Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Sep. 30, 2023 | Nov. 10, 2023 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39683 | |
Entity Registrant Name | REZOLUTE, INC. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 27-3440894 | |
Entity Address, Address Line One | 275 Shoreline Drive, Suite 500 | |
Entity Address, City or Town | Redwood City | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94065 | |
City Area Code | 650 | |
Local Phone Number | 206-4507 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | RZLT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 39,625,271 | |
Entity Central Index Key | 0001509261 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 8,057 | $ 16,036 |
Investments in marketable debt securities | 90,673 | 85,860 |
Prepaid expenses and other | 3,915 | 3,014 |
Total current assets | 102,645 | 104,910 |
Long-term assets: | ||
Investments in marketable debt securities | 8,144 | 16,470 |
Right-of-use assets | 1,933 | 2,054 |
Property and equipment, net | 129 | 139 |
Deposits and other | 148 | 148 |
Total assets | 112,999 | 123,721 |
Current liabilities: | ||
Accounts payable | 2,432 | 3,269 |
Accrued liabilities: | ||
Accrued clinical and other | 2,557 | 507 |
Compensation and benefits | 1,681 | 883 |
Current portion of operating lease liabilities | 525 | 541 |
Total current liabilities | 7,195 | 5,200 |
Long term liabilities: | ||
Operating lease liabilities, net of current portion | 1,814 | 1,937 |
Embedded derivative liability | 426 | 412 |
Total liabilities | 9,435 | 7,549 |
Commitments and contingencies (Notes 5, 9 and 10) | ||
Shareholders' equity: | ||
Preferred stock, $0.001 par value; 400 shares authorized; no shares issued and outstanding | ||
Common stock, $0.001 par value; 100,000 shares authorized; issued and outstanding 36,827 shares as of September 30, 2023 and June 30, 2023 | 37 | 37 |
Additional paid-in capital | 379,320 | 377,471 |
Accumulated other comprehensive loss | (284) | (351) |
Accumulated deficit | (275,509) | (260,985) |
Total shareholders' equity | 103,564 | 116,172 |
Total liabilities and shareholders' equity | $ 112,999 | $ 123,721 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
Unaudited Condensed Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 400 | 400 |
Preferred stock, shares, issued | 0 | 0 |
Preferred stock, shares, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 36,827 | 36,827 |
Common stock, shares outstanding | 36,827 | 36,827 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating expenses: | ||
Research and development | $ 12,214 | $ 7,704 |
General and administrative | 3,700 | 2,514 |
Total operating expenses | 15,914 | 10,218 |
Operating loss | (15,914) | (10,218) |
Non-operating income (expense): | ||
Interest and other income, net | 1,404 | 400 |
Loss from change in fair value of derivative liability | (14) | (13) |
Total non-operating income, net | 1,390 | 387 |
Net loss | (14,524) | (9,831) |
Other comprehensive income: | ||
Net unrealized gain on available-for-sale marketable debt securities | 67 | |
Comprehensive loss | $ (14,457) | $ (9,831) |
Net loss per common share - basic (in dollars per share) | $ (0.28) | $ (0.19) |
Net loss per common share - diluted (in dollars per share) | $ (0.28) | $ (0.19) |
Weighted average number of common shares outstanding - basic (in shares) | 51,409 | 50,528 |
Weighted average number of common shares outstanding - diluted (in shares) | 51,409 | 50,528 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock 2022 Private Placement. | Common Stock | Additional Paid-in Capital 2022 Private Placement. | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | 2022 Private Placement. | Total |
Balance at Jun. 30, 2022 | $ 34 | $ 358,635 | $ (209,198) | $ 149,471 | ||||
Balance (in shares) at Jun. 30, 2022 | 33,582 | |||||||
Gross proceeds from issuance of common stock for cash | $ 3 | $ 12,327 | $ 12,330 | |||||
Gross proceeds from issuance of common stock for cash (in shares) | 3,245 | |||||||
Underwriting commissions and other equity offering costs | (759) | (759) | ||||||
Share-based compensation | 1,879 | 1,879 | ||||||
Net loss | (9,831) | (9,831) | ||||||
Balance at Sep. 30, 2022 | $ 37 | 372,082 | (219,029) | 153,090 | ||||
Balance (in shares) at Sep. 30, 2022 | 36,827 | |||||||
Balance at Jun. 30, 2022 | $ 34 | 358,635 | (209,198) | 149,471 | ||||
Balance (in shares) at Jun. 30, 2022 | 33,582 | |||||||
Net loss | (51,800) | |||||||
Balance at Jun. 30, 2023 | $ 37 | 377,471 | $ (351) | (260,985) | 116,172 | |||
Balance (in shares) at Jun. 30, 2023 | 36,827 | |||||||
Share-based compensation | 1,849 | 1,849 | ||||||
Net change in accumulated other comprehensive loss | 67 | 67 | ||||||
Net loss | (14,524) | (14,524) | ||||||
Balance at Sep. 30, 2023 | $ 37 | $ 379,320 | $ (284) | $ (275,509) | $ 103,564 | |||
Balance (in shares) at Sep. 30, 2023 | 36,827 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (14,524) | $ (9,831) | |
Share-based compensation expense | 1,849 | 1,879 | |
Non-cash lease expense | 122 | 23 | |
Loss from change in fair value of derivative liability | 14 | 13 | |
Accretion of discounts and amortization of premiums on marketable debt securities, net | 973 | ||
Depreciation and amortization expense | 10 | 3 | |
Changes in operating assets and liabilities: | |||
Decrease (increase) in prepaid expenses and other assets | (902) | 388 | |
Decrease in accounts payable | (836) | (22) | |
Increase (decrease) in accrued liabilities | 2,709 | (42) | |
Net Cash Used in Operating Activities | (10,585) | (7,589) | $ (44,500) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of marketable debt securities | (15,989) | ||
Proceeds from maturities of marketable debt securities | 18,595 | ||
Purchase of property and equipment | (70) | ||
Total Cash Provided by (Used In) Investing Activities | 2,606 | (70) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Gross proceeds from issuance of common stock for cash in 2022 Private Placement | 12,330 | ||
Payment of commissions and other offering costs | (759) | ||
Net Cash Provided by Financing Activities | 11,571 | ||
Net increase (decrease) in cash and cash equivalents | (7,979) | 3,912 | |
Cash and cash equivalents at beginning of period | 16,036 | 150,410 | 150,410 |
Cash and cash equivalents at end of period | 8,057 | 154,322 | $ 16,036 |
SUPPLEMENTARY CASH FLOW INFORMATION: | |||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 171 | $ 29 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2023 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 — NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Rezolute, Inc. (the “Company”) is a clinical stage biopharmaceutical business developing transformative therapies for metabolic diseases related to chronic glucose imbalance. The Company’s primary clinical assets consist of (i) RZ358, which is a potential treatment for congenital hyperinsulinism, an ultra-rare pediatric genetic disorder characterized by excessive production of insulin by the pancreas, and (ii) RZ402, which is an oral plasma kallikrein inhibitor (“PKI”) being developed as a potential therapy for the chronic treatment of diabetic macular edema. Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the rules and regulations of the SEC for interim financial information, and the instructions to Form 10-Q and Article 8 of Regulation S-X. The condensed consolidated balance sheet as of June 30, 2023, has been derived from the Company’s audited consolidated financial statements. The unaudited interim financial statements should be read in conjunction with the Company’s 2023 Form 10-K, which contains the Company’s audited financial statements and notes thereto, together with the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended June 30, 2023. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all information and footnote disclosures necessary for a comprehensive presentation of financial position, results of operations, and cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) that are necessary for a fair financial statement presentation have been made. The interim results for the three months ended September 30, 2023 are not necessarily indicative of the financial condition and results of operations that may be expected for any future interim period or for the fiscal year ending June 30, 2024. Consolidation The Company has two wholly owned subsidiaries consisting of Rezolute (Bio) Ireland Limited, and Rezolute Bio UK, Ltd. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and the accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, determination if other than temporary impairment exists for marketable debt securities, the fair value of an embedded derivative liability, fair value of share-based payments, management’s assessment of going concern, and estimates related to clinical trial accrued liabilities. Actual results could differ from those estimates. Risks and Uncertainties The Company’s operations may be subject to significant risks and uncertainties including financial, operational, regulatory, international conflicts and wars, pandemics and other risks associated with a clinical stage business. Significant Accounting Policies The Company’s significant accounting policies are described in Note 1 to the financial statements in Item 8 of the 2023 Form 10-K. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not currently expected to have a material impact on the Company’s financial statements upon adoption. |
LIQUIDITY
LIQUIDITY | 3 Months Ended |
Sep. 30, 2023 | |
LIQUIDITY | |
LIQUIDITY | NOTE 2 — LIQUIDITY As a clinical stage business, the Company has not yet generated any revenues and had an accumulated deficit of $275.5 million as of September 30, 2023. For the three months ended September 30, 2023, the Company incurred a net loss of $14.5 million and net cash used in operating activities amounted to $10.6 million. For the fiscal year ended June 30, 2023, the Company incurred a net loss of $51.8 million and net cash used in operating activities amounted to $44.5 million. As of September 30, 2023, the Company’s capital resources consist of cash and cash equivalents of $8.1 million, short-term investments in marketable debt securities of $90.7 million and long-term investments in marketable debt securities of $8.1 million. As of September 30, 2023, the Company has total liabilities of $9.4 million, including current liabilities of $7.2 million. As discussed in Note 5, the Company is subject to license agreements that provide for future contractual payments upon achievement of various milestone events. Pursuant to the XOMA License Agreement (as defined below), a $5.0 million milestone payment will be due upon dosing of the first patient in a Phase 3 clinical trial for RZ358 and an additional $5.0 million milestone payment will be due upon the dosing of the last patient in a Phase 3 clinical trial for RZ358. The first patient dosing milestone event in connection with the RZ358 Phase 3 clinical trial is expected to occur within the next 12 months. Management believes the Company’s existing cash and cash equivalents and investments in marketable debt securities will be adequate to meet the Company’s contractual obligations and carry out ongoing clinical trials and other planned activities through November 2024, at a minimum. |
INVESTMENTS IN MARKETABLE DEBT
INVESTMENTS IN MARKETABLE DEBT SECURITIES | 3 Months Ended |
Sep. 30, 2023 | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | NOTE 3 —INVESTMENTS IN MARKETABLE DEBT SECURITIES Investments in marketable debt securities, are accounted for as available-for-sale investments consisting of the following (in thousands ): September 30, June 30, 2023 2023 Short-term investments $ 90,673 $ 85,860 Long-term investments 8,144 16,470 Total investments $ 98,817 $ 102,330 The Company’s investments in debt securities are subject to interest rate risk and credit risk that results in differences between amortized cost basis and the fair value of investments. To minimize the exposure due to an adverse shift in interest rates, the Company generally invests in securities with expected maturities of two years or less and maintains a weighted average maturity of one year or less. As of September 30, 2023, investments in marketable debt securities with an aggregate fair value of $90.7 million are scheduled to mature during the 12-month period ending September 30, 2024. Substantially all of the remaining investments, with an aggregate fair value of $8.1 million, are scheduled to mature during the 12-month period ending September 30, 2025. During the three months ended September 30, 2023, marketable debt securities for $18.6 million matured and approximately $16.0 million of the proceeds were reinvested in additional marketable debt securities. The Company did not sell any marketable debt securities prior to the scheduled maturity dates for the three months ended September 30, 2023. Accrued interest receivable on all marketable debt securities amounted to $0.4 million and $0.3 million as of September 30, 2023 and June 30, 2023, respectively. Accrued interest receivable is included in other current assets in the accompanying condensed consolidated balance sheets For the three months ended September 30, 2023, the Company did not recognize any allowance for credit losses related to investments in marketable debt securities. The following table summarizes the cumulative unrealized gains and losses that result in differences between the amortized cost basis and fair value of the Company’s marketable debt securities held as of September 30, 2023 (in thousands): Gross Unrealized Amortized Cost Gains Losses Fair Value Corporate commercial paper $ 40,944 $ — $ (45) $ 40,899 Obligations of U.S. government agencies 24,698 1 (59) 24,640 U.S. Treasury obligations 5,478 — (13) 5,465 Corporate notes and bonds 23,742 — (163) 23,579 Asset-backed securities 4,239 5 (10) 4,234 Total $ 99,101 $ 6 $ (290) $ 98,817 |
OPERATING LEASES
OPERATING LEASES | 3 Months Ended |
Sep. 30, 2023 | |
OPERATING LEASES | |
OPERATING LEASES | NOTE 4 — OPERATING LEASES The Company’s right-of-use assets and operating lease liabilities are as follows (in thousands): September 30, June 30, 2023 2023 Right-of-use assets $ 1,933 $ 2,054 Operating lease liabilities: Current $ 525 $ 541 Long-term 1,814 1,937 Total $ 2,339 $ 2,478 For the three months ended September 30, 2023 and 2022, operating lease expense is included under the following captions in the accompanying condensed consolidated statements of operations and comprehensive loss (in thousands): 2023 2022 Research and development $ 131 $ 77 General and administrative 42 23 Total $ 173 $ 100 As of September 30, 2023, the weighted average remaining lease term under operating leases was 4.1 years, and the weighted average discount rate for operating lease liabilities was 6.8%. Future cash payments under all operating lease agreements as of September 30, 2023 are as follows (in thousands): Fiscal year ending June 30, Remainder of fiscal year 2024 $ 509 2025 627 2026 646 2027 666 Thereafter 224 Total lease payments 2,672 Less imputed interest (333) Present value of operating lease liabilities $ 2,339 |
LICENSE AGREEMENTS
LICENSE AGREEMENTS | 3 Months Ended |
Sep. 30, 2023 | |
LICENSE AGREEMENTS | |
LICENSE AGREEMENTS | NOTE 5 — LICENSE AGREEMENTS XOMA License Agreement In December 2017, the Company entered into a license agreement (the “XOMA License Agreement”) with XOMA Corporation (“XOMA”), through its wholly-owned subsidiary, XOMA (US) LLC, pursuant to which XOMA granted an exclusive global license to the Company to develop and commercialize XOMA 358 (formerly X358, now RZ358) for all indications. In January 2022, the Company was required to make a milestone payment under the XOMA License Agreement of $2.0 million that became due upon the dosing of the last patient in the Company’s Phase 2b Clinical Trial for RZ358. Upon the achievement of certain clinical and regulatory events under the XOMA License Agreement, the Company will be required to make additional milestone payments to XOMA up to $35.0 million. After the clinical and regulatory milestones, the Company will be required, upon the future commercialization of RZ358, to pay royalties to XOMA based on the net sales of the related products and additional milestone payments to XOMA up to $185.0 million related to annual net sales amounts. There have been no events that would result in any royalty payments owed under the XOMA License Agreement to date. The next milestone payment of $5.0 million will be due upon dosing of the first patient in a Phase 3 clinical trial for RZ358. ActiveSite License Agreement In August 2017, the Company entered into a Development and License Agreement (the “ActiveSite License Agreement”) with ActiveSite Pharmaceuticals, Inc. (“ActiveSite”) pursuant to which the Company acquired the rights to ActiveSite’s Plasma Kallikrein Inhibitor program (“PKI Portfolio”). The Company is initially using the PKI Portfolio to develop an oral PKI therapeutic for diabetic macular edema (RZ402) and may use the PKI Portfolio to develop other therapeutics for different indications. The ActiveSite License Agreement requires various milestone payments up to $46.5 million, if all milestones are achieved. The first milestone payment for $1.0 million was paid in December 2020 after clearance was received for an Initial Drug Application, or IND, filed with the U.S. Food and Drug Administration (“FDA”). The second milestone payment of $3.0 million was paid in February 2023 after dosing of the first patient in a Phase 2 clinical trial for RZ402. The next milestone payment of $5.0 million will be due upon dosing of the first patient in a Phase 3 clinical trial. The Company is also required to pay royalties equal to 2.0% of any sales of products that use the PKI Portfolio. There have been no events that would result in any royalty payments owed under the ActiveSite License Agreement to date. |
EMBEDDED DERIVATIVE LIABILITY
EMBEDDED DERIVATIVE LIABILITY | 3 Months Ended |
Sep. 30, 2023 | |
EMBEDDED DERIVATIVE LIABILITY | |
EMBEDDED DERIVATIVE LIABILITY | NOTE 6 — EMBEDDED DERIVATIVE LIABILITY On April 14, 2021, the Company entered into a $30.0 million Loan and Security Agreement (the “Loan Agreement”) with SLR Investment Corp. and certain other lenders (collectively, the “Lenders”). The Lenders agreed to loan up to $30.0 million but the actual amount borrowed by the Company amounted to $15.0 million. The maturity date of the outstanding borrowings was April 1, 2026 (the “Maturity Date”), but the Company elected to repay the entire amount and terminated the Loan Agreement on June 30, 2022. Concurrently with the execution of the Loan Agreement, the Company entered into an exit fee agreement (the “Exit Fee Agreement”) that provides for a fee of 4.00% of the funded principal balance for a total of $0.6 million in the event certain transactions (defined as “Exit Events”) occur prior to April 13, 2031. The Exit Fee Agreement was not impacted by the termination of the Loan Agreement discussed above. The Company is accounting for the Exit Fee Agreement as an embedded derivative liability with an estimated fair value of $0.4 million as of September 30, 2023 and June 30, 2023. Exit Events include, but are not limited to, sales of substantially all assets, certain mergers, change of control transactions, and issuances of common stock that result in new investors owning more than 35% of the Company’s shares. Fair value of this embedded derivative liability is reassessed at the end of each reporting period with changes in fair value recognized as a nonoperating gain or loss. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 3 Months Ended |
Sep. 30, 2023 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 7 — SHAREHOLDERS’ EQUITY In May 2022, the Company entered into securities purchase agreements (“SPAs”) with Handok, Inc. (“Handok”) and certain of its affiliates. Handok is an affiliate of a member of the Company’s Board of Directors. In July 2022, the Company entered into amended SPAs for a private placement of common stock (the “2022 Private Placement”). The 2022 Private Placement resulted in gross proceeds of $12.3 million in exchange for the issuance of approximately 3.2 million shares of common stock. The Company incurred approximately $0.8 million for underwriting commissions and other offering costs, resulting in net proceeds of $11.5 million. |
SHARE-BASED COMPENSATION AND WA
SHARE-BASED COMPENSATION AND WARRANTS | 3 Months Ended |
Sep. 30, 2023 | |
SHARE-BASED COMPENSATION AND WARRANTS | |
SHARE-BASED COMPENSATION AND WARRANTS | NOTE 8 — SHARE-BASED COMPENSATION AND WARRANTS Stock Option Plans Presented below is a summary of the number of shares authorized, outstanding, and available for future grants under each of the Company’s stock option plans as of September 30, 2023 (in thousands): Plan Termination Number of Shares Description Date Authorized Outstanding Available 2015 Plan February 2020 17 17 — 2016 Plan October 2021 123 123 — 2019 Plan July 2029 200 200 — 2021 Plan March 2031 10,700 8,769 1,931 Total 11,040 9,109 1,931 2022 Employee Stock Purchase Plan On June 16, 2022, the Company’s shareholders approved the adoption of the 2022 Employee Stock Purchase Plan (the “2022 ESPP”). The 2022 ESPP provides an opportunity for employees to purchase the Company’s common stock through accumulated payroll deductions. The 2022 ESPP has consecutive offering periods that begin approximately every 6 months commencing on the first trading day on or after July 1 and terminating on the last trading day of the offering period ending on December 31 and commencing on the first trading day on or after January 1 and terminating on the last trading day of the offering period ending on June 30. The 2022 ESPP reserves 0.5 million shares for purchases. There have been no offering periods under the 2022 ESPP through September 30, 2023. Stock Options Outstanding The following table sets forth a summary of the activity under all of the Company’s stock option plans for the three months ended September 30, 2023 (shares in thousands): Shares Price (1) Term (2) Outstanding, June 30, 2023 8,745 $ 4.56 8.8 Grants to employees 415 1.51 Expired (27) 12.67 Forfeited (24) 4.06 Outstanding, September 30, 2023 9,109 4.40 8.6 Vested, September 30, 2023 3,188 6.21 8.2 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the stock options expire. For the three months ended September 30, 2023, the aggregate fair value of stock options granted for approximately 0.4 million shares of common stock amounted to $0.5 million or approximately $1.18 per share as of the grant dates. Fair value was computed using the Black-Scholes-Merton (“BSM”) option-pricing model and will result in the recognition of compensation cost ratably over the expected vesting period of the stock options. For the three months ended September 30, 2023, the fair value of stock options was estimated on the respective dates of grant, with the following weighted-average assumptions: Market price of common stock on grant date $ 1.51 Expected volatility 94 % Risk free interest rate 4.2 % Expected term (years) 6.1 Dividend yield 0 % Share-based compensation expense for the three months ended September 30, 2023 and 2022 is included under the following captions in the unaudited condensed consolidated statements of operations and comprehensive loss (in thousands): 2023 2022 Research and development $ 840 $ 870 General and administrative 1,009 1,009 Total $ 1,849 $ 1,879 Unrecognized share-based compensation expense is approximately $15.4 million as of September 30, 2023. This amount is expected to be recognized over a weighted average period of 2.7 years. Pre-Funded Warrants In connection with an underwritten offering in October 2021, the Company issued 1,661,461 pre-funded warrants (“PFWs”) to purchase 1,661,461 shares of common stock at an issuance price of $6.49 per warrant for gross proceeds of $10.8 million (the “2021 PFWs”). The 2021 PFWs may be exercised at any time by paying the exercise price of $0.01 per share, subject to certain ownership restrictions. In connection with a registered direct offering in May 2022, the Company issued 1,973,684 Class A PFWs and 10,947,371 Class B PFWs to purchase an aggregate of 12,921,055 shares of common stock at an issuance price of $3.799 per warrant (collectively, the “2022 PFWs”). As of September 30, 2023, all of the 2022 PFWs may be exercised at any time by paying the exercise price of $0.001 per share, subject to certain ownership restrictions. On October 4, 2023, a holder of Class B PFW’s provided notice of cashless exercise of their 2,800,000 Class B PFW’s, resulting in the issuance of 2,797,404 shares of common stock on October 6, 2023. No cash proceeds were received by the Company as a result of this exercise. Other Warrants In connection with an equity financing in October 2020, the Company issued warrants entitling the holders to purchase approximately 0.8 million shares of common stock. The warrants are exercisable at $19.50 per share for a period of seven years, may be exercised on a cash or cashless basis at the election of the holders, and holders are entitled to share in any dividends or distributions payable to holders of common stock on an as-converted basis. In addition, the Company has issued warrants in conjunction with various debt and equity financings and for services. As of September 30, 2023, all of the warrants were vested. For the three months ended September 30, 2023, no warrants were granted, exercised or expired. Excluding the 2021 PFWs and the 2022 PFWs discussed above, the following table sets forth a summary of all other warrants for the three months ended September 30, 2023 (shares in thousands): Shares Price (1) Term (2) Outstanding, June 30, 2023 888 $ 22.10 4.1 Outstanding, September 30, 2023 888 22.10 3.8 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the warrants expire . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Sep. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 — COMMITMENTS AND CONTINGENCIES Licensing Commitments Please refer to Note 5 for further discussion of commitments to make milestone payments and to pay royalties under license agreements with XOMA and ActiveSite. Legal Matters From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of September 30, 2023, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the Company’s results of operations. At each reporting period, the Company evaluates known claims to determine whether a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Sep. 30, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 10 — RELATED PARTY TRANSACTIONS Related Party Licensing Agreement On September 15, 2020, the Company and Handok entered into an exclusive license agreement (the “Handok License”) for the territory of the Republic of Korea. The Handok License relates to pharmaceutical products in final dosage form containing the pharmaceutical compounds developed or to be developed by the Company, including those related to RZ358 and RZ402. The Handok License is in effect for a period of 20 years after the first commercial sale of each product and requires (i) milestone payments to the Company of $0.5 million upon approval of a New Drug Application (“NDA”) for each product in the territory, and (ii) the Company will sell products ordered by Handok at a transfer price equal to 70% of the net selling price of the products. To date, no milestone payments have been earned by the Company. Investors in 2022 Private Placement Handok and certain of its affiliates were the sole investors in the 2022 Private Placement discussed in Note 7. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Sep. 30, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 11 — INCOME TAXES Income tax expense during interim periods is based on applying an estimated annualized effective income tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. The computation of the annualized estimated effective tax rate for each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating results for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred income tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known or as the tax environment changes. For the three months ended September 30, 2023 and 2022, the Company did not recognize any income tax benefit due to a full valuation allowance on its deferred income tax assets. The Company did not have any material changes to its conclusions regarding valuation allowances for deferred income tax assets or uncertain tax positions for the three months ended September 30, 2023 and 2022. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Sep. 30, 2023 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | NOTE 12 — NET LOSS PER SHARE Basic net loss per share is computed by dividing net loss by the weighted average number of common shares, 2021 PFWs and 2022 PFWs outstanding during the period, without consideration for other potentially dilutive securities. PFWs are included in the computation of basic and diluted net loss per share since the exercise price is negligible and all of the PFWs are fully vested and exercisable. Accordingly, the weighted average number of shares outstanding is computed as follows for the three months ended September 30, 2023 and 2022 (in thousands): 2023 2022 Common Stock 36,827 35,946 2021 PFWs 1,661 1,661 2022 PFWs: Class A PFWs 1,974 1,974 Class B PFWs 10,947 10,947 Total 51,409 50,528 For the three months ended September 30, 2023 and 2022, basic and diluted net loss per share were the same since all other common stock equivalents were anti-dilutive. As of September 30, 2023 and 2022, the following outstanding potential common stock equivalents were excluded from the computation of diluted net loss per share since the impact of inclusion was anti-dilutive (in thousands): 2023 2022 Stock options 9,109 8,482 Other warrants 888 1,150 Total 9,997 9,632 |
FINANCIAL INSTRUMENTS AND SIGNI
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | 3 Months Ended |
Sep. 30, 2023 | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | NOTE 13 — FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS Fair Value Measurements Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1—Quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2—Other than quoted prices included in Level 1 that are observable for the asset and liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3—Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any market activity for the asset or liability at the measurement date. The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy classification of such fair values as of September 30, 2023 and June 30, 2023 (in thousands): Fair Value Measurement of Assets as of September 30, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents: Money market funds $ 5,323 $ 5,323 $ — $ — Marketable debt securities: Corporate commercial paper 40,899 — 40,899 — U.S. Government agencies 24,640 — 24,640 — U.S. Government treasuries 5,465 5,465 — — Corporate notes and bonds 23,579 — 23,579 — Asset-backed securities 4,234 — 4,234 — Total $ 104,140 $ 10,788 $ 93,352 $ — Fair Value Measurement of Assets as of June 30, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents: Money market funds $ 5,464 $ 5,464 $ — $ — Corporate commercial paper 4,481 4,481 — — Marketable debt securities: Corporate commercial paper 41,597 — 41,597 — U.S. Government agencies 26,394 — 26,394 — U.S. Government treasuries 10,404 10,404 — — Corporate notes and bonds 19,240 — 19,240 — Asset-backed securities 4,694 — 4,694 — Total $ 112,274 $ 20,349 $ 91,925 $ — Marketable debt securities classified as Level 2 within the valuation hierarchy generally consist of U.S. government agency securities, corporate bonds, and commercial paper. The Company determines the fair value of marketable debt securities based upon valuations obtained from third-party pricing sources. Except for the amounts shown in the table above, the Company did not have any other assets measured at fair value on a recurring basis as of September 30, 2023 and June 30, 2023. The Company’s embedded derivative liability discussed in Note 6 is classified under Level 3 of the fair value hierarchy and is required to be measured and recorded at fair value on a recurring basis. Fair value is determined based on management’s assessment of the probability and timing of occurrence for the Exit Events discussed in Note 6 using a discount rate equal to the effective interest rate under the Loan Agreement. The following table sets forth changes in the fair value of the Company’s embedded derivative liability for the three months ended September 30, 2023 and 2022 (in thousands): 2023 2022 Fair value, beginning of period $ 412 $ 407 Loss from change in fair value 14 13 Fair value, end of period $ 426 $ 420 Except for the embedded derivative liability, the Company did not have any other liabilities measured at fair value on a recurring basis as of September 30, 2023 and June 30, 2023. Due to the relatively short maturity of the respective instruments, the fair value of cash, accounts payable, and accrued liabilities approximated their carrying values as of September 30, 2023 and June 30, 2023. The Company’s policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During the three months ended September 30, 2023 and 2022, the Company did not have any transfers of its assets or liabilities between levels of the fair value hierarchy. Significant Concentrations Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and investments in marketable debt securities. The Company maintains cash in demand accounts at a high-quality financial institution. As of and for the three months ended September 30, 2023 and 2022, cash deposits have exceeded the amount of insurance provided on such deposits by the Federal Deposit Insurance Corporation. As of September 30, 2023, the Company has an aggregate of $41.9 million invested in the debt securities of issuers in the banking and financial services industries, and an aggregate of $24.6 million invested in the debt securities of a single agency of the U.S. government. While the Company’s investment policy requires investments in highly rated securities, a wide variety of broad economic factors and issuer-specific factors could result in credit agency downgrades below the Company’s minimum credit rating requirements that could result in losses regardless of whether the Company elects to sell the securities or hold them until maturity. |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 30, 2023 | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations | Nature of Operations Rezolute, Inc. (the “Company”) is a clinical stage biopharmaceutical business developing transformative therapies for metabolic diseases related to chronic glucose imbalance. The Company’s primary clinical assets consist of (i) RZ358, which is a potential treatment for congenital hyperinsulinism, an ultra-rare pediatric genetic disorder characterized by excessive production of insulin by the pancreas, and (ii) RZ402, which is an oral plasma kallikrein inhibitor (“PKI”) being developed as a potential therapy for the chronic treatment of diabetic macular edema. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the rules and regulations of the SEC for interim financial information, and the instructions to Form 10-Q and Article 8 of Regulation S-X. The condensed consolidated balance sheet as of June 30, 2023, has been derived from the Company’s audited consolidated financial statements. The unaudited interim financial statements should be read in conjunction with the Company’s 2023 Form 10-K, which contains the Company’s audited financial statements and notes thereto, together with the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended June 30, 2023. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all information and footnote disclosures necessary for a comprehensive presentation of financial position, results of operations, and cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) that are necessary for a fair financial statement presentation have been made. The interim results for the three months ended September 30, 2023 are not necessarily indicative of the financial condition and results of operations that may be expected for any future interim period or for the fiscal year ending June 30, 2024. |
Consolidation | Consolidation The Company has two wholly owned subsidiaries consisting of Rezolute (Bio) Ireland Limited, and Rezolute Bio UK, Ltd. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the unaudited condensed consolidated financial statements and the accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, determination if other than temporary impairment exists for marketable debt securities, the fair value of an embedded derivative liability, fair value of share-based payments, management’s assessment of going concern, and estimates related to clinical trial accrued liabilities. Actual results could differ from those estimates. |
Risks and Uncertainties | Risks and Uncertainties The Company’s operations may be subject to significant risks and uncertainties including financial, operational, regulatory, international conflicts and wars, pandemics and other risks associated with a clinical stage business. |
Significant Accounting Policies | Significant Accounting Policies The Company’s significant accounting policies are described in Note 1 to the financial statements in Item 8 of the 2023 Form 10-K. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not currently expected to have a material impact on the Company’s financial statements upon adoption. |
INVESTMENTS IN MARKETABLE DEB_2
INVESTMENTS IN MARKETABLE DEBT SECURITIES (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Schedule of investments in marketable securities, are accounted for as available-for-sale investments | Investments in marketable debt securities, are accounted for as available-for-sale investments consisting of the following (in thousands ): September 30, June 30, 2023 2023 Short-term investments $ 90,673 $ 85,860 Long-term investments 8,144 16,470 Total investments $ 98,817 $ 102,330 |
Schedule of marketable securities recorded at fair value | For the three months ended September 30, 2023, the Company did not recognize any allowance for credit losses related to investments in marketable debt securities. The following table summarizes the cumulative unrealized gains and losses that result in differences between the amortized cost basis and fair value of the Company’s marketable debt securities held as of September 30, 2023 (in thousands): Gross Unrealized Amortized Cost Gains Losses Fair Value Corporate commercial paper $ 40,944 $ — $ (45) $ 40,899 Obligations of U.S. government agencies 24,698 1 (59) 24,640 U.S. Treasury obligations 5,478 — (13) 5,465 Corporate notes and bonds 23,742 — (163) 23,579 Asset-backed securities 4,239 5 (10) 4,234 Total $ 99,101 $ 6 $ (290) $ 98,817 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
OPERATING LEASES | |
Schedule of carrying value of right-of-use assets and operating lease liabilities | The Company’s right-of-use assets and operating lease liabilities are as follows (in thousands): September 30, June 30, 2023 2023 Right-of-use assets $ 1,933 $ 2,054 Operating lease liabilities: Current $ 525 $ 541 Long-term 1,814 1,937 Total $ 2,339 $ 2,478 |
Schedule of operating lease expense | For the three months ended September 30, 2023 and 2022, operating lease expense is included under the following captions in the accompanying condensed consolidated statements of operations and comprehensive loss (in thousands): 2023 2022 Research and development $ 131 $ 77 General and administrative 42 23 Total $ 173 $ 100 |
Schedule of future payments under operating lease agreements | Future cash payments under all operating lease agreements as of September 30, 2023 are as follows (in thousands): Fiscal year ending June 30, Remainder of fiscal year 2024 $ 509 2025 627 2026 646 2027 666 Thereafter 224 Total lease payments 2,672 Less imputed interest (333) Present value of operating lease liabilities $ 2,339 |
SHARE-BASED COMPENSATION AND _2
SHARE-BASED COMPENSATION AND WARRANTS (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
SHARE-BASED COMPENSATION AND WARRANTS | |
Schedule of the number of shares authorized, outstanding, and available for future grants under stock option | Presented below is a summary of the number of shares authorized, outstanding, and available for future grants under each of the Company’s stock option plans as of September 30, 2023 (in thousands): Plan Termination Number of Shares Description Date Authorized Outstanding Available 2015 Plan February 2020 17 17 — 2016 Plan October 2021 123 123 — 2019 Plan July 2029 200 200 — 2021 Plan March 2031 10,700 8,769 1,931 Total 11,040 9,109 1,931 |
Summary of the stock option plans | The following table sets forth a summary of the activity under all of the Company’s stock option plans for the three months ended September 30, 2023 (shares in thousands): Shares Price (1) Term (2) Outstanding, June 30, 2023 8,745 $ 4.56 8.8 Grants to employees 415 1.51 Expired (27) 12.67 Forfeited (24) 4.06 Outstanding, September 30, 2023 9,109 4.40 8.6 Vested, September 30, 2023 3,188 6.21 8.2 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the stock options expire. |
Schedule of the fair value of stock options | For the three months ended September 30, 2023, the fair value of stock options was estimated on the respective dates of grant, with the following weighted-average assumptions: Market price of common stock on grant date $ 1.51 Expected volatility 94 % Risk free interest rate 4.2 % Expected term (years) 6.1 Dividend yield 0 % |
Schedule of share-based compensation expense | Share-based compensation expense for the three months ended September 30, 2023 and 2022 is included under the following captions in the unaudited condensed consolidated statements of operations and comprehensive loss (in thousands): 2023 2022 Research and development $ 840 $ 870 General and administrative 1,009 1,009 Total $ 1,849 $ 1,879 |
Schedule of warrant activity | For the three months ended September 30, 2023, no warrants were granted, exercised or expired. Excluding the 2021 PFWs and the 2022 PFWs discussed above, the following table sets forth a summary of all other warrants for the three months ended September 30, 2023 (shares in thousands): Shares Price (1) Term (2) Outstanding, June 30, 2023 888 $ 22.10 4.1 Outstanding, September 30, 2023 888 22.10 3.8 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term for the number of years until the warrants expire . |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
NET LOSS PER SHARE | |
Schedule of weighted average shares outstanding | Accordingly, the weighted average number of shares outstanding is computed as follows for the three months ended September 30, 2023 and 2022 (in thousands): 2023 2022 Common Stock 36,827 35,946 2021 PFWs 1,661 1,661 2022 PFWs: Class A PFWs 1,974 1,974 Class B PFWs 10,947 10,947 Total 51,409 50,528 |
Summary of potential common stock equivalents were excluded from the computation of diluted net loss per share | As of September 30, 2023 and 2022, the following outstanding potential common stock equivalents were excluded from the computation of diluted net loss per share since the impact of inclusion was anti-dilutive (in thousands): 2023 2022 Stock options 9,109 8,482 Other warrants 888 1,150 Total 9,997 9,632 |
FINANCIAL INSTRUMENTS AND SIG_2
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | |
Schedule of financial assets measured at fair value on a recurring basis | The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy classification of such fair values as of September 30, 2023 and June 30, 2023 (in thousands): Fair Value Measurement of Assets as of September 30, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents: Money market funds $ 5,323 $ 5,323 $ — $ — Marketable debt securities: Corporate commercial paper 40,899 — 40,899 — U.S. Government agencies 24,640 — 24,640 — U.S. Government treasuries 5,465 5,465 — — Corporate notes and bonds 23,579 — 23,579 — Asset-backed securities 4,234 — 4,234 — Total $ 104,140 $ 10,788 $ 93,352 $ — Fair Value Measurement of Assets as of June 30, 2023 Total Level 1 Level 2 Level 3 Cash and cash equivalents: Money market funds $ 5,464 $ 5,464 $ — $ — Corporate commercial paper 4,481 4,481 — — Marketable debt securities: Corporate commercial paper 41,597 — 41,597 — U.S. Government agencies 26,394 — 26,394 — U.S. Government treasuries 10,404 10,404 — — Corporate notes and bonds 19,240 — 19,240 — Asset-backed securities 4,694 — 4,694 — Total $ 112,274 $ 20,349 $ 91,925 $ — |
Summary of changes in the fair value of the company's derivative liabilities, fair value, level 3 inputs | The following table sets forth changes in the fair value of the Company’s embedded derivative liability for the three months ended September 30, 2023 and 2022 (in thousands): 2023 2022 Fair value, beginning of period $ 412 $ 407 Loss from change in fair value 14 13 Fair value, end of period $ 426 $ 420 |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended |
Sep. 30, 2023 subsidiary | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Number of wholly owned subsidiaries | 2 |
LIQUIDITY (Details)
LIQUIDITY (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | |
Accumulated deficit | $ (275,509) | $ (260,985) | ||
Net loss | (14,524) | $ (9,831) | (51,800) | |
Net cash used in operating activities | (10,585) | $ (7,589) | (44,500) | |
Cash and cash equivalents | 8,057 | 16,036 | ||
Short-term investments | 90,673 | 85,860 | ||
Long-term investments | 8,144 | 16,470 | ||
Total liabilities | 9,435 | 7,549 | ||
Current liabilities | 7,195 | $ 5,200 | ||
XOMA (US) LLC | Phase 3 Clinical Trial RZ 358 | Xoma License Agreement | Scenario, Upon First Dosing Of The First Patient [Member] | ||||
Milestone closing payment | $ 5,000 | 5,000 | ||
XOMA (US) LLC | Phase 3 Clinical Trial RZ 358 | Xoma License Agreement | Scenario, Upon Dosing Of The Last Patient [Member] | ||||
Milestone closing payment | $ 5,000 |
INVESTMENTS IN MARKETABLE DEB_3
INVESTMENTS IN MARKETABLE DEBT SECURITIES - Investments in marketable securities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | ||
Short-term investments | $ 90,673 | $ 85,860 |
Long-term investments | 8,144 | 16,470 |
Total investments | $ 98,817 | $ 102,330 |
INVESTMENTS IN MARKETABLE DEB_4
INVESTMENTS IN MARKETABLE DEBT SECURITIES - Additional Information (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Jun. 30, 2023 | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | ||
Debt securities, available-for-sale, term | 2 years | |
Debt securities, available-for-sale, weighted average term | 1 year | |
Short-term investments | $ 90,673,000 | $ 85,860,000 |
Long-term investments | 8,144,000 | 16,470,000 |
Investment in marketable securities | 15,989,000 | |
Proceeds from maturities of marketable debt securities | 18,595,000 | |
Interest receivable | 400,000 | $ 300,000 |
Allowance for credit losses related to investments in marketable debt securities | $ 0 |
INVESTMENTS IN MARKETABLE DEB_5
INVESTMENTS IN MARKETABLE DEBT SECURITIES - Cash and cash equivalents and marketable securities held (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | $ 99,101 |
Gross Unrealized Gains | 6 |
Gross Unrealized Losses | (290) |
Fair Value | 98,817 |
Corporate commercial paper | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | 40,944 |
Gross Unrealized Losses | (45) |
Fair Value | 40,899 |
Obligations of U.S. government agencies | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | 24,698 |
Gross Unrealized Gains | 1 |
Gross Unrealized Losses | (59) |
Fair Value | 24,640 |
U.S. Treasury obligations | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | 5,478 |
Gross Unrealized Losses | (13) |
Fair Value | 5,465 |
Corporate notes and bonds | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | 23,742 |
Gross Unrealized Losses | (163) |
Fair Value | 23,579 |
Asset-backed securities | |
INVESTMENTS IN MARKETABLE DEBT SECURITIES | |
Amortized Cost | 4,239 |
Gross Unrealized Gains | 5 |
Gross Unrealized Losses | (10) |
Fair Value | $ 4,234 |
OPERATING LEASES - Additional I
OPERATING LEASES - Additional Information (Details) | Sep. 30, 2023 |
OPERATING LEASES | |
Weighted average remaining lease term under operating leases | 4 years 1 month 6 days |
Weighted average discount rate for operating lease liabilities | 6.80% |
OPERATING LEASES - Assets and o
OPERATING LEASES - Assets and operating lease liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
Carrying value of right-of-use assets and operating lease liabilities | ||
Right-of-use assets, net | $ 1,933 | $ 2,054 |
Operating lease liabilities: | ||
Current | 525 | 541 |
Long-term | 1,814 | 1,937 |
Total | $ 2,339 | $ 2,478 |
OPERATING LEASES - Operating le
OPERATING LEASES - Operating lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease expense | $ 173 | $ 100 |
Research and development | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease expense | 131 | 77 |
General and administrative | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease expense | $ 42 | $ 23 |
OPERATING LEASES - Future Opera
OPERATING LEASES - Future Operating Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
Future lease payments related to operating lease agreements | ||
Remainder of fiscal year 2024 | $ 509 | |
2025 | 627 | |
2026 | 646 | |
2027 | 666 | |
Thereafter | 224 | |
Total lease payments | 2,672 | |
Less imputed interest | (333) | |
Present value of operating lease liabilities | $ 2,339 | $ 2,478 |
LICENSE AGREEMENTS (Details)
LICENSE AGREEMENTS (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |||
Feb. 28, 2023 | Jan. 31, 2022 | Dec. 31, 2020 | Aug. 31, 2017 | Sep. 30, 2023 | |
XOMA (US) LLC | Xoma License Agreement | Upon Clinical and Regulatory Milestones | Maximum | |||||
License Agreements | |||||
Maximum Amount of Milestone Events | $ 35 | ||||
XOMA (US) LLC | Xoma License Agreement | After Clinical and Regulatory Milestones | Maximum | |||||
License Agreements | |||||
Maximum Amount of Milestone Events | 185 | ||||
XOMA (US) LLC | Phase 2 Clinical Trial RZ358 | Xoma License Agreement | |||||
License Agreements | |||||
Milestone closing payment | 2 | ||||
XOMA (US) LLC | Phase 3 Clinical Trial RZ 358 | Xoma License Agreement | Scenario, Upon First Dosing Of The First Patient [Member] | |||||
License Agreements | |||||
Milestone closing payment | $ 5 | $ 5 | |||
XOMA (US) LLC | Phase 3 Clinical Trial RZ 358 | Xoma License Agreement | Scenario, Upon Dosing Of The Last Patient [Member] | |||||
License Agreements | |||||
Milestone closing payment | $ 5 | ||||
ActiveSite Pharmaceuticals, Inc | |||||
License Agreements | |||||
Royalties percentage | 2% | ||||
ActiveSite Pharmaceuticals, Inc | Development And License Agreement | |||||
License Agreements | |||||
Milestone closing payment | $ 1 | ||||
ActiveSite Pharmaceuticals, Inc | Development And License Agreement | Plan | Maximum | |||||
License Agreements | |||||
Maximum Amount of Milestone Events | $ 46.5 | ||||
ActiveSite Pharmaceuticals, Inc | Phase 2 Clinical Trial RZ402 | Development And License Agreement | |||||
License Agreements | |||||
Milestone closing payment | $ 3 | ||||
ActiveSite Pharmaceuticals, Inc | Phase 3 Clinical Trial RZ 402 | Development And License Agreement | Scenario, Upon First Dosing Of The First Patient [Member] | |||||
License Agreements | |||||
Milestone closing payment | $ 5 |
EMBEDDED DERIVATIVE LIABILITY (
EMBEDDED DERIVATIVE LIABILITY (Details) - USD ($) $ in Thousands | Apr. 14, 2021 | Sep. 30, 2023 | Jun. 30, 2023 |
Debt Instrument [Line Items] | |||
Embedded derivative liability | $ 426 | $ 412 | |
Loan and security agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 30,000 | ||
Exit fee on the funded principal balance | 4% | ||
Exit fee amount | $ 600 | ||
Embedded derivative liability | $ 400 | $ 400 | |
Percentage of entity's shares held by investors | 35% | ||
Term A loan | Loan and security agreement | |||
Debt Instrument [Line Items] | |||
Gross proceeds from issuance of debt | $ 15,000 |
SHAREHOLDERS' EQUITY - 2022 Pri
SHAREHOLDERS' EQUITY - 2022 Private Placement (Details) - July 2022 Financing shares in Millions, $ in Millions | 1 Months Ended |
Jul. 31, 2022 USD ($) shares | |
Class of Stock [Line Items] | |
Gross proceeds from issuance of common stock for cash (in shares) | shares | 3.2 |
Proceeds from Issuance of Common Stock | $ 12.3 |
Underwriting discounts and commissions expense | 0.8 |
Proceeds From Issuance Of Common Stock, Net Of Underwriting Discounts And Commissions | $ 11.5 |
SHARE-BASED COMPENSATION AND _3
SHARE-BASED COMPENSATION AND WARRANTS - Stock Option Plans (Details) - shares shares in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 11,040 | |
Number of shares outstanding | 9,109 | 8,745 |
Number of shares available | 1,931 | |
2015 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 17 | |
Number of shares outstanding | 17 | |
2016 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 123 | |
Number of shares outstanding | 123 | |
2019 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 200 | |
Number of shares outstanding | 200 | |
2021 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 10,700 | |
Number of shares outstanding | 8,769 | |
Number of shares available | 1,931 |
SHARE-BASED COMPENSATION AND _4
SHARE-BASED COMPENSATION AND WARRANTS - Stock Options Outstanding (Details) - $ / shares shares in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Jun. 30, 2023 | |
Number of Options | ||
Outstanding, beginning | 8,745 | |
Granted | 415 | |
Expired | (27) | |
Forfeited | (24) | |
Outstanding, ending | 9,109 | 8,745 |
Vested, ending | 3,188 | |
Weighted Average Exercise Price | ||
Outstanding, beginning of fiscal year | $ 4.56 | |
Granted | 1.51 | |
Expired | 12.67 | |
Forfeited | 4.06 | |
Outstanding, end of fiscal year | 4.40 | $ 4.56 |
Vested, end of fiscal year | $ 6.21 | |
Weighted Average Remaining Contractual Life | ||
Remaining contractual term (years) | 8 years 7 months 6 days | 8 years 9 months 18 days |
Vested | 8 years 2 months 12 days | |
Weighted average grant date fair value, granted | $ 1.18 |
SHARE-BASED COMPENSATION AND _5
SHARE-BASED COMPENSATION AND WARRANTS - Weighted Average Assumptions (Details) - Time-Based | 3 Months Ended |
Sep. 30, 2023 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Market price of common stock on grant date | $ 1.51 |
Expected volatility | 94% |
Risk free interest rate | 4.20% |
Expected term (years) | 6 years 1 month 6 days |
Dividend yield | 0% |
SHARE-BASED COMPENSATION AND _6
SHARE-BASED COMPENSATION AND WARRANTS - Share Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost | $ 1,849 | $ 1,879 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost | 840 | 870 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost | $ 1,009 | $ 1,009 |
SHARE-BASED COMPENSATION AND _7
SHARE-BASED COMPENSATION AND WARRANTS - Warrants (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | |||||
Oct. 04, 2023 | May 31, 2022 | Oct. 31, 2021 | Sep. 30, 2023 | Oct. 06, 2023 | Jun. 30, 2023 | Oct. 09, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants outstanding, beginning (In shares) | 888,000 | ||||||
Warrants outstanding, ending (In shares) | 888,000 | ||||||
Warrant price (per share) | $ 22.10 | $ 22.10 | |||||
Weighted average remaining contractual term | 3 years 9 months 18 days | 4 years 1 month 6 days | |||||
Warrants granted, exercised or expired | 0 | ||||||
2021 Pre-Funded Warrants. | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Pre-funded warrants to purchase shares of common stock | 1,661,461 | ||||||
Shares issue price | $ 6.49 | ||||||
Proceeds from warrants issued | $ 10.8 | ||||||
Warrants granted (In shares) | 1,661,461 | ||||||
Warrant price (per share) | $ 0.01 | ||||||
2022 Pre-Funded Warrants | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Pre-funded warrants to purchase shares of common stock | 12,921,055 | ||||||
Shares issue price | $ 3.799 | ||||||
Warrant price (per share) | $ 0.001 | ||||||
Class A Warrants | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants granted (In shares) | 1,973,684 | ||||||
Class B Warrants | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants granted (In shares) | 10,947,371 | ||||||
Class B Warrants | Subsequent event. | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Pre-funded warrants to purchase shares of common stock | 2,797,404 | ||||||
Warrants exercised | 2,800,000 | ||||||
Proceeds from exercise of warrants | $ 0 | ||||||
Participating Warrants [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Pre-funded warrants to purchase shares of common stock | 800,000 | ||||||
Warrant price (per share) | $ 19.50 | ||||||
Weighted average remaining contractual term | 7 years |
SHARE-BASED COMPENSATION AND _8
SHARE-BASED COMPENSATION AND WARRANTS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Jun. 16, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Estimated fair value of stock options | $ 0.5 | |
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, stock options | $ 15.4 | |
Expected to be recognized over a remaining weighted average period | 2 years 8 months 12 days | |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares reserved for purchase | 500,000 | |
Shares purchases | 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Related Party [Member] - Handok License Agreement - Handok, Inc. - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 15, 2020 | Sep. 30, 2023 | |
Related Party Transaction [Line Items] | ||
License term (in years) | 20 years | |
Milestone payments | $ 500 | |
Transfer price (in percent) | 70% | |
Milestone payments earned | $ 0 |
NET LOSS PER SHARE - Weighted A
NET LOSS PER SHARE - Weighted Average Number of Shares Outstanding (Details) - shares shares in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of shares outstanding | 51,409 | 50,528 |
2021 Pre-Funded Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of shares outstanding | 1,661 | 1,661 |
Class A Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of shares outstanding | 1,974 | 1,974 |
Class B Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of shares outstanding | 10,947 | 10,947 |
Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of shares outstanding | 36,827 | 35,946 |
NET LOSS PER SHARE - Anti-dilut
NET LOSS PER SHARE - Anti-dilutive (Details) - shares shares in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
NET LOSS PER SHARE | ||
Total | 9,997 | 9,632 |
Stock options | ||
NET LOSS PER SHARE | ||
Total | 9,109 | 8,482 |
Other warrants | ||
NET LOSS PER SHARE | ||
Total | 888 | 1,150 |
FINANCIAL INSTRUMENTS AND SIG_3
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Fair value on a recurring basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Marketable debt securities | $ 98,817 | $ 102,330 |
Recurring | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Financial assets measured at fair value | 104,140 | 112,274 |
Recurring | Money market funds | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Cash and cash equivalents | 5,323 | 5,464 |
Recurring | Corporate commercial paper | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Cash and cash equivalents | 4,481 | |
Marketable debt securities | 40,899 | 41,597 |
Recurring | U.S. Government agencies | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Marketable debt securities | 24,640 | 26,394 |
Recurring | U.S. Government treasuries | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Marketable debt securities | 5,465 | 10,404 |
Recurring | Corporate notes and bonds | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Marketable debt securities | 23,579 | 19,240 |
Recurring | Asset-backed securities | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Marketable debt securities | 4,234 | 4,694 |
Recurring | Level 1 | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Financial assets measured at fair value | 10,788 | 20,349 |
Recurring | Level 1 | Money market funds | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Cash and cash equivalents | 5,323 | 5,464 |
Recurring | Level 1 | Corporate commercial paper | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Cash and cash equivalents | 4,481 | |
Recurring | Level 1 | U.S. Government treasuries | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Marketable debt securities | 5,465 | 10,404 |
Recurring | Level 2 | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Financial assets measured at fair value | 93,352 | 91,925 |
Recurring | Level 2 | Corporate commercial paper | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Marketable debt securities | 40,899 | 41,597 |
Recurring | Level 2 | U.S. Government agencies | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Marketable debt securities | 24,640 | 26,394 |
Recurring | Level 2 | Corporate notes and bonds | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Marketable debt securities | 23,579 | 19,240 |
Recurring | Level 2 | Asset-backed securities | ||
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | ||
Marketable debt securities | $ 4,234 | $ 4,694 |
FINANCIAL INSTRUMENTS AND SIG_4
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Summary of Changes in the Fair Value (Details) - Embedded derivative liability - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at the beginning | $ 412 | $ 407 |
Loss from change in fair value | $ 14 | $ 13 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Derivative Instruments, Net, Pretax | Gain (Loss) on Derivative Instruments, Net, Pretax |
Balance at the end | $ 426 | $ 420 |
FINANCIAL INSTRUMENTS AND SIG_5
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Jun. 30, 2023 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Concentration Risk, Credit Risk, Uninsured Deposits | Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and investments in marketable debt securities. The Company maintains cash in demand accounts at a high-quality financial institution. As of and for the three months ended September 30, 2023 and 2022, cash deposits have exceeded the amount of insurance provided on such deposits by the Federal Deposit Insurance Corporation. | |
Marketable debt securities | $ 98,817 | $ 102,330 |
Banking and Financial Services Industries | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Marketable debt securities | 41,900 | |
U.S. government | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Marketable debt securities | $ 24,600 |