Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 30, 2021 | |
Document and Entity Information | ||
Entity Registrant Name | Catabasis Pharmaceuticals, Inc. | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Entity File Number | 001-37467 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-3687168 | |
Entity Address, Address Line One | 100 High Street Floor 28 | |
Entity Address, City or Town | Boston | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02110 | |
City Area Code | 617 | |
Local Phone Number | 349-1971 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | CATB | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 76,948,803 | |
Entity Central Index Key | 0001454789 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 139,520 | $ 24,930 |
Short-term investments | 20,000 | |
Prepaid expenses and other current assets | 532 | 1,395 |
Total current assets | 140,052 | 46,325 |
Right-of-use asset | 717 | 966 |
Other assets | 176 | 165 |
Total assets | 140,945 | 47,456 |
Current liabilities: | ||
Accounts payable | 619 | 1,544 |
Accrued expenses | 2,714 | 4,197 |
Current portion of operating lease liabilities | 655 | 649 |
Total current liabilities | 3,988 | 6,390 |
Long-term portion of operating lease liabilities | 58 | 397 |
Total liabilities | 4,046 | 6,787 |
Commitments | ||
Stockholders' equity: | ||
Common stock, $0.001 par value per share, 150,000,000 shares authorized; 76,948,803 and 20,084,337 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 77 | 20 |
Additional paid-in capital | 475,499 | 301,546 |
Accumulated deficit | (438,447) | (260,897) |
Total stockholders' equity | 136,899 | 40,669 |
Total liabilities and stockholders' equity | 140,945 | $ 47,456 |
Series X redeemable convertible preferred stock | ||
Stockholders' equity: | ||
Preferred stock, value | $ 99,770 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, authorized (in shares) | 5,000,000 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 76,948,803 | 20,084,337 |
Common stock, outstanding (in shares) | 76,948,803 | 20,084,337 |
Series X redeemable convertible preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, authorized (in shares) | 37,848 | |
Preferred stock, issued (in shares) | 32,545 | 0 |
Preferred stock, outstanding (in shares) | 32,545 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Operating expenses: | ||||
Research and development | $ 3,478 | $ 6,750 | $ 6,071 | $ 12,039 |
General and administrative | 4,008 | 2,803 | 6,881 | 5,555 |
Acquired in-process research and development | 164,617 | |||
Total operating expenses | 7,486 | 9,553 | 177,569 | 17,594 |
Loss from operations | (7,486) | (9,553) | (177,569) | (17,594) |
Other income (expense): | ||||
Interest and investment income | 40 | 60 | 53 | 227 |
Other expense, net | (20) | (15) | (34) | (93) |
Total other income, net | 20 | 45 | 19 | 134 |
Net loss | (7,466) | (9,508) | (177,550) | (17,460) |
Dividend on convertible preferred stock related to beneficial conversion feature and issuance costs | (24,437) | (24,437) | ||
Net loss attributable to common shareholders | $ (31,903) | $ (9,508) | $ (201,987) | $ (17,460) |
Net loss per share - basic and diluted | $ (0.89) | $ (0.53) | $ (6.93) | $ (1.03) |
Weighted-average common shares outstanding used in net loss per share - basic and diluted | 35,880,580 | 17,967,495 | 29,167,672 | 16,933,079 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Condensed Consolidated Statements of Comprehensive Loss | ||||
Net loss | $ (7,466) | $ (9,508) | $ (177,550) | $ (17,460) |
Other comprehensive gain: | ||||
Gain on short-term investments | 16 | 1 | ||
Total other comprehensive gain: | 16 | 1 | ||
Comprehensive loss | $ (7,466) | $ (9,492) | $ (177,550) | $ (17,459) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock - Series X redeemable convertible preferred stock - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | |
Series X redeemable convertible preferred stock | ||
Balance, beginning of period | $ 240,881 | $ 0 |
Balance, beginning of period (in shares) | 86,077 | 0 |
Issuance of preferred stock in a private offering of public equity, net of issuance costs | $ 84,696 | |
Issuance of preferred stock in a private offering of public equity, net of issuance costs (in shares) | 35,573 | |
Issuance of preferred stock upon acquisition of Quellis | $ 156,185 | |
Issuance of preferred stock upon acquisition of Quellis (in shares) | 50,504 | |
Reclassification of preferred stock to permanent equity | $ (240,881) | $ (240,881) |
Reclassification of preferred stock to permanent equity (in shares) | (86,077) | (86,077) |
Balance, end of period | $ 0 | $ 0 |
Balance, end of period (in shares) | 0 | 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Preferred StockSeries X redeemable convertible preferred stock | Common Stock | Additional paid-in capital | Accumulated Deficit | Accumulated other comprehensive loss | Total |
Balance, beginning of period at Dec. 31, 2019 | $ 0 | $ 12 | $ 259,305 | $ (223,597) | $ 0 | |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 0 | 12,433,600 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of common stock in a public offering, net of issuance costs | 24,554 | |||||
Issuance of common stock for at-the-market offerings | $ 2 | 7,328 | ||||
Issuance of common stock for at-the-market offerings (in shares) | 1,100,001 | |||||
Issuance of common stock and warrants in public offerings | $ 5 | |||||
Issuance of common stock and warrants in public offerings (in shares) | 5,290,000 | |||||
Stock-based compensation expense | 710 | |||||
Net loss | (17,460) | $ (17,460) | ||||
Realized loss on short-term investments | 1 | 1 | ||||
Balance, end of period at Jun. 30, 2020 | $ 19 | 291,897 | (241,057) | 1 | 50,860 | |
Balance, end of period (in shares) at Jun. 30, 2020 | 18,823,601 | |||||
Balance, beginning of period at Mar. 31, 2020 | $ 0 | $ 18 | 285,257 | (231,549) | (15) | |
Balance, beginning of period (in shares) at Mar. 31, 2020 | 0 | 17,897,172 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of common stock for at-the-market offerings | $ 1 | 6,269 | ||||
Issuance of common stock for at-the-market offerings (in shares) | 926,429 | |||||
Stock-based compensation expense | 371 | |||||
Net loss | (9,508) | (9,508) | ||||
Realized loss on short-term investments | 16 | 16 | ||||
Balance, end of period at Jun. 30, 2020 | $ 19 | 291,897 | (241,057) | $ 1 | 50,860 | |
Balance, end of period (in shares) at Jun. 30, 2020 | 18,823,601 | |||||
Balance, beginning of period at Dec. 31, 2020 | $ 0 | $ 20 | 301,546 | (260,897) | $ 40,669 | |
Balance, beginning of period (in shares) at Dec. 31, 2020 | 0 | 20,084,337 | 20,084,337 | |||
Increase (Decrease) in Shareholders' Equity | ||||||
Reclassification of preferred stock to permanent equity | $ 240,881 | |||||
Reclassification of preferred stock to permanent equity (in shares) | 86,077 | |||||
Conversion of preferred stock into common stock | $ (165,548) | |||||
Conversion of preferred stock into common stock (in shares) | (53,532) | |||||
Issuance of preferred stock in a private offering of public equity, net of issuance costs | 19,565 | |||||
Issuance of common stock upon acquisition of Quellis | $ 3 | 8,095 | ||||
Issuance of common stock upon acquisition of Quellis (in shares) | 3,332,669 | |||||
Issuance of common stock upon the conversion of preferred stock | $ 54 | 165,495 | ||||
Issuance of common stock upon the conversion of preferred stock (in shares) | 53,531,797 | |||||
Dividend on convertible preferred stock related to beneficial conversion feature and issuance costs | $ 24,437 | (24,437) | ||||
Expense related to warrants inherited in acquisition of Quellis | 387 | |||||
Reclassification of warrant liability to additional paid-in capital | 3,468 | |||||
Stock-based compensation expense | 1,380 | |||||
Net loss | (177,550) | $ (177,550) | ||||
Balance, end of period at Jun. 30, 2021 | $ 99,770 | $ 77 | 475,499 | (438,447) | $ 136,899 | |
Balance, end of period (in shares) at Jun. 30, 2021 | 32,545 | 76,948,803 | 76,948,803 | |||
Balance, beginning of period at Mar. 31, 2021 | $ 0 | $ 23 | 329,813 | (430,981) | ||
Balance, beginning of period (in shares) at Mar. 31, 2021 | 0 | 23,417,006 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Reclassification of preferred stock to permanent equity | $ 240,881 | |||||
Reclassification of preferred stock to permanent equity (in shares) | 86,077 | |||||
Conversion of preferred stock into common stock | $ (165,548) | |||||
Conversion of preferred stock into common stock (in shares) | (53,532) | |||||
Issuance of common stock upon the conversion of preferred stock | $ 54 | 165,495 | ||||
Issuance of common stock upon the conversion of preferred stock (in shares) | 53,531,797 | |||||
Dividend on convertible preferred stock related to beneficial conversion feature and issuance costs | $ 24,437 | (24,437) | ||||
Expense related to warrants inherited in acquisition of Quellis | 146 | |||||
Reclassification of warrant liability to additional paid-in capital | 3,468 | |||||
Stock-based compensation expense | 1,014 | |||||
Net loss | (7,466) | $ (7,466) | ||||
Balance, end of period at Jun. 30, 2021 | $ 99,770 | $ 77 | $ 475,499 | $ (438,447) | $ 136,899 | |
Balance, end of period (in shares) at Jun. 30, 2021 | 32,545 | 76,948,803 | 76,948,803 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating activities | ||
Net loss | $ (177,550) | $ (17,460) |
Reconciliation of net loss to net cash used in operating activities: | ||
Non-cash portion of acquired in-process research and development | 164,612 | |
Stock-based compensation expense | 1,380 | 710 |
(Gain) loss on warrants inherited in acquisiton of Quellis | (700) | |
Other non-cash items | 10 | 23 |
Changes in assets and liabilities: | ||
Prepaid expenses and other current assets | 999 | 1,079 |
Right-of-use asset-operating | (85) | 134 |
Accounts payable | (2,900) | (26) |
Accrued expenses | (1,882) | 1,085 |
Net cash used in operating activities | (16,116) | (14,455) |
Investing activities | ||
Purchases of short-term investments | (42,777) | |
Sales and maturities of short-term investments | 20,000 | 67,110 |
Cash acquired in acquisition of Quellis | 6,466 | |
Purchases of property and equipment | (21) | (23) |
Net cash provided by (used in) investing activities | 26,445 | 24,310 |
Financing activities | ||
Proceeds from public offerings, net of issuance costs | 24,559 | |
Proceeds from private offering of public equity, net of issuance costs | 104,261 | |
Proceeds from at-the-market offering, net of issuance costs | 7,330 | |
Net cash provided by financing activities | 104,261 | 31,889 |
Net increase in cash, cash equivalents and restricted cash | 114,590 | 41,744 |
Cash, cash equivalents and restricted cash, beginning of period | 25,051 | 10,376 |
Cash, cash equivalents and restricted cash, end of period | 139,641 | $ 52,120 |
Supplemental disclosure of cash flow information | ||
Conversion of Series X Preferred Stock into common stock | 165,549 | |
Non-cash dividend on convertible preferred stock | 24,437 | |
Reclassification of warrant liability to additional paid-in capital | $ 3,468 |
Organization and Operations
Organization and Operations | 6 Months Ended |
Jun. 30, 2021 | |
Organization and Operations | |
Organization and Operations | 1. Organization and Operations The Company Catabasis Pharmaceuticals, Inc. (the “Company”) is a biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutics. Its mission is to bring hope with life-changing therapies to patients and families. On October 26, 2020, the Company announced that the Phase 3 PolarisDMD trial of the Company’s previous lead product candidate, edasalonexent, for the treatment of Duchenne muscular dystrophy (DMD) did not meet its primary and secondary endpoints. Based on these results, the Company announced that it was stopping activities related to the development of edasalonexent, including the Company’s ongoing open-label extension trial. On January 28, 2021, the Company acquired Quellis Biosciences, Inc (“Quellis”). The Company's lead product candidate, which was acquired in the Quellis acquisition, is QLS-215, a monoclonal antibody inhibitor of plasma kallikrein in preclinical development for the treatment of hereditary angioedema, or HAE, a rare, debilitating and potentially life-threatening disease. The Company was incorporated in the State of Delaware on June 26, 2008. Agreement and Plan of Merger On January 28, 2021, the Company acquired Quellis (the “Quellis Acquisition”). Under the terms of the Merger Agreement, the Company issued to the stockholders of Quellis 3,332,669 shares of the Company’s common stock, par value $0.001 per share, and 50,504 shares of newly designated Series X redeemable convertible preferred stock (“Series X Preferred Stock”) (as described below). The Series X Preferred Stock had a conversion value on the closing date of $122.7 million. In addition, the Company assumed options granted under the Quellis stock option plan, which became options to purchase 332,494 shares of the Company’s common stock, a warrant to purchase 2,805 shares of Series X Preferred Stock at an exercise price of $341.70 per share, and a warrant to purchase 185,136 shares of the Company’s common stock at an exercise price of $0.35 per share, which warrants are exercisable until December 14, 2030. Upon stockholder approval of the Conversion Proposal (as defined below) on June 2, 2021, the warrant to purchase Series X Preferred Stock was converted into the right to purchase 2,805,000 shares of the Company’s common stock, at a per share exercise price of $0.35 per share. Stock Purchase Agreement and Series X Preferred Stock Concurrent with the Quellis Acquisition, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with certain institutional and accredited investors. Pursuant to the Purchase Agreement, the Company sold an aggregate of 35,573 shares of Series X Preferred Stock for gross proceeds of approximately $110.0 million, and net proceeds of $104.3 million (the “February 2021 Financing”). In accounting for the Purchase Agreement, the Company recorded a beneficial conversion feature of $19.6 million and issuance costs of $5.7 million. The combined total was treated as a discount to the value of Series X Preferred Stock, See Note 2 – “Summary of Significant Accounting Policies” for further discussion. As a result of the Quellis Acquisition and the February 2021 Financing, in 2021 the Company issued the following Series X Preferred Stock or warrants to purchase Series X Preferred Stock: Series X Common Stock Preferred Issuable Upon Stock at Conversion at Transaction Transaction Date Date Outstanding shares issued in merger 50,504 50,504,000 Outstanding shares issued in February 2021 Financing 35,573 35,573,000 Warrants assumed in merger 2,805 2,805,000 Total 88,882 88,882,000 At its 2021 Annual Meeting of Stockholders on June 2, 2021, the Company’s stockholders approved the conversion of the Company’s Series X Preferred Stock into shares of the Company’s common stock in accordance with Nasdaq Listing Rule 5635(a) (the “Conversion Proposal”). Following stockholder approval of the Conversion Proposal, each share of Series X Preferred Stock then outstanding automatically converted into 1,000 shares of the Company’s common stock, subject to certain beneficial ownership limitations, including that a holder of Series X Preferred Stock is prohibited from converting shares of Series X Preferred Stock into shares of the Company’s common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be initially set at 9.99% and thereafter adjustable by the holder to a number between 4.99% and 19.99%) of the total number of shares of the Company’s common stock issued and outstanding immediately after giving effect to such conversion. As of June 30, 2021, 53,532 shares of Series X Preferred Stock were converted into 53,531,797 shares of common stock and 32,545 shares of Series X Preferred Stock remained outstanding. Outstanding shares of Series X Preferred Stock are subject to conversion at the option of the holder. Prior to stockholder approval of the Conversion Proposal, the terms of the Series X Preferred Stock included a cash redemption feature. This cash redemption feature resulted in substantial doubt about the Company’s ability to continue as a going concern as disclosed in the Company’s annual report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report on Form 10-K”) and the Company’s quarterly report on Form 10-Q for the three months ended March 31, 2021. Upon stockholder approval of the Conversion Proposal, the cash redemption feature was eliminated and, consequently, there is no longer substantial doubt about the Company’s ability to continue as a going concern for at least twelve months subsequent to the issuance of these financial statements. Holders of Series X Preferred Stock are entitled to receive dividends, subject to certain beneficial ownership limitations, on shares of Series X Preferred Stock equal, on an as-if-converted-to-common-stock basis, and in the same form as dividends actually paid on shares of the Company’s common stock. Except as otherwise required by law, the Series X Preferred Stock does not have voting rights. However, as long as any shares of Series X Preferred Stock are outstanding, the Company may not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series X Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Series X Preferred Stock or alter or amend the Certificate of Designation that authorized the Series X Preferred Stock, amend or repeal any provision of, or add any provision to, the Company’s Certificate of Incorporation or bylaws, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series X Preferred Stock, (ii) issue further shares of Series X Preferred Stock or increase or decrease (other than by conversion) the number of authorized shares of Series X Preferred Stock, or (iii) enter into any agreement with respect to any of the foregoing. January 2020 Financing On January 30, 2020, the Company entered into an underwriting agreement with Oppenheimer & Co. Inc. relating to an underwritten public offering (the “January 2020 Financing”) of 5,290,000 shares of common stock at a price to the public of $5.00 per share, including 690,000 shares issued upon the exercise in full by Oppenheimer & Co. Inc. of its overallotment option. This resulted in gross proceeds of $26.5 million, and net proceeds of $24.6 million. Liquidity The Company has entered into various sales agreements with Cowen and Company LLC (“Cowen”), pursuant to which the Company could issue and sell shares of common stock under at-the-market offering programs. On May 20, 2021, the Company terminated its sales agreement with Cowen. On June 30, 2021, the Company entered into an Open Market Sale Agreement SM During the six months ended June 30, 2020, the Company sold an aggregate of 1,100,001 shares of common stock pursuant to the ATM Programs, at an average price of $6.87 per share, for net proceeds of $7.3 million after deducting sales commissions and offering expenses. There was no activity from the ATM Programs during the six months ended June 30, 2021. As of June 30, 2021, the Company had an accumulated deficit of $438.4 million and had available cash and cash equivalents of $139.5 million. The Company has been primarily involved with research and development activities and has incurred operating losses and negative cash flows from operations since its inception. The Company has not generated any product revenues and has financed its operations primarily through public offerings and private placements of its equity securities. There can be no assurance that the Company will be able to obtain additional debt, equity or other financing or generate product revenue or revenues from collaborative partners, on terms acceptable to the Company, on a timely basis or at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company's business, results of operations, and financial condition. The Company is subject to a number of risks similar to other life science companies, including, but not limited to, successful discovery and development of its drug candidates, raising additional capital, development by its competitors of new technological innovations, protection of proprietary technology and regulatory approval and market acceptance of the Company's products. The Company has been primarily involved with research and development activities and has incurred operating losses and negative cash flows from operations since its inception. The Company anticipates that it will continue to incur significant operating losses for the next several years as it continues to develop its product candidates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying financial statements and the related disclosures are unaudited and have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Additionally, certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted from this report. Accordingly, these condensed financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2020 and notes thereto included in the 2020 Annual Report on Form 10-K. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, including those adjustments that are of a normal and recurring nature, which are necessary to fairly present the Company’s results for the interim periods presented. The results for the three and six months ended June 30, 2021 are not necessarily indicative of the results for the year ending December 31, 2021, or for any future period. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Catabasis Securities Corporation and Quellis Biosciences, LLC, successor in interest to Quellis. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from such estimates. The Company utilizes certain estimates to record expenses relating to research and development contracts. These contract estimates, which are primarily related to the length of service of each contract and the amount of service provided as of each measurement date, are determined by the Company based on input from internal project management, as well as from the Company’s service providers. Net Loss Per Share Basic net loss per share is calculated by dividing net loss attributable to common shareholders by the weighted average shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the Company’s dilutive net loss per share calculation, preferred stock, stock options and warrants to purchase common stock and preferred stock were considered to be common stock equivalents but were excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive; therefore, basic and diluted net loss per share were the same for all periods presented. The following common stock equivalents were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Three and Six Months Ended June 30, 2021 2020 Series X Preferred Stock (1) 32,545,203 — Stock options 7,930,334 1,301,262 Common stock warrants 9,183,885 6,193,749 49,659,422 7,495,011 (1) Shown as common stock equivalents Cash, Cash Equivalents and Restricted Cash The reconciliation of cash, cash equivalents and restricted cash reported within the applicable balance sheet that sum to the total of the same such amount shown in the statement of cash flows is as follows (in thousands): June 30, 2021 2020 Cash and cash equivalents $ 139,520 $ 51,885 Restricted cash (1) 121 235 Total $ 139,641 $ 52,120 (1) Included in prepaid expenses and other current assets and other assets. Acquired In-Process Research and Development The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs. Goodwill is not recognized in asset acquisitions. In an asset acquisition, the cost allocated to acquire in-process research and development (“IPR&D”) with no alternative future use is charged to expense at the acquisition date. Refer to Note 3, “Acquisition of Quellis” for a more detailed description of the accounting policy utilized for the recent asset acquisition. Preferred Stock Discount As discussed above, in February 2021, the Company issued Series X Preferred Stock in a private placement transaction. It was determined that this transaction resulted in recognition of a beneficial conversion feature, which was valued based on the difference between the price of the shares of common stock on the date of commitment and the conversion price on the closing date, resulting in a total value of $19.6 million. Additionally, the Company incurred total issuance costs of $5.7 million related to the private placement. Both of these features were taken as a discount on Series X Preferred Stock recognized at the close of the transaction. These features are analogous to preferred dividends and are recorded as a non-cash return to holders of Series X Preferred Stock through additional paid in capital. The discount related to the beneficial conversion feature is recognized through the earliest possible date of conversion, which occurred upon the shareholder approval of the conversion in June 2021. The issuance costs are recognized as a dividend at the time of conversion to common shares. As of June 30, 2021, $24.4 million of the above amounts were accounted for as a non-cash return related to shares of Series X Preferred Stock. Recent Accounting Pronouncements - Not Yet Adopted From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses smaller reporting companies, early adoption is permitted. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Company’s 2020 Annual Report on Form 10-K, and there were no significant changes to such policies in the three and six months ended June 30, 2021 that had a material impact on the Company’s results of operations or financial position. |
Acquisition of Quellis
Acquisition of Quellis | 6 Months Ended |
Jun. 30, 2021 | |
Acquisition of Quellis | |
Acquisition of Quellis | 3. Acquisition of Quellis On January 28, 2021, the Company completed its acquisition of Quellis in accordance with the terms of the Merger Agreement as discussed in Note 1, “Organization and Operations” . The Company concluded that the Quellis Acquisition was not the acquisition of a business, as substantially all of the fair value of the non-monetary assets acquired was concentrated in a single identifiable asset, QLS-215. The Company determined that the cost to acquire the Quellis assets was $170.7 million, based on the fair value of the equity consideration issued and including direct costs of the acquisition of $1.8 million. The net assets acquired in connection with the Quellis Acquisition were recorded at their estimated fair values as of January 28, 2021, which is the date the Quellis Acquisition was completed. The following table summarizes the net assets acquired based on their estimated fair values as of January 28, 2021 (in thousands): Acquired IPR&D $ 164,612 Cash and cash equivalents 8,307 Prepaid expenses and other assets 136 Accounts payable (1,974) Accrued liabilities (400) Net acquired tangible assets $ 170,681 In the estimation of fair value of the asset purchase consideration, the Company used the carrying value of the cash and cash equivalents, prepaid expenses, accounts payable and accrued liabilities as the most reliable indicator of fair value based on the associated short-term nature of the balances. The remaining fair value was attributable to the acquired IPR&D. As QLS-215 had not, at the time of the Quellis Acquisition, received regulatory approval in any territory, the cost attributable to the IPR&D was expensed in the Company’s consolidated statements of operations and comprehensive loss for the six months ended June 30, 2021 as the acquired IPR&D had no alternative future use, as determined by the Company in accordance with U.S. GAAP. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2021 | |
Financial Instruments | |
Financial Instruments | 4. Financial Instruments The tables below present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize observable inputs such as quoted prices in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are either directly or indirectly observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs utilize unobservable data points for which there is little or no market data, which require the Company to develop its own assumptions for the asset or liability. There were no transfers between fair value measurement levels during the three and six months ended June 30, 2021 or 2020. The Company’s investment portfolio may include fixed income securities that do not always trade on a daily basis. As a result, the pricing services used by the Company apply other available information as applicable through processes such as benchmark yields, benchmarking of like securities, sector groupings and matrix pricing to prepare valuations. The Company validates the prices provided by its third party pricing services by obtaining market values from other pricing sources and analyzing pricing data in certain instances. The Company has from time to time invested in certain reverse repurchase agreements which are collateralized by deposits in the form of U.S. Government Securities and Obligations for an amount no less than 102% of their value. The Company has not recorded an asset or liability for the collateral as the Company was not permitted to sell or re-pledge the collateral. The collateral had at least the prevailing credit rating of U.S. Government Treasuries and Agencies. The Company utilized a third-party custodian to manage the exchange of funds and ensure that collateral received is maintained at 102% of the value of the reverse repurchase agreements on a daily basis. The Company accounted for warrants to purchase its stock pursuant to Accounting Standards Codification (“ASC”) Topic 470, Debt Distinguishing Liabilities from Equity Below is a summary of assets and liabilities measured at fair value on a recurring basis (in thousands): As of June 30, 2021 Quoted Prices Significant Significant in Active Observable Unobservable Markets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents: Money market funds $ 1,841 $ — $ — $ 1,841 Reverse repurchase agreements — 39,000 — 39,000 Total assets $ 1,841 $ 39,000 $ — $ 40,841 As of December 31, 2020 Quoted Prices Significant Significant in Active Observable Unobservable Markets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents: Money market funds $ 22,999 $ — $ — $ 22,999 Short-term investments: Reverse repurchase agreements — 20,000 — 20,000 Total assets $ 22,999 $ 20,000 $ — $ 42,999 At June 30, 2021 and December 31, 2020, cash equivalents approximated their fair value due to their short-term nature. The warrant liability was valued based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company estimated the fair value of the warrant liability using Black-Scholes option-pricing models and assumptions that are based on the individual characteristics of the warrants on the valuation date, as well as assumptions including the fair value per share of the underlying security, the remaining contractual term of the warrant, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying security (in thousands). June 30, 2021 Balance at beginning of year $ — Issuance of warrants 4,332 (Decrease) increase in the fair value of the warrants $ (864) Reclassification of warrant liability to additional paid-in capital (3,468) Ending balance $ — |
Short-Term Investments
Short-Term Investments | 6 Months Ended |
Jun. 30, 2021 | |
Short-Term Investments | |
Short-Term Investments | 5. Short-Term Investments The Company did not hold any short-term investments at June 30, 2021. The following table summarizes the short-term investments held at December 31, 2020 (in thousands): Gross Unrealized Gross Unrealized Amortized Cost Gains Losses Fair Value December 31, 2020 Reverse repurchase agreements $ 20,000 $ — $ — $ 20,000 Total $ 20,000 $ — $ — $ 20,000 The contractual maturities of all short-term investments held at December 31, 2020 were one year or less. There were no short-term investments in an unrealized loss position at December 31, 2020. Gross realized gains and losses on the sales of short-term investments are included in other income, net. Unrealized holding gains or losses for the period that have been included in accumulated other comprehensive income, as well as gains and losses reclassified out of accumulated other comprehensive income into other income, net were not material to the Company’s condensed consolidated results of operations. The cost of investments sold or the amount reclassified out of the accumulated other comprehensive income into other income, net is based on the specific identification method for purposes of recording realized gains and losses. All proceeds in the three and six-month periods ended June 30, 2021 and 2020 related to maturities of underlying investments. The gains on proceeds from maturities of short-term investments were not material to the Company’s condensed consolidated results of operations for the three and six months ended June 30, 2021 and 2020. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2021 | |
Accrued Expenses | |
Accrued Expenses | 6. Accrued Expenses Accrued expenses consisted of the following (in thousands): June 30, December 31, 2021 2020 Accrued compensation $ 1,018 $ 1,719 Accrued contracted research costs 790 1,726 Accrued professional fees 663 356 Accrued other 180 — Accrued severance 63 396 Total $ 2,714 $ 4,197 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | 7. Stockholders’ Equity Preferred Stock Under the Company’s amended and restated certificate of incorporation, the Company has 5,000,000 shares of preferred stock authorized for issuance, with a $0.001 par value per share. Preferred stock may be issued from time to time in one or more series, each series to have such terms as stated or expressed in the resolutions providing for the issue of such series adopted by the board of directors of the Company. Preferred stock which may be redeemed, purchased or acquired by the Company may be reissued except as otherwise provided by law. As of June 30, 2021, the Company had 32,545 shares of Series X Preferred Stock outstanding. Refer to Note 1 “Organization and Operations ” Outstanding Warrants The following table presents information about warrants that are issued and outstanding at June 30, 2021: Year Issued Equity Instrument Warrants Outstanding Exercise Price Date of Expiration 2014 Common Stock 1,227 $ 122.12 8/26/2021 2015 Common Stock 1,227 $ 122.12 3/30/2022 2018 Common Stock 4,199,995 $ 12.00 6/21/2023 2019 Common Stock 1,991,300 $ 6.25 2/7/2024 2021 Common Stock 2,990,136 $ 0.35 12/14/2030 Total 9,183,885 Weighted average exercise price $ 6.99 Weighted average life in years 4.55 |
Reserved for Future Issuance
Reserved for Future Issuance | 6 Months Ended |
Jun. 30, 2021 | |
Reserved for Future Issuance | |
Reserved for Future Issuance | 8. Reserved for Future Issuance The Company has reserved for future issuance the following shares of common stock: June 30, December 31, 2021 2020 Warrants for the purchase of common stock 9,183,885 6,193,749 Options outstanding to purchase common stock 7,930,334 1,367,667 Options available for future issuance to purchase common stock 1,697,308 1,936,173 Shares reserved for the employee stock purchase plan 185,421 148,951 Total 18,996,948 9,646,540 As of June 30, 2021, the Company also had 32,545 shares of Series X Preferred Stock outstanding. Each share of Series X Preferred Stock outstanding is convertible into 1,000 shares of the Company’s common stock, subject to certain beneficial ownership limitations at the holder’s option. See Note 1 “Organization and Operations ” |
Stock Incentive Plans
Stock Incentive Plans | 6 Months Ended |
Jun. 30, 2021 | |
Stock Incentive Plans | |
Stock Incentive Plans | 9. Stock Incentive Plans A summary of the Company’s stock option activity and related information follows: Weighted Average Weighted- Remaining Aggregate Average Exercise Contractual Intrinsic Value Shares Price Term (years) (in thousands) Outstanding at December 31, 2020 1,367,667 $ 11.38 8.13 $ — Granted 6,447,000 $ 2.74 Assumed in Quellis Acquisition 332,494 $ 0.29 Cancelled or forfeited (208,152) $ 8.71 Expired (8,675) $ 16.70 Outstanding at June 30, 2021 7,930,334 $ 3.96 9.44 $ 662 Vested and exercisable at June 30, 2021 770,141 $ 14.07 7.31 $ 207 There were no options exercised in the three or six months ended June 30, 2021 and 2020. The total grant date fair value of options vested for the three months ended June 30, 2021 and 2020 was $0.4 million and $0.3 million, respectively. The total grant date fair value of options vested for the six months ended June 30, 2021 and 2020 was $1.0 million and $0.8 million, respectively. The weighted-average grant date fair value of options granted to employees and non-employees for the three months ended June 30, 2021 and 2020 was $1.73 and $4.00, respectively. The weighted-average grant date fair value of options granted to employees and non-employees for the six months ended June 30, 2021 and 2020 was $1.73 and $3.64, respectively. At June 30, 2021, the total unrecognized compensation expense related to unvested stock option awards was $12.7 million. The Company expects to recognize that cost over a weighted-average period of approximately 3.3 years. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events | |
Subsequent Events | 10. Subsequent Events Reverse Stock Split On August 4, 2021, the Company’s Board of Directors approved a reverse stock split of its outstanding shares of common stock at a ratio of one-for- six |
Summary of Significant Accoun_2
Summary of Significant Accounting Polices (Polices) | 6 Months Ended |
Jun. 30, 2021 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying financial statements and the related disclosures are unaudited and have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Additionally, certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted from this report. Accordingly, these condensed financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2020 and notes thereto included in the 2020 Annual Report on Form 10-K. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, including those adjustments that are of a normal and recurring nature, which are necessary to fairly present the Company’s results for the interim periods presented. The results for the three and six months ended June 30, 2021 are not necessarily indicative of the results for the year ending December 31, 2021, or for any future period. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Catabasis Securities Corporation and Quellis Biosciences, LLC, successor in interest to Quellis. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from such estimates. The Company utilizes certain estimates to record expenses relating to research and development contracts. These contract estimates, which are primarily related to the length of service of each contract and the amount of service provided as of each measurement date, are determined by the Company based on input from internal project management, as well as from the Company’s service providers. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss attributable to common shareholders by the weighted average shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the Company’s dilutive net loss per share calculation, preferred stock, stock options and warrants to purchase common stock and preferred stock were considered to be common stock equivalents but were excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive; therefore, basic and diluted net loss per share were the same for all periods presented. The following common stock equivalents were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Three and Six Months Ended June 30, 2021 2020 Series X Preferred Stock (1) 32,545,203 — Stock options 7,930,334 1,301,262 Common stock warrants 9,183,885 6,193,749 49,659,422 7,495,011 (1) Shown as common stock equivalents |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The reconciliation of cash, cash equivalents and restricted cash reported within the applicable balance sheet that sum to the total of the same such amount shown in the statement of cash flows is as follows (in thousands): June 30, 2021 2020 Cash and cash equivalents $ 139,520 $ 51,885 Restricted cash (1) 121 235 Total $ 139,641 $ 52,120 (1) Included in prepaid expenses and other current assets and other assets. |
Acquired In-Process Research and Development | Acquired In-Process Research and Development The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs. Goodwill is not recognized in asset acquisitions. In an asset acquisition, the cost allocated to acquire in-process research and development (“IPR&D”) with no alternative future use is charged to expense at the acquisition date. Refer to Note 3, “Acquisition of Quellis” for a more detailed description of the accounting policy utilized for the recent asset acquisition. |
Preferred Stock Discount | Preferred Stock Discount As discussed above, in February 2021, the Company issued Series X Preferred Stock in a private placement transaction. It was determined that this transaction resulted in recognition of a beneficial conversion feature, which was valued based on the difference between the price of the shares of common stock on the date of commitment and the conversion price on the closing date, resulting in a total value of $19.6 million. Additionally, the Company incurred total issuance costs of $5.7 million related to the private placement. Both of these features were taken as a discount on Series X Preferred Stock recognized at the close of the transaction. These features are analogous to preferred dividends and are recorded as a non-cash return to holders of Series X Preferred Stock through additional paid in capital. The discount related to the beneficial conversion feature is recognized through the earliest possible date of conversion, which occurred upon the shareholder approval of the conversion in June 2021. The issuance costs are recognized as a dividend at the time of conversion to common shares. As of June 30, 2021, $24.4 million of the above amounts were accounted for as a non-cash return related to shares of Series X Preferred Stock. |
Recent Accounting Pronouncements - Not Yet Adopted | Recent Accounting Pronouncements - Not Yet Adopted From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses smaller reporting companies, early adoption is permitted. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements. |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Company’s 2020 Annual Report on Form 10-K, and there were no significant changes to such policies in the three and six months ended June 30, 2021 that had a material impact on the Company’s results of operations or financial position. |
Organization and Operations (Ta
Organization and Operations (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Organization and Operations | |
Schedule of common stock warrants outstanding | As a result of the Quellis Acquisition and the February 2021 Financing, in 2021 the Company issued the following Series X Preferred Stock or warrants to purchase Series X Preferred Stock: Series X Common Stock Preferred Issuable Upon Stock at Conversion at Transaction Transaction Date Date Outstanding shares issued in merger 50,504 50,504,000 Outstanding shares issued in February 2021 Financing 35,573 35,573,000 Warrants assumed in merger 2,805 2,805,000 Total 88,882 88,882,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of anti-dilutive common stock equivalents excluded from calculation of diluted net loss per share | Three and Six Months Ended June 30, 2021 2020 Series X Preferred Stock (1) 32,545,203 — Stock options 7,930,334 1,301,262 Common stock warrants 9,183,885 6,193,749 49,659,422 7,495,011 (1) Shown as common stock equivalents |
Schedule of reconciliation of cash, cash equivalents and restricted cash | The reconciliation of cash, cash equivalents and restricted cash reported within the applicable balance sheet that sum to the total of the same such amount shown in the statement of cash flows is as follows (in thousands): June 30, 2021 2020 Cash and cash equivalents $ 139,520 $ 51,885 Restricted cash (1) 121 235 Total $ 139,641 $ 52,120 (1) Included in prepaid expenses and other current assets and other assets. |
Acquisition of Quellis (Tables)
Acquisition of Quellis (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Acquisition of Quellis | |
Schedule of net assets acquired | The following table summarizes the net assets acquired based on their estimated fair values as of January 28, 2021 (in thousands): Acquired IPR&D $ 164,612 Cash and cash equivalents 8,307 Prepaid expenses and other assets 136 Accounts payable (1,974) Accrued liabilities (400) Net acquired tangible assets $ 170,681 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Financial Instruments | |
Schedule of assets and liabilities measured fair value on recurring basis | Below is a summary of assets and liabilities measured at fair value on a recurring basis (in thousands): As of June 30, 2021 Quoted Prices Significant Significant in Active Observable Unobservable Markets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents: Money market funds $ 1,841 $ — $ — $ 1,841 Reverse repurchase agreements — 39,000 — 39,000 Total assets $ 1,841 $ 39,000 $ — $ 40,841 As of December 31, 2020 Quoted Prices Significant Significant in Active Observable Unobservable Markets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents: Money market funds $ 22,999 $ — $ — $ 22,999 Short-term investments: Reverse repurchase agreements — 20,000 — 20,000 Total assets $ 22,999 $ 20,000 $ — $ 42,999 |
Summary of warrant liability was valued based on significant inputs not observable in the market, which represents a Level 3 | The Company estimated the fair value of the warrant liability using Black-Scholes option-pricing models and assumptions that are based on the individual characteristics of the warrants on the valuation date, as well as assumptions including the fair value per share of the underlying security, the remaining contractual term of the warrant, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying security (in thousands). June 30, 2021 Balance at beginning of year $ — Issuance of warrants 4,332 (Decrease) increase in the fair value of the warrants $ (864) Reclassification of warrant liability to additional paid-in capital (3,468) Ending balance $ — |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Short-Term Investments | |
Schedule of short term investments | The Company did not hold any short-term investments at June 30, 2021. The following table summarizes the short-term investments held at December 31, 2020 (in thousands): Gross Unrealized Gross Unrealized Amortized Cost Gains Losses Fair Value December 31, 2020 Reverse repurchase agreements $ 20,000 $ — $ — $ 20,000 Total $ 20,000 $ — $ — $ 20,000 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accrued Expenses | |
Schedule of accrued expenses | Accrued expenses consisted of the following (in thousands): June 30, December 31, 2021 2020 Accrued compensation $ 1,018 $ 1,719 Accrued contracted research costs 790 1,726 Accrued professional fees 663 356 Accrued other 180 — Accrued severance 63 396 Total $ 2,714 $ 4,197 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Stockholders' Equity | |
Summary of Series X preferred stock or warrants to purchase | The following table presents information about warrants that are issued and outstanding at June 30, 2021: Year Issued Equity Instrument Warrants Outstanding Exercise Price Date of Expiration 2014 Common Stock 1,227 $ 122.12 8/26/2021 2015 Common Stock 1,227 $ 122.12 3/30/2022 2018 Common Stock 4,199,995 $ 12.00 6/21/2023 2019 Common Stock 1,991,300 $ 6.25 2/7/2024 2021 Common Stock 2,990,136 $ 0.35 12/14/2030 Total 9,183,885 Weighted average exercise price $ 6.99 Weighted average life in years 4.55 |
Reserved For Future Issuance (T
Reserved For Future Issuance (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Reserved for Future Issuance | |
Schedule of common stock reserved for future issuance | June 30, December 31, 2021 2020 Warrants for the purchase of common stock 9,183,885 6,193,749 Options outstanding to purchase common stock 7,930,334 1,367,667 Options available for future issuance to purchase common stock 1,697,308 1,936,173 Shares reserved for the employee stock purchase plan 185,421 148,951 Total 18,996,948 9,646,540 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Stock Incentive Plans | |
Summary of stock option activity | Weighted Average Weighted- Remaining Aggregate Average Exercise Contractual Intrinsic Value Shares Price Term (years) (in thousands) Outstanding at December 31, 2020 1,367,667 $ 11.38 8.13 $ — Granted 6,447,000 $ 2.74 Assumed in Quellis Acquisition 332,494 $ 0.29 Cancelled or forfeited (208,152) $ 8.71 Expired (8,675) $ 16.70 Outstanding at June 30, 2021 7,930,334 $ 3.96 9.44 $ 662 Vested and exercisable at June 30, 2021 770,141 $ 14.07 7.31 $ 207 |
Organization and Operations - A
Organization and Operations - Agreement and Plan of Merger (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 28, 2021 | Jun. 30, 2021 | Jun. 02, 2021 | Dec. 31, 2020 |
Agreement and Plan of Merger | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Series X redeemable convertible preferred stock | ||||
Agreement and Plan of Merger | ||||
Issuance of preferred stock upon acquisition of Quellis (in shares) | 50,504 | |||
Common Stock | ||||
Agreement and Plan of Merger | ||||
Shares issued on acquisition (in shares) | 3,332,669 | |||
Common Stock | Series X redeemable convertible preferred stock | ||||
Agreement and Plan of Merger | ||||
Warrants to purchase number of shares | 2,805,000 | |||
Exercise Price (in dollars per share) | $ 0.35 | |||
Quellis Biosciences, Inc | Series X redeemable convertible preferred stock | ||||
Agreement and Plan of Merger | ||||
Issuance of preferred stock upon acquisition of Quellis (in shares) | 50,504 | |||
Conversion value on closing date | $ 122.7 | |||
Warrants to purchase number of shares | 2,805 | |||
Exercise Price (in dollars per share) | $ 341.70 | |||
Quellis Biosciences, Inc | Common Stock | ||||
Agreement and Plan of Merger | ||||
Shares issued on acquisition (in shares) | 3,332,669 | |||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Number of options assumed in Quellis Acquisition | 332,494 | |||
Warrants to purchase number of shares | 185,136 | |||
Exercise Price (in dollars per share) | $ 0.35 |
Organization and Operations - S
Organization and Operations - Stock Purchase Agreement and Series X Preferred Stock (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 02, 2021 | Jan. 28, 2021 | Jun. 30, 2021 | Feb. 28, 2021 | Dec. 31, 2020 |
Stock Purchase Agreement and Series X Preferred Stock | ||||||
Net proceeds from issuance of private placement | $ 104,261 | |||||
Series X Preferred Stock at Transaction Date | 88,882 | |||||
Common Stock Issuable Upon Conversion at Transaction Date | 88,882,000 | |||||
Percentage of beneficial ownership initially, after conversion | 9.99% | 9.99% | ||||
Minimum | ||||||
Stock Purchase Agreement and Series X Preferred Stock | ||||||
Percentage of beneficial ownership thereafter, after conversion | 4.99% | 4.99% | ||||
Maximum | ||||||
Stock Purchase Agreement and Series X Preferred Stock | ||||||
Percentage of beneficial ownership thereafter, after conversion | 19.99% | 19.99% | ||||
Quellis Biosciences, Inc | Stock Purchase Agreement | ||||||
Stock Purchase Agreement and Series X Preferred Stock | ||||||
Beneficial conversion feature | $ 19,600 | |||||
Series X redeemable convertible preferred stock | ||||||
Stock Purchase Agreement and Series X Preferred Stock | ||||||
Issuance of preferred stock in a private offering of public equity, net of issuance costs (in shares) | 35,573 | |||||
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 1,000 | 1,000 | ||||
Conversion of preferred stock into common stock (in shares) | 53,532 | |||||
Issuance of common stock upon the conversion of preferred stock (in shares) | 53,531,797 | |||||
Preferred stock, outstanding (in shares) | 32,545 | 32,545 | 0 | |||
Series X redeemable convertible preferred stock | Quellis Biosciences, Inc | ||||||
Stock Purchase Agreement and Series X Preferred Stock | ||||||
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 1,000 | |||||
Series X redeemable convertible preferred stock | Quellis Biosciences, Inc | Stock Purchase Agreement | ||||||
Stock Purchase Agreement and Series X Preferred Stock | ||||||
Issuance of preferred stock in a private offering of public equity, net of issuance costs (in shares) | 35,573 | |||||
Gross proceeds from issuance of preferred stock in a private offering | $ 110,000 | |||||
Net proceeds from issuance of private placement | 104,300 | |||||
Issuance costs | $ 5,700 | |||||
Outstanding shares issued in merger | ||||||
Stock Purchase Agreement and Series X Preferred Stock | ||||||
Series X Preferred Stock at Transaction Date | 50,504 | |||||
Common Stock Issuable Upon Conversion at Transaction Date | 50,504,000 | |||||
Outstanding shares issued in February 2021 Financing | ||||||
Stock Purchase Agreement and Series X Preferred Stock | ||||||
Series X Preferred Stock at Transaction Date | 35,573 | |||||
Common Stock Issuable Upon Conversion at Transaction Date | 35,573,000 | |||||
Warrants assumed in merger | ||||||
Stock Purchase Agreement and Series X Preferred Stock | ||||||
Series X Preferred Stock at Transaction Date | 2,805 | |||||
Common Stock Issuable Upon Conversion at Transaction Date | 2,805,000 |
Organization and Operations - J
Organization and Operations - January 2020 Financing (Details) - January 2020 Financing $ / shares in Units, $ in Millions | 1 Months Ended |
Jan. 31, 2020USD ($)$ / sharesshares | |
January 2020 Financing | |
Gross proceeds from sale of stock in public offering | $ | $ 26.5 |
Proceeds from public offering, net of issuance costs | $ | $ 24.6 |
Common Stock | |
January 2020 Financing | |
Number of shares issued | shares | 5,290,000 |
Share price (in dollars per share) | $ / shares | $ 5 |
Oppenheimer & Co. Inc | |
January 2020 Financing | |
Number of shares issued | shares | 690,000 |
Organization and Operations - L
Organization and Operations - Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Common Stock | ||||
Accumulated deficit | $ (438,447) | $ (260,897) | ||
Cash and cash equivalents | $ 51,885 | $ 139,520 | $ 51,885 | $ 24,930 |
Cowen | ||||
Common Stock | ||||
Percentage of commission paid to underwriter based on proceeds from common stock | 3.00% | |||
Jefferies | ||||
Common Stock | ||||
Remaining available under sales agreement | $ 25,000 | |||
Jefferies | ATM | ||||
Common Stock | ||||
Maximum aggregate value of common shares which can be issued under the agreement | 25,000 | |||
Common Stock | ||||
Common Stock | ||||
Issuance of common stock for at-the-market offerings (in shares) | 926,429 | 1,100,001 | ||
Common Stock | ATM | ||||
Common Stock | ||||
Issuance of common stock for at-the-market offerings (in shares) | 1,100,001 | |||
Share price (in dollars per share) | $ 6.87 | $ 6.87 | ||
Proceeds from public offering, net of issuance costs | $ 7,300 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Net Loss Per Share (Details) - shares | 3 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive common stock equivalents excluded from computation of diluted net loss per share | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares) | 49,659,422 | 7,495,011 |
Series X Preferred Stock | ||
Antidilutive common stock equivalents excluded from computation of diluted net loss per share | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares) | 32,545,203 | |
Stock options | ||
Antidilutive common stock equivalents excluded from computation of diluted net loss per share | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares) | 7,930,334 | 1,301,262 |
Warrants for the purchase of common stock | ||
Antidilutive common stock equivalents excluded from computation of diluted net loss per share | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares) | 9,183,885 | 6,193,749 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Summary of Significant Accounting Policies | ||||
Cash and cash equivalents | $ 139,520 | $ 24,930 | $ 51,885 | |
Restricted cash | 121 | 235 | ||
Total | $ 139,641 | $ 25,051 | $ 52,120 | $ 10,376 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Preferred Stock Discount (Details) - Private Placement - Series X redeemable convertible preferred stock $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Antidilutive Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share | |
Beneficial conversion feature | $ 19.6 |
Issuance costs | 5.7 |
Non cash return | $ 24.4 |
Acquisition of Quellis (Details
Acquisition of Quellis (Details) - USD ($) $ in Thousands | Jun. 02, 2021 | Jan. 28, 2021 | Jun. 30, 2021 |
Common Stock | |||
Acquisition of Quellis | |||
Issuance of common stock upon acquisition of Quellis (in shares) | 3,332,669 | ||
Quellis Biosciences, Inc | |||
Acquisition of Quellis | |||
Cost to acquire the assets | $ 170,681 | ||
Acquisition costs | $ 1,800 | ||
Quellis Biosciences, Inc | Common Stock | |||
Acquisition of Quellis | |||
Issuance of common stock upon acquisition of Quellis (in shares) | 3,332,669 | ||
Series X redeemable convertible preferred stock | |||
Acquisition of Quellis | |||
Issuance of preferred stock upon acquisition of Quellis (in shares) | 50,504 | ||
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 1,000 | 1,000 | |
Series X redeemable convertible preferred stock | Quellis Biosciences, Inc | |||
Acquisition of Quellis | |||
Issuance of preferred stock upon acquisition of Quellis (in shares) | 50,504 | ||
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 1,000 |
Acquisition of Quellis - Net as
Acquisition of Quellis - Net assets acquired based on their estimated fair values (Details) - Quellis Biosciences, Inc $ in Thousands | Jan. 28, 2021USD ($) |
Acquisition of Quellis | |
Acquired IPR&D | $ 164,612 |
Cash and cash equivalents | 8,307 |
Prepaid expenses and other assets | 136 |
Accounts payable | (1,974) |
Accrued liabilities | (400) |
Net acquired tangible assets | $ 170,681 |
Financial Instruments - Fair va
Financial Instruments - Fair value hierarchy (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | |
Financial Instruments | |||
Fair value assets, transfers from Level 1 to Level 2 | $ 0 | $ 0 | |
Fair value assets, transfers from Level 2 to Level 1 | 0 | 0 | |
Fair value liabilities, transfers from Level 1 to Level 2 | 0 | 0 | |
Fair value liabilities, transfers from Level 2 to Level 1 | $ 0 | $ 0 | |
Reverse repurchase agreements | Government Securities and Obligations | Minimum | |||
Financial Instruments | |||
Percentage of investment amount to collateralized deposits value | 102.00% | ||
Recurring | |||
Assets: | |||
Total assets | $ 40,841 | $ 42,999 | |
Recurring | Level 1 | |||
Assets: | |||
Total assets | 1,841 | 22,999 | |
Recurring | Level 2 | |||
Assets: | |||
Total assets | 39,000 | 20,000 | |
Recurring | Money market fund | |||
Assets: | |||
Cash and cash equivalents | 1,841 | 22,999 | |
Recurring | Money market fund | Level 1 | |||
Assets: | |||
Cash and cash equivalents | 1,841 | 22,999 | |
Recurring | Reverse repurchase agreements | |||
Assets: | |||
Cash and cash equivalents | 39,000 | ||
Short-term investments | 20,000 | ||
Recurring | Reverse repurchase agreements | Level 2 | |||
Assets: | |||
Cash and cash equivalents | $ 39,000 | ||
Short-term investments | $ 20,000 |
Financial Instruments - Warrant
Financial Instruments - Warrant liability (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Derivative warrant liability was valued based on significant inputs not observable in the market, which represents a Level 3 | |
Beginning balance | $ 0 |
Issuance of warrants | 4,332 |
(Decrease) increase in the fair value of the warrants | (864) |
Reclassification of warrant liability to additional paid-in capital | (3,468) |
Ending balance | $ 0 |
Short-Term Investments (Details
Short-Term Investments (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)instrument | |
Short-Term Investments | |
Amortized Cost | $ 20,000 |
Fair Value | $ 20,000 |
Number of short term investments in unrealized loss position | instrument | 0 |
Reverse repurchase agreements | |
Short-Term Investments | |
Amortized Cost | $ 20,000 |
Fair Value | $ 20,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accrued Expenses | ||
Accrued compensation | $ 1,018 | $ 1,719 |
Accrued contracted research costs | 790 | 1,726 |
Accrued professional fees | 663 | 356 |
Accrued other | 180 | |
Accrued severance | 63 | 396 |
Total | $ 2,714 | $ 4,197 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Preferred Stock | ||
Preferred stock, authorized (in shares) | 5,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Series X redeemable convertible preferred stock | ||
Preferred Stock | ||
Preferred stock, authorized (in shares) | 37,848 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, outstanding (in shares) | 32,545 | 0 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Warrants (Details) - Warrants for the purchase of common stock | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Common Stock Warrants | |
Warrants Outstanding (in shares) | shares | 9,183,885 |
Weighted Average | |
Common Stock Warrants | |
Exercise Price (in dollars per share) | $ / shares | $ 6.99 |
Weighted average life (in years) | 4 years 6 months 18 days |
Warrants Issued in 2014 | |
Common Stock Warrants | |
Warrants Outstanding (in shares) | shares | 1,227 |
Exercise Price (in dollars per share) | $ / shares | $ 122.12 |
Warrants Issued in 2015 | |
Common Stock Warrants | |
Warrants Outstanding (in shares) | shares | 1,227 |
Exercise Price (in dollars per share) | $ / shares | $ 122.12 |
Warrants Issued in 2018 | |
Common Stock Warrants | |
Warrants Outstanding (in shares) | shares | 4,199,995 |
Exercise Price (in dollars per share) | $ / shares | $ 12 |
Warrants Issued in 2019 | |
Common Stock Warrants | |
Warrants Outstanding (in shares) | shares | 1,991,300 |
Exercise Price (in dollars per share) | $ / shares | $ 6.25 |
Warrants Issued In 2021 | |
Common Stock Warrants | |
Warrants Outstanding (in shares) | shares | 2,990,136 |
Exercise Price (in dollars per share) | $ / shares | $ 0.35 |
Reserved for Future Issuance (D
Reserved for Future Issuance (Details) - shares | Jun. 02, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Common Stock | |||
Number of shares reserved for future issuance | 18,996,948 | 9,646,540 | |
Warrants for the purchase of common stock | |||
Common Stock | |||
Number of shares reserved for future issuance | 9,183,885 | 6,193,749 | |
Options outstanding to purchase Common Stock | |||
Common Stock | |||
Number of shares reserved for future issuance | 7,930,334 | 1,367,667 | |
Options available for future issuance to purchase Common Stock | |||
Common Stock | |||
Number of shares reserved for future issuance | 1,697,308 | 1,936,173 | |
Shares reserved for the employee stock purchase plan | |||
Common Stock | |||
Number of shares reserved for future issuance | 185,421 | 148,951 | |
Series X redeemable convertible preferred stock | |||
Common Stock | |||
Preferred stock, outstanding (in shares) | 32,545 | 0 | |
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 1,000 | 1,000 |
Stock Incentive Plans (Details)
Stock Incentive Plans (Details) - Stock options - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Shares | |||||
Outstanding, beginning of period (in shares) | 1,367,667 | ||||
Granted (in shares) | 6,447,000 | ||||
Assumed in Quellis Acquisition (in shares) | 332,494 | ||||
Cancelled or forfeited (in shares) | (208,152) | ||||
Expired (in shares) | (8,675) | ||||
Outstanding, end of period (in shares) | 7,930,334 | 7,930,334 | 1,367,667 | ||
Vested and exercisable (in shares) | 770,141 | 770,141 | |||
Weighted-Average Exercise Price | |||||
Outstanding, beginning of period (in dollars per share) | $ 11.38 | ||||
Granted (in dollars per share) | 2.74 | ||||
Assumed in Quellis Acquisition (in dollars per share) | 0.29 | ||||
Cancelled or forfeited (in dollars per share) | 8.71 | ||||
Expired (in dollars per share) | 16.70 | ||||
Outstanding at end of year (in dollars per share) | $ 3.96 | 3.96 | $ 11.38 | ||
Vested and Exercisable (in dollars per share) | $ 14.07 | $ 14.07 | |||
Weighted Average Remaining Contractual Term (years) | |||||
Outstanding | 9 years 5 months 8 days | 8 years 1 month 17 days | |||
Vested and Exercisable | 7 years 3 months 21 days | ||||
Aggregate Intrinsic Value | |||||
Outstanding | $ 662,000 | $ 662,000 | |||
Vested and Exercisable | $ 207,000 | $ 207,000 | |||
Stock Incentive Plans | |||||
Exercised (in shares) | 0 | 0 | 0 | 0 | |
Aggregate fair value of options vested | $ 400,000 | $ 0.3 | $ 1,000,000 | $ 800,000 | |
Weighted average grant date fair value of options granted (in dollars per share) | $ 1.73 | $ 4 | $ 1.73 | $ 3.64 | |
Unrecognized compensation expense related to unvested stock option awards | $ 12,700,000 | $ 12,700,000 | |||
Weighted-average amortization period over which cost is expected to be recognized | 3 years 3 months 18 days |
Subsequent Events (Details)
Subsequent Events (Details) | Aug. 04, 2021 |
Subsequent Events. | |
Subsequent Events | |
Reverse stock split ratio | 0.167 |