balance sheets with related unrealized gains and losses included within accumulated other comprehensive gain (loss) on the condensed consolidated balance sheets. The amortized cost of marketable securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in other income on the condensed consolidated statements of operations and comprehensive loss. When the fair value is below the amortized cost of a marketable security, the Company reviews and determines whether the impairment is due to credit-related factors or noncredit-related factors. The credit-related impairment amount is recognized in other income on the condensed consolidated statements of operations and comprehensive loss, with a corresponding allowance for credit losses account in the condensed consolidated balance sheet. Subsequent improvements in expected credit losses are recognized as a reversal of an amount in the allowance account. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security prior to recovery of its amortized cost basis, then the allowance for the credit loss is written-off and the excess of the amortized cost basis of the asset over its fair value is recorded in the condensed consolidated statements of operations. There were no credit losses recorded during the periods ended March 31, 2025 and 2024.

Concentrations of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, short-term and long-term marketable securities. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash investments in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. At March 31, 2025, all of the Company’s cash, cash equivalents, short-term and long-term investments were held at three accredited financial institutions.

Leases

The Company determines whether an arrangement is or contains a lease at inception by assessing whether the arrangement contains an identified asset and whether the Company has the right to control the identified asset. Right-of-use (“ROU”), assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. ROU assets are based on the measurement of the lease liability and are further adjusted by any lease payments made prior to or on lease commencement, lease incentives received and initial direct costs incurred, as applicable. The Company has elected to not recognize leases with a lease term of one year or less on its balance sheet. Operating lease costs included in the measurement of the lease are recognized on a straight-line basis over the lease term. Variable lease costs are expensed as incurred as an operating expense.

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

The Company determines the lease classification and the present value of future lease payments at the time of the lease commencement using an incremental borrowing rate that it estimates based upon the Company’s credit risk and term of the lease. The interest rate implicit in lease contracts has not historically been readily determinable and the Company must therefore use the appropriate incremental borrowing rate to measure its lease liability. To estimate the incremental borrowing rate, a credit rating applicable to the Company is estimated using a synthetic credit rating analysis since the Company does not currently have a rating agency-based credit rating.

Research and development costs

Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop drug candidates, including personnel expenses, stock-based compensation expense, third-party license fees and external costs including fees paid to consultants, contract manufacturing organizations, or CMOs, and clinical research organizations, or CROs, in connection with drug product manufacturing, nonclinical studies and clinical trials, and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical trial database management, clinical trial material management and statistical compilation and analysis. Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered.

Foreign currency transaction gains and losses related to the purchase of contract manufacturing services are included as a component of research and development expense.

Costs incurred in obtaining technology licenses are charged immediately to research and development expense if the technology licensed has not reached technological feasibility and has no alternative future uses.

Accrued and prepaid research and development expenses

The Company has entered into various research and development and other agreements with commercial firms, researchers and others for provisions of goods and services. These agreements are generally cancelable, and the related costs are recorded as research and development expenses as incurred. The Company makes estimates of accrued and prepaid research and development expenses as of each balance sheet date based on facts and circumstances known at that time. When evaluating the adequacy of the accrued liabilities and the appropriateness of the prepaid expenses, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued and prepaid balances at the end of any reporting period. Actual results could differ materially from the Company’s estimates.

Stock-based compensation

The Company makes stock-based awards from its stock compensation plans (see Note 8). The Company measures all stock option awards granted to employees and nonemployees based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis. The Company accounts for forfeitures as they occur. The Company recognizes stock-based compensation expense for awards that contain performance-based conditions using the accelerated attribution method when management determines it is probable that the performance condition will be satisfied. The Company measures all restricted stock unit awards based on the market closing price of the Company’s common stock on the grant date. Stock-based compensation expense for these awards is recognized on a straight-line basis over the requisite service period, generally four years.

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the Company’s expected dividend yield. The Company currently estimates its share price volatility using a combined weighting of the historical volatility of publicly traded peer companies and the volatility of its traded share price and expects to continue to do so until mid-2025. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common stock and the expectation that it will not pay any cash dividends in the foreseeable future.

Compensation expense for purchases under the Employee Stock Purchase Plan is recognized based on the fair value of the common stock estimated based on the closing price of our common stock as reported on the date of offering, less the purchase discount percentage provided for in the plan.

The Company classifies stock-based compensation expense in its condensed consolidated statement of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

Loan Payable

Loan Payable represents borrowings under the Loan and Security Agreement, dated June 15, 2022 (“Loan Agreement”) with Hercules Capital, Inc. (“Hercules”), subsequently amended on June 7, 2023 and February 28, 2024, which the Company has accounted for as a debt financing arrangement. Interest expense is accrued using the effective interest rate method over the estimated period the loan will be repaid. Loan issuance costs have been recorded as a debt discount in the condensed consolidated balance sheets and are being amortized and recorded as interest expense throughout the life of the Loan Agreement using the effective interest rate method.

Warrant liabilities

The Company accounts for warrants anticipated to be issued in the future under the Loan Agreement as liabilities and measures them at fair value using the Black-Scholes valuation model. The warrants are subject to remeasurement at each prospective balance sheet date, with any changes in the fair value recorded in the condensed consolidated statements of operations.

Comprehensive loss

Comprehensive loss includes net loss as well as other changes in stockholders' equity (deficit) that result from transactions and economic events other than those with stockholders. The Company’s comprehensive loss is comprised of net loss and changes in unrealized gains and losses on its short and long-term marketable securities.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Under ASU No. 2023-09, entities are required to uniformly classify and present greater disaggregation of information in the rate reconciliation and income taxes paid. ASU No. 2023-09 is intended to benefit investors by improving the transparency and decision usefulness of income tax disclosures. The new standard is effective for annual periods beginning after December 15, 2024. The Company adopted the ASU No. 2023-09 effective January 1, 2025. The

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

Recently Issued Accounting Standards Not Yet Adopted

In November 2024 and January 2025, the FASB issued ASU No. 2024-03 and ASU No. 2025-01, Comprehensive Income - Expense Disaggregation Disclosures, which will improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions such as cost of sales, selling, general and administrative, and research and development. The amendments are effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued or made available. The amendments should be applied on either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the provisions of the amendments and the effect on its future condensed consolidated financial statements.

3. Fair value measurements

Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•

Level 1—Quoted prices in active markets for identical assets or liabilities.

•

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

•

Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

The following is a summary of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024:


	March 31, 2025
	Total		Level 1		Level 2		Level 3
Money market funds	$	184,987	$	184,987	$	—	$	—
U.S. Treasury securities		626,181		626,181		—		—
U.S. Government agency securities		29,851		—		29,851		—
Commercial paper		49,296		—		49,296		—
Corporate debt securities		237,046		—		237,046		—
Total assets	$	1,127,361	$	811,168	$	316,193	$	—

Warrant liabilities	$	296	$	—	$	—	$	296
Total liabilities	$	296	$	—	$	—	$	296

	December 31, 2024
	Total		Level 1		Level 2		Level 3
Money market funds	$	314,092	$	314,092	$	—	$	—
U.S. Treasury securities		248,885		248,885		—		—
U.S. Government agency securities		60,691		—		60,691		—
Commercial paper		34,544		—		34,544		—
Corporate debt securities		113,471		—		113,471		—
Total assets	$	771,683	$	562,977	$	208,706	$	—

Warrant liabilities	$	194	$	—	$	—	$	194
Total liabilities	$	194	$	—	$	—	$	194

Level 2 assets were valued by the Company using quoted prices in active markets for similar securities.

The carrying values of the Company’s prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. During the three months ended March 31, 2025 and the twelve months ended December 31, 2024, there were no transfers between Level 1, Level 2 and Level 3.

The Loan Payable is classified as a Level 3 liability. As of March 31, 2025, the carrying value of the Loan Payable approximates its fair value. The Company estimated the fair value of the warrant liabilities using the Black-Scholes model based on key assumption and inputs (see Note 6). The Company utilizes a probability assessment to estimate the likelihood of vesting for the remaining Loan Agreement warrants and allocated the probability of occurrence percentage to the fair values calculated.

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

4. Short and long-term marketable securities

The following is a summary of short-term and long-term marketable securities as of March 31, 2025 and December 31, 2024:


	March 31, 2025
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Credit losses		Fair value
Money market funds	$	184,987	$	—	$	—		$	—	$	184,987
U.S. Treasury securities		625,293		891		(2	)		—		626,182
U.S. Government agency securities		29,808		43		—			—		29,851
Commercial paper		49,294		7		(5	)		—		49,296
Corporate debt securities		236,894		160		(9	)		—		237,045
	$	1,126,276	$	1,101	$	(16	)	$	—	$	1,127,361

Cash equivalents										$	184,987
Short-term marketable securities											500,371
Long-term marketable securities											442,003
										$	1,127,361

	December 31, 2024
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Credit losses		Fair value
Money market funds	$	314,092	$	—	$	—		$	—	$	314,092
U.S. Treasury securities		248,202		738		(55	)		—		248,885
U.S. Government agency securities		60,596		95		—			—		60,691
Commercial paper		34,500		45		(1	)		—		34,544
Corporate debt securities		113,346		141		(16	)		—		113,471
	$	770,736	$	1,019	$	(72	)	$	—	$	771,683

Cash equivalents										$	314,092
Short-term marketable securities											402,840
Long-term marketable securities											54,751
										$	771,683

The following table presents the contractual maturities of the Company’s short-term and long-term marketable securities as of March 31, 2025 and December 31, 2024.


	March 31, 2025		December 31, 2024
Due within one year	$	500,371	$	402,840
Due after one year through two years		442,003		54,751
Total	$	942,374	$	457,591

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

5. Accrued expenses and other current liabilities

The following is a summary of accrued expenses and other current liabilities as of March 31, 2025 and December 31, 2024:


	March 31, 2025		December 31, 2024
Accrued external research and development expenses	$	21,527	$	28,925
Accrued employee compensation and benefits		2,772		1,171
Short-term lease liability and other		645		631
	$	24,944	$	30,727

6. Loan Payable and Warrant Liability

On June 15, 2022, the Company entered into the Loan Agreement with Hercules, which was subsequently amended on June 7, 2023 and February 28, 2024, for an aggregate principal amount of $150,000 (“Term Loan”). Pursuant to the amended Loan Agreement, the Term Loan is available to the Company in five tranches, subject to certain terms and conditions.

Under the terms of the Loan Agreement, the Company received $10,000 upon closing, $15,000 was borrowed in March 2023 and an additional $10,000 was borrowed in connection with the second amendment on February 28, 2024 (the “Tranche I and Tranche II Commitments”). At the sole discretion of the Company, $30,000 is available to be drawn from June 15, 2024 through June 15, 2025 (“Tranche III Commitment”). Also at the sole discretion of the Company, an additional $35,000 is available to be drawn at the earlier of the full draw of Tranche III or June 15, 2025 through June 15, 2026 (“Tranche IV Commitment”). An additional $50,000 may become available to the Company prior to January 1, 2026, subject to Hercules' approval (“Tranche V Commitment”).

The Term Loan will mature on March 1, 2027 (the “Maturity Date”). The Term Loan bears interest at a variable annual rate equal to the greater of (a) 7.65% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 3.65% (the “Interest Rate”). The Company makes payments of interest only until January 1, 2026 (the “interest-only period”). After the interest-only period, the principal balance and related interest are required to be repaid in equal monthly installments and continuing until the Maturity Date.

The Loan Agreement contains customary closing fees, events of default, and representations, warranties and covenants, including a financial covenant requiring the Company to maintain a minimum cash balance in the future in relation to the outstanding principal balance of the Term Loan. The Loan Agreement is secured by most of the Company’s assets, including its bank and investment accounts. The Loan Agreement provides for a prepayment charge equal to 1% of the outstanding principal balance of the Term Loan. In addition, the Loan Agreement provides for an End of Term Charge equal to the greater of 5.85% of the outstanding principal balance, or $2,048, which is recognized as a debt discount and is being accreted into the amortization of debt issuance costs and discount using the effective interest rate method over the term of the loan payable.

The Company was in compliance with all covenants of the Loan Agreement as of March 31, 2025.

The Loan Agreement requires the Company to issue warrants to Hercules to purchase shares of the Company’s common stock, par value $0.0001 per share (“common stock”). The amount of shares that may be purchased for the warrants will not exceed 1.5% multiplied by the greater of Tranche I and the aggregate original amount of the term loan advances, divided by the exercise price of the warrants. Upon closing, the Company issued to Hercules warrants to

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

purchase 36,718 shares of Company’s common stock and recognized them at their relative fair value of $227 as of the date of issuance in the shareholders equity category of the balance sheet.

In accordance with Accounting Standards Codification 815-40, additional warrants to purchase shares of the Company’s common stock that the Company is contingently required to issue are recognized at their relative fair value in the noncurrent liabilities category of the balance sheet, given the variable settlement amount of the warrant shares. The fair value of the equity and liability classified warrants are collectively recognized as a debt discount and are being accreted into the amortization of debt issuance costs and discount using the effective interest rate method over the term of the loan. The Company reassesses the fair value of the warrant liability at the end of each reporting period.

On March 10, 2023, the Company issued warrants to purchase 9,180 shares of the Company’s common stock in connection with the $15,000 borrowed from Hercules on that date, and the fair value associated with these warrants of $330 was reclassified from warrant liability to additional paid in capital. On February 28, 2024, the Company issued warrants to purchase 18,359 shares of the Company’s common stock in connection with the $10,000 borrowed from Hercules on that date, and the fair value associated with these warrants of $431 was reclassified from warrant liability to additional paid in capital.

As of March 31, 2025, the Company is contingently liable to issue warrants to purchase up to an additional 211,137 shares of common stock under the Loan Agreement, in connection with future borrowings as they may occur.

Future principal debt payments on the currently outstanding loan payable as of March 31, 2025 and December 31, 2024 are as follows (in thousands):


		March 31, 2025			December 31, 2024
2025	$		—		$	—
2026			27,777			27,777
2027			7,223			7,223
Total principal outstanding			35,000			35,000
End of term charge			2,048			2,048
Total principal outstanding and end of term charge			37,048			37,048
Unamortized discount and issuance costs			(1,573	)		(1,751	)
Loan Payable	$		35,475		$	35,297

Loan Payable - current	$		6,664		$	—
Loan Payable - noncurrent			28,811			35,297
Loan Payable	$		35,475		$	35,297

The Company estimated the fair value of the warrant liability as of March 31, 2025 and 2024 using probability assumptions of achieving the future milestones and using the Black-Scholes model based on the following key assumptions:


	Three Months Ended March 31,
	2025			2024
Expected term (in years)		4.2			5.2
Expected volatility		92.38	%		85.37	%
Risk-free interest rate		3.96	%		4.20	%
Expected dividend yield		0.00	%		0.00	%

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

7. Stockholder’s equity (deficit)

Common stock

As of March 31, 2025 and December 31, 2024, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue 150,000,000 shares of $0.0001 par value common stock. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. The holders of common stock, voting exclusively and as a separate class, have the exclusive right to vote for the election of directors of the Company. Common stockholders are entitled to receive dividends, as may be declared by the board of directors. Through March 31, 2025, no cash dividends had been declared or paid.

On June 24, 2019, the Company completed its IPO at which time the Company issued 6,612,500 shares of common stock, including the exercise in full by the underwriters of their option to purchase up to 862,500 additional shares of common stock, at a public offering price of $16.00 per share. The Company received $98,394, net of underwriting discounts and commissions, but before deducting offering costs paid by the Company, which were $2,942. Upon the closing of the IPO, all outstanding shares of convertible preferred stock converted into 21,056,136 shares of common stock.

On July 10, 2020, the Company completed a follow-on public offering at which time the Company issued 6,012,390 shares of common stock, including the exercise in full by the underwriters of their option to purchase up to 784,224 additional shares of common stock, at a public offering price of $36.00 per share. The Company received $203,460 net of underwriting discounts and commissions, but before deducting offering costs paid by the Company.

On June 15, 2022, the Company entered into a securities purchase agreement for the sale of 2,525,252 shares of the Company’s common stock to Pfizer Inc. at $9.90 per share in a registered direct offering conducted without an underwriter or placement agent and pursuant to the Company’s effective shelf registration statement on Form S-3ASR and a related prospectus supplement filed with the U.S. Securities and Exchange Commission (“SEC”). The offering closed on June 17, 2022 for net proceeds of $24,647, after deducting offering costs paid by the Company.

On September 19, 2022, the Company completed a follow-on public offering at which time the Company issued 8,846,154 shares of common stock, including the exercise in full by the underwriters of their option to purchase up to 1,153,846 additional shares of common stock, at a public offering price of $26.00 per share. The Company received $216,200 net of underwriting discounts and commissions of $13,800, but before deducting offering costs incurred by the Company.

In March 2023, the Company entered into a sales agreement with Jefferies LLC (the “Sales Agreement”) activating an At-The-Market (“ATM”) facility. Pursuant to the Sales Agreement, the Company filed a prospectus supplement on March 17, 2023, under which the Company may offer and sell shares of common stock, having an aggregate value of up to $200,000. In April and May 2023, the Company sold 3,006,052 shares of common stock under the Sales Agreement, at an average price of $42.38 per share, and received net proceeds of $123,824, after deducting sales agent commissions and issuance costs of approximately $3,578. In February 2024, the Company sold an additional 500,000 shares of common stock under the Sales Agreement, at an average price of $21.75 per share, and received net proceeds of $10,604, after deducting sales agent commissions and issuance costs of approximately $271.

On May 16, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Jefferies LLC, (“Jefferies”), as a representative of the several underwriters, pursuant to which the Company agreed to issue and sell 5,238,500 shares of the Company’s common stock at $42.00 per share in a registered direct offering pursuant to the Company’s effective shelf registration statement on Form S-3ASR and a related prospectus supplement filed with the SEC. The offering closed on May 16, 2023. The Company received net proceeds of $210,956, after deducting underwriters commissions and offering costs incurred by the Company of approximately $9,061.

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

On March 8, 2024, the Company completed a follow-on public offering at which time the Company issued 12,650,000 shares of common stock, including the exercise in full by the underwriters of their option to purchase up to 1,650,000 additional shares of common stock, at a public offering price of $29.00 per share. The Company received $344,838 net of underwriting discounts and commissions of $22,011, but before deducting offering costs incurred by the Company of approximately $401.

On May 10, 2024, the Company entered into an amendment to the Sales Agreement (“Amended Sales Agreement”) to increase the aggregate offering price of the shares of the Company’s common stock by an additional $200,000. In accordance with the terms of the Amended Sales Agreement, the Company may now offer and sell shares of its common stock having an aggregate offering price of up to $261,723 from time to time.

In November and December 2024, the Company sold 2,249,907 shares of common stock under the Amended Sales Agreement, at an average price of $30.83 per share, and received gross proceeds of $69,373 before deducting sales agent commissions and issuance costs of approximately $1,734. In January 2025, the Company sold an additional 380,488 shares of common stock under the Amended Sales Agreement, at an average price of $27.93 for gross proceeds of $10,627 and before deducting sales agent commissions of approximately $266.

In January 2025, the Company sold 6,427,170 shares of the its common stock at a public offering price of $48.00 per share, and in lieu of common stock to certain investors, pre-funded warrants to purchase 1,958,247 shares of common stock at a public offering price of $47.9999 per pre-funded warrant, which represents the per share public offering price of each share of common stock less the $0.0001 per share exercise price for each pre-funded warrant. The pre-funded warrants do not have an expiration date and are exercisable at any time. The pre-funded warrants are classified within stockholders' equity on the Company’s condensed consolidated balance sheet as of March 31, 2025. The Company received net proceeds of $378,350, after deducting underwriting discounts and commission of $24,150, but before deducting offering costs incurred by the Company of approximately $569. The Company may receive nominal proceeds, if any, from the exercise of the prefunded warrants. There were no pre-funded warrants exercised during the three months ended March 31, 2025.

As of March 31, 2025 and December 31, 2024, there were 79,669,920 and 72,383,013 shares of common stock issued and outstanding, respectively.

The following shares of common stock were reserved for issuance as follows:


	March 31, 2025		December 31, 2024
Options outstanding under the 2018 Stock Option and Grant Plan		450,304		577,089
Options outstanding under the 2019 Stock Option and Incentive Plan		7,068,321		6,983,360
Unvested restricted stock units outstanding under the 2019 Stock Option and Incentive Plan		767,792		715,306
Warrants to purchase common stock associated with Loan Agreement		64,257		64,257
Pre-funded warrants sold in a public offering in January 2025		1,958,247		—
Options available for future grant		4,344,045		1,938,688
Warrants available for future grant to Hercules		211,137		211,137
Common stock available for ATM program		9,092,586		9,473,074
2019 Employee Stock Purchase Plan		2,384,465		1,973,662
		26,341,154		21,936,573

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

Undesignated preferred stock

The Company’s fourth amended and restated certificate of incorporation authorizes the Company to issue up to 10,000,000 shares of undesignated preferred stock, par value $0.0001 per share. There were no undesignated preferred shares issued or outstanding as of March 31, 2025.

Warrants Associated with Loan Agreement

In connection with the Loan Agreement with Hercules (see Note 6), the Company is obligated to issue warrants to purchase shares of the Company’s common stock. The amount of shares that may be purchased for the warrants will not exceed 1.5% multiplied by the greater of Tranche I and the aggregate original amount of the term loan advances, divided by the exercise price of the warrants. Upon execution of the Loan Agreement on June 15, 2022, the Company issued warrants to purchase 36,718 shares of the Company’s common stock, which have been recorded at their relative fair value at the time of issuance within shareholder’s equity. The Company issued warrants to purchase an additional 9,180 shares of the Company’s common stock to Hercules in connection with the additional $15,000 borrowing on March 10, 2023 and warrants to purchase 18,359 shares of the Company’s common stock to Hercules in connection with the additional $10,000 borrowing on February 28, 2024.

8. Stock-based awards

2018 Stock option and grant plan

The Company’s 2018 Stock Option and Grant Plan (the “2018 Plan”) provided for the Company to grant incentive stock options or nonqualified stock options, restricted stock awards and other stock-based awards to employees, directors and consultants of the Company. The 2018 Plan was administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors. The exercise prices, vesting and other restrictions were determined at the discretion of the board of directors, or its committee if so delegated.

The total number of shares of common stock that could have been issued under the 2018 Plan was 3,071,960 shares, of which 107,635 shares remained available for grant on June 18, 2019, the date that the Company’s 2019 Stock Option and Incentive Plan (the “2019 Plan”) became effective. Upon the effectiveness of the 2019 Plan, the 107,635 remaining shares available under the 2018 Plan were transferred and became available for issuance under the 2019 Plan. Shares of common stock underlying outstanding awards under the 2018 Plan that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of stock, expire or are otherwise terminated (other than by exercise) will be added to the shares of common stock available for issuance under the 2019 Plan.

2019 Stock option and incentive plan

The 2019 Plan was adopted and approved by the Company’s board of directors in May 2019 and by the Company’s stockholders in June 2019. The 2019 Plan became effective on June 18, 2019 and replaced the Company’s 2018 Plan on that date. The 2019 Plan allows the board of directors or the compensation committee of the board of directors to make equity-based incentive awards to the Company’s officers, employees, directors or other key persons (including consultants). The number of shares initially reserved for issuance under the 2019 Plan was 2,572,457, which included the 107,635 shares transferred from the 2018 Plan, and shall be cumulatively increased on each January 1 by 4% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or such lesser number of shares determined by the Company’s board of directors or compensation committee of the board of directors. The 2019 Plan was increased by 2,230,177 shares on January 1, 2024 and by 2,895,320 shares on January 1, 2025.

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

The 2019 Plan is administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors. The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors, or its committee if so delegated, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the share of common stock on the date of grant and the term of stock option may not be greater than ten years. All incentive options granted to any person possessing more than 10% of the total combined voting power of all classes of shares may not have an exercise price of less than 110% of the fair market value of the common stock on the grant date. Stock options granted to employees, officers, members of the board of directors and consultants will typically vest over a four-year period.

Shares that are expired, terminated, surrendered or canceled under the 2019 Plan without having been fully exercised will be available for future awards.

2019 Employee stock purchase plan

The 2019 Employee Stock Purchase Plan (the “2019 ESPP”) was adopted and approved by the Company’s board of directors in May 2019 and by the Company’s stockholders in June 2019. The 2019 ESPP became effective on June 18, 2019, at which time 273,869 shares were reserved for issuance. The 2019 ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2020 and each January 1 through January 1, 2029, by the least of (i) 1% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31, (ii) 410,803 shares or (iii) such number of shares as determined by the compensation committee. The 2019 ESPP was increased by 410,803 shares on January 1, 2024 and by 410,803 shares on January 1, 2025.

Stock option valuation

The assumptions that the Company used to determine the grant-date fair value of stock options granted to employees, directors and consultants as follows, presented on a weighted average basis:


	Three Months Ended March 31,
	2025			2024
Expected term (in years)		6.02			6.00
Expected volatility		88.72	%		85.47	%
Weighted average risk-free interest rate		4.43	%		3.96	%
Expected dividend yield		0.00	%		0.00	%

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

Stock options

The following table summarizes the Company’s stock option activity since December 31, 2024:


				Weighted-		Weighted-
				Average		Average		Aggregate
				Exercise		Remaining		Intrinsic
	Number			Price per		Contractual		Value
	of Options			Share		Term (years)		(000’s)
Balance outstanding, December 31, 2024		7,560,449		$	24.38		7.53	$	46,487
Options granted		404,750		$	28.39
Options exercised		(438,512	)	$	16.87
Options cancelled		(8,062	)	$	45.78
Balance outstanding, March 31, 2025		7,518,625		$	25.01		7.50	$	121,109
Vested and expected to vest, March 31, 2025		7,518,625		$	25.01		7.50	$	121,109
Exercisable, March 31, 2025		4,119,081		$	23.83		6.35	$	71,705

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock.

The weighted average grant-date fair value per share of stock options granted during the three months ended March 31, 2025 and 2024 was $21.50 and $23.82, respectively.

Restricted Stock Units

The 2019 Plan allows for the grants of Restricted Stock Units (“RSUs”). Generally, the RSUs are subject to a four-year vesting period, vesting in equal quarterly or semi-annual installments over the vesting period.

The following table summarizes the Company’s RSUs activity since December 31, 2024:


				Weighted-		Weighted-
				Average		Average		Aggregate
				Grant Date		Remaining		Intrinsic
	Underlying			Fair Value per		Contractual		Value
	Shares			Share		Term (years)		(000’s)
Balance outstanding, December 31, 2024		715,306		$	27.04		1.74	$	19,900
Granted		93,275		$	28.08
Vested		(40,789	)	$	28.89
Cancelled or forfeited		—		$	—
Balance outstanding, March 31, 2025		767,792		$	27.07		1.64	$	31,080

The aggregate intrinsic value of RSUs is calculated based of the fair value of the Company’s common stock and the outstanding RSUs.

The weighted average grant-date fair value per share of RSUs granted during the three months ended March 31, 2025 and 2024 was $28.08 and $23.48, respectively.

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Akero Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share data)

Stock-based compensation

The following table summarizes the Company’s stock-based compensation expense during the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024
Classified within research and development expense	$	3,463	$	2,721
Classified within general and administrative expense		5,321		4,677
Total stock-based compensation expense	$	8,784	$	7,398

As of March 31, 2025, total unrecognized compensation cost related to unvested stock options and RSUs was $60,356 and $19,214, respectively. These unvested stock options and RSUs are expected to be recognized over a weighted average period of 2.62 years and 3.06

Akero Therapeutics, Inc. 10-Q