Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 12, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ARPO | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Registrant Name | Aerpio Pharmaceuticals, Inc. | |
Entity Central Index Key | 0001422142 | |
Entity Common Stock, Shares Outstanding | 47,371,482 | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity File Number | 001-38560 | |
Entity Tax Identification Number | 61-1547850 | |
Entity Address, Address Line One | 9987 Carver Road | |
Entity Address, City or Town | Cincinnati | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 45242 | |
City Area Code | 513 | |
Local Phone Number | 985-1920 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common stock, $0.0001 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 39,008,517 | $ 42,604,935 |
Prepaid research and development contracts | 257,081 | 510,177 |
Other current assets | 1,733,655 | 1,603,913 |
Total current assets | 40,999,253 | 44,719,025 |
Furniture and equipment, net | 104,950 | 121,730 |
Operating lease right-of-use assets, net | 37,160 | 63,919 |
Deposits | 20,000 | 20,000 |
Total assets | 41,161,363 | 44,924,674 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,090,031 | 1,799,371 |
Current portion of operating lease liability | 39,171 | 67,438 |
Total current liabilities | 2,129,202 | 1,866,809 |
Total liabilities | 2,129,202 | 1,866,809 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.0001 par value per share; 300,000,000 shares authorized and 47,371,482 and 47,251,319 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively. | 4,737 | 4,725 |
Additional paid-in capital | 190,020,008 | 189,603,985 |
Accumulated deficit | (150,992,584) | (146,550,845) |
Total stockholders’ equity | 39,032,161 | 43,057,865 |
Total liabilities and stockholders’ equity | $ 41,161,363 | $ 44,924,674 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 47,371,482 | 47,251,319 |
Common stock, shares outstanding | 47,371,482 | 47,251,319 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating expenses | ||
Research and development | $ 2,228,002 | $ 1,829,042 |
General and administrative | 2,136,591 | 2,285,891 |
Restructuring expense | 1,238,270 | |
Total operating expenses | 5,602,863 | 4,114,933 |
Loss from operations | (5,602,863) | (4,114,933) |
Other income | 1,158,088 | |
Grant income | 79,900 | |
Interest income | 3,036 | 116,370 |
Total other income | 1,161,124 | 196,270 |
Net and comprehensive loss | $ (4,441,739) | $ (3,918,663) |
Net and comprehensive loss per share | ||
Basic and diluted | $ (0.09) | $ (0.10) |
Weighted average number of common shares used in computing net loss per share attributable to common stockholders, basic and diluted | 47,282,322 | 40,588,004 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2019 | $ 36,535,343 | $ 4,059 | $ 178,766,806 | $ (142,235,522) |
Balance, Shares at Dec. 31, 2019 | 40,588,004 | |||
Issuance of warrants | 62,347 | 62,347 | ||
Stock-based compensation expense | 327,467 | 327,467 | ||
Net and comprehensive loss | (3,918,663) | (3,918,663) | ||
Balance at Mar. 31, 2020 | 33,006,494 | $ 4,059 | 179,156,620 | (146,154,185) |
Balance, Shares at Mar. 31, 2020 | 40,588,004 | |||
Balance at Dec. 31, 2020 | 43,057,865 | $ 4,725 | 189,603,985 | (146,550,845) |
Balance, Shares at Dec. 31, 2020 | 47,251,319 | |||
Issuance of common stock upon exercise of stock options | $ 70,275 | $ 8 | 70,267 | |
Issuance of common stock upon exercise of stock options, shares | 78,769 | 78,769 | ||
Issuance of common stock | $ 4 | $ 4 | ||
Issuance of common stock, shares | 41,394 | |||
Stock-based compensation expense | 345,756 | 345,756 | ||
Net and comprehensive loss | (4,441,739) | (4,441,739) | ||
Balance at Mar. 31, 2021 | $ 39,032,161 | $ 4,737 | $ 190,020,008 | $ (150,992,584) |
Balance, Shares at Mar. 31, 2021 | 47,371,482 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities: | ||
Net and comprehensive loss | $ (4,441,739) | $ (3,918,663) |
Adjustments to reconcile net and comprehensive loss to net cash used in operating activities: | ||
Depreciation | 16,780 | 15,102 |
Stock-based compensation | 345,756 | 327,467 |
Consulting expenses related to warrants | 62,347 | |
Changes in operating assets and liabilities: | ||
Prepaid research and development contracts | 253,096 | 82,492 |
Other current assets | (129,742) | 167,287 |
Accounts payable and accrued expenses | 289,152 | (675,858) |
Net cash used in operating activities | (3,666,697) | (3,939,826) |
Financing activities: | ||
Proceeds from issuance of common stock upon exercise of stock options | 70,279 | |
Net cash provided by financing activities | 70,279 | |
Net decrease in cash and cash equivalents | (3,596,418) | (3,939,826) |
Cash and cash equivalents at beginning of year | 42,604,935 | 38,524,536 |
Cash and cash equivalents, three months ended | $ 39,008,517 | $ 34,584,710 |
Nature of Organization and Oper
Nature of Organization and Operations | 3 Months Ended |
Mar. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Organization and Operations | 1. Nature of Organization and Operations Aerpio Pharmaceuticals, Inc. (the “Company”) is a biopharmaceutical company focused on developing compounds that activate Tie2 as well as other indications in which the Company believes that activation of Tie2 may have therapeutic potential. The Company was incorporated as Zeta Acquisition Corp. II (“Zeta”) in the State of Delaware on November 16, 2007. Zeta was a “shell company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended). In December 2020, the Company ascular endothelial protein tyrosine phosphatase In January 2021, the Company executed a realignment plan to reduce operating costs and better align our workforce with the needs of its ongoing business. The realignment plan reduced the Company’s workforce by seven employees, representing approximately 58% of its workforce. As a result of this realignment plan, the Company incurred a one-time employee related severance expenses of approximately $1.2 million in the first quarter of 2021 and anticipates the majority of the one-time employee severance liability to be paid during 2021. The final payment of the severance liability in connection with the realignment plan is subject to a number of assumptions, actual results may differ from the original estimate. Additionally, the Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the realignment plan. In addition to glaucoma, the Company has the following clinical programs: Acute Respiratory Distress Syndrome: Based on results in preclinical studies and observations in patients in TIME-2 and TIME-2b trials, the Company believed that a vascular endothelial receptor, Tie2, may play a pivotal role in the defense against microvascular breach in Acute Respiratory Distress Syndrome (“ARDS”) and have therapeutic potential for the treatment of COVID-19 associated ARDS. During 2020, the Company initiated two Phase 2 trials to evaluate subcutaneous razuprotafib for the prevention and treatment of ARDS in adult patients with moderate to severe COVID-19 (“RESCUE”) and critical COVID-19 (“I-SPY”). In January 2021, the Data Monitoring Committee recommended discontinuation of razuprotafib in the I-SPY trial after 21 patients due to the complexity of monitoring patients in the setting of a surge in ICU patients. For the RESCUE trial, t he Company decided to stop recruiting in February 2021 after the first 31 patients were enrolled based on challenges recruiting and monitoring patients in the current pandemic environment. There were no apparent safety signals associated with dosing COVID-19 patients in either trial and the Company plans to further analyze the data to assess trends in efficacy and biomarkers. The Company expects to report topline data from the RESCUE trial during the second quarter of 2021. All clinical activity related to the RESCUE trial will be completed during the second quarter of 2021. Diabetic Kidney Disease: In two consecutive trials, TIME-2 and TIME-2b, subcutaneous razuprotafib showed reduction in Urine Albumin-Creatinine Ratio (“UACR”), a measure of progression of diabetic kidney disease. The Company believes that systemic treatment with razuprotafib could have the potential to change the treatment paradigm for diabetics in the future and potentially address a major societal problem by lowering the cost of care associated generally with diabetes. ARP-1536 and Bi-Specific Antibody: ARP-1536, the humanized monoclonal antibody directed at the same target as subcutaneous razuprotafib, is in preclinical development. The Company is evaluating development options for ARP-1536, including subcutaneous injection for the treatment of diabetic vascular complications, e.g., diabetic nephropathy and intravitreal injection as an adjunctive therapy for diabetic macular edema. The Company is also developing a bispecific antibody that binds both v ascular endothelial growth factor (“VEGF”) and VE-PTP which is designed to inhibit VEGF activation and activate Tie2. The Company believes this bispecific antibody has the potential to be an improved treatment for wet aged-related macular degeneration (“AMD”) and diabetic macular edema via intravitreal injection. In June 2018, the Company licensed AKB-4924 (now GB004), a selective stabilizer of hypoxia-inducible factor-1 alpha (“HIF-1 alpha”) to a wholly-owned subsidiary of Gossamer Bio, Inc., GB004, Inc. (collectively “Gossamer”), which is being developed for the treatment of inflammatory bowel disease (“IBD”). HIF-1 alpha is involved in mucosal wound healing and the reduction of inflammation in the gastrointestinal tract. Gossamer completed the Phase 1b clinical trial in ulcerative colitis (“UC”) patients and reported results during the second quarter of 2020. Gossamer has announced that, subject to developments in the ongoing COVID-19 pandemic, it initiated a 12-week Phase 2 study of GB004 in patients with mild-to-moderate UC during the second half of 2020. In May 2020, the Company received a one-time payment of $15.0 million pursuant to an amendment to its license agreement with Gossamer resulting in a reduction in future potential milestone payments and tiered royalty rates over the life of the license agreement. Gossamer is responsible for all remaining development and commercial activities for GB004. The Company’s operations to date have been limited to organizing and staffing the Company, business planning, raising capital, acquiring and developing its technology, identifying potential product candidates and undertaking preclinical and clinical studies. The Company’s revenue has been primarily limited to license revenue from Gossamer. Future revenue is dependent on the terms of the license agreement with Gossamer as further described in Note 10. The Company’s product candidates are subject to long development cycles and there is no assurance the Company will be able to successfully develop, obtain regulatory approval for, or market its product candidates. The Company is subject to a number of risks similar to other life science companies in the current stage of its life cycle including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of any of the Company’s products that are approved, and protection of proprietary technology. If the Company does not successfully commercialize any of its products or mitigate any of these other risks, it will be unable to generate revenue or achieve profitability. The Company incurred losses from operations and had a negative cash flows from operating activities for the three months ended March 31, 2021 and 2020 (and since inception). As of March 31, 2021, the Company’s cash and cash equivalents were approximately $39.0 million. The Company expects the RESCUE trial to be completed during the second quarter of 2021. Based on its current operating plan, and absent any future financings or strategic partnerships, the Company believes its existing cash and cash equivalents will be sufficient to fund its current operating plan through the fourth quarter of 2022 COVID-19 has resulted, and will likely continue to result, in significant governmental measures being implemented to control the spread of the virus through quarantines, travel restrictions, heightened border security and other measures. While the Company cannot predict the scope and severity, these developments and measures could materially and adversely affect its business and its financial condition. In addition, in response to the continuing spread of COVID-19, the Company has kept its executive offices closed with its employees continuing their work outside of the office. The Company is closely monitoring the impact of COVID-19 on all aspects of its business and is taking steps to minimize the impact on its business. However, the extent to which COVID-19 ultimately impacts the Company’s business, results of operations or financial condition will depend on future developments, which remain highly uncertain and cannot be predicted with confidence, such as the duration of the COVID-19 pandemic, new information that may emerge concerning the severity of COVID-19 and the effectiveness of actions taken to contain the COVID-19 pandemic or treat its impact, including vaccination campaigns, among others. Although states have quarantines and similar restrictions in place, the regulations vary on a state by state basis and the effectiveness of these restrictions and mass vaccination campaigns on slowing the spread of COVID-19 varies, making it difficult to predict what the lasting impact of the COVID-19 pandemic will be. If the Company or any of the third parties with whom it engages were to experience additional shutdowns or other prolonged business disruptions, the Company’s ability to conduct its business in the manner and on the timelines presently planned could have a material adverse impact on the Company’s business, results of operation and financial condition. In addition, a recurrence of COVID-19 cases could cause other widespread or more severe impacts depending on where infection rates are highest. The Company will continue to monitor developments as it deals with the disruptions and uncertainties relating to the COVID-19 pandemic. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Securities and Exchange Commission (“SEC”) regulations and include all of the information and disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”) for interim financial reporting, and, in the opinion of management include all adjustments necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity and cash flows for each period presented. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). All adjustments are of a normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company as of and for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 11, 2021. The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. The Company’s condensed consolidated financial statements are stated in U.S. Dollars. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the business of developing and commercializing proprietary therapeutics. All the assets and operations of the Company’s sole operating segment are located in the United States. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these condensed consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: prepaid and accrued research and development expense, stock-based compensation expense, revenue recognition and income taxes. The Company’s results can also be affected by economic conditions, global health concerns, such as the COVID-19, and political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies, and changes in the prices of research studies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings. Cash and Cash Equivalents Cash and cash equivalents consist of all cash on hand and short-term certificates of deposits with original maturities of three months or less at the time of purchase. At March 31, 2021 and December 31, 2020, the Company’s cash equivalents are primarily held in money market funds. The Company maintains balances with its banks in excess of federally insured limits. Revenue Recognition At the inception of an arrangement, the Company evaluates if a counterparty to a contract is a customer, if the arrangement is within the scope of revenue from contracts with customers guidance and the term of the contract. The Company recognizes revenue when its customer obtains control of promised goods or services in a contract for an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. For contracts with customers, the Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. As part of the accounting for contracts with customers, the Company must develop assumptions that require judgment to determine the standalone selling price of each performance obligation identified in the contract. The Company then allocates the total transaction price to each performance obligation based on the estimated standalone selling prices of each performance obligation. The Company recognizes the amount of the transaction price as revenue that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. The Company enters into collaboration arrangements, under which it licenses certain rights to its intellectual property to third parties. The terms of these agreements may include payment to the Company of one or more of the following: nonrefundable upfront license fees; development, sale and commercial milestone payments and royalties on net sales of licensed products. Each of these types of payments are classified as license revenue except for revenue from royalties on net sales of licensed products, which are classified as royalty revenue, if received. For each collaboration agreement that results in revenues, the Company identifies all material promised goods and services, which may include a license to intellectual property, research and development activities and/or transition activities. Promised goods or services are considered to be separate performance obligations if they are distinct. In order to determine the transaction price to be allocated to each performance obligation, in addition to any upfront payment, the Company estimates the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract. The Company constrains (reduces) the estimates of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur throughout the life of the contract. When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. Once the estimated transaction price is established, amounts are allocated to the performance obligations that have been identified. The transaction price is generally allocated to each separate performance obligation on a relative standalone selling price basis. The Company must develop assumptions that require judgment to determine the standalone selling price (“SSP”) in order to account for these agreements. To determine the standalone selling price the Company’s assumptions may include (i) assumptions regarding the probability of obtaining marketing approval for the drug candidate; (ii) estimates regarding the timing of and the expected costs to develop and commercialize the drug candidate; (iii) estimates of future cash flows from potential product sales with respect to the drug candidate; and (iv) appropriate discount and tax rates. Standalone selling prices used to perform the initial allocation are not updated after contract inception. The Company does not include a financing component to its estimated transaction price at contract inception unless it estimates that certain performance obligations will not be satisfied within one year. Upfront License and Amendment License Fees: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, upfront (or one-time) license and amendment license fees based on the relative value prescribed to the license compared to the total value of the arrangement. The revenue is recognized when the cash is received or when the license is transferred to the collaborator and the collaborator is able to use and benefit from the license. For licenses that are not distinct from other obligations identified in the arrangement, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, the Company applies an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, license fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Development Milestone Payments: Depending on facts and circumstances, the Company may conclude it is appropriate to include the milestone in the estimated transaction price using the most likely amount method or it is appropriate to fully constrain the milestone. A milestone payment is included in the transaction price in the reporting period the Company concludes that it is probable that recording revenue in the period will not result in a significant reversal in amounts recognized in future periods. The Company may record revenues from certain milestones in a reporting period before the milestone is achieved if the Company concludes that achievement of the milestone is probable and that recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. The Company records a corresponding contract asset when this conclusion is reached. Milestone payments that have not been included in the transaction price to date are fully constrained. These milestones remain fully constrained until the Company concludes that achievement of the milestone is probable and recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. The Company re-evaluates the probability of achievement of such development milestones and any related constraint each reporting period. The Company adjusts its estimate of the overall transaction price, including the amount of collaborative revenue that it has recorded, if necessary. Sales-based Milestone and Royalty Payments: The Company’s collaborators may be required to pay the Company sales-based milestone payments or royalties on future sales of commercial products. The Company recognizes revenues related to sales-based milestone and royalty payments upon the later to occur of (i) achievement of the collaborator’s underlying sales or (ii) satisfaction of any performance obligation(s) related to these sales, in each case assuming the license to the Company’s intellectual property is deemed to be the predominant item to which the sales-based milestones and/or royalties relate. Other Income Other income represents reimbursed internal and external qualified expenses, per the terms of the U.S. Government operating through Medical Technology Enterprise Consortium (“MTEC”) The reimbursable qualified expenses were incurred in conjunction with the RESCUE trial and the potential of subcutaneous razuprotafib for the prevention and treatment of ARDS in adult patients with moderate to severe COVID-19. During the first quarter of 2021, $1.2 million was recorded as other income during the three months ended March 31, 2021. Other income is recorded, and costs are generally reimbursed, in the period the internal or external qualified clinical trial expenses are incurred, and paid, by the Company. Grant Income Grant income is recognized as earned based on contract work performed. Research and Development Research and development costs are expensed as incurred. Research and development expense consists of (i) employee-related expenses, including salaries, benefits, travel and stock-based compensation expense; (ii) external research and development expenses incurred under arrangements with third parties, such as contract research organizations and consultants; (iii) the cost of acquiring, developing and manufacturing clinical study materials; and (iv) costs associated with clinical, preclinical and regulatory activities. The Company enters into consulting, research, and other agreements with commercial firms, researchers, universities and others for the provision of goods and services. Under such agreements, the Company may pay for services on a monthly, quarterly, project or other basis. Such arrangements are generally cancellable upon reasonable notice and payment of costs incurred. Costs are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data provided to the Company by its clinical sites and vendors. These costs consist of direct and indirect costs associated with specific projects, as well as fees paid to various entities that perform certain research on behalf of the Company. Patents Costs incurred in connection with the application for and issuances of patents are expensed as incurred. Income Taxes Income taxes are recorded in accordance with ASC Topic 740, Income Taxes . The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of March 31, 2021 and December 31, 2020, the Company does not have any uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions, if any exist, in income tax expense. Net and Comprehensive Loss per Share Attributable to Common Stockholders The Company’s basic net and comprehensive loss per share attributable to common stockholders is calculated by dividing the net and comprehensive loss by the weighted average number of shares of common stock outstanding for the period. The diluted net and comprehensive loss per share attributable to common stockholders is computed by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation – Stock Compensation Due to the historical lack of a public market for the trading of the Company’s common stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment Compensation expense related to awards to employees is calculated on a straight-line basis by recognizing the grant date fair value over the associated service period of the award, which is generally the vesting term. Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, accounts payable and accrued expenses. The Company values cash equivalents using quoted market prices. The fair value of accounts payable and accrued expenses approximates its carrying value because of its short-term nature. The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC Topic 820, Fair Value Measurements and Disclosures Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date • Level 2 – Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly • Level 3 – Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. There were no transfers within the fair value hierarchy during the three months ended March 31, 2021 or 2020. The assets of the Company measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total March 31, 2021 Assets: Cash and cash equivalents $ 39,008,517 $ — $ — $ 39,008,517 Total assets $ 39,008,517 $ — $ — $ 39,008,517 December 31, 2020 Assets: Cash and cash equivalents $ 42,604,935 $ — $ — $ 42,604,935 Total assets $ 42,604,935 $ — $ — $ 42,604,935 Concentrations of Credit Risk and Off-Balance Sheet Risk Cash and cash equivalents are the only financial instruments that potentially subject the Company to concentrations of credit risk. At March 31, 2021 and December 31, 2020, the Company maintains its cash and cash equivalents with high-quality, accredited financial institutions and, accordingly, such funds are subject to minimal credit risk. The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, if any. Comprehensive loss equaled net loss for all periods presented. Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation. Furniture and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Such costs are periodically reviewed for recoverability when impairment indicators are present. Such indicators include, among other factors: operating losses, unused capacity, market value declines, and technological obsolescence. Recorded values of asset groups of furniture and equipment that are not expected to be recovered through undiscounted future net cash flows are written down to current fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). Leases At the inception of an arrangement the Company determines whether the arrangement is or contains a lease based on the circumstances present. All leases with a term greater than one year are recognized on the condensed consolidated balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the condensed consolidated balance sheet leases with terms of one-year or less if entered into. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. Recent Accounting Pronouncements No new accounting pronouncement have been recently issued or newly effective which would have or be expected to have a material impact on the Company’s condensed consolidated financial statements. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2021 | |
Payables And Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 3. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses are as follows: March 31, December 31, 2021 2020 Restructuring accrual (see Note 11) $ 1,107,205 $ - Accounts payable 458,658 523,037 Professional fees 220,352 444,534 Accrued project costs 159,312 328,463 Accrued retention bonus 90,384 — Accrued vacation 18,487 48,107 Accrued bonus — 428,683 Other 35,633 26,547 Total accounts payable and accrued expenses $ 2,090,031 $ 1,799,371 |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Common Stock | 4. Common Stock As of March 31, 2021 and December 31, 2020, the Company had 300,000,000 shares of authorized common stock with par value of $0.0001 per share. The common stock has the following characteristics: Voting The holders of common stock are entitled to one vote for each share of common stock held at all meetings of stockholders and written actions in lieu of meetings. Dividends The holders of common stock are entitled to receive dividends, if and when declared by the board of directors of the Company (the “Board of Directors”). Since the Company’s inception, no dividends have been declared or paid to the holders of common stock. Liquidation In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Company, the holders of common stock are entitled to share ratably in the Company’s assets. Warrants to Purchase Common Stock The Company had warrants outstanding for the purchase of 600,000 shares of the Company’s common stock at March 31, 2021 and December 31, 2020. In October 2019, the Company issued warrants for the purchase of 600,000 shares of the Company’s common stock at an exercise price of $0.486 per share in connection with the hiring of a strategic advisor consultant for a six-month period. These warrants vested in equal monthly installments over a six-month period beginning October 14, 2019 and expire on October 24, 2024. At the date of grant the fair value of these awards was determined using a Black-Scholes Merton pricing model. The number of shares and the exercise price shall be adjusted for standard anti-dilution events such as stock splits, combinations, reorganizations, or issue shares as part of a stock dividend. Upon a change of control, the warrant holder will have the right to receive securities, cash or other properties it would have been entitled to receive had the warrant been exercised. |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Preferred Stock | 5. Preferred Stock As of March 31, 2021 and December 31, 2020, the Company had 10,000,000 shares of preferred stock, par value $0.0001 per share, in authorized capital. No preferred stock was issued and outstanding at March 31, 2021 and December 31, 2020. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 6. Stock-Based Compensation In March 2017, the Company’s Board of Directors adopted, and the stockholders approved, the 2017 Stock Option and Incentive Plan (the “2017 Plan”), that became effective in April 2017. The 2017 Plan provides for the issuance of incentive awards up to 4,600,000 shares of common stock to officers, employees, consultants and directors, less the number of shares subject to issued and outstanding awards under the 2011 Plan that were assumed in the Merger. The 2017 Plan also provides that the number of shares reserved for issuance thereunder will be increased annually on the first day of each year beginning in 2018 by four percent (4%) of the shares of our common stock outstanding on the last day of the immediately preceding year or such smaller increase as determined by our Board of Directors. In January 2021, the Company’s Board of Directors approved a 4% increase adding 1,890,052 shares to the 2017 Plan, which was effective as of January 1, 2021. Stock Options The options granted generally vest over 48 months. Under the 2017 Plan, options vest in installments of 25% at the one-year anniversary and thereafter in 36 equal monthly installments beginning on the 1 st As of March 31, 2021 and December 31, 2020, 5,530,530 and 3,634,905 shares were reserved for issuance under the 2017 Plan, respectively. The following table summarizes the stock option activity during the three months ended March 31, 2021: Stock Option Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding, January 1, 2021 4,642,240 $ 1.81 7.00 $ 358,209 Granted 71,428 1.46 Exercised (78,769 ) 0.89 Expired/cancelled (149,573 ) 1.52 Outstanding, March 31, 2021 4,485,326 $ 1.83 6.79 $ 1,016,074 Expected to vest, March 31, 2021 1,859,530 $ 1.46 8.35 $ 563,260 Options exercisable, March 31, 2021 2,625,796 $ 2.10 5.69 $ 452,814 Aggregate intrinsic value represents the estimated fair value of the Company’s common stock at in excess of the weighted average exercise price multiplied by the number of options outstanding or exercisable. As of March 31, 2021, there was $1,126,603 of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 1.51 years. Stock Awards On March 31, 2021 the Company’s non-employee directors were awarded 41,394 shares of the Company’s common stock at the fair market value of $1.29. The awards were in the form of Unrestricted Stock Awards (as defined in the 2017 Plan) equal to the quarterly cash retainer payable to such directors under the Company’s non-employee director compensation policy currently in effect divided by the average closing price of the Company’s common stock on the Nasdaq Capital Market during the quarter ending March 31, 2021. Compensation Expense Summary The Company recognized the following compensation cost related to employee and non-employee stock-based compensation activity for the periods presented: Three Months Ended March 31, 2021 2020 Research and development $ 108,014 $ 131,678 General and administrative 237,742 195,789 Total $ 345,756 $ 327,467 The total R&D expense of $108,014 was related to stock options. The total G&A expense of $237,742 consisted of $53,398 from stock awards and $184,344 from stock options. The Company uses the Black-Scholes option pricing model to determine the estimated fair value for stock-based awards. Option pricing and models require the input of various assumptions, including the option’s expected life, expected dividend yield, price volatility and risk-free interest rate of the underlying stock. Accordingly, the weighted-average fair value of the options granted during the three months ended March 31, 2021 and 2020 was $0.89 and $0.31 per share, respectively. The calculation was based on the following assumptions. Three Months Ended March 31, 2021 2020 Expected term (years) 5.31 6.08 Risk-free interest rate 0.50% 0.59% Expected volatility 74.16% 67.33% Expected dividend yield 0% 0% |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The Company did not record a current or deferred income tax expense or benefit for the three months ended March 31, 2021 and 2020, due to the Company’s net and comprehensive losses and increases in its deferred tax asset valuation allowance. |
Net and Comprehensive Loss Per
Net and Comprehensive Loss Per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net and Comprehensive Loss Per Share Attributable to Common Stockholders | 8. Net and Comprehensive Loss per Share Attributable to Common Stockholders The following table sets forth the computation of the Company’s basic and diluted net and comprehensive loss per share attributable to common stockholders for the periods presented: Three Months Ended March 31, 2021 2020 Net and comprehensive loss attributable to common stockholders $ (4,441,739 ) $ (3,918,663 ) Weighted average common shares used in computing net loss per share attributable to common stockholders, basic and diluted 47,282,322 40,588,004 Net and comprehensive loss per share attributable to common stockholder, basic and diluted $ (0.09 ) $ (0.10 ) Holders of non-vested stock-based compensation awards do not have voting rights. The following weighted average common stock equivalents were excluded from the calculation of basic and diluted net and comprehensive loss per share attributable to common stockholders for the periods presented because including them would have had an anti-dilutive effect: Three Months Ended March 31, 2021 2020 Options to purchase common stock 4,485,326 4,771,960 Warrants to purchase common stock 600,000 600,000 |
Employee Stock Purchase Plan
Employee Stock Purchase Plan | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Employee Stock Purchase Plan | 9. Employee Stock Purchase Plan In March 2017, the Board of Directors adopted and the stockholders approved the Employee Stock Purchase Plan that became effective in April 2017. On June 20, 2018, the Company’s stockholders approved the Amended and Restated 2017 Employee Stock Purchase Plan (the “ESPP”) at the 2018 annual meeting of stockholders. Pursuant to the terms of the ESPP, the Company will reserve for issuance 300,000 shares of the Company’s common stock in the aggregate, plus, on January 1, 2019 and each January 1 thereafter through January 1, 2028, the number of shares of the Company’s common stock reserved and available for issuance under the ESPP will be cumulatively increased by the least of (i) one percent of the number of shares of the Company’s common stock issued and outstanding on the immediately preceding December 31; (ii) 350,000 shares; or (iii) such lesser number of shares of the Company’s common stock as determined by the Board of Directors, in each case subject to adjustment in accordance with the terms of the ESPP. In January 2021, the Company’s Board of Directors approved an increase of 350,000 shares to the ESPP, which increase was effective as of January 1, 2021. No shares under the ESPP are outstanding at March 31, 2021 and December 31, 2020. |
License Agreement
License Agreement | 3 Months Ended |
Mar. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
License Agreement | 10. License Agreement On June 24, 2018, the Company entered into a license agreement (the “Gossamer License Agreement”) with Gossamer, under which the Company granted Gossamer an exclusive, sublicensable license to develop and commercialize AKB-4924 and other structurally related products worldwide, with initial development expected in the indications of induction and maintenance in ulcerative colitis and Crohn’s Disease (collectively “initial indications”). Prior to the execution of the Gossamer License Agreement, AKB-4924 was a pipeline program for the Company that completed a Phase 1a clinical trial in healthy volunteers. On May 12, 2020, the Company entered into Amendment No. 1 to the Gossamer License Agreement (“Amendment No. 1”). Pursuant to Amendment No. 1, Gossamer made a payment to the Company of $15.0 million on May 12, 2020. For the year ended December 31, 2020, the Company recognized revenue of $15.0 million based on the terms of Amendment No. 1. Gossamer is responsible for the development and commercialization of the licensed products, and a joint development committee has been formed to oversee the development and manufacturing activities related to the licensed products. Under the terms of the Gossamer License Agreement and as amended by Amendment No. 1 (collectively, the “Amended Gossamer License Agreement”), Gossamer is obligated to use its commercially reasonable efforts to develop and commercialize licensed products in the United States, two major European countries and Japan for at least one of the initial indications. The Amended Gossamer License Agreement includes an exclusivity provision that prohibits the Company from developing, manufacturing or commercializing, and prohibits Gossamer from clinically developing or commercializing certain HIF stabilizing compounds other than as permitted in the Amended Gossamer License Agreement. Under the terms of the Amended Gossamer License Agreement, the Company is eligible to receive up to $40.0 million in approval milestone payments related to indications in ulcerative colitis and Crohn’s disease, and up to $50.0 million in sales milestone payments. The Company is also eligible to receive the tiered royalties on sales of licensed products from percentages ranging from a low-single-digit to mid-single-digit, subject to certain customary reductions. In addition, under certain circumstances, in lieu of receiving the foregoing milestone payments and royalties, the Company may elect to receive 20% of payments received by Gossamer and its stockholders (with some exclusions) in connection with Gossamer’s grant of a sublicense or other rights to the licensed products or if Gossamer undergoes a changes of control and the value of the transaction exceeds a certain value (provided that Gossamer can prevent the Company from exercising this option if the parent company of Gossamer is the entity undergoing the change of control, in which case each of the royalty rate percentages described above would automatically be increased by low single digits). Conversely, the Company could be required to accept such 20% of those payments if Gossamer agrees to pay the Company a certain minimum upon Gossamer and its stockholders being paid. Such amount may be reduced if the transaction includes pharmaceutical candidates or products or other named asset categories in addition to the licensed products. The Amended Gossamer License Agreement expires on a licensed-product-by-licensed-product and country-by-country basis on the later of fifteen years from the date of first commercial sale or when there is no longer a valid patent claim covering such licensed product in such country. Either party may terminate the Amended Gossamer License Agreement for an uncured material breach by the other party or upon the bankruptcy or insolvency of the other party. Gossamer may terminate the Amended Gossamer License Agreement in the event Gossamer determines there is a potential safety or efficacy issue with the licensed products. The Company may terminate the Amended Gossamer License Agreement if Gossamer institutes certain actions related to the licensed patents. Under certain termination circumstances, the Company would have worldwide rights to the terminated program. As of March 31, 2021, all development milestones, sales-based milestones and royalty payments within the Amended Gossamer License Agreement are constrained to the point where no transaction price has been allocated to the future milestones or royalty payments. |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | 11. Restructuring In January 2021, the Company executed a realignment plan to reduce operating costs and better align its workforce with the needs of its ongoing business. The realignment plan reduced the Company’s workforce by seven employees, representing approximately 58% of the Company’s workforce. As a result, Total cash payments against the severance liability was approximately $0.1 million in the three months ended March 31, 2021. The remaining liability as of March 31, 2021 was approximately $1.1 million and is included in accounts payable and accrued expenses in the condensed consolidated balance sheet. These amounts are expected to be substantially paid in cash by December 31, 2021. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events On May 16, 2021, the Company entered into an agreement and plan of merger (“Merger Agreement” or “Merger”) with Aadi Bioscience, Inc. (“Aadi”), a Delaware corporation, and Aspen Merger Subsidiary, Inc. (“Merger Sub”), a Delaware corporation and a direct, wholly-owned subsidiary of the Company, pursuant to which, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Aadi, with Aadi surviving as a wholly-owned subsidiary of the Company (the “Merger”). If the Merger is completed, the business of Aadi will continue as the business of the combined company. The Merger Agreement was approved by the members of the board of directors of the Company (the “Board”) and the Board resolved to recommend approval of the Merger Agreement to the Company’s shareholders. In connection with the Merger Agreement, the Company has entered into subscription agreements to raise an aggregate amount of $155.0 million in a Private Investment in Public Equity (“PIPE”) financing in shares of common stock and pre-funded warrants to purchase Aerpio common stock. The PIPE financing is expected to be consummated concurrently with the closing of the Merger, subject to customary closing conditions, and is contingent on the closing of the Merger. The Merger is expected to close in the second half of 2021. The closing of the Merger is subject to approval of the Company's shareholders and the satisfaction of certain closing conditions, including, among others, obtaining the requisite approval of the stockholders of Aerpio, Aerpio’s cash and cash equivalents maintaining a balance equal to or greater than $10.0 million and the completion of the PIPE financing The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes. If the Company is unable to satisfy the closing conditions in Aadi’s favor or if other applicable closing conditions are not satisfied, Aadi will not be obligated to complete the Merger. The Merger Agreement provides Aerpio and Aadi with specified termination rights, and further provides that, upon termination of the Merger Agreement under specified circumstances, Aerpio may be required to pay the Aadi a termination fee of $2.0 million. In addition, in connection with certain terminations of the Merger Agreement, Aerpio may be required to pay Aadi’s out-of-pocket fees and expenses up to $750,000. If the Merger is consummated, on a pro forma basis, current shareholders of Aadi will own approximately 66.8% and current shareholders of the Company will own approximately 33.2% of the combined company upon the closing of the Merger, without giving effect to the proposed PIPE. Following the closing of the anticipated PIPE financing, the former Aadi shareholders are expected to own approximately 29.6% of the outstanding shares of Aerpio common stock, on a fully-diluted basis, the shareholders of Aerpio (as of immediately prior to the closing of the Merger) are expected to own approximately 14.7% of the outstanding shares of Aerpio common stock, on a fully-diluted basis, and the PIPE investors are expected to own approximately 55.7% of the outstanding shares of Aerpio common stock, on a fully-diluted basis. The Merger Agreement contemplates that, at or prior to the effective time of the Merger (the “Effective Time”), Aerpio, the Holder Representative (as defined therein) and the Rights Agent (as defined therein) will execute and deliver a contingent value rights agreement (the “CVR Agreement”), pursuant to which each holder of Aerpio common stock as of immediately prior to the Effective Time shall be entitled to one contractual contingent value right issued by Aerpio, subject to and in accordance with the terms and conditions of the CVR Agreement, for each share of Aerpio common stock held by such holder. Each contingent value right shall entitle the holder thereof to receive a defined percentage of the net proceeds, if any, received by the newly combined company, subsequent to the closing of the Merger, pursuant to the Amended Gossamer License Agreement (as defined in Note 10) and any other agreements, with respect to certain other Aerpio assets, entered into prior to the closing of the Merger. The contingent value rights are not transferable, except in certain limited circumstances as will be provided in the CVR Agreement, will not be certificated or evidenced by any instrument and will not be registered with the SEC or listed for trading on any exchange. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Securities and Exchange Commission (“SEC”) regulations and include all of the information and disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”) for interim financial reporting, and, in the opinion of management include all adjustments necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity and cash flows for each period presented. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). All adjustments are of a normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company as of and for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 11, 2021. The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. The Company’s condensed consolidated financial statements are stated in U.S. Dollars. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the business of developing and commercializing proprietary therapeutics. All the assets and operations of the Company’s sole operating segment are located in the United States. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these condensed consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: prepaid and accrued research and development expense, stock-based compensation expense, revenue recognition and income taxes. The Company’s results can also be affected by economic conditions, global health concerns, such as the COVID-19, and political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies, and changes in the prices of research studies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of all cash on hand and short-term certificates of deposits with original maturities of three months or less at the time of purchase. At March 31, 2021 and December 31, 2020, the Company’s cash equivalents are primarily held in money market funds. The Company maintains balances with its banks in excess of federally insured limits. |
Revenue Recognition | Revenue Recognition At the inception of an arrangement, the Company evaluates if a counterparty to a contract is a customer, if the arrangement is within the scope of revenue from contracts with customers guidance and the term of the contract. The Company recognizes revenue when its customer obtains control of promised goods or services in a contract for an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. For contracts with customers, the Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. As part of the accounting for contracts with customers, the Company must develop assumptions that require judgment to determine the standalone selling price of each performance obligation identified in the contract. The Company then allocates the total transaction price to each performance obligation based on the estimated standalone selling prices of each performance obligation. The Company recognizes the amount of the transaction price as revenue that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. The Company enters into collaboration arrangements, under which it licenses certain rights to its intellectual property to third parties. The terms of these agreements may include payment to the Company of one or more of the following: nonrefundable upfront license fees; development, sale and commercial milestone payments and royalties on net sales of licensed products. Each of these types of payments are classified as license revenue except for revenue from royalties on net sales of licensed products, which are classified as royalty revenue, if received. For each collaboration agreement that results in revenues, the Company identifies all material promised goods and services, which may include a license to intellectual property, research and development activities and/or transition activities. Promised goods or services are considered to be separate performance obligations if they are distinct. In order to determine the transaction price to be allocated to each performance obligation, in addition to any upfront payment, the Company estimates the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract. The Company constrains (reduces) the estimates of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur throughout the life of the contract. When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. Once the estimated transaction price is established, amounts are allocated to the performance obligations that have been identified. The transaction price is generally allocated to each separate performance obligation on a relative standalone selling price basis. The Company must develop assumptions that require judgment to determine the standalone selling price (“SSP”) in order to account for these agreements. To determine the standalone selling price the Company’s assumptions may include (i) assumptions regarding the probability of obtaining marketing approval for the drug candidate; (ii) estimates regarding the timing of and the expected costs to develop and commercialize the drug candidate; (iii) estimates of future cash flows from potential product sales with respect to the drug candidate; and (iv) appropriate discount and tax rates. Standalone selling prices used to perform the initial allocation are not updated after contract inception. The Company does not include a financing component to its estimated transaction price at contract inception unless it estimates that certain performance obligations will not be satisfied within one year. Upfront License and Amendment License Fees: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, upfront (or one-time) license and amendment license fees based on the relative value prescribed to the license compared to the total value of the arrangement. The revenue is recognized when the cash is received or when the license is transferred to the collaborator and the collaborator is able to use and benefit from the license. For licenses that are not distinct from other obligations identified in the arrangement, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, the Company applies an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, license fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Development Milestone Payments: Depending on facts and circumstances, the Company may conclude it is appropriate to include the milestone in the estimated transaction price using the most likely amount method or it is appropriate to fully constrain the milestone. A milestone payment is included in the transaction price in the reporting period the Company concludes that it is probable that recording revenue in the period will not result in a significant reversal in amounts recognized in future periods. The Company may record revenues from certain milestones in a reporting period before the milestone is achieved if the Company concludes that achievement of the milestone is probable and that recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. The Company records a corresponding contract asset when this conclusion is reached. Milestone payments that have not been included in the transaction price to date are fully constrained. These milestones remain fully constrained until the Company concludes that achievement of the milestone is probable and recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. The Company re-evaluates the probability of achievement of such development milestones and any related constraint each reporting period. The Company adjusts its estimate of the overall transaction price, including the amount of collaborative revenue that it has recorded, if necessary. Sales-based Milestone and Royalty Payments: The Company’s collaborators may be required to pay the Company sales-based milestone payments or royalties on future sales of commercial products. The Company recognizes revenues related to sales-based milestone and royalty payments upon the later to occur of (i) achievement of the collaborator’s underlying sales or (ii) satisfaction of any performance obligation(s) related to these sales, in each case assuming the license to the Company’s intellectual property is deemed to be the predominant item to which the sales-based milestones and/or royalties relate. |
Other Income | Other Income Other income represents reimbursed internal and external qualified expenses, per the terms of the U.S. Government operating through Medical Technology Enterprise Consortium (“MTEC”) The reimbursable qualified expenses were incurred in conjunction with the RESCUE trial and the potential of subcutaneous razuprotafib for the prevention and treatment of ARDS in adult patients with moderate to severe COVID-19. During the first quarter of 2021, $1.2 million was recorded as other income during the three months ended March 31, 2021. Other income is recorded, and costs are generally reimbursed, in the period the internal or external qualified clinical trial expenses are incurred, and paid, by the Company. |
Grant Income | Grant Income Grant income is recognized as earned based on contract work performed. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development expense consists of (i) employee-related expenses, including salaries, benefits, travel and stock-based compensation expense; (ii) external research and development expenses incurred under arrangements with third parties, such as contract research organizations and consultants; (iii) the cost of acquiring, developing and manufacturing clinical study materials; and (iv) costs associated with clinical, preclinical and regulatory activities. The Company enters into consulting, research, and other agreements with commercial firms, researchers, universities and others for the provision of goods and services. Under such agreements, the Company may pay for services on a monthly, quarterly, project or other basis. Such arrangements are generally cancellable upon reasonable notice and payment of costs incurred. Costs are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data provided to the Company by its clinical sites and vendors. These costs consist of direct and indirect costs associated with specific projects, as well as fees paid to various entities that perform certain research on behalf of the Company. |
Patents | Patents Costs incurred in connection with the application for and issuances of patents are expensed as incurred. |
Income Taxes | Income Taxes Income taxes are recorded in accordance with ASC Topic 740, Income Taxes . The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of March 31, 2021 and December 31, 2020, the Company does not have any uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions, if any exist, in income tax expense. |
Net and Comprehensive Loss per Share Attributable to Common Stockholders | Net and Comprehensive Loss per Share Attributable to Common Stockholders The Company’s basic net and comprehensive loss per share attributable to common stockholders is calculated by dividing the net and comprehensive loss by the weighted average number of shares of common stock outstanding for the period. The diluted net and comprehensive loss per share attributable to common stockholders is computed by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation – Stock Compensation Due to the historical lack of a public market for the trading of the Company’s common stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment Compensation expense related to awards to employees is calculated on a straight-line basis by recognizing the grant date fair value over the associated service period of the award, which is generally the vesting term. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, accounts payable and accrued expenses. The Company values cash equivalents using quoted market prices. The fair value of accounts payable and accrued expenses approximates its carrying value because of its short-term nature. The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC Topic 820, Fair Value Measurements and Disclosures Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date • Level 2 – Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly • Level 3 – Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. There were no transfers within the fair value hierarchy during the three months ended March 31, 2021 or 2020. The assets of the Company measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total March 31, 2021 Assets: Cash and cash equivalents $ 39,008,517 $ — $ — $ 39,008,517 Total assets $ 39,008,517 $ — $ — $ 39,008,517 December 31, 2020 Assets: Cash and cash equivalents $ 42,604,935 $ — $ — $ 42,604,935 Total assets $ 42,604,935 $ — $ — $ 42,604,935 |
Concentrations of Credit Risk and Off-Balance Sheet Risk | Concentrations of Credit Risk and Off-Balance Sheet Risk Cash and cash equivalents are the only financial instruments that potentially subject the Company to concentrations of credit risk. At March 31, 2021 and December 31, 2020, the Company maintains its cash and cash equivalents with high-quality, accredited financial institutions and, accordingly, such funds are subject to minimal credit risk. The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, if any. Comprehensive loss equaled net loss for all periods presented. |
Furniture and Equipment | Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation. Furniture and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Such costs are periodically reviewed for recoverability when impairment indicators are present. Such indicators include, among other factors: operating losses, unused capacity, market value declines, and technological obsolescence. Recorded values of asset groups of furniture and equipment that are not expected to be recovered through undiscounted future net cash flows are written down to current fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). |
Leases | Leases At the inception of an arrangement the Company determines whether the arrangement is or contains a lease based on the circumstances present. All leases with a term greater than one year are recognized on the condensed consolidated balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the condensed consolidated balance sheet leases with terms of one-year or less if entered into. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements No new accounting pronouncement have been recently issued or newly effective which would have or be expected to have a material impact on the Company’s condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Assets Measured on Recurring Basis | The assets of the Company measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total March 31, 2021 Assets: Cash and cash equivalents $ 39,008,517 $ — $ — $ 39,008,517 Total assets $ 39,008,517 $ — $ — $ 39,008,517 December 31, 2020 Assets: Cash and cash equivalents $ 42,604,935 $ — $ — $ 42,604,935 Total assets $ 42,604,935 $ — $ — $ 42,604,935 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables And Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are as follows: March 31, December 31, 2021 2020 Restructuring accrual (see Note 11) $ 1,107,205 $ - Accounts payable 458,658 523,037 Professional fees 220,352 444,534 Accrued project costs 159,312 328,463 Accrued retention bonus 90,384 — Accrued vacation 18,487 48,107 Accrued bonus — 428,683 Other 35,633 26,547 Total accounts payable and accrued expenses $ 2,090,031 $ 1,799,371 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | The following table summarizes the stock option activity during the three months ended March 31, 2021: Stock Option Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding, January 1, 2021 4,642,240 $ 1.81 7.00 $ 358,209 Granted 71,428 1.46 Exercised (78,769 ) 0.89 Expired/cancelled (149,573 ) 1.52 Outstanding, March 31, 2021 4,485,326 $ 1.83 6.79 $ 1,016,074 Expected to vest, March 31, 2021 1,859,530 $ 1.46 8.35 $ 563,260 Options exercisable, March 31, 2021 2,625,796 $ 2.10 5.69 $ 452,814 |
Summary of Recognized Compensation Cost Related to Employee and Non-employee Stock-Based Compensation Activity | The Company recognized the following compensation cost related to employee and non-employee stock-based compensation activity for the periods presented: Three Months Ended March 31, 2021 2020 Research and development $ 108,014 $ 131,678 General and administrative 237,742 195,789 Total $ 345,756 $ 327,467 |
Stock Options Valuation Assumptions | The calculation was based on the following assumptions. Three Months Ended March 31, 2021 2020 Expected term (years) 5.31 6.08 Risk-free interest rate 0.50% 0.59% Expected volatility 74.16% 67.33% Expected dividend yield 0% 0% |
Net and Comprehensive Loss Pe_2
Net and Comprehensive Loss Per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net and Comprehensive Loss per Share | The following table sets forth the computation of the Company’s basic and diluted net and comprehensive loss per share attributable to common stockholders for the periods presented: Three Months Ended March 31, 2021 2020 Net and comprehensive loss attributable to common stockholders $ (4,441,739 ) $ (3,918,663 ) Weighted average common shares used in computing net loss per share attributable to common stockholders, basic and diluted 47,282,322 40,588,004 Net and comprehensive loss per share attributable to common stockholder, basic and diluted $ (0.09 ) $ (0.10 ) |
Schedule of Weighted Average Common Stock Equivalents Excluded from Calculation of Basic and Diluted Net and Comprehensive Loss per Share | The following weighted average common stock equivalents were excluded from the calculation of basic and diluted net and comprehensive loss per share attributable to common stockholders for the periods presented because including them would have had an anti-dilutive effect: Three Months Ended March 31, 2021 2020 Options to purchase common stock 4,485,326 4,771,960 Warrants to purchase common stock 600,000 600,000 |
Nature of Organization and Op_2
Nature of Organization and Operations - Additional Information (Detail) | May 12, 2020USD ($) | Jan. 31, 2021Employee | May 31, 2020USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||
Realignment plan reduced the company’s workforce, number of employees | Employee | 7 | ||||
Realignment plan reduced the company’s workforce, percentage | 58.00% | ||||
Realignment plan, one-time employee related severance expenses | $ 1,200,000 | ||||
One-time payment received | $ 15,000,000 | $ 15,000,000 | |||
Cash and cash equivalents | $ 39,008,517 | $ 42,604,935 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | ||
Mar. 31, 2021USD ($)Segment | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of operating segment | Segment | 1 | ||
Uncertain tax positions | $ 0 | $ 0 | |
Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Furniture and equipment estimated useful lives | 3 years | ||
Maximum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Furniture and equipment estimated useful lives | 7 years | ||
US Government Insured Loan Program [Member] | Medical Technology Enterprise Consortium [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Clinical trial discontinued as other income | $ 1,200,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Assets Measured on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Cash and cash equivalents | $ 39,008,517 | $ 42,604,935 |
Total assets | 39,008,517 | 42,604,935 |
Level 1 [Member] | ||
Assets: | ||
Cash and cash equivalents | 39,008,517 | 42,604,935 |
Total assets | $ 39,008,517 | $ 42,604,935 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Detail) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Payables And Accruals [Abstract] | ||
Restructuring accrual (see Note 11) | $ 1,107,205 | |
Accounts payable | 458,658 | $ 523,037 |
Professional fees | 220,352 | 444,534 |
Accrued project costs | 159,312 | 328,463 |
Accrued retention bonus | 90,384 | |
Accrued vacation | 18,487 | 48,107 |
Accrued bonus | 428,683 | |
Other | 35,633 | 26,547 |
Total accounts payable and accrued expenses | $ 2,090,031 | $ 1,799,371 |
Common Stock - Additional Infor
Common Stock - Additional Information (Detail) - USD ($) | Oct. 14, 2019 | Mar. 31, 2021 | Dec. 31, 2020 |
Equity [Abstract] | |||
Common stock, shares authorized | 300,000,000 | 300,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Dividends common stock declared or paid | $ 0 | ||
Warrants outstanding | 600,000 | 600,000 | |
Number of warrants issued to purchase common stock | 600,000 | ||
Warrants exercise price per share | $ 0.486 | ||
Warrants vesting period | 6 months | ||
Warrants expiration date | Oct. 24, 2024 |
Preferred Stock - Additional In
Preferred Stock - Additional Information (Detail) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Temporary Equity Disclosure [Abstract] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | |||||
Jan. 31, 2021 | May 31, 2019 | Mar. 31, 2017 | Mar. 31, 2021 | Mar. 31, 2020 | Jan. 01, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Options to purchase common stock, granted | 71,428 | ||||||
Unrecognized compensation cost related to stock options | $ 1,126,603 | ||||||
Weighted average period expected to be recognized | 1 year 6 months 3 days | ||||||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 41,394 | ||||||
Share-based compensation common stock fair market value | $ 1.29 | ||||||
Stock-based compensation expense | $ 345,756 | $ 327,467 | |||||
Weighted-average fair value of options granted | $ 0.89 | $ 0.31 | |||||
Research and development [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 108,014 | $ 131,678 | |||||
General and Administrative Expense [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 237,742 | $ 195,789 | |||||
Stock Option [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting period | 48 months | ||||||
Stock Option [Member] | General and Administrative Expense [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 184,344 | ||||||
Stock Awards [Member] | General and Administrative Expense [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 53,398 | ||||||
2017 Stock Option and Incentive Plan [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock shares available for issuance | 4,600,000 | 1,890,052 | |||||
Percentage applied to the outstanding shares as annual increase in number of shares authorized for issuance | 4.00% | 4.00% | |||||
2017 Stock Option and Incentive Plan [Member] | Stock Option [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock shares available for issuance | 5,530,530 | 3,634,905 | |||||
Term of options to be granted | 10 years | ||||||
Shares issued for special retention grant | 2,419,050 | ||||||
Options to purchase common stock, granted | 71,428 | 702,000 | |||||
2017 Stock Option and Incentive Plan [Member] | Stock Option [Member] | One-year Anniversary [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting percentage | 25.00% | ||||||
2017 Stock Option and Incentive Plan [Member] | Stock Option [Member] | First Installment [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting percentage | 50.00% | ||||||
Option, vesting date | Jun. 30, 2020 | ||||||
2017 Stock Option and Incentive Plan [Member] | Stock Option [Member] | Second Installment [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Vesting percentage | 50.00% | ||||||
Option, vesting date | Jun. 30, 2021 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Shares, Outstanding at beginning balance | 4,642,240 | |
Shares, Granted | 71,428 | |
Shares, Exercised | (78,769) | |
Shares, Expired/cancelled | (149,573) | |
Shares, Outstanding at ending balance | 4,485,326 | 4,642,240 |
Shares, Expected to vest | 1,859,530 | |
Shares, Options exercisable | 2,625,796 | |
Weighted Average Exercise Price, Outstanding at beginning balance | $ 1.81 | |
Weighted Average Exercise Price, Granted | 1.46 | |
Weighted Average Exercise Price, Exercised | 0.89 | |
Weighted Average Exercise Price, Expired/cancelled | 1.52 | |
Weighted Average Exercise Price, Outstanding at ending balance | 1.83 | $ 1.81 |
Weighted Average Exercise Price, Expected to vest | 1.46 | |
Weighted Average Exercise Price, Options exercisable | $ 2.10 | |
Weighted Average Remaining Contractual Term, Outstanding | 6 years 9 months 14 days | 7 years |
Weighted Average Remaining Contractual Term, Expected to vest | 8 years 4 months 6 days | |
Weighted Average Remaining Contractual Term, Options exercisable | 5 years 8 months 8 days | |
Aggregate Intrinsic Value, Outstanding | $ 1,016,074 | $ 358,209 |
Aggregate Intrinsic Value, Expected to vest | 563,260 | |
Aggregate Intrinsic Value, Options exercisable | $ 452,814 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Recognized Compensation Cost Related to Employee and Non-employee Stock-Based Compensation Activity (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 345,756 | $ 327,467 |
Research and development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 108,014 | 131,678 |
General and administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 237,742 | $ 195,789 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Valuation Assumptions (Detail) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Expected term (years) | 5 years 3 months 21 days | 6 years 29 days |
Risk-free interest rate | 0.50% | 0.59% |
Expected volatility | 74.16% | 67.33% |
Expected dividend yield | 0.00% | 0.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Current income tax expense or benefit | $ 0 | $ 0 |
Deferred income tax expense or benefit | $ 0 | $ 0 |
Net and Comprehensive Loss Pe_3
Net and Comprehensive Loss Per Share Attributable to Common Stockholders - Schedule of Computation of Basic and Diluted Net and Comprehensive Loss Per Share (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net and comprehensive loss attributable to common stockholders | $ (4,441,739) | $ (3,918,663) |
Weighted average number of common shares used in computing net loss per share attributable to common stockholders, basic and diluted | 47,282,322 | 40,588,004 |
Basic and diluted | $ (0.09) | $ (0.10) |
Net and Comprehensive Loss Pe_4
Net and Comprehensive Loss Per Share Attributable to Common Stockholders - Schedule of Weighted Average Common Stock Equivalents Excluded from Calculation of Basic and Diluted Net and Comprehensive Loss per Share (Detail) - Weighted Average [Member] - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Options to Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total amount of anti-dilutive securities excluded from computation of earnings per share | 4,485,326 | 4,771,960 |
Warrants to Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total amount of anti-dilutive securities excluded from computation of earnings per share | 600,000 | 600,000 |
Employee Stock Purchase Plan -
Employee Stock Purchase Plan - Additional Information (Detail) - shares | Jun. 20, 2018 | Mar. 31, 2021 | Dec. 31, 2020 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Maximum number of shares provided for issuance | 41,394 | ||
Number of shares outstanding | 4,485,326 | 4,642,240 | |
Employee Stock Purchase Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares outstanding | 0 | 0 | |
Common Stock [Member] | Employee Stock Purchase Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Common stock shares available for issuance | 300,000 | ||
Maximum number of shares provided for issuance | 350,000 | 350,000 | |
Percentage of annual increase in number of shares reserved for issuance | 1.00% |
License Agreement - Additional
License Agreement - Additional Information (Detail) - USD ($) | May 12, 2020 | May 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Revenue From Contract With Customer [Abstract] | ||||
Payment received from license agreement | $ 15,000,000 | $ 15,000,000 | ||
Revenue recognized | $ 15,000,000 | |||
Revenue, Product and Service [Extensible List] | arpo:LicenseRevenueMember | |||
Maximum amount of milestone payments eligible to receive under license agreement | $ 40,000,000 | |||
Maximum amount of sales milestone payments eligible to receive under license agreement | $ 50,000,000 | |||
Percentage of payments received | 20.00% |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) | 1 Months Ended | 3 Months Ended |
Jan. 31, 2021Employee | Mar. 31, 2021USD ($) | |
Restructuring Cost And Reserve [Line Items] | ||
Realignment plan, number of employees reduced in workforce | Employee | 7 | |
Realignment plan, number of employees reduced by percentage on workforce | 58.00% | |
Realignment plan, employee severance expense | $ 1,200,000 | |
Remaining liability related to severance | 1,107,205 | |
Accounts Payable and Accrued Expenses [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Remaining liability related to severance | 1,100,000 | |
Workforce Reduction [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Realignment plan, number of employees reduced in workforce | Employee | 7 | |
Realignment plan, number of employees reduced by percentage on workforce | 58.00% | |
Realignment plan, employee severance expense | 1,200,000 | |
Cash payments against severance liability | $ 100,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] | May 16, 2021USD ($) |
Former Shareholders of Aadi [Member] | |
Subsequent Event [Line Items] | |
Expected ownership percentage on common stock | 29.60% |
Company Shareholders (immediately prior to closing of the Merger) [Member] | |
Subsequent Event [Line Items] | |
Expected ownership percentage on common stock | 14.70% |
PIPE Investors [Member] | |
Subsequent Event [Line Items] | |
Expected ownership percentage on common stock | 55.70% |
Merger Agreement [Member] | |
Subsequent Event [Line Items] | |
Date of acquisition agreement | May 16, 2021 |
Threshold minimum cash and cash equivalents balance | $ 10,000,000 |
Termination fees | $ 2,000,000 |
Merger Agreement [Member] | Current Shareholders of Aadi [Member] | |
Subsequent Event [Line Items] | |
Ownership percentage of combined company upon closing of merger | 66.80% |
Merger Agreement [Member] | Current Shareholders of Aerpio [Member] | |
Subsequent Event [Line Items] | |
Ownership percentage of combined company upon closing of merger | 33.20% |
Merger Agreement [Member] | Maximum [Member] | |
Subsequent Event [Line Items] | |
Out-of-pocket fees and expenses | $ 750,000 |
Merger Agreement [Member] | Subscription Agreements [Member] | Private Investment in Public Equity [Member] | |
Subsequent Event [Line Items] | |
Aggregate proceeds from issuance of common stock | $ 155,000,000 |