Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 12, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PTI | |
Entity Registrant Name | Proteostasis Therapeutics, Inc. | |
Entity Central Index Key | 0001445283 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 52,184,755 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Address, State or Province | MA | |
Entity File Number | 001-37695 | |
Entity Tax Identification Number | 20-8436652 | |
Entity Address, Address Line One | 80 Guest Street | |
Entity Address, Address Line Two | Suite 500 | |
Entity Address, City or Town | Boston | |
Entity Address, Postal Zip Code | 02135 | |
City Area Code | 617 | |
Local Phone Number | 225-0096 | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 35,752 | $ 25,008 |
Short-term investments | 5,000 | 44,459 |
Prepaids and other current assets | 821 | 1,404 |
Total current assets | 41,573 | 70,871 |
Operating lease, right-of-use asset | 11,682 | 12,631 |
Property and equipment, net | 268 | 394 |
Restricted cash | 828 | 828 |
Total assets | 54,351 | 84,724 |
Current liabilities: | ||
Accounts payable | 882 | 2,283 |
Accrued expenses | 3,670 | 6,864 |
Operating lease liabilities | 1,231 | 1,153 |
Short-term borrowings | 369 | |
Total current liabilities | 6,152 | 10,300 |
Derivative liability | 3 | 3 |
Operating lease liabilities, net of current portion | 11,109 | 12,043 |
Total liabilities | 17,264 | 22,346 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of September 30, 2020 and December 31, 2019 | ||
Common stock, $0.001 par value; 125,000,000 shares authorized; 52,180,380 and 52,116,629 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 52 | 52 |
Additional paid-in capital | 400,635 | 398,979 |
Accumulated other comprehensive income | 7 | |
Accumulated deficit | (363,600) | (336,660) |
Total stockholders’ equity | 37,087 | 62,378 |
Total liabilities and stockholders’ equity | $ 54,351 | $ 84,724 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 52,180,380 | 52,116,629 |
Common stock, shares outstanding | 52,180,380 | 52,116,629 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 5,000 | |||
Operating expenses: | ||||
Research and development | $ 1,240 | $ 10,145 | $ 12,342 | 43,217 |
General and administrative | 4,536 | 3,154 | 12,489 | 10,781 |
Restructuring costs | 2,401 | 2,401 | ||
Total operating expenses | 8,177 | 13,299 | 27,232 | 53,998 |
Loss from operations | (8,177) | (13,299) | (27,232) | (48,998) |
Interest income | 8 | 224 | 269 | 879 |
Interest expense | (4) | (13) | ||
Other income, net | 4 | 242 | 36 | 850 |
Net loss | $ (8,169) | $ (12,833) | $ (26,940) | $ (47,269) |
Net loss per share—basic and diluted | $ (0.16) | $ (0.25) | $ (0.52) | $ (0.93) |
Weighted average common shares outstanding—basic and diluted | 52,177,557 | 51,099,307 | 52,157,355 | 51,058,339 |
Other comprehensive income: | ||||
Unrealized gain (loss) on investments | $ (17) | $ (7) | $ 15 | |
Comprehensive loss | $ (8,169) | $ (12,850) | $ (26,947) | $ (47,254) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] |
Beginning balance at Dec. 31, 2018 | $ 114,342 | $ 51 | $ 391,825 | $ 1 | $ (277,535) |
Beginning balance, shares at Dec. 31, 2018 | 50,808,422 | ||||
Exercise of stock options | 3 | 3 | |||
Exercise of stock options, shares | 2,543 | ||||
Stock-based compensation expense | 2,710 | 2,710 | |||
Issuance of common stock for payment of consulting services | 242 | 242 | |||
Issuance of common stock for payment of consulting services, shares | 102,302 | ||||
Issuance of common stock pursuant to employee stock purchase plan | 78 | 78 | |||
Issuance of common stock pursuant to employee stock purchase plan, shares | 52,284 | ||||
Issuance of common stock for restricted stock units, shares | 163,425 | ||||
Other comprehensive income (loss) | 15 | 15 | |||
Net loss | (47,269) | (47,269) | |||
Ending balance at Sep. 30, 2019 | 70,121 | $ 51 | 394,858 | 16 | (324,804) |
Ending balance, shares at Sep. 30, 2019 | 51,128,976 | ||||
Beginning balance at Jun. 30, 2019 | 81,985 | $ 51 | 393,872 | 33 | (311,971) |
Beginning balance, shares at Jun. 30, 2019 | 51,099,307 | ||||
Stock-based compensation expense | 961 | 961 | |||
Issuance of common stock for payment of consulting services | 25 | 25 | |||
Issuance of common stock for payment of consulting services, shares | 29,669 | ||||
Other comprehensive income (loss) | (17) | (17) | |||
Net loss | (12,833) | (12,833) | |||
Ending balance at Sep. 30, 2019 | 70,121 | $ 51 | 394,858 | 16 | (324,804) |
Ending balance, shares at Sep. 30, 2019 | 51,128,976 | ||||
Beginning balance at Dec. 31, 2019 | $ 62,378 | $ 52 | 398,979 | 7 | (336,660) |
Beginning balance, shares at Dec. 31, 2019 | 52,116,629 | 52,116,629 | |||
Stock-based compensation expense | $ 1,598 | 1,598 | |||
Issuance of common stock pursuant to employee stock purchase plan | 58 | 58 | |||
Issuance of common stock pursuant to employee stock purchase plan, shares | 59,232 | ||||
Issuance of common stock for restricted stock units, shares | 4,519 | ||||
Other comprehensive income (loss) | (7) | $ (7) | |||
Net loss | (26,940) | (26,940) | |||
Ending balance at Sep. 30, 2020 | $ 37,087 | $ 52 | 400,635 | (363,600) | |
Ending balance, shares at Sep. 30, 2020 | 52,180,380 | 52,180,380 | |||
Beginning balance at Jun. 30, 2020 | $ 44,936 | $ 52 | 400,315 | (355,431) | |
Beginning balance, shares at Jun. 30, 2020 | 52,147,656 | ||||
Stock-based compensation expense | 287 | 287 | |||
Issuance of common stock pursuant to employee stock purchase plan | 33 | 33 | |||
Issuance of common stock pursuant to employee stock purchase plan, shares | 28,205 | ||||
Issuance of common stock for restricted stock units, shares | 4,519 | ||||
Net loss | (8,169) | (8,169) | |||
Ending balance at Sep. 30, 2020 | $ 37,087 | $ 52 | $ 400,635 | $ (363,600) | |
Ending balance, shares at Sep. 30, 2020 | 52,180,380 | 52,180,380 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (26,940) | $ (47,269) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 126 | 150 |
Non-cash lease expense | 949 | 909 |
Accretion of short-term investments | (38) | (850) |
Stock-based compensation expense | 1,598 | 2,710 |
Stock issued for consulting services | 242 | |
Changes in operating assets and liabilities: | ||
Prepaids and other current assets | 583 | 548 |
Other assets | (112) | |
Accounts payable | (1,401) | 2,184 |
Accrued expenses | (3,194) | 716 |
Operating lease liabilities | (856) | (783) |
Net cash used in operating activities | (29,173) | (41,555) |
Cash flows from investing activities: | ||
Purchases of short-term investments | (16,227) | (63,040) |
Proceeds received from maturities of short-term investments | 55,717 | 111,017 |
Purchases of property and equipment | (9) | |
Net cash provided by investing activities | 39,490 | 47,968 |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 3 | |
Proceeds from issuance of common stock pursuant to employee stock purchase plan | 58 | 78 |
Proceeds from issuance of short-term borrowings | 1,220 | |
Repayment of short-term borrowings | (851) | |
Net cash provided by financing activities | 427 | 81 |
Net increase in cash, cash equivalents and restricted cash | 10,744 | 6,494 |
Cash, cash equivalents and restricted cash at beginning of period | 25,836 | 29,638 |
Cash, cash equivalents and restricted cash at end of period | $ 36,580 | $ 36,132 |
Nature of the Business
Nature of the Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of the Business | 1. Nature of the Business Proteostasis Therapeutics, Inc. (the “Company”) was incorporated in Delaware on December 13, 2006. The Company is a clinical stage biopharmaceutical company committed to the discovery and development of novel therapeutics to treat cystic fibrosis (“CF”) through theratyping, or the process of matching modulators to individual response to treatment regardless of cystic fibrosis transmembrane conductance regulator (“CFTR”) mutations. CF is a disease caused by defects in the function or abundance of CFTR protein. Since its inception, the Company has devoted substantially all of its efforts to organizing and staffing the Company, business planning, raising capital, acquiring and developing product and technology rights, and conducting research and development activities. It has funded its operations to date with proceeds from the sale of preferred stock, the issuance of convertible promissory notes, proceeds from its initial public offering in February 2016, proceeds from its follow-on public offerings, and payments received in connection with collaboration agreements and a research grant, as well as funds from the sale of stock under at-the-market offering programs. In August 2020, the Company announced that after consideration of various financing and strategic alternatives for its CF portfolio, with the goal of maximizing stockholder value of these assets, it has decided to continue its operations while exploring business and strategic options related to its research and discovery platform and intellectual property portfolio. On August 14, 2020, the Company formed Pangolin Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”). After conducting a process of evaluating strategic alternatives for the Company, on August 22, 2020, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Yumanity Therapeutics, Inc., a Delaware corporation (“Yumanity”), Yumanity Holdings, LLC, a Delaware limited liability company (“Holdings) and the Merger Sub, which was subsequently amended on November 6, 2020. Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by the Company’s stockholders and Yumanity’s stockholders and the consolidation of Yumanity and Holdings prior to the closing of the transaction, Merger Sub will be merged with and into Yumanity (the “Merger”), with Yumanity surviving the Merger as a wholly-owned subsidiary of the Company. If the Merger is completed, the business of the Company will become the business of Yumanity. The Merger is expected to be treated by the Company as a reverse merger accounted for as an asset acquisition in accordance with accounting principles generally accepted in the United States (“GAAP”). For accounting purposes, Yumanity is considered to be acquiring the Company in the Merger. In accordance with the accounting guidance under Accounting Standard Updates (or “ASU”) 2017-01, the Merger is considered an asset acquisition. Accordingly, the assets and liabilities of the Company will be recorded as of the closing date of the Merger at the purchase price of the accounting acquirer. The Merger is expected to close in the fourth quarter of 2020, subject to the approval by the Company’s stockholders at a special meeting of the Company’s stockholders to be held on December 16, 2020, as well as other customary conditions. Upon completion of the Merger, the combined company will be renamed Yumanity Therapeutics, Inc., and is expected to trade on the Nasdaq Capital Market under the ticker symbol “YMTX”. On August 22, 2020, due to the entry into of the Merger Agreement with Yumanity, the Company’s Board of Directors (the “Board”) committed to reducing its workforce by approximately 79% to a total of five full-time employees, who will remain with the Company until the closing of the Merger to assist with its day-to-day business operations, including the maintenance of the sale and disposition of the Company’s intellectual property and assets relating to its cystic fibrosis clinical program (the “CF Assets”), and those activities necessary to complete the proposed Merger. The Company has also retained its core intellectual property, licenses, collaborations with research institutions and universities, and proprietary equipment. The Company has incurred certain restructuring costs related to a reduction in its workforce, totaling $2.4 million through September 30, 2020. At September 30, 2020, the Company has have accrued one-time termination benefits of $1.6 million, of which the majority of this amount is anticipated to be incurred in the fourth quarter of 2020. In addition to restructuring costs, the Company has incurred approximately $1.6 million in other merger-related costs, which are included in the general and administrative costs on the Company’s statement of operations and consists primarily of professional fees. Although the Company has entered into the Merger Agreement and intends to consummate the Merger, there is no assurance that it will be able to successfully consummate the Merger on a timely basis, or at all. If, for any reason, the Merger does not close, the Company’s Board may elect to, among other things, attempt to complete another strategic transaction like the Merger, attempt to sell or otherwise dispose of the Company’s various assets, resume the Company’s research and development activities and continue to operate the Company’s business or dissolve and liquidate its assets. If the Company decides to dissolve and liquidate its assets, it would be required to pay all of its debts and contractual obligations, and set aside certain reserves for potential future claims, and there can be no assurances as to the amount or timing of available cash left, if any, to distribute to the Company’s stockholders after paying its debts and other obligations and setting aside funds for reserves. If the Company were to continue its business, it would need to raise a substantial amount of cash to fund ongoing operations and future development activities for its existing product candidates. The Company has not generated any commercial revenue since inception. As a result, the Company has incurred recurring losses and requires significant cash resources to execute its business plans. In accordance with ASC 205-40, Going Concern . As of September 30, 2020, the Company had an accumulated deficit of $363.6 million. The Company has incurred losses and negative cash flows from operations since its inception. During the nine months ended September 30, 2020, the Company incurred losses of $26.9 million and used $29.2 million of cash in operations. $40.8 million will be sufficient to fund its operating expenses and capital requirements, based upon its current operating plan, for at least 12 months from the date that these consolidated financial statements are issued. The novel coronavirus (“COVID-19”) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Unaudited Interim Consolidated Financial Information The condensed balance sheet as of December 31, 2019 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying condensed consolidated financial statements, as of September 30, 2020 and for the three and nine months ended September 30, 2020, are unaudited and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 10, 2020. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, as necessary for the fair statement of the Company’s financial position as of September 30, 2020, results of its operations for the three and nine months ended September 30, 2020, stockholders’ equity for the three and nine months ended September 30, 2020, and cash flows for the nine months ended September 30, 2020, have been made. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2020. Summary of Significant Accounting Policies The Company’s significant accounting policies, which are disclosed in the audited financial statements for the year ended December 31, 2019 and the notes thereto, are included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March 10, 2020 (the “Annual Report”). There were no changes to significant accounting policies during the three and nine months ended September 30, 2020. Risks and Uncertainties The Company is monitoring the potential impact of the ongoing COVID-19 pandemic, if any, on the carrying value of certain assets. To date, the Company has not experienced material business disruption, nor has it incurred impairment of any assets as a result of the COVID-19 pandemic. The extent to which these events may impact the Company’s business, clinical development and regulatory efforts, and the value of its common stock, will depend on future developments, which are highly uncertain and cannot be predicted at this time. The duration and intensity of these impacts and resulting disruption to the Company’s operations is uncertain and the Company will continue to assess the financial impact. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company’s business and results of operations, including the ability to execute the proposed Merger, it may also have the effect of heightening many of the other risks and uncertainties discussed in the Annual Report. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, revenue recognition, the accrual for research and development expenses, and the valuation the derivative liability. Estimates are periodically reviewed in light of changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. An adjustment has also been made to the condensed statement of cash flows for the period ended September 30, 2019, to reclassify non-cash lease expense out of depreciation and amortization. Consolidation These consolidated financial statements include Pangolin Merger Sub, Inc., the Company’s wholly-owned subsidiary. All intercompany transactions and balances are eliminated in consolidation. Recently Adopted Accounting Pronouncements ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recently Issued Accounting Pronouncements ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Short-Term Investments
Short-Term Investments | 9 Months Ended |
Sep. 30, 2020 | |
Cash Cash Equivalents And Short Term Investments [Abstract] | |
Short-Term Investments | 3. Short-Term Investments The following table summarizes the Company’s short-term investments as of September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasury securities $ 5,000 $ — $ — $ 5,000 $ 5,000 $ — $ — $ 5,000 December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government-sponsored enterprise securities $ 20,456 $ 2 $ (1 ) $ 20,457 U.S. treasury securities 23,996 7 (1 ) 24,002 $ 44,452 $ 9 $ (2 ) $ 44,459 Short-term investments represent holdings of available-for-sale debt securities and are reported at fair value with unrealized gains and losses reported net of taxes, if material, in other comprehensive income. The Company did not have any realized gains or losses on its short-term investments for the three and nine months ended September 30, 2020 and 2019 2019 |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | 4. Fair Value of Financial Assets and Liabilities The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands): Fair Value Measurements as of September 30, 2020 using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 27,820 $ — $ — $ 27,820 U.S. treasury securities — 5,999 — 5,999 U.S. government-sponsored enterprise securities — 1,000 — 1,000 Short-term investments: U.S. treasury securities — 5,000 — 5,000 $ 27,820 $ 11,999 $ — $ 39,819 Liabilities: Derivative liability $ — $ — $ 3 $ 3 Fair Value Measurements as of December 31, 2019 using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 23,906 $ — $ — $ 23,906 Short-term investments: U.S. government-sponsored enterprise securities — 20,457 — 20,457 U.S. treasury securities — 24,002 — 24,002 $ 23,906 $ 44,459 $ — $ 68,365 Liabilities: Derivative liability $ — $ — $ 3 $ 3 During the periods ended September 30, 2020 and December 31, 2019, there were no transfers between Level 1, Level 2, and Level 3. The derivative liability relates to a cash settlement option associated with the change of control provision in the Company’s Cystic Fibrosis Foundation, Inc. (“CFF”) agreement, which meets the definition of a derivative. The fair value of the derivative liability is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the derivative instrument was originally determined using the Monte-Carlo simulation analysis. In determining the fair value of the derivative liability, the inputs impacting fair value include the fair value of the Company’s common stock, expected term of the derivative instrument, expected volatility of the common stock price, risk-free interest rate, expected sales-based milestone payments, discount rate, probability of a change of control event, and the probability that the counterparty would elect to accept the alternative cash payment in lieu of its right to the future sales-based milestone payments. The fair value of the derivative liability was not material at September 30, 2020 and December 31, 2019. |
Prepaids and Other Current Asse
Prepaids and Other Current Assets | 9 Months Ended |
Sep. 30, 2020 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Prepaids and Other Current Assets | 5. Prepaids and Other Current Assets Prepaids and other current assets consisted of the following (in thousands): September 30, December 31, 2020 2019 Prepaid clinical, manufacturing and scientific expenses $ 80 $ 767 Prepaid insurance expenses 684 125 Other prepaid expenses and other current assets 57 512 $ 821 $ 1,404 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Payables And Accruals [Abstract] | |
Accrued Expenses | 6. Accrued Expenses Accrued expenses consisted of the following (in thousands): September 30, December 31, 2020 2019 Accrued payroll and related expenses 2,334 3,203 Accrued research and development expenses $ 685 $ 3,186 Accrued professional fees 635 397 Accrued other 16 78 $ 3,670 $ 6,864 |
Short-Term Borrowings
Short-Term Borrowings | 9 Months Ended |
Sep. 30, 2020 | |
Short Term Borrowings [Abstract] | |
Short-Term Borrowings | 7. Short-Term Borrowings As of September 30, 2020, the Company had short-term borrowings of $0.4 million consisting of a Commercial Insurance Premium Finance and Security Agreement (the “Finance and Security Agreement”) entered into on February 27, 2020. The Finance and Security Agreement has a ten-month repayment period with an annual interest rate of 2.59% and a maturity of December 11, 2020. Collateral under the Finance and Security Agreement includes the right, title, and interest in the underlying business insurance policies. As of September 30, 2020, the Company has paid less than $0.1 million in interest on short-term borrowings. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 8 . Stock-Based Compensation 2016 Stock Option and Incentive Plan On February 3, 2016, the Company’s stockholders approved the 2016 Stock Option and Incentive Plan (the “2016 Plan”), which became effective on February 9, 2016. The 2016 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock units, restricted stock awards and other stock-based awards. The number of shares initially reserved for issuance under the 2016 Plan was 1,581,839 shares. The number of shares of common stock that may be issued under the 2016 Plan will automatically increase each January 1, beginning January 1, 2017, by the lesser of 3% of the shares of the Company’s common stock outstanding on the immediately preceding December 31, or an amount determined by the Company’s board of directors or the compensation committee of the board of directors. The shares of common stock underlying any awards that are forfeited, canceled, repurchased, or are otherwise terminated by the Company under the 2016 Plan and the 2008 Equity Incentive Plan, as amended (the “2008 Plan”) will be added back to the shares of common stock available for issuance under the 2016 Plan. On January 1, 2020, an additional 1,563,498 shares were reserved for issuance under the 2016 Plan. As of September 30, 2020, the total number of shares of the Company’s common stock reserved for issuance under the 2016 Plan was 6,914,838, of which 2,749,403 shares are available for future issuance under the 2016 Plan. 2016 Employee Stock Purchase Plan On February 3, 2016, the Company’s stockholders approved the 2016 Employee Stock Purchase Plan (the “2016 ESPP”), which became effective in connection with the completion of the Company’s initial public offering. A total of 138,757 shares of common stock were initially reserved for issuance under the 2016 ESPP. In addition, the number of shares of common stock that may be issued under the 2016 ESPP will automatically increase each January 1, beginning January 1, 2017, by the lesser of (i) 138,757 shares of common stock, (ii) 1% of the Company’s shares of common stock outstanding on the immediately preceding December 31, or (iii) an amount determined by the Company’s board of directors or the compensation committee of the board of directors. During the nine months ended September 30, 2020, 59,232 shares of common stock were issued pursuant to the 2016 ESPP. As of September 30, 2020, the total number of shares reserved under the 2016 ESPP was 552,537 shares. The Company recognized less than $0.1 million of stock-based compensation during the three and nine months ended September 30, 2020 related to the 2016 ESPP. Restricted Stock Units (RSUs) On February 4, 2020, the Company’s Board approved payment to be made to a nonemployee through a grant of RSUs based on the February 4, 2020 closing share price of the Company’s common stock. The requisite service period for the awards was from February 4, 2020 to August 4, 2020 (the vesting period). The Company recognized employee stock-based compensation expense for the RSU grant on a straight-line basis over the vesting period of the awards. As of September 30, 2020, 4,519 RSUs have vested and the Company recognized less than $0.1 million of stock-based compensation expense during the three and nine months ended September 30, 2020. On June 29, 2020, the Company’s Board approved the grant of RSU awards with an aggregate fair market value equal to the RSU value of $1.2 million (each, an “Award”) to two consultants (each, a “Grantee”) in consideration for services. Each Award shall vest in full immediately prior to, but subject to the occurrence of, a specific strategic event (the “Vesting Date”), so long as the respective Grantee remains in service to the Company through the Vesting Date. If the Awards vest as provided for above, the Company shall issue a number of shares of stock equal to the RSU value, divided by the volume-weighted average price per share of the Company’s stock for the 10-day period ending on the Vesting Date. The Company also has the option to issue each Grantee the respective cash equivalent of the Award in part or in full satisfaction of the delivery of the stock in connection with the vesting of each Award. The Company believes equity classification of the RSUs is appropriate as the Company, not the Grantee, has the ability to determine whether to settle the Awards in cash or shares as of the reporting date and it reasonably expects to deliver the share equivalent of the Awards at the settlement date. As of September 30, 2020, the Company did not recognize compensation costs associated with the Awards as the occurrence of such strategic event is outside of the Company’s control and therefore, cannot be considered probable. Stock-Based Compensation Stock-based compensation expense, including shares issued to consultants for services, was classified in the statements of operations as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Research and development $ (52 ) $ 460 $ 443 $ 1,228 General and administrative 340 501 1,155 1,724 $ 288 $ 961 $ 1,598 $ 2,952 The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2020 (in thousands except share and per share amounts): Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (Years) Outstanding at December 31, 2019 4,364,839 $ 5.30 7.32 $ 132 Granted 1,663,000 1.56 Forfeited (1,862,404 ) 3.52 Outstanding at September 30, 2020 4,165,435 $ 4.60 6.90 $ 7 Exercisable at September 30, 2020 2,776,235 $ 5.58 6.19 $ 7 Vested and expected to vest at September 30, 2020 4,082,185 $ 4.65 7.03 $ 7 The grant date fair value of options granted during the period was $1.8 million, or $1.09 per share on a weighted-average basis, and will be recognized as compensation expense over the requisite service period of four years. As of September 30, 2020, there was $1.6 million of unrecognized compensation cost related to employee and nonemployee unvested stock options granted under the 2016 Plan, which is expected to be recognized over a weighted-average remaining service period of 2.1 years. Stock compensation costs have not been capitalized by the Company. Prior to 2013, the Company issued options to purchase 203,964 shares of common stock to nonemployees, primarily members of the Company’s scientific advisory board, that vest upon the achievement of specified development and clinical milestones. As of September 30, 2020, options for the purchase of 83,250 shares held by nonemployees remained unvested, pending achievement of the specified milestones. |
Restructuring Costs
Restructuring Costs | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring Costs [Abstract] | |
Restructuring Costs | 9. Restructuring Costs On August 22, 2020, due to the entry into the Merger Agreement with Yumanity, the Company’s Board committed to reducing its workforce by approximately 79% to a total of five full-time employees, who will remain with the Company until the closing of the proposed Merger to assist with its day-to-day business operations, including the maintenance of the rights of all or any part of the Company’s intellectual property portfolio relating to its cystic fibrosis clinical programs (the “CF Assets”), and those activities necessary to complete the proposed Merger. All employees affected by the workforce reduction are eligible to receive, among other things, severance payments based on the applicable employee’s level and years of service with the Company and the continuation of group health insurance coverage for a specified time period post-termination. In addition, certain affected employees are eligible for an extension of the post-termination exercise period for their outstanding stock options. Each affected employee’s eligibility for the severance benefits was contingent upon such employee’s execution of a separation agreement, which includes a general release of claims against the Company. The following table represents activity related to the Company’s restructuring costs liability for nine months ended September 30, 2020 (in thousands): One-Time Termination Benefits Balance at December 31, 2019 $ — Costs incurred and charged to expense 2,401 Costs paid or otherwise settled (796 ) Balance at September 30, 2020 $ 1,605 As a result of the workforce reduction, the Company has recorded restructuring costs, primarily related to severance-related payments, in the amount of $2.4 million. The Company expects to incur total restructuring costs between $4.2 million to $4.7 million related to the Company’s restructuring plan. |
Significant Agreements
Significant Agreements | 9 Months Ended |
Sep. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Significant Agreements | 10 . Significant Agreements Genentech In December 2018, the Company entered into a Technology Transfer and License Agreement (the “Genentech Agreement”) with Genentech, Inc. (“Genentech”) under which the Company granted Genentech an exclusive worldwide license for technology and materials relating to potential therapeutic small molecule modulators of an undisclosed target within the proteostasis network. The rights do not include CFTR modulators and are unrelated to the Company’s investigational medicines or other ongoing research programs in cystic fibrosis. In connection with the terms of the Genentech Agreement, the Company was entitled to a nonrefundable cash payment of $5.0 million following the successful completion of the technology and materials transfer to Genentech and future milestone payments in the aggregate of approximately $96.0 million upon the achievement of specified development, regulatory, and commercial milestones. In addition, Genentech is obligated to pay the Company tiered royalties in the low single-digits based on net sales of products covered by the licenses granted under the Genentech Agreement. There are no cancellation, termination, or refund provisions in the Genentech Agreement that contain material financial consequences to the Company. Unless earlier terminated, the Genentech Agreement continues in full force and effect until the passing or expiration of all royalty payment obligations. Reciprocal termination rights under the agreement include termination for breach and termination for bankruptcy. Genentech may terminate the Genentech Agreement in its entirety, for convenience, upon thirty days’ notice to the Company. The Company evaluated the Genentech Agreement in accordance with the provisions of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers The Company measured the transaction price solely in reference to the $5.0 million payment due upon receipt of notice from Genentech regarding the satisfactory completion of the technology and materials transfer. None of the variable consideration payable under the arrangement has been included in the transaction price. As of September 30, 2020, the Company has not achieved any research, development, regulatory, or commercial milestones, or earned any royalties under the Genentech Agreement. The Company utilizes “the most likely” amount method to estimate the amount of research, development, and regulatory milestone payments to be received. As part of the evaluation for the research and development milestone payments, the Company considers several factors including the stage of research and development of the compounds included in the arrangement, the risk associated with the remaining research and development work required to achieve the milestone, and the Company’s level of involvement in the research and development activities. Regulatory milestone payments are triggered upon the first commercial sale following receipt of regulatory approval from the FDA or other global regulatory authorities; therefore, such amounts will be excluded from the transaction price until the associated regulatory approval is received. The commercial milestone payments and royalties are subject to the royalty recognition constraint whereby such amounts will be recognized as revenue upon the later of: (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the payment has been allocated has been satisfied, or partially satisfied, because the exclusive license is deemed to be the sole or predominant item to which the payments relate. As all performance obligations are satisfied, the Company will recognize royalty revenue at the date the sales occur. The Company did not adjust the promised amount of consideration for the effects of a significant financing component because the Company expects that the period between when the promised goods and services are transferred and when the customer pays for those goods and services will be one year or less. There were no changes in the transaction price for the nine months ended September 30, 2020. The transaction price of $5.0 million allocated to the combined performance obligation was recognized as revenue in February 2019 at the point in time that Genentech provided notice regarding the satisfactory completion of the technology and materials transfer. Upon that successful execution of the technology and materials transfer, control was deemed to be transferred for both the exclusive license and the technology and materials transfer promises, therefore the risks and rewards of ownership had been conveyed. As of September 30, 2020, the Company did not have any receivables or deferred revenue related to the Genentech Agreement because no payments under the arrangement became due, nor had the underlying performance obligation been satisfied. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes The Company did not record a federal or state income tax benefit for its losses for the three and nine months ended September 30, 2020 and 2019, respectively, due to the conclusion that a full valuation allowance is required against the Company’s deferred tax assets. All the Company’s losses before income taxes were generated in the United States. |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | 12. Net Loss per Share Basic and diluted net loss per share was calculated as follows (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator: Net loss $ (8,169 ) $ (12,833 ) $ (26,940 ) $ (47,269 ) Denominator: Weighted average number of common shares outstanding—basic and diluted 52,177,557 51,099,307 52,157,355 51,058,339 Net loss per share—basic and diluted $ (0.16 ) $ (0.25 ) $ (0.52 ) $ (0.93 ) The following common stock equivalents have been excluded from the computation of diluted weighted-average shares outstanding, because such securities had an antidilutive impact : September 30, 2020 2019 Options to purchase common stock 4,165,435 4,545,064 Restricted stock units (1) — — 4,165,435 4,545,064 (1) Certain restricted stock units are excluded from the table as the number of shares of stock to be issued will be determined based on a computation at the vesting date, as described in Note 8. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | 13. Leases The Company has an operating lease for office and laboratory space for its corporate headquarters in Boston, Massachusetts. The lease commenced in January 2018 and rent payments began in April 2018. This lease has a ten-year initial term with an option to extend for seven additional years. The Company has the right to terminate the lease in the event of the inability to use the space due to substantial damage while the lessor has the right to terminate the lease if the Company defaults on the lease financial obligations. Per the terms of the lease agreement, the Company does not have any residual value guarantees. In calculating the present value of the lease payments, the Company utilized its incremental borrowing rate, which is based on rates that would be incurred to borrow on a collateralized basis over a term equal to the lease payments in a similar economic environment. The Company has allocated all the contract considerations to the one lease component. This may result in the initial and subsequent measurement of the balances of the right-of-use asset and lease liability for leases being greater than if the policy election was not applied. The Company’s real estate lease in Boston is considered a net lease, as the non-lease components (i.e., common area maintenance) are paid separately from rent, based on actual costs incurred. Therefore, the variable non-lease components were not included in the right-of-use asset and liability and are reflected as an expense in the period incurred. As of September 30, 2020, and December 31, 2019, assets under operating lease were $11.7 million and $12.6 million, respectively. The elements of lease expense were as follows (in thousands): For the Three Months Ended September 30, 2020 2019 Lease cost Operating lease cost $ 462 $ 462 Variable lease cost (1) 158 182 Total lease cost $ 620 $ 644 For the Nine Months Ended September 30, 2020 2019 Lease cost Operating lease cost $ 1,387 $ 1,387 Variable lease cost (1) 420 494 Total lease cost $ 1,807 $ 1,881 Other information Operating cash flows used for operating leases $ 1,296 $ 1,261 Weighted-average remaining lease term 7.59 years 8.59 years Weighted-average discount rate 4.50 % 4.50 % (1) The variable lease costs for the three and nine months ended September 30, 2020 and 2019 Future lease payments under no ncancelable leases as of September 30, 2020 (in thousands): Future Operating Lease Payments 2020 $ 437 2021 1,780 2022 1,829 2023 1,880 2024 1,931 Thereafter 6,825 Total lease payments 14,682 Less: imputed interest (2,342 ) Total operating lease liabilities $ 12,340 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Unaudited Interim Consolidated Financial Information | Unaudited Interim Consolidated Financial Information The condensed balance sheet as of December 31, 2019 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying condensed consolidated financial statements, as of September 30, 2020 and for the three and nine months ended September 30, 2020, are unaudited and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 10, 2020. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, as necessary for the fair statement of the Company’s financial position as of September 30, 2020, results of its operations for the three and nine months ended September 30, 2020, stockholders’ equity for the three and nine months ended September 30, 2020, and cash flows for the nine months ended September 30, 2020, have been made. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2020. |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The Company’s significant accounting policies, which are disclosed in the audited financial statements for the year ended December 31, 2019 and the notes thereto, are included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March 10, 2020 (the “Annual Report”). There were no changes to significant accounting policies during the three and nine months ended September 30, 2020. |
Risks and Uncertainties | Risks and Uncertainties The Company is monitoring the potential impact of the ongoing COVID-19 pandemic, if any, on the carrying value of certain assets. To date, the Company has not experienced material business disruption, nor has it incurred impairment of any assets as a result of the COVID-19 pandemic. The extent to which these events may impact the Company’s business, clinical development and regulatory efforts, and the value of its common stock, will depend on future developments, which are highly uncertain and cannot be predicted at this time. The duration and intensity of these impacts and resulting disruption to the Company’s operations is uncertain and the Company will continue to assess the financial impact. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company’s business and results of operations, including the ability to execute the proposed Merger, it may also have the effect of heightening many of the other risks and uncertainties discussed in the Annual Report. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, revenue recognition, the accrual for research and development expenses, and the valuation the derivative liability. Estimates are periodically reviewed in light of changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. |
Reclassification | Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. An adjustment has also been made to the condensed statement of cash flows for the period ended September 30, 2019, to reclassify non-cash lease expense out of depreciation and amortization. |
Consolidation | Consolidation |
Recently Issued and Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recently Issued Accounting Pronouncements ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Cash Cash Equivalents And Short Term Investments [Abstract] | |
Summary of Short-Term Investments | The following table summarizes the Company’s short-term investments as of September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasury securities $ 5,000 $ — $ — $ 5,000 $ 5,000 $ — $ — $ 5,000 December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government-sponsored enterprise securities $ 20,456 $ 2 $ (1 ) $ 20,457 U.S. treasury securities 23,996 7 (1 ) 24,002 $ 44,452 $ 9 $ (2 ) $ 44,459 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands): Fair Value Measurements as of September 30, 2020 using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 27,820 $ — $ — $ 27,820 U.S. treasury securities — 5,999 — 5,999 U.S. government-sponsored enterprise securities — 1,000 — 1,000 Short-term investments: U.S. treasury securities — 5,000 — 5,000 $ 27,820 $ 11,999 $ — $ 39,819 Liabilities: Derivative liability $ — $ — $ 3 $ 3 Fair Value Measurements as of December 31, 2019 using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 23,906 $ — $ — $ 23,906 Short-term investments: U.S. government-sponsored enterprise securities — 20,457 — 20,457 U.S. treasury securities — 24,002 — 24,002 $ 23,906 $ 44,459 $ — $ 68,365 Liabilities: Derivative liability $ — $ — $ 3 $ 3 |
Prepaids and Other Current As_2
Prepaids and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Schedule of Prepaids and Other Current Assets | Prepaids and other current assets consisted of the following (in thousands): September 30, December 31, 2020 2019 Prepaid clinical, manufacturing and scientific expenses $ 80 $ 767 Prepaid insurance expenses 684 125 Other prepaid expenses and other current assets 57 512 $ 821 $ 1,404 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following (in thousands): September 30, December 31, 2020 2019 Accrued payroll and related expenses 2,334 3,203 Accrued research and development expenses $ 685 $ 3,186 Accrued professional fees 635 397 Accrued other 16 78 $ 3,670 $ 6,864 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock-based Compensation Expense, Including Shares Issued to Consultants for Services | Stock-based compensation expense, including shares issued to consultants for services, was classified in the statements of operations as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Research and development $ (52 ) $ 460 $ 443 $ 1,228 General and administrative 340 501 1,155 1,724 $ 288 $ 961 $ 1,598 $ 2,952 |
Summary of Stock Option Activity | The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2020 (in thousands except share and per share amounts): Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (Years) Outstanding at December 31, 2019 4,364,839 $ 5.30 7.32 $ 132 Granted 1,663,000 1.56 Forfeited (1,862,404 ) 3.52 Outstanding at September 30, 2020 4,165,435 $ 4.60 6.90 $ 7 Exercisable at September 30, 2020 2,776,235 $ 5.58 6.19 $ 7 Vested and expected to vest at September 30, 2020 4,082,185 $ 4.65 7.03 $ 7 |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring Costs [Abstract] | |
Schedule of activity related to our restructuring costs liability | The following table represents activity related to the Company’s restructuring costs liability for nine months ended September 30, 2020 (in thousands): One-Time Termination Benefits Balance at December 31, 2019 $ — Costs incurred and charged to expense 2,401 Costs paid or otherwise settled (796 ) Balance at September 30, 2020 $ 1,605 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss per Share | Basic and diluted net loss per share was calculated as follows (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator: Net loss $ (8,169 ) $ (12,833 ) $ (26,940 ) $ (47,269 ) Denominator: Weighted average number of common shares outstanding—basic and diluted 52,177,557 51,099,307 52,157,355 51,058,339 Net loss per share—basic and diluted $ (0.16 ) $ (0.25 ) $ (0.52 ) $ (0.93 ) |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Weighted-average Shares Outstanding | The following common stock equivalents have been excluded from the computation of diluted weighted-average shares outstanding, because such securities had an antidilutive impact : September 30, 2020 2019 Options to purchase common stock 4,165,435 4,545,064 Restricted stock units (1) — — 4,165,435 4,545,064 (1) Certain restricted stock units are excluded from the table as the number of shares of stock to be issued will be determined based on a computation at the vesting date, as described in Note 8. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Lessee Disclosure [Abstract] | |
Elements of Lease Expense | The elements of lease expense were as follows (in thousands): For the Three Months Ended September 30, 2020 2019 Lease cost Operating lease cost $ 462 $ 462 Variable lease cost (1) 158 182 Total lease cost $ 620 $ 644 For the Nine Months Ended September 30, 2020 2019 Lease cost Operating lease cost $ 1,387 $ 1,387 Variable lease cost (1) 420 494 Total lease cost $ 1,807 $ 1,881 Other information Operating cash flows used for operating leases $ 1,296 $ 1,261 Weighted-average remaining lease term 7.59 years 8.59 years Weighted-average discount rate 4.50 % 4.50 % (1) The variable lease costs for the three and nine months ended September 30, 2020 and 2019 |
Schedule of Future Lease Payments under Noncancelable Leases | Future lease payments under no ncancelable leases as of September 30, 2020 (in thousands): Future Operating Lease Payments 2020 $ 437 2021 1,780 2022 1,829 2023 1,880 2024 1,931 Thereafter 6,825 Total lease payments 14,682 Less: imputed interest (2,342 ) Total operating lease liabilities $ 12,340 |
Nature of the Business - Additi
Nature of the Business - Additional Information (Detail) - USD ($) $ in Thousands | Aug. 22, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Nature of Business [Line Items] | ||||||
Restructuring costs | $ 2,401 | $ 2,401 | ||||
Accumulated deficit | (363,600) | (363,600) | $ (336,660) | |||
Cash, cash equivalents and short-term investments | 40,800 | 40,800 | ||||
Net loss | (8,169) | $ (12,833) | (26,940) | $ (47,269) | ||
Cash in operations | 29,173 | $ 41,555 | ||||
Yumanity [Member] | ||||||
Nature of Business [Line Items] | ||||||
Percentage of reduction in workforce | 79.00% | |||||
Restructuring costs | 2,400 | |||||
General and Administrative Costs [Member] | Yumanity [Member] | ||||||
Nature of Business [Line Items] | ||||||
Other merger related costs | 1,600 | |||||
One-Time Termination Benefits [Member] | ||||||
Nature of Business [Line Items] | ||||||
Accrued termination benefits | $ 1,600 | $ 1,600 |
Short-Term Investments - Summar
Short-Term Investments - Summary of Short-Term Investments (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 5,000 | $ 44,452 |
Gross Unrealized Gains | 9 | |
Gross Unrealized Losses | (2) | |
Fair Value | 5,000 | 44,459 |
U.S. Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 5,000 | 23,996 |
Gross Unrealized Gains | 7 | |
Gross Unrealized Losses | (1) | |
Fair Value | $ 5,000 | 24,002 |
U.S Government-Sponsored Enterprise Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 20,456 | |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (1) | |
Fair Value | $ 20,457 |
Short-Term Investments - Additi
Short-Term Investments - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | ||||
Realized gains (losses) on short-term investments | $ 0 | $ 0 | $ 0 | $ 0 |
Other-than-temporary impairments recognized | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Total assets | $ 11,999 | $ 44,459 |
Liabilities: | ||
Derivative liability | 3 | 3 |
U.S Government-Sponsored Enterprise Securities [Member] | ||
Assets: | ||
Cash equivalents | 1,000 | |
Short-term investments | 20,457 | |
U.S. Treasury Securities [Member] | ||
Assets: | ||
Cash equivalents | 5,999 | |
Short-term investments | 5,000 | 24,002 |
Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Total assets | 39,819 | 68,365 |
Liabilities: | ||
Derivative liability | 3 | 3 |
Fair Value, Measurements, Recurring [Member] | Money Market Funds [Member] | ||
Assets: | ||
Cash equivalents | 27,820 | 23,906 |
Fair Value, Measurements, Recurring [Member] | U.S Government-Sponsored Enterprise Securities [Member] | ||
Assets: | ||
Cash equivalents | 1,000 | |
Short-term investments | 20,457 | |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | ||
Assets: | ||
Cash equivalents | 5,999 | |
Short-term investments | 5,000 | 24,002 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Assets: | ||
Total assets | 27,820 | 23,906 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Money Market Funds [Member] | ||
Assets: | ||
Cash equivalents | 27,820 | 23,906 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Liabilities: | ||
Derivative liability | $ 3 | $ 3 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | ||
Transfer of assets from level 1 to level 2 | $ 0 | $ 0 |
Transfer of assets from level 2 to level 1 | 0 | 0 |
Transfer of liabilities from level 1 to level 2 | 0 | 0 |
Transfer of liabilities from level 2 to level 1 | $ 0 | 0 |
Fair value determination model | Monte-Carlo simulation analysis | |
Fair value of derivative liability | $ 0 | $ 0 |
Prepaids and Other Current As_3
Prepaids and Other Current Assets - Schedule of Prepaids and Other Current Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid clinical, manufacturing and scientific expenses | $ 80 | $ 767 |
Prepaid insurance expenses | 684 | 125 |
Other prepaid expenses and other current assets | 57 | 512 |
Prepaids and other current assets | $ 821 | $ 1,404 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Payables And Accruals [Abstract] | ||
Accrued payroll and related expenses | $ 2,334 | $ 3,203 |
Accrued research and development expenses | 685 | 3,186 |
Accrued professional fees | 635 | 397 |
Accrued other | 16 | 78 |
Total accrued expenses | $ 3,670 | $ 6,864 |
Short-Term Borrowings - Additio
Short-Term Borrowings - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Short Term Debt [Line Items] | |
Short-term borrowings | $ 369 |
Finance And Security Agreement | |
Short Term Debt [Line Items] | |
Short-term borrowings | $ 400 |
Agreement commencement date | Feb. 27, 2020 |
Debt instrument, term | 10 months |
Short-term debt, annual interest rate | 2.59% |
Debt instrument, maturity date | Dec. 11, 2020 |
Interest on short-term borrowings | $ 100 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) | Jun. 29, 2020USD ($)Consultant | Feb. 04, 2020 | Feb. 03, 2016shares | Sep. 30, 2020USD ($)shares | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($) | Jan. 01, 2020shares | Dec. 31, 2019shares | Dec. 31, 2016shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock reserved for issuance | 1,563,498 | |||||||||
Stock-based compensation | $ | $ 288,000 | $ 961,000 | $ 1,598,000 | $ 2,952,000 | ||||||
Stock option grants | 1,663,000 | |||||||||
RSUs outstanding | 4,165,435 | 4,165,435 | 4,364,839 | |||||||
Grant date fair value of options | $ | $ 1,800,000 | |||||||||
Weighted average grant date fair value | $ / shares | $ 1.09 | |||||||||
Requisite service period | 4 years | |||||||||
Bonus Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation | $ | $ 100,000 | $ 100,000 | ||||||||
RSUs outstanding | 4,519 | 4,519 | ||||||||
Vesting of restricted stock units | $ | $ 1,200,000 | |||||||||
Compensation costs associated with awards | $ | $ 0 | |||||||||
Award vesting terms | Company shall issue a number of shares of stock equal to the RSU value, divided by the volume-weighted average price per share of the Company’s stock for the 10-day period ending on the Vesting Date. The Company also has the option to issue each Grantee the respective cash equivalent of the Award in part or in full satisfaction of the delivery of the stock in connection with the vesting of each Award. | |||||||||
Number of consultants for services | Consultant | 2 | |||||||||
Nonemployees [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of options unvested | 83,250 | 83,250 | ||||||||
Nonemployees [Member] | Prior to 2013 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Option issued to purchase common stock | 203,964 | |||||||||
Maximum [Member] | Bonus Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Awards requisite service period date | Aug. 4, 2020 | |||||||||
Minimum [Member] | Bonus Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Awards requisite service period date | Feb. 4, 2020 | |||||||||
2016 Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock reserved for issuance | 1,581,839 | 2,749,403 | 2,749,403 | |||||||
Common stock reserved for issuance, percentage of number of shares of common stock outstanding | 3.00% | |||||||||
Unrecognized compensation cost related to the unvested stock-based awards | $ | $ 1,600,000 | $ 1,600,000 | ||||||||
Compensation cost not yet recognized, period for recognition | 2 years 1 month 6 days | |||||||||
2016 Plan and 2008 Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock reserved for issuance | 6,914,838 | 6,914,838 | ||||||||
2016 ESPP [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock reserved for issuance | 138,757 | 552,537 | 552,537 | |||||||
Common stock reserved for issuance, percentage of number of shares of common stock outstanding | 1.00% | |||||||||
Common stock available for issuance | 138,757 | |||||||||
Number of shares issued | 59,232 | |||||||||
2016 ESPP [Member] | Maximum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock-based compensation | $ | $ 100,000 | $ 100,000 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock-based Compensation Expense, Including Shares Issued to Consultants for Services (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total Stock-based compensation expense | $ 288 | $ 961 | $ 1,598 | $ 2,952 |
Research and Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total Stock-based compensation expense | (52) | 460 | 443 | 1,228 |
General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total Stock-based compensation expense | $ 340 | $ 501 | $ 1,155 | $ 1,724 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Number of Shares | ||
Outstanding at December 31, 2019 | 4,364,839 | |
Granted | 1,663,000 | |
Forfeited | (1,862,404) | |
Outstanding at September 30, 2020 | 4,165,435 | 4,364,839 |
Exercisable at September 30, 2020 | 2,776,235 | |
Vested and expected to vest at September 30, 2020 | 4,082,185 | |
Weighted Average Exercise Price Per Share | ||
Outstanding at December 31, 2019 | $ 5.30 | |
Granted | 1.56 | |
Forfeited | 3.52 | |
Outstanding at September 30, 2020 | 4.60 | $ 5.30 |
Exercisable at September 30, 2020 | 5.58 | |
Vested and expected to vest at September 30, 2020 | $ 4.65 | |
Weighted Average Remaining Contractual Term, Outstanding | 6 years 10 months 24 days | 7 years 3 months 25 days |
Weighted Average Remaining Contractual Term, Exercisable at March 31, 2020 | 6 years 2 months 8 days | |
Weighted Average Remaining Contractual Term, Vested and expected to vest at March 31, 2020 | 7 years 10 days | |
Aggregate Intrinsic Value, Outstanding | $ 7 | $ 132 |
Aggregate Intrinsic Value, Exercisable at March 31, 2020 | 7 | |
Aggregate Intrinsic Value, Vested and expected to vest at March 31, 2020 | $ 7 |
Restructuring Costs - Additiona
Restructuring Costs - Additional Information (Detail) - Yumanity [Member] - USD ($) $ in Millions | Aug. 22, 2020 | Sep. 30, 2020 |
Restructuring Cost And Reserve [Line Items] | ||
Restructuring and Related Cost, Description | On August 22, 2020, due to the entry into the Merger Agreement with Yumanity, the Company’s Board committed to reducing its workforce by approximately 79% to a total of five full-time employees, who will remain with the Company until the closing of the proposed Merger to assist with its day-to-day business operations, including the maintenance of the rights of all or any part of the Company’s intellectual property portfolio relating to its cystic fibrosis clinical programs (the “CF Assets”), and those activities necessary to complete the proposed Merger. All employees affected by the workforce reduction are eligible to receive, among other things, severance payments based on the applicable employee’s level and years of service with the Company and the continuation of group health insurance coverage for a specified time period post-termination. In addition, certain affected employees are eligible for an extension of the post-termination exercise period for their outstanding stock options. Each affected employee’s eligibility for the severance benefits was contingent upon such employee’s execution of a separation agreement, which includes a general release of claims against the Company. | |
Percentage of reduction in workforce | 79.00% | |
Employee Severance [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring costs | $ 2.4 | |
Restructuring Plan | Employee Severance [Member] | Minimum [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring costs | 4.2 | |
Restructuring Plan | Employee Severance [Member] | Maximum [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring costs | $ 4.7 |
Restructuring Costs - Schedule
Restructuring Costs - Schedule of activity related to our restructuring costs liability (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Restructuring Costs [Abstract] | |
Costs incurred and charged to expense | $ 2,401 |
Costs paid or otherwise settled | (796) |
Balance at September 30, 2020 | $ 1,605 |
Significant Agreements - Additi
Significant Agreements - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Feb. 28, 2019 | Sep. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2018 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||
Revenue | $ 5,000 | |||
Genentech [Member] | ||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||
Nonrefundable cash payment | $ 5,000 | $ 5,000 | ||
Future milestone payment | $ 96,000 | |||
Revenue | $ 5,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Federal income tax benefit | $ 0 | $ 0 | $ 0 | $ 0 |
State income tax benefit | $ 0 | $ 0 | $ 0 | $ 0 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Basic and Diluted Net Loss per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net loss | $ (8,169) | $ (12,833) | $ (26,940) | $ (47,269) |
Denominator: | ||||
Weighted average common shares outstanding—basic and diluted | 52,177,557 | 51,099,307 | 52,157,355 | 51,058,339 |
Net loss per share—basic and diluted | $ (0.16) | $ (0.25) | $ (0.52) | $ (0.93) |
Net Loss per Share - Schedule_2
Net Loss per Share - Schedule of Antidilutive Securities Excluded from Computation of Diluted Weighted-average Shares Outstanding (Detail) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities outstanding | 4,165,435 | 4,545,064 |
Options to Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities outstanding | 4,165,435 | 4,545,064 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Jan. 19, 2018 |
Leases [Abstract] | |||
Operating lease, initial term | 10 years | ||
Operating lease, option to extend additional term | 7 years | ||
Operating lease assets | $ 11,682 | $ 12,631 |
Leases - Elements of Lease Expe
Leases - Elements of Lease Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Lease cost | ||||
Operating lease cost | $ 462 | $ 462 | $ 1,387 | $ 1,387 |
Variable lease cost | 158 | 182 | 420 | 494 |
Total lease cost | $ 620 | $ 644 | 1,807 | 1,881 |
Other information | ||||
Operating cash flows used for operating leases | $ 1,296 | $ 1,261 | ||
Weighted-average remaining lease term | 7 years 7 months 2 days | 8 years 7 months 2 days | 7 years 7 months 2 days | 8 years 7 months 2 days |
Weighted-average discount rate | 4.50% | 4.50% | 4.50% | 4.50% |
Leases - Schedule of Future Lea
Leases - Schedule of Future Lease Payments under Noncancelable Leases (Detail) $ in Thousands | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 437 |
2021 | 1,780 |
2022 | 1,829 |
2023 | 1,880 |
2024 | 1,931 |
Thereafter | 6,825 |
Total lease payments | 14,682 |
Less: imputed interest | (2,342) |
Total operating lease liabilities | $ 12,340 |