Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 04, 2022 | Jun. 30, 2021 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity File Number | 001-37467 | ||
Entity Registrant Name | Astria Therapeutics, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 26-3687168 | ||
Entity Address, Address Line One | 100 High Street | ||
Entity Address, Address Line Two | 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 | ATXS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | 13,016,955 | ||
Entity Public Float | $ 129,863,570 | ||
Entity Central Index Key | 0001454789 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | Boston, Massachusetts |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 86,508 | $ 24,930 |
Short-term investments | 39,000 | 20,000 |
Prepaid expenses and other current assets | 1,567 | 1,395 |
Total current assets | 127,075 | 46,325 |
Right-of-use asset | 394 | 966 |
Other assets | 45 | 165 |
Total assets | 127,514 | 47,456 |
Current liabilities: | ||
Accounts payable | 1,557 | 1,544 |
Accrued expenses | 3,281 | 4,197 |
Current portion of operating lease liabilities | 365 | 649 |
Total current liabilities | 5,203 | 6,390 |
Long-term portion of operating lease liabilities | 397 | |
Total liabilities | 5,203 | 6,787 |
Commitments (Note 7) | ||
Stockholders' equity: | ||
Preferred Stock | ||
Common stock, $0.001 par value per share, 150,000,000 shares authorized; 13,016,955 and 3,347,386 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively | 13 | 4 |
Additional paid-in capital | 481,709 | 301,562 |
Accumulated other comprehensive loss | ||
Accumulated deficit | (455,809) | (260,897) |
Total stockholders' equity | 122,311 | 40,669 |
Total liabilities and stockholders' equity | 127,514 | $ 47,456 |
Series X redeemable convertible preferred stock | ||
Stockholders' equity: | ||
Preferred Stock | $ 96,398 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 5,000,000 | |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
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) | 13,016,955 | 3,347,386 |
Common stock, outstanding (in shares) | 13,016,955 | 3,347,386 |
Preferred shares | ||
Preferred stock, authorized (in shares) | 4,908,620 | 4,908,620 |
Series X redeemable convertible preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 91,380 | 91,380 |
Preferred stock, issued (in shares) | 31,455 | 0 |
Preferred stock, outstanding (in shares) | 31,455 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating expenses: | ||
Research and development | $ 15,552 | $ 25,590 |
General and administrative | 14,807 | 11,845 |
Acquired in-process research and development | 164,617 | |
Total operating expenses | 194,976 | 37,435 |
Loss from operations | (194,976) | (37,435) |
Other income (expense): | ||
Interest and investment income | 122 | 236 |
Other expense, net | (58) | (101) |
Total other income, net | 64 | 135 |
Net loss | (194,912) | (37,300) |
Dividend on convertible preferred stock related to beneficial conversion feature and issuance costs | (24,437) | |
Net loss attributable to common shareholders | $ (219,349) | $ (37,300) |
Net loss per share - basic | $ (24.58) | $ (12.20) |
Net loss per share - diluted | $ (24.58) | $ (12.20) |
Weighted-average common shares outstanding used in net loss per share - basic | 8,925,173 | 3,058,578 |
Weighted-average common shares outstanding used in net loss per share - diluted | 8,925,173 | 3,058,578 |
Consolidated Statements Compreh
Consolidated Statements Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements Comprehensive Loss | ||
Net loss | $ (194,912) | $ (37,300) |
Other comprehensive income: | ||
Gain on short-term investments | 0 | 0 |
Total other comprehensive income: | 0 | 0 |
Comprehensive loss | $ (194,912) | $ (37,300) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Preferred StockSeries X Preferred Stock | Common stock | Additional Paid-in Capital | Deficit Accumulated | Series X Preferred Stock | Total |
Balance, beginning of period at Dec. 31, 2019 | $ 2 | $ 259,315 | $ (223,597) | $ 35,720 | ||
Balance, beginning of period (in shares) at Dec. 31, 2019 | 2,072,266 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of stock, net of issuance costs | $ 1 | 24,558 | 24,559 | |||
Issuance of stock, net of issuance costs (in shares) | 881,666 | |||||
Issuance of common stock for at-the-market offerings, net of issuance costs | 16,268 | 16,268 | ||||
Issuance of common stock for at-the-market offerings, net of issuance costs (in shares) | 392,288 | |||||
Proceeds from exercises of options | $ 1 | 31 | 32 | |||
Proceeds from exercises of options (in shares) | 1,166 | |||||
Stock-based compensation expense | 1,390 | 1,390 | ||||
Net loss | (37,300) | (37,300) | ||||
Balance, end of period at Dec. 31, 2020 | $ 4 | 301,562 | (260,897) | $ 40,669 | ||
Balance, end of period (in shares) at Dec. 31, 2020 | 3,347,386 | 3,347,386 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of stock, net of issuance costs | $ 84,696 | 19,565 | $ 104,261 | |||
Issuance of stock, net of issuance costs (in shares) | 35,573 | |||||
Issuance of preferred stock and common stock upon acquisition of Quellis | $ 156,185 | 8,098 | 164,283 | |||
Issuance of common stock upon acquisition of Quellis (in shares) | 50,504 | 555,444 | ||||
Issuance of common stock upon the conversion of preferred stock | $ (168,920) | $ 9 | 168,911 | |||
Issuance of common stock upon the conversion of preferred stock (in shares) | (54,622) | 9,103,664 | 9,103,664 | |||
Fair value adjustment to acquired Quellis warrants | 1,157 | 1,157 | ||||
Accretion of preferred stock discount | $ 24,437 | (24,437) | ||||
Proceeds from exercises of options | 23 | $ 23 | ||||
Proceeds from exercises of options (in shares) | 10,470 | 10,470 | ||||
Reclassification of equity classified warrants | 3,468 | $ 3,468 | ||||
Fractional shares eliminated pursuant to reverse stock split | (9) | |||||
Stock-based compensation expense | 3,362 | 3,362 | ||||
Net loss | (194,912) | (194,912) | ||||
Balance, end of period at Dec. 31, 2021 | $ 96,398 | $ 13 | $ 481,709 | $ (455,809) | $ 122,311 | |
Balance, end of period (in shares) at Dec. 31, 2021 | 31,455 | 13,016,955 | 13,016,955 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Issuance of common stock and warrants in public offering | |
Issuance costs | $ 1.9 |
ATM | |
Issuance costs | $ 0.5 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities | ||
Net loss | $ (194,912) | $ (37,300) |
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 | 3,362 | 1,390 |
Net gain on warrants inherited in acquisiton of Quellis | 71 | |
Other non-cash items | 21 | 58 |
Changes in assets and liabilities: | ||
Prepaid expenses and other assets | 85 | 1,257 |
Right-of-use asset-operating | (109) | 176 |
Accounts payable | (1,965) | 347 |
Accrued expenses | (1,316) | 1,587 |
Net cash used in operating activities | (30,151) | (32,485) |
Investing activities | ||
Purchases of short-term investments | (78,000) | (62,777) |
Sales and maturities of short-term investments | 59,000 | 69,110 |
Cash acquired in acquisition of Quellis | 6,466 | |
Purchases of property and equipment | (21) | (33) |
Net cash provided by investing activities | (12,555) | 6,300 |
Financing activities | ||
Proceeds from underwritten public offering, 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 | 16,270 | |
Proceeds from exercise of common stock options | 23 | 31 |
Net cash provided by financing activities | 104,284 | 40,860 |
Net increase in cash, cash equivalents and restricted cash | 61,578 | 14,675 |
Cash, cash equivalents and restricted cash, beginning of period | 25,051 | 10,376 |
Cash, cash equivalents and restricted cash, end of period | 86,629 | $ 25,051 |
Supplemental disclosure of non-cash transactions: | ||
Conversion of Series X Preferred Stock into common stock | 168,920 | |
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 | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Operations | |
Organization and Operations | Astria Therapeutics, Inc. Notes to Consolidated Financial Statements 1. Organization and Operations The Company Astria Therapeutics, Inc. (the “Company”), formerly known as Catabasis Pharmaceuticals, Inc., 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 that are affected by rare and niche allergic and immunological diseases. 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 STAR-0215 (formerly known as 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. Reverse Stock Split On August 19, 2021, the Company effected a reverse stock split of its outstanding shares of common stock at a ratio of one Agreement and Plan of Merger On January 28, 2021, the Company acquired Quellis (the “Quellis Acquisition”). Under the terms of that certain agreement and plan of merger, dated January 28, 2021 (the “Merger Agreement”), the Company issued to the stockholders of Quellis 555,444 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 55,414 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 30,856 shares of the Company’s common stock at an exercise price of $2.10 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 467,500 shares of the Company’s common stock, at a per share exercise price of $2.10 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”). Each share of Series X Preferred Stock is convertible into 166.67 shares of common stock. 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, the Company issued the following Series X Preferred Stock or warrants to purchase Series X Preferred Stock: Series X Preferred Stock at Transaction Date Shares issued in merger 50,504 Shares issued in February 2021 Financing 35,573 Warrants assumed in merger 2,805 Total 88,882 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 166.67 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 (as of December 31, 2021, these percentages are set at 4.99% to 9.99% and can be adjusted 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 December 31, 2021, 54,622 shares of Series X Preferred Stock were converted into 9,103,664 shares of common stock and 31,455 shares of Series X Preferred Stock remained outstanding. Each share of Series X Preferred Stock is convertible into 166.67 shares of common stock. At December 31, 2021, the number of shares of common stock issuable upon conversion of the remaining outstanding shares of Series X Preferred Stock is 5,242,501. 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”). 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 881,666 shares of common stock at a price to the public of $30.00 per share, including 115,000 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 year ended December 31, 2020, the Company sold an aggregate of 392,288 shares of common stock pursuant to the ATM Programs, at an average price of $42.76 per share, for net proceeds of $16.3 million after deducting sales commissions and offering expenses. There was no activity from the ATM Programs during the year ended December 31, 2021. As of December 31, 2021, the Company had an accumulated deficit of $455.8 million and had available cash, cash equivalents and short-term investments $125.5 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 | 12 Months Ended |
Dec. 31, 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 consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Astria Securities Corporation and Quellis Biosciences, LLC, successor in interest to Quellis. All intercompany balances and transactions have been eliminated in consolidation. These consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the 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 service providers. Off-Balance Sheet Risk and Concentrations of Credit Risk The Company has no off-balance sheet risk, such as foreign exchange contracts, option contracts or other foreign hedging arrangements. Financial instruments that subject the Company to credit risk primarily consist of cash, cash equivalents, short-term investments and restricted cash. The primary objectives for the Company’s investment portfolio are the preservation of capital and the maintenance of liquidity. The Company’s investment policy includes guidelines on the quality of the institutions and financial instruments and defines allowable investments that the Company believes minimizes the exposure to concentration of credit risk. Cash and 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): December 31, 2021 2020 Cash and cash equivalents $ 86,508 $ 24,930 Restricted cash (1) 121 121 Total $ 86,629 $ 25,051 (1) Included in prepaid expenses and other current assets at December 31, 2021 and other long-term assets at December 31, 2020. Short-Term Investments The Company classifies all corporate debt securities with a remaining maturity of greater than three months and reverse repurchase agreements with a remaining maturity of greater than one business day at the time of purchase as short-term investments. Short-term investments are recorded at fair value, with the unrealized gains and losses reported in other comprehensive loss. The amortized cost of debt securities is adjusted for the amortization of premiums and accretion of discounts to maturity. Such amortization is included in interest and investment income. Realized gains and losses, interest, dividends and declines in value judged to be other-than-temporary are included in interest and investment income. The cost of securities sold is based on the specific identification method for purposes of recording realized gains and losses. To determine whether an other-than-temporary impairment exists, the Company considers whether it has the ability and intent to hold the investment until a market price recovery, and whether evidence indicating the recoverability of the cost of the investment outweighs evidence to the contrary. Fair Value of Financial Instruments The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts reflected in the balance sheets for cash equivalents, restricted cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values at December 31, 2021 and 2020, due to their short-term nature. There have been no changes to the valuation methods during the years ended December 31, 2021 and 2020. The Company evaluates transfers between levels at the end of each reporting period. There were no transfers of assets 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 also invests in certain reverse repurchase agreements which are collateralized by deposits in the form of United States Government Securities and Obligations for an amount no less than 102% of their value. The Company does not record an asset or liability for the collateral as the Company is not permitted to sell or re-pledge the collateral. The collateral has at least the prevailing credit rating of United States Government Treasuries and Agencies. The Company utilizes 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, and ASC Topic 480, Distinguishing Liabilities from Equity, and classifies warrants for common stock and preferred stock as liabilities or equity. The warrants classified as liabilities are reported at their estimated fair value and any changes in fair value are reflected in research and development expense. The warrants classified as equity are reported at their estimated fair value with no subsequent remeasurement. Impairment of Long-Lived Assets The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company has not recognized any significant impairment charges from inception through December 31, 2021. Research and Development Expenses Research and development costs are expensed as incurred. Research and development costs include salaries and personnel-related costs, stock-based compensation, consulting fees, fees paid for contract research services, the costs of laboratory equipment and facilities and other external costs. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred. The deferred amounts are expensed as the related goods are delivered or the services are performed. Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation ( For awards subject to service-based vesting conditions, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period. The Company expenses restricted stock awards based on the fair value of the award on a straight-line basis over the associated service period of the award. During the years ended December 31, 2021 and 2020, the Company recorded stock-based compensation expense for employee and non-employee stock options and restricted stock, which was allocated as follows in the statements of operations (in thousands): Year Ended December 31, 2021 2020 Research and development $ 1,132 $ 599 General and administrative 2,230 791 Total $ 3,362 $ 1,390 No related tax benefits were recognized for the years ended December 31, 2021 and 2020. Net Loss Per Share Basic net loss per share is calculated by dividing net loss 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, stock options and warrants to purchase the Company’s common 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: Year Ended December 31, 2021 2020 Stock options 1,346,733 227,945 Common stock warrants 1,530,380 1,032,292 Series X Preferred Stock (1) 5,242,501 — 8,119,614 1,260,236 (1) Shown as common stock equivalents Income Taxes The Company provides deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the Company’s financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. A valuation allowance is provided to reduce the deferred tax assets to the amount that will more likely than not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC Topic 740, Expenses—Income Taxes The Company assesses the impact of various tax reform proposals and modifications to existing tax treaties in all jurisdictions where it has operations to determine the potential effect its business and any assumptions it has made about its future taxable income. The Company cannot predict whether any specific proposals will be enacted, the terms of any such proposals or what effect, if any, such proposals would have on its business if they were to be enacted. Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminates the currently available option to deduct research and development expenditures and requires taxpayers to amortize them over five years. The U.S. Congress is considering legislation that would defer the amortization requirement to future periods, however, the Company has no assurance that the provision will be repealed or otherwise modified. Segment Information Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, the Company’s chief executive officer, in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business in one operating segment. The Company operates in one geographic segment. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) lease assets, current portion of lease obligations, and long-term lease obligations on the Company’s balance sheets. The Company does not currently hold any financing leases. ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s facility leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s ROU lease assets also include any lease payments made and excludes lease incentives. If the Company’s facility lease includes options to terminate the lease which would affect the lease period when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments under facility leases are recognized on a straight-line basis over the lease term. 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 recorded 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 December 31, 2021, $24.4 million of the above amounts were accounted for as a non-cash dividend related to shares of Series X Preferred Stock, and $0.9 million remained to be recognized upon future conversion. Recent Accounting Pronouncements -Adopted In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740) Recent Accounting Pronouncements - Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses |
Acquisition of Quellis
Acquisition of Quellis | 12 Months Ended |
Dec. 31, 2021 | |
Acquisition of Quellis | |
Acquisition of Quellis | 3. Acquisition of Quellis On January 28, 2021, the Company completed the Quellis Acquisition in accordance with the terms of the Merger Agreement as discussed in Note 1, “Organization and Operations”. Under the terms of the Merger Agreement, the Company issued 555,444 shares of common stock and 50,504 shares of Series X Preferred Stock. Each share of Series X Preferred Stock is convertible into 166.67 shares of Common Stock, subject to certain conditions. 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, STAR-0215. 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 STAR-0215 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 year ended December 31, 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 | 12 Months Ended |
Dec. 31, 2021 | |
Financial Instruments | |
Financial Instruments | 4. Financial Instruments The following tables present information about the Company’s financial assets and liabilities that have been measured at fair value, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value. Below is a summary of assets and liabilities measured at fair value on a recurring basis (in thousands): As of December 31, 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 $ 1,853 $ — $ — $ 1,853 Reverse repurchase agreements — — — — Short-term investments: Reverse repurchase agreements — 39,000 — 39,000 Total $ 1,853 $ 39,000 $ — $ 40,853 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 December 31, 2021 and 2020, cash equivalents approximated their fair value due to their short-term nature. In connection with the Quellis Acquisition, the Company issued a warrant to purchase 2,805 shares of Series X Preferred Stock at an exercise price of $341.70 per share. Upon stockholder approval of the Conversion Proposal, and reflecting the reverse stock split, the warrant became a warrant to purchase 467,500 shares of common stock at a purchase price of $2.10. This was originally accounted for as a liability until stockholder approval of the Conversion Proposal on June 2, 2021, at which point the warrant was reclassified to permanent equity. 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). December 31, 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 $ — The fair value of the warrants was based on the following assumptions: Year Ended December 31, 2021 Weighted-average expected volatility 89.1-89.3 % Expected term (in years) 9.54-9.88 Risk-free interest rate 1.064-1.725 % Expected dividend yield 0 % |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Dec. 31, 2021 | |
Short-Term Investments | |
Short-Term Investments | 5. Short-Term Investments The following tables summarize the short-term investments held at December 31, 2021 and 2020 (in thousands): Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value December 31, 2021 Reverse repurchase agreements $ 39,000 $ — $ — $ 39,000 Total $ 39,000 $ — $ — $ 39,000 Gross Gross Unrealized 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, 2021 and 2020 were one year or less. There were no short-term investments in an unrealized loss position at December 31, 2021 and 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 consolidated results of operations. During the years ended December 31, 2021 and 2020 all proceeds included in the Company’s cash flows related to maturities of underlying securities. The gains on proceeds of maturities of short-term investments were not material to the Company’s consolidated results of operations for the years ended December 31, 2021 and 2020. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Expenses | |
Accrued Expenses | 6. Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, December 31, 2021 2020 Accrued compensation $ 1,958 $ 1,719 Accrued contracted costs 760 1,726 Accrued other 295 — Accrued professional fees 268 356 Accrued severance — 396 Total $ 3,281 $ 4,197 |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2021 | |
Commitments | |
Commitments | 7. Commitments In November 2019, the Company entered into a sublease for office space which was classified as an operating lease. At inception of the lease, the Company recognized a lease liability The lease is scheduled to expire in 2022. Future minimum payments required under the non-cancelable operating leases as of December 31, 2021 are $0.4 million. Rent expense was $0.7 million and $0.8 million for the years ended December 31, 2021 and 2020, respectively. Lease payments were $0.7 million and $1.5 million for the years ended December 31, 2021 and 2020, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | 8. 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 December 31, 2021, the Company had 31,455 shares of Series X Preferred Stock outstanding. Each share of Series X Preferred Stock is convertible into 166.67 shares of common stock and therefore the number of shares of underlying common stock issuable upon conversion of the Series X Preferred Stock is 5,242,501. Refer to Note 1 – “Organization and Operations” regarding the Company’s issuance of Series X Preferred Stock in January 2021 and February 2021. Outstanding Warrants The following table presents information about warrants that are issued and outstanding at December 31, 2021: Year Issued Equity Instrument Warrants Outstanding Exercise Price Date of Expiration 2015 Common Stock 204 $ 732.72 3/30/2022 2018 Common Stock 699,962 $ 72.00 6/21/2023 2019 Common Stock 331,858 $ 37.50 2/7/2024 2021 Common Stock 498,356 $ 2.10 12/14/2030 Total 1,530,380 Weighted average exercise price $ 41.84 Weighted average life in years 4.05 Common Stock As of December 31, 2021, the Company had 150,000,000 shares of common stock authorized for issuance, $0.001 par value per share, with 13,016,955 shares issued and outstanding Reserved for Future Issuance The Company has reserved for future issuance the following shares of common stock: December 31, December 31, 2021 2020 Series X Preferred Stock 5,242,501 — Warrants for the purchase of common stock 1,530,380 1,032,291 Options outstanding to purchase common stock 1,346,733 227,846 Options available for future issuance to purchase common stock 1,633,736 322,695 Shares reserved for the employee stock purchase plan 30,904 24,825 Total 9,784,254 1,607,657 As of December 31, 2021, the Company also had 31,455 shares of Series X Preferred Stock outstanding. Each share of Series X Preferred Stock outstanding is convertible into 166.67 shares of the Company’s common stock, subject to certain beneficial ownership limitations at the holder’s option. See Note 1 – “Organization and Operations” for additional detail. |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Dec. 31, 2021 | |
Stock Incentive Plans | |
Stock Incentive Plans | 9. Stock Incentive Plans Prior to the Company’s initial public offering in June 2015 (the “IPO”), the Company granted awards to eligible participants under its 2008 Equity Incentive Plan. In May 2015, the Company’s board of directors adopted and, in June 2015, the Company’s stockholders approved the 2015 Stock Incentive Plan, as amended and amended and restated since the IPO (“2015 Plan”), which became effective immediately prior to the effectiveness of the IPO. Subsequent to the IPO, option grants have been awarded to eligible participants only under the 2015 Plan. The 2015 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The Company’s employees, officers, directors and consultants and advisors are eligible to receive awards under the 2015 Plan. Terms of stock option agreements, including vesting requirements, are determined by the Company’s board of directors, subject to the provisions of the applicable stock incentive plan. Options granted by the Company generally vest ratably over four years, with a one-year cliff, and options are exercisable from the date of grant for a period of ten years. For options granted through December 31, 2021, the exercise price or purchase price, as applicable, equaled the estimated fair value of the common stock as determined by the Company’s board of directors on the date of grant. A summary of the Company’s stock option activity and related information for employees and non-employees follows: Weighted Average Weighted- Remaining Aggregate Average Exercise Contractual Intrinsic Value Shares Price Term (years) (in thousands) Outstanding at December 31, 2020 227,846 $ 68.25 8.13 $ — Granted 1,156,646 $ 15.91 Assumed in Quellis Acquisition 55,414 $ 1.73 Exercised (10,470) $ 2.10 Cancelled or forfeited (81,196) $ 48.13 Expired (1,507) $ 100.85 Outstanding at December 31, 2021 1,346,733 $ 22.25 9.02 $ 168,181 Vested and exercisable at December 31, 2021 135,412 $ 72.76 7.19 $ 77,798 The total intrinsic value of options exercised in the years ended December 31, 2021 and 2020 was $45 thousand and $29 thousand, respectively. The weighted-average grant date fair value of options granted to employees and non-employees for the years ended December 31, 2021 and 2020 was $9.82 and $3.81, respectively. At December 31, 2021, the total unrecognized compensation expense related to unvested stock option awards was $10.8 million. The Company expects to recognize that cost over a weighted-average period of approximately 2.9 years. Stock-Based Compensation Expense The fair value of stock options granted to employees and non-employees was estimated using the Black-Scholes option-pricing model based on the following assumptions: Year Ended December 31, 2021 2020 Weighted-average expected volatility 69.28-71.32% 75.51-82.08% Expected term (in years) 5-6.25 5.50-6.25 Risk-free interest rate 0.42-1.36% 0.37-1.51% Expected dividend yield 0% 0% Volatility Due to the lack of company-specific historical and implied volatility data of its common stock, the Company does not have relevant historical data to support its expected volatility. As such, the Company has used a weighted average of expected volatility based on the volatilities of a representative group of publicly traded biopharmaceutical companies. For purposes of identifying representative companies, the Company considered characteristics such as number of product candidates in early stages of product development, area of therapeutic focus, and length of trading history. The expected volatility was determined using an average of the historical volatilities of the representative group of companies for a period equal to the expected term of the option grant. The Company intends to continue to consistently apply this process using the same representative companies until a sufficient amount of historical information regarding the volatility of the Company’s own share price becomes available or until circumstances change, such that the identified entities are no longer representative companies. In the latter case, more suitable, similar entities whose share prices are publicly available would be utilized in the calculation. Expected Term The Company uses the “simplified method” to estimate the expected term of stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the contractual term (ten years) and the vesting term (generally four years) of the Company’s stock options, taking into consideration multiple vesting tranches. The Company utilizes this method due to lack of historical exercise data and the plain-vanilla nature of the Company’s share-based awards. Risk-Free Rate The risk-free rate was based on the yield curve of United States Treasury securities with periods commensurate with the expected term of the options being valued. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | 10. Income Taxes For the years ended December 31, 2021 and 2020, the Company did not record a provision for federal or state income taxes as it has incurred cumulative net operating losses since inception. A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows for the years ended December 31, 2021 and 2020: Year Ended December 31, 2021 2020 Federal income tax (benefit) at statutory rate 21.00 % 21.00 % Permanent differences (0.25) (0.41) Federal research and development credits and adjustments 0.44 2.78 Nondeductible research costs (17.75) — State income tax, net of federal benefit 0.82 6.03 Other 0.01 0.37 Change in valuation allowance (4.27) (29.77) Effective income tax rate — % — % The Company’s deferred tax assets consisted of the following (in thousands): Year Ended December 31, 2021 2020 Deferred tax assets Net operating loss carryforwards $ 75,849 $ 65,373 Tax credit carryforwards 10,063 9,273 Capitalized research and development 139 482 Capitalized legal expenses 1,048 1,070 Lease liability 99 284 Other differences 1,977 1,648 Total deferred tax assets 89,175 78,130 Deferred tax liabilities ROU asset (107) (262) Valuation allowance (89,068) (77,868) Net deferred tax assets $ — $ — The Company recorded an increase to the valuation allowance of $11.2 million during the year ended December 31, 2021 due primarily to the federal and state net operating losses and tax credits generated. The Company recorded an increase to the valuation allowance of $11.1 million during the year ended December 31, 2020 which was also primarily due to the federal and state net operating losses and tax credits generated. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences representing net future deductible amounts become deductible. Due to the Company’s history of losses and expectation of future losses, the deferred tax assets were fully offset by a valuation allowance at December 31, 2021 and 2020. As of December 31, 2021, the Company had approximately $279.4 million of federal and $271.8 million of state net operating loss respectively, which may be available to offset future taxable income. Federal net operating loss carryforwards of $150.6 million and state net operating loss carryforwards of $271.8 million will expire at various dates from 2028 through 2041. Federal net operating loss carryforwards of $128.8 million can be carried forward indefinitely. The Company had approximately $8.1 million of federal and $2.4 million of state tax credit carryforwards available to reduce future tax liabilities as of December 31, 2021, which will expire at varying times through the year 2041. The Internal Revenue Code of 1986, as amended (the “Code”), provides for a limitation of the annual use of net operating losses and other tax attributes (such as research and development tax credit carryforwards) following certain ownership changes (as defined by the Code) that could limit the Company’s ability to utilize these carryforwards. At this time, the Company has not completed a study to assess whether an ownership change under Section 382 of the Code has occurred, or whether there have been multiple ownership changes since the Company’s formation, due to the costs and complexities associated with such a study. The Company may have experienced various ownership changes, as defined by the Code, as a result of past financing transactions. Accordingly, the Company’s ability to utilize the aforementioned carryforwards may be limited. Additionally, U.S. tax laws limit the time during which these carryforwards may be applied against future taxes. Therefore, the Company may not be able to take full advantage of these carryforwards for federal or state income tax purposes. As of December 31, 2021 and 2020, the Company did not have any significant unrecognized tax benefits. The Company had not accrued interest or penalties related to uncertain tax positions. The federal and state income tax returns are generally subject to tax examinations for the tax years ended December 31, 2018 through December 31, 2021. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state taxing authorities to the extent utilized in a future period. |
Defined Contribution Benefit Pl
Defined Contribution Benefit Plan | 12 Months Ended |
Dec. 31, 2021 | |
Defined Contribution Benefit Plan | |
Defined Contribution Benefit Plan | 11. Defined Contribution Benefit Plan The Company sponsors a 401(k) retirement plan, in which substantially all of its employees are eligible to participate. Participants may contribute a percentage of their annual compensation to this plan, subject to statutory limitations. The Company did not provide any contributions to this plan during the years ended December 31, 2021 or 2020. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events | |
Subsequent Events | 12. Subsequent Events Operating Lease On January 28, 2022, the Company entered into a sublease agreement (the “Sublease”) with Grant Thornton LLP (the “Sublandlord”), for office space. The Sublease will commence on the latest to occur of (i) May 1, 2022, (ii) the receipt of the landlord’s consent to the Sublease and (iii) the date on which the Sublandlord delivers full and exclusive possession of the premises to the Company as set forth in the Sublease and will end on July 31, 2024. The Sublease will increase the future minimum payments described in Note 7 from approximately $0.4 million to approximately $1.8 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Polices (Polices) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Astria Securities Corporation and Quellis Biosciences, LLC, successor in interest to Quellis. All intercompany balances and transactions have been eliminated in consolidation. These consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the 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 service providers. |
Off-Balance Sheet Risk and Concentrations of Credit Risk | Off-Balance Sheet Risk and Concentrations of Credit Risk The Company has no off-balance sheet risk, such as foreign exchange contracts, option contracts or other foreign hedging arrangements. Financial instruments that subject the Company to credit risk primarily consist of cash, cash equivalents, short-term investments and restricted cash. The primary objectives for the Company’s investment portfolio are the preservation of capital and the maintenance of liquidity. The Company’s investment policy includes guidelines on the quality of the institutions and financial instruments and defines allowable investments that the Company believes minimizes the exposure to concentration of credit risk. |
Cash, Cash Equivalents and Restricted Cash | Cash and 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): December 31, 2021 2020 Cash and cash equivalents $ 86,508 $ 24,930 Restricted cash (1) 121 121 Total $ 86,629 $ 25,051 (1) Included in prepaid expenses and other current assets at December 31, 2021 and other long-term assets at December 31, 2020. |
Short-Term Investments | Short-Term Investments The Company classifies all corporate debt securities with a remaining maturity of greater than three months and reverse repurchase agreements with a remaining maturity of greater than one business day at the time of purchase as short-term investments. Short-term investments are recorded at fair value, with the unrealized gains and losses reported in other comprehensive loss. The amortized cost of debt securities is adjusted for the amortization of premiums and accretion of discounts to maturity. Such amortization is included in interest and investment income. Realized gains and losses, interest, dividends and declines in value judged to be other-than-temporary are included in interest and investment income. The cost of securities sold is based on the specific identification method for purposes of recording realized gains and losses. To determine whether an other-than-temporary impairment exists, the Company considers whether it has the ability and intent to hold the investment until a market price recovery, and whether evidence indicating the recoverability of the cost of the investment outweighs evidence to the contrary. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts reflected in the balance sheets for cash equivalents, restricted cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values at December 31, 2021 and 2020, due to their short-term nature. There have been no changes to the valuation methods during the years ended December 31, 2021 and 2020. The Company evaluates transfers between levels at the end of each reporting period. There were no transfers of assets 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 also invests in certain reverse repurchase agreements which are collateralized by deposits in the form of United States Government Securities and Obligations for an amount no less than 102% of their value. The Company does not record an asset or liability for the collateral as the Company is not permitted to sell or re-pledge the collateral. The collateral has at least the prevailing credit rating of United States Government Treasuries and Agencies. The Company utilizes 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, and ASC Topic 480, Distinguishing Liabilities from Equity, and classifies warrants for common stock and preferred stock as liabilities or equity. The warrants classified as liabilities are reported at their estimated fair value and any changes in fair value are reflected in research and development expense. The warrants classified as equity are reported at their estimated fair value with no subsequent remeasurement. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company has not recognized any significant impairment charges from inception through December 31, 2021. |
Research and Development Expenses | Research and Development Expenses Research and development costs are expensed as incurred. Research and development costs include salaries and personnel-related costs, stock-based compensation, consulting fees, fees paid for contract research services, the costs of laboratory equipment and facilities and other external costs. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred. The deferred amounts are expensed as the related goods are delivered or the services are performed. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation ( For awards subject to service-based vesting conditions, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period. The Company expenses restricted stock awards based on the fair value of the award on a straight-line basis over the associated service period of the award. During the years ended December 31, 2021 and 2020, the Company recorded stock-based compensation expense for employee and non-employee stock options and restricted stock, which was allocated as follows in the statements of operations (in thousands): Year Ended December 31, 2021 2020 Research and development $ 1,132 $ 599 General and administrative 2,230 791 Total $ 3,362 $ 1,390 No related tax benefits were recognized for the years ended December 31, 2021 and 2020. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss 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, stock options and warrants to purchase the Company’s common 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: Year Ended December 31, 2021 2020 Stock options 1,346,733 227,945 Common stock warrants 1,530,380 1,032,292 Series X Preferred Stock (1) 5,242,501 — 8,119,614 1,260,236 (1) Shown as common stock equivalents |
Income Taxes | Income Taxes The Company provides deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the Company’s financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. A valuation allowance is provided to reduce the deferred tax assets to the amount that will more likely than not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC Topic 740, Expenses—Income Taxes The Company assesses the impact of various tax reform proposals and modifications to existing tax treaties in all jurisdictions where it has operations to determine the potential effect its business and any assumptions it has made about its future taxable income. The Company cannot predict whether any specific proposals will be enacted, the terms of any such proposals or what effect, if any, such proposals would have on its business if they were to be enacted. Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminates the currently available option to deduct research and development expenditures and requires taxpayers to amortize them over five years. The U.S. Congress is considering legislation that would defer the amortization requirement to future periods, however, the Company has no assurance that the provision will be repealed or otherwise modified. |
Segment Information | Segment Information Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, the Company’s chief executive officer, in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business in one operating segment. The Company operates in one geographic segment. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) lease assets, current portion of lease obligations, and long-term lease obligations on the Company’s balance sheets. The Company does not currently hold any financing leases. ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s facility leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s ROU lease assets also include any lease payments made and excludes lease incentives. If the Company’s facility lease includes options to terminate the lease which would affect the lease period when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments under facility leases are recognized on a straight-line basis over the lease term. |
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 recorded 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 December 31, 2021, $24.4 million of the above amounts were accounted for as a non-cash dividend related to shares of Series X Preferred Stock, and $0.9 million remained to be recognized upon future conversion. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements -Adopted In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740) Recent Accounting Pronouncements - Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses |
Organization and Operations (Ta
Organization and Operations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Operations | |
Schedule of common stock warrants outstanding | Series X Preferred Stock at Transaction Date Shares issued in merger 50,504 Shares issued in February 2021 Financing 35,573 Warrants assumed in merger 2,805 Total 88,882 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
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): December 31, 2021 2020 Cash and cash equivalents $ 86,508 $ 24,930 Restricted cash (1) 121 121 Total $ 86,629 $ 25,051 (1) Included in prepaid expenses and other current assets at December 31, 2021 and other long-term assets at December 31, 2020. |
Schedule of stock-based compensation expense | During the years ended December 31, 2021 and 2020, the Company recorded stock-based compensation expense for employee and non-employee stock options and restricted stock, which was allocated as follows in the statements of operations (in thousands): Year Ended December 31, 2021 2020 Research and development $ 1,132 $ 599 General and administrative 2,230 791 Total $ 3,362 $ 1,390 |
Schedule of anti-dilutive common stock equivalents excluded from calculation of diluted net loss per share | Year Ended December 31, 2021 2020 Stock options 1,346,733 227,945 Common stock warrants 1,530,380 1,032,292 Series X Preferred Stock (1) 5,242,501 — 8,119,614 1,260,236 |
Acquisition of Quellis (Tables)
Acquisition of Quellis (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Acquisition of Quellis | |
Schedule of net assets acquired | 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) | 12 Months Ended |
Dec. 31, 2021 | |
Financial Instruments | |
Schedule of assets and liabilities measured fair value on recurring basis | As of December 31, 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 $ 1,853 $ — $ — $ 1,853 Reverse repurchase agreements — — — — Short-term investments: Reverse repurchase agreements — 39,000 — 39,000 Total $ 1,853 $ 39,000 $ — $ 40,853 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 | December 31, 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 $ — |
Schedule of fair value of the warrants | Year Ended December 31, 2021 Weighted-average expected volatility 89.1-89.3 % Expected term (in years) 9.54-9.88 Risk-free interest rate 1.064-1.725 % Expected dividend yield 0 % |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Short-Term Investments | |
Schedule of short term investments | The following tables summarize the short-term investments held at December 31, 2021 and 2020 (in thousands): Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value December 31, 2021 Reverse repurchase agreements $ 39,000 $ — $ — $ 39,000 Total $ 39,000 $ — $ — $ 39,000 Gross Gross Unrealized 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) | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Expenses | |
Schedule of accrued expenses | Accrued expenses consisted of the following (in thousands): December 31, December 31, 2021 2020 Accrued compensation $ 1,958 $ 1,719 Accrued contracted costs 760 1,726 Accrued other 295 — Accrued professional fees 268 356 Accrued severance — 396 Total $ 3,281 $ 4,197 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Reserved for Future Issuance | |
Schedule of common stock reserved for future issuance | December 31, December 31, 2021 2020 Series X Preferred Stock 5,242,501 — Warrants for the purchase of common stock 1,530,380 1,032,291 Options outstanding to purchase common stock 1,346,733 227,846 Options available for future issuance to purchase common stock 1,633,736 322,695 Shares reserved for the employee stock purchase plan 30,904 24,825 Total 9,784,254 1,607,657 |
Summary of Series X preferred stock or warrants to purchase | The following table presents information about warrants that are issued and outstanding at December 31, 2021: Year Issued Equity Instrument Warrants Outstanding Exercise Price Date of Expiration 2015 Common Stock 204 $ 732.72 3/30/2022 2018 Common Stock 699,962 $ 72.00 6/21/2023 2019 Common Stock 331,858 $ 37.50 2/7/2024 2021 Common Stock 498,356 $ 2.10 12/14/2030 Total 1,530,380 Weighted average exercise price $ 41.84 Weighted average life in years 4.05 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 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 227,846 $ 68.25 8.13 $ — Granted 1,156,646 $ 15.91 Assumed in Quellis Acquisition 55,414 $ 1.73 Exercised (10,470) $ 2.10 Cancelled or forfeited (81,196) $ 48.13 Expired (1,507) $ 100.85 Outstanding at December 31, 2021 1,346,733 $ 22.25 9.02 $ 168,181 Vested and exercisable at December 31, 2021 135,412 $ 72.76 7.19 $ 77,798 |
Schedule of assumptions made based on the Black-Scholes option pricing model | Year Ended December 31, 2021 2020 Weighted-average expected volatility 69.28-71.32% 75.51-82.08% Expected term (in years) 5-6.25 5.50-6.25 Risk-free interest rate 0.42-1.36% 0.37-1.51% Expected dividend yield 0% 0% |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Schedule of reconciliation of U.S. statutory income tax rate to effective tax rate | Year Ended December 31, 2021 2020 Federal income tax (benefit) at statutory rate 21.00 % 21.00 % Permanent differences (0.25) (0.41) Federal research and development credits and adjustments 0.44 2.78 Nondeductible research costs (17.75) — State income tax, net of federal benefit 0.82 6.03 Other 0.01 0.37 Change in valuation allowance (4.27) (29.77) Effective income tax rate — % — % |
Schedule of components of deferred tax assets | The Company’s deferred tax assets consisted of the following (in thousands): Year Ended December 31, 2021 2020 Deferred tax assets Net operating loss carryforwards $ 75,849 $ 65,373 Tax credit carryforwards 10,063 9,273 Capitalized research and development 139 482 Capitalized legal expenses 1,048 1,070 Lease liability 99 284 Other differences 1,977 1,648 Total deferred tax assets 89,175 78,130 Deferred tax liabilities ROU asset (107) (262) Valuation allowance (89,068) (77,868) Net deferred tax assets $ — $ — |
Organization and Operations - R
Organization and Operations - Reverse Stock Split, Agreement and Plan of Merger (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 19, 2021 | Jan. 28, 2021 | Dec. 31, 2021 | Jun. 02, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||||
Reverse stock split ratio | 0.1667 | ||||
Agreement and Plan of Merger | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Number of options assumed in Quellis Acquisition | 55,414 | ||||
Common stock | |||||
Agreement and Plan of Merger | |||||
Issuance of common stock upon acquisition of Quellis (in shares) | 555,444 | ||||
Warrants to purchase number of shares | 467,500 | ||||
Exercise Price (in dollars per share) | $ 2.10 | ||||
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 | |||||
Issuance of common stock upon acquisition of Quellis (in shares) | 555,444 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Number of options assumed in Quellis Acquisition | 55,414 | ||||
Warrants to purchase number of shares | 30,856 | ||||
Exercise Price (in dollars per share) | $ 2.10 |
Organization and Operations - S
Organization and Operations - Stock Purchase Agreement and Series X Preferred Stock (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)shares | Jan. 28, 2021 | Dec. 31, 2020shares | |
Stock Purchase Agreement and Series X Preferred Stock | |||
Net proceeds from issuance of private placement | $ | $ 104,261 | ||
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 166.67 | ||
Preferred stock, outstanding (in shares) | 0 | 0 | |
Minimum | |||
Stock Purchase Agreement and Series X Preferred Stock | |||
Common stock, percentage of beneficial ownership initially, after conversion | 4.99% | ||
Common stock, percentage of beneficial ownership thereafter, after conversion | 4.99% | ||
Maximum | |||
Stock Purchase Agreement and Series X Preferred Stock | |||
Common stock, percentage of beneficial ownership initially, after conversion | 9.99% | ||
Common stock, percentage of beneficial ownership thereafter, after conversion | 19.99% | ||
Series X redeemable convertible preferred stock | |||
Stock Purchase Agreement and Series X Preferred Stock | |||
Series X Preferred Stock at Transaction Date | 88,882 | ||
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 166.67 | ||
Number of Series X preferred shares converted during period | 54,622 | ||
Number of common shares issued from conversion of Series X preferred shares | 9,103,664 | ||
Number of common shares issuable upon conversion of preferred stock (in shares) | 5,242,501 | ||
Preferred stock, outstanding (in shares) | 31,455 | 0 | |
Series X redeemable convertible preferred stock | Shares issued in merger | |||
Stock Purchase Agreement and Series X Preferred Stock | |||
Series X redeemable convertible preferred stock, shares issued | 50,504 | ||
Series X redeemable convertible preferred stock | Shares issued in February 2021 Financing | |||
Stock Purchase Agreement and Series X Preferred Stock | |||
Series X redeemable convertible preferred stock, shares issued | 35,573 | ||
Series X redeemable convertible preferred stock | Warrants assumed in merger | |||
Stock Purchase Agreement and Series X Preferred Stock | |||
Series X Preferred Stock at Transaction Date | 2,805 | ||
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 | 166.67 | ||
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 | ||
Beneficial conversion feature | $ | 19,600 | ||
Issuance costs | $ | $ 5,700 | ||
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 166.67 |
Organization and Operations - J
Organization and Operations - January 2020 Financing (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 30, 2020 | Dec. 31, 2020 |
Common stock | ||
January 2020 Financing | ||
Issuance of stock, net of issuance costs (in shares) | 881,666 | |
January 2020 Financing | ||
January 2020 Financing | ||
Gross proceeds from sale of stock in public offering | $ 26.5 | |
Proceeds from public offering, net of issuance costs | $ 24.6 | |
January 2020 Financing | Common stock | ||
January 2020 Financing | ||
Issuance of stock, net of issuance costs (in shares) | 881,666 | |
Share price (in dollars per share) | $ 30 | |
January 2020 Financing | Oppenheimer & Co. Inc | ||
January 2020 Financing | ||
Issuance of stock, net of issuance costs (in shares) | 115,000 |
Organization and Operations - L
Organization and Operations - Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Common Stock | |||
Accumulated deficit | $ 455,809 | $ 260,897 | |
Cash, Cash Equivalents, and Short-term Investments | 125,500 | ||
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 | ||
Percentage of commission paid to underwriter based on proceeds from common stock | 3.00% | ||
Issuance of common stock for at-the-market offerings, net of issuance costs (in shares) | 0 | ||
Common stock | |||
Common Stock | |||
Issuance of common stock for at-the-market offerings, net of issuance costs (in shares) | 392,288 | ||
Common stock | ATM | |||
Common Stock | |||
Issuance of common stock for at-the-market offerings, net of issuance costs (in shares) | 392,288 | ||
Share price (in dollars per share) | $ 42.76 | ||
Proceeds from public offering, net of issuance costs | $ 16,300 |
Summary of Significant Accoun_4
Summary of Significant Accounting Polices - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Summary of Significant Accounting Policies | |||
Cash and cash equivalents | $ 86,508 | $ 24,930 | |
Restricted cash | 121 | 121 | |
Total | $ 86,629 | $ 25,051 | $ 10,376 |
Summary of Significant Accoun_5
Summary of Significant Accounting Polices - Fair Value of Financial Instruments (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Fair Value of Financial Instruments | |
Fair value assets, transfers from Level 1 to Level 2 | $ 0 |
Fair value assets, transfers from Level 2 to Level 1 | 0 |
Fair value liabilities, transfers from Level 1 to Level 2 | 0 |
Fair value liabilities, transfers from Level 2 to Level 1 | $ 0 |
Reverse repurchase agreements | |
Fair Value of Financial Instruments | |
Percentage of investment amount to collateralized deposits value | 102.00% |
Reverse repurchase agreements | Government Securities and Obligations | Minimum | |
Fair Value of Financial Instruments | |
Percentage of investment amount to collateralized deposits value | 102.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-Based Compensation | ||
Stock-based compensation expense | $ 3,362 | $ 1,390 |
Tax benefits recognized from stock-based compensation expense | 0 | 0 |
Research and development | ||
Stock-Based Compensation | ||
Stock-based compensation expense | 1,132 | 599 |
General and administrative | ||
Stock-Based Compensation | ||
Stock-based compensation expense | $ 2,230 | $ 791 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Net Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 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) | 8,119,614 | 1,260,236 |
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) | 1,346,733 | 227,945 |
Common stock warrants | ||
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) | 1,530,380 | 1,032,292 |
Series X Preferred Stock (1) | ||
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) | 5,242,501 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Segment Information (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Summary of Significant Accounting Policies | |
Number of operating segments | 1 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Preferred Stock Discount (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Feb. 28, 2021 | Dec. 31, 2021 | |
Antidilutive Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share | ||
Conversion of Series X Preferred Stock into common stock | $ 168,920 | |
Series X redeemable convertible preferred stock | ||
Antidilutive Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share | ||
Conversion of Series X Preferred Stock into common stock | 900 | |
Private Placement | Series X redeemable convertible preferred stock | ||
Antidilutive Common Stock Equivalents Excluded from Computation of Diluted Net Loss Per Share | ||
Beneficial conversion feature | $ 19,600 | |
Issuance costs | $ 5,700 | |
Non cash return | $ 24,400 |
Acquisition of Quellis (Details
Acquisition of Quellis (Details) $ in Thousands | Jan. 28, 2021USD ($)shares | Dec. 31, 2021shares |
Acquisition of Quellis | ||
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 166.67 | |
Common stock | ||
Acquisition of Quellis | ||
Issuance of common stock upon acquisition of Quellis (in shares) | 555,444 | |
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) | 555,444 | |
Series X redeemable convertible preferred stock | ||
Acquisition of Quellis | ||
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 166.67 | |
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 | 166.67 | |
Series X redeemable convertible preferred stock | Quellis Biosciences, Inc | Stock Purchase Agreement | ||
Acquisition of Quellis | ||
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 166.67 |
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 (Details)
Financial Instruments (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Summary of assets measured at fair value on a recurring basis | ||
Total assets | $ 40,853 | $ 42,999 |
Level 1 | ||
Summary of assets measured at fair value on a recurring basis | ||
Total assets | 1,853 | 22,999 |
Level 2 | ||
Summary of assets measured at fair value on a recurring basis | ||
Total assets | 39,000 | 20,000 |
Money market funds | ||
Summary of assets measured at fair value on a recurring basis | ||
Cash and cash equivalents | 1,853 | 22,999 |
Money market funds | Level 1 | ||
Summary of assets measured at fair value on a recurring basis | ||
Cash and cash equivalents | 1,853 | 22,999 |
Reverse repurchase agreements | ||
Summary of assets measured at fair value on a recurring basis | ||
Short-term investments | 39,000 | 20,000 |
Reverse repurchase agreements | Level 2 | ||
Summary of assets measured at fair value on a recurring basis | ||
Short-term investments | $ 39,000 | $ 20,000 |
Financial Instruments - Warrant
Financial Instruments - Warrant liability (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Jun. 02, 2021 | Jan. 28, 2021 | |
Derivative warrant liability was valued based on significant inputs not observable in the market, which represents a Level 3 | |||
Beginning balance | $ 0 | ||
Issuance of warrant | 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 | ||
Common stock | |||
Financial Instruments | |||
Number of shares which may be purchased with warrants | 467,500 | ||
Exercise price of warrants (in dollars per share) | $ 2.10 | ||
Quellis Biosciences, Inc | Series X redeemable convertible preferred stock | |||
Financial Instruments | |||
Number of shares which may be purchased with warrants | 2,805 | ||
Exercise price of warrants (in dollars per share) | $ 341.70 | ||
Quellis Biosciences, Inc | Common stock | |||
Financial Instruments | |||
Number of shares which may be purchased with warrants | 30,856 | ||
Exercise price of warrants (in dollars per share) | $ 2.10 |
Financial Instruments - Fair va
Financial Instruments - Fair value of warrants (Details) | Dec. 31, 2021itemY |
Weighted-average expected volatility | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.891 |
Weighted-average expected volatility | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.893 |
Expected term (in years) | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | Y | 9.54 |
Expected term (in years) | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | Y | 9.88 |
Risk-free interest rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.01064 |
Risk-free interest rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.01725 |
Expected dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0 |
Short-Term Investments (Details
Short-Term Investments (Details) $ in Thousands | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)instrument |
Short-Term Investments | ||
Number of short term investments in unrealized loss position | instrument | 0 | |
Short-term Investments | ||
Short-Term Investments | ||
Amortized Cost | $ 39,000 | $ 20,000 |
Fair Value | 39,000 | 20,000 |
Reverse repurchase agreements | ||
Short-Term Investments | ||
Amortized Cost | 39,000 | 20,000 |
Fair Value | $ 39,000 | $ 20,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Expenses | ||
Accrued compensation | $ 1,958 | $ 1,719 |
Accrued contracted costs | 760 | 1,726 |
Accrued other | 295 | |
Accrued professional fees | 268 | 356 |
Accrued severance | 396 | |
Total | $ 3,281 | $ 4,197 |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Nov. 30, 2019 | |
Operating leases | |||
Operating lease liability | $ 400 | $ 1,700 | |
Right-of-use asset | 394 | $ 966 | $ 1,700 |
Estimated incremental borrowing rate | 7.49% | ||
Future minimum payments | 400 | ||
Rent expense | 700 | 800 | |
Lease payments | $ 700 | $ 1,500 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) | Dec. 31, 2021series$ / sharesshares | Dec. 31, 2020$ / sharesshares |
Preferred Stock | ||
Preferred stock, authorized (in shares) | 5,000,000 | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Minimum number of series used to issue preferred stock | series | 1 | |
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 166.67 | |
Series X redeemable convertible preferred stock | ||
Preferred Stock | ||
Preferred stock, authorized (in shares) | 91,380 | 91,380 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Preferred stock, issued (in shares) | 31,455 | 0 |
Preferred stock, outstanding (in shares) | 31,455 | 0 |
Number of shares of common stock into which each share of Series X Preferred Stock may be converted | 166.67 | |
Number of common shares issuable upon conversion of preferred stock (in shares) | 5,242,501 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Warrants (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Weighted Average | |
Common Stock Warrants | |
Weighted average life (in years) | 4 years 18 days |
Common stock warrants | |
Common Stock Warrants | |
Warrants Outstanding (in shares) | shares | 1,530,380 |
Common stock warrants | Weighted Average | |
Common Stock Warrants | |
Exercise Price (in dollars per share) | $ / shares | $ 41.84 |
Warrants Issued in 2015 | Common stock warrants | |
Common Stock Warrants | |
Warrants Outstanding (in shares) | shares | 204 |
Exercise Price (in dollars per share) | $ / shares | $ 732.72 |
Warrants Issued in 2018 | Common stock warrants | |
Common Stock Warrants | |
Warrants Outstanding (in shares) | shares | 699,962 |
Exercise Price (in dollars per share) | $ / shares | $ 72 |
Warrants Issued in 2019 | Common stock warrants | |
Common Stock Warrants | |
Warrants Outstanding (in shares) | shares | 331,858 |
Exercise Price (in dollars per share) | $ / shares | $ 37.50 |
Warrants Issued In 2021 | Common stock warrants | |
Common Stock Warrants | |
Warrants Outstanding (in shares) | shares | 498,356 |
Exercise Price (in dollars per share) | $ / shares | $ 2.10 |
Stockholders' Equity - Common_2
Stockholders' Equity - Common Stock (Details) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common Stock | ||
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Par value of common stock (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, issued (in shares) | 13,016,955 | 3,347,386 |
Common Stock, outstanding (in shares) | 13,016,955 | 3,347,386 |
Stockholders' Equity - Shares R
Stockholders' Equity - Shares Reserved for Future Issuance (Details) - shares | Dec. 31, 2021 | Dec. 31, 2020 |
Stockholders' Equity | ||
Number of shares reserved for future issuance | 9,784,254 | 1,607,657 |
Series X Preferred Stock | ||
Stockholders' Equity | ||
Number of shares reserved for future issuance | 5,242,501 | |
Warrants for the purchase of common Stock | ||
Stockholders' Equity | ||
Number of shares reserved for future issuance | 1,530,380 | 1,032,291 |
Options outstanding to purchase common Stock | ||
Stockholders' Equity | ||
Number of shares reserved for future issuance | 1,346,733 | 227,846 |
Options available for future issuance to purchase common stock | ||
Stockholders' Equity | ||
Number of shares reserved for future issuance | 1,633,736 | 322,695 |
Shares reserved for the employee stock purchase plan | ||
Stockholders' Equity | ||
Number of shares reserved for future issuance | 30,904 | 24,825 |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Plans (Details) - Stock options | 12 Months Ended |
Dec. 31, 2021 | |
Stock Incentive Plans | |
Vesting period | 4 years |
Cliff period for vesting | 1 year |
Expiration period | 10 years |
Stock Incentive Plans - Stock o
Stock Incentive Plans - Stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||
Outstanding, beginning of period (in shares) | 227,846 | |
Granted (in shares) | 1,156,646 | |
Assumed in Quellis Acquisition (in shares) | 55,414 | |
Exercised (in shares) | (10,470) | |
Cancelled or forfeited (in shares) | (81,196) | |
Expired (in shares) | (1,507) | |
Outstanding, end of period (in shares) | 1,346,733 | 227,846 |
Vested and exercisable (in shares) | 135,412 | |
Weighted-Average Exercise Price | ||
Outstanding, beginning of period (in dollars per share) | $ 68.25 | |
Granted (in dollars per share) | 15.91 | |
Assumed in Quellis Acquisition (in dollars per share) | 1.73 | |
Exercised (in dollars per share) | 2.10 | |
Cancelled or forfeited (in dollars per share) | 48.13 | |
Expired (in dollars per share) | 100.85 | |
Outstanding at end of year (in dollars per share) | 22.25 | $ 68.25 |
Vested and Exercisable (in dollars per share) | $ 72.76 | |
Weighted Average Remaining Contractual Term (years) | ||
Outstanding | 9 years 7 days | 8 years 1 month 17 days |
Vested and Exercisable | 7 years 2 months 8 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 168,181 | |
Vested and Exercisable | 77,798 | |
Stock options | ||
Additional disclosures | ||
Intrinsic value of options exercised | $ 45 | $ 29 |
Weighted average grant date fair value of options granted (in dollars per share) | $ 9.82 | $ 3.81 |
Unrecognized compensation expense related to unvested stock option awards | $ 10,800 | |
Weighted-average amortization period over which cost is expected to be recognized | 2 years 10 months 24 days |
Stock Incentive Plans - Stock-B
Stock Incentive Plans - Stock-Based Compensation Expense (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Assumptions used to calculate fair value of stock options | ||
Expected dividend yield | 0.00% | 0.00% |
Stock options | Minimum | ||
Assumptions used to calculate fair value of stock options | ||
Weighted-average expected volatility | 69.28% | 75.51% |
Expected term (in years) | 5 years | 5 years 6 months |
Risk-free interest rate | 0.42% | 0.37% |
Stock options | Maximum | ||
Assumptions used to calculate fair value of stock options | ||
Weighted-average expected volatility | 71.32% | 82.08% |
Expected term (in years) | 6 years 3 months | 6 years 3 months |
Risk-free interest rate | 1.36% | 1.51% |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate | ||
Federal income tax (benefit) at statutory rate | 21.00% | 21.00% |
Permanent differences | (0.25%) | (0.41%) |
Federal research and development credits and adjustments | 0.44% | 2.78% |
Nondeductible research costs | (17.75%) | |
State income tax, net of federal benefit | 0.82% | 6.03% |
Other | 0.01% | 0.37% |
Change in valuation allowance | (4.27%) | (29.77%) |
Effective income tax rate | 0.00% | 0.00% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax assets | ||
Net operating loss carryforwards | $ 75,849 | $ 65,373 |
Tax credit carryforwards | 10,063 | 9,273 |
Capitalized research and development | 139 | 482 |
Capitalized legal expenses | 1,048 | 1,070 |
Lease liability | 99 | 284 |
Other differences | 1,977 | 1,648 |
Total deferred tax assets | 89,175 | 78,130 |
Deferred tax liabilities | ||
ROU asset | (107) | (262) |
Valuation allowance | (89,068) | (77,868) |
Net deferred tax assets | 0 | 0 |
Increase in valuation allowance | $ 11,200 | $ 11,100 |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforwards (Details) $ in Millions | Dec. 31, 2021USD ($) |
Federal | |
Operating loss carryforwards | |
Net operating loss | $ 279.4 |
Tax credit carryforwards | 8.1 |
Federal | Tax Years 2023 through 2039 | |
Operating loss carryforwards | |
Net operating loss | 150.6 |
Federal | No expiration | |
Operating loss carryforwards | |
Net operating loss | 128.8 |
State | |
Operating loss carryforwards | |
Net operating loss | 271.8 |
Tax credit carryforwards | 2.4 |
State | Tax Years 2023 through 2039 | |
Operating loss carryforwards | |
Net operating loss | $ 271.8 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Jan. 28, 2022 | Dec. 31, 2021 | Nov. 30, 2019 |
Sublease | |||
Operating lease liability | $ 0.4 | $ 1.7 | |
Subsequent Event | |||
Sublease | |||
Operating lease liability | $ 1.8 |